What did the Supreme Court decide in IMA v. Shantha?

Medical services are ‘service’ under the Consumer Protection Act, 1986, except when provided entirely free to all or when the relationship is a true contract of service (like employer–employee). Paying patients in mixed hospitals are consumers.

Are government hospitals covered by the ruling?

Yes, if the hospital charges some patients, those paying patients are consumers. Fully free hospitals are outside the Act.

How is negligence assessed for doctors under the Act?

Negligence is judged using professional standards such as the Bolam test—whether the doctor acted in line with a responsible body of medical opinion.

Who bears liability—doctor or hospital?

Both can be liable for deficiency in service. Hospitals may be vicariously liable for staff negligence.

Do insurance or employer-sponsored treatments come under the Act?

Yes. Beneficiaries of paid schemes (insurance/employer panels) are consumers because consideration is paid on their behalf.

Indian Medical Association v. V.P. Shantha & Ors

Indian Medical Association v. V.P. Shantha & Ors.

Clear, classroom-style explainer on how the Supreme Court brought medical services within the Consumer Protection Act, 1986—and the key exceptions.

Supreme Court of India 1995 3-judge bench (1995) 6 SCC 651 Consumer & Medical Negligence 8 min read

Author: Gulzar Hashmi · India · Published: 13 Nov 1995

Case Meta

CASE_TITLE

Title: Indian Medical Association v. V.P. Shantha & Ors.
Citation: (1995) 6 SCC 651
Court: Supreme Court of India
Jurisdiction: India
Author: Gulzar Hashmi
PUBLISH_DATE: 13 Nov 1995
LOCATION: India
PRIMARY_KEYWORDS: medical services, consumer protection, negligence
SECONDARY_KEYWORDS: Bolam test, hospital liability, free services, vicarious liability
Slug: indian-medical-association-v-v-p-shantha-ors

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Quick Summary

The Supreme Court held that medical services count as “service” under Section 2(1)(o) of the Consumer Protection Act, 1986. Doctors and hospitals can be sued for deficiency in service before consumer fora. Two key carve-outs exist: (1) services provided totally free to every patient, and (2) a true “contract of service” (like employer–employee). If a hospital charges some patients (even if others are treated free), the paying patients—and beneficiaries of paid schemes like insurance or employer panels—are consumers.

Issues

When is a medical practitioner’s work “service” under Section 2(1)(o) of the Consumer Protection Act, 1986?
Do hospital/nursing home services fall within Section 2(1)(o)? If yes, are there exceptions?

Rules

Consumer Protection Act, 1986: “Service” includes services for consideration, with specified exclusions (e.g., contract of service).
Negligence Standard: Professional negligence is assessed against accepted medical practice (Bolam principle).

Facts (Timeline Style)

Rising complaints of medical negligence led to uncertainty: Are medical and hospital services covered by COPRA, 1986?

Conflicting decisions and multiple Special Leave Petitions reached the Supreme Court for a clear ruling.

Key concern: Are doctors and hospitals service providers? What about free services and mixed-payment hospitals?

The Court consolidated matters to settle the scope of “service” as applied to the medical profession.

Timeline of IMA v. Shantha highlighting ambiguity and Supreme Court clarification

Arguments

Appellant (Indian Medical Association)

Medical practice is a profession, not an “occupational service” covered by COPRA.
Section 2(1)(o) exclusions (e.g., contract of service) keep medical services outside the Act.
“Deficiency” grounds are narrow and fit poorly with complex clinical judgment.

Respondent (Consumers)

Patients pay hospitals/doctors; that is consideration—so services should be covered.
Free services for some do not change the paid nature for others.
Consumer fora provide quicker, cheaper redress for negligent treatment.

Judgment

Held: Medical services are generally “service” under Section 2(1)(o) of the Consumer Protection Act, 1986. Doctors and hospitals can be proceeded against for “deficiency in service.”

Covered: Treatment for a fee; diagnostic, surgical, and allied services; hospital services where patients pay; beneficiaries of paid schemes (insurance/employer panels).
Not Covered: Services provided entirely free to all patients; true contract of service relationships (e.g., employee treated by employer’s in-house doctor in a strict master–servant setting).
Negligence Test: Apply professional standards such as the Bolam test to judge deficiency.
Liability: Hospitals may be vicariously liable for staff negligence.

Judgment gavel with healthcare icons representing consumer protection

Ratio Decidendi

“Service” under COPRA is broad. Medical services are included when there is consideration, except where the service is wholly free to everyone or where the relationship is a true contract of service. Mixed hospitals bring paying patients (and beneficiaries of paid schemes) within the Act.

Why It Matters

Opened the doors of consumer fora to patients for speedy relief.
Pushed hospitals to improve consent, documentation, and protocols.
Balanced accountability with professional judgment through Bolam.

Key Takeaways

Medical services = “service” (with clear exceptions).
Paying or insured patients are consumers.
Hospitals can be vicariously liable.

Bolam guides the negligence inquiry.
Fully free hospitals are outside COPRA.
“Contract of service” ≠ covered; “for service” = covered.

Mnemonic + 3-Step Hook

Mnemonic: “PAY-INSURE-BOLAM”

PAY: If you pay (or someone pays for you), you are a consumer.
INSURE: Insurance/employer plans count as consideration.
BOLAM: Negligence judged by professional standards.

IRAC Outline

Issue

Do medical and hospital services fall within “service” under COPRA? What about free services and mixed-payment hospitals?

Rule

Section 2(1)(o) COPRA; exclusions for “contract of service”; deficiency judged via professional standards (Bolam).

Application

Paid treatments involve consideration; mixed hospitals serve both free and paid—paying/insured patients are consumers; fully free hospitals are outside.