September 30, 2022

Indian Medical Association vs V.P. Shantha- An Analysis

This article is part of our Medical Negligence Series

Connected with this question was other the question whether the service rendered at a hospital/nursing home can be regarded as ‘service’ under Section 2(1)(o) of the Act.

Here it is relevant to know the provision of section 2 (1) (o) of CPA, it provides-

(o) “service” means service of any description which is made available to potential.”

These questions have been considered by various High Courts as well as by the National Consumer Disputes Redressal Commission.

Contentions

-Medical Profession does not fall under Section 2(1)(o)

  • 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 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 the 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 and provides for disciplinary action by the Medical Council of India and/or State Medical Councils against a person for professional misconduct.

Holding of the Court

On this contention, the court after discussing the literature and cases on the question of distinction between profession and occupation, reached to the following conclusion and said that,

“Immunity from suit was enjoyed by certain profession on the grounds of public interest. The trend is towards narrowing of such immunity……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 reasonable skill and care. It would thus appear that medical practitioners, though belonging to the medical profession, are not immune from a claim for damages on the ground of negligence.

The fact that they are governed by the Indian Medical Council Act and are subject to the disciplinary control of Medical Council of India and/or State Medical Councils is no solace to the person who has suffered due to their negligence and the right of such person to seek redress is not affected.

We are, therefore, unable to subscribe to the view that merely because medical practitioners belong to the medical profession they are outside the purview of the provisions of the Act and the services rendered by medical practitioners are not covered by Section 2(1)(o) of the Act.”

Relationship between the medical Practitioner and the patient is of trust and confidence

Counsel for the IMA urged that the relationship between a medical practitioner and the patient is of trust and confidence and, therefore, it is in the nature of a contract of personal service and the service rendered by the medical practitioner to the patient is not `service’ under Section 2(1)(o) of the Act.

In answer of this contention, the court differentiated the meaning of ‘contract for service’ and ‘contract of service’.

Contract for services

A `contract for services implies a contract whereby one party undertakes to render services e.g. professional or technical services, to or for another in the performance of which he is not subject to detailed direction and control but exercises professional or technical skill and uses his own knowledge and discretion.

Contract of service

A `contract of service’ implies relationship of master and servant and involves an obligation to obey orders in the work to be performed and as to its mode and manner of performance.

The court said that, Parliament has deliberately chosen the expression `contract of service’ instead of the expression `contract for services’, in the exclusionary part of the definition of `service’ in Section 2(1)(o). The reason being that an employer cannot be regarded as a consumer in respect of the services rendered by his employee in pursuance of a contract of employment.

It is no doubt true that the relationship between a medical practitioner and a patient carries within it certain degree of mutual confidence and trust and, therefore, the services rendered by the medical practitioner can be regarded as services of personal nature but 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 but is a contract for services and the service rendered by the medical practitioner to his patient under such a contract is not covered by the exclusionary part of the definition of `service’ contained in Section 2(1)(o) of the Act.”

Only government hospitals do not fall under section 2 (1)(o)

In respect of the hospitals/nursing homes (Government and non-Government) falling in category (i), i.e., where services are rendered free of charge to everybody availing the services, it has been urged that even though the service rendered at the hospital, being free of charge, does not 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 service free of charge because the said medical officer receives amoluments by way of salary for employment in the hospital.

But the court did not find any merit in this contention. And said that the medical officer who is employed in the hospital renders the service on behalf of the hospital administration and if the service, as rendered by the hospital, does not fall within the ambit of Section 2(1) (o), being free of charge, the same service cannot be treated as service under Section 2(1) (o) for the reason that it has been rendered by a medical officer in the hospital who receives salary for employment in the hospital.

There is no direct nexus between the payment of the salary to the medical officer by the hospital administration and the person to whom service is rendered. The salary that is paid by the hospital administration to the employee medical officer cannot be regarded as payment made on behalf of the person availing the service or for his benefit so as to make the person availing the service a “consumer” under Section 2(1) (d) in respect of the service rendered to him. the service rendered by the employee medical officer to such a person would, therefore, continue to be service rendered free of charge and would be outside the purview of Section 2(1)(o).

Government hospitals service falls under ‘service’ as the salary of the doctors are paid from the tax

A contention has also been raised that even in the 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 taxes paid by the tax payers.

The court did not agree with the contention. And said that the essential characteristics of a tax are that

(i) it is imposed under statutory power without the taxpayer’s consent and the payment is enforced by law;

(ii) it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax’ and

(iii) it is part of the common burden, the quantum of imposition upon the tax payer depends generally upon his capacity to pay.

And concluded that the tax paid by the person availing the service at a Government hospital cannot be treated as a consideration or charge for the service rendered at the said hospital and such service though rendered free of charge does not cease to be so because the person availing the service happens to be a tax payer.

If medical profession brought in the preview of CPA, it would be deterrent to Medical professional

Counsel painted a grim picture that if medical practitioners are brought within the purview of the Act the consequence would be huge increase in medical expenditure on account of insurance charges as well as tremendous increase in defensive medicine and that medical practitioners may refuse to attend to medical emergencies and there will be no safeguards against frivolous and vexatious complaints and consequent blackmail.

The court rejected this apprehension. And said that, by holding that medical practitioners fall within the purview of the Act no change is brought about in the substantive law governing claims for compensation on the ground of negligence and the principles which apply to determination of such a claim before the civil court would equally apply to consumer disputes before the Consumer Disputes Redressal Agencies under the Act. The Act only provides an inexpensive and a speedy remedy for adjudication of such claims.

Other conclusions of the court

After elaborately discussing the various aspects of medical profession and its service, and apart from the answer which we mentioned above, the court also concluding followings-

  • Service rendered at a non-Government hospital/Nursing home where charges are required to be paid by persons who are in a position to pay and persons who cannot afford to pay are rendered service free of charge would fall within the ambit of the expression ‘service’ as defined in Section 2(1) (o) of the Act irrespective of the fact that the service is rendered free of charge to persons who are not in a position to pay for such services. Free service, would also be “service” and the recipient a “consumer” under the Act.
  • Service rendered at a Government hospital/health centre/dispensary where services are rendered on payment of charges and also rendered free of charge to other persons availing such services would fall within the ambit of the expression ‘service’ as defined in Section 2(1) (o) of the Act irrespective of the fact that the service is rendered free of charge to persons who do not pay for such service. Free service would also be “service” and the recipient a “consumer” under the Act.
  • 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.
  • 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 hospital/nursing home would not be free of charge and would constitute ‘service’ under Section 2(1) (o) of the Act.

Reference

Indian Medical Association vs V.P. Shantha; 1996 AIR 550, 1995 SCC (6) 651