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PETITIONER: INDIAN MEDICAL ASSOCIATION

       Vs.

RESPONDENT: V.P. SHANTHA & ORS.

DATE OF JUDGMENT13/11/1995

BENCH: AGRAWAL, S.C. (J) BENCH: AGRAWAL, S.C. (J) KULDIP SINGH (J) HANSARIA B.L. (J)

CITATION:  1996 AIR  550            1995 SCC  (6) 651  JT 1995 (8)   119        1995 SCALE  (6)273

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T S.C. AGRAWAL, J. :      Leave granted  in SLP  (C) Nos.  18497/93 and 21755/94. Delay condoned  and leave  granted in  SLP (C)  Nos.  18445- 73/94.      These appeals,  special leave  petitions and  the  Writ Petition raise  a common question, viz., 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  (hereinafter referred  to as ’the Act’].  Connected with  this question  is the  question whether the  service rendered at a hospital/nursing home can be regarded  as ’service’  under Section 2(1)(o) of the Act. These questions  have been considered by various High Courts as well  as by  the  National  Consumer  Disputes  Redressal Commission  [hereinafter   referred  to   as  ’the  National Commission’].      In Dr.  A.S. Chandra v. Union of India, (1992) 1 Andhra Law Times 713, a Division Bench of Andhra Pradesh High Court has held  that service rendered for consideration by private medical practitioners,  private hospitals  and nursing homes must be  construed as  ’service’ for  the purpose of Section 2(1)(d) of  the Act  and the  persons availing such services are ’consumers’ within the meaning of Section 2(1)(d) of the Act.      In Dr.C.S.  Subramanian v.  Kumarasamy & Anr., (1994) 1 MLJ 438,  a Division  Bench of  the Madras  High Court  has, however, taken  a different  view. It has been held that the services rendered  to a patient by a medical practitioner or by a  hospital by  way  of  diagnosis  and  treatment,  both medicinal and surgical, would not come within the definition of ’service’  under Section 2(1)(o) of the Act and a patient who undergoes  treatment under  a medical  practitioner or a hospital by way of diagnosis and treatment, both medical and

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surgical, cannot be considered to be a ‘consumer’ within the meaning of  Section 2(1)(d)  of the  Act;  but  the  medical practitioners  or   hospitals  undertaking   and   providing paramedical services  of all  kinds  and  categories  cannot claim similar  immunity from  the provisions  of the Act and that they  would fall,  to the  extent of  such para-medical services  rendered   by  them,   within  the  definition  of ‘service’ and  a person  availing of such service would be a ‘consumer’ within  the meaning  of the  Act. C.A.Nos.  4664- 65/94 and  Civil Appeal  arising out  of SLP(C) No. 21775/94 filed by  the complainants  and Civil Appeals arising out of SLP(C) Nos.  18445-73/94 filed  by the  Union of  India  are directed against the said judgment of the Madras High Court.      The National Commission by its judgment and order dated December 15, 1989 in First Appeal No.2 of 1989 has held that persons who  avail themselves  of the  facility  of  medical treatment in  Government hospitals  are not  "consumers" and the said facility offered in the Government hospitals cannot be regarded  as service  "hired" for "consideration". It has been held  that the  payment of  direct or indirect taxes by the public  does not  constitute "constitute "consideration" paid for  hiring the  services rendered  in  the  Government hospitals. It has also been held that contribution made by a Government employee  in the Central Government Health Scheme or such  other similar Scheme does not make him a "consumer" within the  meaning of  the Act. Civil Appeal arising out of SLP(C) No.18497/93  has been  filed by  Consumer Unity Trust Society, a  recognised consumer  association,  against  this judgment of the National Commission.      By judgment  dated April  21, 1992 in First Appeal Nos. 48 and 94 of 1991, the National Commission has held that the activity of providing medical assistance for payment carried on by  hospitals and members of the medical profession falls within the  scope of  the expression ‘service’ as defined in Section 2(1)(o)  of the  Act and  that in  the event  of any deficiency in the performance of such service, the aggrieved party can  invoke the  remedies provided  under the  Act  by filing  a   complaint  before   the  Consumer  Forum  having jurisdiction.  It   has  also   been  held  that  the  legal representatives of the deceased patients who were undergoing treatment in  the hospital are ‘consumers’ under the Act and are competent  to maintain  the complaint.  C.A. Nos. 688/93 and 689/93  filed by  the Indian Medical Association and SLP (C) Nos. 6885 and 6950/92 filed by M/s Cosmopolitan Hospital are directed  against the  said  judgment  of  the  National Commission. The  said judgment  dated  April  21,  1992  was followed by  the National  Commission in  its judgment dated November 16,  1992 in  First Appeal  No. 97 of 1991 [Dr. Sr. Louie &  Anr. v.  Smt. Kannolil  Pathumma &  Anr.]. SLP  No. 351/93 has  been filed  by Josgiri Hospital and Nursing Home against the said judgment of the National Commission.      By judgment  dated May  3, 1993  in O.P.No.  93/92, the National Commission  has held  that since the treatment that was given  to the  complainant’s  deceased  husband  in  the nursing home  belonging to  the opposite  party was  totally free of  any charge,  it did  not  constitute  ‘service’  as defined under  the Act  and the complainant was not entitled to seek  any relief  under the  Act. C.A.No. 254/94 has been filed by  the complainant  against the  said judgment of the National Commission.      Writ Petition  No. 16  of 1994  has  been  filed  under Article 32  of the Constitution by Cosmopolitan Hospital (P) Ltd., and  Dr. K.  Venogopolan Nair  [petitioners in  SLP(C) Nos. 6885  and 6950/92]  wherein the  said petitioners  have assailed the  validity of the provisions of the Act, insofar

