Court case(2022) 5 SCC 42

The appellant, a stockbroker, availed of an overdraft facility from the respondent bank for the purposes of his share-broking business, securing it by pledging shares. Disputes arose between him and the bank over the operation and closure of the facility and the bank's dealing with the pledged securities, and he complained to the National Commission under the Consumer Protection Act 1986, alleging deficiency in service. The National Commission dismissed the complaint, holding that he had availed of the bank's services for a commercial purpose and was not a consumer. He appealed to the Supreme Court, contending that he had availed of the service for earning his livelihood.

The Supreme Court dismissed the appeal. Since the 2002 amendment, a person who avails of services for a commercial purpose is not a consumer. The overdraft facility was taken to augment and run the appellant's broking business, whose object is profit; the relationship between him and the bank was a business-to-business relationship. Applying the principles of Laxmi Engineering Works and Lilavati Kirtilal Mehta Medical Trust, the transaction had a close and direct nexus with a profit-generating activity, and the appellant could not claim the self-employment exception. His remedy lay elsewhere.