Negotiable Instruments: Exhaustive Coverage by Adv Roma Bhagat. Register Now!
LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Medical Profession Brought Within The Ambit Of A 'service' As Defined In Section 2(1)(o) Of The Consumer Protection Act, 1986, And Therefore Liable For Compensation Under “a Deficiency Of Service” Under The Act.

Saurabh Uttam Kamble ,
  01 April 2023       Share Bookmark

Court :
Hon’ble Supreme Court Of India.
Brief :

Citation :
1996 AIR 550

Case title:

Indian Medical Association v. V.P.Shantha

Date of Order:



Hon’ble Justice S.C. Agrawal, Justice Kuldip Sigh, Justice B.L. Hansaria


Petitioner: Indian Medical Association   

Respondent: V.P. Shantha & Ors


The judgment acknowledged the consumer’s rights to register a complaint under the Consumer Protection Act for damage received during medical treatment and classified the relationship between patients and medical professionals as contractual. Patients were given an alternative, affordable, and quick option for the resolution of medical malpractice claims.



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

(o) “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; "spurious goods and services" mean such goods and services which are claimed to be genuine but they are actually not so.

  • Section 2 (1) (d) defines who is consumer-

Consumer means any person who:

buys any goods 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 user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

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.

  • Ratio Decidendi

Medical malpractice is the case's ratio decidendi. Medical malpractice is essentially when a medical professional violates their professional obligations by failing to provide adequate care for their patients, who are customers. They debated whether this constituted carelessness under the Torts Act or the IPC, but it was ultimately ruled that any negligence in the medical area would be governed by the CPA, 1986. The Supreme Court also ruled that a doctor, a nursing home, or a hospital might all be considered to be providing services under the CPA, 1986.


  • When cases of doctor (medical) negligence increased, it was unclear if medical services fell under the purview of COPRA, 1986, and whether hospitals, doctors, and other medical practitioners were covered by the law or not.
  • Additionally, numerous High Courts and other lower courts have made judgments and provided justifications that are in contradiction with one another on this matter. The Supreme Court has received numerous Special Leave Petitions challenging rulings and verdicts from lower courts.
  • The Supreme Court has to deal with a significant influx of SLPs. Thus, a writ was filed in this PIL asking the Supreme Court to decide the scope and jurisdiction of the Consumer Protection Act, 1986, in accordance with Article 32 of the Indian Constitution.
  • Hon’ble Court Held that:
  • Under Section 2(1)(o) of the Act, medical services are considered to fall under the definition of "services."- The contract of service in Section 2(1)(o) cannot be limited to contracts for the employment of domestic servants alone; there is no master-servant relationship, hence it is not a contract of personal service. 
  • Section 2(1)(o) of the Act does not apply to medical services provided by hospitals or nursing homes that are provided at no cost to patients where it is free of cost to everyone.
  • The Act covers medical services provided in exchange for money or other remuneration.
  • Medical services that are paid for with a third party's money are considered to fall inside the purview of the Act.
  • Under Section 2(1)(d) of the Act, a hospital where some patients are taxed and others are excluded from payment because they cannot afford the services will be considered a consumer.


1. Whether a doctor can be considered to be giving "service" under Section 2(1)(o) of the Consumer Protection Act of 1986, and if so, under what conditions.

2. Whether a hospital's or nursing home's services qualify as "services" under Section 2(1)(o) of the Act..


  • The IMA argued that under Section 2(1)(o) of the Act, professional services are not included since there is a legal distinction between them and occupational services. Hence, while being a professional service, the medical profession shouldn't be protected by the Act.
  • It was argued that since contracts of personal services are excluded from the definition of services under Section 2(1)(o), medical services are not covered by that provision.
  • Regarding the phrase "which is made available to potential users" found in Section 2(1)(o) of the Act, it was argued that medical practitioners were not intended to be covered by the Act's provisions.
  • It was argued that because the deficiency with regard to fault, imperfection, shortcoming, or inadequacy in respect of service under the aforementioned clause must be determined on the basis of certain norms relating to quality, nature, and manner of performance and because medical services provided by a medical practitioner cannot be evaluated on the basis of any fixed norms, a medical practitioner cannot be said to have been covered by the expression "service" as defined in the aforementioned clause (o).


