{"id":378982,"date":"2026-03-20T17:00:44","date_gmt":"2026-03-20T11:30:44","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=378982"},"modified":"2026-03-24T17:26:56","modified_gmt":"2026-03-24T11:56:56","slug":"sc-on-deposit-interest-commercial-purpose-under-consumer-protection-act","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2026\/03\/20\/sc-on-deposit-interest-commercial-purpose-under-consumer-protection-act\/","title":{"rendered":"Interest earned on deposit by itself doesn\u2019t establish a \u2018commercial purpose\u2019 under Consumer Protection Act: Supreme Court"},"content":{"rendered":"
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Supreme Court:<\/span> In an appeal challenging order of the National Consumer Disputes Redressal Commission (NCDRC), dated 13 March 2023, whereby the consumer complaint of the appellant was dismissed on the ground that the complainant-appellant was not a consumer as per Section 2(1)(d)<\/a> of the Consumer Protection Act, 1986<\/a> (Consumer Protection Act), a Division Bench of Pamidighantam Sri Narasimha and Manoj Misra,*<\/span> JJ., upheld the impugned order, holding that although the reasoning adopted by the NCDRC regarding the commercial purpose of the deposit was not entirely correct, the dismissal of the complaint was nevertheless justified because the dispute involved serious allegations of fraud and disputed facts unsuitable for summary consumer proceedings.<\/p>\n

Factual Matrix<\/h3>\n

In the instant matter, the appellant filed a consumer complaint against respondent alleging deficiency in banking service. The appellant had invested ₹9 crores in a fixed deposit (FR) with the respondent bank for 1 year starting from 28 February 2014, for which a fixed deposit receipt (FDR) was issued, and interest was credited after deduction of TDS.<\/p>\n

Subsequently, the appellant received a communication from the respondent bank stating that an overdraft facility of ₹8.10 crores had been sanctioned against the FDR, which according to the appellant was done without authorization. Suspecting fraud, the appellant lodged a complaint with the Economic Offences Wing and requested the respondent bank to reverse the overdraft entries. The respondent bank refused and later adjusted the maturity value of the FDR towards the overdraft dues and remitted the balance amount.<\/p>\n

The appellant did not accept the adjustment and filed a complaint before the NCDRC seeking refund of the entire deposit with interest and compensation. The NCDRC dismissed the complaint holding that the appellant was not a consumer under Section 2(1)(d)<\/a> of the Consumer Protection Act<\/a> as the deposit had a commercial purpose. Aggrieved, the appellant approached the Supreme Court.<\/p>\n

Moot Points<\/h3>\n
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  1. \n

    Whether a body corporate, while availing services of the respondent 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)<\/a>, Consumer Protection Act<\/a>?<\/p>\n<\/li>\n

  2. \n

    Whether the nature of allegations made in the complaint were such that they took the claim outside the purview of proceedings under the Consumer Protection Act?<\/p>\n<\/li>\n<\/ol>\n

    Court’s Analysis<\/h3>\n