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ARMY INSTITUTE OF LAW

MEDICAL ASSOCIATION OF INDIA


VS
V.P. SHANTHA
A PROJECT REPORT SUBMITTED TO ARMY
INSTITUTE OF LAW IN PARTIAL FULFILLMENT OF
THE REQUIREMENT FOR THE DEGREE OF
B.A.L.L.B

SUBMITTED TO:
BY:
MR SHAILENDER SLATHIA
KUMAR

SUBMITTED
ASHUTOSH

(FACULTY FOR LAW OF TORTS)


150

ROLL NO.-

ARMY INSTITUTE OF LAW

Sector 68, Mohali

BONA FIDE CERTIFICATE

This is to certify that the Project Report titled


MEDICAL ASSOCIATION OF INDIA VS V.P.
SHANTHA for LAW OF TORTS is a bona fide work
carried out by ASHUTOSH KUMAR of B.A.L.L.B Ist
year of Army Institute Of Law, Mohali for fullfillment
of Bachelor of Art cousre of Army Institute Of Law,
Mohali.

MR SHAILENDER SLATHIA
KUMAR

ASHUTOSH

ACKNOWLEDGEMENTS

A project is a golden oppurtunity for


learning and self development. I
consider myself very lucky and honoured
to have so many wonderful people who
lead me through, in completion of this
project.
My grateful thanks to Amit Raina and
Ransher singh, who in spite of being
extraordinarily busy with there work, took
time out to hear , guide and keep me on
the correct path. I am very thankful to
them for their suppor

INDEX
CONTENT

1.
INTRODUCTION
2.
CONSUMER PROTECTION ACT
1986
3.
INDIAN MEDICAL ASSOCIATION
OF INDIA VS
V .P. SANTHA
4.
CONCLUSION
5.
REFERENCE

INTRODUCTION

The doctor- patient relationship is one of the most unique and privileged
relation based on mutual trust and faith. But presently there is a great
decline in this relationship which might be due to communication gap
between them, commercialization of health services, raising expectations
from doctors or increased consumer awareness. Though to err is human
nature, but mistakes of medical professional which may result in death
of a person or cause permanent impairment can be particularly costly
and cannot be overlooked. The law does not aim to punish doctors for all
their mistakes, but only to those which are committed out of negligence.
Mistakes occur but which occurs from carelessness and negligence
cannot be let off. The landmark case Indian Medical Association Vs.
V.P.Shantha brought the medical professionals within the ambit of
service as defined in the Consumer Protection Act, 1986.

Doctors in India may be held liable for their services individually or


vicariously unless they come within the exceptions specified in the case
of Indian Medical Association vs V P Shantha . Doctors are not liable
for their services individually or vicariously if they do not charge fees.
Thus free treatment at a non-government hospital, governmental
hospital, health centre, dispensary or nursing home would not be
considered a service as defined in Section 2 (1) (o) of the Consumer
Protection Act, 1986.

CONSUMER PROTECTION ACT 1986


Though consumer is the purpose and most powerful motivating force
of production, yet at the same time consumer is equally vulnerable
segment of the whole marketing system. Attempts have been made to
guard the interest of the consumer in a sporadic way till 1986, when
Government of India enacted a comprehensive legislation-Consumer
Protection Act, to safe guard the interest of the consumer then ever
before. The Consumer Protection Act, 1986, applies to all goods and
services, excluding goods for resale or for commercial purpose and
services rendered free of charge and under a contract for personal
service. The provisions of the Act are compensatory in nature. It
covers public, private, joint and cooperative sectors.
The Act enshrines the rights of the consumer such as right to
safety, right to be informed, right to be heard, and right to choose,
right to seek redressal and right to consumer education.
Consumer: A consumer is any person who buys any goods for a
consideration and user of such goods where the use is with the
approval of buyer, any person who hires/avails of any service for a
consideration and any beneficiary of such services, where such
services are availed of with the approval of the person hiring the
service. The consumer need not have made full payment.1
Goods: Goods mean any movable property and also include shares,
but do not include any auctionable claims.2

Ratanlal and Dheerajlal the law of Torts 24 th edition 2004

ibid

Service: Service of any description such as banking, insurance,


transport, processing, housing construction, supply of electrical
energy, entertainment, board or lodging.3
Nature of complaint:
a)

Any unfair trade practice or restrictive trade practice adopted ;by the
trader
b) Defective goods

b)

Deficiency in service

c)