  • According to Section 2(1)(o) of the Act, medical services shall be treated as services, and from this point forward, the potential user will be referred to as the medical services consumer.
  • Concerning the second matter: According to the Hon'ble Judge, patients in the third group who receive services at no cost are also beneficiaries because those individuals are paying consideration for non-paying patients in addition to themselves. As beneficiaries, they fall under the Act's purview. As a result, they are considered consumers under Section 2(1)(d) of the Act.
  • Several National Commission verdicts used diverse philosophies. In its judgment and order dated December 15, 1989, it determined that people who use the medical treatment provided in government hospitals are not "consumers" and that since the public's payment of taxes does not count as "consideration," the service is essentially provided for free, falling under the Act's exclusionary definition of "service."
  • The National Commission determined in its decision dated April 21, 1992 that the activity of providing medical aid for compensation carried out by hospitals and members of the medical profession falls within the definition of the term "service”.
  • According to the opinion of the Honorable Court, damages should be given for losses or injuries incurred by customers as a result of the other party's negligence. Therefore, the same criteria used in a claim for negligent damages must be used to determine whether there was a failure in service for the purposes of Section 2(1)(g). 
  • The House of Lords has agreed in a number of cases with the standard of care that is expected of medical professionals as stated by McNair J. in his instruction to the jury in Bolam v. Friern Hospital Management Committee, (1957) 1 WLR 582.
  • It is undeniably true that there is a certain amount of mutual trust and confidence present in the connection between a doctor and a patient.
  • Since there is no master-servant relationship between the doctor and the patient, the services provided by the medical professional can therefore be considered to be of a personal nature. However, because the contract between the medical professional and his patient is one for services rather than personal services, the services provided by the medical professional to his patient under such a contract are not excluded by the exclusionary part in Sec 2(1)(o).


  • The Supreme Court developed a logical approach to medical professional liability and granted patients the status of "consumer" in order to provide them with the protection they need. The court drew inspiration from a number of English cases, including Arizona v. Maricopa County Medical Society, 457 US 332. Medical negligence is regarded by consumer protection laws as a type of service failure, akin to liability under the law of torts. It mandates that professionals use reasonable care in the performance of their jobs.
  • Yet, the system of liability established in this case exclusively penalizes medical malpractice, not all actions taken by a doctor that results in injury.
  • It was determined in Laxman Balakrishna Joshi v. Trimbak Bapu Godbole & Anr., 1969 (1) SCR 206 that a doctor's obligations to his patient are explicit. A person who presents himself as prepared to offer medical advice and treatment implicitly represents that he has the knowledge and skill necessary for the job. When a patient consults this individual, the person owes the patient a number of duties, including a duty of care when determining whether to take the case, a duty of care when determining what treatment to deliver, or a duty of care when administering that treatment. The patient has the right to sue for negligence if any of those obligations are broken.
  • Nonetheless, the community of medical professionals has criticized the ruling in Indian Medical Association v. P. Shantha for leaving the medical profession open to numerous litigation, many of which are brought to harass doctors or avoid paying medical expenses. 
  • While maintaining the integrity of this profession is crucial, the rising number of medical malpractice claims is cause for alarm. The Supreme Court's understanding of "service" is to protect patients' interests and well-being, which are of utmost importance.
"Loved reading this piece by Saurabh Uttam Kamble?
Join LAWyersClubIndia's network for daily News Updates, Judgment Summaries, Articles, Forum Threads, Online Law Courses, and MUCH MORE!!"

Published in Others
Views : 702


Latest Judgments

More »