Vinit Bahri & Anr. v. M/s MGF Developers Ltd. & Anr.

 Leasing a residential flat does not per se amount to ‘commercial purpose’; the service provider bears the burden to prove dominant profit motive to exclude consumer status under s. 2(1)(d) of the 1986 Act.

 

Background

The appellants booked a residential unit in a group housing project in 2005 and executed a Flat Buyer’s Agreement in 2006, stipulating possession within 36 months. Alleging delayed possession, unilateral change in layout, excess demands, and deficiency in fixtures, they filed a consumer complaint in 2017 seeking interest and compensation. The NCDRC dismissed the complaint on the ground that the appellants had leased out the flat after taking possession and therefore were not “consumers”.

 

Issues Framed

Whether leasing out a residential flat ipso facto renders the allottee a non-consumer by attracting the “commercial purpose” exclusion under s. 2(1)(d), Consumer Protection Act, 1986.

 

Court’s Reasoning

1. Meaning of ‘commercial purpose’:
The Court reiterated that “commercial purpose” is not exhaustively defined and must be determined by the dominant intention or dominant purpose of the transaction. The inquiry focuses on whether there is a close and direct nexus between the purchase and a profit-generating commercial activity, relying on LaxmiEngineering Works and Lilavati Kirtilal Mehta Medical Trust.
2. Burden of proof:
Where the service provider invokes the exclusionary clause, the onus lies on the service provider to prove, on a preponderance of probabilities, that the goods/services were obtained for a commercial purpose. A negative burden cannot be placed on the complainant, following ShriramChits (India) Pvt. Ltd.
3. Application to facts:
The mere fact that the appellants leased the flat after possession does not by itself establish that the flat was purchased with a dominant profit motive. No cogent material was produced to show that the purchase was integrally linked to a commercial enterprise or profit-generating activity. Absent such proof, the appellants could not be excluded from the definition of “consumer”.
 

Decision 

The appeal was allowed. The NCDRC’s order dismissing the complaint was set aside, and Consumer Complaint No. 74/2017 was restored for decision on merits in accordance with law. 

 

Ratio 

Leasing of a residential property, without proof that the dominant purpose of purchase was commercial profit, does not attract the “commercial purpose” exclusion under s. 2(1)(d) of the Consumer Protection Act, 1986, and the burden to prove such exclusion lies on the service provider.

 

Case Details

• Citation: 2026 INSC 114
• Decided on: 04 February 2026
• Case Title: Vinit Bahri & Anr. v. M/s MGF Developers Ltd. & Anr.
• Court: Supreme Court of India
• Bench: Prashant Kumar Mishra J. and N.V. Anjaria J.

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