Consumer
Under Section 2(7) of the Consumer Protection Act, 2019, a person who buys goods or hires or avails of services for consideration, including approved users and beneficiaries, but not for resale or commercial purpose.
Explained
Section 2(7) of the Consumer Protection Act, 2019 defines a consumer in two limbs. Under clause (i), a consumer is a person who buys any goods for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, and includes any user of the goods with the buyer's approval. Under clause (ii), a consumer is a person who hires or avails of any service for such consideration, and includes any beneficiary of the service when it is availed of with the approval of the person who hired it.
Both limbs carry exclusions. A person who obtains goods for resale or for any commercial purpose is not a consumer, and a person who avails of a service for any commercial purpose is not one either. Explanation (a) narrows the exclusion: commercial purpose does not include use by a person of goods bought and used by him exclusively for earning his livelihood by self-employment. Explanation (b) brings in transactions made offline or online through electronic means, teleshopping, direct selling or multi-level marketing.
Consideration is essential. A service rendered free of charge to everyone is outside the definition. In Indian Medical Association v. V.P. Shantha (1995), decided under the 1986 Act, medical services for payment were held to be service, while services free to all patients were excluded; where some patients pay, those treated free are also consumers. In Spring Meadows Hospital v. Harjol Ahluwalia (1998), both the parents who hired a hospital's services and the child who benefited were held to be consumers. In Lucknow Development Authority v. M.K. Gupta (1993), an allottee of housing from a statutory authority was held to be a consumer of a service.
Examiners test the commercial purpose exclusion and its livelihood exception, the inclusion of users and beneficiaries, online purchases, and the position of patients and home buyers. The earlier definition was in Section 2(1)(d) of the Consumer Protection Act, 1986.
What the law says
Section 2, Consumer Protection Act
(7) “consumer” means any person who—
(i) 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
(ii) 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 and 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.
Explanation.—For the purposes of this clause,—
(a) the expression “commercial purpose” does not include use by a person of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;
(b) the expressions “buys any goods” and “hires or avails any services” includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing;
Clause (7) defines consumer with its Explanation
Example
For example, a person who buys one auto-rickshaw and drives it himself to earn his living remains a consumer under Explanation (a). A company buying a fleet of auto-rickshaws to let them out on hire buys them for a commercial purpose and is not a consumer.
For the exam
- Two limbs: buyer of goods and hirer or availer of services, for consideration.
- Users and beneficiaries with the buyer's or hirer's approval are consumers.
- Resale or commercial purpose excludes; self-employment for livelihood does not.
- Online, teleshopping, direct selling and multi-level marketing transactions are covered.
- Free services to all are excluded (IMA v. V.P. Shantha, 1995).
409 questions in the Law Maker question bank use this term. Practise Consumer Protection Act, 2019 questions
Judgments
- Indian Medical Association v. V.P. Shantha (1995)Medical services rendered for payment by doctors and hospitals, including free treatment where others pay, are 'service' under Section 2(1)(o) of the Consumer Protection Act, 1986. Services free to all, and service under a contract of employment, are excluded.
- Spring Meadows Hospital v. Harjol Ahluwalia (1998)Parents who hire a hospital's services for their child and the child as beneficiary are both consumers under Section 2(1)(d)(ii) of the Consumer Protection Act, 1986, and each may be awarded compensation for medical negligence.
- Lucknow Development Authority v. M.K. Gupta (1993)Statutory development authorities that allot plots or build houses render 'service' under the Consumer Protection Act, 1986, even before the 1993 amendment, and consumer fora may award compensation for harassment, to be recovered from the officers responsible.
Related terms
- DeficiencyAny fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance of a service, including negligence and deliberate withholding of relevant information (Section 2(11) CPA 2019).
- DefectUnder Section 2(10) of the Consumer Protection Act, 2019, any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard of goods required by law, contract or the trader's claim.
- Unfair trade practiceA trade practice that, to promote the sale, use or supply of goods or services, adopts an unfair method or an unfair or deceptive practice, including those listed in Section 2(47) of the Consumer Protection Act, 2019.
- Product liabilityThe responsibility of a product manufacturer or product seller to compensate for harm caused to a consumer by a defective product or by deficiency in services relating to it (Section 2(34), CPA 2019).
- Unfair contractA contract between a manufacturer, trader or service provider and a consumer whose terms cause significant change in the consumer's rights, such as excessive deposits or one sided termination. Section 2(46) of the CPA, 2019.
Further reading
Checked 6 November 2026. Statutory text is quoted from the Bare Acts library, taken from India Code. See the full glossary.