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Published : July 13, 2015 | Author : Lydia Kerketta
Category : Consumer laws | Total Views : 17918 | Rating :

  
Lydia Kerketta
Ms. Lydia has completed B.Sc.(H)Chem, B.Ed., LL.B.(Law Centre 1) and LL.M. (Faculty of Law) from Delhi University. She has done extensive research on Armed Forces (Special Powers) Act, 1958 during her course work in LL.M. She is also NET-JRF qualified in Law. Currently, she is pursuing M.Phil./ Ph.D in International Legal Studies from Jawaharlal Nehru University.
 

Unfair Trade Practice In India

The Constitution of India, in its essay in building up a just society, has mandated the State to direct its policy towards securing that end. Articles 38 and 39 of the Constitution of India, which are part of the Directive Principles of State Policy, mandate the state to direct its policy towards securing: that the ownership and control of material resources of the community are so distributed as to best sub serve the common good; and that the operation of the economic system does not result in concentration of wealth and means of production to the common detriment.

Accordingly, after independence, the Indian Government assumed increased responsibility for the overall development of the country. Government policies were framed with the aim of achieving a socialistic pattern of society that promoted equitable distribution of wealth and economic power. However, even as the economy grew over the years after independence, there was little evidence of the intended trickle-down. Concerned with this, the Government appointed a Committee on Distribution of Income and Levels of Living (Mahalanobis Committee) in October 1960. The Committee noted that big business houses were emerging because of the “planned economy” model practised by the Government and recommended looking at industrial structure, and whether there was concentration. Subsequently, the Government appointed the Monopolies Inquiry Commission (MIC) in April 1964, which reported that there was high concentration of economic power in over 85 percent of industrial items in India.

The MIC observed that big businesses were at an advantage in securing industrial licences to open or expand undertakings. This intensified concentration, especially as the Government did not have adequate mechanisms to check it. Subsequently, the Planning Commission of India, in July 1966, appointed the Hazari Committee to review the operation of the industrial licensing system. The report echoed previous concerns regarding skewed benefits of the licensing system. Following this, the Government, in July 1967, appointed the Industrial Licensing Policy Inquiry Committee, which felt that licensing was unable to check concentration, and suggested that the Monopolies and Restrictive Trade Practices (MRTP) Bill (as proposed by the MIC) be passed, to set up an effective legislative regime.

With this backdrop, the MRTP Act, India’s competition law, was enacted in December 1969 to check concentration of economic power, control the growth of monopolies and prevent various trade practices detrimental to public interest. It came into force in June 1970 and the MRTP Commission, a regulatory authority to deal with offences falling under the statute, was set up in August 1970.

1. Definition of Unfair Trade Practice

UTPs encompass a broad array of torts, all of which involve economic injury brought on by deceptive or wrongful conduct. The legal theories that can be asserted include claims such as trade secret misappropriation, unfair competition, false advertising, palming-off, dilution and disparagement. UTPs can arise in any line of business and frequently appear in connection with the more traditional intellectual property claims of patent, trademark and copyright infringement. Specific types of UTPs prohibited in domestic law depend on the law of a particular country. The World Bank (WB) and the Organisation for Economic Cooperation and Development (OECD) Model Law, for example, lists the following trade practices to be unfair:

#  distribution of false or misleading information that is capable of harming the business interests of another firm;

#  distribution of false or misleading information to consumers, including the distribution of information lacking a reasonable basis, related to the price, character, method or place of production, properties, and suitability for use, or quality of goods; false or misleading comparison of goods in the process of advertising;

#  fraudulent use of another’s trade mark, firm name, or product labelling or packaging;

# unauthorized receipt, use or dissemination of confidential scientific, technical, production, business or trade information.

The dictionary meaning of ‘unfair trade practice’ is: a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive.

2. Definition of Unfair Trade Practice Under Consumer Protection Act, 1986

Section 2(1) (r) of Consumer Protection Act, 1986 also defines the term ‘unfair trade practice’. It reads:

"unfair trade practice" means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely;—

(1) the practice of making any statement, whether orally or in writing or by visible representation which,—

(i) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;

(ii) falsely represents that the services are of a particular standard, quality or grade;

(iii) falsely represents any re-built, second-hand, reno­vated, reconditioned or old goods as new goods;

(iv) represents that the goods or services have sponsor­ship, approval, performance, characteristics, accesso­ries, uses or benefits which such goods or services do not have;

(v) represents that the seller or the supplier has a spon­sorship or approval or affiliation which such seller or supplier does not have;

(vi) makes a false or misleading representation concern­ing the need for, or the usefulness of, any goods or services;

(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof;

Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;

(viii) makes to the public a representation in a form that purports to be—

(i) a warranty or guarantee of a product or of any goods or services; or

(ii) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or prom­ise is materially misleading or if there is no reasonable prospect that such warranty, guaran­tee or promise will be carried out;

(ix) materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;

(x) gives false or misleading facts disparaging the goods, services or trade of another person.

Explanation. - For the purposes of clause (1), a statement that is—

(a) expressed on an article offered or displayed for sale, or on its wrapper or container; or

(b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or

(c) contained in or on anything that is sold, sent, delivered, transmit­ted or in any other manner whatsoever made available to a member of the public,

shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;

(2) permits the publication of any advertisement whether in any news­paper or otherwise, for the sale or supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement.

Explanation .—For the purpose of clause (2), "bargaining price" means—

(a) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise, or

(b) a price that a person who reads, hears or sees the advertisement, would reasonably understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold;

(3) permits—
(a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole;

(b) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;

(3A) withholding from the participants of any scheme offering gifts, prizes or other items free of charge, on its closure the information about final results of the scheme.

Explanation — For the purposes of this sub-clause, the participants of a scheme shall be deemed to have been informed of the final results of the scheme where such results are within a reasonable time, published, prominently in the same newspapers in which the scheme was originally advertised;

(4) permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, fin­ishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;

(5) permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services.

(6) manufacture of spurious goods or offering such goods for sale or adopts deceptive practices in the provision of services.

