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Running a clinic is not commercial activity: HC

High court gave the final verdict as hundreds of clinics closed down across India

Policy Pulse
Publish Date: Oct 27 2016 5:50PM | Updated Date: Oct 27 2016 5:50PM

Running a clinic is not commercial activity: HC

Private clinic cannot be termed as commercial establishment; high court gave the final verdict as hundreds of clinics closed down across India as they were termed as commercial establishment.

 
However a division bench of Justices V M Kanade and P D Kode has struck down a 1977 amendment that included the medical practitioners' establishments.
 
The constitutional validity of the section, 2 (7), was challenged by a gyanecologist based in Andheri, Mumbai. Dr Shubhada Motwani was prosecuted for not registering her clinic. The punishment comprised a fine, calculated for each day of non-registration.
 
Later she moved to court to get the justice. Her lawyer, S C Naidu, argued that a medical clinic should not fall within the definition of commercial establishment as a doctor provides service to patients, an activity that cannot be termed commercial.
 
He argued that the amendment had included in its ambit legal practitioners and CAs as well. Lawyers moved court, and the HC held, in 1984, that the amendment was ultra vires, striking down their inclusion in the definition of commercial establishment. In 2006, CAs were given relief.
 
In the Motwani case, the judges upheld Naidu's submission that an SC judgment of May 2, 1968, where it was held that the private dispensary of a doctor are not a part of commercial establishment, will apply.