Latest JudgementConsumer Protection Act, 1986

M/S CITICORP FINANCE (INDIA) LIMITED Vs. SNEHASIS NANDA, 2025

The complainant did not qualify as a "consumer" under the Consumer Protection Act, 1986

Supreme Court of India·21 March 2025

Court

Supreme Court of India

Date of Decision

21 March 2025

Citation

Acts / Provisions

Section 2(d), Section 2(1)(g), Section 12 of Consumer Protection Act, 1986

Facts of the Case

The respondent (complainant) purchased a flat through a housing loan from ICICI Bank. The borrower, Mubarak Vahid Patel, wanted to buy the flat for Rs. 32,00,000/- and entered into a loan agreement with Citicorp Finance.
As the flat was mortgaged to ICICI Bank, the borrower requested Citicorp Finance to pay Rs. 17,80,000/- directly to ICICI Bank to release the mortgage.
The complainant sought Rs. 13,20,000/- (balance sale consideration) from Citicorp Finance, arguing that there was a tripartite agreement involving him, the borrower, and Citicorp Finance, which required the appellant to pay the full sale amount.
The National Consumer Disputes Redressal Commission (NCDRC) directed Citicorp Finance to refund Rs. 13,20,000/- along with interest and litigation costs.
Citicorp Finance appealed to the Supreme Court.

Whether the complainant can be regarded as a "consumer" under the Consumer Protection Act, 1986?
Whether there was privity of contract between the respondent and Citicorp Finance, making them liable to pay the balance sale consideration?

The Supreme Court overturned the NCDRC's ruling, stating that the complainant (respondent) did not have privity of contract with Citicorp Finance, and thus could not be termed a "consumer" under the Consumer Protection Act.
The Court noted that the sale transaction was between the complainant and the borrower, not involving Citicorp Finance directly.
The loan sanctioned to the borrower was Rs. 23,40,000/-, and there was no contractual obligation on Citicorp Finance to pay the full sale consideration of Rs. 31,00,000/- to the complainant.

The complainant did not qualify as a "consumer" under the Consumer Protection Act, 1986, as there was no privity of contract between him and Citicorp Finance.
The NCDRC’s decision was set aside, and the appeal by Citicorp Finance was allowed.

The Supreme Court emphasized the importance of privity of contract in determining whether a party qualifies as a "consumer." Since the respondent had no direct contract with Citicorp Finance, he could not seek remedies under the Consumer Protection Act.
The Court clarified that even assuming liability on the part of Citicorp Finance, their obligation was limited to paying the loan dues of the respondent to ICICI Bank and not to any additional amount beyond what was specified in the Home Loan Agreement.