Omkar Realtors & Developers Pvt. Ltd. vs Kushalraj Land Developers Pvt. Ltd. 2024 INSC 629 – Consumer Protection Act – Commercial Purpose

Consumer Protection Act,1986; Section 2 (7) -Consumer means any person who buys any goods for a consideration but does not include a person who obtains such goods for resale or for any commercial purpose. Therefore, purchase and sale of goods for resale or for commercial purpose is excluded from the purview of the definition of “consumer”- To determine whether the goods purchased by a person (which would include a legal entity like a company) were for commercial purpose or not within the meaning of the Act would depend upon the facts and circumstances of each case. However, ordinarily “commercial purpose” is understood to include manufacturing/industrial activity or business-to-business transactions between commercial entities. The purchase of the goods should have a close and direct nexus with a profit generating activity. If it is found that the dominant purpose behind purchasing the goods was for the personal use and consumption of the purchaser and/or the beneficiary, or was otherwise not linked with other commercial activities, the question whether such a purchase was for the purpose of “generating livelihood by means of selfemployment” need not be looked into. In short, the dominant intention or the dominant purpose of the transaction is to be looked into to find out if it had any nexus with some kind of profit generation as part of the commercial activities – Referred to M/s Daimler Chrysler India Pvt. Ltd. vs. M/s Controls & Switchgear Company Ltd. (Para 14-15)

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