FINAL DRAFT

ON

CASE: INDIAN MEDICAL ASSOCIATION VS.V.P. SHANTHA AND OTHERS

ACKNOWLEDGEMENT

I am obliged to our assistant professor has given me golden chance for this research project. I
would also like to thank the almighty and my parents for their moral support and my friends who
are always there to extend the helping hand whenever and wherever required.
I further extend my thanks to library staff of DR. RAM MANOHAR LOHIYA
NATIONAL LAW UNIVERSITY who helped me in getting all the materials necessary for the
project.

TABLE OF CONTENTS

1. List of Abbreviations
2. Index of Authorities
3. Preface
4. Introduction
5. Heading
6. Statement of Facts
7. Issues Under Consideration
8. Arguments Advanced
9. Final Judgement
10. Critical Analysis
11. Conclusion
12. Bibliography

LIST OF ABBREVIATIONS

AIR
COPRA
CPA
Honble
IMA

All India Reporter

Consumer Protection Act
Consumer Protection Act
Honourable
Indian Medical Association

PIL
SC
v

Public Interest Litigation

Supreme Court
versus

INDEX OF AUTHORITIES
CASES REFERRED

Bolam v Friern Hospital Management Committee [1957] 1 W.L.R. 582

Dharangdhara Chemical Works Ltd. v State of Saurashtra, AIR 1957 SC 264
Lucknow Development Authority v M.K. Gupta, 1994 AIR 787
Cosmopolitan Hospitals vs W Santha ,1992(24)DRJ310

STATUTES REFERRED

Consumer Protection Act , 1986

PREFACE

The doctors liability is clearly defined under torts law, however the doctors in contended their
services being under the purview of the consumer protection act, the arguments put forth were:

1. Services rendered by the doctor come under the exclusionary clause of contract of personal
service under the consumer protection act (CPA).
2. The Indian medical council governs doctors, so CPA will not apply.

3. Consumer courts are not competent to try medical negligence cases.

4. As there is no need to pay court fee for a petition under the CPA, malpractice suits against
the medical professionals will flood the forums.
5. Suits will force the doctors to practice defensive medicine, which will increase the cost of
health care services.

In Cosmopolitan Hospitals v Vasantha P Nair1 and Cosmopolitan Hospitals v W Santha, the

National Commission rejected all the above contentions, counter arguing that any hospital or
medical professions who charges fees for their services come under the purview of the act.
National commission also said that torts law covers the fields left unoccupied by the Indian
medical council act in general and the CPA, therefore the stand of IMCA will not change and
will remain the same as before.

The IMA went and appealed over the above order, it filed a writ petition stating that medical
services should not be under the purview of the CPA and the order was violative of articles 14
and 19(1) (g) of the constitution. The IMA has been operative in states as well as central level
against the medical practitioners for their professional misconduct. The petition was rejected.

In the case of V.P. Shantha, the facts of case were that the plaintiffs husband died due to
negligence of the doctors. The treatment was done in government hospital no fees was charged
therefore no compensation could be paid as government hospitals and other honorary authorities
which render their services free of charges did not fall under the purview of the CPA. The case
was dismissed and subsequently the plaintiff filed an appeal to the Supreme Court of India.
National commission contended that since free services do not come under the purview of the
CPA, The National Commission was justified in dismissing the case. The Supreme Court agreed
the contention and with these viewpoints laid down certain principles determining the liability of
the doctors under this act. Although the Supreme Court did not agree that just because the
medical services have come under the CPA, the doctors will start pursuing defensive medicine.

1 Cosmopolitan Hospitals v Vasantha P Nair , 1992(24)DRJ310

INTRODUCTION

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 asThe right to be protected against marketing of goods which are hazardous to life and property;
The right to be informed about the quality, quantity, potency, purity, standard and price of
goods to protect the consumer against unfair trade practices;
The right to be assured, wherever possible, access to an authority of goods at competitive
prices;
The right to be heard and to be assured that consumers interests will receive due consideration
at appropriateforums;
The right to seek redressal against unfair trade practices or unscrupulous exploitation of
consumers; and
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.

HEADING

Equivalent Citation: AIR1996SC550

Appellants: Indian Medical Association
Respondent: V.P. Shantha and Ors.
Hon'ble Judges/Coram:
Kuldip Singh, S.C. Agrawal and B.L. Hansaria, JJ.
Decided On: 13.11.1995

STATEMENT OF FACTS

1.

The plaintiffs husband died due to negligence of the doctors.

2.

The treatment was done in government hospital no fees was charged therefore no
compensation could be paid as government hospitals and other honorary authorities
which render their services free of charges did not fall under the purview of the CPA.

3.

The case was dismissed and subsequently the plaintiff filed an appeal to the Supreme
Court of India. National commission contended that since free services do not come
under the purview of the CPA, the National Commission was justified in dismissing the
case.

ISSUE UNDER CONSIDERATION

Whether the free medical services provided by the government hospitals covered under
Consumer Protection Act of 1986 or not?

ARGUMENTS ADVANCED

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 Honble Judge as he said that medical practitioner should be held
liable when they are negligent and to find out their negligence Bolam test2 is sufficient enough.
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.
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
Saurashtra3, 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.
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.
2 Bolam v Friern Hospital Management Committee [1957] 1 W.L.R. 582
3 Dharangdhara Chemical Works Ltd. v State of Saurashtra, AIR 1957 SC 264

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.
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 Honble 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.

FINAL JUDGEMENT

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.

CRITICAL ANALYSIS

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.

CONCLUSION

The service rendered free of charge by a medical practitioner attached to or employed by a

hospital , whether governmental or non-governmental , or a nursing home , or a health centre or a
dispensary where no charge is made from any person availing of such service and all patients are
given free service is excluded by exclusionary provision of section 2(1)(o).
The court held the above after rejecting the contentions that nominal registration fee or the
medical officers salary for employment in the hospital or , the taxpayers money contributing to
functioning of government hospitals or health dispensaries , would constitute consideration for
free services rendered in such cases.
The exclusionary part of the definition in section 2(1)(o) does not obviously cover service
rendered at a non-governmental hospital or nursing home where charges are required to be paid
by persons availing such services and therefore , falls within the purview of the expression
services as defined under the Act.
It was held that services rendered at a government hospital , health centre or dispensary where
such services are rendered on payment of charges and also rendered free of charge would fall
within the scope of the Act , the persons belonging to the poor class who were provided services
free of charge were held to be the beneficiaries of the services which is hired or availed of by the
paying class.
However in the definition of consumers as under section 2(1)(d), a person can become a
beneficiary only with the approval of the person who has paid the consideration. In this case ,
there is no approval which may be obtained and hence it is doubtful whether the concept of
beneficiaries can be extended as has been done. If the concept of beneficiaries has thus been
extended , then the court should not have had any hesitance in holding that the people who avail
of free services when such services are not paid for by any other recipient of the service can also
be made consumers since they are the beneficiaries of the taxpayers , albeit without their
approval.

BIBLIOGRAPHY

Indian Medical Association v V.P. Shantha & Ors on 13 November, 1995

Equivalent citations: 1996 AIR 550, 1995 SCC (6) 651

http://www.legalservicesindia.com/article/article/indian-medical-association-v-v-pshantha-1097-1.html