Indian Medical Association V.P.Shantha
1996 AIR 550
Factual History Or Background:-
Consumer Protection Act was enacted in 1986 as to protect consumer. The Consumer Protection Bill, 1986 seeks to provide for better protection of the interests of consumers and for the purpose, to make provision for the establishment of Consumer councils and other authorities for the settlement of consumer disputes and for matter connected therewith. It seeks, inter alia, to promote and protect the rights of consumers such as-
Ø The right to be protected against marketing of goods which are hazardous to life and property;
Ø The right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices;
Ø The right to be assured, wherever possible, access to an authority of goods at competitive prices;
Ø The right to be heard and to be assured that consumers interests will receive due consideration at appropriate forums;
Ø The right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers; and
Ø The right to consumer education.
As there were increasing case relating to Doctor (Medical) Negligence, and it was ambiguous that whether medical services are services under COPRA, 1986 or not and whether hospital or doctor or medical practitioner is in the ambit of COPRA, 1986 or not. Also, there were different contrasting and conflicting decisions and rationale regarding this issue were given by various High Courts and other lower courts. Many a Special Leave Petition were filed in the Supreme Court against decisions and judgments of subordinate courts. Supreme Court faced very big flow of SLPs coming in. Hence, in this PIL, a writ was filed in Supreme Court under Article 32 of Constitution of India, to decide upon Scope and Jurisdiction of the Consumer Protection Act, 1986. Some of the cases and SLPs, which have contrasting and dissimilar decisions, are A.S. Chandra v. Union of India, Dr.C.S. Subramanian v. Kumarasamy & Anr., Dr. Sr. Louie & Anr. v. Smt. Kannolil Pathumma & Anr., Cosmopolitan Hospital (P) Ltd., and Dr. K. Venogopolan Nair.
Section 2(1) (d) of Consumer Protection Act, 1986, which defines “Consumer” of service as a person who 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 of any commercial purpose.
Section 2(1) (o) of Consumer Protection Act, 1986, which 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, 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.
Section 2(1) (g) of Consumer Protection Act, 1986, states that "Deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
Section 14 (1) (d) of Consumer Protection Act, 1986,deals with “Finding of District Forum”, If, after the proceeding conducted under section 13, the District Forum is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services are proved, it shall issue an order to the opposite party directing him to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party.
· Bolam v Friern Hospital Management Committee  1 W.L.R. 582
· Dharangdhara Chemical Works Ltd. v State of Saurashtra, AIR 1957 SC 264
· Lucknow Development Authority vs M.K. Gupta, 1994 AIR 787
1. Whether and, if so, in what circumstances, a medical practitioner can be regarded as rendering 'service' under Section 2(1)(o) of the Consumer Protection Act, 1986
2. Whether the service rendered at a hospital/nursing home can be regarded as 'service' under Section 2(1) (o) of the Act.
v First issue which was raised in petition dealt with services of medical practitioner are services under Consumer Protection Act, 1986. It was contended from the side of respondent IMA that law distinguishes between profession and occupation and the Act include only occupational services not those of professional services under Section 2(1)(o) of the Act. So, medical profession being a professional service should not be covered under the Act.
This argument was rejected by Hon’ble Judge as he said that medical practitioner should be held liable when they are negligent and to find out their negligence Bolam test is sufficient enough.
v Respondent argued that as Section 2(1) (g) contains certain basis on which service can be treated as deficient. Since, these basis are limited and rigid, also have less application in medical services.
This contention was also rejected as section 14 (1) (d) includes in finding court may award compensation on basis of damage suffered by negligence of opposite party.
v It was urged from side of respondent that medical services are Contract of personal service which implies that medical services are not services under Section 2(1) (o) as Contract of personal service is exclusionary part of the services.
This argument was ignored by referring a case Dharangdhara Chemical Works Ltd. v State of Saurashtra, which distinguishes between Contract of service and Contact for service. Mere fiduciary relationship does not give effect to and since there is no master servant relationship between Doctor and Patient, it will not result into Contract of Service.
v Other argument which was raised by respondent was that “service” does not include any such term medical service, so medical service are not in the purview of the Act.
This argument was rejected as definition of service is not limited but it is a having three parts i.e. Main part, inclusionary part, exclusionary part. Though main part does not include medical services but inclusionary part of the definition have wider scope and covers medical services.
Hence, It was held by the Court that medical services will be treated as services as in accordance with Section 2(1) (o) of the Act, hereinafter the potential user will be said consumer of medical services.
v Second issue which was raised questioned hospitals and nursing homes are in the scope of the Act. There were made three broad categories under which nature services of doctors/hospital can be determined:-
a. Services rendered free of charge to everybody.
b. Charges paid by all users.
c. Charges are required to be paid by all person except those, who cannot afford (services are rendered free)
There is no difficulty in finding out liability in first two categories as when services are rendered free of charge there is no service rendered as according to Section 2(1) (o) of the Act hence excluded by virtue of exclusionary clause of the Section. Also token money will be treated as no consideration paid. But it will not include those independent doctors who are rendering service free of charge. And in second category if a person is paying consideration it will come under jurisdiction of the Act as medical services are services and consideration is paid to avail them.
It was opined by Hon’ble Judge that since patients, who are availing services free of charge, belonging to third category are beneficiary as patients who are paying consideration in that category are, actually, paying for non-paying patients too. So being beneficiary they are under scope of the Act. Hence are treated as consumer under Section 2(1) (d) of the Act.
1. Medical Services are treated as in ambit of “services” under Section 2(1) (o) of the Act.
· It is not contract of personal service as there is absence of master servant relationship.
· Contract of service in Section 2(1) (o) cannot be confined to contracts for employment of domestic servants only. The services rendered to employer are not covered under the Act.
2. Medical Services rendered by hospital/nursing home free of charge are not in the purview of Section 2(1) (o) of the Act.
3. Medical Services rendered by independent Doctor free of charge are under Section 2(1) (o) of the jurisdiction of the Act.
4. Medical Services rendered against payment of consideration are in the scope of the Act.
5. A medical service where payment of consideration is paid by third party is treated as in the ambit of the Act.
6. Hospital in which some person are charged and some are exempted from charging because of their inability of affording such services will be treated as consumer under of Section 2(1) (d) of the Act.
1. This case gave effect to consumers who were suffering from medical negligence and including medical services in the ambit of Consumer Protection Act, 1986 enabled consumer to get more speedy and cheap justice. As this is the main aim of the Act.
2. This case also differentiated contract for service and contract of service, in respect of medical practice and profession.
3. System of liability which it established is not appropriate in case where patients are not treated as consumer even in government hospital availing services free of charge. It is question of common conscience and equity as person who are availing services in government hospital are not economically sound that is why they are availing services in government hospital. It is point of reconsideration.
4. Hospital rendering services free of charge are outside the purview of the Consumer Protection Act, 1986. As some charitable trust do not have profit motive they can be sued in either civil case but not in Consumer court.
# (1992) 1 Andhra Law Times 713
# (1994) 1 MLJ 438
# Bolam v Friern Hospital Management Committee  1 W.L.R. 582. Bolam test implies that whether doctor was reasonable enough to use special skill as used by generally by the personnel of that profession.
# AIR 1957 SC 264
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