Consumer Protection Act: Everything is ‘Commercial’, yet Nothing is
Forty years since the Consumer Protection Act’s enactment, the line separating what is, and is not, a ‘commercial purpose’ in business-to-business transactions remains unclear, adding on to the worrying state of our consumer disputes redressal system.
Published on: 29 March 2026, 11:59 am
EARLIER THIS MONTH, the Supreme Court in Sant Rohidas Leather Industries v. Vijaya Bank (2026) reiterated the dominant purpose and direct nexus test to determine ‘commercial purpose’ that excludes consumer fora adjudication under the Consumer Protection Act. In doing so, it endorsed its 2023 judgment in National Insurance Co. Ltd. v. Harsolia Motors.
However, this dominant purpose test, as upheld, remains nebulous. There is no bright line between what is and is not a commercial purpose in business-to-business transactions. Accordingly, any business-to-business transaction is capable of being classified as ‘commercial’ or not, based on subjective and often questionable interpretation.
Who is a Consumer?
In both the Consumer Protection Act, 1986 and its successor Consumer Protection Act, 2019 (either being referred to as ‘CPA’), a consumer is a person who buys any goods or hires any service for consideration, but does not include a person who obtains such goods or services for a ‘commercial purpose’. Commercial purpose does not include instances where a person buys goods to be used exclusively by him for the purpose of earning a livelihood by self-employment. The definitions can be found in Section 2(1)(d) and 2(7) of the CPA 1986 and CPA 2019, respectively.
There is no bright line between what is and is not a commercial purpose in business-to-business transactions.
The CPA allows only a ‘complainant’ to agitate complaints before the consumer fora. At the very definitional threshold—under Section 2(5) of the CPA 2019—only ‘consumers’ or their representatives (or a class or the government) are defined as complainants.
Therefore, proving a complainant’s ‘commercial purpose’ by the respondent would strip the complainant of its locus to agitate the consumer complaint under the CPA because such a complainant would cease to be a ‘consumer’ for the transaction.
Surprisingly, there is no prohibition in the CPA on companies being recognised as consumers. In Karnataka Power Transmission Corporation v. Ashok Iron Works Pvt. Ltd. (2009), the Supreme Court held that the definition of a ‘person’ is inclusive and would include body corporates such as companies as well.
As such, business-to-business (‘B2B’) transactions are not excluded from the ambit of adjudication of the causes of action delineated in the CPA such as deficiency in goods or services. Yet, ‘commercial purpose’ is not defined under the CPA.