Commercial Transactions Are Outside The Purview Of Consumer Protection Act: Supreme Court

The Supreme Court of India, on April 5, held that commercial transactions are outside the purview of the Consumer Protection Act 1986.

Bench comprising Justice Vikram Nath and Justice Satish Chandra Sharma held that commercial disputes cannot be decided in summary proceeding under the Consumer Protection Act 1986.

The instant appeal was preferred against an order passed by the National Consumer Disputes Redressal Commission whereby the revision petition was dismissed.

Brief facts 

The respondent no. 1 had filed a complaint before the District Commission. It was claimed in the complaint that an investment of Rs. 5 lakh was made whose premature payment was denied to the complainant. This compelled him to issue a notice. Later on, a complaint was filed before the District Commission. Issues with regards to the Partnership Act arose in the said dispute. It was contended that the dispute was not maintainable in view of Section 63 of the Indian Partnership Act 1932.

The complaint was, however, allowed by the District Commission.

The State Commission set aside the order passed by the District Commission and remitted the matter back to it. The District Commission, once again, allowed the complaint. In appeal, the State Commission, once again remitted the matter back to the District Commission. The District Commission, for the third time, allowed the complaint. The appeal to the State Commission, came to be dismissed.

Thereafter, a revision petition was preferred before the NCDRC which was also dismissed.

What the Supreme Court held?

The Supreme Court held that commercial disputes cannot be decided in summary proceedings and the appropriate remedy would lie before the Civil Court. The complaint was held to be non maintainable.

The Court also reiterated that legal heirs of a deceased partner do not become liable for any liability of the firm upon the death of the partner.

2024 INSC 276