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as they are held to be applicable to the medical profession, as being  violative of  Articles  14  and  19(1)(g)  of  the Constitution.      Shri K.Parasaran, Shri Harish Salve, Shri A.M. Singhvi, Shri Krishnamani  and Shri S.Balakrishnan have addressed the court on  behalf of the medical profession and the hospitals and Shri  Rajeev  Dhavan  has  presented  the  case  of  the complainants.  Before   we  proceed   to  deal   with  their contentions we would briefly take note of the background and the scheme of the Act.      On April  9, 1985,  the General  Assembly of the United Nations,  by  Consumer  Protection  Resolution  No.  39/248, adopted  the   guidelines  to   provide  a   framework   for Governments, particularly  those of developing countries, to use in  elaborating and  strengthening  consumer  protection policies  and   legislation.  The  objectives  of  the  said guidelines  include  assisting  countries  in  achieving  or maintaining adequate  protection  for  their  population  as consumers and encouraging high levels of ethical conduct for those engaged  in the  production and  distribution of goods and services  to the  consumers. The  legitimate needs which the guidelines  are intended  to meet include the protection of consumers  from hazards  to their  health and  safety and availability of  effective consumer redress. Keeping in view the said  guidelines, the  Act was  enacted by Parliament to provide for  the  better  protection  of  the  interests  of consumers and  for that  purpose to  make provision  for the establishment of  consumers councils  and other  authorities for the  settlement of  consumers’ disputes  and for matters connected therewith.  The Act sets up a three-tier structure for the  redressal of  consumer grievances.  At  the  lowest level, i.e.,  the District  level, is  the Consumer Disputes Redressal Forum  known as  ‘the District Forum’; at the next higher  level,  i.e.,  the  State  level,  is  the  Consumer Disputes  Redressal   Commission   known   as   ‘the   State Commission’  and  at  the  highest  level  is  the  National Commission. [Section  9]. The  jurisdiction of  these  three Consumer  Disputes   Redressal  Agencies  is  based  on  the pecuniary limit  of the  claim made  by the  complainant. An appellees to  the State  Commission against an order made by the District  Forum [Section  15] and  an appeal lies to the National Commission  against an  order  made  by  the  State Commission on  a complaint  filed before  it or in an appeal against the  order passed  by the  District Forum.  [Section 19]. The  State Commission can exercise revisional powers on grounds similar  to those  contained in  Section 115  CPC in relation to  a consumer dispute pending before or decided by a District Forum [Section 17(b)] and the National Commission has similar revisional jurisdiction in respect of a consumer dispute pending  before or  decided by  a State  Commission. [Section 21(b)]. Further, there is a provision for appeal to this Court  from an order made by the National Commission on a complaint  or on  an appeal  against the  order of a State Commission. [Section  23]. By  virtue of  the definition  of complainant in  Section 2(1)(c),  the Act affords protection to  the   consumer  against   unfair  trade  practice  or  a restricitive trade practice adopted by any trader, defect in the goods  bought or  agreed to  be bought  by the consumer, deficiency in  the service  hired or availed of or agreed to be hired or availed of by the consumer, charging by a trader price in  excess of  the price fixed by or under any law for the time  being in  force or  displayed on  the goods or any package containing  such goods  and  offering  for  sale  to public, goods  which will  be hazardous  to life  and safety when used, in contravention of the provisions of any law for

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the  time  being  in  force  requiring  traders  to  display information in  regard to the contents, manner and effect of use of  such goods. The expression "complainant", as defined in Section  2(1)(b), is comprehensive to enable the consumer as well  as any  voluntary consumer  association  registered under the Companies Act, 1956 or under any other law for the time being  in force, or the Central Government or any State Government or one or more consumers where there are numerous consumers having  the same  interest, to  file  a  complaint before the  appropriate Consumer  Disputes Redressal  Agency and the consumer dispute raised in such complaint is settled by the  said agency  in accordance  with the  procedure laid down in  Section 13  of the  Act which  prescribes that  the District Forum  [as well  as the  State Commission  and  the National Commission] shall have the same power as are vested in a  civil court  under the  Code  of  Civil  Procedure  in respect  of   summoning  and  enforcing  attendance  of  any defendant or  witness and  examining the  witness  on  oath; discovery and  production of  any document or other material object producible  as evidence; the reception of evidence on affidavits;  the   requisitioning  of   the  report  of  the concerned analysis  or test  from the appropriate laboratory or from any other relevant source; issuing of any commission for the  examination of  any witness;  and any  other matter which may be prescribed. Section 14 makes provisions for the nature of  reliefs that can be granted to the complainant on such a  complaint. The provisions of the Act are in addition to and  not in derogation of the provisions of any other law for the time being in force. [Section 3].      In this  group of cases we are not concerned with goods and we  are only concerned with rendering of services. Since the Act  gives protection  to the  consumer  in  respect  of service rendered to him, the expression "service" in the Act has to  be construed  keeping  in  view  the  definition  of "consumer" in  the Act.  It is,  therefore, necessary to set out the definition of the expression ‘consumer’ contained in Section 2(1)(d)  insofar as  it relates  to services and the definition of  the expression ‘service’ contained in Section 2(1)(o) of the Act. The said provisions are as follows :      "Section 2(1)(d) "consumer" means any      person who, -      (i) omitted      (ii) 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 service 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.      Explanation. - Omitted"      "Section 2(1) (o) : "service" means      service of any description which is made      available to the 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

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    purveying of  news or other information,      but does not include rendering of any      service free of charge or under a      contract of personal service;"      The words  "or avails  of" after  the word  "hires"  in Section 2(1)(d)(ii)  and the words "housing construction" in Section 2(1)(o) were inserted by the Act 50 of 1993.      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 of 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.      The definition  of ‘service’  as contained  in  Section 2(1)(o) of  the Act  has been  construed by  this  Court  in Lucknow Development  Authority v.  M.K. Gupta,  1994 (1) SCC 243. After pointing out that the said definition is in three parts, the Court has observed :      "The main clause itself is very wide. It      applies to any service made available to      potential users. The words ‘any ’ and      ‘potential’ are significant. Both are of      wide amplitude. The word ‘any’      dictionarily means; one or some or all’,      In Black’s Law Dictionary it is      explained thus, "word ‘any’ has a      diversity of meaning and may be employed      to indicate  ‘all’ or ‘every’ as well as      ‘some’ or ‘one’ and its meaning in a      given statue depends upon the context      and the subject- matter of the statute".      The use of the word ‘any’ in the context      it has been used in clause (o) indicates      that it has been used in wider sense      extending from one to all. The other      word ‘potential’  is again very wide. In      Oxford Dictionary it is defined as      ‘capable of coming into being,      possibility’. In  Black’s Law Dictionary      it is defined "existing in possibility      but not in act. Naturally and probably      expected to  come into existence at some      future time, though not now existing;      for example, the future product of grain      or trees already planted, or the      successive future instalments or      payments on a contract or engagement      already made." In other words service      which is not only extended to actual      users but those who are capable of using      it are covered in the definition. The      clause is  thus very wide and extends to      any  or all  actual or potential users."      [p.255]      The contention  that the entire objective of the Act is to protect the consumer against malpractices in business was rejected with the observations :      "The argument proceeded on complete

