Vindhyachal Distilleries Pvt. Ltd. Vs. Respondent: State of Madhya Pradesh

MANU/MP/0934/2006

Equivalent Citation: ILR[2006]MP542, (2007)7VST197(MP)

IN THE HIGH COURT OF MADHYA PRADESH (JABALPUR BENCH)

Writ Petition Nos. 2346, 2403, 3663, 3798, 3851, 3971, 4223 and 4224/2006

Decided On: 29.04.2006

Appellants: Vindhyachal Distilleries Pvt. Ltd.
Vs.
Respondent: State of Madhya Pradesh

Judges/Coram:
A.K. Mishra and Manjusha Namjoshi, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: Kunal Thakre and Akshat Sharma, Advs.
For Respondents/Defendant: Dharmendra Sharma, Addl. Solicitor General and O.P. Namdeo, GA for UOI, Commissioner, Central Excise and Sanjay Yadav, Dy. AG
For Intervenor: H.S. Shrivastava, Sr. Counsel, Girish Shrivastava and Vijay Raghav Singh, Advs.
Subject: Service Tax
Relevant Section:

·  FINANCE ACT,1994 - Section 65(76)(b)

Acts/Rules/Orders:

·  Finance Act, 2005 - Section 65(76),

·  Finance Act, 2005 - Section 68,

·  Finance Act, 2005 - Section 69;

·  Central Excise Act, 1944 - Section 2;

·  Madhya Pradesh Excise Act, 1915 ;

·  Central Excise Tariff Act, 1985 ;

·  Finance Act, 1994 - Section 65,

·  Finance Act, 1994 - Section 66,

·  Finance Act, 1994 - Section 68(1);

·  Madhya Prades General Sales Tax Act, 1958 - Section 2;

·  Madhya Pradesh Country Spirit Rules, 1995 ;

·  Madhya Pradesh Country Spirit Rules, 1995 - Rules 2A,

·  Madhya Pradesh Country Spirit Rules, 1995 - Rules 3(3);

·  Service Tax Rules, 1994 - Rules 4A,

·  Service Tax Rules, 1994 - Rules 4A(1),

·  Service Tax Rules, 1994 - Rules 6;

·  Service Tax (Amendemnt), Rules 1997 - Rule 2;

·  Service Tax Rules, 1944

Cases Referred:

·  Vidhyachal Distilleries Pvt. Ltd. case W.P. No. 2346/2006;

·  T.N. Kalyana Mandapam Association v. Union of India and Ors. 2006 (3) S.T.R. 260 (S.C.) : 2004 (167) E.L.T. 3 : (2004) 5 SCC 632;

·  India Cement Ltd. v. State of T.N. (1990) 1 SCC 12;

·  Sudhir Chandra Nawn v. WTO AIR 1969 SC 59;

·  Asstt. Commr. of Urban Land Tax v. Buckingham and Carnatk Co. Ltd. (1969) 2 SCC 55 SCR 278 : SCC 63;

·  Second Gift Tax Officer v. DM. Nazareth (1970) 1 SCC 749;

·  Union of India v. Harbhajan Singh Dhillon (1971) 2 SCC 779 SCC 792;

·  Bhagwan Dass Jain v. Union of India (1981) 2 SCC 135;

·  Western India Theatres Ltd. v. Cantonment Board Poona AIR 1959 SC 582 SCR 69;

·  Doypack Systems (P) Ltd. v. Union of India (1988) 2 SCC 299 SCC p. 302;

·  Laghu Udyog Bharati and Anr. v. Union of India and Ors. 2006 (2) S.T.R. 276 (S.C.) : 1999 (112) E.L.T. 365 : (1999) 6 SCC 418;

·  Central Excise Bombay v. S.D. Fine Chemicals Pvt. Ltd. 1995 (77) E.L.T. 49 (S.C.) : (1995) Supp. 2 SCC 336;

·  Central Excise Hyderabad v. Jayant Oil Mills Pvt. Ltd. 1989 (40) E.L.T. 287 (S.C.) : (1989) 3 SCC 343;

·  Aditya Mills Ltd. v. Union of India (1988) 4 SCC 315;

·  Collector of Central Excise Madras v. Kutty Flush Doors and Furniture Co. (P) Ltd. 1988 (35) E.L.T. 6 (S.C.) : AIR 1988;

·  Som Distillers and Breweries Pvt. Ltd. v. State of M.P. and Anr. 1997 (1) E.L.T. 319;

·  Ashirwad Ispat Udyog and Ors. v. State Level Committee and Ors. (1999) 32 VKN 65

Citing Reference:

Aditya Mills Ltd. vs. Union of India (UOI) MANU/SC/0007/1988	Discussed
Ashirwad Ispat Udyog and Ors. v. State Level Committee and Ors	Discussed
Bhagwan Dass Jain vs. Union of India (UOI) and Ors. MANU/SC/0529/1981	Mentioned
Collector of Central Excise, Hyderabad vs. Jayant Oil Mills Pvt. Ltd. MANU/SC/0111/1989	Discussed
Collector of Central Excise, Madras vs. Kutty Flush Doors & Furniture Co. (P) Ltd. MANU/SC/0091/1988	Discussed
Collector, Central Excise, Bombay vs. S.D. Fine Chemicals Pvt. Ltd. MANU/SC/1018/1995	Discussed
Doypack Systems Pvt. Ltd. vs. Union of India (UOI) and Ors MANU/SC/0300/1988	Mentioned
India Cement Ltd. and Ors. vs. State Of Tamil Nadu and Ors. MANU/SC/0226/1989	Mentioned
Laghu Udyog Bharati and Anr. vs. Union of India and Others MANU/SC/0444/1999	Discussed
Som Distillers & breweries Pvt. Ltd. v. State of M.P. and Anr	Distinguished
Sudhir Chandra Nawn vs. Wealth Tax Officer, Calcutta and Ors. MANU/SC/0032/1968	Mentioned
Tamil Nadu Kalyana Mandapmam am Assn. vs. Union of India (UOI) and Ors. MANU/SC/0354/2004	Relied On
The Assistant Commissioner of Urban Land Tax and Ors. vs. The Buckingham and Carnatic Co. Ltd., etc. MANU/SC/0068/1969	Mentioned
The Second Gift Tax Officer, Mangalore etc. vs. D.H. Nazareth etc. MANU/SC/0309/1970	Mentioned
The Western India Theatres Ltd. vs. The Cantonment Board, Poona, Cantonment MANU/SC/0154/1959	Mentioned
Union of India (UOI) vs. Shri Harbhajan Singh Dhillon MANU/SC/0062/1971	Mentioned

CaseNote:
Service Tax - Imposition of - Sections 65(76)(b), 66, 68(1) and 69 of the Finance Act, 1994 - Petitioner was distillers/retail contractors of country liquor - As per amendment made in Section 65(76)(b) of Act, service tax also imposed upon 'packaging activities' - Petitioner got itself registered under Section 69 of Act - After registration, respondent no.2 imposed service tax upon petitioner - Petitioner passed its liability and charged service tax from retail contractors - However, respondent no.4 directed petitioner to not to collect service tax from retail contractors - Hence, present petition - Whether liability can be passed on by distillers (petitioner) to retail contractors? - Held, as per Section 68(1) of Act, "Every person providing taxable service to any person shall pay service tax at the rate specified in Section 66 of Act " - Service tax is payable on the value of taxable services - Accordingly, distillers liable to pay service tax being a service provider - Further, as decided by Apex Court in T.N. Kalyana Mandapam Association v. Union of India and Ors., service tax being indirect tax, element of service tax can be passed on to the service receiver - Accordingly, petitioner entitled to pass on the liability of service tax to retail contractors - Petitions disposed of
Industry: Breweries and Distilleries

ORDER

A.K. Mishra, J.

1. In these writ petitions the question involved is whether service tax on packaging i.e. bottling and labelling of liquor, can be exacted from the distillers and whether they can pass on this liability to the contractors obtaining the supplies from them.

