# INDIAN MEDICAL ASSOCIATION v. V.P. SHANTHA AND ORS

- **Citation:** [1995] Supp. 5 S.C.R. 110
- **Court:** Supreme Court of India
- **Decided:** 1995-11-13
- **Case number:** Civil Appeal No. 688 of 1993
- **Bench:** Kuldip Singh, S.C. Agrawal, B.L. Hansaria
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/indian-medical-association-v-v-p-shantha-and-ors-13468
- **Pages:** 42

## Headnote

Consumer Protection Act. 1986.
Ss. 2(1)(o), (c), (d), (g) and 14-Scope of 'Service' in the light of the
C definition 'consumer' and other relevant provisions of the Act-Remedy
against malpractice or negligence by Medical Practitioners, hospitals and
nursing homes in the process of consultation, diagnosis and treatment-Where
such medical se1vices are rendered free of charge to everybody availing the
se1vices they do not fall under the definition 'se1vice'-'--But where charges are
required to be paid by eve1ybody or payable by those who could afford and
D not by those who could not such medical se1vice rendered would constitute
'Se1vice'-Payment of token amount for registration purposes cannot be
treated as charges-Payment of charges by insurance company or employer
for medical services rendered to insured/employee, such se1vices would still
fall under 'se1vice' "contract of service'~ "Contract for service''-Difference.
E between-Se1vices rendered by medical practitioners or hospitals or nursing
homes-Deficiency in-To be judged by applying the test of reasonable skill
and care as applicable in action for damages for negligence.
F
Sections 3 and 13-Procedure followed by the Redressal
Fomm--Speedy disposal of complaints-Complicated issues requiling recording of evidence of experts-Complainant can be directed to approach Civil
Court.
Sections 3, JO, 13, 16 and 2o--Redressal Fomm-Associating non-legal
persons having knowledge in other fields connected with the object of the
G Act-Decision on the basis of maj01ity view-Technical matters arising in
complaint regarding deficiency in se1vice-Such members need not be experts
in the subject.
T01ts:
H
Negligence or malp1:actice by Medical Practitioners-Liable for
110
INDIAN MEDICAL ASSN. v. V.P.SHANTIIA
111
damages-Can be sued in contract-Failure to take reasonable skill and A
care-Not immune from liability on the ground that they are subject to
disciplinary control under Medical Council Act.
Constitution of India, 1950 :
Article 265-T~haracteristics of-Expenses of 1wming a govemB
ment hospital met from Consolidated Fund which is raised from taxes paid
by tax payers-'Free of charge' medical services rendere·d by the hospital to
such tax payers-Held, cannot be treated as paid services.
Words & Phrases : "Service'~ "Preferential users'~ "made available'~ C
"avails of' "Hires" Meaning of-In the context of Consumer Protection Act,
1986.
Divergent views had been expressed on the question whether a
medical practitioner can be regarded as rendering 'service' under Section
2(i)(o) of the Consumer Protection Act, 1986, and whether the service D
rendered at the hospital/nursing home can be regarded as 'service' under
the said provision. In Writ Petitions filed under Article 226 of the Constitution, the Madras High Court had held that 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 come within the definition of 'service' under Section 2(1)(o) of the Act and a patient who
undergoes treatment under a medical practitioner or in a hospital by way
of diagnosis and treatment, both medicinal and surgical, cannot be considered to be a 'consumer' within the meaning of Section 2(1)(d) of the Act
but para-medical services rendered by them would be within the definition
E
of 'service' and a person availing of such service would be a 'consumer'.
F
In proceedings arising out of complaints filed under the Act the
National Consumer Disputes Redressal Commission on the other hand,
had held that the activity of providing medical assistance for payment
carried on by the hospitals and members of the medical profession falls
within the expression of 'service' and in the event of any deficiency in the G
performance of such service, the aggrieved party can invoke the remedies
provided under the Act by filing a complaint before the Consumer Forum
having jurisdiction. The National Commission had also held that the legal
repre

## Text

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A
INDIAN MEDICAL ASSOCIATION
v.
V.P. SHANTHA AND ORS.
NOVEMBER 13, 1995 .
B
[KULDIP SINGH, S.C. AGRAWAL AND B.L. HANSARIA, JJ.]
Consumer Protection Act. 1986.
Ss. 2(1)(o), (c), (d), (g) and 14-Scope of 'Service' in the light of the
C definition 'consumer' and other relevant provisions of the Act-Remedy
against malpractice or negligence by Medical Practitioners, hospitals and
nursing homes in the process of consultation, diagnosis and treatment-Where
such medical se1vices are rendered free of charge to everybody availing the
se1vices they do not fall under the definition 'se1vice'-'--But where charges are
required to be paid by eve1ybody or payable by those who could afford and
D not by those who could not such medical se1vice rendered would constitute
'Se1vice'-Payment of token amount for registration purposes cannot be
treated as charges-Payment of charges by insurance company or employer
for medical services rendered to insured/employee, such se1vices would still
fall under 'se1vice' "contract of service'~ "Contract for service''-Difference.