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    misapprehension of the purpose of Act      and even  its explicit language. In fact      the Act  requires provider of service to      be more objective and caretaking."      (p.256)      Referring to  the inclusive  part of  the definition it was said :      "The inclusive clause succeeded in      widening its scope but not exhausting      the services which could be covered in      earlier part. so any service except when      it is free of charge or under a      constraint of personal service is      included in it." [p.257]      In that  case the  Court was  dealing with the question whether housing  construction could  be regarded  as service under Section  2(1)(o) of  the Act.  While  the  matter  was pending in  this Court,  "housing construction" was inserted in the  inclusive part  by Ordinance No. 24 of 1993. Holding that housing  activity is  a service  and was covered by the main part of the definition, the Court observed :      "..... the entire purpose of widening      the definition is to include in it not      only day to day buying and selling      activity undertaken  by a common man but      even such activities which are otherwise      not commercial in nature yet they      partake of a character in which some      benefit is conferred on the consumer."      [p.256]      In  the   present  case   the  inclusive  part  of  the definition  of  "service"  is  not  applicable  and  we  are required  to   deal   with   the   questions   falling   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 falling within  the main part of the definition contained in 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). This  determination has  to be made in the light of the  aforementioned   observations  in  Lucknow  Development Authority (supra).  We will  first examine  this question in relation to medical practitioners.      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.      While  expressing   his  reluctance   to   propound   a

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comprehensive definition  of a  ‘profession’, Scrutton  L.J. has said  " ‘profession’,in  the  present  use  of  language involves the  idea of  an occupation requiring either purely intellectual skill,  or of  manual skill  controlled, as  in painting and  sculpture, or  surgery,  by  the  intellectual skill of  the operator,  as distinguished from an occupation which is substantially the production or sale or arrangement for the  production or  sale of  commodities.  The  line  of demarcation  may   vary  from   time  to   time.  The   word ‘profession’ used  to  be  confined  to  the  three  learned professions, the  Church, Medicine  and Law.  It has  now, I think, a  wider meaning".  [See :  Commissioners  of  Inland Revenue v. Maxse, 1919 1 K.B. 647 at p.657].      According to  Rupert M.  Jackson and  John L.Powell the occupations which  are regarded  as  professions  have  four characteristice, viz., i)     the   nature  of   the  work  which  is  skilled  and specialized and  a substantial  part is  mental rather  than manual; ii)   commitment  to moral  principles which  go beyond  the general duty  of honesty and a wider duty to community which may transcend the duty to a particular client or patient; iii)  professional association which regulates admission and seeks to  uphold the  standards of  the  profession  through professional codes on matters of conduct and ethics; and iv)   high status in the community.      The  learned   authors  have  stated  that  during  the twentieth century  an increasing  number of occupations have been seeking  and achieving  "professional" status  and that this has  led inevitably  to some  blurring of  the features which traditional  distinguish the  professions  from  other occupations.  In   the  context   of  the  law  relating  to Professional Negligence  the learned  authors have  accorded professional status  to seven  specific occupations, namely, (i)  architects,  engineers  and  quantity  surveyors,  (ii) surveyors,   (iii)   accountants,   (iv)   solicitors,   (v) barristers, (vi)  medical practitioners  and (vii) insurance brokers. [See : Jackson & Powell on Professional Negligence, paras 1-01 and 1-03, 3rd Ed.1.].      In the  matter of  professional  liability  professions differ  from   other  occupations   for  the   reason   that professions operate  in  spheres  where  success  cannot  be achieved in  every case  and very  often success  or failure depends upon  factors beyond the professional man’s control. In devising  a rational  approach to  professional  liabilty which must  provide proper  protection to the consumer while allowing for  the factors  mentioned above,  the approach of the courts  is  to  require  that  professional  men  should possess a certain minimum degree of competence and that they should exercise  reasonable care  in the  discharge of their duties. In  general, a professional man owes to his client a duty in  tort as  well as in contract to exercise reasonable care in giving advice or performing services. [See : Jackson & Powell  (supra), paras 1-04, 1-05 and 1-56]. Immunity from suit was  enjoyed by  certain profession  on the  grounds of public interest.  The trend  is towards  narrowing  of  such immunity and  it is  no longer  available to  architects  in respect of  certificates negligently  given  and  to  mutual valuers. Earlier, barristers were enjoying complete immunity but now  even for  them the filed is limited to work done in court and  to a  small category  of pre-trial  work which is directly related to what transpires in court. [See : Jackson & Powell,  (supra), para 1-66; Saif Ali v. Sidney Mitchell & Co., (1980)  1 A.C.  198; Rees v. Sinclair (1974) 1 N.Z.L.R. 180; Giannarelli  v. Wraith  (1988) 81  A.L.R. 417]. Medical

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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.      Referring to  the changing  position with regard to the relationship  between  the  medical  practitioners  and  the patients in the United Kingdom, it has been said :      "Where, then, does the doctor stand      today in relation to society? To some      extent, he is a servant of the public, a      public which is widely (though not      always well) informed on medical      matters. Society is conditioned to      distrust paternalism and the modern      medical practitioner  has little wish to      be paternalistic. The new talk is of      ‘producers and consumers’ and the      concept that ‘he who pays the piper      calls the tune’ is established both      within the profession and in its      relationships with patients. The      competent patient’s inalienable rights      to understand his treatment and to      accept or refuse it are now well      established." (pp.16-17)      "Consumerism is now firmly established      in medical  practice - and this has been      encouraged on a wide scale by government      in the United Kingdom through the      introduction of ‘charters’. Complaint is      central to this ethos - and the notion      that blame must be attributed, and      compensated, has a high priority."      (p.192)      [Mason & McCall Smith  Law and Medical      Ethics,4th Edn.]      In Arizona  v. Maricopa  County Medical Society, 457 US 332 = 73 L.Ed. (2d) 48, two Arizona county medical societies formed two  foundations for medical care to promote fee-for- service  medicine  and  to  provide  the  community  with  a competitive alternative  to existing  health insurance plans and  by   agreement  amongst  the  doctors  established  the schedule of  maximum fees  that participating doctors agreed to accept  as payment  in full  for services  performed  for patients insured  under plans.  It was held that the maximum fee  agreement,   as  price  fixing  agreements,  are  perse unlawful under the Sherman Act. It was observed :      "Nor does the fact doctors - rather than      non-professionals - are the parties to      the price  fixing agreements support the      respondents’ position. ... The      respondents claim for relief from the      per se  rule is simply that the doctors’      agreement not to charge certain insureds      more than  a fixed price facilitates the      successful marketing of an attractive      insurance plan. But the claim that the      price restraint  will make it easier for

