Bank deposits not always ‘commercial purpose’: Supreme Court holds FDR interest alone does not exclude consumer status under Consumer Protection Act

Case Name: Sant Rohidas Leather Industries and Charmakar Development Corporation Ltd. v. Vijaya Bank
Citation: 2026 INSC 264
Date of Judgment/Order: 19 March 2026
Bench: Justice Pamidighantam Sri Narasimha and Justice Manoj Misra

Held: The Supreme Court held that mere placement of funds in a bank deposit earning interest does not automatically amount to a “commercial purpose” under Section 2(1)(d) of the Consumer Protection Act, 1986, and a depositor may still qualify as a consumer depending on the dominant purpose of the transaction. However, where the dispute involves serious allegations of fraud, forgery, or disputed pledge of fixed deposit receipts, such issues fall outside the scope of summary consumer proceedings and must be adjudicated before appropriate civil or criminal forums.

Summary: The appellant, a government undertaking, placed INR 9 crore in a fixed deposit with the respondent bank. Subsequently, it discovered that an overdraft facility had allegedly been sanctioned against the FDR without its consent, and the maturity proceeds were adjusted by the bank against the said overdraft. The appellant alleged fraud and sought recovery through a consumer complaint, which was dismissed by the National Consumer Disputes Redressal Commission on the ground that the transaction was for a commercial purpose.

The Supreme Court examined the definition of “consumer” and clarified that the test is the dominant purpose of the transaction, not merely the fact that interest is earned. It held that banking services such as deposits may serve multiple purposes including safekeeping or statutory compliance, and earning interest alone does not establish a commercial purpose. However, the Court noted that if deposits are used to leverage credit facilities for business, the transaction may assume a commercial character. In the present case, there was a serious factual dispute regarding whether the FDR had been pledged and whether fraud had been committed. The Court held that such issues involving allegations of forgery, criminal conduct, and disputed contractual arrangements cannot be adjudicated in summary consumer proceedings and require detailed evidence before civil or criminal courts.

Decision: The Supreme Court dismissed the appeal, upheld the dismissal of the consumer complaint, clarified that the reasons of the NCDRC were partly incorrect, and granted liberty to the appellant to pursue appropriate remedies before competent civil or criminal forums, while disposing of all pending applications without costs.