(2) Any reference in this Act to any other Act or provision thereof which is not in force in any area to which this Act applies shall be construed to have a reference to the corresponding Act or provision thereof in force in such area.

3. Evolution of This Definition

As we analyse the definition of ‘unfair trade practice’ under consumer protection Act, 1986 is inclusive in nature and is both general and specific and was substituted in 1993 w.e.f. 18 June. The inclusive and general nature of the definition makes the Consumer Protection Act, 1986 self sufficient and complete in itself.

The specific part of the definition is inspired by Sec. 36A of MRTP Act (although section 36A was inspired by decisions given by the FTCA) and the general part of the definition is inspired by Sec. 5 of Federal Trade Commission Act, 1914. So in order to find out the merits of the section 2(1)(r) we have to trace back the history of both MRTP Act, 1969 and FTCA, 1914.

4. Borrowings From Monopolies And Restrictive Trade Practices Act, 1969

Originally MRTP Act, contained no provision for protection of consumers against false and misleading advertisements or other similar trade practices. This Act was directed, interalia, against restrictive and monopolistic trade practices. It proceeded on the assumption that the competitive market would provide fair deal to the consumers. But that was only partly true. There is now a greater recognition that consumers need to be protected not only from the effects of restrictive trade practices but also from the practices which are resorted to by the trade and industry to mislead and dupe the customers. The effect is to shift the emphasis on detection and eradication of frauds against the consumers. If a consumer is thus falsely induced to enter into buying goods which do not possess quality and do not have the cure for the ailment advertised, it is apparent that consumer is being made to pay for the quality of things on false representation. This has created a situation of very safe haven for the suppliers and positions of frustration and the uncertainty for the consumers. Obviously, such a situation cannot be accepted. The consumer protection must have a positive and active role to play. The Sachar Committee, therefore, recommended that the unfair trade practices like misleading advertisements and false representations, bargain sales, bait and switch selling, offering of gifts and prizes with intention of not providing them, conducting promotional contests, supplying goods that do not comply with safety standards and hoarding and destruction of goods should be prohibited.

The MRTP Act, 1969, was enacted to prevent monopolies and restrictive trade practices in the economy. In 1984, it was amended to add chapter V introducing the concept of unfair trade practices on the basis of high powered Sachar Committee. It also created a body called the Director General of Investigation and Registration (DGIR). On a complaint, or on its own, the DGIR could investigate into a claim of a restrictive or an unfair trade practice. The MRTP created a judicial body called the MRTP Commission and the DGIR was to take cases before the benches of the Commission. The Commission, on judging a practice to be an unfair trade practice, could order the offending party to cease and desist the practice.

To understand the working of the law on unfair trade practices, one would need to examine specific provisions of the MRTP Act. Section 36 A of the Act lists unfair trade practices. This is the substantive ground on which the DGIR could start investigations and bring the matter before the MRTP Commission. The Commission could discontinue an unfair trade practice, under Section 36 D, if the practice is ‘prejudicial to the public interest or to the interest of any consumer or consumers generally.’ Section 36 A has five parts or sub-sections covering different themes.

36 A (1): False representation of products or services, including false description, guarantee, warranty or performance of a product or service.
36 A (2): Advertisement of false bargain price.
36 A (3): Contest, lotteries, game of chance or skill for promotion of sale.
36 A (4): Sale of goods not in conformity with safety standards provided by the law.
36 A (5): Hoarding or destruction of goods or refusal to sell goods.

In MRTP, Act 1969, the greatest advantage was that it has fixed categories of unfair trade practices. This was helpful in predicting law and advance knowledge of what kind of conduct would amount to violations of provision. But the definition of MRTP Act, 1969 had a major shortcoming. It was too specific and it can be denied that human mind can invent new forms of unfair trade practices with the advancement of new technologies. Therefore, MRTP Act was insufficient to curb and regulate these practices.


Therefore, there was a requirement for a general definition which can curb unexpected and unspecified categories of unfair practices. This will make the definition more living and less static, which can take care of future developments in the field of unfair trade practices.

Cases on unfair trade practices under MRTP Act

In re Lakhanpal National Ltd. v. MRTP Commission, it was alleged before the Commission that:
1. the appellant company was manufacturing NOVINO (dry cell) batteries in collaboration with M/s. Mitsushita Electric Industrial Company of Japan, and not with National Panasonic of Japan using their techniques, as advertised by it: and

2. the representation that NOVINO batteries are manufactured in joint venture or in collaboration with National Panasonic is false and misleading.

The MRTP commission held it to be misleading but the Supreme Court reversed the order by saying:
There is no other company with the name ‘national’ or ‘panasonic’ and there is no scope for any confusion on that score. Where the reference is being made to the standard of the quality, it is not material whether manufacturing company is indicated by its accurately correct name or by its description with reference to its products. We, therefore, hold that the erroneous description of the manufacturing company in its advertisements in question does not attract sec 36A of the Act, although we would hasten to add that it would be more proper for the appellant company to give the full facts by referring to Mitsushita Ltd. by its correct name and further stating that its products are known by the names ‘national’ and ‘panasonic’.

In re Glaxo Ltd and Capsulation Services Ltd., the allegation was that Glaxo marketed a drug ‘phexin’, manufactured by capsulation, showing logo of Glaxo prominently on the packing strip and name of Capsulation written in small print, thereby giving the impression that Phexin is being manufactured by Glaxo. In the course of the inquiry it was found:

1. the said drug was manufactured and packed by Capsulation on the basis of technical know-how supplied by Glaxo and under its supervision as per iits quality control standard and therefore, the said product was not an inferior product.

2. The price of this drug compared well with similar products manufactured by other leading pharmaceutical manufacturers.

The commission held that the ingredient of loss or injury being absent, even though the impugned practice may fall under one or more clauses of Section 36 A of the Act, it is not an unfair trade practice.

