Who is a Consumer for Purposes of Consumer Protection Act, 1986 ? SC Answers in its Recent Judgment

Who is a Consumer for Purposes of Consumer Protection Act, 1986 ?

In a recent Judgment issue has been discussed. It would be useful to reproduce the definition of “consumer” as contained in Section 2(1)(d) of the Consumer Protection Act, 1986.

Sub-clause (i) of Clause (d) of sub-section (1) of Section 2 of the 1986 Act in simple terms provides that “consumer” means any person who buys any goods for a consideration. However, it excludes from its purview a person who obtains such goods for resale or for any commercial purpose. 

Explanation to clause (d) of sub-section (1) of Section 2 of 1986 Act carves out an exception by clarifying that commercial purpose does not include use by a person of goods bought and used or/ and services availed by him exclusively for the purpose of earning his livelihood by means of self-employment. 

definition of “person” in Section 2(1)(m) is inclusive and not exhaustive. Therefore, there can be no doubt that even an incorporated company could be a consumer within the meaning of Section 2(1)(d) read with Section 2(1)(m) of the 1986 Act.

What is clear is that the identity of the person making the purchase, or the value of the transaction, is not conclusive to determine whether the transaction or activity is for a commercial purpose.

If it is found that the dominant purpose behind purchasing goods or services is for personal use and consumption of the purchaser, or is otherwise not linked to any commercial activity, the question whether such purchase is for generating a livelihood by means of self-employment need not be looked into. However, where the transaction is for a commercial purpose then it might have to be considered whether it is for generating livelihood by means of self-employment or not.

In the instant case, the complainant had been an established company doing business which bought the product license to automate its processes. In such circumstances, the object of the purchase was not to generate self-employment but to organize its operations with a view to maximise profits. In such situation therefore, the case of the complainant does not fall within the Explanation to Section 2(1)(d) of the 1986 Act. Such organisation cannot be treated as consumer for purposes of the 1986 Act.

For details refer Poly Medicure Ltd v. Brillio Technologies Pvt Ltd [2025] GCtR 1695 (SC).