A legal battle over a ₹10 crore project loan linked to the Rajinikanth starrer Kochadaiyan has led the Supreme Court to rule that businesses availing banking services for profit-driven activities do not qualify as “consumers” under the Consumer Protection Act.
The verdict came in a dispute between Central Bank of India and M/s Ad Bureau Advertising Pvt. Ltd. The company had taken the loan in 2014 for the movie’s post-production, pledging property as collateral. However, after defaulting on payments, its account was classified as a Non-Performing Asset (NPA) in 2015.
Following a one-time settlement, the bank mistakenly flagged the company as a defaulter to CIBIL, leading to financial setbacks, including the loss of an Airports Authority of India contract. Ad Bureau then approached the National Consumer Disputes Redressal Commission (NCDRC), which ruled in its favor, awarding ₹75 lakh in compensation and ordering the bank to rectify its records.
Challenging this decision, the bank argued that the company, having taken the loan for commercial purposes, could not claim protection under consumer law. The Supreme Court agreed, emphasizing that the loan was intended for revenue generation and thus fell outside the Act’s scope.
The Court clarified that the case only addressed whether the company’s complaint was maintainable under consumer law and did not comment on the broader dispute. This ruling reinforces that businesses borrowing funds for commercial gain cannot invoke consumer protection remedies against banks.