Lawyers excluded from the consumer protection law. Are doctors next?

On 14 May 2024, in Bar of Indian Lawyers v D.K. Gandhi, a Supreme Court bench of Justices Bela Trivedi and Pankaj Mithal held that advocates would not be liable under the Consumer Protection Act, 2019 (CPA), for deficiencies in service. The judgement overturned a decision of the National Consumer Disputes Redressal Commission (NCDRC). 

The NCDRC relied on the Supreme Court’s 1995 judgement in Indian Medical Association v V.P. Shantha, where a three-judge bench held that doctors were liable under the CPA. While overturning the decision of the NCDRC, the Court asked for the review of V.P. Shantha, creating a future possibility of doctors not being covered under the consumer protection laws. 

But the judgement in D.K. Gandhi has seemingly overlooked key observations in V.P. Shantha. Some oversights include the simplistic reading of the relationship between a client and an advocate as a simple master-servant relationship, an attempt to consider all professionals as outside the CPA’s purview and, finally, the sidestepping of judgements that have furthered the purview of V.P. Shantha. 

The client-advocate relationship does not exhibit master-servant features 

The specific provision of the CPA in contention in V.P. Shantha and D.K. Gandhi was the definition (under Section 2(42) of the CPA 2019, and Section 2(1)(o) of its predecessor, CPA 1986) of “service”. The CPA 2019 defines “service” as “service of any description which is made available to potential users and includes…banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information; but does not include the rendering of any service free of charge or under a contract of personal service.”

Both judgements are explorations of what amount of control the client exercises over the work of the doctors or advocates. The V.P. Shantha bench drew an important distinction between a “contract of service” and “contract for services.” CPA’s exclusion clause uses the expression “contract of [personal] service” instead of “contract for services”. The bench added that the “Parliamentary draftsman” was aware of this well-accepted distinction.

Here’s how it explained the distinction: “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. A contract of service’ implies a 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.”

In V.P. Shantha, the bench had held that since there was no relationship of master and servant between doctors and the patients, their contract could not be treated as one of personal service—the relationship was, in fact, a “contract for personal service”. 

This clear enunciation has now failed to convince the D.K. Gandhi bench, which held that the question of whether a given relationship should be classified as a “contract for services” as opposed to a “contract of personal service” is “incapable of being answered with exactitude without reference” to a case’s underlying facts. 

For this view, the bench relied on a 1957 decision in Dharangadhra Chemical Works Ltd v State of Saurashtra, even though V.P. Shantha was delivered later and with the added backing of the CPA which came into force in 1986. Based on the 1957 judgement, the D.K. Gandhi bench proposed that the greater the degree of direct control exercised over the person rendering the services, stronger would be the grounds for holding it to be a “contract of service.”  

The bench suggested that with a conjoint reading of the provisions in Order III of the Civil Procedure Code and Chapter IV of Advocates Act, there remained no doubt that an advocate whose name has been entered in the state roll is entitled to practise in all courts. However, he can act only when he is appointed by a client executing a Vakalatnama. 

The bench then concluded that a “considerable amount” of direct control is exercised by the client over the manner in which an advocate renders their services during the course of their employment. This, the bench then infers, clarifies that the services of an advocate would be that of a “contract of personal service” and thus be excluded from the CPA’s definition of “service”. 

But this proposition is not very persuasive. What the bench failed to fully explore was that even as advocates have certain authority by virtue of a Vakalatnama, they also have a duty to the courts, to the client, to the opponent and to colleagues as laid down in the Bar Council of India Rules. 

The bench also overstated the amount of direct control the client has over the advocate’s services. The advocate may require instructions before making concessions or giving an undertaking, but they often exercise complete control over deciding legal strategy and contentions. 

The bench missed the fact that the advocate is not subject to detailed direction and control by their client, freely exercising their professional or technical skill, and using their knowledge and discretion instead, much like doctors. 

In D.K. Gandhi, Justice Trivedi observed that the legal profession is a “service-oriented, noble profession”, and lawyers are expected to be “fearless and independent” when protecting the rights of citizens, judicial independence and the rule of law. It is precisely for this reason that many would say that lawyers cannot be reduced to servants of their clients, as concluded by the bench to justify their exclusion from the CPA. 

