In 1995, the Supreme Court delivered a historic decision in Indian Medical
Association v VP Shantha
which brought the medical profession within the ambit
of a ‘service’ as defined in Section 2(1)(o) of the Consumer Protection Act,
1986, and clarified earlier conflicting decisions regarding this issue given by
various High Courts and Consumer Forums.
This decision redefined the
relationship between patients and medical professionals as contractual and
recognized the right of patients to file a complaint under the Consumer
Protection Act for injuries sustained in the course of medical treatment.
Patients were provided with an alternative, inexpensive and speedy remedy for
adjudication of medical negligence claims.
Indian Medical Association v/s
Respondent – V.P. Shanta & Ors
- Supreme Court Of India
Bench/Judges – Justice S.C. Agrawal , Justice Kuldip Singh , Justice B.L.
Citation- 1996 AIR 550, 1995 SCC (6) 651 -
Date of Judgement- 13 November 1995
Whether a medical practitioner, hospital, or nursing home can be regarded as
rendering ‘service’ under Section 2(1)(o) of the Consumer Protection Act, 1986?
Under what circumstances can the service render at a hospital/nursing be
regarded as ‘service’ under Section 2(1)(o) of the Consumer Protection Act,
Brief Facts of the case
A series of decisions led to confusion and contradictions in the judiciary
regarding the scope and application of the Act in cases of medical negligence.
In Dr. A.S. Chandra v. Union of India, a Division Bench of the Andhra Pradesh
High Court held that service rendered for consideration by private medical
practitioners, private hospitals, and nursing homes is ‘service’ for Section
2(1)(d) of the Act and the persons availing such services are ‘consumers’ within
the meaning of Section 2(1)(d) of the Act.
A different view was taken in the case of Dr.C.S. Subramanian v. Kumarasamy &
., where a Division Bench of the Madras High Court held that the services
rendered to a patient by a medical practitioner or by a hospital by way of
diagnosis and treatment, both medicinal and surgical, would not be a ‘service’
and therefore a patient cannot be considered to be a `consumer’ within the
meaning of the Act. It, however, recognized paramedical services as falling
under the ambit of the definition of ‘service’.
Conflicting approaches were taken in various judgments of the National
Commission. In its judgment and order dated December 15, 1989, it held that
persons who avail themselves of the facility of medical treatment in Government
hospitals are not consumers and since the payment of taxes by the public would
not constitute ‘consideration’, the service would essentially be rendered free
of charge falling in the exclusionary part of the definition of ‘service’ under
the Act. In its judgment dated April 21, 1992, the National Commission held that
the activity of providing medical assistance for payment carried on by hospitals
and members of the medical profession falls within the scope of the expression
Owing to the lack of uniformity in judicial interpretation a series of appeals,
special leave petitions, and the Writ Petitions were filed against the
contradictory decisions of the High Courts and subordinate courts. These were
heard together and decided by the Supreme Court in the present case of Indian
Medical Association v VP Shantha.
Arguments Advanced of the Case
Issue 1. Whether a medical practitioner, hospital, or nursing home can be
regarded as rendering ‘service’ under Section 2(1)(o) of the Consumer Protection
The Supreme Court keeping in mind the wide amplitude of the definition of
`service’ in the main part of Section 2(1)(o), held in the affirmative.
It rejected the argument put forth by the petitioners contending that services
rendered by a person belonging to a ‘profession’ would not fall within the ambit
of the Act. Even though medical practitioners are governed by the Indian Medical
Council Act and are subject to the disciplinary control of Medical Councils of
India, they are not immune from a claim for damages on the ground of negligence.
The Court was unable to agree with the submission that a determination about
deficiency in medical service for Section 2(1)(g) cannot be judged based on any
fixed norms. It observed that a deficiency in service may be due to obvious
faults attributable to medical practitioners which can be easily established
such as removal of the wrong limb or the performance of an operation on the
wrong patient, etc. The Court held that a determination about deficiency in
service is to be made by applying the Bolam test as laid down in the English
case of Bolam v Friern Hospital Management Committee for tortious action for
damages for negligence.
The Bolam test provides that a medical practitioner must
bring to his task a reasonable degree of skill and knowledge and must exercise a
reasonable degree of care. When consulted by a patient, he owes a duty of care
in deciding whether to undertake the case, in deciding what treatment, and in
the administration of that treatment. A breach of any of these duties gives a
right of action for negligence to the patient.
Issue 2. Under what circumstances can the service render at a hospital/nursing
be regarded as ‘service’ under Section 2(1)(o) of the Consumer Protection Act,
Holding that the definition of ‘service’ is wide enough to include services
rendered by medical practitioners, the Supreme Court proceeded to consider the
exclusionary part of Section 2(1)(o). The exclusionary part excludes services
rendered (i) free of charge; or (ii) under a contract of personal service.
Concerning (i), it held that doctors and hospitals/nursing homes who render
service without any charge to every person availing the service would not fall
within the ambit of the Act. This would fall in the exclusionary part of the
definition of service. However, medical services rendered on payment of
consideration are included under Section 2(1)(o).
The Court further considered a situation where free medical services are
provided to only those persons who cannot afford to pay off them, and held that
such services would undoubtedly fall within the ambit of the Act since these
expenses are met out of the income received from paying patients.
Concerning (ii), the court reiterated the distinction between a ‘contract of
service’ and a ‘contract for service’. The fundamental difference is that in the
former, the employer enjoys a degree of control over the work of the employee
whereas in the latter, the independent contractor so employed is not subject to
the control of the employer and is free to exercise discretion. The court held
that the contract between the medical practitioner and his patient cannot be
treated as a contract of personal service as a master-servant relations are
absent. It would be a contract for services and therefore, will not be covered
by the exclusionary part.
