HIMACHAL PRADESH NATIONAL LAW

UNIVERSITY , SHIMLA

2017-2018
Assignment of Torts
INDIAN MEDICAL ASSOCIATION v. V.P. SHANTHA
(1995) 6 SCC 651

Submitted to - Mr. Santosh Sharma and Dr. Ruchi Gupta

Submitted by – Abhishek Jaiswal

B.A.LL.B (First Semester)

Roll No. - 13
 ACKNOWLEDGEMENT

It is not possible to prepare a project report without the assistance and encouragement of
other people. This is certainly no exception. I am using this opportunity to express my
gratitude to everyone who supported me throughout the course of this assignment. I am
thankful for their aspiring guidance, invaluably constructive criticism and friendly advice
during the assignment work. I am sincerely grateful to them for sharing their truthful and
illuminating views on a number of issue related to the project. I would like to express my
special gratitude to Prof. (Dr.) S.C. Raina and Assistant Professor Mr. Santosh Sharma
and Dr. Ruchi Gupta who gave me the golden opportunity to do this wonderful project,
which also helped me in doing a lot of Research and I came to know about so many new
things for which I am indebted to them from the core of my heart. I also acknowledge with
a deep sense of reverence, my gratitude towards my parents and member of my family,
because of whom I have managed to complete this assignment on time and who have
always supported me morally. At last, my gratitude goes to all of my friends who directly
or indirectly helped me to complete this assignment. Any omission in this brief
acknowledgement does not mean lack of gratitude.
 CONTENTS

1) Introduction

2) Issue

3) Argument

4) Judgement

5) Analysis

6) Conclusion
 INDIAN MEDICAL ASSOCIATION v. V.P. SHANTHA
(1995) 6 SCC 651

“It is better to risk saving a guilty person than to condemn an innocent one.”

― Voltaire, Zadig

INTRODUCTION

The basic issue addressed in this landmark judgment is that of the applicability of the
Consumer Protection Act, 1986, to the medical profession, hospitals, dispensaries and
paramedical services. The Consumer Protection Act, 1986 1, was the outcome of the
adoption by the United Nations of a basic framework for the governments of the third world
countries to strengthen consumer protection policies 2. For this purpose, the COPRA
provides for establishment of various quasi-judicial machinery like the District, State
and National commissions to provide a speedy remedy to consumers.

Legally a doctor is liable in an action for negligence if he fails to exercise the care and skill
reasonably expected of a competent medical practitioner. This has been the basis of
tortious liability for medical practitioners. The radical departure is made by COPRA in that
no court fee is needed to be paid and provision is made for expeditious disposal of
complaints, thereby seeking to provide effective remedy to the consumers.

Till the pronouncement of the judgment, the accountability of medical professionals and
indemnification of aggrieved parties had become a controversial issue. The decline in the
fiduciary character of the doctor-patient relationship coupled with the commercialisation
of the services of the medical establishment had led to the evolution of the concept of the
patient as a consumer. Resultantly, the issue of interpreting the statute to allow for medical
services to be included within the scope of COPRA was largely for the purpose of providing
quick justice to patients having grievances as consumers of medical services.

1
Referred to as COPRA
2
On 09/04/1985, the General Assembly of the U.N. passed the Consumer Protection Resolution
ND 39/248.
The Supreme Court through its judgement on 13-11-1995 pronounced by a three-judge
bench comprising of Justices Kuldip Singh, S.C. Agrawal and B.L Hansaria have dealt
with the controversy with COPRA being made applicable.

THE BROAD ISSUES EXAMINED

1) Whether and, if so, in what circumstances, a medical practitioner can be regarded as

2) Whether the service rendered at a hospital/nursing home can be regarded as 'service'

3) The competence of the remedial bodies under COPRA to address cases of medical
professional negligence.

Definition of Service under Section 2(1)(0)3 explanatory part and the medical services

This issue was considered by the court keeping in mind the object of the Act and the
definition of consumers envisaged under the Act.

As interpreted earlier in Lucknow Development Authority v. M.K. Gupta,4 the court held
that the object of the Act was to recognise that a consumer is a person who is not only
involved in purely commercial transactions as the availed of goods and services as in buying
and selling, but is also involved in such activities which are not strictly commercial in
character and in which some benefits are conferred on the consumer. The words 'any' and
'potential' in the definition of service were therefore given the widest amplitude
considering thus that hospitals are often managed by corporate entities and treatment costs
are translated into profits.5 As such, medical services may be included in the wide

3
Definition of services in section 2(1)(0) service means services of any description which is made
available to 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.

