VINIT BAHRI AND ANOTHERversusM/S MGF DEVELOPERS LTD. AND ANOTHER

                 [2026] 2 S.C.R. 370 : 2026 INSC 114

                     Vinit Bahri and Another
                                 v.
               M/s MGF Developers Ltd. and Another
                      (Civil Appeal No. 6588 of 2023)
                             04 February 2026
           [Prashant Kumar Mishra* and N.V. Anjaria, JJ.]


                          Issue for Consideration
       Whether the NCDRC was right in dismissing the complaint filed
       by the appellants on the premise that they do not fall under
       the definition of ‘consumer’ for leasing out the subject property
       for commercial purposes, falling within the exclusion clause of
       s.2(1)(d) of the Consumer Protection Act, 1986.

                                 Headnotes†
       Consumer Protection Act, 1986 – s.2(1)(d) – The respondents
       launched a group housing project – The appellants in March
       2005, deposited Rs.15,00,000/- as the booking amount, and,
       on 02.09.2005, they were allotted a Unit – The appellants
       filed the subject complaint alleging deficiency in service and
       unfair trade practice – The appellants challenged the demand
       of Rs.30,81,894/- under various heads of EEDC, IDC, Service
       Tax, etc. and also Rs.4,80,000/- towards deficiency in providing
       promised fixtures in the flat – Respondent no.1 alleged that
       appellants have purchased the said flat for commercial
       purposes and that appellants are not consumers – The
       NCDRC reached to a conclusion that the appellants do not
       fall under the definition of ‘consumer’ as they leased the said
       flat premises – Correctness:
       Held: The NCDRC has erred in dismissing the appellants’
       complaint – The onus of proving that the appellants fall within
       the exclusion clause of s.2(1)(d) of the 1986 Act rests upon the
       respondents, and the respondents have failed to discharge this
       onus on a preponderance of probabilities – The determinative
       question is whether the dominant intention or dominant purpose



* Author
[2026] 2 S.C.R.                                                              371

   Vinit Bahri and Another v. M/s MGF Developers Ltd. and Another


     behind purchasing the flat was to facilitate profit generation through
     commercial activity, and whether there exists a close and direct
     nexus between the purchase and such profit-generating activity –
     The respondents have not placed any cogent material on record
     to establish such nexus – The mere factum of leasing out the flat
     does not, by itself, demonstrate that the appellants purchased the
     property with the dominant purpose of engaging in commercial
     activity – The question of what constitutes ‘commercial purpose’
     is a question of fact to be decided in the circumstances of each
     case based on the purpose to which the goods/properties were
     purchased – It must be emphasized that the mere act of purchasing
     immovable property, even multiple units, cannot ipso facto attract
     the exclusion clause of s.2(1)(d) of the 1986 Act unless and until
     it is proved that the dominant purpose behind such purchase was
     commercial in nature – In absence of such proof, the appellants
     cannot be excluded from the definition of ‘consumer’ under the
     1986 Act. [Para 17]

                              Case Law Cited
     Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers and
     Others [2019] 14 SCR 563 : (2020) 2 SCC 265; Rohit Chaudhary
     and Another v. Vipul Limited [2023] 14 SCR 394 : (2024) 1 SCC
     8; Shriram Chits (K) Pvt. Ltd v. Raghachand Associates [2024] 6
     SCR 214 : (2024) 9 SCC 509 – relied on.
     IREO Private Ltd. v. Aloke Anand and Others [2022] 2 SCR 411 :
     (2022) 9 SCC 412; Synco Textiles Pvt. Ltd. v. Greaves Cotton and
     Company Ltd., 1990 SCC OnLine NCDRC 3; Laxmi Engineering
     Works v. P.S.G. Industrial Institute [1995] 3 SCR 174 : (1995) 3
     SCC 583; National Insurance Co. Ltd. v. Harsolia Motors [2023]
     3 SCR 448 : (2023) 8 SCC 362 – referred to.

