Holding

A body corporate may be a consumer of banking services unless the deposit is made to secure credit facilities, and the complaint involving alleged fraud is not maintainable under the Consumer Protection Act, 1986.

Summary

Sant Rohidas Leather Industries, a state‑run corporation, deposited Rs 9 crore as a fixed‑deposit receipt (FDR) with Vijaya Bank. The bank later pledged the FDR to secure an overdraft of Rs 8.10 crore, which the company alleged was done fraudulently and without its consent, prompting a complaint to the Economic Offences Wing and a consumer complaint under the Consumer Protection Act, 1986. The National Consumer Disputes Redressal Commission dismissed the complaint, holding that the company was not a consumer because the banking service was used for a commercial purpose. On appeal, the Supreme Court examined whether a body corporate can be a consumer when merely parking surplus funds in a bank and whether the allegations of fraud and forgery fall within the purview of the Act. The Court held that a corporate depositor can be a consumer unless the deposit is made to obtain credit facilities, and that the present complaint involved complex factual issues of alleged fraud that are outside the summary jurisdiction of the Act. Consequently, the Court affirmed the NCDRC’s dismissal and dismissed the appeal.

Issues considered

Whether a body corporate that deposits surplus funds in a bank as a fixed‑deposit receipt qualifies as a consumer under Section 2(1)(d) of the Consumer Protection Act, 1986.
Whether the nature of the allegations (fraudulent hypothecation, forgery, and criminal aspects) takes the dispute outside the scope of proceedings under the Consumer Protection Act, 1986.

Legislation cited

Consumer Protection Act, 1986s. 2(1)(d), s. 2(1)(g), s. 2(1)(m), s. 2(1)(o)

Headnote

Issue for Consideration Whether the appellant, a body corporate, while availing services of the Bank to deposit its surplus funds in an interest bearing term deposit, such as a Fixed Deposit Receipt (FDR), could be considered a consumer as defined in Protection Act, 1986; whether the nature of allegations made in the complaint were such that they took the claim outside the purview of proceedings under the 1986 Act. Headnotes† Consumer Protection Act, 1986 – s.2(1)(d) – “consumer” – NCDRC dismissed the

Subjects

Section 2(1)(d)Consumer Protection Act, 1986consumerbody corporatebanking servicesfixed deposit receiptcommercial purposedeficiency in service

Judgment

[2026] 4 S.C.R. 221 : 2026 INSC 264

Sant Rohidas Leather Industries and Charmakar
Development Corporation Ltd.
v.
Vijaya Bank
(Civil Appeal No. 4841 of 2023)
19 March 2026
[Pamidighantam Sri Narasimha and Manoj Misra,* JJ.]

Issue for Consideration
Whether the appellant, a body corporate, while availing services
of the Bank to deposit its surplus funds in an interest bearing
term deposit, such as a Fixed Deposit Receipt (FDR), could be
considered a consumer as defined in s.2(1)(d) of the Consumer
Protection Act, 1986; whether the nature of allegations made in the
complaint were such that they took the claim outside the purview
of proceedings under the 1986 Act.

Headnotes†
Consumer Protection Act, 1986 – s.2(1)(d) – “consumer” –
NCDRC dismissed the consumer complaint of the appellant,
a body corporate on the ground that the deposit made by the
appellant with the Bank had a direct nexus to generation of
profit(s) (i.e., earning interest on surplus funds), therefore,
the banking services availed were for a commercial purpose
and thus, the appellant was not a consumer qua the Bank as
per s.2(1)(d) – Challenge to:
Held: In normal course, parking of surplus funds by a body corporate
with a bank, either for safe custody or to comply with statutory
mandate is not reflective of a commercial purpose – More so,
because ordinarily all deposits in a Bank earn interest – Hence,
it cannot be said that since the deposit earned interest, banking
service was availed for a commercial purpose – However, it would
be different where deposits are made to leverage a credit facility,
or for availing other banking services, for business use – Deposit
of the latter kind may amount to availing banking services for a
commercial purpose – In the present case, the deposit was by
one business entity, the appellant company, with another business
entity, the Bank – It was thus, a business-to-business transaction –
* Author
222 [2026] 4 S.C.R.