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    customers to pay does not distinguish      the medical profession from any other      provider of goods or services." [pp.      348-49, 61-62]      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.      Shri Harish  Salve, appearing  for the  Indian  Medical Association, has  urged that having regard to the expression ‘which is  made available  to potential  users’ contained in Section 2(1)(o)  of the  Act., medical practitioners are not contemplated  by   parliament  to   be  covered  within  the provisions of the Act. He has urged that the said expression is indicative  of the  kind of service the law contemplates, namely, service  of an  institutional type which is really a commercial enterprise and open and available to all who seek to avail  thereof. In  this context,  reliance has also been placed on  the  word  ’hires’  in  sub-clause  (ii)  of  the definition of ‘consumer’ contained in Section 2(1)(d) of the Act. We  are unable  to uphold  this  contention.  The  word ‘hires’ in  Section 2(1)(d)(ii)  has been  used in  the same sense as  ‘avails of’  as would  be evident  from the  words ‘when such  services are  availed of’  in the latter part of Section 2(1)(d)(ii).  By inserting  the words ‘or avails of’ after  the  word  ‘hires’  in  Section  2(1)(d)(ii)  by  the Amendment Act of 1993, Parliament has clearly indicated that the word  ‘hires’ has been used in the same sense as ‘avails of’. The  said amendment  only clarifies  what was  implicit earlier. The  word ‘use’  also means  ‘to avail oneself of’. [See :  Black’s Law  Dictionary, 6th  Edn., at p. 1541]. The word ‘user’  in the  expression ‘which  is made available to potential users’  in the  definition of ‘service’ in Section 2(1)(o) has  to be construed having regard to the definition of ‘consumer’  in Section  2(1)(d)(ii) and, if so construed, it means  ‘availing of  services’. From  the use of the word ‘potential users’ it cannot, therefore, be inferred that the services  rendered   by  medical   practitioners   are   not contemplated  by   Parliament  to   be  covered  within  the expression ‘service’ as contained in Section 2(1)(o).      Shri Harish  Salve has  also  placed  reliance  on  the definition of  the expression  ‘deficiency’ as  contained in Section 2(1)(g) of the Act which provides as follows :      "Section 2(1)(g) : "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;"      The submission  of Shri  Salve is  that under  the said clause the  deficiency with  regard to  fault, imperfection, shortcoming or  inadequacy in  respect of  service has to be ascertained on  the  basis  of  certain  norms  relating  to quality, nature  and manner  of performance and that medical services rendered by a medical practitioner cannot be judged on the  basis of  any fixed  norms and, therefore, a medical practitioner cannot  be said  to have  been covered  by  the expression "service"  as defined  in Section 2(1)(o). We are unable  to   agree.  While   construing  the  scope  of  the provisions of  the Act  in  the  context  of  deficiency  in service it  would be relevant to take note of the provisions

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contained in  Section 14  of  the  Act  which  indicate  the reliefs that  can be  granted on a complaint filed under the Act. In  respect of  deficiency in  service,  the  following reliefs can be granted : i) return  of the  charges paid  by the complainant. [Clause c)] ii) payment of such amount as may be awarded as compensation to the  consumer for  any loss  or injury  suffered  by  the consumer due  to  the  negligence  of  the  opposite  party. [Clause (d)] iii) removal  of the defects or deficiencies in the services in question. [Clause (e)]      Section 14(1)(d)  would, therefore,  indicate that  the compensation to be awarded is for loss or injury suffered by the consumer  due to the negligence of the opposite party. A determination about deficiency in service for the purpose of Section 2(1)(g)  has, therefore,  to be made by applying the same test  as is  applied  in  an  action  for  damages  for negligence. The  standard of  cara which  is  required  from medical practitioners  as laid  down by  McNair  J.  in  his direction to the jury in Bolam v. Friern Hospital Management Committee, (1957)  1 WLR 582, has been accepted by the House of Lords  in a  number of cases. [See : Whitehouse v.Jordan, 1981 (1)  WLR 246; Maynard v. West Midlands, Regional Health Authority, 1984  (1) WLR  634  ;  Sidaway  v.  Governors  of Bethlem Royal  Hospital, 1985  AC  871].  In  Bolam  (supra) McNair J has said :      "But where you get a situation which      involves the use of some special skill      or competence, then the test as to      whether there has been negligence or not      is not the test of the man on the top of      a Clapham omnibus, because he has not      got this  special skill. The test is the      standard of the ordinary skilled man      exercising and professing to have that      special skill. A man need not possess      the highest expert skill; it is well      established law that it is sufficient if      he exercises the ordinary skill of an      ordinary competent man exercising that      particular art." [p.586]      In an  action for  negligence in tort against a surgeon this Court,  in Laxman  Balakrishna Joshi  v.  Trimbak  Bapu Godbole & Anr., 1969 (1) SCR 206, has held :      "The duties which a doctor owes to his      patieint are  clear. A  person who holds      himself out ready to give medical advice      and treatment  impliedly undertakes that      he is possessed of skill and knowledge      for the purpose. Such a person when      consulted by  a patient owes him certain      duties, viz., a duty of care in deciding      whether to undertake the case, a duty of      care in  deciding what treatment to give      or a  duty of care in the administration      of that treatment. A breach of any of      those duties gives a right of action for      negligence to the patient. The      practitioner must bring to his task a      reasonable degree of skill and knowledge      and must exercise a reasonable degree of      care. Neither the very highest nor a      very low degree of care and competence      judged in the light of the particular

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    circumstances of each case is what the      law require. [p.213]      It is,  therefore, not possible to hold that in view of the definition  of  "deficiency"  as  contained  in  Section 2(1)(9) medical  partitioners must be treated to be excluded from the  ambit of  the Act and the service rendered by them is not convered under Section 2(1)(o).      Another contention  that  has  been  urged  by  learned counsel appearing  for the  medical  profession  to  exclude medical practitioners  from the ambit of the Act is that the composition of  the District Forum, the State Commission and the national  Commission is  such  that  they  cannot  fully appreciate  the   complex  issues   which  may   arise   for determination  and   further  that  the  procedure  that  is followed by  these bodies for determination of issues before them  is   not  suitable   for  the   determination  of  the complicated questions  which arise  in respect of claims for negligence in  respect of  the services  rendered by medical practitioners. The provisions with regard to the composition of the District Forum are contained in Section 10 of the Act which provides  that the  President of  the Forum shall be a person who  is or  who has  been or  is qualified  to  be  a District Judge and the other two members shall be persons of ability, integrity  and standing,  having adequate knowledge or experience  or, or having shown capacity in dealing with, problems relating  to economics, law, commerce, accountancy, industry, public  affairs or  administration and one of them shall be  a woman. Similarly, with regard to the composition of the State Commission, it is provided in Section 16 of the Act that  the President  of the Commission shall be a person who is  or who has been a Judge of a High Court appointed by the State  Government in  consulation with the Chief Justice of the  High Court  and that  the other two members shall be persons of  ability, integrity and standing, having adequate knowledge or  experience of,  or having  shown  capacity  in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, and one of  them shall  be  a  woman.  The  composition  of  the National Commission  is governed  by Section  20 of  the Act which provides that the President of the Commission shall be a person who is or who has been a Judge of the Supreme Court to be  appointed by the Central Government after consulation with the Chief Justice of India and four other members shall be  persons   of  ability,  integrity  and  standing  having adequate  knowledge   or  experience  of,  or  having  shown capacity in  dealing with,  problems relating  to economics, law, commerce,  accountancy,  industry,  public  affairs  or administration and  one of  them shall  be a  woman. It will thus be  seen that  the President  of the  District Forum is required to  be a  person who  is or  who  has  been  or  is qualified to  be a  District Judge  and the President of the State Commission  is required  to be  a person who is or who has been  the judge  of the  High Court and the President of the national Commission is required to be a person who is or who has  been a Judge of the Supreme Court, which means that all the Consumer Disputes Redressal Agencies are headed by a person who  is well  versed  in  law  and  has  considerable judicial  or   legal  experience.   It  has,  however,  been submitted that  in case  there is difference of opinion, the opinion of  the majority  is to  prevail and, therefore, the President may  be out-voted  by the  other membrs  and  that there is no requirement that the membrs should have adequate knowledge or experience in dealing with problems relating to medicine. It  is no  doubt true  that the  decisions of  the District Forum  as well  as the  State  Commission  and  the