E between-Se1vices rendered by medical practitioners or hospitals or nursing
homes-Deficiency in-To be judged by applying the test of reasonable skill
and care as applicable in action for damages for negligence.
F
Sections 3 and 13-Procedure followed by the Redressal
Fomm--Speedy disposal of complaints-Complicated issues requiling recording of evidence of experts-Complainant can be directed to approach Civil
Court.
Sections 3, JO, 13, 16 and 2o--Redressal Fomm-Associating non-legal
persons having knowledge in other fields connected with the object of the
G Act-Decision on the basis of maj01ity view-Technical matters arising in
complaint regarding deficiency in se1vice-Such members need not be experts
in the subject.
T01ts:
H
Negligence or malp1:actice by Medical Practitioners-Liable for
110
INDIAN MEDICAL ASSN. v. V.P.SHANTIIA
111
damages-Can be sued in contract-Failure to take reasonable skill and A
care-Not immune from liability on the ground that they are subject to
disciplinary control under Medical Council Act.
Constitution of India, 1950 :
Article 265-T~haracteristics of-Expenses of 1wming a govemB
ment hospital met from Consolidated Fund which is raised from taxes paid
by tax payers-'Free of charge' medical services rendere·d by the hospital to
such tax payers-Held, cannot be treated as paid services.
Words & Phrases : "Service'~ "Preferential users'~ "made available'~ C
"avails of' "Hires" Meaning of-In the context of Consumer Protection Act,
1986.
Divergent views had been expressed on the question whether a
medical practitioner can be regarded as rendering 'service' under Section
2(i)(o) of the Consumer Protection Act, 1986, and whether the service D
rendered at the hospital/nursing home can be regarded as 'service' under
the said provision. In Writ Petitions filed under Article 226 of the Constitution, the Madras High Court had held that 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 come within the definition of 'service' under Section 2(1)(o) of the Act and a patient who
undergoes treatment under a medical practitioner or in a hospital by way
of diagnosis and treatment, both medicinal and surgical, cannot be considered to be a 'consumer' within the meaning of Section 2(1)(d) of the Act
but para-medical services rendered by them would be within the definition
E
of 'service' and a person availing of such service would be a 'consumer'.
F
In proceedings arising out of complaints filed under the Act the
National Consumer Disputes Redressal Commission on the other hand,
had held that the activity of providing medical assistance for payment
carried on by the hospitals and members of the medical profession falls
within the expression of 'service' and in the event of any deficiency in the G
performance of such service, the aggrieved party can invoke the remedies
provided under the Act by filing a complaint before the Consumer Forum
having jurisdiction. The National Commission had also held that the legal
representatives of the deceased patients who were undergoing treatment
in the hospital are consumers under the Act and are competent to mainH
112
SUPREME COURT REPORTS (1995] SUPP. 5 S.C.R.
A
tain the complaint. The National Commission was, however, of the view
that if the treatment given in a nursing home was totally free of charge, it
did not constitute 'service' under the Act. As regards Government hospitals the National Commission held that persons who avail themselves of
the facility of medical treatment in Government hospitals are not conB
sumers and the said facility cannot be regarded as service 'hired' for
'consideration'. It was also ·held that the contribution made by the Government employee in the Central Government Health Scheme or such other
similar scheme does not make him 'consumer' within the meaning of the
Act .
. C
Appeals were filed by the petitioner in the Writ Petitions against the
judgment of the Madras High Court as well as various judgments of the
National Commission by the complainants as also the members of medical
profession and hospitals. A Writ Petition under Article 32 was also filed
by a hospital and a medical practitioner wherein the validity of the
provisions of the Act was challenged on the ground that the same. were
D
violative of the provisions of Articles 14 and 19(1) (g) of the Constitution.
E
F
G
H
On behalf of the medical profession and the hospitals, the following
contentions were urged :-
(i)
In law there is distinction between a 'profession' and an
'occupation' and while a person engaged in an occupation
renders service which falls within the ambit of Section 2(1)(o)
of the Consumer Protection Act the service rendered by a
person belonging to a profession does not fall within the ambit
of the said expression and therefore medical practitioners who
belong to the medical profession are not covered under the
provisions of the Act.
(ii)
Jn view of the words 'potential user· in Section 2(1) (o) and the
word 'hires' in Section 2(1)(d)(ii) medical practitioners are
not contemplated by Parliament to be covered by the
provisions of the Act.