Supreme Court Reports

Admittedly, the Bank had set up a case that FDR was pledged to
avail credit facility and the maturity value of the FDR was adjusted
against the dues – Though the appellant has denied this loan
transaction, this issue is not settled by either a criminal court or a
civil court even though a criminal complaint has been made in that
regard – Thus, it is not a simple case of not fulfilling contractual
obligation qua the deposit but a case where a subsequent contract
of pledge is set up which, if accepted, would override the contractual
obligation under the FDR – Thus, without determining whether
there was fraud played upon the appellant, or forged documents
were created for a false pledge/loan, it would not be possible to
determine whether the services availed by the appellant from the
respondent-Bank were for a commercial purpose or not – NCDRC
was justified in dismissing the complaint even though the reasons
for such dismissal may not be entirely correct [Paras 26, 27, 33]

Consumer Protection Act, 1986 – Whether the nature of
allegations made in the complaint were such that they took the
claim outside the purview of proceedings under the 1986 Act:
Held: The complaint as framed is not maintainable – According to
the complaint allegations, the appellant had invested 9 crores by
way of a term deposit with the Bank and that the said term deposit
was fraudulently hypothecated for availing overdraft without the
sanction of the appellant company – When the overdraft against
the FDR was brought to the notice of the appellant, a complaint
was made with the respondent-bank – The response of the Bank
to that complaint is important, inasmuch as the Bank claims that
the original of the FDR is with the Bank and the same stands
pledged for availing overdraft – Besides, the Bank claimed that
the FDR which the appellant claims to be in its possession is a
forged document – In the complaint itself, the appellant admitted
that this matter was reported to the Economic Offences Wing –
Therefore, the main grievance of the appellant appears to be qua
adjustment of proceeds of the FDR against the amount outstanding
in the overdraft account – Thus, what is clear from the complaint
allegations is that the Bank had acknowledged the FDR and had
accounted for the interest payable thereon but, instead of releasing
the maturity proceeds in favour of the appellant, it had set up a
subsequent contract of pledge of that FDR for according overdraft
facility to the appellant – According to the appellant this pledge is a
fraudulent act and amounts to an offence – In such circumstances,
[2026] 4 S.C.R. 223

Sant Rohidas Leather Industries and Charmakar
Development Corporation Ltd. v. Vijaya Bank

the complaint allegations as they stand cannot be adjudicated upon
in a proceeding under the 1986 Act as those allegations could
appropriately be addressed in a regular criminal or civil proceeding
and hence, the complaint is not maintainable – NCDRC justified
in dismissing the complaint even though the reasons recorded
for such dismissal may not be entirely correct. [Paras 30, 32, 33]

Consumer Protection Act, 1986 – Does not deal with complex
factual issues pertaining to criminal or tortious liability:
Held: The burden to prove deficiency in service is on the
complainant, and deficiency in service is different from criminal or
tortious acts of the service provider – Though one of the objects
of the 1986 Act is to provide speedy and simple redressal to
consumer disputes, its object is not to deal with complex factual
issues pertaining to criminal or tortious liability in a summary
manner. [Para 30]

Consumer Protection Act, 1986 – Fixed deposit receipt earning
interest, whether means that the banking service availed is
for a commercial purpose:
Held: No – A bank renders multiple types of service – Accepting
cash deposits from customers and paying interest thereon is the
most basic of services rendered by a bank, as ordinally all cash
deposits yield interest – Therefore, merely because a deposit
earns interest, it does not mean that the deposit was made for
a commercial purpose because there may be other reasons to
deposit the money in a bank and those may have nothing to do
with generation of profit – Merely because a fixed deposit receipt
earns interest does not mean that the banking service availed is
for a commercial purpose – To this extent, the view of NCDRC not
agreed with – However, if the deposit is made to leverage credit
facilities for augmenting business, it would have a direct nexus
with revenue generation/ profits – In such a case, it could be said
that the banking service was availed for a commercial purpose – In
that scenario, the service recipient may not fall in the category of
a consumer unless he brings his case within the four corners of
the Explanation to s.2(1)(d) of the 1986 Act. [Paras 21, 22]

Consumer Protection Act, 1986 – Whether the purchasing of
goods, or availing of services, is for a commercial purpose
or not – Determination of:
224 [2026] 4 S.C.R.

Supreme Court Reports

Held: The identity of the person making the purchase, or the
value of the transaction, is not conclusive to determine whether
the transaction or activity is for a commercial purpose – What
needs to be seen is the dominant intention or dominant purpose
of the transaction i.e. whether it is to facilitate some kind of profit
generation for the purchaser(s) and/or its/their beneficiary – If it
is found that the dominant purpose behind the purchase of goods
or services is personal use and consumption by the purchaser,
and those are otherwise not linked to any commercial activity, the
question whether such purchase is for generating a livelihood by
means of self employment need not be addressed – However,
where the transaction is for a commercial purpose, it may have
to be considered whether it is for generating livelihood by means
of self-employment or not – To determine whether the purchasing
of goods, or availing of services, is for a commercial purpose
or not, one has to look at the dominant object or purpose with
which those goods are purchased or services are availed – To
ascertain the dominant object, nature of the goods purchased or
the services availed also assume importance – Therefore, each
case would have to be decided on its own facts – The status of
the purchaser or recipient of goods or services, that is, whether it
is an individual or a body corporate, is not the determining factor
for holding whether the transaction is, or is not, for a commercial
purpose – The burden to prove that the goods purchased, or
services availed, as the case may be, is for a commercial purpose
is on the respondent and not the complainant. [Paras 15, 18, 19]

