Indian Medical Association v. V.P. Shantha and Ors.

Name of the CaseIndian Medical Association v. V.P. Shantha & Ors
Citation1996 AIR 550, 1995 SCC (6) 651
Year of the Case1996
AppellantIndian Medical Association
RespondentVP Shantha & Ors.
Bench/JudgesS.C. Agarwal, Kuldip Singh, B.L. Hansaria
Acts InvolvedConsumer Protection Act, 1986
Important SectionsSection 2 of Consumer Protection Act, 1986

Abstract

The case discusses the ambit of “services” under the Consumer Protection Act, 1986, and seeks to answer whether people can avail of the recourse under the Act for deficiency of services rendered by medical practitioners. It is an important case dealing with medical negligence and the legal liability that the medical practitioners owe in case of breach of their duty of care.

Introduction

The Parliament enacted the Consumer Protection Act, 1986 (“Act”) to provide protection to the consumers and establish a consumer council to adjudicate matters regarding consumer disputes. It encourages the ethical conduct of people providing goods and services to the public. It is under this Act, that the definition of “service” has created ambiguity with regard to the health care service. This case settles the issue of whether medical practitioners are governed under this Act and whether people can take recourse of the provision herein to claim relief for damages/injury caused by the services availed from medical practitioners and hospitals.

Factual Background

Common questions arose out of several cases that have been dealt with the Supreme Court in the present case to clarify the position of medical practitioners vis-à-vis the Consumer Protection Act. The below-mentioned cases have raised confusion regarding this, and appeals have been filed against the order in the following judgments.

In the case, Dr. A.S. Chandra v. Union of India[1], the Andhra Pradesh High Court concluded that service rendered by a private medical practitioner, private hospitals and nursing homes can be construed as a “service” for the purposes of section 2(1)(d) of the Act and persons availing such services would come under the purview of “consumers”.

In the case, Dr. C.S. Subramanian v. Kumarasamy & Anr.[2], the Madras High Court concluded that services rendered by a medical practitioner or a hospital, both medicinal and surgical, would not be considered as “service” under the Act. However, any paramedical services rendered by them would fall within the ambit of “services”.

In the National Commission judgment dated 15.12.1989[3], it was ruled that medical treatment availed at a Government hospital is not regarded as “service” and does not make a person availing such service a “consumer”.

In the National Commission judgment dated 21.04.1992[4], it was ruled that medical assistant provided by hospitals for payment would be considered “service” and relief can be claimed under the provisions of the Act.

In the National Commission judgment dated 03.05.1993[5], it was ruled that medical treatment provided free of charge would not constitute “service” and therefore, no relief could be claimed under the Act.

Writ Petition[6] was filed alleging that the provisions of the Act, if applicable to medical practitioners, were violative of Article 14 and 19(1)(g) of the Constitution of India.

Issues

  • Whether a medical practitioner can be considered as rendering ‘service’ under Section 2(1)(o) of the Consumer Protection Act, 1986 (“Act”)? If yes, under what circumstances?
  • Whether the service rendered at a hospital/nursing home can be considered as ‘service’ under Section 2(1)(o) of the Act?

Relevant provisions

Section 2(1)(d)(ii) Consumer –  “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 service 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.”

Section 2(1)(o) Service – “means service of any description which is made available to the 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;”

Contentions and the Respective Discussion

We will look at the contentions raised by the counsel arguing that medical practitioners do not fall within the ambit of the Act and the discussion of the Court following each contention for better clarity.

  • A profession and occupation are distinct, and person engaged in an occupation render services that would fall within the purview of section 2(1) (o) while the services rendered by a professional does not.

Rejected by the Court – With regards to the first contention, the Court observed that generally, a professional owes his/her client a duty in tort as well as in contract to exercise reasonable care in the rendering of services. The role of the Court in approaching cases of professions would be to ensure that the professional has the minimum degree of competence and discharges the duty with reasoned care. While some professions enjoy immunity on the grounds of public interest, medical practitioners are not one of them. As per a catena of judgments, they can be used under tort law as well as contract law for failing to exercise reasonable skill and care in the rendering of services. Therefore, they can be sued for negligence.

  • Medical practitioners are governed by the provisions of the Indian Medical Council Act, 1956, and the Code of Medical Ethics made by the Medical Council of India, which regulates their conduct and provides for disciplinary action against them for professional misconduct.

Rejected to by Court – With regards to the second contention, the fact that they are governed under the provisions of the Medical Council Act does not provide solace to the people who have suffered on account of their negligence and this does not affect the right to seek redressal for their grievances. The mere fact that medical practitioners belong to the medical professional does not preclude them from the provisions of the Act.

  • The legislature has not contemplated that medical practitioners should be covered under the Act as the expression “which is made available to potential users” and “hires” is used indicating services that are institutionalized.

Rejected by the Court – With regards to the third contention, the Court observed that the word “hires” has been used to mean as “avails of” and the provision of the definition of service has to be interpreted with regard to the definition of consumer. As such, it cannot be inferred that the legislature did not contemplate that medical practitioners would be covered under the provisions of the Act.

  • As per the definition of “deficiency” of services, it must be determined on certain norms about the quality, nature, and manner of performance. Medical services cannot be judged on the basis of any fixed criteria and, therefore, it cannot be said that the services rendered by a medical practitioner are covered by “service” under the Act.  

