Aapka Consultant Judgment Series- In this series, we are providing case analysis of Landmark Judgments of Hon’ble Supreme Court of India.
Indian Medical Association v. V.P. Shantha and Ors.
AIR 1996 SC 550
JUDGES: S.C. Agrawal, Kuldip Singh and B.L. Hansaria
Date of Decision: 13-11-1995
FACTS:-
With liver cancer, stomach cancer, stomach illness’ like gastritis increasing over the years, especially in countries like Indonesia, India, in Central America and in Asia, more people are in need of medical attention. Thanks to clinics like the IBS CLinic London, many nationals and even internationals are able to receive the attention they need. However, there have been many cases were people are being neglected their right to receive medical attention. There were various conflicting judgments of the National Consumer Dispute Redressal Commission and High Courts on the issue of medical professional’s negligence in multiple cases. Therefore, this case was brought before the Supreme Court to rest the controversy with respect to amenability of Medical Professionals to the provisions of Consumer Protection Act, 1986.
ISSUE:-
- Whether and, if so, in what circumstances, a medical practitioner can be regarded as rendering ‘service’ under Section2(1)(o) of the Consumer Protection Act, 1986?
- Whether the service rendered at a hospital/nursing home can be regarded as ‘service’ under Section2(1)(o) of the Act?
JUDGMENT:-
The Hon’ble Apex Court noted that the expression “service” under section 2(1)(o) in the Act has to be construed keeping in view the definition of “consumer” in the Act. The words “or avails of” after the word “hires” in Section 2(1)(d)(ii) and the words “housing construction” in Section 2(1)(o) were inserted by the Act 50 of 1993. The definition of ‘service’ in Section 2(1)(o) of the Act can be split up into three parts- the main part, the inclusionary part and the exclusionary part. The main part is explanatory in nature and defines ‘service’ which means service of any description made available to the potential users. The inclusionary part expressly 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. The exclusionary part excludes rendering of any service free of charge or under a contract of personal service.
In the matter of professional liability professions differ from other occupations for the reason that professions operate in spheres where success cannot be achieved in every case and very often success or failure depends upon factors beyond the professional man’s control. To provide proper protection to the consumer, the approach of the courts is to require that professional men should possess a certain minimum degree of competence and that they should exercise reasonable care in the discharge of their duties. In general, a professional man owes to his client a duty in tort as well as in contract to exercise reasonable care in giving advice or performing services. Medical practitioners do not enjoy any immunity and they can be sued in contract or tort on the ground that they have failed to exercise reasonable skill and care. The fact that they are governed by the Indian Medical Council Act and are subject to the disciplinary control of Medical Council of India and/or State Medical Councils is no solace to the person who has suffered due to their negligence and the right of such person to seek redress is not affected. Therefore, considering the wide construction of term “Service” by the court in the case of Lucknow Development Authority v. MK Gupta [AIR 1994 SC 787], services rendered by medical practitioners are covered by Section 2(1)(o) of the Act.
Whether such service is excluded or not? The exclusionary part excludes from the main part service rendered (i) free of charge; or (ii) under a contract of personal service. It is no doubt true that the relationship between a medical practitioner and a patient carries within its certain degree of mutual confidence and trust and, therefore, the services rendered by the medical practitioner can be regarded as services of personal nature but since there is no relationship of master and servant between the doctor and the patient the contract between the medical practitioner and his patient cannot be treated as a contract of personal service but is a contract for services and the service rendered by the medical practitioner to his patient under such a contract is not covered by the exclusionary part of the definition of ‘service’ contained in Section 2(1)(o) of the Act. There can be a contract of personal service if there is relationship of master and servant between a doctor and the person availing his services and in that event the services rendered by the doctor to his employer would be excluded from the purview of the expression ‘service’ under Section 2(1)(o) of the Act by virtue of the exclusionary clause in the said definition.
The other part of exclusionary clause relates to services rendered “free of charge”. The medical practitioners, Government hospitals/nursing homes and private hospitals/nursing homes (hereinafter called “doctors and hospitals”) broadly fall in three categories:
(i) where services are rendered free of charge to everybody availing the said services,
(ii) where charges are required to be paid by everybody availing the services, and
(iii) where charges are required to be paid by persons availing services but certain categories of persons who cannot afford to pay are rendered service free of charges.
There is no difficulty in respect of first two categories. Doctors and hospitals who render service without any charge whatsoever to every person availing the service would not fall within the ambit of “service” under Section 2(1)(o) of the Act. The payment of a token amount for registration purposes only would not alter the position in respect of such doctors and hospitals. So far as the second category is concerned, since the service is rendered on payment basis to all the persons they would clearly fall within the ambit of Section 2(1)(o) of the Act. The third category of doctors and hospitals do provide free service to some of the patients belonging to the poor class but the bulk of the service is rendered to the patients on payment basis. The expenses incurred for providing free service are met out of the income from the service rendered to the paying patients, The service rendered by such doctors and hospitals to paying patients undoubtedly fall within the ambit of Section 2(1)(o) of the Act.