(iii) Having regard to the definition of 'deficiency' in Section
2(1)(g), a medical practitioner is excluded from the definition
of 'service' because medical services rendered by a medical
practitioner cannot be judged on the basis of any fixed norms.
-
INDIAN MEDICAL ASSN. v. V.P. SHANTHA
113
(iv)
The relationship between a medical practitioner and the A
patient is of trust and confidence and therefore it is in the
nature of a contract of personal service and it is excluded
from the ambit of 'service' by the exclusionary clause in Sec-
(v)
tion 2(1)(o).
The composition of the District Consumer Redressal Forum,
the State Consumer Disputes Redressal Commission and the
National Commission and the procedure to be followed by
these agencies is such that it is not suitable for determination
of the complex questions which may arise in respect of claims
B
for negligence in respect of services rendered by medical prncC
titioners.
(vi) If the provisions of the Act are so construed as being ap·
plicable to the medical profession and hospitals then the same
are violative of the provisions of Articles 14 and 19(l)(g) of
the Constitution of India. ·
D
(vii) lf the medical profession is brought within the purview of the
Act, the consequences would be huge increase in medical
expenditure on account of insurance charges as well as
tremendous increase in defensive medicine and that medical E
practitioners may refuse to attend to medical emergencies and
there will be no safeguard against frivolous and vexatious
complaints and consequent blackmail.
Refuting the abovesaid contentions, the complainants submitted :-
F
(i)
The expression "Contract of personal service" in Section
2(1)(o) is confined to employment of domestic servants only
and does not include the employment of a medical officer.
(ii)
Even though the service rendered at a hospital, being free of
charge, does not fall within the ambit of Section 2(1)(o) in so G
far as the hospital is concerned, the said service would fall
within the ambit of Section 2(1)(o) since it is rendered by a
medical officer employed in the hospital who is not rendering
the services free of charge because the said medical officer
receives emoluments by way of salary for employment in the H
A
B
c
114
SUPREME COURT REPORTS [1995) SUPP. 5 S.C.R.
hospital.
(iii) Even in Government hospitals/health centres/dispensaries
where services are rendered free of charge to all the patients,
the provisions of the Act shall apply because the expenses of
running the said hospitals are met by appropriation from the
Consolidated Fund which is raised from the tax paid by the
tax payers.
Disposing of the rival contentions, this Court
HELD : 1.1. The definition of 'service' in Sectfon 2(1)(o) contains
words of wide amplitude. The word 'any' has been used in a wider sense
extending from one to all. [125-C]
1.2. Service rendered to a patient by a medical practitioner (except
where the doctor renders service free of charge to every patient or under
D
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. [146-FJ
1.3. The fact that medical practitioners belong to the medical profession and are subject to the disciplinary control of the Medical Council of
E
India and/or State Medical Councils constituted under the provisions of
the Indian Medical Council Act would not exclude the services rendered
by them from the ambit of the Act. [146-G]
Mason & McCall Smith; Law and Medical Ethics, 4th Edn. pp. 16~17
F. and 192 and Arizona v. Mmicopa Country Medical Society, 457 US 332 = 73
L.Ed. (2d) 48, referred to.
Lucknow Development Auth01ity v. M.K Gupta, (1994] 1 SCC 243,
relied on.
G
2. A professional person owes to his client a duty in tort as well as
in contract to exercise reasonable care in givi~g advice of performing
service. 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 a
reasonable skill and care. [128-C; E]
H
Saif Ali v. Sidney Mitchell & Co., (1980) 1 AC 198; Rees v. Sinclair,
-
INDIAN MEDICAL ASSN. v. V.P .. SHAN1HA
115
(1974) 1NZLR180 and Jackson & Powell on Professional Negligence, paras A
1-04, 1-05 and 1-56, referred to.
3.1. The word 'hires' in Section 2(1)(d)(ii) has been used in the same
sense as 'avails or and the words 'potential users' in Section 2(1)(o) means
'availing of services'. From the use of these words it cannot be inferred
that the services rendered by medical practitioners are not contemplated B
by Parliament to be covered with the expression 'service' as defined in
Section 2(1)(o). [130-C; E]
Black's Law Dictionary, 6th Edn., p. 1541, referred to.
3.2. A determination about deficiency in service for the purpose of C
Section 2(1) (g) has to be made by applying the same test as is applied in
action founded on tort of negligence. It cannot, therefore, be said that in
view of the definition of'deficiency' as contained in Section 2(1)(g) medical
practitioners must be treated to be excluded from the ambit of the Act.
[131-E; 132-E] D
Bolam v. F1iers Management Committee, [1957) 1WLR582; W1zite v.