                                 List of Acts
     Consumer Protection Act, 1986.

                              List of Keywords
     Consumer; s.2(1)(d) of Consumer Protection Act, 1986;
     Preponderance of probabilities; Dominant intention; Dominant
     purpose; Profit generation; Leasing; Commercial purpose.
372                                                            [2026] 2 S.C.R.

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                                Case Arising From
       CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6588 of 2023
       From the Judgment and Order dated 11.05.2023 of the National
       Consumers Disputes Redressal Commission, New Delhi in CC
       No. 74 of 2017

                              Appearances for Parties
       Advs. for the Appellant(s):
       Krishnamohan K., Ms. Priya, Ms. Dania Nayyar, Mrs. Prerna Jain
       Kala.
       Adv. for the Respondent(s):
       Ms. Diya Kapoor, Sr. Adv., Yudister Singh, Akhil Sachar, Siddhartha
       Iyer, Aman Gupta, Ms. Srishti Ghoshal, Tonmoy Talukdar, Ms. Payal
       Rani, Ms. Sonakshi Malhan.

                     Judgment / Order of the Supreme Court

                                    Judgment

       Prashant Kumar Mishra, J.

1)     This Appeal assails the impugned judgment dated 11.05.2023 in
       Consumer Complaint No.74/2017, passed by the National Consumer
       Disputes Redressal Commission1 at New Delhi whereby, the NCDRC
       dismissed the consumer complaint preferred by the appellants.

       FACTUAL MATRIX
2)     Shorn of unnecessary details, the facts stand thus: the appellants
       filed a complaint before the NCDRC for seeking a direction to
       the respondents to pay (i) Rs. 1,59,89,994/- being 18% interest;
       (ii) Rs.50,00,000/- as compensation for mental agony and harassment;
       (iii) Rs.15,00,000/- as compensation due to the change in location
       of Tower-C; (iv) Rs.35,61,494/- as excess amount realized towards
       fixtures and fitting; (v) Rs.2,50,000/- as the litigation costs; and (vi)
       any other relief which is deemed fit and proper.



