SC: Purchaser Is Not Consumer, If Goods Or Services Purchased For Profit
The bench said that where a company purchases software for automating its processes for profit, it would not fall within the Consumer Protection Act.
By Sumit Saxena
Published : November 13, 2025 at 10:24 PM IST
New Delhi: The Supreme Court on Thursday ruled that if any purchase of goods or services is for profit generation, then the purchaser cannot be held to be a consumer and consequently cannot pursue cases under the Consumer Protection Act.
A bench comprising justices JB Pardiwala and Manoj Misra said in the instant case, not only the complainant is a commercial entity, the purchase of goods/ services (i.e., software) from the respondent was with a view to automate the processes of the company which were linked to generation of profit inasmuch as automation of business processes is undertaken not just for better management of the business but to reduce costs and maximise profits.
“Thus, in our view, the transaction of purchase of goods/ services (i.e., software) had a nexus with generation of profits and, therefore, qua that transaction the appellant cannot be considered a consumer as defined in Section 2(1)(d) of the Act”, said the bench, in a judgment delivered on an appeal filed by M/s Poly Medicure Ltd.
The bench said it is of the considered view that both the state commission as well as the national commission were justified in holding that the goods /services purchased/ availed by the appellant were for a commercial purpose and therefore the appellant is not a “consumer” as per Section 2(1)(d) of the 1986 Act.
The bench, while dismissing the appeal of the firm, said that if the transaction has a nexus with the generation of profits, it would be treated as one for a commercial purpose.
In 2019, Poly Medicure Ltd, a manufacturer and exporter of medical devices, moved before the Delhi State Consumer Disputes Redressal Commission. It alleged a deficiency in service by M/s Brillio Technologies Pvt Ltd, from which it had purchased a software product licence for streamlining its export-import documentation system.
Poly Medicure claimed that despite making full payment, the software did not function properly and sought a refund of the licence and development costs, along with 18 per cent interest.
