Corporate self‑use of enterprise software is a “commercial purpose”: Supreme Court’s profit‑nexus test and the narrow scope of the self‑employment exception — Poly Medicure Ltd. v. Brillio Technologies Pvt. Ltd. (2025 INSC 1314)

Introduction

In M/S Poly Medicure Ltd. v. M/S Brillio Technologies Pvt. Ltd., Civil Appeal No. 6349 of 2024 (arising out of SLP(C) No. 14306 of 2020), decided on 13 November 2025, the Supreme Court of India addressed a recurring question under the Consumer Protection Act, 1986: when does a purchaser of goods or services qualify as a “consumer” and, in particular, does a company buying software for its own internal business processes fall within or outside that definition?

The appellant, Poly Medicure Ltd., a company engaged in import and export of medical devices, bought a licence of “Brillio Opti Suite” software (and paid for additional customized development) to implement an export/import documentation system. Alleging that the software did not function properly, the company filed a consumer complaint seeking refund and interest at 18%. The State Consumer Disputes Redressal Commission, Delhi held the complaint not maintainable, ruling that the purchase was for a commercial purpose and hence the buyer was not a “consumer” under Section 2(1)(d) of the 1986 Act. The National Consumer Disputes Redressal Commission (NCDRC) affirmed. The Supreme Court, by a bench speaking through Manoj Misra, J., dismissed the appeal.

The central issue was whether the appellant, in the context of purchasing a software licence and allied development services for automating its export/import operations, could claim the status of a “consumer” under Section 2(1)(d) of the 1986 Act, especially in light of the Explanation excluding from “commercial purpose” the use of goods/services by a person exclusively for earning livelihood through self‑employment.

Summary of the Judgment

The Supreme Court reaffirmed that although a company is a “person” capable of being a “consumer” under the Act (Karnataka Power Transmission Corporation v. Ashok Iron Works), it will not be a consumer where the goods/services are obtained for a “commercial purpose”.
Applying the “dominant purpose” and “profit‑nexus” test distilled in Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers, the Court held that Poly Medicure’s purchase of a customized software suite to automate export/import documentation and related business functions bears a direct nexus with profit generation and cost‑efficiency and is therefore for a commercial purpose.
The “self‑employment” Explanation to Section 2(1)(d) is confined to goods or services bought and used by an individual to earn his livelihood. It does not extend to corporations that purchase enterprise software to maximize profits by automating business processes (Paras 18, 22).
Harsolia Motors was clarified: the meaningful inquiry is whether the goods/services are directly intended to generate profit; insurance services are generally protective/risk‑transfer and not availed to generate profit, so they can be within the Act even in a B2B context. But automation software used in core business operations is profit‑linked and hence commercial (Paras 25–27).
Appeal dismissed; orders of the State Commission and NCDRC upheld; complaint not maintainable as the appellant is not a “consumer” for the transaction in question.

Detailed Analysis

Statutory Framework and Core Tests

Section 2(1)(d) of the Consumer Protection Act, 1986 defines “consumer” to include persons who buy goods or hire/avail services for consideration, but excludes those who obtain goods for resale or for “any commercial purpose”, and those who avail services “for any commercial purpose”. The Explanation states that “commercial purpose” does not include use by a person of goods bought and used by him or services availed by him exclusively for the purpose of earning his livelihood by means of self‑employment.

The Court applied two key interpretive anchors:

The “dominant purpose” inquiry: What was the predominant objective behind the purchase/hiring — personal consumption or profit generation?
The “profit‑nexus” test: Is there a close and direct nexus between the goods/services and a profit‑generating activity? If yes, the transaction is commercial.

These principles were drawn from Lilavati Kirtilal Mehta Medical Trust and were consistently applied across authorities cited.

How the Court Applied the Law to the Facts

The software suite “Brillio Opti Suite” was customized to support Poly Medicure’s live business functions, including export documentation sets, clubbing/splitting SAP sales documents, bill of exchange processes, FIRC, CHA charges tracking, duty drawback computations, LC management, container tracking, ECGC policy management, export credit handling, and forex forward cover management. These are functions that:

Directly support the core export/import business;
Reduce transaction costs, improve process precision, and increase speed and compliance;
Collectively enhance efficiency and profitability.

The Court held that automating such processes is not merely for comfort or administrative convenience; it has a direct nexus with the company’s profit generation. Therefore, the acquisition was for a commercial purpose. Crucially, the fact that the software was for the buyer’s own internal “self‑use” as an end‑user did not convert the transaction into a non‑commercial one when the user is a company and the use is in its business (Paras 20, 22, 27).