1    For short, ‘the NCDRC’
[2026] 2 S.C.R.                                                         373

     Vinit Bahri and Another v. M/s MGF Developers Ltd. and Another


3)    The backdrop of the above complaint is that the respondents launched
      a group housing project in the name of ‘The Villas’ at Village Sahraul,
      Sector-25, Gurgaon, in the year 2005. The appellants in March 2005,
      deposited Rs.15,00,000/- as the booking amount, and, on 02.09.2005,
      they were allotted Unit No.VP-C/802 located on the ground floor of
      Tower-C with super built area of 3590 square feet.
4)    Thereafter, on 12.06.2006, a Flat Buyer’s Agreement was executed in
      favour of the appellants and Clause 9.1 of the Agreement stipulates
      that the possession of the flat shall be handed over within 36 months
      from the date of the Agreement, subject to a grace period of 90 days
      for obtaining the occupation certificate. It is the appellants’ case
      that the due date of possession expired on 11.09.2009 and that the
      respondents have unilaterally changed the layout plan of Tower-C
      without informing the buyers. The respondents in their meeting held
      on 23.04.2009 have admitted the factum of change in the layout plan
      of Tower-C. The appellants also alleged that, on 06.09.2009, the
      respondents raised a demand for Rs.10,82,000/- and, subsequently,
      on multiple occasions, the respondents demanded for payments
      and the appellants have obliged to the same under protest and
      have taken possession of the flat on 08.01.2015. The respondents
      vide letter dated 02.01.2015, invited objections against the change
      of layout plan and the appellants filed their objections against the
      same. However, Director, Town and Country Planning, Haryana,
      issued occupation certificate on 14.08.2015.
5)    On 10.01.2017, the appellants filed the subject complaint alleging
      deficiency in service and unfair trade practice. The appellants
      challenged the demand of Rs.30,81,894/- under various heads
      of EEDC, IDC, Service Tax, etc. and also Rs.4,80,000/- towards
      deficiency in providing promised fixtures in the flat.
6)    Before the NCDRC, respondent No.1 filed a written reply wherein
      it was stated that the appellants have already been paid/adjusted
      a delay compensation of Rs.12,10,237/- as per clause 9.7 of the
      Agreement, and the same has been accepted unconditionally. It is
      also the case of respondent No.1 that the total area of the flat has
      been increased by 271.08 square feet, and the appellants were
      liable to pay for subject increase in the area. It is also stated that
      all the demands raised by the respondents were according to the
      Flat Buyer’s Agreement. Significantly, it is alleged by respondent
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       No.1 that the appellants have purchased the said flat for commercial
       purposes and after taking over the possession, the flat has been
       let out to one Shri Sunil Raman since March 2015. A lease deed to
       this effect has been executed on 03.03.2016. Ergo, it is the case
       of respondent No.1 that the appellants are not consumers and that
       the appellants’ complaint should be dismissed. Respondent No.2
       also filed a separate reply wherein it was stated that the said project
       ‘The Villas’ was handed over to respondent No.1 through settlement
       deed dated 19.12.2013 and that respondent No.2 is absolved of
       all liabilities as respondent No.1 took all the liabilities towards the
       project through indemnity deed dated 09.03.2016.
7)     The NCDRC after considering the rival submissions, reached to
       a conclusion that the appellants do not fall under the definition of
       ‘consumer’ as they leased the said flat premises to Shri Sunil Raman
       and the said act is considered as commercial purpose.

       SUBMISSIONS
8)     Learned counsel for the appellants contended that the residential
       unit purchased by the appellants was purely purchased for personal
       usage and the NCDRC has committed an error in observing that
       the subject premises were purchased for commercial usage. The
       sole intent of the appellants behind purchasing the residential unit
       was to live closer to their parents. To buttress his submissions, the
       learned counsel for the appellants relied upon the decisions in IREO
       Private Ltd. vs. Aloke Anand and Others2; and Synco Textiles
       Pvt. Ltd. vs. Greaves Cotton and Company Ltd.3.
9)     Per contra, learned senior counsel for the respondents supported
       the impugned judgment and prayed for dismissal of this Appeal.

       ANALYSIS
10) The pivotal question which falls for our considerations is whether the
    NCDRC was right in dismissing the complaint filed by the appellants
    on the premise that they do not fall under the definition of ‘consumer’



2    (2022) 9 SCC 412
3    1990 SCC OnLine NCDRC 3
[2026] 2 S.C.R.                                                            375

    Vinit Bahri and Another v. M/s MGF Developers Ltd. and Another


     for leasing out the subject property for commercial purposes, falling
     within the exclusion clause of Section 2(1)(d) of the Consumer
     Protection Act, 19864.
11) Before adverting to the issue of whether the act of the appellants in
    leasing the subject flat falls under the exclusion clause of Section
    2(1)(d) of the 1986 Act, it is necessary to outline the meaning and
    scope of the term ‘consumer’. The said term has been defined under
    Section 2(1)(d) of the 1986 Act and the same is reproduced below
    for ready reference:
             “2. Definitions
             (1) In this Act, unless the context otherwise requires,-
             …
             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 payments, 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


4   For Short, ‘the 1986 Act’
376                                                      [2026] 2 S.C.R.

                         Supreme Court Reports


            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;”
                                               (Emphasis Supplied)

