Supreme Court Clarifies ‘Consumer’ Status under the Consumer Protection Act, 1986 Rohit Chaudhary & Anr. v. M/s Vipul Ltd., decided on 6th September, 2023 – Supreme Court

Summary:

In a landmark judgment, the Supreme Court has definitively outlined the criteria determining ‘consumer’ status under the Consumer Protection Act, 1986. The ruling emphasizes that individuals purchasing goods for personal use or self-employment, even if engaged in business activities, are entitled to consumer protection. The ruling clarifies that the exclusion from ‘consumer’ status applies to those buying goods for large-scale profit-making, not for personal livelihood.

Facts of the Case:

The case involved appellants who had booked a commercial space with M/s Vipul Ltd. When the developer failed to deliver the allotted space, the appellants sought a refund through the National Consumer Disputes Redressal Commission (NCDRC). The NCDRC denied their claim, asserting the appellants were not consumers due to their existing business activities.

Issues Raised:

The central issue revolved around the definition of ‘consumer’ under Section 2(1)(d) of the Consumer Protection Act, 1986. The question was whether individuals engaged in business activities, seeking goods for self-employment, qualified as consumers.

Analysis:

The Supreme Court clarified that individuals purchasing goods or services for self-employment and personal use are considered consumers. The key determinant is not merely the intent of profit but the purpose of livelihood. The ruling highlighted that each case must be evaluated on its merits, emphasizing the absence of a rigid formula for categorization.

The court criticized the NCDRC’s judgment, stating that the appellants had clearly expressed their intent to purchase the office space for self-employment and livelihood, not for resale or investment purposes. Therefore, the denial of consumer status was erroneous.

Furthermore, considering the prolonged dispute and the appellants’ financial investment, the court directed the developer to refund the amount along with 12% interest per annum. This decision aimed to balance the interests of both parties and ensure justice prevailed.

This ruling not only clarifies the definition of ‘consumer’ but also underscores the need for a case-specific analysis, promoting fairness and equity in consumer protection cases.