In re Bombay Tyres International Limited, the respondent company was supplying tyres ti TELCO under the brand name ‘modistones’ which, however, were not manufactured by it, but by Modi Rubber Limited at Modipuram. It was alleged that it was an unfair trade practice attracting clause (i) of Section 36 A(1). The commission holding that no UTP was involved closed the enquiry with the following observations:

“As regards unfair trade practices, U/S 36A(1)(i) it would be objectionable only if for the purpose of promoting sale, use or supply of goods the respondent company falsely represents that the goods are of a particular standard, quality, grade, composition, styles or model. Section 36 A of the Act does not inhibit procuring of particular goods from another manufacturer so long as the quality or the standard which the said goods represented to possess are not allowed to Deteriorate in any way.

Changes made in the MRTP Act, 1991

Section 36 A as initially framed, inter alia, envisaged to necessary ingredients of an unfair trade practice:
1. The trade practice should fall within the ambit of one or more of the categories enumerated in clauses (1) to (5) of section 36 A
2. The trade practice should cause loss or injury to the consumers of goods or services.

Thus, it was necessary to allege an establish loss or injury to the consumers of goods or services before a trade practice could be branded as unfair, within the meaning of the MRTP Act. Also if any trade practice, even if undesirable or deceptive, was not covered by the categories specified in the section, it fell outside the provisions of the Act. In the opening part of the Section the words, “adopts one or more of the following practices and thereby causes loss or injury to the consumers or such goods or services, whether by eliminating or restricting competition or otherwise” have now been substituted by the words “adopts any unfair method or unfair or deceptive practice including any of the following practices”.

In Society for Civic Rights v. Colgate Palmolive (India) Ltd. in a full bench of commission, the majority view held that the Key Phase ‘’ and thereby causes loss or injury to the consumers of such goods and services’’ does not require the causing of actual loss or injury to the consumers. Rather the key phase is a part of the definition which implies in every trade practice which adopts one or the other trade practice mentions in the subsequent paragraphs of Section 36A, loss or injury is implied.

The definition of unfair trade practice has, thus, been amplified on the lines of the provisions contained in the U.S. Anti-Trust Law. Even if the trade practice is not of the nature stated in clauses (1) to (5) of this section, it would nonetheless be regarded as unfair trade practice, if it is otherwise unfair or deceptive. By another amendment, the scope of clause (1) (i) has been expanded by the inclusion of the words “quantity”. Thus, if there is a false representation about the quantity, it would amount to unfair trade practice. It is now not necessary to establish loss or injury to consumers.

5. Borrowings From Federal Trade Commission Act, 1914

Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45 grants the FTC power to investigate and prevent deceptive trade practices. The statute declares that “unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful. Unfairness and deception towards consumers represent two distinct areas of FTC enforcement and authority. The FTC also has authority over unfair methods of competition between businesses.

But the motto behind enacting this Act was not the protection of interest of consumers. It was rather enacted to protect the interest of the competitors. In FTC v. Raladam Co. it was held that FTC has no jurisdiction if it is deceptive of public. It has jurisdiction only if it is injurious to the interest of competitors.

Although 1938 Amendment gave jurisdiction to FTC in cases of deception to public as well.

By the enforcement of Sec. 5 of FTCA, different orders were passed by the FTC. Authors wrote many books giving different headings. Indian law is inspired by that, and therefore other 5 categories have been taken from FTC orders.

By 1964 enough cases had been decided to enable the Commission to identify three factors that it considered when applying the prohibition against consumer unfairness. These were:

(1) whether the practice injures consumers;

(2) whether it violates established public policy;

(3) whether it is unethical or unscrupulous. These factors were later quoted with apparent approval by the Supreme Court in the 1972 case of Sperry & Hutchinson. (Cigarette test rule) Since then the Commission has continued to refine the standard of unfairness in its cases and rules, and it has now reached a more detailed sense of both the definition and the limits of these criteria.10

Consumer injury

Unjustified consumer injury is the primary focus of the FTC Act, and the most important of the three S&H criteria. By itself it can be sufficient to warrant a finding of unfairness. The Commission's ability to rely on an independent criterion of consumer injury is consistent with the intent of the statute, which was to "[make] the consumer who may be injured by an unfair trade practice of equal concern before the law with the merchant injured by the unfair methods of a dishonest competitor."

The independent nature of the consumer injury criterion does not mean that every consumer injury is legally "unfair," however. To justify a finding of unfairness the injury must satisfy three tests. It must be substantial; it must not be outweighed by any countervailing benefits to consumers or competition that the practice produces; and it must be an injury that consumers themselves could not reasonably have avoided.

First of all, the injury must be substantial. The Commission is not concerned with trivial or merely speculative harms. In most cases a substantial injury involves monetary harm, as when sellers coerce consumers into purchasing unwanted goods or services or when consumers buy defective goods or services on credit but are unable to assert against the creditor claims or defences arising from the transaction. Unwarranted health and safety risks may also support a finding of unfairness. Emotional impact and other more subjective types of harm, on the other hand, will not ordinarily make a practice unfair. Thus, for example, the Commission will not seek to ban an advertisement merely because it offends the tastes or social beliefs of some viewers, as has been suggested in some of the comments.

Second, the injury must not be outweighed by any offsetting consumer or competitive benefits that the sales practice also produces. Most business practices entail a mixture of economic and other costs and benefits for purchasers. A seller's failure to present complex technical data on his product may lessen a consumer's ability to choose, for example, but may also reduce the initial price he must pay for the article. The Commission is aware of these tradeoffs and will not find that a practice unfairly injures consumers unless it is injurious in its net effects. The Commission also takes account of the various costs that a remedy would entail. These include not only the costs to the parties directly before the agency, but also the burdens on society in general in the form of increased paperwork, increased regulatory burdens on the flow of information, reduced incentives to innovation and capital formation, and similar matters.

Finally, the injury must be one which consumers could not reasonably have avoided. Normally we expect the marketplace to be self-correcting, and we rely on consumer choice-the ability of individual consumers to make their own private purchasing decisions without regulatory intervention--to govern the market. We anticipate that consumers will survey the available alternatives, choose those that are most desirable, and avoid those that are inadequate or unsatisfactory. However, it has long been recognized that certain types of sales techniques may prevent consumers from effectively making their own decisions, and that corrective action may then become necessary. Most of the Commission's unfairness matters are brought under these circumstances. They are brought, not to second-guess the wisdom of particular consumer decisions, but rather to halt some form of seller behaviour that unreasonably creates or takes advantage of an obstacle to the free exercise of consumer decision making.