Whether the service rendered to patients free of charge by the doctors and hospitals in category (iii) is excluded by virtue of the exclusionary clause in Section 2(1)(o) of the Act? The Act has been enacted to provide for the protection of the interests of “consumers” in the background of the guidelines contained in the Consumer Protection Resolution passed by the U.N. General Assembly on April 9, 1985.
These guidelines refer to “achieving or maintaining adequate protection for their population as consumers” and “encouraging high levels of ethical conduct for those engaged in the protection and distribution of goods and services to the consumers”. The protection that is envisaged by the Act is, therefore, protection for consumers as a class. The word “users” (in plural), in the phrase ‘potential users’ in Section 2(1)(o) of the Act also gives an indication that consumers as a class are contemplated. To hold otherwise would mean that the protection of the Act would be available to only those who can afford to pay and such protection would be denied to those who cannot so afford, though they are the people who need the protection more. It is difficult to conceive that the legislature intended to achieve such a result. Another consequence of adopting a construction would be that the standard and quality of service rendered at an establishment would cease to be uniform. It would be of a higher standard and of better quality for persons who are in a position to pay for such service while the standard and quality of such service would be inferior for person who cannot afford to pay for such service and who avail the service without payment. Such a consequence would defeat the object of the Act. This article about Littmann steths will throw more light on this issue.
Service rendered by the doctors and hospitals falling in category (iii) irrespective of the fact that part of the service is rendered free of charge, would nevertheless fall within the ambit of the expression “service” as defined in Section 2(1)(o) of the Act. Moreover, persons who are rendered free service are the “beneficiaries” and as such come within the definition of “consumer” under Section 2(1)(d) of the Act,
Doctors working in the hospitals/nursing homes/dispensaries, whether Government or private – belonging to categories (ii) and (iii) above would be covered by the definition of “service” under the Act and as such are amenable to the provisions of the Act along with the management of the hospital, etc. jointly and severally.
HELD:-
The Hon’ble Apex Court held 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), would fall within the ambit of ‘service’ as defined in Section2(1)(o)of the Act.
- Service rendered free of charge by a medical practitioner attached to a hospital/Nursing home or a medical officer employed in a hospital/Nursing home where such services are rendered free of charge to everybody, would not be “service” as defined in Section2(1)(o)of the Act. The payment of a token amount for registration purpose only at the hospital/nursing home would not alter the position.
3. Service rendered at a non-Government hospital/Nursing home where no charge whatsoever is made from any person availing the service and all patients (rich and poor) are given free service – is outside the purview of the expression ‘service’ as defined in Section 2(1)(o) of the Act. The payment of a token amount for registration purpose only at the hospital/Nursing home would not alter the position
4. Service rendered at a non-Government hospital/Nursing home where charges are required to be paid by the persons availing such services falls within the purview of the expression ‘service’ as defined in Section2(1)(o)of the Act.Service rendered at a non-Government hospital/Nursing home where charges are required to be paid by persons who are in a position to pay and persons who cannot afford to pay are rendered service free of charge would fall within the ambit of the expression ‘service’ as defined in Section2(1)(o)of the Act irrespective of the fact that the service is rendered free of charge to persons who are not in a position to pay for such services. Free service, would also be “service” and the recipient a “consumer” under the Act.
5. Service rendered at a Government hospital/health center/dispensary where no charge whatsoever is made from any person availing the services and all patients (rich and poor) are given free service – is outside the purview of the expression ‘service’ as defined in Section2(1)(o)of the Act. The payment of a token amount for registration purpose only at the hospital/nursing home would not alter the position.
6. Service rendered at a Government hospital/health center/dispensary where services are rendered on payment of charges and also rendered free of charge to other persons availing such services would fall within the ambit of the expression ‘service’ as defined in Section 2(1)(o) of the Act irrespective of the fact that the service is rendered free of charge to persons who do not pay for such service. Free service would also be “service” and the recipient a “consumer” under the Act.
7. Service rendered by a medical practitioner or hospital/nursing home cannot be regarded as service rendered free of charge, if the person availing the service has taken an insurance policy for medical care where under the charges for consultation, diagnosis and medical treatment are borne by the insurance company and such service would fall within the ambit of ‘service’ as defined in Section 2(1)(o) of the Act
Similarly, where, as a part of the conditions of service, the employer bears the expenses of medical treatment of an employee and his family members dependent on him, the service rendered to such an employee and his family members by a medical practitioner or a hospital/nursing home would not be free of charge and would constitute ‘service’ under Section2(1)(o)of the Act.
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