Purchaser of property for the purpose of expansion of an existing business, does not fall in the ambit of “Consumer” within the meaning of the Consumer Protection Act

In a recent pronouncement of the National Consumer Disputes Redressal Commission, New Delhi (referred to as “NCDRC” hereinafter) held that a purchaser of a commercial unit would be a consumer within the meaning of Section 2 (1) (d) only if one does not already have a business establishment. It was held that booking of a shop for the purpose of expansion of business means existence of business establishment already in which case, availing of service would tantamount to for commercial purpose and in such event complainant would not be a consumer.

The judgment was delivered by NCDRC in the matter of Gowhar Riyaz Khan Vs. Ansal Housing & Construction Ltd. and Ors., First Appeal No. 410 of 2018, decided on 16.04.2018.


In the facts of the present case, the Appellant/Complainant was the sole proprietor of M/s. F.F. Handicrafts. The appellant purchased a commercial shop in a project of Respondent No. 1 in the name of M/s F.F. Handicrafts with a view to expand her business. The expected time for completion of the said project was represented to be 18 months. However, when the Respondent No. 1 failed to complete construction and deliver possession of the said property within the stipulated time, the Appellant preferred a claim before the Respondents to refund among others, the principal amount as also the interest but her requests to this effect evoked no response. Consequently, a consumer complaint was preferred by the Appellant before the State Commission seeking refund of the principal amount long with interest thereon.

The primary objection to the complaint of the appellant was that the unit was booked in the name of M/s F.F. Handicrafts and was therefore, meant to be utilised for commercial purposes and does not fall under the ambit of Section 2(1) (d) of the Consumer Protection Act, 1986. The said complaint was dismissed.


NCDRC noted that the Complainant was already self-employed owning her own business in the name of M/s. F.F. Handicrafts, which she had been operating from shop, E-137, Sector-55, Noida, (U.P.) and not from her residence, i.e. K-35, Batla House, Zamia Nagar, Okhla, New Delhi-110020. Also, the Appellant had booked the said unit in the name of her business for enhancement/expansion of her existing business. Hence, the Appellant/Complainant cannot be covered under the Explanation given in Section 2(1)(d) of the Consumer Protection Act, 1986, by which the only exception is for a person who has bought goods and used by him and services availed exclusively for the purpose of earning his livelihood by means of self-employment. In the present Complaint, the Appellant/Complainant being the sole proprietor of M/s. F.F. Handicrafts and operating the said firm from E-137, Sector-55, Noida, (U.P.) had booked the said unit to enhance/expand her business and for better opportunity and prospects. Therefore, the NCDRC, concurring with the State Commission, held that the appellant could not be termed as a “Consumer” for the purpose of the Act.