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National Commission  have to be taken by majority and it may be possible  in some  cases that  the President  may  be  in minority. But the presence of a person well versed in law as the President  will have  a bearing  on the deliberations of these Agencies  and their  decisions. As regards the absence of a requirement about a member having adequate knowledge or experience in dealing with the problems relating to medicine it may  be stated  that the  persons to be chosen as members are required  to have  knowledge and  experience in  dealing with problems  relaing to  various fields connected with the object  and   purpose  of  the  Act,  viz.,  protection  and interests  of   the  consumers.   The  said   knowledge  and experience would enable them to handle the consumer disputes coming up  before them for settlement in consonance with the requirement of  the Act.  To say  that the members must have adequate knowledge  or experience  in the field to which the goods or  services, in  respect of  which the  complaint  is made, are  related would  lead to  impossible situations. At one time there will be two members in the District Forum and they would  have knowledge or experience in two fields which would mean  that complaints  in respect of goods or services relating to  other fields would be beyond the purview of the District Forum.  Similarly in the State Commission there may be members  having knowledge  or experience  in fields other than the  fields in  which the members of the District Forum have knowledge  or experience.  It would mean that the goods or services  in respect  of which  the  District  Forum  can enteration a  complaint will  be outside  the purview of the State Commission.  Same will  be the  position in respect of the National  Commission. Since  the goods  or  services  in respect of  which complaint  can be  filed under the Act may relate to  number of  fields it  cannot be expected that the members of  the Consumer  Disputes Redressal  Agencies  must have experties  in the  field to which the goods or services in respect of which complaint is filed, are related. It will be for  the parties  to place the necessary material and the knowledge and  experience which the members will have in the fields indicated  in the  Act would enable them to arrive at their findings  on the  basis of  that material.  It cannot, therefore, be  said that  since the  members of the Consumer Disputes  Redressal   Agencies  are  not  required  to  have knowledge and  experience in  medicine, they  are not  in  a position to  deal with issues which may arise before them in proceedings arising  out of  complaints about the deficiency in service rendered by medical partitioners.      Discussing the  role of lay persons in decision making, Prof. White  has referred  to two  divergent views. One view holds that  lay adjudicators  are superior  to  professional judges in the application of general standars of conduct, in their notions of reasonableness, fairness and good faith and that  they   act   as   ‘an   antidote   against   excessive technicality’ and  ‘some guarantee  that the  law  does  not diverge too  far from  reality’. The other view, however, is that since they are not experts, lay decision makers present a very  real danger  that the dispute may not be resolved in accordance  with   the  prescribed  rules  of  law  and  the adjudication of  claims may be based on whether the claimant is seen  as deserving  rather than  on the  legal  rules  of entitlement. Prof.  White has indicated his preference for a Tribunal composed  of a  lawyer, as  Chairman, and  two  lay members. Such  a Tribunal,  according to  Prof. White, would present an  opportunity to  develop a  model of adjudication that combines  the merits  of lay decision making with legal competence and  participation of  lay membrs  would lead  to general public confidence in the fairness of the process and

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widen the  social experience  represented  by  the  decision makers. Prof.  White says  that apart  from their breadth of experience, the key role of lay members would be in ensuring that procedures do not become too full of mystery and ensure that litigants  before  them  are  not  reduced  to  passive spectators in  a process designed to resolve their disputes. [See :  Prof. Robin  C.A.  White  :  The  Administration  of Justice, 2nd Edition, P. 345].      In the matter of constituion of the District Forum, the State  Commission   and  the  National  Commission  the  Act combines with  legal competence  the merits  of lay decision making by members having knowledge and experience in dealing with problems relating to various fields which are connected with the  object and  purpose of the Act, namely, protection and interests of the consumers.      Moreover, there  is a  further safeguard  of an  appeal against the  order made  by the  District Forum to the State Commission  and   against  the   order  made  by  the  State Commission to  the National  Commission and a further appeal to this   Court  against the  order  made  by  the  National Commission.  It   cannot,  therefore,   be  said   that  the composition of  the Consumer  Disputes Redressal Agencies is such as to render them unsuitable for adjudicating on issues arising in  a  complaint  regarding  deficiency  in  service rendered by a medical partitioner.      As regards  the  procedure  to  be  followed  by  these agencies in the matter of determination of the issues coming up for  consideration it  may be  stated that  under Section 13(2)(b), it  is provided  that  the  District  Forum  shall proceed to  settle the consumer disputes (i) on the basis of evidence brought  to its  notice by  the complainant and the opposite party,  where the opposite party denies or disputes the allegations  contained in  the complaint, or (ii) on the basis of  evidence brought  to its notice by the complainant where the  opposite party  omits or fails to take any action to represent his case within the time given by the Forum. In Section 13(4)  of the  Act it  is further  provided that the District Forum  shall have  the same powers as are vested in the civil  court under  the Code  of Civil  procedure  while trying a suit in respect of the following matters:      "(i) the summoning and enforcing      attendance of any defendant or witness      and examining the witness on oath;      (ii) the discovery and production of any      document or other material object      producible as evidence;      (iii) the reception of evidence on      affidavits;      (iv) the requisitioning of the report of      the concerned  analysis or test from the      appropriate laboratory or from any other      relevant source;      (v) issuing of any commission for the      examination of any witness and      (vi) any other matter which may be      prescribed." The same  provisions apply  to proceedings  before the State Commission and  the National  Commission. It  has been urged that proceedings  involving  negligence  in  the  matter  of rendering services  by a  medical parctitioner  would  arise complicated questions  requiring evidence  of experts  to be recorded and  that  the  procedure  which  is  followed  for determination of  consumer disputes under the Act is summary in nature  involving trial on the basis of affidavits and is not suitable  for determination of complicated questions. It

