1. Purchase of software for business automation — Complaint for deficiency in service — Determination of consumer status under Section 2(1)(d), Consumer Protection Act, 1986. (Para 1 , 4 , 6 )
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2025 Supreme(SC) 1928
SUPREME COURT OF INDIA
J. B. PARDIWALA, MANOJ MISRA, JJ.
M/s Poly Medicure Ltd. – Appellant
Versus
M/s Brillio Technologies Pvt. Ltd. – Respondents
Civil Appeal No. 6349 of 2024 Arising out SLP (C) No. 14306 of 2020
Decided On : 13-11-2025
Advocates Appeared:
For the Appellant(s) : Mr. Shashank Garg, Sr. Adv. Mr. Divyakant Lahoti, AOR Mr. Kartik Lahoti, Adv. Ms. Praveena Bisht, Adv. Ms. Vindhya Mehra, Adv. Mr. Kumar Vinayakam Gupta, Adv. Mr. Adith Menon, Adv. Ms. Samridhi Bhatt, Adv. Ms. Shreya Gokel, Adv. Mr. Siddharth Tripathi, Adv. Ms. Akanksha Soni, Adv. Ms. Shubheksha Dwivedi, Adv. Ms. Nishtha Jain, Adv.
For the Respondent(s): Mr. Jayant Mehta, Sr. Adv. Mr. Ankur Sangal, Adv. Ms. Sucheta Roy, Adv. Mr. Raghu Vinayak Sinha, Adv. M/S. Khaitan & Co., AOR
For the Appellant(s) : Mr. Shashank Garg, Sr. Adv. Mr. Divyakant Lahoti, AOR Mr. Kartik Lahoti, Adv. Ms. Praveena Bisht, Adv. Ms. Vindhya Mehra, Adv. Mr. Kumar Vinayakam Gupta, Adv. Mr. Adith Menon, Adv. Ms. Samridhi Bhatt, Adv. Ms. Shreya Gokel, Adv. Mr. Siddharth Tripathi, Adv. Ms. Akanksha Soni, Adv. Ms. Shubheksha Dwivedi, Adv. Ms. Nishtha Jain, Adv.
For the Respondent(s): Mr. Jayant Mehta, Sr. Adv. Mr. Ankur Sangal, Adv. Ms. Sucheta Roy, Adv. Mr. Raghu Vinayak Sinha, Adv. M/S. Khaitan & Co., AOR
IMPORTANT POINT
Consumer complaint – Maintainability – Commercial purpose – Identity of person making purchase, or value of transaction, is not conclusive to determine whether transaction or activity is for a commercial purpose – What is to be seen is dominant intention or dominant purpose for the transaction.
Headnote:
(A) Consumer Protection Act, 1986 – Section 2(1)(d) read with Section 2(1)(m) [Consumer Protection Act, 2019 – Section 2(7) – Consumer complaint – Maintainability – Commercial purpose – Identity of person making purchase, or value of transaction, is not conclusive to determine whether transaction or activity is for a commercial purpose – What is to be seen is dominant intention or dominant purpose for the transaction – If it is found that dominant purpose behind purchasing goods or services is for personal use and consumption of purchaser, or is otherwise not linked to any commercial activity, question whether such purchase is for generating a livelihood by means of self-employment need not be looked into – However, where transaction is for a commercial purpose then it might have to be considered whether it is for generating livelihood by means of self-employment or not – Ordinarily commercial purpose is understood to include manufacturing/ industrial activity or business to business transaction between commercial entities – There is difference between a self-employed individual and a corporation – Goods purchased by a self-employed individual for self-use for generating livelihood would fall within explanation even if activity of that person is to generate profits for the purpose of its livelihood – But where a company purchases a software for automating its processes, object is to maximise profits and it would not fall within explanation of Section 2(1)(d) of 1986 Act. (Paras 16, 17 and 18)
(B) Consumer Protection Act, 1986 – Section 2(1)(d) read with Section 2(1)(m) [Consumer Protection Act, 2019 – Section 2(7) – Consumer complaint – Maintainability – Commercial purpose – Complainant had been an established company doing business which bought product license to automate its processes – In such circumstances, object of purchase was not to generate self-employment but to organize its operations with a view to maximise profits – Case of complainant does not fall within Explanation to Section 2(1)(d) of 1986 Act – Not only complainant is a commercial entity, purchase of goods/ services (i.e., software) from respondent, had a nexus with generation of profit – Appellant cannot be considered a consumer as defined in Section 2(1)(d) of 1986 Act – Appellant is not a “consumer” – Appeal dismissed. (Paras 22, 27, 28 and 29)
Facts of the case:
The issue which falls for consideration is whether in respect of the goods purchased/services availed, appellant would qualify as a “consumer” as defined in Section 2(1)(d) of 1986 Act.
Findings of Court:
Both State Commission as well as National Commission were justified in holding that goods /services purchased/ availed by appellant were for a commercial purpose and therefore the appellant is not a “consumer” as per Section 2(1)(d) of 1986 Act.
Result : Appeal dismissed.
Judgement Key Points
Key Points: - The appeal concerns whether the appellant (a company) qualifies as a "consumer" under Section 2(1)(d) of the 1986 Act (!) . - The Court holds that "commercial purpose" is not determined by the mere identity of the purchaser or the value, but by the dominant intention or purpose behind the transaction (!) (!) . - The Supreme Court cites Lilavati Kirtilal Mehta Medical Trust and elaborates broad principles for determining commercial purpose, including nexus to profit generation and the distinction between self-employment and corporate activity (!) (!) (!) (!) (!) . - It is noted that a company purchasing software to automate its processes has a nexus to profit generation and thus may not be a consumer under Section 2(1)(d) read with 2(1)(m) (!) . - The State Commission and NCDRC correctly held the complainant was not a consumer due to its commercial purpose (!) (!) . - The judgment discusses examples illustrating when purchases are not for commercial purpose (e.g., appliances for personal use) versus those for profit-generating activities (!) (!) (!) (!) (!) .
