Business Transaction Disputes cannot be tried in Consumer Courts

Tamil Nadu State Consumer Disputes Redressal Commission, setting aside the order of the district forum held that-

Disputes over business transactions – where goods are purchased and services availed for commercial purposes – can’t be tried in a consumer court.”

It also said matters relating to criminal activities, breach of trust and cheating can only be filed before a criminal court.


Mrinal Spinning Mills, Coimbatore, a yarn manufacturer, had supplied goods worth Rs, 9.31 lakh to Sri Ambika Textile and Ramashankar Surgical in Chatrapti town of Virudhunagar district. Lakshmi Traders, the consignee, ordered the goods which were transported by Bannari Amman Transport. However, the goods were not delivered and the investigating report of the insurance company said they had been offloaded at some other place.

A case was filed against the transport company for cheating and against the two firms in Chatrapati town for “instigating the delivery of goods at their desired place.”

He also moved the district forum in Coimbatore asking the parties involved to refund the value of goods.

The district forum, in its verdict, held the transport company responsible and asked it to pay Rs. 9.31 lakh and a compensation of Rs. 50,000/-.


In appeal, the Tamil Nadu State Consumer Dispute Redressal Commissionheld that on the basis of the insurance company’s report it was clear goods had been offloaded at another place at the instructions of the consignee.

Relying upon the decisions of the Supreme Court in Birla Technologies Ltd. versus Neutral Glass and Allied Industries Ltd.[1], in which it is observed as follows: “In case of goods purchased and services hired or availed of for commercial purposes, complaint before Consumer Disputes Redressal Forum is not maintainable”.

Again in Prahlad Sharma Vs. ICICI Lombard General Insurance Co. &Anr.[2]reported in, Supreme Court observed that: “such controversy would require voluminous oral and documentary evidence including cross examination of witnesses and also determination of inter-se liability of OPs to indemnify complainant- Complainant should be relegated to work out his remedy before Civil Court”.

The Forum observed that:-

  1. Disputes over the business transactions involving sale and purchase of good and provision of services cannot be tried in consumer courts.
  2. The matter relating to criminal activities regarding breach of trust, cheating etc., this complaint cannot be tried before the consumer commission.


[1]2011 (1) CPR (SC)

[2]2012 (2) CPR 293 (NC)