12) A bare perusal of the above provision reveals that the term ‘consumer’
    encompasses any person who buys goods or avails services for
    consideration, but excludes a person who obtains such goods for
    resale or for any commercial purpose. The Explanation to the said
    clause clarifies that ‘commercial purpose’ does not include use
    by a person of goods bought and used by him exclusively for the
    purposes of earning his livelihood by means of self-employment. While
    the 1986 Act does not exhaustively define ‘commercial purpose’,
    though the Explanation to Section 2(1)(d) carves out an exception
    for self-employment and earning livelihood, the dominant intention
    or dominant purpose of the transaction is determinative of whether
    the purchaser falls within the exclusion clause.
13) This Court in Laxmi Engineering Works vs. P.S.G. Industrial
    Institute5 observed that in absence of a statutory definition, the
    term ‘commercial’ denotes activities connected with or engaged in
    commerce, having profit as the main aim, whereas ‘commerce’ means
    financial transactions, especially buying and selling of merchandise
    on a large scale. This Court in Laxmi Engineering Works (supra)
    approved the view taken by the NCDRC in Synco Textiles Pvt. Ltd.
    (supra) wherein the NCDRC held that where a person purchases
    goods “with a view to using such goods for carrying on any activity
    on a large scale for the purpose of earning profit” he will not be
    a ‘consumer’, and that in order for the exclusion clause to apply,
    there must be a close nexus between the transaction of purchase
    of goods and the large scale activity carried on for earning profit.
    This Court in Laxmi Engineering Works (supra) further observed
    that the Explanation, being an exception to an exception, clarifies
    that purchase of goods for ‘commercial purpose’ would not take the
    purchaser out of the definition of ‘consumer’ if the commercial use
    is by the purchaser himself for the purpose of earning his livelihood
    by means of self-employment. The Explanation reduces the question


5   (1995) 3 SCC 583
[2026] 2 S.C.R.                                                            377

    Vinit Bahri and Another v. M/s MGF Developers Ltd. and Another


     of what constitutes ‘commercial purpose’ to a question of fact to be
     decided in the circumstances of each case, and it is not the value of
     the goods that matters but the purpose to which the goods bought
     are put to.
14) The interpretation of expression ‘commercial purpose’ was further
    expounded in Lilavati Kirtilal Mehta Medical Trust vs. Unique
    Shanti Developers and Others6 wherein it was observed thus :
            “19. To summarise from the above discussion, though a
            strait jacket 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.”
                                                  (Emphasis Supplied)


6   (2020) 2 SCC 265
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15) The principles laid down in Lilavati Kirtilal Mehta Medical Trust
    (supra) were reiterated in Rohit Chaudhary and Another vs. Vipul
    Limited7, wherein this Court observed as under:
            “18. Thus, if the dominant purpose of purchasing the
            goods or services is for a profit motive and this fact is
            evident from the record, such purchaser would not fall
            within the four corners of the definition of “consumer”.
            On the other hand, if the answer is in the negative, namely,
            if such person purchases the goods or services is not for
            any commercial purpose and for one’s own use, it cannot
            be gainsaid even in such circumstances the transaction
            would be for a commercial purpose attributing profit motive
            and thereby excluding such person from the definition of
            “consumer”.
                                                  (Emphasis Supplied)

16) While the aforesaid decisions elucidate the legal principles for
    determining what constitutes ‘commercial purpose’, the equally
    critical question as to who bears the burden of proving whether
    or not, the transaction falls within the exclusion clause of the term
    ‘consumer’ was addressed by this Court in Shriram Chits (India)
    Private Limited Earlier Known as Shriram Chits (K) Pvt. Ltd vs.
    Raghachand Associates8, in following words:
            “19. As we have shown above, the definition of consumer
            has three parts. The significance of deconstructing the
            definition into three parts was for the purpose of explaining
            on whom lies the onus to prove each of the different parts.
            There can hardly be any dispute that the onus of proving
            the first part i.e. that the person had bought goods/availed
            services for a consideration, rests on the complainant
            himself. The carve out clause, in the second part, is invoked
            by the service providers to exclude the complainants from
            availing benefits under the Act. The onus of proving that
            the person falls within the carve out must necessarily
            rest on the service provider and not the complainant.