2. The petitioners are distillers/retail contractors, licence has been granted for supply of country made liquor for the warehouses situated in various districts of the State of Madhya Pradesh to distillers. The retail contractors take supply from the distillers under the terms of CS-I licence issued to distillers and CS-II licence issued to the retail contractors. The distiller is entitled to receive the cost price of liquor from the Government and the sealing and bottling charges from the retail contractors. The retail contractors are required to deposit the bottling and sealing charges in advance before lifting the country liquor from the warehouse. Licence (P-3) was issued to M/s. Vidhyachal Distilleries Pvt. Ltd. (in W.P. No. 2346/2006).

3. It is further averred that on 16.6.2005 Section 65(76)(b) of the Finance Act, 2005 was amended and "Packaging Activity" was also brought within the ambit of service tax. On 9th September, 2005, the Commissioner, Customs and Central Excise, Indore wrote letter (P-4) to the Excise Commissioner, M.P. It was clarified that under Section 65(76)(b) inserted by the Finance Act, 2005 the service tax was imposed w.e.f. 16.6.2005. The Excise Commissioner directed as per letter (P-5), dated 13.9.2005 all the distillers/service providers to get themselves registered with department of Excise and to pay the service tax @ 10.2% on packaging/sealing charges of Rs. 2.25 per bottle.

4. The petitioner M/s. Vindhyachal Distilleries Pvt. Ltd. got the registration certificate (P-6) under Section 69 of the Finance Act. After registration the distillers demanded the service tax @ 10.2% on the packaging/sealing charges of Rs. 2.25 per bottle from the retail contractors, same was disputed by them. There was some conflict of opinion as apparent from letter (P-7) dated 27.9.2005. However, clarincatory letter (P-8) was issued on 27th September, 2005 by the Excise Commissioner, M.P. Gwalior, it was explained that service tax was an indirect tax and though the liability of payment of the same was on the distillers i.e. the service provider but the same could be passed on to the retail contractors. The retail contractors could also pass it on to the actual consumers. One Shri Akhilesh Rai filed a writ petition without impleading M/s. Vindhyachal Distilleries Pvt. Ltd. and injunction was granted. Suit was also filed, filing of suit was suppressed, an order (P-II) was passed in W.P. Nos. 13906/05,14045/05,13052/05, in which this Court held that service tax was to be realised by the Central Excise Department from the service provider, however, distiller (service provider) was given liberty to seek appropriate remedy as may be available in accordance with law. Whether service tax could be passed on, was not adjudicated upon. It is submitted that distiller has a right to pass on the service tax to the retail contractors. Service tax by nature is such a tax, which is meant to be passed on to the actual users. It was directed by District Excise Officer not to collect the service tax from the retail contractors.

5. It is further submitted that under the Madhya Pradesh Country Spirit Rules, 1995 the distillers are given a CS-1 licence to manufacture country spirit from rectified spirit by essencing, colouring, flavouring, reducing, blending etc. at the manufacturing warehouses. Colouring and flavouring agents are added at the time of maturation. This is a process of treatment given to over proof spirit in order to render it fit for human consumption in the form of country liquor. This process is manufacturing of country liquor in the real sense as well as within the meaning and scope of Central Excise Act, 1944 and M.P. Excise Act, 1915. It is further submitted that as the Packaging Activity is covered by and part of process of manufacture within the meaning of Clause (f) of Section 2 of the Central Excise Act, 1944, hence service tax cannot be levied on such an activity of packaging. Rule 3(3) of M.P. Country Spirit Rules, 1965 and Rule 2-A has also been relied upon to contend that manufacture of country spirit includes bottling of liquor hence sealing of country liquor is not a packaging activity within the purview of service tax but is a part of manufacturing process. No cost of country spirit is recovered from the retail contractors except cost of rectified spirit, empty bottles is recovered from the retail contractors and this amount is termed as sealing charges, which has been misunderstood as packaging charges. Bottling and sealing done is incidental to the process 6f manufacture to make it a marketable commodity. Sealing charges form part of manufacturing cost, hence does not attract service tax. The order not to recover the service tax is against the provision of Rule 4-A of Service Tax Rules, 1994, which was inserted w.e.f. 10th September, 2004, which provides that service tax can be passed on in the bill to next person.

6. The counsel for respondent Central Excise has relied upon the Gazette Notification which was issued for inviting the tenders for bottling and supply of country spirit in sealed bottles in various districts of State of M.P. It is submitted that bottling, labelling and sealing by pilfer proof cap of glass bottles of volume is independent activity and is not part of process of manufacture of country made liquor, it is a service provided, hence service tax can be realised by Central Excise Department of Govt. of India. It is also submitted that as per Section 2(d) of the Central Excise Act, excisable goods means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985. Chapter 22 of the Central Excise Tariff Act, 1985 covers Beverages, Spirits and Vinegar, however, as per Chapter Note 4 alcoholic liquors for human consumption is not covered. The manufacture of liquor is not taxable under Central Excise Act and the activity of distilling, bottling and packaging liquor also not defined as the goods specified in Section or Chapter Notes of the Central Excise Tariff Act, 1985. The bottled country liquor or its packing or repacking activity has not been mentioned/specified in Central Excise Tariff Act, and that is why it is not a Central Excise manufactured product and therefore, it is correctly falling under the purview of service tax under the head of Packaging Activity Service w.e.f. 16.6.2005. It is further submitted on behalf of Central Excise that activity of bottling, labelling and sealing of (plain/spiced) country liquor are covered as a Packaging Activity and attracts service tax under Section 65(76)(b) inserted by Finance Act, 2005. The tax is payable on the value of the taxable service received by the service provider. Accordingly such distillers/bottlers shall pay service tax being a service provider. The Central Excise can recover service tax from the distillers/service provider only. The Packaging Activity service is provided by Distillers/Bottlers by way of bottling the liquor and being transferred to wholesale or retail dealer/contractors etc. The dispute of passing liability of service tax onwards is inter se distillers and contractors. It can be recovered by distillers from contractors as per Rule 4A(1) of the Service Tax Rules, 1994.

7. The stand of the State Government counsel is that service tax is realised by Central Excise, it is the dispute between the distillers/contractors. A letter was issued pursuant to the directives issued by this Court, they have to abide by the decision to be rendered in the matter.

8. Shri H.S. Shrivastava, learned Sr. Counsel with Shri Girish Shrivastava, Shri Kunal Thakrey and Shri Akshat Sharma appearing in some of the petitions for petitioners and in some of the petitions for respondents/interveners have submitted that it is not open to impose the service tax on bottling and sealing of country made liquor as that forms part of the process of manufacture as defined in Section 2(f) of the Central Excise Act, 1944. In case packaging forms part of process of manufacture, it is outside the purview of service tax as imposed as inserted under Section 65(76)(b) by Finance Act, 2005. It is submitted that without bottling and sealing, process of manufacture is not complete, it is necessary to make it a marketable commodity, hence service tax could not be imposed upon the distillers, consequently it could not be passed on to the contractors and so on. Alternatively it is submitted on behalf of distillers that in case this Court come to the conclusion that the activity of packaging is liable for service tax under Section 65(76)(b) as inserted by Finance Act, 2005, it being an indirect tax, it is permissible to pass it on to the wholesalers/contractors by the service provider.

9. Shri Dharmendra Sharma, Asst. Solicitor General appearing for Central Excise has submitted that it is clear that the activity is packaging activity within the purview of Section 65(76)(b) as inserted by Finance Act, 2005, which means packaging of goods including pouch filling, bottling, labelling or imprinting of the package, since it is not an item covered within the purview of Central Excise Act, 1944. No Central Excise is levied, it cannot be said to be part of process of manufacture within the meaning of Clause (f) of Section 2 of the Act. Alternatively, he has submitted that the process of packaging of goods including pouch filling, bottling, labelling or imprinting of the package is specifically included within the packaging activity and it is an independent activity than the process of manufacture as contemplated under Section 2(f) of the Central Excise Act, 1944, hence service tax was rightly levied, further considering the tender notice, it is clear that activity of bottling and sealing is an independent process for which separate charges are realised and for country spirit separate billing is made, thus two activities are different. It has to be seen in the facts of the each case whether packaging activity forms part of process of manufacture when tender notice is considered. It is clear that it is an independent activity (service provided) and cannot be said to be part of process of manufacture under Section 2(f) of Central Excise Act. It can be passed on to the wholesalers/contractors being an indirect tax.