Sellers may adopt a number of practices that unjustifiably hinder such free market decisions. Some may withhold or fail to generate critical price or performance data, for example, leaving buyers with insufficient information for informed comparisons. Some may engage in overt coercion, as by dismantling a home appliance for "inspection" and refusing to reassemble it until a service contract is signed. And some may exercise undue influence over highly susceptible classes of purchasers, as by promoting fraudulent "cures" to seriously ill cancer patients. Each of these practices undermines an essential precondition to a free and informed consumer transaction, and, in turn, to a well-functioning market. Each of them is therefore properly banned as an unfair practice under the FTC Act.

Violation of public policy

The second S&H standard asks whether the conduct violates public policy as it has been established by statute, common law, industry practice, or otherwise. This criterion may be applied in two different ways. It may be used to test the validity and strength of the evidence of consumer injury, or, less often, it may be cited for a dispositive legislative or judicial determination that such injury is present.

Although public policy was listed by the S&H Court as a separate consideration, it is used most frequently by the Commission as a means of providing additional evidence on the degree of consumer injury caused by specific practices. To be sure, most Commissi6n actions are brought to redress relatively clear-cut injuries, and those determinations are based, in large part, on objective economic analysis. As we have indicated before, the Commission believes that considerable attention should be devoted to the analysis of whether substantial net harm has occurred, not only because that is part of the unfairness test, but also because the focus on injury is the best way to ensure that the Commission acts responsibly and uses its resources wisely. Nonetheless, the Commission wishes to emphasize the importance of examining outside statutory policies and established judicial principles for assistance in helping the agency ascertain whether a particular form of conduct does in fact tend to harm consumers. Thus the agency has referred to First Amendment decisions upholding consumers' rights to receive information, for example, to confirm that restrictions on advertising tend unfairly to hinder the informed exercise of consumer choice.

Conversely, statutes or other sources of public policy may affirmatively allow for a practice that the Commission tentatively views as unfair. The existence of such policies will then give the agency reason to reconsider its assessment of whether the practice is actually injurious in its net effects. In other situations there may be no clearly established public policies, or the policies may even be in conflict. While that does not necessarily preclude the Commission from taking action if there is strong evidence of net consumer injury, it does underscore the desirability of carefully examining public policies in all instances. In any event, whenever objective evidence of consumer injury is difficult to obtain, the need to identify and assess all relevant public policies assumes increased importance.

Sometimes public policy will independently support a Commission action. This occurs when the policy is so clear that it will entirely determine the question of consumer injury, so there is little need for separate analysis by the Commission. In these cases the legislature or court, in announcing the policy, has already determined that such injury does exist and thus it need not be expressly proved in each instance. An example of this approach arose in a case involving a mail-order firm. There the Commission was persuaded by an analogy to the due-process clause that it was unfair for the firm to bring collection suits in a forum that was unreasonably difficult for the defendants to reach. In a similar case the Commission applied the statutory policies of the Uniform Commercial Code to require that various automobile manufacturers and their distributors refund to their customers any surplus money that was realized after they repossessed and resold their customer's cars. The Commission acts on such a basis only where the public policy is suitable for administrative enforcement by this agency, however. Thus it turned down a petition for a rule to require fuller disclosure of aerosol propellants, reasoning that the subject of fluorocarbon safety was currently under study by other scientific and legislative bodies with more appropriate expertise or jurisdiction over the subject.

To the extent that the Commission relies heavily on public policy to support a finding of unfairness, the policy should be clear and well-established. In other words, the policy should be declared or embodied in formal sources such as statutes, judicial decisions, or the Constitution as interpreted by the courts, rather than being ascertained from the general sense of the national values. The policy should likewise be one that is widely shared, and not the isolated decision of a single state or a single court. If these two tests are not met the policy cannot be considered as an "established" public policy for purposes of the S&H criterion. The Commission would then act only on the basis of convincing independent evidence that the practice was distorting the operation of the market and thereby causing unjustified consumer injury.

Unethical or unscrupulous conduct

Finally, the third S&H standard asks whether the conduct was immoral, unethical, oppressive, or unscrupulous. This test was presumably included in order to be sure of reaching all the purposes of the underlying statute, which forbids "unfair" acts or practices. It would therefore allow the Commission to reach conduct that violates generally recognized standards of business ethics. The test has proven, however, to be largely duplicative. Conduct that is truly unethical or unscrupulous will almost always injure consumers or violate public policy as well. The Commission has therefore never relied on the third element of S&H as an independent basis for a finding of unfairness, and it will act in the future only on the basis of the first two.

Deceptive Acts and Practices

Assessing Whether an Act or Practice Is Deceptive?

A three-part test is used to determine whether a representation, omission, or practice is ‘‘deceptive.’’ First, the representation, omission, or practice must mislead or be likely to mislead the consumer. Second, the consumer’s interpretation of the representation, omission, or practice must be reasonable under the circumstances. Lastly, the misleading representation, omission, or practice must be material. Each of these elements is discussed below in greater detail.

• There must be a representation, omission, or practice that misleads or is likely to mislead the consumer—An act or practice may be found to be deceptive if there is a representation, omission, or practice that misleads or is likely to mislead the consumer. Deception is not limited to situations in which a consumer has already been misled. Instead, an act or practice may be found to be deceptive if it is likely to mislead consumers. A representation may be in the form of express or implied claims or promises and may be written or oral. Omission of information may be deceptive if disclosure of the omitted information is necessary to prevent a consumer from being misled. In determining whether an individual statement, representation, or omission is misleading, the statement, representation, or omission will not be evaluated in isolation .The agencies will evaluate it in the context of the entire advertisement, transaction, or course of dealing to determine whether it constitutes deception. Acts or practices that have the potential to be deceptive include making misleading cost or price claims; using bait-and-switch techniques; offering to provide a product or service that is not in fact available; omitting material limitations or conditions from an offer; selling a product unfit for the purposes for which it is sold; and failing to provide promised services.

