Shrikant G. Mantri vs. Punjab National Bank
Background
The appellant, a stock-broker, had taken an overdraft facility from a bank (later merged into Punjab National Bank) for his share-trading business, pledging shares as security; the facility was progressively enhanced from Rs. 1 crore to Rs. 6 crore over the years. When the account became irregular after a stock market crash, the bank sold part of the pledged shares in 2002 (allegedly at a low point, causing him loss) and later reached a One Time Settlement with him, after which it issued a "No Dues Certificate" but did not return his remaining pledged shares. The appellant filed a consumer complaint against the bank for deficiency in service, but the National Consumer Disputes Redressal Commission dismissed it, holding that he was not a "consumer" because he had availed the overdraft facility for a "commercial purpose."
Decision Breakdown
The Supreme Court traced the legislative history of Section 2(1)(d) of the Consumer Protection Act, which excludes from "consumer" status anyone who avails goods or services for a commercial purpose, unless the explanation applies: i.e., unless the services were availed "exclusively for the purposes of earning his livelihood by means of self-employment." Applying the tests laid down in earlier precedents (including Lilavati Kirtilal Mehta Medical Trust), the Court held that whether a transaction is commercial depends on the dominant purpose, profit generation versus personal livelihood, and that a business-to-business relationship aimed at expanding profit generally falls outside consumer protection. On the facts, the appellant was already an established stock-broker who took and repeatedly enhanced the overdraft facility specifically to expand his trading business and profits, making it a purely business-to-business relationship with the bank, not a service availed exclusively for earning a basic livelihood through self-employment. The Court therefore upheld the Commission's finding that he was not a "consumer" under the Act and dismissed the appeal, while noting he remained free to pursue his grievance in an appropriate forum (such as a civil court).
Lesson Learnt
The consumer protection forums are meant for genuine consumer grievances, not commercial or business disputes: a person who avails a bank's services (like an overdraft) to expand an already-existing profit-making business, rather than exclusively to earn a basic livelihood through self-employment, cannot invoke the Consumer Protection Act and must instead seek relief through ordinary civil remedies.