Precedents Cited and Their Influence

1) Karnataka Power Transmission Corp. v. Ashok Iron Works Pvt. Ltd. (2009) 3 SCC 240

The Court reaffirmed that “person” in Section 2(1)(m) of the 1986 Act is inclusive and covers juristic entities, including companies. Thus, a company can, in principle, be a “consumer” if it satisfies the non‑commercial use condition. This cleared the way for substantive analysis of whether the particular purchase was for a commercial purpose.

2) Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers (2020) 2 SCC 265

The Supreme Court extracted and applied Lilavati’s broad principles:

Commercial purpose is fact‑dependent; ordinarily includes manufacturing/industrial activity or B2B transactions;
The purchase must have a close, direct nexus with profit‑generating activity to be commercial;
Neither the identity of the purchaser (individual vs company) nor the transaction value is conclusive; the dominant purpose matters;
If the dominant purpose is personal use/consumption unlinked to commercial activity, the “livelihood by self‑employment” carve‑out need not be invoked.

Using these principles, the Court focused on the intrinsic link between enterprise software functions and Poly Medicure’s revenue‑earning operations.

3) Sunil Kohli v. Purearth Infrastructure Ltd. (2020) 12 SCC 235

Sunil Kohli recognized that individuals who purchase property to earn their livelihood by self‑employment can be consumers. The present Court distinguished it, emphasizing that Poly Medicure is a company already engaged in business and it bought the software to expand and automate operations — not to commence individual self‑employment. Hence, the “self‑employment” Explanation did not apply (Paras 19–20).

4) Virender Singh v. Darshana Trading Co. (SLP(C) No. 5510/2020, decided 18.03.2025)

The Court relied on its recent decision distinguishing Paramount Digital Colour Lab v. Agfa India Pvt. Ltd. While two unemployed graduates buying a machine for their own self‑employment could qualify as consumers, a person already running a business who purchases machinery to expand it, employing others to operate it, cannot invoke the “self‑employment” exception. That logic was extended to Poly Medicure: a company using enterprise software to augment business efficiency and profit falls squarely outside the exception (Paras 21–22).

5) National Insurance Co. Ltd. v. Harsolia Motors (2023) 8 SCC 362

Harsolia clarified that services availed to indemnify risk (e.g., insurance) are not availed with a dominant aim to generate profit and hence are not for a commercial purpose, even in a B2B setting. The present Court carefully read Harsolia, highlighting that:

What matters is whether there is a profit nexus (Para 25);
Examples like office refrigerators/air‑conditioners illustrate goods for comfort with no direct profit nexus;
Insurance is protective, not profit‑generating, and thus not commercial in purpose (Paras 26–27).

The Court cautioned against treating Harsolia’s illustrations as ratio and reaffirmed the profit‑nexus test as determinative.

6) Other authorities referenced

Laxmi Engineering Works v. P.S.G. Industrial Institute (1995) 3 SCC 583 and Cheema Engineering Services v. Rajan Singh (1997) 1 SCC 131: foundational cases on the scope of “commercial purpose” and the self‑employment carve‑out, often turning on fact‑intensive inquiries.
Paramount Digital Colour Lab v. Agfa India Pvt. Ltd. (2018) 14 SCC 81: exemplifies when individuals genuinely purchasing for self‑employment may be consumers; distinguished in Virender Singh and, by extension, here.
S hrikant G. Mantri v. Punjab National Bank (2022) 5 SCC 42: invoked by the respondent for the principle that services availed for commercial/business purposes (especially financial services facilitating business) fall outside the consumer definition.
Illustrative references (from Harsolia) to Kalpavruksha Charitable Trust and Rajeev Metal Works emphasize that purchases integral to revenue‑earning activities are commercial; purchases for comfort or non‑revenue objectives are not.

Legal Reasoning: Why the Court Reached This Result

Statutory text: The Court began with the structure of Section 2(1)(d), noting the explicit exclusion for “commercial purpose” purchases in both goods and services clauses, and the narrow “self‑employment” Explanation (Paras 11–12).
Corporate capacity v. purpose: While a company is a “person” capable of being a consumer (Karnataka Power), status depends on the purpose of the transaction. Corporate “self‑use” does not equate to “self‑employment” (Paras 14, 18).
Dominant purpose and profit nexus: Using Lilavati’s framework, the Court evaluated whether the software was directly tied to profit generation. It found a close, direct nexus: the software automated profit‑critical export/import processes and financial controls (Paras 15–17, 27).
Self‑employment exception narrowed: The Explanation protects individuals using goods/services to earn their livelihood through personal work. It does not extend to companies seeking to organize/scale operations to maximize profits (Paras 18, 22).
Harsolia harmonized: The Court explained that while business‑to‑business transactions are not automatically excluded, the decisive factor is the purpose. Insurance — a risk‑transfer mechanism — typically lacks a profit nexus; enterprise software aimed at cost reduction and profit maximization does not (Paras 25–27).

