Gujarat State Consumer Commission Rules Free Hospital Services Still Fall Under Consumer Protection Act

The judgment passed by the Gujarat State Consumer Redressal Commission, holding that hospitals offering free services to patients do not negate the patient’s right to be considered a consumer and can therefore seek compensation under the Consumer Protection Act does not appear to be the first of its kind, as similar judgments have been delivered in the past. According to senior consumer commission advocates, several judgments have established that even if a patient pays a nominal amount at government hospitals, such as an entry fee, it amounts to a form of tax paid to the government. In return, the hospitals are liable to provide services to the patient, thereby bringing government hospitals under the ambit of the Consumer Protection Act.

Expert Opinions on the Judgment

Senior advocate Shekhar B. Prabhawalkar, who has been practising for 44 years, told FPJ: “The view taken by the Gujarat State Commission seems correct, based on a series of judgments from the NCDRC and Supreme Court. The consistent view is that if a hospital provides services to the majority of patients for consideration, and treats a few of them free of cost, the Consumer Protection Act still applies. The hospital is liable to pay compensation to a patient receiving free services if negligence is found by the commission.”

Advocate Anand Patwardhan, former president of the Consumer Court’s Advocates Association, also described the judgment as progressive. “The judgment is very progressive and needs to be tested by higher courts to settle the law. The definition of a consumer is one who pays, agrees, or undertakes to pay, and it extends to the beneficiaries of such payment. However, the definition also requires that it be under a licence or permission from the person who pays. In this case, it must have been presumed that such licence or permission exists, as the person who has paid money in the form of taxes to the government is effectively extending that benefit,” he said.

Clarification on Paid vs Free Services

Meanwhile, Advocate Shirish V. Deshpande, Chairman of the Mumbai Grahak Panchayat, offered a detailed explanation. “The judgment given by the Gujarat State Commission cannot be faulted. From the news report, the hospital appears to be a private hospital and therefore must not be rendering free medical treatment to all patients. The Supreme Court, in a landmark judgment in Indian Medical Association v. V.P. Shantha (decided on November 13, 1995), settled this issue and held that if a hospital treats some patients for free and charges others, the free patients are considered ‘beneficiaries’ of a service funded by the paying patients.”

Further clarifying, Deshpande added that patients receiving free treatment can be considered consumers if the hospital follows a dual model—treating both paid and free patients—where the free services are subsidized by the paying patients. In such cases, free patients are beneficiaries under the Consumer Protection Act. However, patients treated entirely free of charge in purely charitable or government hospitals, without any cross-subsidization, do not fall within the definition of consumers.

Case Details and Outcome

The Gujarat State Consumer Dispute Redressal Commission emphasized that even if a hospital does not charge, the patient remains a consumer because the hospital provides a “service” under the provisions of the Consumer Protection Act. The state commission remanded a case back to the district forum, which in 2015 had rejected a compensation claim by a patient’s family. The family had sought compensation from a hospital after the patient’s death, alleging medical negligence, despite the hospital providing free treatment.

The case dates back to 2013, when Bharatkumar Gorahva was admitted to Akshar Surgical Hospital in Botad for kidney stone treatment.