10. Shri Sanjay Yadav, learned Dy. Advocate General appearing for the State has submitted that the service tax is realised by the Central Excise. The State has no concern with the service tax, which is realised, hence dispute is inter se the distillers/contractors. He has also submitted that charges for bottling, labelling and sealing are fixed @ Rs. 2.25/- per piece.

11. The "Packaging Activity'" has been defined in Section 65(76)(b) as inserted by the Finance Act, 2005 thus:

(76)(b): "packaging activity" means packaging of goods including pouch filling, bottling, labelling or imprinting of the package, but does not include any packaging activity that amounts to "manufacture" within the meaning of Clause (f) of Section 2 of the Central Excise Act, 1944 (1 of 1944);
Section 2(f) of the Central Excise Act, 1944 defines the process of manufacture thus:
(f) : "manufacture" includes any process - (i) incidental or ancillary to the completion of a manufactured product;
(ii) which is specified in relation to any goods in the Section or Chapter notes of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture; or
(iii) which in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or relabelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer;
Section 2(d) of the Central Excise Act, 1944 defines excisable goods; thus:
(d): "excisable goods" means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as being subject to a duty of excise and includes salt;
Service Tax was introduced in India vide Finance Act, 1994. Service Tax is legislated by Parliament under the residuary entry 97 of List I of the Seventh Schedule of Constitution of India. Section 65 of the Finance Act, 1994 provides for taxable service. Section 66 provides for charge of service tax by the person designated as person responsible for collecting service tax. Section 68 of the Act provides for collection and payment mechanism for service tax. Service tax is an indirect tax and has to be paid on all the services notified by the Government of India for the said purpose. The said tax is on the service and not on the service provider. The service provider is expected to collect the tax from the client for utilising his service as apparent from the provision of the Act and Service Rules of 1944. To enable the Government to widen the nature of service tax, certain changes are made time to time by making amendment in the Finance Act. Accordingly the packaging activity was inserted in Section 65(76)(b) by Finance Act, 2005. It has to be seen in every case whether packaging activity of packaging of goods including pouch filling, bottling, labelling or imprinting of the package is outside the purview of process of manufacture. In case it is a part of process of manufacture as defined within the meaning of Clause (f) of Section 2 of the Central Excise Act, 1944, it is of the packaging activity under Section 65(76)(b).

12. When we consider the transaction in question, which is best reflected in the tender notice published in the gazette of M.P., pursuant to which distillers have been granted the licence for bottling and supply of country spirit in various districts of State of M.P. published in gazette notification dated 19.5.2005. The tenderer is required to be a distiller holding appropriate licence for distillery from the competent authority and the distillery should be in production. Every intending distiller is free to tender for any one or more supply areas. Tenders are invited from the distillers for grant of licence under the provision of Madhya Pradesh Country Spirit Rules, 1995 to supply country spirit through bonded warehouses to the retail sale contractors in sealed bottles for a period commencing within seven days from grant of such licence and ending 31st March, 2006. The lowest rate was to be accepted. The production capacity was one of the relevant criteria. Every tenderer was required to follow certain conditions. No dues and credibility certificate regarding past performance with respect to production and supply of alcohol issued by the Excise Commissioner of the State or an equivalent authority where the distillery is situated, was to be submitted. The distillers situated outside of M.P. were also eligible to apply. An unconditional consent regarding supply of the spirit from the distillery situated outside M.P. to the warehouse situated in M.P. for fulfilment of supply requirement of country spirit of the area for which the tender is submitted, was to be submitted. The intention was to supply the country spirit through bonded warehouses to the retail sale contractors in sealed bottles. Spirit could be manufacture at any place out side the State also. There are certain important conditions with respect to the supply of country spirit. Condition No. 6 contains material provisions with respect to the responsibility of successful tenderers to receive empty bottles from retail contractors at the issue warehouses and charges for bottling, labelling and sealing by pilfer proof cap of the glass bottles of volume are fixed at Rs, 2.25/- per piece. Rates of deposit money for empty glass bottles payable by retail contractors was also specified in the tender notice. Condition No. 6 of the Tender notice is quoted below:

(i) : The successful tenderer shall supply country spirit filled in a semiautomatic bottling plant in the supply area allotted to him. The bottling can be done at one or more of the warehouses of each of the concerned supply area. The list of warehouses of each of the supply area is annexed to this tender notice.
(ii) The successful tenderer shall use the plant during the period of the contract and on expiry of the contract, the plant shall have to be handed over to the new successful tenderer against its depreciated cost, to be paid by the new successful tenderer. The successful tenderer shall make all such arrangements of semi-automatic bottling at the respective warehouse as would be necessary to ensure that he is capable of supplying 1.5 time the estimated supply of the country spirit in that supply area.
(iii) It will be the responsibility of the successful tenderer to arrange supplies of country spirit (manufactured using standard rectified spirit manufactured in his distillery) to the area from the warehouses of the supply area during the entire period of the contract. It will also be the responsibility of the successful tenderer to receive the empty bottles from the retail contractor at the issue warehouses.
(iv) The country spirit, bottles, labels and bottling caps should be of such good quality, standard pattern and specifications, as prescribed by the Excise Commissioner.
(v) Charges for bottling, labelling; and sealing by pilfer proof cap of the glass bottles of volume 750 ml, 375 ml, 250 ml, and 180 ml are fixed at Rs. 2.25 per piece.
(vi) Rates of deposit money for empty glass bottles payable by retail contractors shall be as follows:

Glass bottle of 750 ml Rs. 3.50 Glass bottle of 375 ml Rs. 2.25 Glass bottle of 250 ml ["M.P. Excise" specially embossed] Rs. 2.80 Glass bottle of 180 ml Rs. 1.50

The deposit money is refundable to the retail contractor on return of glass bottles at the supply warehouse.

(vii) The ratio of supply of country spirit in different sizes of glass bottles to the retail contractors in the area/areas is fixed as under:

750 ml 10 375 ml 20 250 ml and 180 ml 70

The above ratio means that every 100-bulk liters of supply of country spirit to the retail contractor shall consist of 10-bulk liters in glass bottles of 750 ml size, 20 bulk liters in glass bottles of 375 ml size and 70 bulk liters in glass bottles of 250 ml or 180 ml size 250 ml bottle will be used only for 60 degree under proof plain country spirit:
Provided that if the retailer demands he will be supplied with country spirit of 25 degree under proof and 50 degree under proof in 180 ml and 60 degree under proof in 250 ml bottles in lieu of 750 ml and/or 375 ml bottles.
(viii) However the ratio shown in Clauses No. (vii) above may be changed at any time during the currency of the contract at the discretion of the Excise Commissioner.
(ix) Supply of country spirit for sale through the shops run by the Excise Department shall be made on the above terms and conditions by the successful tenderer.
(x) Minimum selling prices are to be printed on each kind and size of labels as directed by the Excise Commissioner.

13. It is clear that Section 65(76)(b) as inserted by the Finance Act, 2005 clearly provides "Packaging Activity" to mean packaging of goods including pouch filling, bottling, labelling or imprinting of the package and it is clear that as per the conditions of tender notice separate charges are levied for this service, which is provided by the distillers as per conditions of tender notice. It is clear from condition No. 6(i) that the successful tenderer shall supply country spirit filled in a semi-automatic bottling plant in the supply area. As provided in condition No. 6(iii) it will be the responsibility of the successful tenderer to receive the empty bottles from the retail contractor at the issue warehouses. As per condition No. 6(v) charges for bottling, labelling and sealing by pilfer proof cap of the glass bottles of volume were prescribed at Rs. 2.25 per piece. Condition No. 6(vi) provides for the rate of deposit of money for empty glass bottles of different sizes payable by retail contractors, which is refundable to the retail contractor on return of glass bottles at the supply warehouse. Thus, it is clear that packaging activity cannot be said to be part of the process of manufacture, as defined in Section 2(f) of Central Excise Act, 1944 it cannot be said to be a packaging activity which amounts to manufacture within the meaning of Clause (f) of Section 2 of the Central Excise Act. The excise is levied on the manufacture not on sale. The Apex Court in T.N. Kalyana Mandapam Association v. Union of India and Ors. MANU/SC/0354/2004 considered the question of imposition of service tax on Mandap Keepers, which were also providing the catering services in addition to the other activities. The Apex Court has laid down that service tax is a tax on services and not a tax on sale or purchase of goods. It was permissible to levy the service tax on the catering services provided by the Mandap Keepers. The submission that it amounts to tax on land, was rejected. The definition of taxable services provided by the Mandap Keepers is not limited to providing of premises on a temporary basis for the purposes specified but includes even other facilities supplied in relation thereto. The phrase "in relation to" is of the widest amplitude. It was held not to be a tax directly on the land. The Apex Court has laid down thus:

