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Court Case: Defective Taxi

, Mr. Sobhag Mal Meena bought a diesel Ambassador car from Mis. Western India State Motors, Jaipur, on February 1, 1989. I The car was manufactured by the Hindustan Motors Ltd. The manufacturer had given a guarantee to the purchaser, in a standard form. The guarantee was to last for one year or till the car completed 16,000 Kms, whichever was earlier. The manufacturer guaranteed replacement or repair of parts if there were any problems arising due to defective material or workmanship. However, this protection did not extend to the batteries, bulbs, tyres and tubes. Further, in respect of paint-work, the guarantee was only for six months or 8000 kms, whichever was earlier. Soon after taking delivery, the car developed some problems. It had to be taken twice, in February, to the garage of the Western India State Motors. The car was serviced and the problem was set right. Mr. Meena had to take the car again, on March 7, 1989, to the workshop. The mechanics examined the defect and decided that the rings and engine bush would have to be replaced after removing and opening the engine. The car had to be left behind in the workshop. It was delivered to Mr. Meena on March 13, 1989. The frequent problems in the new car, were troubling Mr. Meena. He earned a living by running the car a a taxi in Rajasthan. And moreover, he had taken a loan from a bank to buy the car. Those were the early days of the Consumer Protection Act. He was advised that consumer forums could be of help to him. On April 1, 1989, he approached the State Commission with the complaint that the car suffered from serious manufacturing defects, which could not be set right by repairs. He should, thus, be given a new car, free of defects. He also claimed Rs. 60,000 from Hindustan Motors Limited and the Western India State Motors, towards loss of profit for the days the car was away for repairs, and for mental agony. Decide the dispute between the parties. me definition of a consumer as it existed then was as follows:

Court Case: Charitable

Eye Centre

Ozanam Eye Centre is a registered charitable mission hospital in Quilon? Towards its mandate, it conducted free eye camps and poor patients were given free medical and surgical care. The Centre had been recognised by the Government of India, from which it had received a grant of Rs. 2 lakh for purchasing new equipment to improve its medical services. Its income from various services, in the Income and Expenditure Account for the period ending March 31, 1992, was as follows:
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Western India State Motors v. Sobhag Mal Meena, NCDRC Nov 8, 1989. Rev. Fr. Ferdinand Kayavil v. Mahavir Gupta, 1994 (2) CTJ 488.

Financial Details of Ozanam Eye Centre


By medicines, injection and dressing By rent By treatment charges By consultation fees By dispensary collection By refraction collection By anaesthesia collection By operation fee By contact lens Profit (excess ofIncome over Expenditure) Rs. 3.09 lakh Rs. 1.49 lakh Rs. 1.22 lakh Rs. 1.48 lakh Rs. 1.31 lakh Rs. 1.34 lakh Rs. 2.34 lakh Rs.12.23Iakh Rs. 7.15 lakh Rs. 2.37 lakh

Theprofit for the year ending March 31, 1990, was Rs. 4.80 lakh; and for the year ending March 31, 1991, it was Rs. 80,000.

The Eye Centre bought an argon laser unit (Photocoagulator), with accessories, for US $30,000 from MIs. Universal Medical Products, USA. The purchase was negotiated in December, 1989, through MIs. Apu Impex, Bombay. The machine was installed by the service engineers of Apu Impex in June, 1990. The machine carried a one year warranty. The laser unit stopped functioning on April 19, 1991. The service engineer of Apu Impex found the reason to be a short circuit, which he rectified. The machine again went out of order in June, 1991. The cause this time was a fault in the transistors and indicators. In July, 1991, Apu Impex asked the supplier of the equipment in the USA, for a new power supply under the warranty. But this did not materialise. As a result, the laser unit could not be used. According to the Eye Centre, the prolonged disuse of the unit led to deterioration of the laser tube, the heart of the unit. The Eye Centre wanted Apu Impex to replace the tube and make the unit fully functional. Apu Impex did not do this. The Eye Centre, thus, came before the National Consumer Commission, claiming Rs. 16.61 lakh from Apu Impex, towards refund of the cost of the unit; towards interest, loss of clientele, goodwill and reputation; and towards costs for seeking legal remedy. Decide.