Amendments serve to underline and not create categories 

The D.K. Gandhi bench found that there was “not a whisper” in the CPA’s statement of objects and reasons to include the services provided by professionals such as advocates and doctors. This argument fails to deal with the fact that there was no whisper precisely because both the 1986 and 2019 versions of the CPA did not aim to lay down an exhaustive list. 

The CPA’s legislative history makes this clear as do the many amendments to the Act. Act 50 of 1993 amended the CPA to insert the words “housing construction” before “entertainment”. Act 62 of 2002 amended the then existing provision by inserting the words “but not limited to” after the words “potential users and includes.” The CPA, 2019, defines services by additionally inserting the word “telecom.”

Whenever Parliament wanted to include new facilities under the definition, it did so through an amendment. Telecom, for example, was an emerging field, not contemplated in 1986. But the fact that Parliament did so only in 2019, and not earlier, shows that the insertion of new facilities through an amendment is a mere formality, or a recognition of a category which is already taken for granted. 

The V.P. Shantha bench made clear that while much of the section listing industries may be considered inclusionary, only two aspects of the law were exclusionary. These pertained to rendering of any service free of charge or under a contract of personal service. 

Before the V.P. Shantha bench, Senior Advocate Harish Salve argued that medical practitioners were not contemplated by Parliament to be covered within the CPA’s provisions. Salve urged that the expression “which is made available to potential users” in Section 2(1)(o) was indicative of the kind of service the law contemplated, namely, service of an institutional type which is really a commercial enterprise and open and available to all. 

But the bench disagreed with Salve, categorically stating that “consultation, diagnosis and treatment, both medicinal and surgical” did fall under Section 2(1)(o)’s ambit. It added that being subject to disciplinary control of medical councils also would not exclude doctors.

Avoiding much of this careful jurisprudence, the D.K. Gandhi bench refers to the “well accepted proposition of the fact that Professionals could not be called Businessmen or Traders, nor Clients or Patients be called Consumers.” It further noted that the terms “business” or “trade” could not be used interchangeably with the term “Profession.” 

Professions would require knowledge of an advanced type in a given field of learning or science, or from a “prolonged course” of specialised study, observed the bench. However, it is also widely recognised that journalism is a profession. Yet, Section 2(1)(o) of the 1986 Act as well as clause 42 of Section 2 of the 2019 Act specifically includes “purveying of news or other information” under its definition of “service.” 

Senior Advocate V. Giri, who appeared as amicus curiae in D.K. Gandhi, stated that advocates who provide services outside the litigation process, and who are sought out for legal opinions or drafting work could be covered by the CPA but those representing clients before the courts should be excluded. The judgement, however, was silent on why it does not favour this distinction. 

Finally, the judgement also erroneously considers the sui generis nature of the profession as a valid ground for excluding it from the CPA but misses the fact that nearly every profession is sui generis.

The bench in D.K. Gandhi observed that if the services provided by all professionals are also brought within the purview of the CPA, it would open a floodgate of litigation, particularly because the remedy provided under the Act is inexpensive and summary in nature. Consequently, the object of providing timely and effective settlement of consumer complaints would be frustrated. The bench did not support this concern with any facts or empirical data. 

In totality, the D.K. Gandhi judgement only underlines the similarities in the nature of the service offered by advocates and doctors. Rather than extending the CPA’s purview to advocates, it instead questioned the inclusion of doctors. 

Undoing the expanded jurisprudence under V.P. Shantha

The D.K. Gandhi bench concedes that instances of professional misconduct are on the rise, from what it calls an “overall depletion and erosion of ethical values and degradation of professional ethics.” Therefore, it says no professional enjoys immunity from being sued or from being held liable for professional misconduct or other misdeeds causing “legal, monetary or other injuries to their clients.”  

That’s why the bench’s suggestion that V.P. Shantha be reviewed is worrying. Take two examples. In a 2013 judgement, the Supreme Court directed a hospital to increase the compensation the NCDRC had required it to pay to the family of a patient who had died after being prescribed the wrong medicines. In a more recent case, Najrul Seikh vs Dr. Sumit Banerjee (2024), the Supreme Court emphasised that a medical practitioner’s duty extends beyond surgery and encompasses pre- and post-operative care. 

These two decisions, apart from several other cases involving medical negligence, stem from the time-tested jurisprudence in V.P. Shantha. These judgements not only underlined the importance of V.P. Shantha but also extended its purview in an attempt to ensure high professional and ethical standards. The decision in D.K. Gandhi has unnecessarily called all that good work into question.