41. With regard to the first aspect, it is submitted that in order to constitute a tax on land, it must be a tax directly on land and a tax on income from land cannot come within the purview of the said entry. This was affirmed by a seven-Judge Bench of this Court in India Cement Ltd. v. State of T.N. MANU/SC/0226/1989 relying upon several judgments of this Court including Sudhir Chandra Nawn v. WTO MANU/SC/0032/1968; Asstt. Commr. of Urban Land Tax v. Buckingham and Carnatk Col Ltd. MANU/SC/0068/1969; Second Gift Tax Officer v. DM. Nazareth MANU/SC/0309/1970 Union of India v. Harbhajan Singh Dhillon MANU/SC/0062/1971 Bhagwan Dass Jain v. Union of India MANU/SC/0529/1981 and Western India Theatres Ltd. v. Cantonment Board Poona MANU/SC/0154/1959. The proposition has been followed in several judgments of this Court.

47. The legislative competence of Parliament also does not depend upon whether in fact any services are made available by the mandap-keepers within the definition of taxable service contained in the Finance Act. Whether in the given case taxable services are rendered or not is a matter of interpretation of the statute and for adjudication under the provisions of the statute and does not affect the vires of the legislation and/or the legislative competence of Parliament. In fact, a wide range of services is included in the definition of taxable services as far as mandap-keepers are concerned. The said definition includes services provided "in relation to use of mandap in any manner" and includes "the facilities provided to the client in relation to such use" and also the services "rendered as a caterer". The phrase "in rotation to" has been construed by this Court to be of the widest amplitude. In Doypack Systems (P) Ltd. v. Union of India MANU/SC/0300/1988, this Court observed as under:

The expressions "pertaining to", "in relation to" and "arising out of" used in the deeming provision, are used in the expansive sense. The expression "arising out of" has been used in the sense that it comprises purchase of shares and lands from income arising out of the Kanpur undertaking. The words "pertaining to "and "in relation to" have the same wide meaning and have been used interchangeably for among other reasons, which may include avoidance of repetition of the same phrases in the same clause or sentence, a method followed in good drafting. The word "pertain" is synonymous with the word "relate". The term "relate" is also defined as meaning to bring into association or connection with. The expression "in relation to" (so also "pertaining to"), is a very broad expression which presupposes another subject-matter. These are words of comprehensiveness which might have both a direct significance as well as an indirect significance depending on the context. (SCC p.329, paras 48, 50).

51. Taxable services, therefore, could include the mere providing of premises on a temporary basis for organising any official, social or business functions, but would also include other facilities supplied in relation thereto. No distinction from restaurants, hotels, etc. which provide limited access to property for specific purpose.

14. It is clear that for supply of country liquor, the distillers transport the rectified spirit to the warehouses/bottling plants. The conversion of rectified spirit into plain/spiced country liquor is earned out under control and supervision of the Warehouse Officer. He examines, tests and approves under proof of the country liquor as per the calibrations/norms fixed by the Government. During the process of converting the rectified spirit into potable spirit plain/spiced country, the said rectified spirit do not undergo any change. Only strength of the rectified spirit is reduced by adding water to make it fit for human consumption, colour and essence is also added in case of spiced liquor. In the bottling plant the said plain/spiced country liquor is filled into glass bottles of different volume and sealed with pilfer proof caps and labels of standard pattern and specifications, as prescribed by the Excise Commissioner are pasted/affixed on the bottles to make country liquor ready for supply at warehouse. The purchaser/contractor pays excise duly @ 115 per proof liter through challan, in the treasury. On presenting the challan to the Warehouse Officer, permit is issued to the contractors for taking delivery of country liquor in sealed bottles of various volume, from the distillers/bottlers. The distillers issue the stock of country liquor in sealed bottles. At the time of supply of country liquor in sealed glass bottles, the service provider recovers the deposit money of the said glass bottles by raising bills, in terms of the condition Nos. (iii) and (vi) of the tender notice dated 19.5.2005. However, the deposit money is refunded to the contractor, when empty bottles are returned back. The glass bottles are not sold but it is re-used again and again for bottling country liquor, for which the distillers also issue a separate bill termed as sealing charges bills for recovery of sealing charges i.e. Rs. 2.25 per piece/bottle on account of filling the country liquor into glass bottle, cost/charge of label and pilfer proof cap. After every month end, the cost price bill of liquor issued in warehouses to the District Excise Officer, as per the rate. It is clear that distillers receive the cost price of the country liquor from the District Excise Officer by raising cost price bills. Further they deposit money of the glass bottles used for filling the country liquor, from the contractors, by raising separate bills and sealing (Packaging) charges of Rs. 2.25 per bottle are separately raised for of packaging activity as defined in Section 65(76)(b) as inserted by Finance Act, 2005.

It is clear from the transaction that only the service was to be provided for the purpose of packaging, which was controlled under the condition of tender notice and separate charges were paid for bottling, labelling and sealing, which was not forming part of the price of the country spirit. For country spirit separate bills were raised and for the aforesaid part of packaging service charges were prescribed and there were service obligations to be carried out in the form of bottling while undertaking the packaging activity. There was obligation to reuse the bottle offered by the contractors. The entire mechanism leaves no room for any doubt that it was packaging activity, which was clearly a service activity under Section 65(76)(b) not process of manufacture as defined in Section 2(f) of the Central Excise Act.

15. It may also be noted that Section 2(d) of the Central Excise Act defines "excisable goods" means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as being subject to a duty of excise and includes salt. The Chapter 22 of the Central Excise Tariff Act, 1985 covers Beverages, Spirits and Vinegar. However, as per the Chapter Note (4) this Chapter does not cover alcoholic liquors for human consumption. Therefore, the activity of various distillers do not come under the purview of manufacture as defined in Section 2(f) of Central Excise Act, 1944. The bottled country liquor or its packing or re-packing activity has not been mentioned/specified in Central Excise Tariff Act. Even if we consider the manufacturing activity, it is clear that manufacturing activity de hors of event of its liability for the Central Excise as defined in Section 2(f), in our opinion, packaging cannot be said to be part of process of manufacture as defined in Section 2(f) in the facts and circumstances of the instant case. It is clearly a service provided as per terms of tender.

16. In the instant case in the entire process it is clear that while packaging, it is only the service which is provided and for was no discrimination made while making the classification. Decision was not in context of Central Excise Act. The decision was not with respect to the activity of packaging under Section 65(76)(b) and the definition under Section 2(f). It was also laid down that bottling fee, which is charged, is not excise duty, though it is an excise revenue for the State and it was within the competence of the State entry under the entry 66 of the list second and entry 8 of the list second of the Schedule of Constitution. We are concerned about the service tax in the instant case, inserted by Finance Act, 2005. The observations were made by the Division Bench in the context of classification which was made under M.P. Excise Act, 1915 where definition of manufacture is different and whether any service was rendered in the process was not the question agitated or decided. The decision is distinguishable and has no application to the controversy involved in the present petition.

Other decisions relied upon is Laghu Udyog Bharati and Anr. v. Union of India and Ors. MANU/SC/0444/1999. The Rule 2(d)(xii) and (xvii) as amended in the year 1997 of the Service Tax Rules, 1994, which provided that persons other than the clearing and forwarding agents or the persons other than that, separate charge is levied by separate bills. Packaging can be in the pouch or in different forms in a given situation, thus it is a service part of the activity which is being taxed, which is independent of the process of manufacture and cannot be said to be integral part of process of manufacture as excluded in section 65(76)(b) inserted by Finance Act, 2005 read with Section 2(f) of Central Excise Act. The Apex Court in Collector, Central Excise Bombay v. S.D. Fine Chemicals Pvt. Ltd. MANU/SC/1018/1995 : (1995) Supp. 2 SCC 336 has laid down that whether a particular process is covered by manufacture as defined in Section 2(f) is a question of fact, to be determined in the facts of each case. In Collector of Central Excise Hyderabad v. Jayant Oil Mills Pvt. Ltd. MANU/SC/0111/1989, the Apex Court held that all processes do not constitute manufacture, in our opinion, merely by providing service for bottling a new commodity, does not come into being new article, it is clearly a service provided. Manufacture is complete as soon as by the application of one or more process, the raw material undergoes some change. The moment there is transformation into a new commodity commercially known as a separate and distinct commodity having its own character and use, 'manufacture' takes place as held by the Apex Court in Aditya Mills Ltd. v. Union of India MANU/SC/0007/1988. In Collector of Central Excise Madras v. Kutty Flush Doors and Furniture Co. (P) Ltd. MANU/SC/0091/1988, it is held that by conversion of timber logs into sawn timber, no new product emerged by sawing of timber, therefore, higher excise duty on sawn timber was not leviable.

