Consumer commissions cannot adjudicate complex allegations of fraud and forgery in summary proceedings.

The Appellant, a Maharashtra State undertaking, deposited ₹9 Crores as a Fixed Deposit Receipt (FDR) with the Respondent Bank in 2014

The Bank subsequently alleged that a loan/overdraft facility of ₹8.10 Crores was sanctioned against the said FDR, which the Appellant contested as a fraudulent transaction, leading to complaints with the Economic Offences Wing and the RBI

In 2017, the Bank closed the overdraft account by adjusting the outstanding balance against the FDR’s maturity value and remitted only the remaining ₹50.58 Lakhs to the Appellant

The Appellant filed a consumer complaint before the National Consumer Disputes Redressal Commission (NCDRC), which was dismissed on the grounds that the Appellant was not a "consumer" under Section 2(1)(d) of the Consumer Protection Act, 1986, as the deposit was made for a "commercial purpose" (earning interest)

The Appellant challenged this dismissal before the Supreme Court.

1. Whether the appellant, a body corporate, while availing services of the Bank to deposit its surplus funds in an interest-bearing term deposit, such as an FDR, could be considered a "consumer" as defined in Section 2(1)(d) of the 1986 Act?

2. Whether the nature of allegations made in the complaint (fraud/forgery) were such that they took the claim outside the purview of summary proceedings under the 1986 Act?

The Court primarily interpreted Section 2(1)(d) of the Consumer Protection Act, 1986, which defines a "consumer" but excludes those who avail services for "commercial purposes"

It relied on Karnataka Power Transmission Corporation v. Ashok Iron Works Pvt. Ltd. to establish that a body corporate falls within the definition of a "person" under Section 2(1)(m)

Regarding "commercial purpose," the Court applied the "dominant purpose" and "direct nexus" tests established in Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers and National Insurance Co. Ltd. v. Harsolia Motors

It further applied the principle from Shriram Chits (India) Pvt. Ltd. v. Raghachand Associates that the burden of proving "commercial purpose" lies on the respondent

Finally, it cited Ravneet Singh Bagga v. KLM Royal Dutch Airlines and City Union Bank Ltd. v. R. Chandramohan to affirm that complex factual disputes involving fraud or tortious acts cannot be adjudicated in summary consumer proceedings.

The Court disagreed with the NCDRC’s reasoning that earning interest on a deposit automatically constitutes a "commercial purpose."

It reasoned that banking services for safekeeping or statutory compliance do not necessarily have a direct nexus with profit generation, even if interest is earned

However, the Court noted that if a deposit is used to leverage credit facilities for business, it assumes a commercial character

In the present case, the Bank set up a defense of a "subsequent contract of pledge" for business credit, which the Appellant claimed was forged

The Court found that determining whether the services were for a commercial purpose was inextricably linked to the truth of the fraud and forgery allegations

Applying the Ravneet Singh Bagga and City Union Bank precedents, the Court held that because the dispute centered on highly complex factual issues of criminal acts (fraud/forgery) and the validity of a pledge, it exceeded the scope of the summary jurisdiction of consumer forums

The Court held that a consumer forum cannot adjudicate complex matters involving allegations of fraud and forgery in a summary manner

The direct answer to Issue (i) is that a corporate deposit is not "commercial" merely due to interest, but may become so if linked to credit leverage

On Issue (ii), the Court held the complaint was not maintainable due to the criminal/tortious nature of the allegations

The Appellant was granted liberty to approach the appropriate civil or criminal court for relief