Court Case: Generator Sets for Synco

SyncoTextiles Private Limited operates an oil mill to produce edible oils and oil cake from oil seeds.' On August 19, 1986, it purchased from Greaves Cotton and Co. Ltd., three generator sets for Rs. 5,53,000. The sets turned out to be defective. One of the engines had an undersized crankshaft. The rubber rings (gaskets) used in the three generating sets were of inferior quality; as a result, water had entered the engines. Synco corresponded with Greaves for replacement of the defective crankshafts, rubber rings and other parts. However, the communication did not yield any result. Synco approached the Rajasthan StateCommission with a claim for recovery of the cost of the three engines; Rs. 10,000 incurred towards the repairing of the generators; and Rs. 41akh towards losses for 'equipment having to be kept idle for about five months'. The State Commission dismissed the case as the purchase had been for a commercial purpose, and thus, in its judgement, Synco was not a consumer within the meaning of the Consumer Protection Act. Synco took the case in appeal, to the National Consumer Council. Synco argued that the State Commission had been mistaken in its interpretation of 'commercial purpose'. It should have distinguished
lSynco Textiles Private Ltd. v. Greaves Cotton and Company Limited, (NCDRC), 1991 CPJ 499.

between commercial purpose, a commercial organisation and commercial activity. Synco argued thatit was trading in edible oil and oil cake, it was not involved in the production of power or the manufacture of plant and machinery. It emphasised that the electricity produced by the generating sets was not meant for sale; it was meant only for production purposes, as distinct from commercial purposes. Decide.

Court Case: Laxmi Engineering Works

Mr. Y. G. Joshi, a diploma holder in engineering, proposed to start a small-scale industry, with financial assistance from public financial institutions." With a loan of Rs. 22.10 lakh from the Maharashtra State Finance Corporation, and with assistance under the Employment Promotion Programme, he set up his business, Laxmi Engineering Works. It was registered as a small-scale industry with the Directorate of Industries, Maharashtra. Mr. Joshi had entered into an agreement with Premier Automobiles for supplying certain parts required for the manufacture of their cars. On May 28, 1990, he purchased PSG 450 CNC Universal Turing Central Machine, from P.S.G. Industrial Institute. Soon after the machine was installed and operated, several defects came to light. These were brought to the notice of PSG. A good amount of correspondence took place between the parties. PSG sent some persons to rectify the defects, but it could not be put in proper order. Mr. Joshi suffered serious financial loss on account of the defective functioning of the machine. He lodged a complaint before the Maharashtra Consumer Commission, claiming an amount of Rs. 4,00,000 on several counts from the PSG. PSG denied all the charges. The Maharashtra Commission, however, accepted some of the contentions of Mr. Joshi, and asked PSG to pay Rs. 2.48 lakh. PSG moved the National Commission and the case finally went to the Supreme Court. A key contention raised by PSG was that Laxmi Engineering Works was not a consumer within the provisions of the Consumer Protection Act. By the time the case arose, an explanation, to the following effect, had been added to the definition of a consumer:
Explanation: 'Commercial purpose' does not include use by a consumer, of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of sell-employment.

Decide/,

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Court Case: MIs. Bala Enterprises v. Chief Post Master General, Delhi Circle Bala Enterprises sent cut and polished diamonds to MIs. Nofi Jewellers, Dubai, by Speed Post, under four different invoices, through the Foreign Post Office in Delhi. All the consignments did not reach their destination. Bala Enterprises filed a case for damages and compensation. According to the Foreign Post Office, the diamonds, after completion of necessary formalities, were handed over to the Emirate
"Laxmi Engineering Works v. P.S.G. Industrial Institute, AIR 1995 SC 1428.