Jordan, [1981) 1 WLR 246; Maynard v. West Midland Regional Health
Authority, [1984) 1 WLR 634 and Sidaway v. Governors of Beth/em Royal
Hospital, (1985) AC 871, referred to.
4.1. There is a well recognised distinction between a 'contract of
service' and a 'contract for services'. Parliament has deliberately chosen
the expression 'contract of service' instead of the expression 'contract for
service' in the exclusionary part of the definition of 'service' in Section
2(1)(o) for the reason that an employee cannot be regarded as a consumer
E
F
in respect of the services rendered by his employer in pursuance of a
contract of employment. By affixing the adjective 'personal' to the word
'service' the nature of the contracts which are excluded is not altered. The
said adjective only emphasizes that what is sought to be excluded is
personal service only. The expression 'contract of personal service' in the
exclusionary part of Section 2(1)(o) excludes services rendered by an G
employee to his employer. [137·H;. 138·C·E]
Dharangadhara Chemical Works Ltd. v. State of Saurashtra, [1957)
SCR 152, relied on.
Oxford Companion to Law, p. 1134; Simmons v. Health Laund1y Co., H
A
B
116
SUPREME COURT REPORTS [1995) SUPP. 5 S.C.R.
(1910) 1 K.B. 543; Halsbury's Laws of England, 4th Edn., Vol.16 para 501
and Siroud's Judicial Dictionary, 5th Edn. p. 540, referred to.
4.2. The expression 'contract of personal service' contained in Section 2(1)(o) is not confined to employment of domestic servants only.
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 service 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. [147-C]
C
43. A 'contract of personal service' has to be distinguished from a
'contract for personal service'. In the absence of a relationship of master
and servant between the patient and medical practitioner, the service
rendered by a medical prnctitioner to the patient cannot be regarded as
service rendered under a 'contract of personal service'. Such service is
service rendered under a 'contract/or personal service' and is not covered
D
by exclusionary clause of the definition of 'service' contained in Section
2(l)(o) of the Act. [146-H; 147-A-B]
·>!
.fl·
The High Commissioner for India v. IM. Lall, (1948) L.R. 75 I.A. 225;
Ram Kissenda:; Dhanuka v. Satya Charan Law, (1949) L.R. 77 I.A. 128 and
E. Dr. S.B. Dutt v. University of Delhi, [1959) SCR"1236, relied on.
5.1. In the matter of constitution of the District Forums, the State
CoPJmission a.nd the National Commission the Act combines with legal
competence the merits of lay decision making by members having
knowledge and experience in dealing with problems relating to various
F _ fields which are connected with the object and purpose of the Act, namely,,
protection of interest of consumers. [135-D-E]
G
Robin CA. White: The Admi11istratio11 of Justice, 2nd Edn. p. 345,
referred to.
5.2. Moreover, there is a safeguard of appeal against the order made
by the District Forum to the State Commission and against the order made
by the Sta~e Commission to the National Commission and further appeal
to the Supreme Court against the order made by the National Commission. The composition of the Consumer Disputes Redressal Agencies is,
H therefore, not such as to render them unsuitable for adjudicating on issues
INDIAN MEDICAL ASSN. v. V.P. SHANTIIA
117
arising in a complaint regarding deficiency in service rendered by the A
medical practitioner. (135-F-G]
5.3. All complaints of deficiency in rendering service by medical
practitioner would not raise complicated questions requiring recording of
evidence of expert. In many cases the deficiency in service may be due to
obvious faults which can be easily established. The issues arising in the
complaints in such cases can be speedily disposed of by the procedure that
is being followed by the Consumer Disputes Redressal Agencies and in
complaints involving complicated issues requiring recording of evidence
of experts, the complainant can be asked to approach the Civil Court for
appropriate relief. It cannot, therefore, be said that on the ground of the
procedure that is followed by the Consumer Disputes Redressal Agencies
in determining the issues arising before them the services rendered by the
medical practitioners are not intended to be included to the expression
'service' as defined in Section 2(1)(o) of the Act. [137-B-D]
B
c
6. The provisions of the Act are not open to challenge as being D
violative of the provisions of Articles 14 and 19(1)(g) of the Constitution
on the· ground that the composition of the Consumer Disputes Redressal
Agencies and the procedure to be followed by such agencies is such that
they are not suitable for adjudication of complex issues arising for consideration in complaints relating to deficiency in service rendered by E
medical practitioners and hospitals. [150-F]
7.1. Doctors and Hospitals rendering services without any charge
whatsoever to every person availing the services would not fall within the
ambit of 'service' under Section 2(1)(o). The payment of a token amount
for registration purposes only would not alter the position in respect of F
such doctors or hospitals. [139-G]
7.2. The service rendered in hospitals/nursing homes where services
J•
are rendered free of charge to everybody availing the services would
continue to be service rendered free of charge and wool~ be outside the G
purview of Section 2(1)(o), even though the said service is rendered by a
medical officer employed in the hospital who receives emoluments by way
of salary for employment in the hospital. [141-F-G]
7.3. Services rendered free of charge to all patients in Government
hospjtaJs/health centres/dispensaries would not cease to be services H
118
SUPREME COURT REPORTS (1995) SUPP. 5 S.C.R.
