Should medical professionals be protected from consumer court proceedings? SC to reconsider 1995 ruling

“We are of the opinion that the decision of the three-judge bench in case of Indian Medical Association vs V P Shantha…deserves to be revisited and considered by a larger bench,” the court said in its judgment on May 14 (Bar of Indian Lawyers vs D K Gandhi).

In V P Shantha (1995), a Bench of Justices S C Agarwal, Kuldip Singh, and B L Hansaria had ruled that medical professionals provide a “service” as defined in the older CPA (the definition remains the same in the current CPA), and could thus be sued in consumer court for providing faulty service.

In its May 14 judgment, the court made a distinction between ‘professionals’ and those who carry out a business or a trade — ruling that “neither the ‘Profession’ could be treated as ‘business’ or ‘trade’ nor the services provided by the ‘Professionals’ could be treated at par with the services provided by the Businessmen or the Traders, so as to bring them within the purview of the CP Act”.

Doctors provide a ‘service’

In the 1995 case, counsel for Indian Medical Association (IMA) argued that a medical practitioner cannot be judged on fixed norms or standards, and thus cannot be covered under the definition of “service” or be sued over “deficiency in service” under the CPA.

The SC acknowledged that professional occupations differ from other occupations as success often depends on factors “beyond the professional man’s control”. However, it ruled that a doctor still has certain duties towards the patient — duties of deciding whether to treat the patient, what treatment to give, and how to administer it.

If the doctor does not exercise a “reasonable degree of care” and breaches one of these duties, they can be liable for deficiency in service, the court said.

In the present case, however, the court held that the purpose of the CPA was to protect consumers from “unfair trade practices and unethical business practices only”, and that the legislature never “intended to include the Professions or the Professionals within the purview of the Act”.

Complexity not a bar

Legal proceedings under the CPA lie before Consumer Redressal Commissions that are constituted at district, state, and national levels. Under the 1986 version of the CPA, which was applicable in 1995, the president of each commission would be a person who was, or was qualified to be, a judge of the district court, High Court, and Supreme Court respectively.

The rest of the members (two at the district and state levels; four at the national level) would be individuals with the knowledge, experience, or capacity to deal with “problems relating to economics, law, commerce, accountancy, industry, public affairs or administration”.

The petitioners in V P Shantha argued that since commission members are not required to have knowledge in medical matters, they are unsuited to deal with complex medical issues.

The court rejected this argument, holding that requiring members to have knowledge and experience that is specifically relevant to each individual case “would lead to impossible situations”.

Question of free service

The definition of ‘service’ in both the 1986 and 2019 CPAs explicitly excludes two types of services — those that are free of charge, and those given under a “contract of personal service”.

The court identified three types of services in the medical profession — those free for everyone, those for which everyone pays, and those which are free for certain categories of people who cannot afford them. Under the CPA, the first is not a service, while the second is.

With regard to the third type of service, the court said it was “difficult to conceive” that lawmakers had intended to make the protections under the CPA available only to consumers who could afford to pay for medical services.

This, the court said, would result in hospitals and doctors giving better services to those who could afford it, while providing “inferior” services to those who could not. To avoid this inequity, the court held that hospitals and doctors falling under the third category will be covered by the definition of ‘service’, regardless of whether it was free.

The court also held that medical care is not provided as a “contract of personal service”, as such contracts are limited to situations where there is an employer-employee or a “master and servant” relationship between the two parties.

“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,” the court held.