Consumer: Meaning and Definition under Section 2(7) of the Consumer Protection Act, 2019

The word consumer is the gateway to the entire Act: only a consumer (or someone standing in her shoes) can complain of defects, deficiencies and unfair practices, and every jurisdictional argument begins by testing the complainant against Section 2(7). The definition has two limbs, buying goods and hiring or availing services, one hinge, consideration, two extensions, the approved user of goods and the approved beneficiary of services, one exclusion, resale and commercial purpose, one exception to the exclusion, livelihood by self-employment, and one modern clarification, that online, teleshopping, direct selling and multi-level marketing transactions are fully covered. This note takes each element in turn.

1. The Text of Section 2(7)

Section 2(7), Consumer Protection Act, 2019

'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 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.

2. The Two Limbs: Buying Goods, Hiring or Availing Services

Limb (i) covers the purchaser of goods; limb (ii) covers the person who hires or avails a service. The verbs are broad by design: 'hires or avails of' catches every mode of obtaining a service, engaging a builder, opening a bank account, taking an insurance policy, boarding a train, admitting a patient. A single transaction may involve both limbs, as where a dealer sells goods and undertakes after-sales service. The complaint's ground then follows the limb: a defect relates to goods, a deficiency to service.

3. Consideration: The Hinge

There is no consumer without consideration, but the requirement is generous in form:

Consideration may be paid, promised, or partly paid and partly promised, and may run under any system of deferred payment: instalments, credit, hire purchase, EMIs. A buyer who has paid nothing yet, but is bound to pay, is already a consumer.
Consideration need not flow from the complainant personally; it is enough that the goods or services were obtained for consideration, the user and beneficiary extensions then do the rest.
A service rendered free of charge creates no consumer (Section 2(42) excludes it), but the Supreme Court's gloss in Indian Medical Association v. V.P. Shantha, (1995) 6 SCC 651, endures: where an institution charges some recipients, those served free are also consumers, the paying class subsidises the whole; and a nominally 'free' benefit tied to a paid transaction (a gift with purchase, a free service coupon with a car) rests on consideration and is covered.
Statutory or tax-funded functions rendered without charge (a municipality's general duties) remain outside; services rendered by public bodies for consideration, housing allotment, electricity, telephone, are squarely inside (Lucknow Development Authority v. M.K. Gupta, (1994) 1 SCC 243).

4. Users and Beneficiaries: Consumers by Extension

The definition deliberately reaches beyond the person who paid:

User of goods: any person using the goods with the approval of the buyer is a consumer, the family member driving the car, the spouse using the appliance. The seller cannot answer the buyer and ignore the user whom the defect injured.
Beneficiary of services: any beneficiary availing the service with the approval of the hirer is a consumer. In Spring Meadows Hospital v. Harjol Ahluwalia, (1998) 4 SCC 39, the parents engaged the hospital and the child was the patient: both were consumers, the child as beneficiary, the parents as hirers, and both could claim compensation for their distinct injuries.
Successors: the legal heirs and representatives of a deceased consumer step in as complainants (Section 2(5)(vi)), and an insurance nominee or assignee enforces the policy as beneficiary.

⚠ Key point

The paying customer, the approved user and the approved beneficiary are all consumers; a stranger to the transaction is not. A bystander injured by a defective product outside any such relationship must look to the product liability chapter, where 'complainant' status attaches to the person harmed by the defective product, or to the ordinary law, rather than to Section 2(7).

5. Offline, Online, Teleshopping, Direct Selling and Multi-Level Marketing

Explanation (b) settles what litigation under the 1986 Act had to reason towards: the mode of the transaction is irrelevant. A buyer on an e-commerce platform, a purchaser responding to a teleshopping broadcast, a customer of a direct seller at her doorstep, and a participant buying goods within a multi-level marketing scheme are consumers exactly as a shop customer is. The counterpart duties sit in the Consumer Protection (E-Commerce) Rules, 2020, seller and grievance details, no unfair practices, and in the direct-selling rules; the platform or seller sued is tested under those regimes, but the complainant's status flows from Section 2(7) itself. The Explanation also removes any doubt about digital products and services bought online, software subscriptions, streaming, app purchases, which pair with the definition of e-commerce in Section 2(16) ('buying or selling of goods or services including digital products over digital or electronic network').

6. The Exclusion: Resale and Commercial Purpose

Both limbs exclude acquisition for resale or for a commercial purpose. Resale is simple: the trader who buys stock to sell again protects his interests through contract and the Sale of Goods Act, not this Act. 'Commercial purpose' is the litigated phrase: it excludes goods and services obtained as inputs to a profit-generating activity, the machinery for a factory, the fleet for a transport business, the overdraft for business expansion (Shrikant G. Mantri v. Punjab National Bank, (2022) 5 SCC 42). The tests, the dominant purpose of the transaction and its close and direct nexus to profit generation (Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers, (2020) 2 SCC 265), and the livelihood by self-employment exception in Explanation (a), the tailor's machine, the driver's taxi, are examined in full in the next note. Two boundary rulings belong here: an insurance claim by a commercial entity is not for a commercial purpose, the policy being for indemnity rather than profit generation (National Insurance Co. v. Harsolia Motors, (2023) 8 SCC 362); and a prospective allottee of company shares was held not a consumer, no goods having been bought and no service hired at the application stage (Morgan Stanley Mutual Fund v. Kartick Das, (1994) 4 SCC 225).

7. The Definition in Operation

Reading the clause as a checklist resolves most disputes at the threshold. Ask, in order: is there a person (which includes firms, companies and associations, Section 2(31))? Were goods bought or a service hired or availed, offline or online? Was there consideration, paid, promised or deferred? Is the complainant the buyer or hirer, or an approved user, beneficiary or heir? And is the acquisition disqualified as resale or commercial purpose, and if so, rescued by the self-employment exception? A complainant who passes is a consumer whatever the seller's size, sector or public character; one who fails is outside the Act however genuine the grievance, and must sue elsewhere.

⚠ Note

The professions mark the definition's current frontier: services of advocates are outside the Act (Bar of Indian Lawyers v. D.K. Gandhi, 2024), and the inclusion of medical services settled by V.P. Shantha since 1995 stands referred for reconsideration by that judgment, though it continues to bind until a larger Bench decides.

8. Related Topics and Provisions

Commercial purpose and the self-employment exception (Topic 6): the exclusion's case law in full
Complainant (Topic 7) and complaint (Topic 8): who sues, and on what grounds
Goods (Topic 10) and service (Section 2(42)): the subject matter of the two limbs
Section 2(16) and the E-Commerce Rules, 2020: the online marketplace's duties
Chapter VI, product liability: the route for persons harmed beyond the buyer's circle