In Warner – Lambert Co. V. FTC, FTC required a mouthwash manufacturer to include in any future advertising, a statement that the product would not help prevent colds, sore throat or lessen their severity.

• The act or practice must be considered from the perspective of the reasonable consumer—In determining whether an act or practice is misleading, the consumer’s interpretation of or reaction to the representation, omission, or practice must be reasonable under the circumstances. The test is whether the consumer’s expectations or interpretation are reasonable in light of the claims made. When representations or marketing practices are targeted to a specific audience, such as the elderly or the financially unsophisticated, the standard is based upon the effects of the act or practice on a reasonable member of that group. If a representation conveys two or more meanings to reasonable consumers and one meaning is misleading, the representation may be deceptive. Moreover, a consumer’s interpretation or reaction may indicate that an act or practice is deceptive under the circumstances, even if the consumer’s interpretation is not shared by a majority of the consumers in the relevant class, so long as a significant minority of such consumers is misled. In evaluating whether a representation, omission, or practice is deceptive, the agencies will look at the entire advertisement, transaction, or course of dealing to determine how a reasonable consumer would respond. Written disclosures may be insufficient to correct a misleading statement or representation, particularly where the consumer is directed away from qualifying limitations in the text or is counselled that reading the disclosures is unnecessary. Likewise, oral disclosures or fine print may be insufficient to cure a misleading headline or prominent written representation.

In F.T.C. v. Cyberspace.com the FTC found that sending consumer’s mail that appeared to be a check for $3.50 to the consumer attached to an invoice was deceptive when cashing the check constituted an agreement to pay a monthly fee for internet access. The back of the check, in fine print, disclosed the existence of this agreement to the consumer. The FTC concluded that the practice was misleading to reasonable consumers, especially since there was evidence that less than one percent of the 225,000 individuals and businesses billed for the internet service actually logged on.

• The representation, omission, or practice must be material—A representation, omission, or practice is material if it is likely to affect a consumer’s decision regarding a product or service. In general, information about costs, benefits, or restrictions on the use or availability of a product or service is material. When express claims are made with respect to a financial product or service, the claims will be presumed to be material. Similarly, the materiality of an implied claim will be presumed when it is demonstrated that the institution intended that the consumer draw certain conclusions based upon the claim. Claims made with the knowledge that they are false will also be presumed to be material. Omissions will be presumed to be material when the financial institution knew or should have known that the consumer needed the omitted information to evaluate the product or service.

In re Gateway Learning Corp. the FTC alleged that Gateway committed unfair and deceptive trade practices by making retroactive changes to its privacy policy without informing customers and by violating its own privacy policy by selling customer information when it had said it would not.] Gateway settled the complaint by entering into a consent decree with the FTC that required it to surrender some profits and placed restrictions upon Gateway for the following 20 years.

6. Detailed Analysis Of Section 2(1) (R) of Consumer Protection Act, 1986

Clause (1) the practice of making any statement, whether orally or in writing or by visible representation which, -

(i) Falsely represent that the goods are of a particular standard, quality, quantity, grade, composition, style or model;

In re Masterphone Industries Private Ltd., the respondent company, engaged in the manufacture of T.V. Sets, gave an advertisement ‘100% imported with matsushita technology and sankyo; the best entertainer’, claiming foreign collaboration for manufacturing T.V. sets. These assertion being false, it was held to be an unfair trade practice.

(ii) Falsely represent that the services are of a particular standard, quality or grade;

In re Institute of Personnel Management and Industrial Relations, the use of the word ‘recognised’ after its name constitute unfair trade practice, as it gave a false impression that all its courses are recognised by the Punjab Government, whereas, in fact, only one course was recognised by the State Government.

(iii) Falsely represent any re-built, second-hand, renovated, reconditioned or old goods as new goods;

In re Bennett Coleman & Co. Ltd., the respondent in its publication series ‘Indrajal Comics’ bought out two comics, which were virtually copies of two comics published earlier under different titles. It was alleged that in doing so, the respondent has falsely given the impression to the readers that two new comics have been published, whereas the so called new comics were mere repetition of the old ones. The commission, while holding that it was an unfair trade practice, disposed of the case on the basis of the following undertaking given by the respondent:

“We Bennett Coleman & Co. Ltd., the publishers of indrajal comics hereby undertake that whenever repeated editions of a particular comic which was published earlier is again brought out, it will be printed in the cover page that the edition is a repeated version of the story published on an earlier date under a particular name, specifying the date and particular name of the earlier publication”.

(iv) Represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;

In re Katihar Medical College, the Principal issued an advertisement that the college was authorised to impart medical education, whereas actually the college was neither recognised by the Medical Council of India nor affiliated to any university and there was no hospital facility available to the students. The respondent came up with an application U/S 36 D (2) of the Act and an undertaking was given by the respondent not to indulge in such unfair trade practice in future.

(v) Represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;

In re Purshottam Thakurdas, the respondent, who is engaged in the business of marketing watches, misrepresented that he is the authorised dealer of HMT, by so mentioning in the cash memos issued by him to his customers. He was also charging more than the fixed retail prices of HMT watches. On the assumption that the impugned trade practice is unfair and on the undertaking furnished by the respondent that he will refrain from indulging therein, the Commission disposed of the enquiry U/S 36D (2) of the Act.

(vi) Makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;

In re Boots Company Limited, the respondent engaged in the manufacture of pharmaceutical products, in its advertisement on the T.V. network failed to state the warning that Coldarin should not be used by children below 12 yrs of age, except under medical advice as per the requirements laid down by the Director General of Health Services. Holding it to be an unfair trade practice, the Commission disposed of the case U/S 36D (2) on the basis of the undertaking given by the respondent.

(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof;

Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;

In re Gem India, the Commission held that making false claim regarding the quality of refrigerator as being free from manufacturing defects and further is not providing satisfactory service by timely replacement in terms of the warranty is a breach of clause (vii). Also that subsequent replacement of the machine after the complaint has been filed with the Commission was too late and did not wipe out the unfair trade practice indulged in by the respondent, as it deprived the consumer of the use of the refrigerator for a long period. A “cease and desist” order was passed requiring the respondent to refrain from indulging in such unfair trade practice amounting to breach of warranty on his part.