17. Shri H.S. Shrivastava has placed reliance on the decision of this Court in Som Distillers & breweries Pvt. Ltd. v. State of M.P. and Anr. 1997 (1) E.L.T. 319 in which this Court has considered the question of classification and imposition of special bottling licence fee. It is held that if distillers bring the manufactured liquor, then they will have to pay import duty under the garb of bottling. By this device, they stand to gain save import duty. In order to save the excise revenue a class which has obtained franchise and blending material for bottling was separately classified as against the other class which is locally bottling the liquor. Classification was held to be permissible. The decision is of no assistance to the question involved in the present case. It was rendered in the context of M.P. Excise Act, 1915 for imposition of duty and there good transport operators collecting the service tax, was held to be ultra vires of the Act. The decision renders no help to the petitioners as service tax is being realised by the Central Excise from the service provider only.

18. Another decision which has been relied upon is Ashirwad Ispat Udyog and Ors. v. State Level Committee and Ors. (1999) 32 VKN 65 in which definition of manufacture in M.P. General Sales Tax Act, 1958 was considered, where the assessee treated iron and steel scrap of considerable bulk by cutting it down by mechanical processes into pieces that may be conveniently utilised in rolling mills and foundries. Such treatment making saleable goods would, fall within the wide definition of "manufacture" under Section 2(j) of the M.P. General Sales Tax Act, 1958. In the instant transaction the tender notice makes it clear that what is provided by the distiller, is only a service and it cannot be said to be part of process of manufacture in view of the conditions mentioned in the tender notice.

19. As per provision of Section 68(1) of the Finance Act, 1994, "Every person providing taxable service to any person shall pay service tax at the rate specified in Section 66 in such manner and within such period as may be prescribed" and as per the provisions of Rule 6 of the Service Tax Rules, 1994, service tax is payable on the value of taxable services. Accordingly such distillers/bottlers shall pay service tax being a service provider.

20. Coming to the question whether liability can be passed on by the distillers/bottlers to the wholesalers/retail contractors. It is clear that service tax being an indirect tax, the element of service tax can be passed on to the service receiver so held by the Apex Court in T.N. Kalyana Mandapam Association v. Union of India and Ors. (supra).

21. It has not been disputed by Shri H.S. Shrivastava, learned Sr. Counsel that once packaging activity is held to be outside purview of Section 2(f) of Central Excise Act than service provider can pass on the liability on the retail contractors and so on. The submission raised is right and is supported by the aforesaid decision of the Apex Court, though the service tax can be realised by the Central Excise only from the service provider. In the decision (P-II) rendered by the learned Single judge of this Court, the only question which was considered, was that "whether service tax could be realised by the Central Excise from the retail contractors, who were not service provider, in that context the decision was rendered. It was not the question agitated or decided whether liability could be passed on by the distillers (service provider) to the retail contractors, thus, in our opinion, the letter issued by the respondents Nos. 2 and 4 restraining the service provider from recovery of service tax from retail contractor cannot be said to be justified, though at the same time the Central Excise has to recover the service tax from service provider only and not from retail contractor.

22. Resultantly, it is held that it is open to the Central Excise to recover the service lax from the service provider under Section 65(76)(b) on the packaging activity as inserted by Finance Act, 2005 and service provider can pass on the liability to the retail contractors. Accordingly writ petitions are disposed of. Parties to bear their own costs as incurred.

Dr. Rajiv Jain, Consultant Otolaryngologist (ENT Specialist), Sarvodaya Hospital and Research Centre, 864, Napier Town, Russel Chowk to Shastri Bridge Road, Jabalpur (Madhya Pradesh), Phone : 0761-403 5700/245 0249

BEFORE THE DISTRICT CONSUMER DISPUTE REDRESSAL FORUM, DISTRICT – JABALPUR (MADHYA PRADESH)

Block No.15-K, Scheme No. 18
Civic Centre, Jabalpur-482 001.    

Phone : 0761-231 0636/232 4891

COMPLAINT CASE NO.    769  OF 2016

COMPLAINANT                :       Bhagwandeen Badhel

VERSUS

OPPOSITE PARTIES                :       Sarvodaya Hospital & Research

Centre & Ors

APPLICATION FOR TAKING ON RECORD PRELIMINARY OBJECTION WITH RESPECT TO THE MAINTAINABILITY OF THE COMPLAINT CASE

Hon’ble Lordships,

The opposite party named above most respectfully begs to state as under:-

That for the facts and circumstances stated in the accompanying preliminary objection it is most respectfully prayed that this Hon’ble forum may graciously be pleased to dismiss the complaint case being based on false, frivolous and vexatious facts under Section 26 of the Consumer Protection Act, 1986.

PRAYER

WHEREFORE, for the facts and circumstances stated in the accompanying preliminary objection it is most respectfully prayed that this Hon’ble Forum may graciously be pleased to dismiss the complaint case being based on false, frivolous and vexatious facts under Section 26 of the Consumer Protection Act, 1986. Otherwise the opposite party shall suffer an irreparable loss and injury.

Any other order or direction which this Hon’ble Commission may deem it fit, proper and judicious under the circumstances of the case may also be passed.

                                             MEDICOLEGAL ADVISOR

Dated: April 28^th, 2017          

                 ADVOCATE

 FOR OPPOSITE PARTY NO 1,2

BEFORE THE DISTRICT CONSUMER DISPUTE REDRESSAL FORUM, DISTRICT – JABALPUR (MADHYA PRADESH)

Block No.15-K, Scheme No. 18
Civic Centre, Jabalpur-482 001.    

Phone : 0761-231 0636/232 4891

COMPLAINT CASE NO.    769  OF 2016

COMPLAINANT                :       Bhagwan Deen Badhel, Aged

about 51 years, S/o Mr. Sukhdev Badhel, R/o House No. 68, Nai Basti Kajarwara, Near Durga Temple, Post Office – Temarbheeta, Bhongadwar, District – Jabalpur (Madhya Pradesh)

VERSUS

OPPOSITE PARTIES                :       1. Sarvodaya Hospital & Research

Centre, 864, Napier Town, Russel Chowk, Shastri Bridge Road, Jabalpur (Madhya Pradesh),  Phone: 0761- 403 5700, 245 0249

                                  2.    Dr. Rajiv Jain, Sarvodaya

Hospital & Research Centre, 864, Napier Town, Russel Chowk, Shastri Bridge Road, Jabalpur (Madhya Pradesh), Phone ), Phone : 0761- 403 5700, 245 0249

3.    Dr. Surja Shekhar Ray, 259, Bhanwartal Road, Near Shastri Chowk, Napier Town, Jabalpur (Madhya Pradesh). Phone : 0761- 245 1188.

PRELIMINARY OBJECTION WITH RESPECT TO THE MAINTAINABILITY OF THE COMPLAINT CASE

Hon’ble Lordships,

The opposite parties No. 1 & 2  named above most respectfully beg to state as under:

1.  That at the very outset the opposite party by virtue of this preliminary objection denies each and every allegation of Professional Negligence alleged by the complainant in this complaint case, the instant complaint case filed before this Hon’ble Commission is founded on false, frivolous, vexatious and concocted facts, no prima facia case of professional negligence is established by the complainant before this Hon’ble forum, the primarily obligation of burden of proof till this date has not been discharged by the complainant. The entire averments of the alleged negligence committed by the opposite party is based on wholly incorrect, wrong and misconceived facts which are not corroborated from the documents placed by the complainant along with his complaint case, the alleged allegation of negligence stated to be committed by the opposite party is based on assumption and presumption which are wholly devoid of merit, the complaint case being vague is liable to be dismissed in limine with heavy cost and special costs throughout.

