Consumer Protection — Definition of “Consumer” — Section 2(1)(d), Consumer Protection Act, 1986 — Commercial purpose — Dominant purpose test. The expression “consumer” under Section 2(1)(d) of the Consumer Protection Act, 1986 excludes persons who obtain goods or services for resale or for any commercial purpose. Determination of “commercial purpose” depends on the dominant intention behind the transaction. The mere leasing out of a residential flat does not ipso facto establish that the purchase was for commercial purpose. (Paras 12–14, 17).

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Consumer Protection — Definition of “Consumer” — Section 2(1)(d), Consumer Protection Act, 1986 — Commercial purpose — Dominant purpose test.
The expression “consumer” under Section 2(1)(d) of the Consumer Protection Act, 1986 excludes persons who obtain goods or services for resale or for any commercial purpose. Determination of “commercial purpose” depends on the dominant intention behind the transaction. The mere leasing out of a residential flat does not ipso facto establish that the purchase was for commercial purpose. (Paras 12–14, 17).

Relied on:
Laxmi Engineering Works v. P.S.G. Industrial Institute
Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers
Rohit Chaudhary v. Vipul Limited

Consumer — Commercial purpose — Close and direct nexus with profit-generating activity required.
To attract the exclusion clause, there must be a close and direct nexus between the purchase of goods/services and a profit-generating commercial activity. It must be shown that the dominant purpose was to facilitate commercial gain. Absent such nexus, exclusion from the definition of consumer is impermissible. (Paras 13–15, 17).

Burden of Proof — Commercial purpose — Onus lies on service provider.
Where the service provider invokes the exclusion clause under Section 2(1)(d), the onus to establish that the goods/services were obtained for a commercial purpose lies on the service provider. The standard of proof is preponderance of probabilities. A negative burden cannot be placed on the complainant. (Para 16).

Relied on:
Shriram Chits (India) Pvt. Ltd. v. Raghachand Associates

Immovable Property — Leasing after purchase — Not determinative of commercial intent.
The mere act of leasing a residential flat after purchase does not, by itself, demonstrate that the dominant purpose of acquisition was commercial. The purpose at the time of purchase is determinative. (Para 17).

Consumer Complaint — Erroneous dismissal — Restoration.
Where the NCDRC dismisses a complaint solely on the ground that the complainant leased the flat, without examining whether the dominant purpose of purchase was commercial, such dismissal is unsustainable. Matter restored for adjudication on merits. (Paras 17–18).

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RATIO DECIDENDI

The core ratio is that the exclusion of a purchaser from the definition of “consumer” under Section 2(1)(d) of the Consumer Protection Act, 1986 requires proof that the dominant purpose of the transaction was commercial in nature. The burden to establish such commercial purpose lies upon the service provider who invokes the exclusion. Mere leasing of a residential flat, without cogent evidence demonstrating a close and direct nexus between purchase and profit-generating activity, does not suffice to deny consumer status.

The Court further held that determination of “commercial purpose” is a question of fact depending upon the dominant intention at the time of purchase, not subsequent use alone. In absence of material proving commercial intent, the complainant cannot be excluded from the statutory protection.

Accordingly, the Supreme Court set aside the order of the NCDRC dismissing the complaint and restored the matter for decision on merits.