The proviso of this sub-clause envisages the onus of proof on the person raising the defence that the warranty or guarantee is based on adequate or proper tests.

(viii) makes to the public a representation in a form that purports to be—

(i) a warranty or guarantee of a product or of any goods or services; or

(ii) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or prom­ise is materially misleading or if there is no reasonable prospect that such warranty, guaran­tee or promise will be carried out;

In re Chloride India Ltd., the respondent is the manufacturer of batteries, which was fitted on Rajdoot Motor Cycles, which carry 12 months warranty. The battery supplied to the complainant developed trouble during the warranty period. The defective battery was however, not repaired or replaced within reasonable time. The respondent was held to have indulged in unfair trade practice.

(ix) materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;

In re Hiralal Bros., an advertisement, representing a sale discount of 50% or more on various textile items, was issued. It did not indicate the original sale price of the said items. On investigation it was found that on 5 items the discount exceeded 50 % but on the remaining 7 items the discount was less than 50%. As a matter of fact, the range of discount varied from 21 – 61% which gives an average of 40% and not even 50%. It was held that the advertisement would be covered by the provision of sub-clause (ix).

(x) Gives false or misleading facts disparaging the goods, services or trade of another person.

This sub-clause is intended to prohibit the practice of making any statement which gives false or misleading facts disparaging the goods, services or trade of another person. It may be direct statement or it may indirectly or inferentially disparage the trade or business of another. ‘Disparagement’ generally involves casting aspersions on the quality or characteristics of goods or services of another, whereas other types of false advertising usually comprise assertions of superior attribute for the advertiser’s own goods and services.

In re Tainwala Chemicals & Plastics India Ltd., the respondent, who is a manufacturer of mosquito repellant mats under the names of ‘casper’, issued an advertisement to promote the sale of its product, falsely disparaging its well known competing brand ‘GOOD KNIGHT’, stating that it is not at all efficacious. A ‘cease and desist’ order was passed by the commission.

Explanation. - For the purposes of clause (1), a statement that is—

(a) expressed on an article offered or displayed for sale, or on its wrapper or container; or

(b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or

(c) contained in or on anything that is sold, sent, delivered, transmit­ted or in any other manner whatsoever made available to a member of the public,

shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;

Exception to clause (1) of 2(1)(r)

It is noted that section 2(1)(r) does not provide any exception to clause (1). Although some exceptions were recommended by the Sachar Committee, but it is not clear as to why they not been incorporated in the Act. It is submitted that following exceptions should be incorporated:

1. The aforesaid provision shall not apply if a person establishes-
(a) That the act or omission giving rise to the offence was a result of a bonafide error.

(b) That he took reasonable precaution and exercised due diligence to prevent the occurrence of such error and that he took reasonable measures forthwith, after the representation was made, to bring the error to the attention of the class of persons likely to have been reached by the representation.

2. In a proceeding for contravention of any of the aforesaid provisions committed by the publication of an advertisement, it would be a defence for a person who establishes that he is a person whose business it is to publish or arrange for the publication of advertisement and that he received the advertisement for publication in the ordinary course or business and did not know and had no reason to suspect that its publication would amount to contravention of any such provision.

(2) permits the publication of any advertisement whether in any news­paper or otherwise, for the sale or supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement.

Explanation- For the purpose of clause (2), "bargaining price" means
(a) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise, or

(b) a price that a person who reads, hears or sees the advertisement, would reasonably understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold;

Under this clause it is an offence to advertise a product at a bargain price if the supplier does not or cannot supply the product in reasonable quantities. This is also known as bait and switch selling. Usually, this practice is aimed at advertising a product in limited supply at low prices solely for the purpose of attracting customers to a retail location when there is little prospectus that the customer can purchase the product advertised. This clause would be applicable in cases where there is no intention to offer for sale the goods or services at the price or for a period that is and quantities that are reasonable having regard to the nature of the market in which the business is carried on, the nature and size of the business and the nature of the advertisement.

The explanation to the section defines what bargain price would mean for this purpose. Where the advertisement does not state but any person who sees, reads or hears the advertisement would reasonably understand the price having regard to the prices at which the product advertised of like products are sold, to be the bargain price.

Bait advertisement is an alluring but insincere offer to sell a product of services which the advertiser in truth does not intend or want to sell. Its purpose is to switch consumers from buying the advertised merchandise, in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser. The primary aim of the bait advertisement is to obtain leads as to persons interested in buying merchandise of the type so advertised. Advertisement includes any form of public notice however disseminated or utilized.

Exception to clause (2) of Section 2(1)(r):

It is to be noted that no exception has been provided in the section but Sachar Committee recommended some of the exceptions that can be adopted. These are:

Ø he took reasonable steps to obtain in adequate time a quantity of the product that would have been reasonable having regard to the nature of the advertisement, but was unable to obtain such quantity by reason of events beyond his control that he could not reasonably have anticipated;

Ø he obtained a quantity of the product that was reasonable having regard to the nature of the advertisement, but was unable to meet the demand thereof, because that demand surpassed his reasonable expectation;

Ø after he became unable to supply the product in accordance with the advertisement, he undertook took to supply the same product or an equivalent product of equal or better quality at the bargain price applied and that he fulfilled the undertaking.

In re Dayal Novelties, the respondent issued an advertisement about organizing exhibition-cum-sale, without mentioning the period of sale and quality of goods offered for discound sale. The sale was actually organized for the purpose of clearing old stocks. While accepting the undertaking and directing the respondents to abide by the undertaking, the Commission directed that the period of sale should be ‘reasonable having regard to the nature of market in which the business is carried out, the nature and size of business, and the nature of the advertisement’ as set out in section 36A (2).

(3) Permits—
(a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole;

It covers cases where gifts, prizes or other items are offered with an intention of not providing them or creating an impression that something is being offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole.