A
rendered free of charge on the ground that the expenses for running the
said hospital are met by appropriation from the Consolidated Fund which
i!t raised from the taxes paid by the tax payers. The tax paid by the person
availing the services at a Government hospital cannot be treated as a
consideration or charge for the services rendered by the said hospital and
B
c
such services though rendered free of charge do not cease to be so because
the person availing the service happens to be a tax payer. [142-C; E-F]
17ie Commissioner, Hindu Religi,ous Endowments, Madras v. S1i
Lakshmindra 17iiltha Swamiar of Sri Shirnr Mutt, [1954) SCR 1005, relied
on ..
7.4. The services rendered by doctors and hospitals providing free
service to some of the patients belonging to the poor class and on payment
basis to the rest of the patients would fall within the ambit of Section
2(1)(o) even in respect of services rendered to patients free of charge. The
persons who are rendered services free of charge by such doctors and
D hospitals are the beneficiaries and as such come within the definition of
'consumer' under Section 2(l)(d)(ii) and services rendered to them, even
though free of charge, fall within the ambit of the expression 'service' in
Section 2(l)(o). [141 .. C-E]
E
F
7 .5. 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
whereunder 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. [148-F]
7.6. 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 hospiG ta)/nursing home would not be free of charge and would constitute 'service'
under Section 2(1)(o) of the Act. [148-G]
8. In the conditions prevailing in India there is no cause for the
apprehension that if medical practitioners are brought within the purview
of the Act, there would be huge increase in .;.edical expenditure on account
H of insurance charges as well as. tremendous increase in defensive medicine
-
INDIANMEDICALASSN.v. V.P.SHANTHA[S.C.AGRAWAL,J.)
119
and that medical practitioners would refuse to attend to medical emergen· A
cies and there will be no safeguards against frivolous and vexatious
complaints and consequent blackmail. [143-G]
Whitehouse v. Jordan & Anr., [1980] 1 All E.R. 650; Jackson & Powell
on Professional Liability, 3rd Edn. para 6-25 p.466; Mason & McCall Smith
: Law and Medical Ethics, 4th Edn., pp. 16, 191, 192-93, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 688 of
1993 etc. etc.
B
From the Judgment and Order dated 21.4.92 of the National ConC
sumer Disputes Redressal Commission, New Delhi, in F.A. No. 94of1991.
H.N. Salve, Dr. Rajeev Dhawan, P.S. Poti, C. Sitramiah, M.N. Krishnamani, P.N. Lekhi, Rajiv Dutta, G. Prakash, L.K. Pandy, M.P. Vinod,
Pramod Kumar, Gopal Singh, Naresh Mathur, Krishan Mahajan, A.D.N.
Rao, AS. Rawat, T.G.N. Nair, Shailendra Bhardwaj, L.R. Singh, Ms. Vimla D
Sinha, Ms. Meenakshi Grover, Yunus Malik, K.R. Nambiar, R.C. Verma,
S.R. Setia, M.K. Garg, Rajiv Dhavan, P.H. Parekh, Fazl, Ms. Lucy, (Mrs.
M. Karanjawala) (NP), P. Narasiman, Gopal Singh, Rakesh Luthra,
M.K.D. Nambordri, K.J. John, Chandra Shekhar, Ms. Indu Malhotra, Anil
Makhija, G. Prabhakar, Mrs. D. Bharathi Reddy, Mrs. Rani Chabbra, E
Prashant Bhushan, K.S. Bhati, S. Balakrishnan, S. Prasad, P.V. Yogeshwaran and Ms. Shoba R. for the appearing parties.
The Judgment of the Court was delivered by
S.C. AGRAWAL, J. Leave granted in SLP (C) Nos. 18497/93 and F
21755/94. Delay condoned and leave granted in SLP(C) Nos. 18445-73/94.
These appeals, ,;pecial leave petitions and the Writ Petition raise a
common question, viz., whether and, if so, in what circumstances, a medical
practitioner can be regarded as rendering 'service' under Section 2(1)(o) G
of the Consumer Protection Act, 1986 (hereinafter referred to as 'the Act').