Case Law Cited
Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers and
Others [2019] 14 SCR 563 : (2020) 2 SCC 265; Karnataka Power
Transmission Corporation & Another v. Ashok Iron Works Pvt. Ltd.
[2009] 1 SCR 1109 : (2009) 3 SCC 240; National Insurance Co.
Ltd. v. Harsolia Motors & Ors. [2023] 3 SCR 448 : (2023) 8 SCC
362; Poly Medicure Ltd. v. Brillio Technologies (Pvt) Ltd. [2025]
12 SCR 189 : 2025 SCC OnLine SC 2443; Shriram Chits (India)
Private Limited v. Raghachand Associates [2024] 6 SCR 214 :
(2024) 9 SCC 509; Ravneet Singh Bagga v. KLM Royal Dutch
Airlines and Another [1999] Supp. 4 SCR 320 : (2000) 1 SCC 66;
Chairman and Managing Director, City Union Bank Limited and
Another v. R. Chandramohan [2023] 3 SCR 688 : (2023) 7 SCC
775 – referred to.
[2026] 4 S.C.R. 225

Sant Rohidas Leather Industries and Charmakar
Development Corporation Ltd. v. Vijaya Bank

List of Acts
Consumer Protection Act, 1986.

List of Keywords
Section 2(1)(d), Consumer Protection Act, 1986; “consumer”; Body
corporate availing services of the Bank; To deposit surplus funds
in an interest bearing term deposit; Fixed deposit receipt (FDR);
Commercial purpose; Fixed deposit receipt earned interest; Banking
service not availed is for commercial purpose; Section 2(1)(m),
Consumer Protection Act, 1986; “person”; Deficiency in service.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4841
of 2023
From the Judgment and Order dated 13.03.2023 of the National
Consumers Disputes Redressal Commission, New Delhi in CC
No. 2866 of 2017

Appearances for Parties
Advs. for the Appellant(s):
Prashant R Dahat, Shreyas Gacche, Sourabh Gupta, Puneet
Yadav, Ms. Priya Mittal, T. R. B. Sivakumar.
Advs. for the Respondent(s):
Vaibhav Dang, Amrendra Kumar Mehta, Ranpal Awana, D N Ojha.

Judgment / Order of the Supreme Court

Judgment

Manoj Misra, J.

1. This statutory appeal arises from a judgment and order of the National
Consumer Disputes Redressal Commission at New Delhi1, dated
13.03.2023, in Consumer Complaint No. 2866 of 2017, whereby
the consumer complaint of the appellant was dismissed, inter alia,
on the ground that the complainant (i.e., the appellant herein) is

1 NCDRC
226 [2026] 4 S.C.R.

Supreme Court Reports

not a consumer as per Section 2(1)(d) of the Consumer Protection
Act, 19862.

FACTS
2. The appellant, a company incorporated, filed a consumer complaint
against Vijaya Bank3 (the respondent), inter alia, alleging that it had
invested a sum of Rs. 9,00,00,000 (Rs.9 Crores), by way of a fixed
deposit, with the Bank, for a period of one year, w.e.f. 28.02.2014, and
evidencing the transaction a fixed deposit receipt4 dated 03.03.2014
was issued to the appellant and even interest payable on the said
FDR was credited in the account of the appellant on 26.03.2014 after
deducting TDS5. However, on 27.06.2014, the appellant received a
letter from the Bank about sanction of a loan/credit facility/ overdraft of
Rs. 8.10 Crores against the FDR. Suspecting foul play in sanction of
loan/ credit facility/ overdraft against the FDR, the appellant lodged a
complaint with the Economic Offences Wing, Crime Branch, Mumbai
on 16.07.2014. A letter was also sent to the Bank to reverse the
entries qua the fraudulent overdraft account. The Bank, however, did
not accede to the request. As a result, the matter was reported to
the Reserve Bank of India6. Subsequently, on 04.03.2017, the Bank
informed the appellant that the overdraft facility has been closed by
adjusting the amount outstanding thereunder against maturity value of
the FDR and the remaining balance i.e., Rs. 50,58,847 was remitted
vide DD No. 245983, dated 04.03.2017. The appellant accepted
neither adjustment nor remission and requested the Bank to make
payment of the entire FDR amount. As the Bank failed to refund the
amount, consumer complaint was filed with a prayer that the Bank
be directed to pay the principal amount of Rs. 9 Crores along with
interest at the rate of 9.75% per annum from 28.02.2014 along with
compensation as well as costs.
3. The Bank contested the complaint on merits as well on its
maintainability, inter alia, on the following grounds:

