Concept of Consumer : Consumer Law


The Oxford dictionary defines a consumer as a purchaser of goods and services. In the words of the Layman, consumer means any person who has purchased movable/immovable property or hires services for various purchases.

Eg.:  Mr. A purchases a T.V. for personal use at home. He is a consumer.

Meaning of ‘Consumer’:-

According to Sec.2 (1) (d) of the Consumer Protection Act, 1986, consumer means:

  • A person who use such goods with the permission of the buyer other than who buys goods for a consideration paid or promised or partly paid or partly promised.
  • A person who buys goods for consideration has been paid or promised or partly paid or partly promised.
  • A person who hires or avails any services for a consideration which has been paid or promised or partly paid or partly promised.
  • A person who is a beneficiary of such services with the approval of the buyers.

Who is not a Consumer?:

A person who obtains goods or services exclusively for commercial purposes does not fall under the definition of consumer- Services obtained free of charge.

An essential consideration to determine consumer:-

  • Goods must have been bought for consideration.
  • There must be a transaction of sale between the buyer and the seller.
  • The sale must be of goods.


  1. Motor Sale Services v. Renji Sebastian, 1991 CPR 158 (Ker):- In this case, the customer had booked a motorbike for consideration but the delivery was a delay and so the court ordered a compensation of Rs. 500 along with the delivery of the bike.
  2. Indian Airline v. N. Singh (1992) C.P.S. 62 NC:- In this case, a metallic wire was found in the food of the passenger, which has injured his gum, a compensation of Rs. 2,000 was awarded for the loss.
  3. Union of India v. S. Prakash 1991 (1) CPR 30:- In this case, it was held that the subscriber of a telephone is also a consumer because he pays rental charges and consumer forum has full jurisdiction to entertain such matters.

A person obtaining goods for resale- Not a Consumer?

  • Resale implies that the goods are bought for selling.
  • Commercial purpose covers those case which relates to goods other than those for resale.
  • Goods bought for reselling are not consumer goods.

Using goods for self-consumption employment:

  • If goods are bought for commercial purpose. But:
  • Use by the buyer himself.
  • Exclusively for earning a livelihood.
  • Use for self-employment.

Then, it is not the intense or commercial purpose and a person is a consumer. This is an exception to the general rule that the buyer of commercial goods is not a consumer.

  • Laxmi Engineering Works v. P.S.G Industrial Institute AIR 1995 SC 428:- It was held that a person who buys goods and uses them exclusively for earning his livelihood by means of self-employment is a consumer.

Using goods without the approval of the buyer:

  • Goods at times used by family relatives and friends.
  • Therefore, the person making actual use of goods may come across defects in the goods.
  • So, the laws believe the uses of goods to be consumer although they have not purchased it.
  • Dinesh Bhagat v. Bajaj auto Ltd. (1992) III CPJ 274: In this case, a scooter was purchased by a friend of a complainant and was used by the complainant from the date of purchase. The complainant faces the problem and sues the seller, he was the user of the goods. He was a consumer under the act.

A person obtaining goods are bought for further selling commercial purpose cause those other than goods resale, so the law believes that goods bought for resale are not falling under the definition of consumer.

  • Prior to 1993, the definition of the term consumer did not include commercial purpose.
  • The post-1993 commercial purpose has added to the definition of sec. 2(1) (d).


  1. Pushpa Meena v. Shah Enterprise Ltd. (1991) 1 CPR 229:- In this case, a Jeep was purchase to the sum as a taxi in Rajasthan State Commission held that since the objective of the purchase was to earn profits. He was not a consumer.
  2. Stealing Computed Ltd. v. P.R. Keetty (1996) I C.P.S. 118 NC:- A computer has purchased for personal use but later on it was used by the office staff for business and it encountered problems dismissing the complaints the national commission held that the purchases were not a consumers as the goods were mainly being used for commercial purpose.

The consumer of Service:-

A person obtaining goods for resale according to Sec. 2 (1) (a) of the service means service of any description made available to potential users:

  • Which is not of free of charge.
  • Which is not under a contract of personal service

Services must be hired or availed:-

  • The term hired means to process services at a price.
  • It also means to avail or use.

