SUPREME COURT OF INDIA
Mr. S.C. Agrawal, Mr. Kuldip Singh & Mr. B.L. Hansaria, JJ.
INDIAN MEDICAL ASSOCIATION—Appellant
versus
V.P. SHANTHA & ORS.—Respondents
Civil Appeal No. 688 of 1993 [With C.A. No. 689/93, W.P. (C) No. 16/94, C.A. No. 4664-4665/94, C.A. No. 254/94 and C.A. Nos. 10039/10081, 10052-80/95 (Arising out of SLP (C) Nos. 18497/93, 21755/94 and 18445-73/94, SLP (C) Nos. 6885/92, 6950/ 92, 351/93, 21348/93 and 21349 of 1993]—Decided on 13.11.1995

Headnote:(i) Consumer Protection Act, 1986 - Sections 2(1)(d), 2(1)(o) - Service - Definition of Service rendered to a patient by a medical practitioner by way of consultation, diagnosis and treatment, both medicinal and surgical - Whether falls within ambit of service as defined in Section 2(1)(o)? - (Yes, except where service rendered free of charge to every patient or under a contract of (personal service) - Such service is service rendered under a contract for personal service so not covered by exclusion clause.

       Held: The definition of service in Section 2(1)(o) of the Act can be split up into three parts the main part, the inclusionary part and the exclusionary part. The main part is explanatory in nature and defines service to mean service of any description which is made available to the potential users. The inclusionary part expressly 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. The exclusionary part excludes rendering of any service free of charge or under a contract of personal service. (Para 10)

       Further Held: In the present case the inclusive part of the definition of "service" is not applicable and we are required to deal with the questions fal1ing for consideration in the light of the main part and the exclusionary part of the definition. The exclusionary part will require consideration only if it is found that in the matter of consultation, diagnosis and treatment a medical practitioner or a hospital/nursing home renders a service fal1ing within the main part of the definition contained in the Section 2(1)(o) of the Act. We have, therefore, to determine whether medical practitioners and hospitals/nursing homes can be regarded as rendering a "service" as contemplated in the main part of Section 2(1)(o). (Para 12)

       Consequently Held 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. . (Para 17)

       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. (Para 19)

       Then Held: We are unable to hold that on the ground of composition of the Consumer Disputes Redressal Agencies or on the ground of the procedure which is followed by the said Agencies for determining the issues arising before them, the service rendered by the medical practitioners are not intended to be included in the expression service as defined in Section 2(1)(o) of the Act. (Para 27)

       Keeping in view the wide amplitude of the definition of service in the main part of Section 2(1)(o) as construed by this Court in Lucknow Development Authority (supra), we find no plausible reason to cut down the width of that part so as to exclude the services rendered by a medical practitioner from the ambit of the main part of Section 2(1)(o). (Para 28)

       Also Held: The expression "contract of personal service" in the exclusionary part of Section 2(1)(o) must, therefore, be construed as excluding the services rendered by an employee to his employer under the contract of personal service from the ambit of the expression "service". (Para 30)

       (ii) Consumer Protection Act, 1986 - Sections 2(1)(d) anti 2(1)(o) - Expressions Consumer anti Service - Medical practice - Service rendered free of charge by a medical practitioner to everybody availing said services Whether would fall within ambit of service u/s 2(1)(o) - (No) - Payment of a token amount for registration purposes only would not alter position.

       Held: Service rendered free of charge by a medical practitioner attached to a hospital/nursing home or a medical officer employed in a hospital/nursing home where such services are rendered free of charge to everybody, would not be "service" as defined in Section 2(1)(o) of the Act the payment of a token amount for registration purpose only at the hospital/nursing home would not alter the position. (Para 42(5))

       Service rendered at a non-Government hospital/Nursing home where no charge whatsoever is made from any person availing the service and all patients (rich and poor) are given free service - is outside the purview of the expression service as defined in Section 2(1)(o) of the Act. The payment of a token amount for registration purpose only at the hospital/Nursing home would not alter the position. (Para 42(6))

       Service rendered at a Government hospital/ health centre/dispensary where no charge whatsoever is made from any person availing the services and all patients (rich and poor) are given free service - is outside the purview of the expression service as defined in Section 2(1)(o) of the Act.

       The payment of a token amount for registration purpose only at the hospital/nursing home would not alter the position. (Para 42(9))

       Further Held: 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. (Para 37)

       (iii) Consumer Protection Act, 1986 - Sections 2(1)(d) anti 2(1)(o) - Service - Medical Practice - Service rendered at a non-Government hospital/Nursing home where charges requited to he paid by persons availing such services - Whether would fall within purview of expression service as defined in Section 2(1)(o)? - (Yes). (aras 33, 42)

       (iv) Consumer Protection Act, 1986 - Sections 2(1)(d) and 2(1)(o) - Service - Medical practice - Service rendered by medical Practitioner where charges required to he paid by persons who are in position to pay - Persons who cannot afford to pay being rendered service free of charge - Whether such a service would fall within purview of expression service as defined in Section 2(1)(o) - (Yes).