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is  no   doubt  true  that  sometimes  complicate  questions requiring recording  of evidence  of expets  may arise  in a complaint about deficiency in service based on the ground of negligence  in  rendering  medical  services  by  a  medical parctitioner; but  this would  not be  so in  all complaints about  deficiency   in  rendering   services  by  a  medical practitioner. There  may be  cases which  do not  raise such complicated questions  and the  deficiency in service may be due to  obvious faults  which can be easily established such as removal  of the  wrong limb  or  the  performance  of  an operation on the wrong patient or giving injection of a drug to which  the patient  is allergic  without looking into the out patient  card containing  the warning [as in Chinkeow v. Government of  Malaysia, (1967)  1 WLR  813 P.C.]  or use of wrong gas  during the  course of  an anesthetic  or  leaving inside  the  patient  swabs  or  other  items  of  operating equipment  after   surgery.  One   often  reads  about  such incidents in  the newspapers.  The  issues  arising  in  the complaints in  such cases can be speedily disposed of by the procedure that  is being  followed by  the Consumer Disputes Redressal Agencies  and there  is no  reason why  complaints regarding deficiency  in service in such cases should not be adjudicated by  the Agencies  under the  Act. In  complaints involving complicated issues requiring recording of evidence of experts,  the complainant  can be  asked to  approach the civil court  for appropriate  relief. Section  3 of  the Act which prescribes  that the provisions of the Act shall be in addition to  and not  in derogation of the provisions of any other law  for the  time being in force, preserves the right of the  consumer to  approach the  civil court for necessary relief. We are, therefore, 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 which 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)(0) of the Act.      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).      We may now proceed to consider the exclusionary part of the definition  to see  whether such  service is excluded by the said  part. The exclusionary part excludes from the main part service  rendered (i)  free of  charge; or (ii) under a contract of personal service.      Shri Salve  has 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.  This contention  of Shri Salve ignores the well  recognised  distinction  between  a  ‘contract  of service’ and  a ‘contract  for services’.  [See : Halsbury’s Laws of  England, 4th Edn., Vol. 16, para 501; Dharangadhara Chemical Works  Ltd. v. State of Saurashtra, 1957 SCR 152 at p. 157].  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. [See  : Oxford

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Companion to  Law, P. 1134]. 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.  [See  :  Stroud’s Judicial Dictionary,  5th Edn.,  P. 540;  Simmons  v.  Heath Laundry Co.  (1910) 1  K.B. 543;  and Dharangadhara Chemical Works (supra)  at  p.  159].  We  entertain  no  doubt  that Parliamentary draftsman  was aware  of  this  well  accepted distinction between  "contract of service" and "contract for services"  and   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.  By affixing  the adjective ‘personal’ to the word  "service"  the  nature  of  the  contracts  which  are excluded is  not altered. The said adjective only emphasizes that what is sought to be excluded is personal service only. 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".      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.      Shri Rajeev  Dhavan has,  however, submitted  that  the expression  ‘contract  of  personal  service’  contained  in Section 2(1)(o)  of the Act has to be confined to employment of domestic  servants only. We do not find any merit in this submission. 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. [See  :  The  High  Commissioner  for  India  v. I.M.Lall, (1948)  L.R. 75 I.A. 225; Ram Kissendas Dhanuka v. Satya Charan Law, (1949) L.R. 77 I.A. 128; and Dr. S.B. Dutt v. University  of Delhi,  1959 SCR  1236]. There  can  be  a contract of  personal service  if there  is relationship  of master and  servant between a doctor and the person availing his services  and in that event the services rendered by the doctor to his employer would be excluded from the purview of the expression ‘service’ under Section 2(1)(o) of the Act by virtue of the exclusionary clause in the said definition.      The  other  part  of  exclusionary  clause  relates  to services   rendered    "free   of   charge".   The   medical practitioners,  Government   hospitals/nursing   homes   and private hospitals/nursing homes (hereinafter called "doctors and hospitals") broadly fall in three categories :-      i)   where services are rendered free of      charge to everybody availing the said      services.

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    ii)  where charges are required to be      paid by  everybody availing the services      and      iii) where charges are required to be      paid by persons availing services but      certain categories of persons who cannot      afford to  pay are rendered service free      of charges. There is  no difficulty  in respect of first two categories. Doctors and  hospitals who render service without any charge whatsoever to  every person  availing the  service would not fall within the ambit of "service" under Section 2(1) (o) of the Act.  The payment  of a  token amount  for  registration purposes only  would not  alter the  position in  respect of such doctors and hospitals. So far as the second category is concerned, since the service is rendered on payment basis to all the  persons they would clearly fall within the ambit of Section 2(1)  (o) of  the Act. The third category of doctors and hospitals  do  provide  free  service  to  some  of  the patients belonging  to the  poor class  but the  bulk of the service is  rendered to  the patients  on payment basis. The expenses incurred  for providing free service are met out of the income from the service rendered to the paying patients. The service rendered by such doctors and hospitals to paying patients undoubtedly  fall within  the ambit of Section 2(1) (o) of the Act.      The question  for  our  consideration  is  whether  the service rendered  to patients  fee of  charge by the doctors and hospitals in category (iii) is excluded by virtue of the exclusionary clause  in Section  2(1) (o) of the Act. In our opinion the  question has to be answered in the negative. In this context  it is  necessary to  bear in mind 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

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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.      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  by Shri  Dhavan 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. There is no merit in this  contention. 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).      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

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Consolidated Fund which is raised from the taxes paid by the tax payers. We do not agree.      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. [See  : The  Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt,  1954 SCR  1005 at pp.1040-41]. 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 thogh rendered free  of charge does not cease to be so because the person availing the service happens to be a tax payer.      Adverting  to   the  individual  doctors  employed  and serving in  the hospitals,  we are  of the  view  that  such doctors      working      in      the      hospitals/nursing homes/dispensaries/whether Government or private - belonging to categories (ii) and (iii)  above would  be  covered  by  the  definition  of "service" under  the Act  and as  such are  amenable to  the provisions of  the Act  along with  the  management  of  the hospital, etc. jointly and severally.      There may,  however, be a case where a person has taken an insurance policy for medi-care whereunder 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, therfore,  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).      Shri A.M.  Singh vi  has invited  our attention  to the following observations  of Lord  Denning M.R. in White house v. Jordan & Anr., (1980) 1 All.E.R. 650 :      "Take heed of what has happened in the      United States, ’Medical malpractice’      cases there are very worrying,      especially as they are tried by juries      who have sympathy for the patient and      none for the doctor, who is insured. The      damages are colossal. The doctors insure      but the  premiums become very high : and      these have to be passed on in fees to      the patients.  Experienced practitioners      are known to have refused to treat      patients for fear of being accused of      negligence. Young  men are even deterred      from entering  the profession because of      the risks involved. In the intersts of      all, we  must avoid such consequences in      England. Not only must we avoid      excessive damages.  We must say, and say      firmly, that,  in a professional man, an