Excess price charged ;by the trader


d) Unlawful goods sale, which is hazardous to life and safety when
used

Consumer Courts: A three-tier-system


a)

National Consumer Dispute Redressal Commission: claims


above Rs. 1 CRORE
(a) Consumer Dispute Redressal Commission or State
Commission: Claims from Rs 20 LAKH to 1 CRORE
(a)

Consumer Dispute Redressal Forum or District


Forum: Claims upto Rs 20 Lakh4

Complaint: A complaint, hand written or typed, can be filed by a


consumer, a registered consumer organisation, central or state
Government and one or more consumers, where there are numerous
3 Ratanlal and Dheerajlal the law of Torts 24 th edition 2004
4 R.k.bangia law of torts 22nd edition 2010

consumers having the same interest.No stamp or court fee is


needed. The nature of complaint must be clearly mentioned as well
as the relief sought by the consumer. It must be in quadruplicate in
district forum or state commission. Else, additional copies are
required to be filed.
Grant of relief:
(a)

Repair of defective goods

(b) Replacement of defective goods


(c)

Refund of the price paid for the defective goods or service

(d) Removal of deficiency in service


(e)

Refund of extra money charged

(f)

Withdrawal of goods hazardous to life and safety

(g) Compensation for the loss or injury suffered by the consumer


due to negligence of the opposite party
(h)

Adequate cost of filing and pursuing the complaint

Normally, complaints should be decided within 90 days from the


date of notice issued to the opposite party. Where a sample of any
goods is required to be tested, a complaint is required to be disposed
of within 150 days; it may take more time due to practical
problems.5
Consumer Protection Councils: Councils have been setup in all
states and at the center to promote and protect the rights and interest
of consumers. These councils are advisory in nature and can play
important role in recommending consumer oriented policies to the
state and central Government.
5

www.wikipedia.org

MEDICAL ASSOCIATION OF INDIA


VS V. P. SANTHA
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. Some of
the cases and SLPs, which have contrasting and dissimilar decisions, are
A.S. Chandra v. Union of India, Dr.C.S. Subramanian v. Kumarasamy &
Anr., Dr. Sr. Louie & Anr. v. Smt. Kannolil Pathumma & Anr.,
Cosmopolitan Hospital (P) Ltd., and Dr. K. Venogopolan Nair.
Statues Referred:Section 2(1) (d) of Consumer Protection Act, 1986, which defines
Consumer of service as a person who 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 of any
commercial purpose.6
Section 2(1) (o) of Consumer Protection Act, 1986, which defines
service as service 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 the rendering of any service free
of charge or under a contract of personal service.7
Section 2(1) (g) of Consumer Protection Act, 1986, states that
"Deficiency" means any fault, imperfection, shortcoming or inadequacy
in the quality, nature and manner of performance which is required to be
maintained by or under any law for the time being in force or has been
undertaken to be performed by a person in pursuance of a contract or
otherwise in relation to any service.
Section 14 (1) (d) of Consumer Protection Act, 1986,deals with Finding
of District Forum, If, after the proceeding conducted under section 13,
the District Forum is satisfied that the goods complained against suffer
from any of the defects specified in the complaint or that any of the
allegations contained in the complaint about the services are proved, it
shall issue an order to the opposite party directing him to pay such
amount as may be awarded by it as compensation to the consumer for
any loss or injury suffered by the consumer due to the negligence of the
opposite party.8
6
7

Avtar singh-introduction to law of torts


ibid

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 vs M.K. Gupta, 1994 AIR 787

ISSUE:1. Whether and, if so, in what circumstances, a medical practitioner can


be regarded as rendering 'service' under Section 2(1)(o) of the Consumer
Protection Act, 1986
2. Whether the service rendered at a hospital/nursing home can be
regarded as 'service' under Section 2(1) (o) of the Act.9

Argument:v 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.

8
9

ibid
www.legalservicesindia.com

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 test is sufficient enough.
v 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.
v 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 Saurashtra, 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.
v 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.
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.v 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.

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 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.10

10

www.legalservicesindia.com

CONCLUSION
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.

REFERENCE

BOOKS
1. A. LAKSHMINATH & M SRIDHAR- RAMASWAMY
IYER
2. RATANLAL & DHEERAJLAL- LAW OF TORTS
3. AVTAR SINGH-INTRODUCTION TO LAW OF TORTS
4. R.K. BANGIA-LAW OF TORTS

WEBSITES
1. WWW.WIKIPEDIA.ORG
2. LEGALSERVICESINDIA.COM
3. WWW.INDIANKANOON.COM

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