What is the main issue in determining whether the appellant qualifies as a "consumer" under Section 2(1)(d) of the Consumer Protection Act, 1986?
What factors determine whether a transaction is for a "commercial purpose" under the Act, particularly in the context of a company purchasing software to automate its processes?
How does the Court interpret the relationship between dominant purpose, profit generation, and the applicability of the consumer forum to commercial entities?
Legal Category Hierarchy
Table of Contents
2. Whether software purchased for business process automation constitutes commercial purpose or self-use for a corporate entity, thereby disqualifying it as a consumer. (Para 9 , 10 )
3. Automation of business processes by a company to reduce costs and maximize profits establishes a direct nexus with profit-generating activity, constituting a commercial purpose. (Para 15 , 16 , 17 , 18 , 20 , 22 , 25 , 26 , 27 )
4. A corporate entity purchasing goods or services to automate business processes for profit maximization is using them for a commercial purpose, excluding it from consumer status. (Para 18 , 27 )
5. Appeal dismissed; the company is not a consumer as the software was purchased for a commercial purpose. (Para 28 , 29 )
6. Can an incorporated company be considered a consumer under the Consumer Protection Act, 1986?
Yes, the definition of person under Section 2(1)(m) is inclusive and not exhaustive, meaning a juristic person like a company can qualify as a consumer under Section 2(1)(d). (Para 13 , 14 )
7. What are the broad principles for determining if a transaction is for a commercial purpose?
Determination depends on facts and circumstances. Generally, it includes manufacturing, industrial activity, or B2B transactions where the purchase has a close and direct nexus with a profit-generating activity. (Para 15 , 16 , 17 )
8. Does the self-employment exception to commercial purpose apply to corporate entities?
No. While individuals using goods for livelihood via self-employment are exempt, companies purchasing goods to automate processes and maximize profits do not fall within this exception. (Para 12 , 18 , 20 , 22 )
9. Does every business-to-business transaction automatically constitute a commercial purpose?
No. If the transaction has no nexus to generate profits—such as insurance to secure against loss or office equipment for comfort—it may not be treated as a commercial purpose. (Para 23 , 25 , 26 )
JUDGMENT :
MANOJ MISRA, J.
1. This appeal arises from Consumer Complaint No. 515 of 2019 filed by the appellant before the State Consumer Disputes Redressal Commission, Delhi1[State Commission]. The State Commission, vide its order dated 19.08.2019, held complaint not maintainable as, according to the State Commission, the complainant (appellant herein) was not a “consumer” as per Section 2(1)(d) of the Consumer Protection Act, 19862[1986 Act].
2. Aggrieved by the State Commission’s order, the appellant filed First Appeal No. 1977 of 2019 before the National Consumer Disputes Redressal Commission, New Delhi3[NCDRC] which was dismissed, vide order dated 15.06.2020, affirming the order of the State Commission.
3. The issue which falls for our consideration is whether in respect of the goods purchased/services availed, the appellant would qualify as a “consumer” as defined in Section 2(1)(d) of the 1986 Act.
Facts
4. The complainant (appellant herein), a company incorporated and registered under the Companies Act, 1956, filed a consumer complaint before the State Commission claiming, inter alia, that, - it is engaged in export and import of medical devices and equipment; with an intent to install and implement an export/ import documentation system at its plant, it sought a software; in connection therewith, it purchased a product licence of “Brillio Opti Suite”, a software, from the respondent; requisite payment for the purchase was made, but the software did not function properly. In consequence, claiming deficiency in service, the complaint was filed, inter alia, for refund of the entire amount paid by the complainant to the respondent towards (a) product licence cost and (b) additional development cost together with interest at the rate of 18%.
5. The respondent contested the complaint claiming, inter alia, that the complaint is not maintainable as the complainant is not a consumer as defined in Section 2 (1) (d) of the 1986 Act.
6. The State Commission vide its order dated 19.08.2019 held that since purchase of the software license was for a commercial purpose, the complainant would not qualify as a “consumer”; hence, the complaint is not maintainable.
7. Aggrieved by the order of the State Commission, the appellant filed an appeal before NCDRC, which came to be dismissed by the impugned order.
8. We have heard learned counsel for the parties.
Submissions on behalf of the appellant
9. On behalf of the appellant, it was contended that software was purchased for self-use; appellant was the end user and had no intention to transfer/ sell it for profit, therefore, it cannot be said that purchase was for commercial purpose; moreover, purchase of goods/ services for self-utilization with no intention to directly generate profit from it, would qualify the purchaser of such goods or services as a “consumer” by virtue of Explanation to Section 2(1)(d) of the 1986 Act, 1986. Decision of this Court in Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers and Ors., (2020) 2 SCC 265 was relied to contend that identity of a person making the purchase, or the value of the transaction, is not conclusive to determine whether it is for a commercial purpose. What is to be seen is the dominant purpose for the transaction, that is, whether it is to facilitate some kind of profit generation for the purchaser / other beneficiary. Additionally, it was argued that since the software was not directly linked to generation of profit, the transaction cannot be considered as one for a commercial purpose so as to disqualify the appellant from being a “consumer”.
9.1. Reliance was also placed on decision of this Court in Sunil Kohli and Anr. v. Purearth Infrastructure Ltd., (2020) 12 SCC 235 to contend that if purchaser of a property puts it to commercial use to earn his livelihood, by way of self-employment, such a purchaser would be a consumer. Based on those decisions, learned counsel for the appellant contended that since the appellant had purchased the