Rejected by the Court – With regards to the fourth contention, the Court looked at section 14 of the Act which grants relief for service deficiency and noted that compensation may be awarded for an injury suffered by the consumer due to negligence of the service provider. The test applied must be the same as the test of damages due to negligence. Therefore, the contention could not be sustained.

Case relied upon for Standard of care for medical practitioners

Bolam v Friern Hospital Management Committee, (1957) 1 WLR 582

In situations involving the use of some special skill or competence, the test to assess the standard of care is that of the ordinary skilled man exercising and professing to have that special skill. Under the law, if the person exercises the ordinary skill of an ordinary competent man, it is sufficient.

Laxman Balakrishna Joshi v Trimbak Bapu Godbole & Anr., 1969 (1) SCR 206

“A person who holds himself out ready to give medical advice and treatment impliedly undertakes that he is possessed of skill and knowledge for the purpose.”[7] The doctor owes his patience a reasonable standard of care and any breach would give rise to a right of action against the doctor for negligence.

  • The composition of the Commissioners (District Forum, the State Commission, and the National Commission) are unable fully appreciate the complex issues which may arise for determination in a medical negligence case and the procedure prescribed under the Act not suitable for determining the complicated questions in respect of these negligence claims.

Rejected by the Court – With regards to the fifth contention, the Court read the relevant provision to observed that the people appointed should be a judge at the prescribed level and other members “having adequate knowledge or experience of, or having shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration.” The Act envisages the combination of competent judicial adjudication and decisions made by laymen having experience in the area. To contend that the members should have adequate knowledge or experience in the field in respect of which the complaint is made would be impractical and impossible. Therefore, it cannot be said that the Commission cannot deal with such a case of they do not have experience in the field of medical negligence. Further, the right of the consumer to approach the civil courts is not restricted in case it is appropriate (complicated issues have risen) and therefore, the procedure is well-equipped to deal with such cases. Section 3 clearly states that the provisions of the Act are in addition to any existing law in force.  

  • The service offered by a medical practitioner falls within the nature of a ‘contract of personal service’ and therefore, is not governed under the Act.  

Rejected by the Court – With regards to the sixth contention, the Court clarifies the distinction between ‘contract of service’ and ‘contract of services’ and ruled that the legislature deliberately chose the wordings ‘contract of service’. In a ‘contract of services’ a professional exercise his own knowledge and skills to render service, whereas ‘contract of service’ implies a master-servant relationship. Therefore, the services of a medical practitioner are not excluded from the definition of services.

Judgement

The Court concluded that the service rendered by a medical practitioner to a patient would fall within the ambit of “service” under the Act. The service could be consultation, diagnosis, and treatment, both medicinal and surgical. Since the issue of the composition of the consumer, the commission has been decided and it is clear that recourse can be taken for proper adjudication of medical negligence complaint, an argument for arbitrariness cannot stand. Therefore, the provisions cannot be held to be violative of Article 14 and 19(1)(g) of the Act.

Additionally, in case the hospitals/nursing homes provide services for free, they will be excluded from the Act as per the exclusionary part in the definition of services. However, in cases where they charge people as a general rule but allow availing of services free of charge for certain categories of people, the service would fall within the ambit of the Act. The Act was created with the intention to protect the consumers so it would be inconceivable to think that the people who can afford to pay for the services are protected as per the Act but those unable to afford the same are denied protection. Further, a contrary view could possibly result in lowering the standard of quality for the population that cannot afford to pay for the services which would have disastrous consequences.

Another point for consideration before the Court was that of insurance. If a person has an insurance policy wherein the charges for consultation ad treatment are borne by the insurance company and the person does not directly make payment to the medical practitioner, the person can avail the benefit of the Act. It cannot be said that the treatment was free of charge and therefore, the service rendered would be service under section 2(1)(o). The same principle would apply to situations where an employer pays for medical treatment for his employee.

The attention of the Court was drawn to a point that, bringing medical negligence under the purview of the Act would result in an increase of medical expenditure to account for insurance charges and the possibility of refusal to attend to medical emergencies because of the risks. The Court denied such claims and stated that adjudicating medical negligence claims under this Act does not make any changes to the substantive law governing the medical practitioners. Moreover, since a complaint can be filed under this Act free of cost unlike the civil courts which require court fees, it would enable more people to claim relief for medical negligence and provide a speedier remedy.

Point of Interest

It may be relevant to mention that when the new consumer protection bill, 2019 was introduced in the Lok Sabha, “healthcare” was included in the list of services, however, the current Act in force (Consumer Protection Act, 2019 which has replaced the Consumer Protection Act, 1986) does not include healthcare in the list. There was stiff opposition from the medical fraternity which expressed apprehension that the CPA 2019 would be misused against them and therefore, healthcare was deleted by way of an amendment. The intentional exclusion of “healthcare” by the legislature may cause confusion as to the applicability of the ratio in this case with respect to the new Act.

FAQs

  1. Can consumers avail of the recourse under the Consumer Protection Act for deficiency of services rendered by medical practitioners?
  2. What is the legal liability that medical practitioners owe in case of breach of their duty of care?
  3. What are the drawbacks of including healthcare and medical practices within the ambit of services under the Consumer Protection Act?
  4. What are the laws that cover the conduct of medical practitioners and provides for disciplinary action against them for professional misconduct?
  5. In light of this judgment, what is the difference between a profession and an occupation?

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