2 1986 Act
3 Bank
4 FDR
5 Tax Deducted at Source
6 RBI
[2026] 4 S.C.R. 227

Sant Rohidas Leather Industries and Charmakar
Development Corporation Ltd. v. Vijaya Bank

(a) The allegations of fraud/forgery etc. can be decided by either a
Civil Court or a Criminal Court and not in summary proceedings
under the 1986 Act; and
(b) The complainant company is engaged in commercial activity;
the alleged investment was to augment profits, therefore, the
complainant is not a consumer as defined in Section 2(1)(d)
of the 1986 Act.
4. NCDRC by placing reliance on the definition of ‘consumer’, as
defined in Section 2(1)(d)7 of the 1986 Act, as also on a decision
of this Court in Lilavati Kirtilal Mehta Medical Trust vs Unique
Shanti Developers and others8 held that the deposit made by the
appellant with the Bank had a direct nexus to generation of profit(s)
(i.e., earning interest on surplus funds), therefore, the banking services
availed were for a commercial purpose. Hence, the complainant
would not be a consumer qua the Bank as per Section 2(1)(d) of the
1986 Act. In consequence, NCDRC dismissed the complaint without
expressing any opinion on its merit.
5. Aggrieved by rejection of its complaint, the appellant has filed this
appeal.
6. We have learned counsel for the parties and have perused the
materials available on record.

SUBMISSIONS ON BEHALF OF THE APPELLANT
7. On behalf of the appellant, it was submitted:

7 Section 2(1)(d) - “Consumer” means any person who, —
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly
promised, or under any system of deferred payment and includes any user of such goods other
than the person who buys such goods for consideration paid or promised or partly paid or partly
promised, or under any system of deferred payment, when such use is made with the approval
of such person, but does not include a person who obtains such goods for resale or for any
commercial purpose; or
(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid
and partly promised, or under any system of deferred payment and includes any beneficiary of
such services other than the person who hires or avails of the services for consideration paid or
promised, or partly paid and partly promised, or under any system of deferred payment, when
such services are availed of with the approval of the first mentioned person but does not include a
person who avails of such services for any commercial purpose;
[Explanation.— For the purposes of this clause, “commercial purpose” does not include use by a person
of goods bought and used by him and services availed by him exclusively for the purposes of earning his
livelihood by means of self-employment];
8 (2020) 2 SCC 265
228 [2026] 4 S.C.R.

Supreme Court Reports

(a) Appellant is an undertaking of State of Maharashtra. It availed
services of the Bank. As there has been deficiency in service,
complaint against the Bank was maintainable.
(b) Deposit in a Bank by itself is not reflective of a commercial
purpose. Every legal person parks its money or funds in a
Bank. Therefore, deposit in a Bank by itself should not be a
determining factor to hold that banking services availed by the
depositor were for a commercial purpose. Moreover, parking
of surplus funds in a Bank does not by itself amounts to a
commercial activity. It may merely be an investment. Therefore,
the view taken by NCDRC that the appellant is not a consumer
is unsustainable in law.
(c) Moreover, there is no direct nexus between the services availed
and generation of profit by the appellant because the principal
object of the appellant is to arrange and supply raw materials
to specified industries.
(d) Besides, even a company can be a consumer. Therefore, merely
because appellant is a company incorporated it would not be
a factor determining whether it is a consumer or not.
8. In light of the above submissions, the learned counsel for the appellant
prayed that the impugned order be set aside and the matter be
remanded back to NCDRC for a decision on merits.

SUBMISSIONS ON BEHALF OF RESPONDENT-BANK
9. Per contra, on behalf of the Bank, it was urged that though main object
of the appellant may be to promote the leather industry, etc., but it
is not precluded from investing money, not immediately required by
the company, for profits. Thus, the purpose of such investment was
to augment profits and, therefore, banking services were availed for
a commercial purpose. NCDRC was, therefore, justified in holding
the appellant not a consumer as per Section 2(1) (d) of the 1986 Act.
10. Additionally, it was submitted on behalf of the Bank that there exists a
serious dispute on facts and the allegations in the complaint relating
to fraud/ forgery/ manipulation can only be decided in a regular civil
or criminal proceeding and not by way of a summary proceeding
under the 1986 Act.
[2026] 4 S.C.R. 229

Sant Rohidas Leather Industries and Charmakar
Development Corporation Ltd. v. Vijaya Bank

ISSUES
11. Upon consideration of the rival submissions and the materials placed
on record, in our view, the following issues arise for our consideration:
(i) Whether the appellant, a body corporate, while availing services
of the Bank to deposit its surplus funds in an interest bearing
term deposit, such as an FDR, could be considered a consumer
as defined in Section 2(1)(d) of the 1986 Act?
(ii) Whether the nature of allegations made in the complaint were
such that they took the claim outside the purview of proceedings
under the 1986 Act?