The Court finally concluded that Service rendered to a patient by a medical
practitioner (except where the doctor renders service free of charge to every
patient or under a contract of personal service), by way of consultation,
diagnosis, and treatment, both medicinal and surgical, would fall within the
ambit of ‘service’ as defined in Section 2(1) (o) of the Act.
Section 2 (1) (0) and Section 2 (1) (d) of the Consumer Protection Act , 1986.
Section 2 (1) (0) defines service.
means service of any description which is made available to
potential 19 [users and includes, but not limited to, the provision of]
facilities in connection with banking, financing insurance, transport,
processing, supply of electrical or other energy, board or lodging or
both, [housing construction,] entertainment, amusement or the purveying of news
or other information, but does not include the rendering of any service free of
charge or under a contract of personal service; "spurious goods and services"
mean such goods and services which are claimed to be genuine but they are
actually not so.
Section 2 (1) (d) defines who is consumer.
means any person who:
- buys any goods for a consideration which has been paid or promised or
partly paid and partly promised, or under any system of deferred payment and
includes any user of such goods other than the person who buys such goods
for consideration paid or promised or partly paid or partly promised, or
under any system of deferred payment, when such use is made with the
approval of such person, but does not include a person who obtains such
goods for resale or for any commercial purpose; or
- hires or avails of any services for a consideration which has been paid
or promised or partly paid and partly promised, or under any system of
deferred payment and includes any beneficiary of such services other than
the person who hires or avails of the services for consideration paid or
promised, or partly paid and partly promised, or under any system of
deferred payment, when such services are availed of with the approval of the
first mentioned person but does not include a person who avails of such
services for any commercial purpose.
The ratio decendi of the case is medical negligence. Medical negligence is
basically the misconduct by medical practitioner by not providing enough care
resulting in breach of their duties and harming the patients which are
consumers. They also argued whether this was the case of negligence in Torts or
IPC, later on it was decided that any negligence in medical field would be
determined under CPA, 1986. The Supreme court also stated that a medical
practitioner, nursing home or a hospital can be regarded as rendering service
under CPA, 1986.
Analysis of the Case
Due to the increasing number of medical negligence cases, numerous complaints
were filed before the consumer courts seeking compensation under the Consumer
Protection Act, 1986. There was ambiguity on the issue of whether doctors,
hospitals, and medical practitioners fall within the ambit of ‘service’ as
defined in Section 2(1)(o) of the Act, thereby recognizing patients as
‘consumers’ and giving them the right to approach the consumer courts to seek
Section 2(1) (o) of the Act defines ‘service’ as:
service of any description which is made available to potential (users and
includes the provision of facilities in connection with banking, financing
insurance, transport, processing, the supply of electrical or other energy,
board or lodging or both, housing construction, entertainment, amusement or the
purveying of news or other information, but does not include the rendering of
any service free of charge or under a contract of personal service.
Neither does the definition expressly
include or does it exclude medical services. In the exclusionary part of the
definition, an interpretation could be adopted which brought medical services
not rendered free of charge under the ambit of ‘service’. Another question to be
considered was whether such services are provided under a ‘contract of personal
service’ to be excluded or not.
These issues were subject to consideration in a series of decisions delivered by
various High Courts and National Consumer Courts, which gave contrasting and
conflicting interpretations. Many Writ Petitions and Special Leave Petitions
were then filed before the Supreme Court against these decisions and judgments.
In 1995, the Supreme Court delivered a historic decision in the case of Indian
Medical Association v VP Shantha
which brought the medical profession within the
ambit of a ‘service’ as defined in Section 2(1)(o) of the Consumer Protection
Act, 1986 and clarified the earlier decisions.
As a result of this judgement , medical profession has been brought under the
Section 2(1) (0) 0f CPA , 1986 and also , it has included the following
categories of doctors/hospitals under this Section:
- All medical / dental practitioners doing independent medical / dental
practice unless rendering only free service.
- All hospitals having free as well as paying patients and all the paying
free category patients receiving treatment in such hospitals.
- Medical / Dental practitioners and hospitals paid by an insurance firm
for the treatment of a client or an employment for that of an employee.
This landmark decision brought in a significant interpretation of medical
negligence liability, by subjecting the medical profession to the Consumer
Protection Act. Patients’ rights were recognized through the conferring of
consumer status, allowing them to file complaints in cases of deficiency in
rendering medical services.
However, this decision has received criticism from the community of medical
practitioners for making the medical profession vulnerable to excessive suits,
many of which are filed to harass doctors or to evade the payment of medical
bills. While it is important to protect the integrity of this profession, the
growing cases of medical negligence are a matter of concern. The interpretation
of ‘service’ by the Supreme Court seeks to safeguards the interest and welfare
of patients, which is paramount.
- Indian Kanoon https://indiankanoon.org/
- Talha Abdul Rahman, Medical negligence and doctors’ liability, Indian
Journal of Medical Ethics https://ijme.in/articles/medical-negligence-and-doctors-liability/?galley=print#:~:text=In%201995%2C%20the%20Supreme%20Court,Act%2C%201986%20(5).&text=They%20are%20contracts%20for%20service,sued%20in%20Consumer%20Protection%20Courts.
- Joga Rao S V. Medical negligence liability under the consumer protection
act: A review of judicial perspective. Indian J Urol 2009 http://www.indianjurol.com/article.asp?issn=0970-1591;year=2009;volume=25;issue=3;spage=361;epage=371;aulast=Joga