4
(1994) 1 SCC 243

5
In Dr. C.S. Subramaniam v. Kumaraswamy, 1994 CCJ 475, the court held that whether there is
a special contract or not between them is not really material but there is always an implied term to act at all
times in the best interest of the patients.
interpretation of 'any service' made available to 'potential users' if a minimum degree of the
professed skill is to be ensured.

The crux of the second objection to the applicability of COPRA to medical services was that
there is a distinction between professions and occupations and the reason why professions
cannot be made subject to legal scrutiny is because in professions, success cannot be
achieved in every case and success and failure depend often on factors beyond the control
of the professional person.6

The court countered this by highlighting that the success or failure of the individual cases
were not being made subject to scrutiny, but a minimum degree of professional skill and
care expected reasonably of a professionally competent person in the discharge of his duties
was being regulated. The standard of reasonable skill and care was already a principle of
tortious liability which has been applied to various professions and the medical profession
could not claim immunity.7

Argument:

1) First issue which was raised in petition dealt with services of medical practitioner are
services under COPRA. 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 Hon’ble Judge as he said that medical practitioner should be
held liable when they are negligent and to find out their negligence Bolam8 test is sufficient
enough.

6
Indian Medical Association v. V.P. Shantha, (1995) 6 SCC 657 at 665.
7
Ibid. The court however, had not taken up another conspicuous reasoning to justify the stand.
8
Bolam v Friern Hospital Management Committee [1957] 1 W.L.R. 582. Bolam test implies that whether doctor
was reasonable enough to use special skill as used by generally by the personnel of that profession.
2) Respondent argued that as Section 2(1) (g) contains certain basis on which service can be
treated as deficient. Since, this basis is 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.

3) 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 Saurashtra9. 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.

4) Other argument which was raised by respondent was that “service” does not include any
such term medical service, so medical service is not in the purview of the Act.

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 has 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.

5) 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)

9
Dharangadhara Chemical Works Ltd vs State of Saurashtra 1957 AIR 264, 1957 SCR 152. which distinguishes
between Contract of service and Contact for service.
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 Hon’ble 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.

Judgment:
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

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

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 judgment has given rise to divergent views on the possible changes that might occur in
the realm of medical services, it has been said that henceforth private doctors would
increasingly seek insurance costs to meet the expenditure in the eventuality of award of
damages and the arena of practising defensive medicine would begin.
Despite the possible disadvantages mentioned generally a greater transparency in the mode of
treatment and surgery ought to occur. In a country like India, where the standard of medical
service offered generally to a great cross-section of the people is low, the system of
negligence action would have a greater deterrence value and thus ought to increase care in
rendering of services. This becomes especially important where negligence is apparent per se.
However, the judgment is not comprehensive since it does not provide a guarantee that
complicated medical issues would be dealt with effectively in the consumer fora, especially
since the prerogative of taking action being with the complainant, the remedy through civil
court would be obviously avoided. Another conspicuous lacuna in the judgment is not
providing for any remedy where free medical services are concerned especially since the
service offered by Government hospitals are far from perfect. The two presumptions
operating with respect to that seem to be that the services rendered by the Government are
free and the services rendered in the Government hospital are perfect. The reluctance of the
court not to uphold the 'taxpayers’' money consideration' contention is not understandable
since though services in Government hospitals are free to the patients they are met from the
taxpayers' money and doctors are paid for their services from the amounts contributed by the
people.

There is a lack of provision in the judgment for any screening procedure at the stage of
admission of a case. It is also suggested that the res ipsa loquitor principle10 where the burden
of proof is shifted on the doctor in cases of obvious negligence or where such an outcome
could not have occurred but for the negligence of the doctor, can be made applicable in India.

10
This principle was made applicable in the English case of Cassidy v. Ministry of Health. (1951) 1 All ER 574,
where the patient underwent treatment to be cured of two stiff fingers but came out with four stiff fingers. This
situation pointed towards the fact that the injury could not have happened but for the negligence of the doctor.
See Mason & McCall Smith, Law and Medical Ethics. 221 (1991).