The Supreme Court in Indian Medical Association v. V P Shanta, (1995), has held that :

a hospital rendering free service to some patients and paid services to others is not covered under the definition of service under the Consumer Protection Act, as gratuitous services is excluded from the definition of service under the Act.

a hospital which renders service to the patients is covered under the Consumer Protection Act whether they are rendering a contract of service or contract for service.

a hospital which is run by the government is not covered under the Consumer Protection Act and the patient who suffers due to the negligence of a doctor working in the hospital will have to file the case in a civil court under the law of tort.

a hospital which renders free service to some patients and paid service to some others is covered under the definition of service, as the patients who receive free service are the beneficiaries of the service hired by the patients who pay for the service.