Airlinesand were to be airlifted by its flight No. EK-703 dated November 26, 1995. All was not well whenthe consignment reached Dubai Airport. The Foreign Post Office alleged that the mischief took paceonly after the bag containing the consignments had been handed over to the Emirate Airlines staff. BalaEnterprises applied to make the Emirates Airlines a party to the case. This is called 'impleading' a party.Can this be allowed? /

Court Case: K. Syed Mohamed Company v. Punjab National Bank K.Syed Mohamed Company is based in Singapore' It has an account with the Indian Bank, Singapore. TheIndian Bank in Singapore sent to the Punjab National Bank, relevant documents for presentation to thebuyer in India. The Punjab National Bank failed to do this. The company moved the court to recover damages from the Punjab National Bank. Court Case: R. Balraj v. Grindlays Bank and the State Bank of India Mr.Gowthama Budhar had a bank account with the Grindlays Bank, Bombay Branch. He requested the bankto make a 'Telegraphic Transfer' of money to his brother T. Balraj, in his account, at the State Bank of India, Kaveripattinam." The Grindlays Bank in Bombay transferred the money through the State BankofIndia in Mumbai. Days and weeks passed by but the money did not get credited to Mr. Balraj's account. Mr. Budhar followed it with the Grindlays Bank and it appeared that the State Bank of India, instead of transferring the money to its branch at Kaveripattinam, sent it to its Dharmapuri Di triet Branch. It was a telegraphic transfer, meant to expedite the transfer of money. Mr. Balraj however, receivedthe money after two and a half months. As Mr. Budhar was based abroad, Mr. Balraj moved the consumer forum against the Grindlays Bank and the State Bank of India. Court Case: Gauhati Cooperative Urban Bank Limited v. Santosh Kumar Tewari

Santosh Kumar Tewari, in response to an advertisement, applied in the prescribed form for an allotment ofequity shares of Rs. 10 each of Tata Elaxi Ltd. Mr. Tewari was not successful in getting an allotment of the shares. The company sent refund vouchers, through its banker, the Gauhati Cooperative Urban BankLimited. The refund voucher was an account payee cheque in favour of Santosh Kumar Tewari. It appears that the Bank did not send the cheque by registered post. Mr. Tewari did not receive the cheque. He then learnt from the Bank that the cheque had been encashed from one of their branches. Another person had managed to get possession of the cheque, created an account pretending to be Mr. Tewari and encashed the cheque. Mr. Tewari was not the only one. The fraud had been done on several other subscribers to the issue as well. The Gauhati Cooperative Urban Bank Limited was not the only bank involved.There were other banks the company had employed to remit the money. The Reserve Bank of India investigated the fraud. According to its investigations, in most of the cases, the branch officials of the Banks had not strictly followed the guidelines/instructions for opening
5K.Syed Mohamed Company v. Punjab National Bank, 2003 CCC 768. 6R. BaJraj v. Manager, Grindlays Bank and The Manager, Remittance Department, State Bank ofIndia, 1995 (3) CTJ 793.

new accounts, which facilitated the fraudulent encashrnent. The Reserve Bank of India had advised that as per the existing instructions, the Banks were expected to reimburse the genuine investors/account holders. As the Banks were not coming forward with the reimbursement, Mr. Tewari, along with 30 others, filled a case with the State Commission. The State Commission awarded compensation to the subscribers. The Banks came in appeal to the National Commission. The contention of the banks was that there was no privity of contract between the banks and the subscribers.

Court Case: Bank of India v. H.C.L. Limited

HCL Ltd. is engaged in the business of manufacturing, leasing and selling computers." It entered into an agreement with the Dealwell Estates Pvt. Ltd. to supply it computer equipment. Towards the supply of equipment, HCL Ltd. got DealWell Ltd. to arrange an irrevocable bank guarantee in its favour. DealWell arranged for this with the Bank of India. The Company invoked the bank guarantee and asked the Bank to make the payment. The Bank refused to make the payment. The HCL Ltd. filed a complaint before the State Commission claiming deficiency in service. The case came before the National Commission, in appeal. The bank raised the contention that there was no privity of contract and thus, the company was not a consumer.

