Who is Consumer and Who is Not a Consumer under Consumer Protection Act, 2019

The Consumer Protection Act (CPA), 2019, is a milestone in Indian legislation designed to protect the interests of consumers in an increasingly complex marketplace. At its core, the Act aims to provide a fast-track grievance redressal mechanism. However, to benefit from this "shield," one must first qualify as a "Consumer."

Section 2(7) of the Act defines a consumer, but just as important is understanding who the law excludes. By drawing a line in the sand, the Act ensures it remains a tool for individual protection rather than a forum for resolving complex commercial or industrial disputes.

Who is a consumer?

A ‘consumer’ is an individual who consumes goods – manufactured by firms or created by nature (air, water, etc.) and services offered by government or firms – hospital, educational institutions, etc. Any individual who purchases products/services for his personal use and not for manufacturing or resale.  Thus, a consumer is a user of goods and services.

Section 2(7) of the Act defines ‘consumer’ as ANY person who:

1. buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
2. hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration  paid or promised, or partly paid partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose.

Beneficiary of Services is also a Consumer

When A hire services from B, may hire it for himself or for any other person. In such a case, the beneficiary (user) of these services is also a consumer.

Example – A takes his son ‘B’ to a doctor for B’s treatment. Here ‘A’ is hirer of services of the doctor and ‘B’ is beneficiary of these services. For the purpose of the act, both A and B are consumers. This is an exception to the rule of Privity of Contract.

Who is NOT a Consumer?

Under the CPA 2019, the definition of a consumer is strictly tied to the concepts of consideration (payment) and purpose. A person is excluded from the definition of a "consumer" if they fall into any of the following categories:

1. Persons Obtaining Goods or Services Free of Charge

The bedrock of the consumer-provider relationship is Consideration. If you receive a product as a gift or avail of a service without any payment (current or promised), you are not a consumer.

Example: A patient treated for free in a charitable hospital where no one is charged cannot sue under the CPA (though they may have remedies under Law of Torts for negligence).

2. Persons Obtaining Goods for Resale or Commercial Purposes

The Act is designed to protect the "end-user." If a person buys goods to sell them again or to use them in a large-scale profit-making activity, they are considered a commercial entity, not a consumer.

Exception (Self-Employment): If a person buys a car to use it as a taxi which they drive themselves to earn a living, they are a consumer. If they buy a fleet of 50 taxis to start a company, they are not.

3. Persons Availing Services under a "Contract of Service"

There is a fine legal distinction between a contract for services and a contract of service:

• Contract for Services: (Consumer Category) You hire a professional (like a doctor or a plumber) to do a job.
• Contract of Service: (Excluded) This refers to a master-servant or employer-employee relationship. An employee cannot sue their employer under the CPA for issues related to their employment.

Relevant Case Laws

To understand the nuances, we must look at how the courts have interpreted these exclusions.

1. Franchise Holder is not a Consumer - In The General Manager, Madras Telephones v. R. Kannan, it was held that a franchise holder is an agent of the principal, not a consumer.
2. Purchase Made for Commercial Purpose, the Complainant was not a Consumer -  In Godrej Computers v. International Data Management Ltd., the purchase of a computer for commercial use disqualified the buyer from being a consumer. Similarly, photocopiers or electronic typewriters bought for business use fall outside the CPA’s protection.
3. Student is not a Consumer - In Chairman, Board of Examination, Madras v. Mohidin Abdul Quadin, the board performing a statutory duty (conducting exams) was not seen as "rendering a service" for a consumer.
4. Teachers Employed in Govt. Aided School/College are not Consumer - In Principal, RSM Inter College v. Smt. Rekha, teachers in govt-aided schools were not considered consumers in the context of their employment/service conditions.
5. Sale of Immovable Property can’t be Subject Matter of Complaint under the CPA - In Ravin Bharti Land Development and Finance Pvt. Ltd. v. Punjab National Bank, it was established that the sale of immovable property (land/buildings) does not typically fall under the CPA, as these are governed by specific property laws (and now RERA).
6. Vehicles Possessed under a Hirer Purchase Agreement, Hirer Complainant would not be a Consumer - In Tata Motors Ltd. v. Sant Bahadur Singh, a person possessing a vehicle under a hire-purchase agreement (where ownership hasn't transferred) was found not to be a consumer in that specific context.
7. Complaint by Wife of a Govt. Servant, she is not a Consumer - In Manoranjan Tiwari v. State Govt. of Rajasthan, it was held that the wife of a government servant (complaining about his service conditions/benefits) does not qualify as a consumer.

One thing is plain and clear from the decided cases that what is important to decide is - Whether a particular good is used for commercial purposes or not. If it is used for commercial purpose(s), the buyer/user is not a consumer, and if it is not - the buyer/user is a consumer.

Summary Table: The "Non-Consumer" Checklist