Case Note & Summary
The Supreme Court allowed the appeal filed by Appellants and Another against Respondents and Another -- The Court reversed the NCDRC's decision which had dismissed the consumer complaint on the ground that the appellants were not 'consumers' under Consumer Protection Act, 1986 -- The NCDRC had concluded that leasing the flat constituted commercial purpose -- The Supreme Court held that the exclusion clause for commercial purpose in Section 2(1)(d) applies only when goods or services are obtained for commercial purpose at the time of purchase -- The appellants had purchased the flat for personal use to live closer to their parents -- Subsequent leasing due to changed circumstances did not alter the nature of the original transaction -- The Court remanded the matter to NCDRC for fresh consideration on the merits of the complaint regarding deficiency in service and unfair trade practice
Headnote
The Supreme Court allowed the appeal and set aside the impugned judgment of the National Consumer Disputes Redressal Commission (NCDRC) -- The Court held that the appellants were 'consumers' under Section 2(1)(d) of Consumer Protection Act, 1986 (the 1986 Act) -- The NCDRC had erroneously dismissed the complaint on the ground that the appellants did not fall under the definition of 'consumer' as they had leased the flat -- The Court emphasized that the exclusion clause for 'commercial purpose' applies only when goods or services are obtained for commercial purpose at the time of purchase -- Subsequent leasing of a property purchased for personal use does not convert the transaction into a commercial purpose -- The burden of proving commercial intent lies on the person alleging it -- The respondents failed to discharge this burden -- The matter was remanded to NCDRC for fresh consideration on merits
Issue of Consideration
Whether the appellants fall under the definition of 'consumer' under Section 2(1)(d) of Consumer Protection Act, 1986 despite leasing the purchased flat
Final Decision
The Supreme Court allowed the appeal, set aside the impugned judgment of NCDRC, and remanded the matter to NCDRC for fresh consideration on merits
Law Points
- Definition of 'consumer' under Section 2(1)(d) of Consumer Protection Act
- 1986
- Exclusion clause for commercial purpose
- Interpretation of 'commercial purpose' in Explanation to Section 2(1)(d)
- Burden of proof regarding commercial intent
- Distinction between purchase for personal use and subsequent leasing
- Principles of statutory interpretation
Case Details
2026 LawText (SC) (02) 11
Civil Appeal No. 6588 of 2023
PRASHANT KUMAR MISHRA J. , N.V. ANJARIA J.
M/s MGF Developers Ltd. and Another
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Nature of Litigation
Consumer dispute regarding deficiency in service and unfair trade practice in real estate transaction
Remedy Sought
Appellants sought direction to respondents to pay various amounts including interest, compensation for mental agony, compensation for change in layout plan, excess amount for fixtures and fittings, and litigation costs
Filing Reason
Alleged deficiency in service and unfair trade practice by respondents including delayed possession, unilateral change in layout plan, and excessive demands
Previous Decisions
NCDRC dismissed the complaint holding appellants were not 'consumers' as they had leased the flat for commercial purpose
Issues
Whether the appellants fall under the definition of 'consumer' under Section 2(1)(d) of Consumer Protection Act, 1986 despite leasing the purchased flat
Submissions/Arguments
Appellants contended the flat was purchased for personal use to live closer to parents and NCDRC erred in holding it was for commercial purpose
Respondents supported NCDRC judgment arguing appellants were not consumers as they leased the flat for commercial purpose
Ratio Decidendi
The exclusion clause for 'commercial purpose' in Section 2(1)(d) of Consumer Protection Act, 1986 applies only when goods or services are obtained for commercial purpose at the time of purchase -- Subsequent leasing of a property purchased for personal use does not convert the transaction into a commercial purpose -- The burden of proving commercial intent lies on the person alleging it
Judgment Excerpts
The pivotal question which falls for our considerations is whether the NCDRC was right in dismissing the complaint filed by the appellants on the premise that they do not fall under the definition of 'consumer' for leasing out the subject property for commercial purposes, falling within the exclusion clause of Section 2(1)(d) of the Consumer Protection Act, 1986
A bare perusal of the above provision reveals that the term 'consumer' encompasses any person who buys any goods for consideration...but does not include a person who obtains such goods for resale or for any commercial purpose
Procedural History
Appellants filed consumer complaint before NCDRC in 2017 -- NCDRC dismissed complaint in 2023 holding appellants were not consumers -- Appellants filed appeal before Supreme Court in 2023 -- Supreme Court heard appeal and delivered judgment
Acts & Sections
- Consumer Protection Act, 1986: Section 2(1)(d)