2.  That the complaint case is not maintainable in view of the fact that present complaint case is neither verified nor identified in accordance with Law, this complaint petition is in complete violation of the provision of Order VI Rule 15 of the Code of Civil Procedure, 1908, which obligate that every pleading shall be verified at the foot by the party or by one of the parties to the pleading. For ready reference of this Hon’ble forum the relevant provision of Order VI Rule 15 of the Code of Civil Procedure, 1908 is being reproduced herein under:

15. Verification of pleadings.—

(1) Save as otherwise provided by any law for the time being in force, every pleading shall be verified at the foot by the party or by one of the parties pleading or by some other person proved to the satisfaction of the Court to be acquainted with the facts of the case.

(2) The person verifying shall specify, by reference to the numbered paragraphs of the pleading, what he verifies of his own knowledge and what he verifies upon information received and believed to be true.

(3) The verification shall be signed by the person making it and shall state the date on which and the place at which it was signed.

(4) The person verifying the pleading shall also furnish an affidavit in support of his pleadings.

3.  That by virtue of this complaint case a total claim of about Rs.Five    lacs (Rs.5,00,000/=) is claimed, it is respectfully submitted that the claim is speculative, in order to circumvent and bye pass the civil court and misuse the jurisdiction of the District Consumer Forum, in order to save the court fee to the tune of 12.5% amounting to Rs. 62500/= applicable in the Civil court.

4.   That the Hon’ble National Commission in Charu Chhabra and another versus Jai Maa Infrastructure Private Limited, reported in III (2015) CPJ 292 (NC) was pleased to consider the aspect of the pecuniary jurisdiction,

5.   6.             the purpose behind filing this complaint before this forum is to bye pass the civil court and circumvent the procedure prescribed in the Consumer Protection Act for hearing a complaint having jurisdictional value despite knowing fully well that ultimately the complainants cannot get an amount of Rs. 5,00,000/=or more from the opposite party. We have before us, a case, where the complainants having invested only Rs.13,475/=, less than four months ago, want the Commission to award them a sum of more than there by giving them a return of 2695% on the investment made by them. The claim, to say the least is grossly inflated and highly unjustified and unreasonable. The opposite party, therefore, pray so to decline to entertain this complaint and reject the same.

6.   That the complainant by virtue of the instant complaint case has made huge, exaggerated and speculative demand bifurcated under various heads of the relief, it is submitted that the claim is not supported by an iota of documentary evidence, it is necessary to submit here that the Hon’ble National Commission in Rajni Gupta versus DLF Universal Limited III (2015) CPJ 149 (NC) was pleased to consider this aspect. The relevant extract of the judgment is being reproduced herein under for the convenience of this Hon’ble Commission:   

9.  There lies no rub in demanding as much as money as one feels correct. However, there should be some ‘basis’ for the same. The question of market value cannot be adjudicated by a Consumer Court which is to dispose of the case in a summary fashion. It is settled law that where huge demand/claim has been made, the complainant should be advised to knock at the doors of the Civil Court. See recent authorities reported in Pesi Dady Shroff v. Boehringer Ingetheim Denmark & Anr., Civil Appeal No. 9453 of 2013, decided on 10.7.2013 and Synco Industries v. State Bank of Bikaner & Jaipur & Ors., I (2002) CPJ 16 (SC)=I (2002) SLT 214=(2002) 2 SCC 1.     

7.   That the complainant has failed to establish the factum of loss and injury suffered by him, the relief worth more than Rs.Five Lacs is wholly illegal, arbitrary and un just which lacks corroboration the entire relief claimed by virtue of the complaint case are speculative and are not corroborated by any evidence, it is worth to mention here that no cause of action has accrued to the complainant to claim a relief valuing Rs. five   Lacks, the entire relief is speculative, exaggerated and inflated intended to by-pass the civil court so to save the court fee to the tune of 12.5% amounting to Rs. 62500/=(Rs. sixty two thousand five hundred only)and to attract the original jurisdiction of this Hon’ble forum. It is submitted here that relief of Rs.Five Lacks towards expenses incurred towards the treatment is not accepted in view of the lack of the evidence, further towards compensation are not corroborated by an iota of evidence, it is pertinent to mention here that the complainant in relief to himself valued the claim of compensation to Rs.five Lacks only, this relief of Rs.  five   Lacks is speculative on the face of record, the case is blatant misuse of the benevolent institution of the Consumer Commission established under Section 9 of the Consumer Protection Act, 1986 and is liable to be dismissed with heavy cost.    

8.   That the complaint case is bad in view of the non jointer of necessary parties, it is submitted here that the patient remained for the treatment under various doctors and hospitals, however with mala fide intention and with ulterior motive,the facts have been hidden away and has not been arrayed as parties in this complaint case. It is further submitted that the patient was attended with due care and caution by the opposite parties and no negligence or deficiency in service has been committed by the opposite parties in this case. It is worth to mention here that the complainant alleges that the cause of action arise to him only when,the complainant took treatment and operation under the vigil of opposite party. However the complainant deliberately on false and concocted documents is filing this complaint case before this Hon’ble forum.

9.   That it is submitted here that the case of Medical Negligence stand on a different footing contrast to other cases which are filed before the Consumer Forum, in the cases pertaining to Professional Negligence the onus lies heavily on the part of the complainant to prove and establish the factum of negligence and only thereafter the burden that negligence has not been committed is shifted at the shoulder of the treating doctor, with reference to this the opposite parties rely on the judgment of the Hon’ble Supreme Court in C.P. Sreekumar (Dr.) versus S. Ramanujam, (2009) 7 SCC 130 at page 140, wherein the scope of the burden of proof was discussed by the Hon’ble Apex Court:

37.     We find from a reading of the order of the Commission that it proceeded on the basis that whatever had been alleged in the complaint by the respondent was in fact the inviolable truth even though it remained unsupported by any evidence. As already observed in Jacob Mathew case (2005) 6 SCC 1 : 2005 SCC (Cri) 1369 the onus to prove medical negligence lies largely on the claimant and that this onus can be discharged by leading cogent evidence. A mere averment in a complaint which is denied by the other side can, by no stretch of imagination, be said to be evidence by which the case of the complainant can be said to be proved. It is the obligation of the complainant to provide the facta probanda as well as the facta probantia.

1.  That it is respectfully submitted that even the principle of res ipsa loquitur (things speak for itself) is not applicable in each and every case pertaining to medical negligence, simply because the complainant suffered in view of any known complication/ailment shall not make liable the treating doctor for the treatment rendered by him. The Hon’ble Supreme Court in Jacob Mathew versus State of Punjab and another reported in (2005) 6 SCC at page 1, has occasion to deal with the extent of the Medical Practitioner liability in criminal and civil law:

 “Negligence by professionals

18.    In the law of negligence, professionals such as lawyers, doctors, architects and others are included in the category of persons professing some special skill or skilled persons generally. Any task which is required to be performed with a special skill would generally be admitted or undertaken to be performed only if the person possesses the requisite skill for performing that task. Any reasonable man entering into a profession which requires a particular level of learning to be called a professional of that branch, impliedly assures the person dealing with him that the skill which he professes to possess shall be exercised with reasonable degree of care and caution. He does not assure his client of the result. A lawyer does not tell his client that the client shall win the case in all circumstances. A physician would not assure the patient of full recovery in every case. A surgeon cannot and does not guarantee that the result of surgery would invariably be beneficial, much less to the extent of 100% for the person operated on. The only assurance which such a professional can give or can be understood to have given by implication is that he is possessed of the requisite skill in that branch of profession which he is practicing and while undertaking the performance of the task entrusted to him he would be exercising his skill with reasonable competence. This is all what the person approaching the professional can expect. Judged by this standard, a professional may be held liable for negligence on one of two findings: either he was not possessed of the requisite skill which he professed to have possessed, or, he did not exercise, with reasonable competence in the given case, the skill which he did possess. The standard to be applied for judging, whether the person charged has been negligent or not, would be that of an ordinary competent person exercising ordinary skill in that profession. It is not necessary for every professional to possess the highest level of expertise in that branch which he practices.