       He/d: 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 arc 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 arc not in a position to pay for such services. Free service, would also be "service" and the recipient a "consumer" under the Act. (Para 42(8))

       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. (Para 42(10))

       Further Held, that the Act has been enacted "to provide for the protection of the interests of "consumers" in the background of the guidelines contained in the Consumer Protection Resolution passed by the U.N. General Assembly on April 9, 1985. These guidelines refer to "achieving or maintaining adequate protection for their population as consumers" and "encouraging high levels of ethical conduct for those engaged in the protection and distribution of goods and services to the consumers". The protection that is envisaged by the Act is, therefore, protection for consumers as a class. The word "users" (in plural), in the phrase potential users in Section 2(1)(o) of the Act also gives an indication that consumers as a class are contemplated. The definition of complainant contained in Section 2(b) of the Act which includes, under clause (ii), any voluntary consumer association, and clauses (b) and (c) of Section 12 which enable a complaint to be filed by any recognised consumer association or one or more consumers where there are numerous consumers, having the same interest, on behalf of or for the benefit of all consumers so interested, also lend support to the view that the Act seeks to protect the interests of consumers as a class. To hold otherwise would mean that the protection of the Act would be available to only those who can afford to pay and such protection would be denied to those who cannot so afford, though they are the people who need the protection more. It is difficult to conceive that the legislature intended to achieve such a result. Another consequence of adopting a construction, which would restrict the protection of the Act to persons who can afford to pay for the services availed by them and deny such protection to those who are not in a position to pay for such services, would be that the standard and quality of service rendered at an establishment would cease to be uniform. It would be of a higher standard and of better quality for persons who are in a position to pay for such service while the standard and quality of such service would be inferior for person who cannot afford to pay for such service and who avail the service without payment. Such a consequence would defeat the object of the Act. All persons who avail the services by doctors and hospitals in category (iii), are required to be treated on the same footing irrespective of the fact that some of them pay for the service and others avail the same free of charge. Most of the doctors and hospitals work on commercial lines and the expenses incurred for providing services free of charge to patients who are not in a position to bear the charges are met out of the income earned by such doctors and hospitals from services rendered to paying patients. The Government hospitals may not be commercial in that sense but on the overall consideration of the objectives and the scheme of the Act it would not be possible to treat the Government hospitals differently. We are of the view that in such a situation the persons belonging to "poor class" who are provided services free of charge are the beneficiaries of the service which is hired or availed of by the "paying class". We are, therefore, of opinion that service rendered by the doctors and hospitals falling in category (iii) irrespective of the fact that part of the service is rendered free of charge, would nevertheless fall within the ambit of the expression "service" as defined in Section 2(1)(o) of the Act. We are further of the view that persons who are rendered free service are the "beneficiaries" and as such come within the definition of "consumer" under Section 2(1)( d) of the Act. (Para 34)

       (v) Consumer Protection Act, 1986 - Sections 2(1)(d) and 2(1)(o) - Service - Medical practice - Service rendered by medical practitioner or hospital/nursing home to a person who has taken an insurance policy for medical care - Whether such service would fall within ambit of service as defined in Section 2(1)(o)? - (Yes).

       Held: Where a person has taken an insurance policy for medi-care where under all the charges for consultation, diagnosis and medical treatment are borne by the insurance company. In such a case the person receiving the treatment is a beneficiary of the service which has been rendered to him by the medical practitioner, the payment for which would be made by the insurance company under the insurance policy. The rendering of such service by the medical practitioner cannot be said to be free of charge and would, therefore, fall within the ambit of the expression service in Section 2(1)(o) of the Act. So also there may be cases where as a part of the conditions of service the employer bears the expense of medical treatment of the employee and his family members dependent on him. The service rendered to him by a medical practitioner would not be free of charge and would, therefore, constitute service under Section 2(1)(o). (Para 39)

       (vi) Consumer Protection Act, 1986 - Sections 2(1)(d) and 2(1)(o) - Service - Medical practice - Service rendered by a medical practitioner to a person whose employer bears medical expenses of employee and his family Whether such a service would constitute service u/s 2(1)(o)? - (Yes) - It would not be free of charge. (Para 42)

       (vii) Consumer Protection Act, 1986 - Section 2(1)(o) - Expression contract of personal service - Interpretation of - It excludes services rendered by an employee to his employer under contract of personal service from ambit of expression service - Contract between a medical practitioner and his patient is contract for services, not excluded from definition of service u/s 2(1)(o).

       Held, 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 it contract is not covered by the exclusionary part of the definition of service contained in Section 2(1)(o) of the Act. (Para 31)

       Further Held: The expression personal service has a well known legal connotation and has been construed in the context of the right to seek enforcement of such a contract under the Specific Relief Act. For that purpose a contract of personal service has been held to cover a civil servant, the managing agents of a company and a Professor in the University. (Para 32)

       Result: Ordered accordingly.

       IMPORTANT POINT

       1. Service rendered to a patient by a medical practitioner (except where the doctor renders service free of charge to every patient or under a contract of personal service) by way of consultation, diagnosis and treatment, both medicinal and surgical, would fall within the ambit of service as defined in Section 2(1)(o) of the Consumer Protection Act.

       2. Medical Practitioners though belonging to the medical profession are not immune from a claim for damages on the ground of negligence.