Mere Purchase of Multiple Properties Doesn’t Exclude Buyer from ‘Consumer’ Definition: Supreme Court

The Supreme Court has held that merely purchasing an immovable property, even more than one unit, does not automatically exclude a buyer from the definition of ‘consumer’ under Section 2(1)(d) of the Consumer Protection Act, 1986. Such exclusion will apply only if it is proved that the dominant purpose behind the purchase was commercial, Court emphasised. 

A Bench of Justices Prashant Kumar Mishra and N V Anjaria clarified that what amounts to a ‘commercial purpose’ depends on the facts of each case. It must be determined by examining the purpose for which the property was purchased, it said. 

Court was hearing an appeal filed by Vinit Bahri and another against a May 11, 2023 order of the National Consumer Disputes Redressal Commission (NCDRC), which had dismissed their complaint against M/s MGF Developers Ltd and another on the ground that they were not ‘consumers’.

The dispute related to a group housing project named ‘The Villas’ at Village Sahraul, Sector-25, Gurgaon. The appellants had sought several reliefs, including Rs 1.59 crore towards 18% interest, Rs 50 lakh as compensation for mental agony and harassment, Rs 15 lakh for change in the location of Tower C, Rs 35.61 lakh towards excess charges for fixtures and fittings, and Rs 2.5 lakh as litigation costs.

The NCDRC had concluded that the appellants did not qualify as ‘consumers’ because they had leased the flat to one Sunil Raman, treating the act as a commercial purpose.

Examining the law, the Supreme Court noted that a ‘consumer’ is any person who buys goods or avails services for consideration. However, the law excludes those who obtain goods for resale or for any commercial purpose. At the same time, the Explanation to Section 2(1)(d) makes it clear that ‘commercial purpose’ does not include goods used exclusively for earning livelihood by self-employment.

Court observed that while the 1986 Act does not give an exhaustive definition of ‘commercial purpose’, the key test is the dominant intention behind the transaction. If the main purpose of purchasing the property was profit-making through commercial activity, and there is a direct and close link between the purchase and such profit-making activity, the buyer would fall within the exclusion clause.

In this case, the Bench found that the NCDRC had erred in dismissing the complaint.

"The onus of proving that the appellants fall within the exclusion clause of Section 2(1)(d) of the 1986 Act rests upon the respondents, and the respondents have failed to discharge this onus on a preponderance of probabilities,'' it held. 

Court further noted that no cogent material had been placed on record to show a direct nexus between the purchase of the flat and any profit-generating commercial activity.

Accordingly, the Supreme Court set aside the NCDRC’s order and restored the consumer complaint for consideration on merits.

Case Title: Vinit Bahri And Another Vs M/s MGF Developers Ltd And Another 

Bench: Justices Prashant Kumar Mishra and N V Anjaria

Date of Judgment: February 4, 2026