25.    A mere deviation from normal professional practice is not necessarily evidence of negligence. Let it also be noted that a mere accident is not evidence of negligence. So also an error of judgment on the part of a professional is not negligence per se. Higher the acuteness in emergency and higher the complication, more are the chances of error of judgment. At times, the professional is confronted with making a choice between the devil and the deep sea and he has to choose the lesser evil. The medical professional is often called upon to adopt a procedure which involves higher element of risk, but which he honestly believes as providing greater chances of success for the patient rather than a procedure involving lesser risk but higher chances of failure. Which course is more appropriate to follow, would depend on the facts and circumstances of a given case. The usual practice prevalent nowadays is to obtain the consent of the patient or of the person in-charge of the patient if the patient is not in a position to give consent before adopting a given procedure. So long as it can be found that the procedure which was in fact adopted was one which was acceptable to medical science as on that date, the medical practitioner cannot be held negligent merely because he chose to follow one procedure and not another and the result was a failure.   

26.    No sensible professional would intentionally commit an act or omission which would result in loss or injury to the patient as the professional reputation of the person is at stake. A single failure may cost him dear in his career. Even in civil jurisdiction, the rule of res ipsa loquitur is not of universal application and has to be applied with extreme care and caution to the cases of professional negligence and in particular that of the doctors. Else it would be counter-productive. Simply because a patient has not favourably responded to a treatment given by a physician or a surgery has failed, the doctor cannot be held liable per se by applying the doctrine of res ipsa loquitur. 

30.    The purpose of holding a professional liable for his act or omission, if negligent, is to make life safer and to eliminate the possibility of recurrence of negligence in future. The human body and medical science, both are too complex to be easily understood. To hold in favour of existence of negligence, associated with the action or inaction of a medical professional, requires an in-depth understanding of the working of a professional as also the nature of the job and of errors committed by chance, which do not necessarily involve the element of culpability.

2.        That there is no expert evidence on record to suggest any negligence committed by the opposite parties in the instant case, neither any medical literature is filed by the complainant to establish her case, bald, baseless and concocted facts are made by virtue of the instant case claiming illegal and arbitrary amount, it is vehemently and vociferously reiterated by the opposite party that no negligence is been committed by them in this case, no case of deficiency in service is established by the complainant rather vague and baseless allegations are made which are afterthought and implanted to extract illegal money from the opposite parties. The opposite parties rely on the judgment of the Hon’ble National Commission in Sethuraman Subramaniam Iyer versus Triveni Nursing Home and another reported in I (1998) CPJ 110 (NC), wherein it was held that complainant since failed to adduce expert evidence hence his cause of Medical Negligence did not stand establish and no case is made out against the doctor. The relevant extract of the judgment is being reproduced herein under for the convenience of this Hon’ble Commission 

….It appears from the record that the complainant did not requisition the services of any expert to support his allegations. In the absence of any expert evidence on behalf of the complainant, the State Commission was right in relying upon the affidavits filed by the four doctors on behalf of the respondents. In our view, the State Commission was right in holding that there was no negligence on the part of the respondents. The State Commission rightly analysed and appreciated the materials placed on the record. The State Commission arrived at the finding after taking into consideration the totality of the circumstances. No case is made out by the appellant for interference with the order passed by the State Commission.

In another judgment by the Hon’ble National Commission in Madan Surgical and Maternity Hospital and another versus Smt. Santosh and another Revision Petition No. 3527 of 2012 decided on 1.4.2014, it has been held that that 4 D’s has to be fulfilled to make out the case of Medical Negligence, namely:

Duty- A professional owed duty to patient

Deficiency- Breach of such duty

Direct Causation- injury caused by the breach (Causa Causans)

Resulting Damages

          

3.      That the instant case involves the issues of complicated and complex nature which requires leading of exhaustive evidence as well as examination and cross examination of witness, since the certificate issued by Dr. S/W/ Thatte is not corroborated and proved by the complainant, such a intricate and complex nature of dispute cannot be adjudicated within the summary jurisdiction of this Hon’ble Commission, the opposite party rely on the judgment of the Hon’ble Apex Court in Trai Foods Ltd. v. National Insurance Co., (2004) 13 SCC 656, wherein the principle of Law was summarized as under

4. Learned counsel appearing for the respondent Insurance Company has stated that the decision in J.J. Merchant1 did not deviate from the principles enunciated by this Court in Synco Industries v. State Bank of Bikaner and Jaipur where this Court has said that where detailed evidence would have to be led to prove the claim and thereafter to prove the damages, it was not appropriate for such cases to be heard and disposed of in the summary jurisdiction of the National Commission and that the more appropriate forum was the civil court.

5. Having heard the submissions, we are of the view that the learned counsel for the respondents is correct. In J.J. Merchant this Court has not denied the discretion of the Commission to refer the complainant to the civil court for appropriate relief, in case the complaint involves complicated issues requiring recording of evidence of experts which may delay the proceedings.

6. The only question to be decided is, when should this jurisdiction be exercised by the Commission. In our view the Commission should address itself to the quantity of the claim, the nature of the claim, the nature of the evidence which would be required to be submitted both in respect of the claim and the damages suffered and the nature of the legal issues before deciding that the matter ought to be decided by the civil courts in the regular course. It is not disputed that the Consumer Forum has been set up to grant speedy remedy. The Consumer Forums have been given the responsibility of achieving this object. They were not meant to duplicate the civil courts, and subject the litigants to delays which have become endemic in the civil courts.

10.  That it is axiomatic to submit that the degree of skill and care required by a medical practitioner is provided in Halsbury’s Laws of England (Fourth Edition, Vol. 30, Para 35). The relevant extract is being quoted for the perusal of this Hon’ble Commission :

The practitioner must bring to his task a reasonable degree of skill and knowledge, and must exercise a reasonable degree of care. Neither the very highest nor a very low degree of care and competence, judged in the light of the particular circumstances of each case, is what the law requires, and a person is not liable in negligence because someone else of greater skill and knowledge would have prescribed different treatment or operated in a different way; nor is he guilty of negligence if he has acted in accordance with a practice accepted as proper by a responsible body of medical men skilled in that particular art, even though a body of adverse opinion also existed among medical men.

Deviation from normal practice is not necessarily evidence of negligence. To establish liability on that basis it must be shown, (1) that there is a usual and normal practice; (2) that the defendant has not adopted it; and (3) that the course in fact adopted is one no professional man of ordinary skill would have taken had he been acting with ordinary care.

11.  That the Hon’ble Supreme Court in a case of Achutrao Haribhau Khodwa & Others v. State of Maharashtra & Others, reported in (1996) 2 SCC 634, made the following observations on the issue of Medical Negligence, which is being reproduced for the perusal of this Hon’ble Commission:

This Court noticed that in the very nature of medical profession, skills differs from doctor to doctor and more than one alternative course of treatment are available, all admissible. Negligence cannot be attributed to a doctor so long as he is performing his duties to the best of his ability and with due care and caution. Merely because the doctor chooses one course of action in preference to the other one available, he would not be liable if the course of action chosen by him was acceptable to the medical profession

12.  That the Hon’ble Supreme Court in the judgment of State of Punjab v. Shiv Ram & Ors., VI (2005) SLT 498, which was a case of a failed tubectomy leading to a plea of medical negligence. This is what the Hon’ble Court had to say in paragraph 33:

A Doctor, in essence, needs to be inventive and has to take snap decisions especially in the course of performing surgery when some unexpected problems crop up or complication sets in. If the medical profession, as a whole, is hemmed in by threat of action, criminal and civil, the consequence will be loss to the patients. No doctor would take a risk, a justifiable risk in the circumstances of a given case, and try to save his patient from a complicated disease or in the face of an unexpected problem that confronts him during the treatment or the surgery. It is in this background that this Court has cautioned that the setting in motion of the criminal law against the medical profession should be done cautiously and on the basis of reasonably sure grounds. In criminal prosecutions or claims in tort, the burden always rests with the prosecution or the claimant. No doubt, in a given case, a doctor may be obliged to explain his conduct depending on the evidence adduced by the prosecution or by the claimant. That position does not change merely because of the caution advocated in Jacob Mathew in fixing liability for negligence, on doctors

13.  That another judgment of the Hon’ble Supreme Court which deserves special mention before this Hon’ble forum is Martin F. D’Souza versus Mohd. Ishfaq wherein the Hon’ble Court cautioned the courts as well as the tribunals in India dealing with the cases of the Medical Negligence, a note of caution was issued by the Hon’ble Apex Court not to straight away issue notice on the treating doctors without ascertaining the substance of the issue involved and the evidences and proof tendered by the complainant. For the necessary perusal the paragraph of the judgment is being reproduced for the convenience of this Hon’ble Commission :

47. Simply because a patient has not favourably responded to a treatment given by a doctor or a surgery has failed, the doctor cannot be held straightaway liable for medical negligence by applying the doctrine of res ipsa loquitur. No sensible professional would intentionally commit an act or omission which would result in harm or injury to the patient since the professional reputation of the professional would be at stake. A single failure may cost him dear in his lapse.

