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.
