Supreme Court Quarterly Digest 2026 - Consumer Law

Consumer Law - Supreme Court Quarterly Digest Jan - Mar, 2026 Consumer Protection Act, 1986; Section 2(1)(d) and 2(1)(g) — Maintainability of Complaint — Commercial Purpose vs. Banking Service — Summary Proceedings — Fraud and Forgery - Commercial Purpose and Bank Deposits - The Supreme Court held that the mere earning of interest on a Fixed Deposit Receipt (FDR) does not automatically categorize the banking service as being for a "commercial purpose." - Parking surplus funds for safe custody or statutory compliance is not reflective of a commercial intent - if a deposit is made specifically to leverage credit facilities for business augmentation, it would have a direct nexus with profit-generating activity and thus fall under "commercial purpose." Sant Rohidas Leather Industries v. Vijaya Bank, 2026 LiveLaw (SC) 267 : 2026 INSC 264 Consumer Protection Act, 1986; Section 2(1)(d) - Statutory Interpretation - Definition of "Consumer" - Commercial Purpose - Onus of Proof - The Supreme Court set aside the NCDRC's dismissal of a consumer complaint, holding that the mere act of leasing out a residential flat does not, by itself, classify the purchase as being for a "commercial purpose" – Noted that the onus of proving that a complainant falls within the exclusion clause of Section 2(1)(d) (i.e., that the goods or services were obtained for a commercial purpose) rests squarely upon the service provider and not the complainant - This burden must be discharged based on a "preponderance of probabilities". Vinit Bahri v. Mgf Developers Ltd., 2026 LiveLaw (SC) 117 : 2026 INSC 114 Consumer Protection Act, 1986 - Dominant Purpose Test - To exclude a person from the definition of a 'consumer', it must be proved that the dominant intention or purpose behind the purchase was to facilitate profit generation through commercial activity, showing a close and direct nexus between the transaction and such profit-generating activity - The mere purchase of immovable property, or even multiple units, does not ipso facto attract the exclusion clause unless a commercial dominant purpose is established – Appeal allowed. [Relied on Lilavati Kirtilal Mehta Medical Trust vs. Unique Shanti Developers and Others (2020) 2 SCC 265; Shriram Chits (India) Private Limited vs. Raghachand Associates (2024) 9 SCC 509; Laxmi Engineering Works vs. P.S.G. Industrial Institute (1995) 3 SCC 583; Paras 11-17] Vinit Bahri v. Mgf Developers Ltd., 2026 LiveLaw (SC) 117 : 2026 INSC 114 Consumer Protection Act, 1986 – Section 14 – Award of Interest beyond Contractual Terms – Supreme Court rejected the appellant's contention that compensation should be restricted to the nominal rate (Rs. 10/- per sq. ft.) specified in Clause 10(c) of the Flat Buyer Agreement - It held that where a clause is found to be unfair, one-sided, or oppressive especially when compared to the high interest (24% p.a.) charged to consumers for defaults—consumer fora are not bound to mechanically enforce it and may award higher interest to prevent manifest injustice. [Paras 15 - 18] Parsvnath Developers Ltd. v. Mohit Khirbat, 2026 LiveLaw (SC) 178 : 2026 INSC 170 : AIR 2026 SC 1101 Consumer Protection Act, 1986 – Sections 13 and 22 – Procedure and Evidence – Applicability of Indian Evidence Act – Held that the Indian Evidence Act (now Bharatiya Sakshya Adhiniyam) is not strictly applicable to Consumer Forums, the Principles of Natural Justice must be followed - If a party seeks to cross-examine a witness or expert whose affidavit is on record, the Commission should evolve a procedure to permit such cross-examination—via written questions, video conferencing, or a court-appointed Commission to ensure fair play. ITC Limited v. Aashna Roy, 2026 LiveLaw (SC) 129 : 2026 INSC 135 : AIR 2026 SC 860 Consumer Protection Act, 1986 – Sections 2(1)(g), 2(1)(o), 2(1)(r), and 14 – Housing Construction and Delay in Possession – Held that housing construction falls within the ambit of "service" under Section 2(1)(o), and failure to deliver possession within the stipulated period constitutes "deficiency" under Section 2(1)(g) - held that the jurisdiction of consumer fora is statutory and not merely contractual; therefore, one-sided or oppressive contractual terms cannot curtail the power of the NCDRC to award just and reasonable compensation. [Paras 10 - 18] Parsvnath Developers Ltd. v. Mohit Khirbat, 2026 LiveLaw (SC) 178 : 2026 INSC 170 : AIR 2026 SC 1101 Consumer Protection Act, 1986 - Summary Jurisdiction and Complex Facts – Noted that proceedings before Consumer Fora are summary in nature and not intended to adjudicate complex factual disputes involving criminal or tortious acts like fraud, cheating, or forgery - Where a Bank sets up a subsequent contract of pledge against an FDR which the complainant alleges is fraudulent or based on forged documents such a dispute must be addressed in a...

Supreme Court Quarterly Digest 2026 - Consumer Law

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