Court case(1995) 6 SCC 651

After the Consumer Protection Act 1986 came into force, patients began filing complaints of medical negligence against doctors and hospitals before the consumer fora. Conflicting decisions followed in the High Courts and the National Commission on whether medical services fell within the Act at all. The Indian Medical Association and several doctors and hospitals argued that the relationship between a doctor and his patient was one of personal service resting on trust, that doctors were already subject to the disciplinary control of the Medical Councils, that the fora (with lay members) were not equipped to decide complex questions of medical negligence requiring expert evidence, and that the summary procedure of the Act was unsuitable. Appeals and writ petitions raising these questions, including one arising from a complaint by V.P. Shantha, were heard together by a three-judge bench of the Supreme Court.

The Supreme Court held that medical practitioners and hospitals rendering services for consideration are within the Act. A "contract of personal service" means a contract of employment (master and servant); the relationship between doctor and patient is a "contract for services", which is not excluded. Disciplinary control by the Medical Council does not oust the consumer remedy, and the fora, which can take expert evidence, are competent to decide negligence; difficult cases may still be left to civil courts in their discretion. The Court classified the position: services by doctors and hospitals that charge all patients are covered; so are services to patients treated free by hospitals that charge others, because the cost is borne by those who pay; so are services paid for by an employer or an insurance company. Services rendered free of charge to every patient (as in wholly free government hospitals and dispensaries) are excluded, as is service by a doctor to his employer under a contract of employment.