ISSUE NO.(i)
12. Section 2(1)(d)(ii) of the 1986 Act, inter-alia, provides that “consumer”
means any person who hires or avails of any services for a
consideration which has been paid or promised or partly paid and
partly promised, or under any system of deferred payment and
includes any beneficiary of such services other than the person who
hires or avails of the services for consideration paid or promised,
or partly paid and partly promised, or under any system of deferred
payment, when such services are availed of with the approval of the
first mentioned person but does not include a person who avails of
such services for any commercial purpose. The Explanation to clause
(d) of sub-section (1) of Section 2 of the 1986 Act provides that for
the purposes of this clause, “commercial purpose” does not include
use by a person of goods bought and used by him and services
availed by him exclusively for the purposes of earning his livelihood
by means of self-employment.
13. The expression ‘person” used in Section 2(1) (d) is defined in Section
2(1)(m)9 of the 1986 Act. Construing the definition of ‘person’ as
provided in Section 2(1)(m) of the 1986 Act, this Court in Karnataka
Power Transmission Corporation & Another v. Ashok Iron Works

9 Section 2. Definitions. - (1) In this Act, unless the context otherwise requires, -
(m) ‘person’ includes, -
(i) a firm whether registered or not;
(ii) a Hindu undivided family;
(iii) a co-operative society;
(iv) every other association of persons whether registered under the Societies Registration Act, 1860
(21 of 1860) or not
230 [2026] 4 S.C.R.

Supreme Court Reports

Pvt. Ltd.10 held that the definition of person is inclusive and not
exhaustive and it would include a body corporate.
14. In Lilavati Kirtilal Mehta Medical Trust (supra), this Court observed
that there could be no straitjacket formula for determining whether
an activity or transaction is for a commercial purpose. Yet, by way
of guidelines, certain principles were summarised in paragraph 19
of the judgment, which is reproduced below:
“19. To summarize from the above discussion, though
a straightjacket formula cannot be adopted in every
case, the following broad principles can be culled out for
determining whether an activity or transaction is “for a
commercial purpose.”
19.1 The question of whether a transaction is for a commercial
purpose would depend upon the facts and circumstances
of each case. However, ordinarily, “commercial purpose”
is understood to include manufacturing/ industrial activity
or business-to-business transactions between commercial
entities.
19.2 The purchase of the good or service should have
a close and direct nexus with a profit-generating activity.
19.3 The identity of the person making the purchase or the
value of the transaction is not conclusive to the question of
whether it is for a commercial purpose. It has to be seen
whether the dominant intention or dominant purpose for the
transaction was to facilitate some kind of profit generation
for the purchaser and/or their beneficiary.
19.4 If it is found that the dominant purpose behind
purchasing the good or service was for the personal use
and consumption of the purchaser and/or their beneficiary,
or is otherwise not linked to any commercial activity, the
question of whether such a purchase was for the purpose
of ‘generating livelihood by means of self-employment’
need not be looked into.”
15. What is clear from above is that the identity of the person making
the purchase, or the value of the transaction, is not conclusive to

10 (2009) 3 SCC 240, paragraph 21
[2026] 4 S.C.R. 231

Sant Rohidas Leather Industries and Charmakar
Development Corporation Ltd. v. Vijaya Bank

determine whether the transaction or activity is for a commercial
purpose. What needs to be seen is the dominant intention or dominant
purpose of the transaction i.e. whether it is to facilitate some kind of
profit generation for the purchaser(s) and/or its/their beneficiary. If
it is found that the dominant purpose behind the purchase of goods
or services is personal use and consumption by the purchaser, and
those are otherwise not linked to any commercial activity, the question
whether such purchase is for generating a livelihood by means of self-
employment need not be addressed. However, where the transaction
is for a commercial purpose, it may have to be considered whether
it is for generating livelihood by means of self-employment or not.
16. In National Insurance Co. Ltd. v. Harsolia Motors & Ors.11, the
complainant, a commercial entity engaged in the business of sale
of vehicles, took fire insurance policy from an insurance company,
covering its office, showroom, garage, machinery lying in the
showroom premises, etc. The complainant’s case was that damages
were sustained during Godhra riots and, therefore, the complainant
was entitled to be indemnified under the policy of insurance.
Aggrieved by action of the insurance company a complaint was filed
by claiming deficiency in service. The insurance company took an
objection that the complainant was not a consumer as per Section
2(1)(d) of the 1986 Act because its ultimate object is to earn profits.
The State Commission upheld the objection; against which, the
complainant went in appeal before NCDRC. NCDRC held that the
expression “for any commercial purpose” would mean that the goods
purchased or services hired should be used in any activity directly
intended to generate profit, but in a case where goods purchased
or services availed are not intended to generate profit, it would
not be a commercial purpose. Consequently, when a person takes
an insurance cover for indemnification of actual loss suffered, the
intention is not to generate profits. Therefore, the complainant was
a consumer. Upholding the above view of the National Commission,
this Court observed:
“43. … What needs to be determined is whether the
insurance service had a close and direct nexus with
the profit generating activity and whether the dominant

