Delhi State Commission: Overdraft Facility Alone Not a “Commercial Purpose”, Restores Consumer Complaint Against HDFC Bank

March 24, 2026 : The Delhi State Consumer Disputes Redressal Commission has allowed an appeal filed by Hans Batra against HDFC Bank, holding that mere availing of an overdraft (OD) facility does not automatically render a transaction “commercial” under the Consumer Protection Act, 1986.

The bench comprising Justice Sangita Dhingra Sehgal and Bimla Kumari set aside the District Commission’s order dated 2 June 2022 and remanded the matter for fresh adjudication on merits.

The dispute arose from fixed deposits (FDs) made by the appellant with Lord Krishna Bank between 2002 and 2006, against which overdraft facilities were availed. Following a series of mergers—first with Centurion Bank and later with HDFC Bank—the appellant alleged that the bank arbitrarily liquidated his FDs and adjusted the proceeds towards alleged overdraft liabilities without authorization, while also failing to provide complete account statements.

The bank, however, contended that the appellant had defaulted on overdraft accounts despite repeated notices, and that the liquidation of deposits was carried out in accordance with applicable terms. It further argued that the transaction was commercial in nature, thereby excluding the complainant from the definition of “consumer.”

Accepting this contention, the District Commission had dismissed the complaint as non-maintainable.

On appeal, the State Commission disagreed, emphasizing that whether a transaction constitutes a “commercial purpose” must be determined on a case-by-case basis. It relied on the Supreme Court’s ruling in Shrikant G. Mantri v. Punjab National Bank, noting that no straightjacket formula applies.

The Commission found that the bank failed to produce any evidence showing that the overdraft facility was used for business or profit-oriented activity. It also reiterated, relying on Kavita Ahuja v. Shipra Estates Ltd., that the burden to prove a transaction is commercial lies on the party asserting it.

Importantly, the Commission held that:

• Availing an overdraft facility against fixed deposits does not, by itself, imply a commercial transaction.
• The purpose of the facility must be examined based on evidence.
• In the absence of proof of commercial use, an individual cannot be denied consumer status.

It further observed that the District Commission erred in dismissing the complaint solely on maintainability without examining the merits or the underlying evidence, including gaps in the bank’s historical records acknowledged before the Banking Ombudsman.

Accordingly, the State Commission restored the complaint and directed the parties to appear before the District Commission for adjudication on merits.

Case Details:

Forum: Delhi State Consumer Disputes Redressal Commission

Case Title: Hans Batra v. HDFC Bank

Case No.: First Appeal No. 143/2022

Decision Date: 24 March 2026