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Supreme Court of India Bars Profit-Linked Purchases From Consumer Law Protection

The ruling sets a dominant-intention test excluding transactions tied to profit from consumer protection.

Overview

  • A bench of Justices J.B. Pardiwala and Manoj Misra dismissed Poly Medicure Ltd.'s appeal against Brillio Technologies over an allegedly defective software licence.
  • The Court held that purchases made with the dominant intention of generating profit fall outside the definition of 'consumer' under Section 2(1)(d) of the Consumer Protection Act, 1986.
  • Companies acquiring software to automate or enhance business processes were deemed to be engaging in commercial transactions rather than consumer purchases.
  • The judgment distinguished self-employed individuals, who may qualify as consumers when buying goods or services to earn a livelihood, from corporate entities seeking business efficiency and profit.
  • The decision affirms prior rulings of the Delhi SCDRC (2019) and the NCDRC (2020) and signals that B2B disputes should proceed via contractual, arbitration, or commercial court remedies.