Connected with this question is the question whether the service rendered
at a hospitaVnursing home can be regarded as 'service' under Section
2(1)(o) of the Act. These questions have been considered by various High
Courts as well as by the National Consumer Disputes Redressal Commission (hereinafter referred to as 'the National Commission').
H
A
B
120
SUPREME COURT REPORTS (1995] SUPP. 5 S.C.R.
In Dr. A.S. Chandra v. Union of India, (1992) 1 Andhra Law Times
713, a Division Bench of Andhra Pradesh High Court has held that service
rendered for consideration by private medical practitioners, private hospi-
. tals and nursing homes must be construed as 'service' for the purpose of
Section 2(1)(o) of the Act and the persons availing such services are
'consumers' within the meaning of Section 2(1)(d) of the Act.
In Dr. C.S. Subramanian v. Kumarasamy & Anr., (1994) 1 MLJ 438,
a Division Bench of the Madras High Court has, however, taken a different
view. It has been held that the services rendered to a patient by a medical
practitioner or by a hospital by way of diagnosis and treatment, both
C
medicinal and surgical, would not come within the definition of 'service'
under Section 2(1)(o) of the Act and a patient who undergoes treatment
under a medical practitioner or a hospital by way of diagnosis and treatment, both medicinal and surgical, cannot be considered to be a 'consumer'
within the meaning of Section 2(1)( d) of the Act; but the medical pracD
titioners or hospitals undertaking and providing para-medical services of
all kinds and categories cannot claim similar immunity from the provisions
of the Act and that they would fall, to the extent of such para-medical
services rendered by them, within the definition of 'service' and a person
availing of such service would be a 'consumer' within the meaning of the
Act. C.A. Nos. 4664-65/94 and Civil Appeal arising out of SLP(C) No.
E
21775/94 filed by the complainants and Civil Appeals arising out of SLP( C)
Nos. 18445-73/94 filed by the Union .of India are directed against the said
judgment of the Madras High Court.
The National Commission by its judgment and order dated DecemF
ber 15, 1989 in First Appeal No. 2of1989 has held that persons who avail
themselves of the facility of medical treatment in Government hospitals are
not "consumers" and the said facility offered in the Government hospitals
cannot be regarded as service "hired" for "consideration". It has been held
that the payment of direct or indirect taxes by the public does not constitute "consideration" paid for hiring the services rendered in the GovernG ment hospitals. It has also been held that contribution made by a
Government employee in the Central Government Health Scheme or such
other similar Scheme does not make him a "consumer" within the meaning
of the Act. Civil Appeal arising out of SLP(C) No. 18497/93 has been filed
by Consumer Unity Trust Society, a recognised consumer association,
H against this judgment of the National Commission.
INDIANMEDICALASSN.v. V.P.SHANTHA[S.C.AGRAWAL,J.)
121
By judgment dated April 21, 1992 in First Appeal Nos. 48 and 94 of A
1991, the National Commission has 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' as
defined in Section 2(1)( o) of the Act and that in the event of any deficiency
in the performance of such service, the aggrieved party can invoke the
remedies provided under the Act by filing a complaint before the Consumer Forum having jurisdiction. It has also been held that the legal
representatives of the deceased patients who were undergoing treatment
B
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in the hospital are 'consumers' under the Act and are competent to
maintain the complaint. C.A. Nos. 688/93 and 689/93 filed by the Indian
Medical Association and SLP (C) Nos. 6885 and 6950/92 filed by Mis
Cosmopolitan Hospital are directed against the said judgment of the
National Commission. The said judgment dated April 21, 1992 was followed by the National Commission in its judgment dated November 16,
1992 in First Appeal No. 97 of 1991 (Dr. Sr. Louie & Anr. v. Smt. Kanno/ii
Pathumma & Anr.). S.L.P. No. 351/93 has been filed by Josgiri Hospital D
and Nursing Home against the said judgment of the National Commission.
By judgment dated May 3, 1993 in O.P. No. 93/92, the National
Commission has held that since the treatment that was given to the
complainant's deceased husband in the nursing home belonging to the
opposite party was totally free of any charge, it did not constitute 'service'
as defined under the Act and the complainant was not entitled to seek any
relief under the Act. C.A. No. 254/94 has Leen filed by the complainant
against the said judgment of the National Commission.
Writ Petition No. 16 of 1994 has been filed under Article 32 of the
Constitution by Cosmopolitan Hospital (P) Ltd., and Dr. K. Venogopalan
Nair (petitioners in SLP (C) Nos. 6885 and 6950/92) wherein the sa;rl
petitioners have assailed the validity of the provisions of the Act, insofar
as they are held to be applicable to the medical profession, as being
violative of Articles 14 and 19(1)(g) of the Constitution.
