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Civil · Reportable judgment

Vinit Bahri and Another vs M/s MGF Developers Ltd. and Another

Court
Supreme Court of India
Date
4 February 2026
Case No.
Civil Appeal No. 6588 of 2023
Result
Allowed
Bench
Prashant Kumar Mishra
Citation
[2026] 2 S.C.R. 370 : 2026 INSC 114
Acts & Sections
Consumer Protection Act, 1986
Supreme Court Reports [2026] 2 S.C.R. 370 : 2026 INSC 114
Issue for consideration
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 s.2(1)(d) of the Consumer Protection Act, 1986.
Headnote

Consumer Protection Act, 1986 – s.2(1)(d) – The respondents launched a group housing project – The appellants in March 2005, deposited Rs.15,00,000/- as the booking amount, and, on 02.09.2005, they were allotted a Unit – The appellants filed the subject complaint alleging deficiency in service and unfair trade practice – The appellants challenged the demand of Rs.30,81,894/- under various heads of EEDC, IDC, Service Tax, etc. and also Rs.4,80,000/- towards deficiency in providing promised fixtures in the flat – Respondent no.1 alleged that appellants have purchased the said flat for commercial purposes and that appellants are not consumers – The NCDRC reached to a conclusion that the appellants do not fall under the definition of ‘consumer’ as they leased the said flat premises – Correctness:

Held: The NCDRC has erred in dismissing the appellants’ complaint – The onus of proving that the appellants fall within the exclusion clause of s.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 – The determinative question is whether the dominant intention or dominant purpose behind purchasing the flat was to facilitate profit generation through commercial activity, and whether there exists a close and direct nexus between the purchase and such profit-generating activity – The respondents have not placed any cogent material on record to establish such nexus – The mere factum of leasing out the flat does not, by itself, demonstrate that the appellants purchased the property with the dominant purpose of engaging in commercial activity – The question of what constitutes ‘commercial purpose’ is a question of fact to be decided in the circumstances of each case based on the purpose to which the goods/properties were purchased – It must be emphasized that the mere act of purchasing immovable property, even multiple units, cannot ipso facto attract the exclusion clause of s.2(1)(d) of the 1986 Act unless and until it is proved that the dominant purpose behind such purchase was commercial in nature – In absence of such proof, the appellants cannot be excluded from the definition of ‘consumer’ under the 1986 Act. [Para 17]

Keywords: Consumer · s.2(1)(d) of Consumer Protection Act, 1986 · Preponderance of probabilities · Dominant intention · Dominant purpose · Profit generation · Leasing · Commercial purpose

As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Ankit Gyan. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.

Full Judgment Text

Judgment Prashant Kumar Mishra, J. 1) This Appeal assails the impugned judgment dated 11.05.2023 in Consumer Complaint No.74/2017, passed by the National Consumer Disputes Redressal Commission1 at New Delhi whereby, the NCDRC dismissed the consumer complaint preferred by the appellants. FACTUAL MATRIX 2) Shorn of unnecessary details, the facts stand thus: the appellants filed a complaint before the NCDRC for seeking a direction to the respondents to pay (i) Rs. 1,59,89,994/- being 18% interest; (ii) Rs.50,00,000/- as compensation for mental agony and harassment; (iii) Rs.15,00,000/- as co
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