CASE BRIEF Indian Medical Association vs V.P. Shantha & Ors

Indian Medical Association vs V.P. Shantha & Ors

FACTS OF THE CASE

A succession of decisions left the judiciary perplexed and divided on the scope and application of the Act in cases of medical negligence. A Division Bench of the Andhra Pradesh High Court held in Dr. A.S. Chandra v. Union of India that service rendered for consideration by private medical practitioners, private hospitals, and nursing homes is “service” for the purposes of Section 2(1)(d) of the Act, and that those who use such services are “consumers” for the purposes of Section 2(1)(d) of the Act. In the case of Dr.C.S. Subramanian v. Kumarasamy & Anr., a Division Bench of the Madras High Court held that services rendered to a patient by a medical practitioner or a hospital in the form of diagnosis and treatment, both medicinal and surgical, would not be considered a ‘service’ and thus a patient could not be considered a ‘consumer’ within the meaning of the Consumer Protection Act. Paramedical services, on the other hand, were acknowledged as being under the term of ‘service.’ The National Commission took a variety of approaches in its numerous judgments. It held in its judgement and order dated December 15, 1989 that people who seek medical treatment in government hospitals are not “consumers,” and that because the public’s payment of taxes does not constitute “consideration,” the service would essentially be provided free of charge, falling under the exclusionary part of the Act’s definition of “service.” The National Commission ruled on April 21, 1992, that the activity of providing medical aid for a fee carried out by hospitals and members of the medical profession fits within the scope of the expression ‘service’. A succession of appeals, special leave petitions, and Writ Petitions were brought against the inconsistent rulings of the High Courts and subordinate courts due to the absence of uniformity in judicial interpretation. In the current case of Indian Medical Association v VP Shantha, the Supreme Court heard both of them and reached a decision.

ISSUES RAISED

1. Is it possible for a doctor, hospital, or nursing home to be considered a “service” provider under Section 2(1)(o) of the Consumer Protection Act, 1986?
2. Under what conditions can a hospital/nursing service be considered a “service” under Section 2(1)(o) of the Consumer Protection Act, 1986?

RULES APPLIED

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

“consumer” means any person who,—

(ii) [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];

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

“service” means service of any description which is made available to potential  [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; [oo] “spurious goods and services” mean such goods and services which are claimed to be genuine but they are actually not so;]

ANALYSIS OF THE CASE

The Supreme Court ruled in favour, citing the broad scope of the meaning of “service” in the main body of Section 2(1)(o). It rejected the petitioners’ assertion that services supplied by a member of a “profession” would not be covered by the Act. Medical practitioners are not exempt from a claim for damages based on negligence, even though they are supervised by the Indian Medical Council Act and are subject to the disciplinary authority of Medical Councils of India. The Court couldn’t agree with the argument that a decision of insufficiency in medical service under Section 2(1)(g) can’t be made based on any set of rules. It was noted that a lack of service could be attributed to clear flaws attributable to medical practitioners, such as the removal of the wrong limb or the performing of an operation on the wrong patient, among other things. The Court concluded that the Bolam standard, as laid forth in the English case of Bolam v Friern Hospital Management Committee for tortious action for damages for negligence, should be used to determine if there was a deficit in service.

The Supreme Court went on to address the exclusionary section of Section 2(1) after concluding that the definition of “service” is broad enough to embrace services given by medical practitioners (o). Services rendered I free of charge; or (ii) under a contract of personal service are excluded from the exclusionary part. Concerning issue I it was decided that doctors and hospitals/nursing homes that provide services without charge to everyone who needs them would not be covered by the Act. This would fall within the exclusionary portion of the service definition. Medical services performed for a fee, on the other hand, are covered by Section 2(1)(o). The Court also addressed a scenario in which free medical treatments are supplied only to individuals who cannot afford to pay for them, concluding that such services would surely fall within the scope of the Act because the costs are covered by the revenue obtained from paying patients. The court clarified the difference between a “contract of service” and a “contract for service” in (ii). The main distinction is that in the former, the employer has some control over the employee’s work, but in the latter, the independent contractor is not subject to the employer’s control and is free to use his or her judgement. The court determined that the contract between the medical practitioner and his patient cannot be considered a personal service contract because no master-servant relationship exists. It would be a service contract, so the exclusionary clause would not apply.

The Court eventually decided that “service rendered to a patient by a medical practitioner, 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, except where the doctor renders service free of charge to every patient or under a contract of personal service.”