LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

saurabh agarwal (CS,LLB)     03 July 2009

Commercial purpose under consumer protection

can a contractor purchasing goods for a project issued through tender file a case before consumer court?

Will it not be termed as a commercial purpose under sec 2(1)(d) and 2(1)(o) of the said act?


 5 Replies

adv. rajeev ( rajoo ) (practicing advocate)     03 July 2009

 if it is for commercial purpose consumer act will not be applicable.  To bring in to consumer act in a complaint u have to take a contention that the contract work is to earn for daily lively hood

saurabh agarwal (CS,LLB)     03 July 2009

Thanks Rajeev Sir for the reply ..

The fact is that the contractor has already filed a case before the consumer court  and the court  has already issued us a notice for the same..Can we defend on the ground that the goods were purchased for commercial purpose?

Shree. ( Advocate.)     03 July 2009

Dear saurabh,

Further adding to Rajeev Sir answer please go thro following decisions regarding your query.


As for the interpretation of term commercial purpose in the  Western India State Motors Vs Subhag Mal Meena & others (Appeal No. 12/89, order dated 8.11.1989 it was held by the National Commission that a vehicle purchased for the purpose of running as taxi was undoubtedly a purchase for commercial purpose.

Any economic activity or transaction carried on with the motive of making profit would fall under the term "Commercial Purpose".

Synco Textiles Pvt Ltd Vs Greaves Cotton & Co. Ltd (1991) CPJ 499 The National Commission observed the main determinants of character of a transaction - whether it is for a commercial purpose or not are immediate purpose as distinct from the ultimate purpose .Buyers of goods or commodities for self consumption were held to be consumers.

A purchase of goods could be said to be for a commercial purpose only if two conditions were satisfied, namely

A) The goods must have been purchased for being used in some profit making activity on a large scale

B) There should be close and direct nexus between the purchase of goods and the profit-making activity.

Laxmi Engineering Works V P S G Industrial Institute (1995 3 SCC 583 SUPREME COURT)

It was held that explanation to sec 2(1)(d) was of clarificatory in nature. It further observed that whether the purpose for which a person had bought goods was commercial purpose was always a question of facts and to be decided in the facts and circumstances of each case.

If the commercial use was by the purchaser himself of earning his livelihood by means of self employment such purchaser of goods would yet be a consumer.The Supreme Court further observed that if a person who purchased a machine to operate it himself for earning his livelihood, he would be a consumer. But if a person purchases a machine and appoint or engage another person exclusively to operate the machine, then such person would not be a consumer.

Bhuperndra Guna Vs Regional Manager and others (II 1995 CPJ 139)

The National Commission held that a tractor purchases primarily to till the land of the purchaser and let or on hire during the idle time to till the lands of others would not amount to commercial use.

Super Engineering Corporation Vs Sanjay Vinayak Pant Kores (India) Ltd Vs Samir Purkayastha (1996) 4 CTJ  579 National Commission

In a given case a farmer had purchased seeds from a party. The seeds did not germinate. The other party took the plea that I was not a consumer. Whether purchase of seeds for the purpose of agriculture is purchase for commercial purpose?

Purchase made for agriculture is not for commercial purpose. Therefore, the complainant is a consumer and entitled to seek redressal of his grievance in a Consumer Court against the party which supplied defective seed to him.

1 Like

Amit Kumar (Advocate)     07 July 2009

To add to the above, in some of the decisions the National Commission.... the goods though purchased for commercial purposes, have been allowed in a Consumer Forum, when the defects were visible during the warranty period !!! 


1 Like

sunil (p)     20 May 2013


I submitted a tender form to Nagarpalika Perishad for plot in 2002 which was commercial cum residential purpose (1000 sq fit only)My rats was Rs. 250.50 sq ft (ceiling cost was 245 sq ft) But nagarpalika intentionally lost the tender file and same plot was allotted in 2007 to other person Mr Lalit ( 152 sq M. area) without any tender in Rs 165/- per sq ft. When i objected Nagarpalika cancel the allotment of the Mr Lalit. ( Mr Lalit and Nagarpalika accountant only went to the registrar office and did the registry without any order of CMO and after 10 days both again did the correction registry for the plot area saying due to clerical mistake area of the plot was 182 in the allotment letter so need correction registry without any order of cmo, also increased area covers the pump house of the Nagarpalika which these two people planed and did the registry, Nagarpalika cancelled the plot allotted  to Mr Lilit due to ill legal allotment and file the criminal case against the CMO and Accountant only of the Nagarpalika holding that time.(now both retired person)

 I also file the case in district forum and forum agreed and given decision in favour of me with Rs 2000/- Penalty and to allot the same plot b/c now plot is cancelled. Nagarpalika appeal in state commission against the order but their appeal dismiss and allowed the same dission of the district forum.

Mr lalit also submitted an application to state commission and in state of state commission his name is written as applicant but he was not applicant in district forum.

Now what will be the status of Mr. lalit (His allotment is cancelled but he is the registered holder of the plot , actual authorised person of the Nagarpalika for to registred a document is CMO not accountant so what will be the status of registry.)

Can Mr lalit file appeal to National commission or not

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register