14.  That from the aforementioned propositions of the settled principles of Law it is explicit that the onus of proving the negligence of Medical Practitioner rests on the complainant who is endowed to prove the negligence and only then the burden shifts on the Medical Men, in the instant case not an iota of evidence has been placed before this Hon’ble Commission except bald, baseless and vague allegations which are not corroborated by any expert evidence or medical literature on record to substantiate the case. Thus the basic and onerous principle with respect to the burden of proof has not been discharged till this date by the complainant, thus the complaint case is liable to be dismissed at the very threshold with exemplary cost.

15.  That the opposite parties respectfully craves leave from this Hon’ble Commission to file additional written synopsis with details of the treatment given to the patient along with the renowned Medical Literature during the course of oral arguments.

16.  That in view of the above the complaint case of the complainant is devoid of merit and is liable to be dismissed under Section 26 of the Consumer Protection Act, 1986 with cost and punitive cost.

                    

WRITTEN STATEMENT ON BEHALF OF OPPOSITE PARTY NO. 2 DR. RAJIV JAIN

Parawise reply

17.        Contents of Para 1 & 2 are matter of record and needs no reply.

18.        Contents and allegations of Para 3 & 4 are specifically denied. True material fact are like this - One patient Mr. Bhagwandin Badhel, was examined by opposite party No. 3 on 21.08.2016. The findings described by opposite party No. 3 were CSOM BE-meaning Chronic Suppurative Otitis Media Both Ear and that his hearing had very much gone down -right ear profound deafness, left ear very severe to profound deafness. This patient was examined separately consequently by opposite party no. 2- Dr. Rajiv Jain on 12.10.2016, when he was found to have CSOM BE with deteriorated hearing on audiogram : right ear profound mixed deafness and also on left side profound mixed deafness. 

19.        Contents and allegations of para 5 are specifically denied. The complainant has revealed his sole motto to file this false frivolous vexatious inflated claim in form of concoted story hiding away the fact, before this Hon. District Forum , bye passing the civil court and the court fee , to EXTORT ILLEGAL SUM OF MONEY. It is specifically denied that complainant is entitled for sum of Rs.2,00,000/- to wards physical and mental agony together with Rs. 1,00,000/- for financial loss, Rs.2,00,000/- towards social loss, total Rs. 5,00,000/- as the sum of compensation from opposite parties. It was professional fee ,TOTAL EXPENSES INCURRED WERE  only Rs.13475/= which have been charged by opposite parties for their expertise skill. There was no question of lack of qualification on the part of opposite parties no 1 & 2 they had the skill and knowledge of their specialized subject. They cannot be held negligent on this count at all. An analysis of the spirit of other judgments also does not help the complainant because there has been no error of judgment, dereliction of duty or non-application of reasonable degree of skill. Where you get a situation which involves the use of some special skill or competence, then the test as to whether there has been negligence or nor is not the test of the man on the top of a Clapham omnibus because he has not got this special skill. The test is the standard of the ordinary skilled man exercising and professing to have that special skill.

20.        Contents and allegations of para 6 & 7 are specifically denied. It is humbly submitted that "CSOM BE" means 'Chronic Suppurative Otitis Media’ Both Ears and this disease process which is inflammatory in origin leads to destruction of ear anatomy had caused diminution of hearing power in both ears, in the right ear profound deafness, left ear very severe to profound deafness ,meaning that the hearing in right  ear had gone down to the highest degree and that in the left ear also it had gone down almost to the highest degree on 21.08.2016 itself. Needless to emphasize here that profound or very severe to profound hearing loss means that the person has lost hearing and that he fails to undertake speech discrimination / understand speech, is deaf for all practical purposes. Further it is submitted that the patient – complainant was given date of operation for 01.09.2016 by opposite party no 3, so to achieve only a dry ear, from records, there was never any possibility for improvement in level of hearing loss nor could there be any further deterioration from the level of hearing loss by the proposed surgery of tympanoplasty on left ear as investigated and reported on 21.08.2016 from records . The opposite party No. 2 has operated on the complainant on 12.10.2016 for left ear to achieve dry ear on this patient, the hearing in this left ear had already deteriorated to severe to profound deafness, there was no further deterioration in hearing level possible from surgery of Tympanoplasty. The complaint filed is on no basis .It needs to be set aside out rightly with heavy costs payable to opposite party no 2.

21.        Contents and allegations of para 8  & 9 (wrongly typed as “10”) are specifically denied. In view of the above discussion, it is crystal clear like light of the day that opposite parties did their duty with utmost care and caution therefore there is no question of medical negligence or deficiency in service, the same is specifically denied.    

22.        Contents of para 10 & 11 (Wrongly typed as “11” & “10”) are formal in nature and needs no reply.

23.        The answering opposite parties relies on and file documents as per list and will rely on and file more documents as and when necessary.

Affidavit is false and specifically denied.

An affidavit in support of this written statement is being filed herewith.

Accordingly the instant complaint, being devoid of any merit, is liable to be rejected, with heavy costs.

PLACE : JABALPUR                           OPPOSITE PARTY no 2

DATED :   18.07.2016                 Medicolegal advisor

                              ADVOCATE FOR OPPOSITE PARTY No.2

V E R I F I C A T I O N

I, Dr. Rajiv Jain, Consultant Otolaryngologist (ENT Specialist), Sarvodaya Hospital and Research Centre, 864, Napier Town, Russel Chowk to Shastri Bridge Road, Jabalpur (Madhya Pradesh), Phone : 0761-403 5700/245 0249, do hereby verify and sign on this day-------- of April, 2017 at Jabalpur and states that the contents of Para 1 to end of the written statement are true to my personal knowledge and belief.

                                                                                  OPPOSITE PARTY no 2

BEFORE THE DISTRICT CONSUMER DISPUTE REDRESSAL FORUM, DISTRICT – JABALPUR (MADHYA PRADESH)

 Block No.15-K, Scheme No. 18 Civic Centre, Jabalpur-482 001 Phone : 0761-2310636
COMPLAINT CASE NO.    769  OF 2016

COMPLAINANT              :        Bhagwandeen Badhel

VERSUS

OPPOSITE PARTY                   :        Sarvodaya Hospital & Research

                                                          Centre & Ors.

AFFIDAVIT

I, Dr. Rajiv Jain, Consultant Otolaryngologist (ENT Specialist), Sarvodaya Hospital and Research Centre, 864, Napier Town, Russel Chowk to Shastri Bridge Road, Jabalpur (Madhya Pradesh), Phone : 0761-403 5700/245 0249, the above named deponent, solemnly affirm and state on oath as under:

1.    That I am opposite party No. 2 in the above mentioned case and am fully conversant with the facts deposed to in the written statement.

2.    That the contents of paragraphs 1 to end of the accompanying written statement are true to my personal knowledge and the contents of paragraphs are based on legal advice, which I believe to be true. No material has been concealed and no part is false.

3.    That the Annexure No(s). to the accompanying case are true copies of the originals and I have compared the said Annexures with their respective originals and certify them to be true copies thereof.

PLACE : JABALPUR                                   

DATED :                                                           DEPONENT

                                        VERIFICATION

I, DR. RAJIV JAIN, the above named deponent do hereby verify on oath that the contents of the affidavit above are true to my personal knowledge and nothing material has been concealed or falsely stated. Verified at ______this______day of _______

DEPONENT