Company Buying Goods/Services to Augment Profits Is Not a Consumer under s2(1)(d) Consumer Protection Act 1986

OVERVIEW OF THE CASE

In a significant judgment, the Supreme Court of India has held that when a company purchases goods or services with the objective of streamlining business operations and augmenting profits, it cannot be treated as a “consumer” under Section 2(1)(d) of the Consumer Protection Act, 1986.

KEY-NOTES FROM THE JUDGEMENT:

• Case Title: Poly Medicure Ltd. v. Brillio Technologies Pvt. Ltd. (Civil Appeal No. 6349 of 2024) decided 13 Nov 2025.

  
  

• Court: Supreme Court of India, Division Bench of Justices J. B. Pardiwala & Manoj Misra.

  
  

• Fact-pattern: The appellant company (Poly Medicure) imported/exports medical devices; it purchased a software licence (“Brillio Opti Suite”) from Brillio Technologies for document-automation in its business. The software allegedly malfunctioned, prompting a complaint for refund before consumer forums.

  
  

• Consumer forum’s decision: State & National Consumer Commissions held the complaint not maintainable as the company wasn’t a “consumer” since the purchase was for commercial purpose.

  
  

• Supreme Court’s holding: The court affirmed that the transaction was linked to profit-generation (automation, cost-reduction) and hence the company cannot be considered a consumer under Section 2(1)(d).

DETAILED LEGAL ANALYSIS

1. Definition of “consumer” under Section 2(1)(d)

Under the Act, a “consumer” means a person who buys any goods or hires or avails any service for a consideration. The proviso excludes purchases made “for any commercial purpose”. The Act’s explanation adds that “commercial purpose” does not include goods purchased by a person for earning livelihood by self-employment.

2. Distinguishing commercial purpose vs self-employment

The Court emphasised that merely being a company isn’t decisive; what matters is the dominant purpose of the transaction. The identity, value, or end-user status are not conclusive. Rather, whether the purchase is for a commercial purpose (i.e., linked to profit-making) is central.

In this case, the Court found automation of business documentation — to reduce costs and enhance export operations — clearly tied to profit generation. Thus, excluded from the Act’s consumer definition.

3. Corporate vs individual self-employed scenarioThe Court drew a line: a self-employed individual buying tools for livelihood may be a “consumer”; but an incorporated company buying goods/services to streamline business operations for profit cannot invoke the consumer law.

4. Practical Implications

• B2B transactions where goods/services are purchased for business use (automation, operations, supply chain) will more likely be treated as commercial purpose and fall outside the Consumer Protection Act’s jurisdiction.

• Entities must assess whether their purchase has a nexus with profit generation — if yes, they cannot claim consumer status.

• For vendors/service-providers, this ruling strengthens the defence against consumer complaints by business entities.—

HOW PRIME 8 LEGAL CAN HELP

At Prime 8 Legal, we assist both buyers and service providers in navigating consumer-protection implications of corporate transactions. Our services:

• Due diligence for service contracts: Advise whether a transaction risks being excluded from consumer law, and how to frame contracts accordingly.

• Representation in consumer forums: For companies caught in consumer claims or seeking defence against such claims.

• Corporate compliance advisory: Help companies structure purchase/licence agreements, automation projects and B2B services with clarity on “consumer” status and risk exposure.

• Vendor risk-assessment: For service-providers or software licensors, advise on client eligibility for consumer vs commercial categorisation, and draft robust limitation/exclusion clauses.—

Important FAQs

Q1. When is a purchase by a company for goods/services covered under the Consumer Protection Act?

If the purchase is not linked to profit generation, and is more akin to personal use or livelihood by self-employment, then the company (or person) may be a “consumer”. If the dominant purpose is business operations for profit, the Act won’t apply.

Q2. Does the identity of the purchaser (company vs individual) decide consumer status?

No. Identity alone doesn’t decide. The key test is the dominant purpose of the purchase — whether for commercial purpose (profit) or personal/use-livelihood.

Q3. Can a self-employed person buying automation software claim consumer status?

Yes – if they buy it exclusively for earning livelihood by means of self-employment (as per the Explanation). But if the scale and intent is business profit-making, it may be treated as commercial purpose.

Q4. What should companies do before filing a consumer complaint?

They must assess whether their purchase is covered by the Consumer Protection Act (i.e., non-commercial). If it’s commercial, they may need to approach ordinary civil/contractual remedies

instead.

Q5. How can vendors protect themselves from being dragged into consumer complaints by corporate buyers?

Include contract terms clarifying the nature of the transaction, limit warranties appropriately, maintain clear documentation of commercial intent, and ensure dispute clauses address business-to‐business engagements.—

CONTACT PRIME 8 LEGAL

If your company or business-entity is facing a potential consumer dispute or wishes to assess whether a transaction qualifies as a “consumer” claim — reach out to Prime 8 Legal.

📍 Address: 318-B, Saraswati Kunj, Sector 53, Golf Course Road, Gurgaon 122003, India

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