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Sllrl~P\lfasaran, Shri Harish Salve, Shri A.M. Singhvi, Shri Krishnamani and Shri S. Balakrishnan have addressed the court on behalf of the
medical profession and the hospitals and Shri Rajeev Dhavan has
presented the case of the complainants. Before we proceed to deal with
their contentions we would briefly take note of the background and the H
122
SUPREME COURT REPORTS [1995] SUPP. 5 S.C.R.
A
scheme of the Act.
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On April 9, 1985, the General Assembly of the United Nations, by
Consumer Protection Resolution No. 39/248, adopted the guidelines to
provide a framework for Governments, particularly those of developing
countries, to use in elaborating and strengthening consumer protection
policies and legislation. The objectives of the said guidelines include assisting countries in achieving or maintaining adequate protection for their
population as consumers and encouraging high levels of ethical conduct for
those engaged in the production and distribution of goods and services to
the consumers. The legitimate needs which the guidelines are intended to
meet include the protection of consumers from hazards to their health and
safety and availability of effective consumer redress. Keeping in view the
said guidelines, the Act was enacted by Parliament to provide for the better
protection of the interests of consumers and for that purpose to make
provision for the establishment of consumer councils and other authorities
D for the settlement of consumers' disputes and for matters connected therewith. The Act sets up a three-tier structure for the redressal of consumer
grievances. At the lowest level, i.e., the District level, is the Consumer
Disputes Redressal Forum known as 'the District Forum'; at the next·
higher level, i.e., the State level, is the Consumer Disputes Redressal
E
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Commission known as 'the State Commission' and at the highest level is
the National Commission. (Section 9). The jurisdiction of these three
Consumer Disputes Redressal Agencies is based on the pecuniary limit of
the claim made by the complainant. An appeal lies to the State Commission
against an order made by the District Forum (Section 15) and an appeal
lies to the National Commission against an order made by the State
Commission on a complaint filed before it or in an appeal against the order
passed by the District Forum. (Section 19). The State Commission can
exercise revisional powers on grounds similar to those contained in Section
115 CPC in relation to a consumer dispute pending before or decideJ by
a District Forum [Section 17(b)] and the National Commission has similar
revisional jurisdiction in respect of a consumer dispute pending before or
G decided by a State Commission. [Section 21(b)]. Further, there is a
provision for appeal to this Court from an order made by the National
Commission on a complaint or on an appeal against the order of a State
Commission. (Section 23). By virtue of the definition of complainant in
Section 2(1)(c), the Act affords protection to the consumer against unfair
H trade practice or a restrictive trade practice adopted by any trader, defect
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INDIAN MEDICAL ASSN. v. V.P. SHANTIIA [S.C. AGRA WAL,).]
123
in the goods bought or agreed to be bought by the consumer, deficiency in A
the service hired or availed of or agreed to be hired or availed of by the
consumer, charging by a trader price in excess of the price fixed by or
under any law for the time being in force or displayed on the goods or any
package containing such goods and offering for sale to public, goods which
will be hazardous to life and safety when used, in contravention of the
provisions of any law for the time being in force requiring traders to display
information in regard to the contents, manner and effect of use of such
goods. The expression "complainant", as defined in Section 2(1)(b), is
comprehensive to enable the consumer as well as any voluntary consumer
association registered under the Companies Act, 1956 or under any other
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law for the time being in force, or the Central Government or any State
Government or one or more consumers where there are numerous consumers having the same interest, to file a complaint before the appropriate
Consumer Disputes Redressal Agency and the consumer dispute raised in
such complaint is settled by the said agency in accordance with the procedure laid down in Section 13 of the Act which prescribes that the District D
Forum (as well as the State Commission and the National Commission)
shall have the same power as are vested in a Civil Court under the Code
of Civil Procedure in respect of summoning and enforcing attendance of
any defendant or witness and examining the witness on oath; discovery and
production of any document or other material object producible as
evidence; the reception of evidence on affidavits; the requisitioning of the
report of the concerned analysis or test from the appropriate laboratory or
from any other relevant source; issuing of any commission for the examination of any witness; and any other matter which may be prescribed. Section
14 makes provisions for the nature of reliefs that can be granted to the
complainant on such a complaint. The provisions of the Act are in addition
to and not in derogation of the provisions of any other law for the time
being in force. (Section 3).
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In this group of cases we are not concerned with goods and we are
only concerned with rendering of services. Since the Act gives protection G
to the consumer in respect of service rendered to him, the expression
"service" in the Act has to be construed keeping in view the definition of
"consumer" in the Act. It is, therefore, necessary to set out the definition
of the expression 'consumer' contained in Section 2(1)( d) insofar as it
relates to services and the definition of the expression 'service' contained
in Section 2(l)(o) of the Act. The said provisions are as follow:
H
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c
D
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SUPREME COURT REPORTS [1995) SUPP. 5 S.C.R.