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    error of judgment is not negligent."      [p.658]      Relying  on  these  observations  learned  counsel  has 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.   We  do   not  entertain   such   an apprehension. In  the first place, it may be stated that the aforementioned observations of Lord Denning were made in the context of  substantive law governing actions for damages on the ground  of  negligence  against  medical  practitioners. There too  the last  sentence in  the said observations that "an error  of  judgment  is  not  negligent"  has  not  been approved, in  appeal, by the House of Lords. [See : 1981 (1) All. E.R.  267]. 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. An  analytical study  of tort litigation in India during  the period  from 1975  to 1985  made by  Prof. Galanter reveals  that a total number of 416 tort cases were decided by  the High  Courts and  this Court, as reported in the All  India Reporter,  out of  which 360 cases related to claims under  the Motor  Vehicles Act  and cases relating to medical malpractice  were  only  three  in  number.  [See  : Upendra  Baxi   and  Thomes   Paul,   Mass   Disasters   and Multinational Liability,  The Bhopal Case, PP. 214-218]. One of the  factors inhibiting  such claims  is the  requirement regarding court fee that must be paid by the plaintiff in an action for  damages on  the ground  of negligence.  Since no court fee  is required to be paid on a complaint filed under the Act  it would  be possible for persons who have suffered injury due  to deficiency  in service  rendered  by  medical practitioners or at hospitals/nursing homes to seek redress. The conditions  prevailing in  India cannot,  therefore,  be compared with those in England and in the United States.      As regards  the criticism  of the  American malpractice litigation by the British judiciary it has been said :      "Discussion of these important issues is      sometimes clouded  by an over-simplistic      comparison between  England and American      "malpractice" litigation. Professor      Miller noted in 1986 that malpractice      claims were brought in the United States      nearly 10  times as often as in England,      and that this is due to a complex      combination of factors, including      cultural differences, judicial      attitudes, differences in the legal      system and the rules about costs. She      points to the deterrent value of      malpractice litigation and resent some      of the criticisms of the American system      expressed by the British judiciary.      Interestingly, in 1989 the number of      medical negligence claims and the size      of medical malpractice insurance

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    premiums started to fall in New York,      California and  many other states. It is      thought that this is due in part to      legislation in a number of states      limiting medical  malpractice claims, an      in part to improved patient care as a      result of litigation."[Jackson & Powe]      not Professional Liability, 3rd Edn.,      para 6-25, p. 466]      Dealing with  the present  state of  medical negligence cases in the United Kingdom it has been observed :      "The legal system, then, is faced with      the classic  problem of doing justice to      both parties. The fears of the medical      profession must be taken into account      while the legitimate claims of the      patient cannot be ignored.      Medical negligence apart, in practice,      the courts are increasingly reluctant to      interfere in  clinical matters. What was      once perceived as a legal threat to      medicine has disappeared a decade later.      While the court will accept the absolute      right of  a patient to refuse treatment,      they will, at the same time, refuse to      dictate to doctors what treatment they      should give. Indeed, the fear could be      that, if anything, the pendulum has      swung too far in favour of therapeutic      immunity. "[p. 16]      "It would be a mistake to think of      doctors and hospitals as easy targets      for the dissatisfied patient. It is      still very  difficult to raise an action      of medical  negligence in Britain; some,      such as the Association of the Victims      of Medical  Accidents, would say that it      is unacceptably  difficult. Not only are      there practical  difficulties in linking      the plaintiff’s injury to medical      treatment, but the standard of care in      medical negligence cases is still      effectively defined by the profession      itself. All these factors, together with      the sheer expense of bringing legal      action and the denial of legal aid to      all but  the poorest, operate to inhibit      medical litigation in a way in which the      American system, with its contingency      fees and its sympathetic juries, does      not.           It is difficult to single out any      one cause for what increase there has      been in the volume of medical negligence      actions in  the United Kingdom. A common      explanation is that there are, quite      simply, more medical accidents occurring      - whether this be due to increased      pressure on hospital facilities, to      falling standards of professional      competence or, more probably, to the      ever-increasing complexity of      therapeutic and diagnostic methods." [p.      191]      "A patient who has been injured by an

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    act of medical negligence has suffered      in a  way which is recognised by the law      - and by the public at large - as      deserving compensation. This loss may be      continuing and what may seem like an      unduly large award may be little more      than that sum which is required to      compensate him  for such matters as loss      of future earnings and the future cost      of medical or nursing care. To deny a      legitimate claim or to restrict      arbitrarily the size of an award would      amount to substantial injustice. After      After all, there is no difference in      legal theory between the plaintiff      injured through medical negligence and      the plaintiff injured in an industrial      or motor accident." [pp. 192-93]      [Mason’s Law and Medical Ethics, 4th      Edn.]      We are,  therefore, not  persuaded to hold that in view of the  consequences indicated by Lord Denning in Whitehouse v. Jorden  (supra) medical  practitioners should be excluded from the purview of the Act.      On the  basis of  the above discussion we arrive at the following conclusions: (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 Act. (2) The  fact  that  medical  practitioners  belong  to  the medical profession  and  are  subject  to  the  disciplinary control of the Medical Council of India and/or State Medical Councils constituted  under the  provisions  of  the  Indian Medical Council  Act would not exclude the services rendered by them from the ambit of the Act. (3) A ’contract of personal service’ has to be distinguished from a ’contract for personal services’. In the absence of a relationship of  master and  servant between the patient and medical practitioner,  the service  rendered  by  a  medical practitioner to  the patient  cannot be  regarded as service rendered  under  a  ’contract  of  personal  service’.  Such service is  service rendered  under a ‘contract for personal services’ and  is not  covered by exclusionary clause of the definition of ’service’ contained in Section 2(1) (o) of the Act. (4)  The expression  ’contract of  personal service’ in Section 2(1)  (o) of the Act cannot be confined to contracts for employment  of  domestic  servants  only  and  the  said expression would include the employment of a medical officer for  the   purpose  of  rendering  medical  service  to  the employer. The  service rendered  by a medical officer to his employer under  the contract  of employment would be outside the purview  of ’service’  as defined in Section 2(1) (o) of the Act. (5)  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. (6) Service  rendered at  a non-Government  hospital/Nursing

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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. (7) Service  rendered at  a non-Government  hospital/Nursing home where  charges are  required to  be paid by the persons availing such  services falls  within  the  purview  of  the expression ’service’  as defined  in Section 2(1) (o) of the Act. (8) 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. (9)  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. (10)  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. (11)  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. (12) 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.      In view  of the conclusions aforementioned the judgment of the  National Commission  dated April  21, 1992  in First Appeal No.  48 of 1991 [M/s Cosmopolitan Hospitals & Anr. v. Smt. Vasantha  P. Nair]  and the judgment dated November 16, 1992 in First Appeal No. 97 of 1991 [Dr. Sr. Louie & Anr. v. Smt. Kannolil  Pathumma & Anr.] holding that the activity of providing medical  assistance  for  payment  carried  on  by hospitals and members of the medical profession falls within the scope  of the expression ’service’ as defined in Section 2(1) (o)  of the Act and that in the event of any deficiency in the  performance of  such service the aggrieved party can