In Re Nirma chemicals Works Ltd., the scheme involving prizes worth Rs. 71 lakhs launched by the respondent for promoting sale, use or supply of its washing powder was held to fall U/S 36A (3)(a) because that created an impression among consumers that something was being given or offered free of charge when it was fully or partly covered by the amount charged in the transaction as a whole. The D.G. (I&R) had argued that the respondent increased the price of their detergent powder just prior to the launching of scheme and that it has the intention to recover the value of the prizes from the consumers by having raised the prices of its products.

(b) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;

This provision reveals that even if conducting any contest, lottery etc. is without any reference to promoting sale, use or supply of any product, it may be to promote some business interest which may ultimately result in promotion of sale, etc.

In re Avon Cycle Pvt. Ltd., the company advertised a scheme offering 42 prizes on the basis of a lucky draw. The company attempted to justify the scheme on the basis that it was financed out of the profits of the company and not by increasing the prize. The scheme was held to be unfair trade practice prejudicial to public interest for several reasons:

# The conduct of lotteries, contests etc. tends to induce consumers to buy products on consideration other than quality and price. When the essential consideration of quality and prices are lost sight of, consumer and public interest suffers.

# The award of prizes, benefits only a miniscule number of consumers. Discriminatory benefits of this kind to a select few without any corresponding benefit to or, as often happens at the expense of the bulk of the consumers is obviously not in the overall interest of the consumers. On the other hand, the same amount, if utilized for the purpose of reducing prices or providing better services to the consumers, in general will enhance consumer satisfaction.

# The practice of offering prizes by lottery tends to encourage the gambling instinct leading to unnecessary, avoidable and excessive purchases by consumers for the purpose of gaining entry into the lottery. Such available and excessive purchases are the real loss to the consumers. Instead of protecting consumer’s interest, lotteries and contests therefore, clearly act in a prejudicial manner in regard to consumer and public interest.

# It has deleterious impact on competition in as much as extraneous considerations other than quality and price tend to determine consumer preferences and purchases and thereby distorting competition. A better product tends to be obscured and inferior products gain preferences in consumer choice merely because the opportunity the latter provides to enter a contest. Interfering with healthy competition, contests and lotteries ultimately result in loss to the consumer.

 

Sachar Committee recommended the following exceptions:

Ø There is adequate and fair disclosure of the number and approximate value of the prizes, of the area or areas to which they relate and of any fact within the knowledge of the advertiser that affects materially the chances of winning.
Ø Distribution of the prizes is not unduly delayed.
Ø Selection of participants or distribution of prizes is made on the basis of scale or on random basis in any area to which prices have been allocated.

(3A) withholding from the participants of any scheme offering gifts, prizes or other items free of charge, on its closure the information about final results of the scheme.

Explanation — For the purposes of this sub-clause, the participants of a scheme shall be deemed to have been informed of the final results of the scheme where such results are within a reasonable time, published, prominently in the same newspapers in which the scheme was originally advertised;

The above provision was added by 2002 amendment and makes it mandatory to inform about the final results of any scheme offering prizes, gifts or other items free of charge. The result of such schemes may be published within a reasonable time in the newspapers in which the scheme was originally advertised. Withholding of the information about the final results of the scheme will amount to an unfair trade practice within the ambit of the Consumer Protection Act.

(4) permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, fin­ishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;

One of the most important right available to the consumers is to assure that the goods purchased will be reasonably safe in use. There is an urgent need for effective action in the field of consumer product safety. Increasing affluence and the increasing range of complex nature of product have led to the prevalent situation in which unsafe products mat cause death or serious injury. Sometimes the danger arises from defective design, or sub-standard material or poor workmanship. This clause also attracts cases where certain goods are knowingly being sold as complying with standards prescribed by a competent authority. Even where a person does not know, it is sufficient if he has reasons to know that sales are being so made. For instance, unauthorized use of I.S.I. mark on the goods or any other mark not permitted by State Government would be hit by this clause.

In re Vijay International Products the respondents were manufacturing and marketing stoves under the brand name ‘nutan’, designed by Indian Oil Corporation without competent authority’s inspection and clearance. The stoves actually marketed were sub-standard without conforming to the approved specifications. The respondent gave an undertaking not to manufacture or sell the stoves designed by IOC without their permission.

(5) Permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services.

The practice of hoarding or destruction of goods with a view to create artificial scarcity and thus to force up prices are quiet common in our country. To control such practices, clause (5) of section 2(1)(r) prohibits hoarding or destruction of goods, or refusal to sell the goods or to make them available for sale, or to provide any service, if such hoarding, destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services.

(6) Manufacture of spurious goods or offering such goods for sale or adopts deceptive practices in the provision of services.

The Amendment Act, 2002 inserted a new sub-clause (6) in section 2(1) (r) of the Act to further enlarge the scope of the definition of ‘unfair trade practice’ to include manufacture of spurious goods or sales of spurious goods or adoption of deceptive practices in the provision of services. According to this provision, manufacture of spurious goods or offering such goods for sale or adopting deceptive practices in the provision of services wills amount to an unfair trade practices. Clause (oo) of Section 2 (1) of the Act defines spurious goods and services to mean such goods and services which are claimed to be genuine but they are not actually so.

7. Conclusion:
It is a recognised fact that consumers as buyers have poor bargaining power. In early years when welfare legislations like the Consumer Protection Act, 1986 did now exist, it is the maxim caveat emptor (let the buyer beware) which governed the market and relations between consumers and traders. Now with the opening of global markets, economies and progressive removal of restrictions on international trade, there is increasing completion among manufacturers which has, though benefited the consumers in the form of improvement in quality of goods and services but as well as given the way to many unfair methods or practices of trade to promote sale of the commodities and it has widely affected the interests of the consumers. Therefore, we may say that it’s an era when it can be propounded that the maxim caveat emptor is to be replaced by ‘let the seller beware’.

In spite of various provisions providing protection to the consumer in different enactments like CPC, 1908, Indian Contract Act, 1872, sale of Goods Act, 1930, Specific Relief Act, 1963 etc. very little could be achieved in the area of consumer protection. The reason behind the same might be found in the fact that these legislations have protected the party only as a party to a contract and there was as of today, no general statutory provision in the Indian Contract Act, 1872 or the Sale of Goods Act, 1930 whereby the courts could give relief to the consumer by holding such terms in contracts as void on the grounds of their being unreasonable, unconscionable or unfair.