"Section 2(1)(d) "consumer" means any person who, -
(i) omitted
(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
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.
Explanation. - Omitted"
"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, 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 rendering of any service free of charge or under a contract
of personal service;"
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
F up into three parts - the main part, the inclusionary part and the exclusionary part. The main part is explanatory in nature and defines service to mean
service of any description which is 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
G electrical or .other energy, board or lodging or both housing construction,
entertainment, amuseinent 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.
The definition of 'service' as contained in Section 2(1)(o) of the Act
'.H has been construed by this Court in Lucknow Development Authority v.
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INDiANMEDICALASSN.v. V.P.SHANTHA[S.C.AGRAWAL,J.)
125
M.K Gupta, [1994) 1 SCC 243. After pointing out that the said definition A
is in three parts, the Court has observed :
"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 word 'any' dictionarily B
means; one or some or all'. In Black's Law Dictionary it is explained thus, "word 'any' has a div~rsity of meaning and may be
employed to indicate 'all' or 'every' as well as 'some' or 'one' and
its meaning in a given statute depends upon the context and the
subject-matter of the statute". The use of the word 'any' in the
context it has been used in clause ( o) indicates that it has been c
used in wider sense extending from one to all. The other word
'potential' is again very wide. In Oxford Dictionary it is defined as
'capable of coming into being, possibility'. In Black's Law Dictionary it is defined "existing in possibility but not in act. Naturally and
probably expected to come into existence at some future time, D
though not now existing; for example, the future product of grain
or trees already planted, or the successive future instalments or
payments on a contract or engagement already made." In other
words service which is not only extended to actual users but those
who are capable of using it are covered in the definition. The clause
is thus very wide and extends to any or all actual or potential users." E
(p.255)
The contention that the entire objective of the Act is to protect the
consumer against malpractices in business was rejected with the observations:
F
"The argument proceeded on complete misapprehension of the
purpose of Act and even its explicit language. In fact the Act
requires provider of service to be more objective and caretaking."
(p.256).
Referring to the inclusive part of the definition it was said :
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"The inclusive clause succeeded in widening its scope but not
exhausting the services which could be covered in earlier part. So
?ny service except when it is free of charge or under a constraint
of personal service is included in it." (p.257)
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B
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126
SUPREME COURT REPORTS [1995] SUPP. 5 S.C.R.
In that case the Court was dealing with the question whether housing
construction could be regarded as service under Section 2(1)(o) of the Act.
While the matter was pending in this Court, "housing construction" was
inserted in the inclusive part by Ordinance No. 24 of 1993. Holding that
housing activity is a service and was covered by the main part. of the
definition, the Court observed :
" ......... the entire purpose of widening the definition is to include
in it not only day to day buying and selling activity undertaken by
a common man but even such activities which are otherwise not
commercial in nature yet they partake of a character in which some
benefit is conferred on the consumer." (p.256)
In the present case the inclusive part of the definition of "service" is
not applicable and we are required to deal with the questions falling for
consideration in the light of the main part and the exclusionary part of the
D definition. The exclusionary part will require consideration only if it is
found that in the matter of consultation, diagnosis and treatment a medical
practitioner or a hospital/nursing home renders a service falling within the
main part of the definition contained in Section 2(1)(o) of the Act. We
have, therefore, to determine whether medical practitioners and hospitals/nursing homes can· be regarded as rendering a "service" as conE templated in the main part of Section 2(1)(o). This determination has to
be made in the light of the aforementioned observations in Lucknow
Development Authority (supra). We will first examine this question in
relation to medic~l practitioners.
F
It has been contended that in law there is a distinction between a
profession and an occupation and that while a person engaged in an
occupation renders service which falls within the ambit of Section 2(1)(o)
the service rendered by a person belonging to a profession does not fall
within the ambit of the said provision and, therefore, medical practitioners
G who belong to the medical profession are not covered by the provisions of
the Act. It has been urged that medical practitioners are governed by the
provisions of tlie Indian Medical Council Act, 1956 and the Code of
Medical Ethics made by the Medical Council of India, as approved by the
Government of India under Section 3 of the Indian Medical Council Act,
1956 which regulates their conduct as members of the medical profession
H ; and provides for disciplinary action by the Medical Council of India and/or
...
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INDIANMEDICALASSN.v. V.P.SHANTHA(S.C.AGRAWAL,J.)
127
State Medical Councils against a person for professional misconduct.
A
While expressing his reluctance to propound a comprehensive definition of a 'profession', Scrutton L.J.