11 (2023) 8 SCC 362
232 [2026] 4 S.C.R.

Supreme Court Reports

intention or dominant purpose of the transaction was to
facilitate some kind of profit generation for the insured or
to the beneficiary and our answer is in the negative and
accordingly we are of the view that the complaint filed
by the respondent insured herein has no close or direct
nexus with the profit generating activity and the claim of
insurance is to indemnify the loss which the respondent
insured had suffered and the Commission has rightly held
that the respondent is a consumer under section 2(1)(d)
of the 1986.
44. We further reiterate that ordinarily the nature of the
insurance contract is always to indemnify the losses.
Insurance contracts are contracts of indemnity whereby
one undertakes to indemnify another against loss / damage
or liability arising from an unknown or contingent event
and is applicable only to some contingency or act likely
to come in future.”
17. In Poly Medicure Ltd. v. Brillio Technologies (Pvt) Ltd.12, after
considering several decisions including Harsolia Motors, it was
observed that if the transaction has a direct nexus with generation
of profits, it would be treated as one for a commercial purpose.
However, whether a transaction has nexus with generation of profits
or not is to be determined on the facts of each case by taking into
consideration, inter alia, the nature of the goods purchased or services
availed and the purpose for which it is purchased or availed and if,
upon consideration of all relevant factors, the picture that emerges is
one which reflects that the object of the purchase of goods/services is
to generate or augment profit, the same would be treated as one for
a commercial purpose. It was also observed that insurance service
by its very nature is to secure the insured against an unforeseen
loss, therefore, the dominant object of availing such service is not
to generate profit but to secure oneself against unforeseen losses.
18. Thus, what is clear from above is that to determine whether the
purchasing of goods, or availing of services, is for a commercial
purpose or not, one has to look at the dominant object or purpose
with which those goods are purchased or services are availed. To

12 2025 SCC OnLine SC 2443
[2026] 4 S.C.R. 233

Sant Rohidas Leather Industries and Charmakar
Development Corporation Ltd. v. Vijaya Bank

ascertain the dominant object, nature of the goods purchased or
the services availed also assume importance. Therefore, each case
would have to be decided on its own facts. What is also clear is
that the status of the purchaser or recipient of goods or services,
that is, whether it is an individual or a body corporate, is not the
determining factor for holding whether the transaction is, or is not,
for a commercial purpose.
19. Besides, the burden to prove that the goods purchased, or services
availed, as the case may be, is for a commercial purpose is on
the respondent and not the complainant. In Shriram Chits (India)
Private Limited v. Raghachand Associates13, after analysing the
definition of “consumer”, this Court observed that the definition has
three parts. The first part relates to buying of goods/ availing of
service for a consideration. Burden of proving the same rests on the
complainant. The second part relates to the exception, that is, whether
those goods were bought, or services availed, for a commercial
purpose. The burden of proving this part lies on the respondent. The
third part relates to the explanation, that is, even though the goods
purchased, or services availed, are for a commercial purpose, the
same are for the purpose of earning complainant’s livelihood, by
way of self-employment. The burden of proving the third part lies
on the complainant.
20. In the instant case, the transaction out of which the complaint arises
is regarding a deposit made by the appellant with the Bank. Section
2(1)(o) of the 1986 Act defines ‘service’. It means service of any
description which is made available to potential users and includes
the provision of facilities in connection with banking, finance, insurance
etc. There is no dispute that such deposit was made and the Bank
had agreed to pay interest. Thus, to that extent the respondent-bank
is the service provider and the appellant a service recipient qua
Bank’s contractual obligation to pay interest and maturity value of the
FDR. Therefore, in that context, the appellant can be considered a
consumer of banking services offered by the respondent. However,
the moot question is whether there was any deficiency in rendering
those services. If yes, whether those services were availed for a
commercial purpose. Both the issues are interlinked because if the

13 (2024) 9 SCC 509
234 [2026] 4 S.C.R.