We may, however, point out that there are certain legislations apart from the Indian Contract Act, 1872 and Sale of Goods Act, 1930 which prevent to a contract from taking undue or unfair advantage of the other. Instance of this type of legislation are the Usurious Loans Act, 1918, Industrial Disputes Act, 1947, Agricultural Produces (grading and marketing) Act, 1937, Prevention of Food Adulteration Act, 1954, Specific Relief Act, 1963 and so on but they all are again punitive in nature and do not provide any direct relief to the consumers.

In this light, I conclude my term paper, after having detailed analysis of various aspects of unfair trade practice, that Consumer Protection Act, 1986 contains a wide definition of UTP and plays a vital role towards combating various ill and unfair practices. Not only this, it is very much evident that the definition is comprehensive and complete in itself and is very much prepared not only to deal with present UTP but also upcoming ones as it is wide and engulfs in itself the whole range of UTP’s in both cases of present and future.

This definition becomes all the more useful as U/S 2(b) of the Consumer Protection Act, 1986, the scope of the definition of ‘complainant’ is wide enough and covers ‘voluntary consumer associations’, Central and State governments and all the consumers when there are numerous consumers having the same interest. And further section 2(c) of the Act covers the allegation related to unfair trade practice under the scope of ‘complaint’.

Reference:
Books:
1. DUGAR, S.M., Commentary on MRTP Law, Competition Law & Consumer Protection Law, Wadhwa and Company, Nagpur. (FOURTH EDITION, 2006 VOLUME 1)
2. Agarwal, V.K., Consumer Protection (Law & Practice) 6th Edition
3. Barowalia, J.N., Commentary on Consumer Protection Act, 1986, Delhi, Universal Law Pub. Co.pvt. Ltd. (2008)

Articles:
1. Legal Responses to Economic Liberalization: The Case of Unfair Trade Practices - Akhileshwar Pathak
2. Use Of Trademark In Comparative Advertising: Situation in India - Priya Bansal
3. Federal Trade Commission Act - Section 5: Unfair or Deceptive Acts or Practices
4. “STUDY AND ANALYSE THE SITUATION IN INDIA REGARDING UNFAIR TRADE PRACTICES AND LIMITATIONS OF THE LAW ENFORCEMENT” CONSUMER UNITY & TRUST SOCIETY D-217, BhaskarMarg, Bani Park Jaipur 302 016, India Ph: 91.141.228 2821; Fx: 91.141.228 2485 Web: www.cuts-ccier.org; www.cuts-international.org
5. Competition Law Regime in India: Evolution, Experience and Challenges - Pradeep S. Mehta, Secretary General, CUTS International, India
6. Why India Adopted a New Competition Law - Published By CUTS International - Researched and Compiled by S. Chakrabarty
(the writer is a civil servant by profession and is a fellow of the CUTS Centre for Competition, Investment and Economic Regulation, Jaipur. He was formerly a member of the MRTP Commission of India)

Legislation:
· Consumer Protection Act, 1986
· Monopolies and Restrictive Trade Practices Act, 1969
· Federal Trade Commission Act, 1914
· Constitution of India, 1950

Law Reports:
Report of the High Powered Expert committee on Companies and MRTP Acts (Sachar Committee) (1978)

# “study and analyse the situation in India regarding unfair trade practices and limitations of the law enforcement” consumer unity & trust society
# D-217, Bhaskar Marg, Bani Park Jaipur 302 016, India Ph: 91.141.228 2821; Fx: 91.141.228 2485 Web: www.cuts-ccier.org; www.cuts-international.org
# Statement of Objects and Reasons attached to MRTP (Amendment Bill, 1983 (Bill no. 37 of 1983)) Pg. 39.
# Sachar Committee Report (1978)
# Ibid. pp. 270-72
# AIR1989 SC 1698
# UTP Enquiry no. 60/1984, Order dated 14-12-1984
# UTP Enquiry No. 41 of 1984, Order Dated 19-06-1992
# 283 U.S. 643, 648 (1931).
# 405 U.S. 223, 244-45 n.5 (1972)
# 83 Cong. Rec. 3255 (1938) (remarks of Senator Wheeler)
# See Statement of Basis and Purpose, Advertising of ophthalmic Goods and Services, 43 Fed. Reg. 23992,24001 (1978), citing Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976).
# CA-D of C, 1977
# 453 F.3d 1196 Federal Trade Commission
# Gateway decision and order, Sept 2004, FTC
# UTP Enquiry No. 101/1986, order dated 18-11-1987
# UTP Enquiry No. 151/1989, order Dated 4-2-1991
# UTP Enquiry No. 29/1986, order Dated 25-8-1986
# UTP Enquiry No. 10/1988, order Dated 28-9-1989
# UTP Enquiry No. 383/1988, order Dated 2-5-1989
# UTP Enquiry No. 401/1987, order Dated 17-11-1988
# UTP Enquiry No. 146/1986, order Dated 22-4-1991
# UTP Enquiry No. 84/1985, order Dated 25-8-1988
# UTP Enquiry No. 4/1984, order Dated 29-1-1985
# UTP Enquiry No. 56/1989, order Dated 16-1-1990
# Sachar Committee Report (1978)
# ibid
# ibid
# UTP Enquiry No. 33/1985, Order dated 24-2-1986
# UTP Enquiry No. 119 of 1991, Order Dated 4-1-1996 by MRTPC
# UTP 43 of 1984, order Dated 10-9-1986
# Sachar Committee Report 1978
# UTP Enquiry No. 11/1984, Order Dated 20-5-1986

 




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Article Comments

Posted by Deepak on January 23, 2016
Sir,
First, i would like to thank you for a comprehensive article on unfair trade practices. Second, I have question regarding gift vouchers. Gift vouchers of some companies come with validity, some with as little as 6months after date of purchase. Now, consumer often forgets to buy/encash the gift voucher. In this scenario these companies get money for essentially no service. People often put gift voucher in drawer and forget or egift voucher can be lost in emails etc. So does this expiry date policy is a unfair trade practice? Where and under which act a complain can be filed?

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