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invoke the  remedies provided  under the  Act  by  filing  a complaint before  the Consumer  Forum  having  jurisdiction, must be  upheld and  Civil Appeal Nos. 688/93 and 689/93 and S.L.P.  (Civil)  Nos.  6885/92,  6950/92  and  351/93  filed against the said judgment have to be dismissed. The National Commission in  its judgment  dated May  3, 1993  in O.P. No. 93/92 has  held that  since the  treatment that was given to the deceased  husband of the complainant in the nursing home belonging to  the opposite  party was  totally free  of  any charge it does not contitute ’service’ as defined in Section 2(1) (o)  of the  Act. The  Tribunal has  not considered the question whether services are rendered free of charge to all the patients  availing services  in the said nursing home or such services  are rendered  free of  charge only to some of the patients  and are  rendered on payment of charges to the rest of  the patients.  Unless it is found that the services are rendered  free of  charge to  all the  patients availing services at  the nursing  home, it  cannot be  held that the said services  do not  constitute ’service’  as  defined  in Section 2(1)  (o) of  the Act.  Civil Appeal No. 254/94 has, therefore, to  be allowed  and the matter has to be remitted to the National Commission for consideration in the light of this judgment.  The judgment of the Madras High Court in Dr. C.S. Subramaniam v. Kumaraswamy & Anr. (supra), holding that the services rendered to a patient by a medical practitioner or a  hospital by  way  of  diagnosis  and  treatment,  both medicinal and surgical, would not come within the definition of ’service’ in Section 2(1) (o) and a patient who undergoes treatment under  a medical practitioner or a hospital by way of diagnosis  and treatment,  both medicinal  and  surgical, cannot be  considered to  be a ’consumer’ within the meaning of Section 2(1) (d) of the Act cannot be sustained and Civil Appeals Nos. 4664-65/94 as well as Civil Appeals arising out of S.L.P.(Civil)  Nos. 21775/94  and 18445-73/94  have to be allowed and  the said  judgment of the Madras High Court has to be  set aside  and the  writ petitions disposed of by the said judgment  have to  be dismissed.  The judgment  of  the National Commission  dated December 15, 1989 in First Appeal No. 2  of 1989  holding that services rendered in Government hospitals are  not covered  by the  expression ’service’  as defined in  Section 2(1)  (o) of the Act cannot be upheld in its entirety  but can  be  upheld  only  to  the  extent  as indicated in  conclusion No.  9. Civil Appeal arising out of S.L.P. (Civil)  No. 18497/93  has  to  be  allowed  and  the complaint has  to be  remitted to  the State  Commission for consideration in  the light  of this judgment. S.L.P.(Civil) Nos. 21348-21349/93  have been filed against the judgment of the Kerala High Court dated October 6,1993 in Writ Petitions filed on  behalf of the hospitals claiming that the services rendered by  the hospitals  do not  fall within the ambit of Section 2(1)  (o) of  the Act.  The said Writ Petitions were dismissed by the High Court having regard to the decision of the National Commission in Cosmopolitan Hospital (supra) and the pendency of appeal against the said decision before this Court. Since  the decision  of the  National  Commission  in Cosmopolitan Hospital  (supra) is being upheld by us, S.L.P. (Civil) Nos. 21348-21349/93 have to be dismissed.      Writ Petition  (Civil) No.  16/94 has been filed by the Cosmopolitan Hospital  (P) Ltd.  and Dr. K. Venugopalan Nair who have  also filed S.L.P. (Civil) Nos. 6885/92 and 6950/92 against the  judgment of the National Commission dated April 21, 1992.  In the  Writ Petition,  the said writ petitioners have sought a declaration that the provisions of the Act are not applicable  to alleged deficiency in medical service and that if the said provisions are held to be applicable to the

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medical profession and hospitals the same may be declared as unconstitutional as  being  violative  of  Articles  14  and 19(1)(g) of  the Constitution.  As regards the first part of the prayer  regarding the  applicabilty of the provisions of the Act  to the  alleged deficiency  in medical  service, we have already  considered  the  matter  and  found  that  the provisions of  the  Act  are  applicable  to  deficiency  in service rendered  by medical practitioners and hospitals and for the  same reason  the said prayer cannot be allowed. the other prayer  sought for  in the Writ Petition regarding the validity of  the provisions  of the  Act is also without any substance. The  ground on  which the  writ  petitioners  are seeking to  assail the validity of the provisions of the Act is that  the composition  of the Consumer Disputes Redressal Agencies and  the procedure  to  be  followed  by  the  said Agencies is such that it is not suitable for adjudication of the  complex  issues  arising  for  consideration.  We  have already considered  this grievance  urged on  behalf of  the medical profession  and have  found that  the composition of the Consumer  Disputes Redressal  Agencies as  well  as  the procedure to  be followed by them does not preclude a proper adjudication  of   the  consumer   disputes  arsing  out  of complaints relating  to deficiency  in service  rendered  by medical practitioners and hospitals. In our opinion, on case is  made   out  that  the  Act  suffers  from  the  vice  of arbitrariness or  unreasonableness so  as to be violative of Articles 14  and 19(1)(g)  of the  Constitution.  There  is, therefore, no  merit in  the Writ  Petition and it has to be dismissed.      In the result Civil Appeals Nos. 688/93 and 689/93, and S.L.P. (Civil)  Nos. 6885/92  and 6950/92 are dismissed. The State Commission  will deal with the complaints in the light of this  judgment.  S.L.P.[Civil]  Nos.  351/93  and  21348- 21349/93 and  Writ Petition  (Civil)  Nos.  16/94  are  also dismissed. Civil  Appeal  No.  254/94  is  allowed  and  the judgment of  the National Commission dated May 3, 199 is set aside  and   O.P.No.  93/92  is  remitted  to  the  National Commission for  consideration in the light of this judgment. Civil Appeals  Nos. 4664-65/94 and Civil Appeals arising out of S.L.P.  (Civil) Nos. 21755/94 and 18445-73/94 are allowed and the judgment of the Madras High Court dated February 17, 1994 is  set aside and the writ petitions disposed of by the said judgment  of the  High Court  are dismissed  and  as  a result the  Consumer Disputes  Redressal Agencies would deal with the complaint petitions covered by those writ petitions in the  light of  this judgment. Civil Appeal arising out of S.L.P. (Civil)  No. 18497/93  is alos  allowed and Complaint Case No.  1 of  1988 is remitted to the State Commission for consideration in  the light of this judgment. No order as to costs.