Supreme Court Reports

Bank’s defence that the FDR was pledged for availing credit facility
is accepted, not only a commercial purpose gets imputed to the
transaction but then there may be no deficiency in rendering service
qua the FDR as it would be subject to a subsequent contract of pledge.
21. A bank renders multiple types of service. Accepting cash deposits
from customers and paying interest thereon is the most basic of
services rendered by a bank, as ordinally all cash deposits yield
interest. Therefore, merely because a deposit earns interest, it does
not mean that the deposit was made for a commercial purpose
because there may be other reasons to deposit the money in a
bank and those may have nothing to do with generation of profit.
For example, holding of cash by a person beyond a limit may not be
permissible under the statutory framework. Therefore, he may have
to deposit the money notwithstanding whether his intention is to earn
profits. Besides, banking service may be utilized for safe-keeping of
money as keeping cash is fraught with risk. Thus, merely because a
fixed deposit receipt earns interest does not mean that the banking
service availed is for a commercial purpose. To this extent, we do
not agree with the view of NCDRC.
22. However, if the deposit is made to leverage credit facilities for
augmenting business, it would have a direct nexus with revenue
generation/ profits. In such a case, it could be said that the banking
service was availed for a commercial purpose. In that scenario, the
service recipient may not fall in the category of a consumer unless he
brings his case within the four corners of the Explanation to Section
2(1)(d) of the 1986 Act.
23. It is undisputed that the appellant is a body corporate. Though being
a body corporate is not the determining factor of a service recipient’s
intent to generate profit, yet it is a factor to be considered along with
others to ascertain the true intent with which the service in question
was availed.
24. In the instant case, according to the complainant, the deposit was
for a fixed term and had no direct nexus to the core business of the
complainant i.e., the appellant. Though, according to the Bank, the
deposit was to generate profit as the FDR not only carried interest,
it was pledged to avail credit facilities/ overdraft for business use
and, therefore it served a commercial purpose.
[2026] 4 S.C.R. 235

Sant Rohidas Leather Industries and Charmakar
Development Corporation Ltd. v. Vijaya Bank

25. The complaint allegations, if read as a whole, would reveal that the
complainant (i.e., the appellant) was aware about Bank’s stand that
the FDR was pledged to avail credit facilities. If that is correct then it
is a matter of common knowledge that credit facilities are availed by
a corporate body for its business. Therefore, there existed a serious
dispute regarding the true intent of the appellant in making such deposit.
26. In normal course, parking of surplus funds by a body corporate with
a bank, either for safe custody or to comply with statutory mandate,
as the case may be, is not reflective of a commercial purpose. More
so, because ordinarily all deposits in a Bank earn interest. Hence,
it would be too naive to hold that since the deposit earned interest,
banking service was availed for a commercial purpose. However,
it would be different where deposits are made to leverage a credit
facility, or for availing other banking services, for business use.
Deposit of the latter kind may amount to availing banking services
for a commercial purpose.
27. In the case on hand, the deposit was by one business entity, namely,
the appellant company, with another business entity, namely, the
Bank. It was thus, a business-to-business transaction. Admittedly, the
Bank had set up a case that FDR was pledged to avail credit facility
and the maturity value of the FDR was adjusted against the dues.
Though the appellant has denied this loan transaction, this issue is not
settled by either a criminal court or a civil court even though a criminal
complaint has been made in that regard. In such circumstances, it is
not a simple case of not fulfilling contractual obligation qua the deposit
but a case where a subsequent contract of pledge is set up which, if
accepted, would override the contractual obligation under the FDR.
Thus, without determining whether there was fraud played upon the
appellant, or forged documents were created for a false pledge /loan,
it would not be possible to determine whether the services availed
by the appellant from the respondent-Bank were for a commercial
purpose or not. Issue No.(i) is decided accordingly.

ISSUE NO.(ii)
28. In Ravneet Singh Bagga v. KLM Royal Dutch Airlines and
Another14 this Court had the occasion to construe the words ‘service’,
as defined in Section 2(1)(o), and ‘deficiency’, as defined in Section

14 (2000) 1 SCC 66
236 [2026] 4 S.C.R.