Impact and Implications

1) Enterprise software, automation tools, and SaaS/cloud subscriptions

Corporations purchasing software (licenses or SaaS) to automate core business processes, optimize supply chains, manage finance/forex, or enhance compliance are unlikely to qualify as “consumers” when they seek remedies under consumer law for defects/deficiencies. Such disputes belong in civil courts or arbitration (as per contract), not consumer fora.

2) Narrowing the “self‑employment” door

The livelihood-by-self‑employment Explanation is reaffirmed as an individual‑centric shield. Micro‑entrepreneurs and sole proprietors personally operating equipment may still be consumers, but companies — even small or closely‑held ones — cannot rely on this exception when purchases are to expand or automate business operations for profit.

3) Business‑to‑business (B2B) is not per se excluded — purpose test prevails

B2B transactions may still fall within consumer protection where the purpose is not profit‑generating (e.g., certain protective services like insurance, or goods for comfort with no direct profit nexus). The Court’s illustrations and Harsolia’s rationale provide a narrow corridor for such cases.

4) Contracting practices and litigation strategy

Vendors of enterprise solutions should expect consumer fora to decline jurisdiction in B2B performance disputes; arbitration clauses will gain prominence.
Buyers must calibrate their litigation strategy accordingly (civil suits/arbitration), and cannot assume consumer fora as a low‑cost, speedy alternative for enterprise procurement disputes.
Evidence of dominant purpose will be key. Contracts, functional specifications, and business cases showcasing operational efficiency and profit linkages will weigh against consumer jurisdiction.

5) Continuity under the Consumer Protection Act, 2019

Although the case applies the 1986 Act, the 2019 Act’s definition of “consumer” and its Explanation are substantially similar. The Court’s “profit‑nexus” and “dominant purpose” approach therefore remains highly persuasive for complaints filed under the 2019 framework.

Complex Concepts Simplified

Consumer (under the 1986 Act): A person who buys goods or hires services for consideration, but not for resale or “any commercial purpose”. Includes beneficiaries of use with the buyer’s approval.
Commercial purpose: Purchases or services with a close, direct nexus to profit‑generating activities, such as manufacturing inputs, machinery to expand business, or enterprise software automating revenue‑earning operations.
Dominant purpose test: The primary objective behind the transaction governs — profit generation vs personal consumption/comfort/protection.
Profit‑nexus: A practical link between the item/service and the earning of income/profits. If the link is close and direct, the purpose is commercial.
Self‑employment exception: A narrow carve‑out; protects individuals who personally use the goods/services to earn their livelihood (e.g., a tailor buying a sewing machine to work himself). It does not cover companies automating or scaling business operations.
B2B vs B2C: Consumer fora are designed for consumer disputes. B2B cases are not automatically excluded, but only those lacking profit‑nexus (e.g., insurance as risk protection) may qualify.

Practical Checklist: Will the buyer qualify as a “consumer”?

Who is the buyer? An individual or a company? (Companies can be “persons”, but identity is not decisive.)
What is the dominant purpose? Is it personal consumption, comfort, or protection? Or is it business expansion, efficiency, or revenue generation?
Is there a direct profit nexus? Does the item/service feed into core revenue‑earning processes?
Is the buyer personally operating the item to earn livelihood (self‑employment), or is it deployed within an enterprise employing others?
What do the contract and functional specifications say about intended use (automation, scale, cost reduction, profit maximization vs comfort/protection)?
Are there precedents categorizing similar items as commercial (e.g., industrial machinery, enterprise software) or non‑commercial (e.g., risk insurance, office air‑conditioners)?

Conclusion

Poly Medicure decisively clarifies that a company purchasing enterprise software to automate its business processes is not a “consumer” under the Consumer Protection Act, 1986. The Supreme Court reaffirmed the “dominant purpose” and “profit‑nexus” tests from Lilavati, narrowed the reach of the self‑employment exception to genuine individual livelihood cases, and harmonized Harsolia by confining consumer claims in B2B contexts to transactions lacking a profit nexus (such as risk‑indemnification via insurance).

The judgment is a significant precedent for digital and enterprise procurement disputes: corporate “self‑use” of process‑automation tools remains a commercial purpose. Going forward, businesses should anticipate that performance disputes over enterprise software, hardware, and similar operational tools will be steered away from consumer fora and into civil courts or arbitration, while individuals genuinely purchasing tools for their own livelihood may still find shelter under consumer protection law.

Key takeaways:

Company = “person” but not a “consumer” when the transaction is profit‑linked.
Automation of business processes is a commercial purpose even if the buyer is the end‑user.
The self‑employment exception is individual‑centric; it does not extend to corporate automation.
B2B is not automatically excluded; the decisive inquiry remains the profit‑nexus.
Harsolia survives as a protective‑purpose (non‑profit) exception, notably for insurance.