Indian Medical Association v. VP Shantha

In the Supreme Court of India
Name of the Case  Indian Medical Association vs V.P. Shantha & Or
Citation  1996 AIR 550, 1995 SCC (6) 651
Year of the Case  1996
Petitioner  Indian Medical Association
Respondent  V.P. Shantha & Ors
Bench/Judges  Justice S.C. Agrawal Justice Kuldip Sigh Justice B.L. Hansaria
Acts Involved  Indian Medical Council Act, 1956 Consumer Protection Act, 1986  
Important Sections    Sectioon 2(1)(o), Section 2(1)(d) of the the Consumer Protection Act, 1986

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.

Introduction

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 compensation.

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[1] 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.  

Background and 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[2], 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 & Anr.[3], 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 `service’.

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.

Issues Involved

  1. 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?
  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, 1986?

Related Provisions

Section 2(1)(o) of the Consumer Protection Act, 1986

Section 2(1)(d) of the Consumer Protection Act, 1986

Related Cases

The court relied on the English case of Bolam v Friern Hospital Management Committee[4] which laid down the Bolam test for medical negligence.

An important case relied upon by the Court was Lucknow Development Authority v M.K. Gupta[5] which widely construed the definition of `service’. It held that “the main clause itself is very wide. It applies to any service made available to potential users. The words `any ‘ and `potential’ are significant. Both are of wide amplitude.”

 The case of Dharangdhara Chemical Works Ltd. v State of Saurashtra[6] was cited which distinguished between a `contract of service’ and a `contract for services’, holding that a `contract of service’ implies a relationship of master and servant and involves an obligation to obey orders in the work to be performed and as to its mode and manner of performance

Some other cases relied upon by the Respondent are The High Commissioner for India v I.M.Lall[7], Ram Kissendas Dhanuka v Satya Charan Law[8], and Dr. S.B. Dutt v. the University of Delhi[9].

Judgment

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 Act, 1986?

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[10] 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, 1986?

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.”

Including Medical Services Within the Purview of the Consumer Protection Act, 1986

The decision in the present case clarified the ambit and scope of ‘services’ as defined under Section 2(1)(o) of the Act concerning the rendering of medical services. The prevailing view before this decision was that medical practitioners were held liable for misconduct and negligence predominantly under tort and the Indian Medical Councils Act, or in some cases under provisions of the Indian Penal Code, 1860. By bringing the medical profession within the purview of the Consumer Protection Act, 1986, this case gave a speedier and cost-effective alternate remedy to aggrieved patients by enabling them to approach the consumer courts for appropriate relief.

The Supreme Court relied upon a series of English decisions and scholarly works in devising a rational approach to medical professional liability to provide proper protection to patients by conferring them with the ‘consumer’ status. Under consumer protection laws, medical negligence is considered to be a form of deficiency in service, similar to liability under the law of torts. It requires professionals to possess a minimum degree of competence and to exercise reasonable care in the discharge of their duties.

The system of liability established in this case however does not punish all acts of a doctor that causes injury, but only those caused by negligence. It has been held in many ensuing decisions that “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.”[11]

Negligence cannot be attributed to a doctor as long as he performs his duties with reasonable skill and competence. It is only in the event of a deficiency in the performance of services when his conduct falls short of the established standards, can an aggrieved patient invoke remedies provided under the Act by filing a complaint before the appropriate Consumer Forum. It is to be noted that the provisions entitling a complainant to approach the consumer courts would in no way preclude his/her right to approach the civil court for necessary relief.[12] The Act only provides an alternative, inexpensive and speedy remedy for adjudication of such medical negligence claims.

Conclusion

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.

References


  • [1] AIR 1996 SC 550
  • [2] (1992) 1 Andhra Law Times 713
  • [3] (1994) 1 MLJ 438
  • [4] [1957] 1 W.L.R. 582
  • [5] 1994 AIR 787
  • [6] AIR 1957 SC 264
  • [7] (1948) L.R. 75 I.A. 225
  • [8] (1949) L.R. 77 I.A. 128
  • [9]  1959 SCR 1236
  • [10] (1957) 1 WLR 582
  • [11] Jacob Mathew v State of Punjab & Another, (2005) 6 SCC 1
  • [12] Section 3, Consumer Protection Act, 1986

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