Supreme Court Reports

2(1) (g) of the 1986 Act. After considering their respective definitions
provided in the 1986 Act, it was held:
“5. Section 2(1)(o) defines “service” to mean service of
any description which is made available to potential users
and includes the provision of facilities in connection with
banking, financing, insurance, transport, processing,
supply of electrical or other energy, board or lodging or
both, entertainment, amusement or the purveying of news
or other information, but does not include the rendering
of any service free of charge or under a contract of
personal service. Section 2(1)(g) defines “deficiency” to
mean any fault, imperfection, shortcoming or inadequacy
in the quality, nature and manner of performance which is
required to be maintained by or under any law for the time
being in force or has been undertaken to be performed
by a person in pursuance of a contract or otherwise in
relation to any service.
6. The deficiency in service cannot be alleged without
attributing fault, imperfection, shortcoming or inadequacy
in the quality, nature and manner of performance which
is required to be performed by a person in pursuance
of a contract or otherwise in relation to any service. The
burden of proving the deficiency in service is upon the
person who alleges it. The complainant has, on facts, been
found to have not established any wilful fault, imperfection,
shortcoming or inadequacy in the service of the respondent.
The deficiency in service has to be distinguished from the
tortious acts of the respondent. In the absence of deficiency
in service the aggrieved person may have a remedy under
the common law to file a suit for damages but cannot
insist for grant of relief under the Act for the alleged acts
of commission and omission attributable to the respondent
which otherwise do not amount to deficiency in service.
In case of bona fide disputes no wilful fault, imperfection,
shortcoming or inadequacy in the quality, nature and manner
of performance in the service can be informed (sic). If on
facts it is found that the person or authority rendering service
had taken all precautions and considered all relevant facts
and circumstances in the course of the transaction and that
their action or the final decision was in good faith, it cannot
[2026] 4 S.C.R. 237

Sant Rohidas Leather Industries and Charmakar
Development Corporation Ltd. v. Vijaya Bank

be said that there had been any deficiency in service. If the
action of the respondent is found to be in good faith, there
is no deficiency of service entitling the aggrieved person
to claim relief under the Act. The rendering of deficient
service has to be considered and decided in each case
according to the facts of that case for which no hard and
fast rule can be laid down. Inefficiency, lack of due care,
absence of bona fides, rashness, haste or omission and
the like may be the factors to ascertain the deficiency in
rendering the service.”
(Emphasis supplied)

29. Following the decision in Ravneet Singh Bagga (supra) in Chairman
and Managing Director, City Union Bank Limited and Another v.
R. Chandramohan15, it was held:
“14. The proceedings before the Commission being
summary in nature, the complaints involving highly disputed
questions of facts or the cases involving tortious acts or
criminality like fraud or cheating, could not be decided by
the Forum/Commission under the said Act. The “deficiency
in service”, as well settled, has to be distinguished from
the criminal acts or tortious acts.”
(Emphasis supplied)

30. It is thus settled that the burden to prove deficiency in service is on
the complainant, and deficiency in service is different from criminal
or tortious acts of the service provider. Though one of the objects of
the 1986 Act is to provide speedy and simple redressal to consumer
disputes, its object is not to deal with complex factual issues pertaining
to criminal or tortious liability in a summary manner.
31. In light of the aforesaid legal position, we shall now consider whether
the allegations set out in the complaint, took the complaint out of
the purview of the 1986 Act.
32. According to the complaint allegations, the appellant had invested 9
crores by way of a term deposit with the Bank. It is also the case of

15 (2023) 7 SCC 775
238 [2026] 4 S.C.R.

Supreme Court Reports

the appellant that the said term deposit was fraudulently hypothecated
for availing overdraft without the sanction of the appellant company.
What is important to note is that when the overdraft against the
FDR was brought to the notice of the appellant, a complaint was
made with the respondent-bank. The response of the Bank to that
complaint is important, inasmuch as the Bank claims that the original
of the FDR is with the Bank and the same stands pledged for
availing overdraft. Besides, the Bank claimed that the FDR which the
appellant claims to be in its possession is a forged document. In the
complaint itself, the appellant admitted that this matter was reported
to the Economic Offences Wing. Therefore, the main grievance
of the appellant appears to be qua adjustment of proceeds of the
FDR against the amount outstanding in the overdraft account. Thus,
what is clear from the complaint allegations is that the Bank had
acknowledged the FDR and had accounted for the interest payable
thereon but, instead of releasing the maturity proceeds in favour of
the appellant, it had set up a subsequent contract of pledge of that
FDR for according overdraft facility to the appellant. According to the
appellant this pledge is a fraudulent act and amounts to an offence.
In such circumstances, the complaint allegations as they stand cannot
be adjudicated upon in a proceeding under the 1986 Act as those
allegations could appropriately be addressed in a regular criminal or
civil proceeding. Hence, the complaint as framed is not maintainable.
Issue No.(ii) is decided in the aforesaid terms.
33. In light of our conclusion on Issue No.(ii), we are of the view that
NCDRC was justified in dismissing the complaint even though
the reasons recorded by it for such dismissal may not be entirely
correct. As a result, the appeal lacks merit and is, accordingly,
dismissed. Dismissal of the complaint shall not be a bar on the right
of the appellant to take recourse to appropriate proceedings before
appropriate court/ forum. There shall be no order as to costs.
34. Pending application(s), if any, stand disposed of.

Result of the case: Appeal dismissed.

†
Headnotes prepared by: Divya Pandey