7   (2024) 1 SCC 8
8   (2024) 9 SCC 509
[2026] 2 S.C.R.                                                           379

   Vinit Bahri and Another v. M/s MGF Developers Ltd. and Another


           This is in sync with the general principle embodied
           in Sections 101 and 102 of the Evidence Act, 1872
           that “one who pleads must prove”. Since it is always
           the service provider who pleads that the service
           was obtained for a commercial purpose, the onus of
           proving the same would have to be borne by it. Further,
           it cannot be forgotten that the Consumer Protection Act is
           a consumer-friendly and beneficial legislation intended to
           address grievances of consumers. [National Insurance Co.
           Ltd. v. Harsolia Motors, (2023) 8 SCC 362 : (2023) 4 SCC
           (Civ) 53] Moreover, a negative burden cannot be placed
           on the complainant to show that the service available was
           not for a commercial purpose.
           20. Having held that the onus to prove that the service
           was obtained for a commercial purpose is on the service
           provider, we may clarify the standard of proof that has to
           be met in order to discharge the onus. The standard of
           proof has to be measured against a “preponderance
           of probabilities”. The test to determine whether service
           obtained qualified as a commercial purpose is no longer
           res integra in view of this Court’s decision in Lilavati
           Kirtilal Mehta case [Lilavati Kirtilal Mehta Medical Trust v.
           Unique Shanti Developers, (2020) 2 SCC 265 : (2020)
           1 SCC (Civ) 320] . Para 19 sets out the principles on
           which it must be determined whether the onus of proving
           “commercial purpose” has been properly discharged by
           the service provider.
           21. If and only if, the service provider discharges its
           onus of showing that the service was availed, in fact
           for a commercial purpose, does the onus shift back
           to the complainant to bring its case within the third
           part i.e. Explanation (a) to Section 2(7) — to show that
           the service was obtained exclusively for the purpose of
           earning its livelihood by means of self-employment.”
                                                 (Emphasis Supplied)

17) In the light of the aforesaid adjudications and for the reasons discussed
    hereinbefore, we are of the considered view that the NCDRC has
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                              Supreme Court Reports


       erred in dismissing the appellants’ complaint. The onus of proving that
       the appellants fall within the exclusion clause of Section 2(1)(d) of
       the 1986 Act rests upon the respondents, and the respondents have
       failed to discharge this onus on a preponderance of probabilities. The
       determinative question is whether the dominant intention or dominant
       purpose behind purchasing the flat was to facilitate profit generation
       through commercial activity, and whether there exists a close and
       direct nexus between the purchase and such profit-generating activity.
       The respondents have not placed any cogent material on record to
       establish such nexus. The mere factum of leasing out the flat does
       not, by itself, demonstrate that the appellants purchased the property
       with the dominant purpose of engaging in commercial activity. The
       question of what constitutes ‘commercial purpose’ is a question of
       fact to be decided in the circumstances of each case based on the
       purpose to which the goods/properties were purchased. It must be
       emphasized that the mere act of purchasing immovable property,
       even multiple units, cannot ipso facto attract the exclusion clause of
       Section 2(1)(d) of the 1986 Act unless and until it is proved that the
       dominant purpose behind such purchase was commercial in nature.
       In absence of such proof, the appellants cannot be excluded from
       the definition of ‘consumer’ under the 1986 Act.
18) In our view, the Complaint Case needs consideration on merits by
    the NCDRC. Accordingly, we set aside the impugned judgment dated
    11.05.2023 passed by the NCDRC and restore Consumer Complaint
    No.74/2017 to its original number to the file of the NCDRC. The
    NCDRC shall proceed to decide the Consumer Complaint on merits
    and in accordance with law.
19) The Appeal is allowed.

       Result of the case: Appeal allowed.




       †
           Headnotes prepared by: Ankit Gyan