Eg:  A goes to a doctor to get himself treated for fracture. A is hiring the services of a doctor. A is a consumer.


  1. Lucknow Development Authority v/s M.K. Gupta, AIR 1994 SC 787:- It was held in this case that the term ‘service’ applies to any service made available to potential users.
  2. P. Goel v. Collector of Stamps (1995) III CPR 6854 (SC):- It was held in this case that a govt. official discharging his duty as a functionary of the state can’t be said to be rendering service under the law and such complaints about non-performance of duty are to be dismissed.

Consideration must be paid or payable:-

  • Consideration is necessary for hiring or availing services.
  • Payment of the same can, however, be in any number of instalments.
  • If services are rendered free of charge then the person availing those is not a consumer.

Eg. – A hires an advocate to fight the case of his brother who is accused of murder and promises to pay a fee monthly. A is a consumer.


  1. N. Rao v/s Union Bank of India:- It was held that when a fixed deposit receipt was to apply and the same was delay court awarded compensation as banking services or hire for consideration.
  2. P. Jain v/s Sharda India Airlines 1995 III CPJ 212:- It this case chicken curry mistakenly served an apology was tendered. The court was held that since there was physical injury and in the absence of men, no compensation was allowed.
  3. Joshna v/s The O.G. Airforce Naval Housing Board (1991) II CPJ 37:- In this case, it was held that housing boards establish to promote suitable services free of charge can’t be held liable for deficiency in services.
  4. Ram Koli v/s Delhi Administration (1991) I CPJ 309:- It was held in this case that sterilization operation is done free of cost and incentive is paid to those who take benefit than the person availing the facility is not a consumer.

Note:- Direct and Indirect taxes paid to the state by a citizen is not payment for services rendered.

The beneficiary of Services:-

  • When a person hires services, he may hire it for himself or any other person.
  • In cases like above the beneficiary of such services is also a consumer.

Eg.: A takes his son B to the doctor C for his treatment. Here A is hirer and B is the beneficiary. Both A and B are consumers according to the Consumer Protection Act.


  • Scope of Sec. 2 (1) (d) is very wide.
  • However, only limited persons are a consumer.
  • There must always be a nexus between the user of goods and the purpose for which they are being used.

Third Party Beneficiary Rights:


Privity of contract means, that a part can’t claim damages in a contract in which he is not a party. However, the concept is criticized on the ground that certain contracts are made for the benefits of the third party.

Historical Overview:

The rule of privity of contract developed only in the mid-19th century. Where 3rd parties can’t enforce a contract to which they are parties.


  1. Tweddle v/s Atkinson (Eng. report) (1861) 121 ER 764:- It was held that the third party beneficiary can’t claim compensation for a contract between the buyer and the seller.
  2. Dunlop Pneumatic Tyre Co. Ltd. v/s Selfridge and Company:- It was held that only a party to a contract who had provided consideration can sue for deficiency in service.


If a 3rd party gets a benefit under a contract he can’t go against the parties to contract. Manufacturer à Distributer à Retailer à Consumer. Privity now being a third party, the consumer can’t directly sue the manufacturers but can do so indirectly.

  • Donoghue v/s Stevenson (1883) QBD 503:- Wherein a bottle of ginger beer was defective and although it was purchased by the friend of the plaintiff. She was awarded compensation as it was the duty of the manufacturer to take reasonable care.

Thus, it is expedient to note that even though a person has not paid any consideration but he is entitled to compensation as beneficiaries.

Eg. of Beneficiary of Services:

A take his mother M to doctor J for a treatment. Here, A and M both are consumers and either can sue for the deficiency in services.


It is important to note that even though a person was not taking any consideration. He is entitled to compensation as beneficial. It is thereby inferred that third parties also have a right to claim compensation in certain exceptional circumstances.


The concept of the complaint is defined under section 2 (1) (c) and it means any obligation made in writing by a complainant against deficiency, defect of service and goods.

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