Borrower Not a Consumer: The Supreme Court ruled that a borrower taking a loan for profit-generating activities doesn’t qualify as a "consumer" under the Consumer Protection Act.
By Aniket Chakraborty
Mar 1, 2025
Business-to-Business Transaction: The Court emphasized that the loan was a commercial transaction, making the complaint against the bank non-maintainable.
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Case Background: Ad Bureau Advertising Pvt Ltd filed a complaint against Central Bank of India for wrongly reporting it as a defaulter to CIBIL.
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Loan for Film Production: The ₹10 crore loan was taken for the post-production of Rajinikanth’s film Kochadaiyan, which later became irregular.
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One-Time Settlement: Ad Bureau settled the loan for ₹3.56 crore but claimed reputational damage due to being marked as a defaulter.
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Dominant Purpose Test: The Court focused on the loan’s dominant purpose, concluding it was for profit generation, not self-use.
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Precedent Cited: The judgment referenced earlier rulings, including Shrikant G. Mantri vs. Punjab National Bank, to support its decision.
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No Consumer Protection: The Court clarified that commercial loans fall outside the scope of the Consumer Protection Act.
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Maintainability Issue: The ruling addressed only the maintainability of the complaint, not the merits of the dispute.
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Reputational Damage Claim: Ad Bureau’s argument of reputational harm due to CIBIL reporting was dismissed as the transaction was deemed commercial.