Court Case: Mumbai Grahak Panchayat v. Dr. (Mrs.) Rashmi B. Fadnavis


Dr. (Mrs.) Rashmi B. Fadnavis is an honorary gynaecologist attached to the Jeevan Vikas Kendra in Andheri, Mumbai.t She performed an operation on Mrs. Meena Pilankar. As is the practice in medical circles, it is the main doctor who arranges for the anaesthetist. The patient died immediately after the operation. The State Commission was of the definite view that Dr. Fadnavis was guilty of medical negligence and that the death of Mrs. Meena Pilankar was caused due to lack of ordinary care and skill which a medical practitioner should have exhibited under the circumstances. The negligence, however, was on the part of the anaesthetist, Dr. (Mrs.) S. S. Kalelkar. The State Commission gave an order that there was no privity of contract between the anaesthetist and the patient. Thus, even if the anaesthetist was negligent, the patient would not have a claim against her ..",

November 11,1992 did not serve any purpose until the remaining 16 cartons were also delivered, which happened only on January 11, 1993. By this time, the Christmas and New Year season was over and the very object of the order for the goods placed by the consignee was lost, with the result that the consignee cancelled the order. Everbright moved the consumer forums for seeking remedy for the loss of profit and mental agony. The claims were to be decided in the following context of the provision of the Carriage by Air Act, i972. The Carriage by Air Act, 1972 limits the liability of an Air Carrier on shipments by air. The Act provides as follows, in the Second Schedule, incorporating the Hague Protocol:
22(1) ... (2) (a) In the carriage of registered baggage and of cargo, the liability of the carrier is limited to a sum of 250 francs per kilogramme, unless the passenger or consignor has made, at the time when the package was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that that sum is greater than the passenger's or consignor's actual interest in delivery at the destination. (b) In the case of loss, damage or delay of part of registered baggage or cargo, or of any object contained therein, the weight to be taken into consideration in determining the amount to which the carrier's liability is limited shall be only the total weight of the package or packages concerned. Nevertheless, when the loss, damage or delay of a part of the registered baggage or cargo,or of an object contained therein, affects the value of other packages covered by the same baggage check or the same air waybill, the total weight of such package or packages shall also be taken into consideration in determining the limit of liability.
(3) ...

(4) The limits prescribed in this rule shall not prevent the Court from awarding, in accordance with its own law, in addition, the whole or part of the Court costs and of the other expenses of the litigation incurred by the plaintiff. The foregoing provisions shall not apply if the amount of the damages awarded excluding Court costs and other expenses of the litigation, does not exceed the sum which the carrier has offered in writing to the plaintiff within a period of six months from the date of the occurrence causing the damage, or before the commencement of the action, if that is later. (5) The sums mentioned in francs in this rule shall be deemed to refer to a currency unit consisting of sixty-five and a ha~ milligrammes of gold of millesimal fineness nine hundred. These sums may be converted into national currencies in round figures. Conversion of the sums into national currencies other than gold shall, in case of judicial proceedings, be made according to the gold value of such currencies at the date of the judgement.

Rule 25 of the Hague Protocol, in the Second Schedule, provides that:


25. The limits of liability specified in rule 22 shall not apply if it is proved that the damage resulted from an act or omission of the carrier, his servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result; provided that, in the case of such act or omission of a servant or agent, it is also proved that he was acting within the scope of his employment.

COMPENSATION

Court Case: British Airways Denies Boarding


Mr. Chandi Prasad Bhatt, the noted environmentalist of the Chipko movement fame, was to go to Mexico to attend a conference, between April 13, 1996 to April 22, 1996.17 He held a confirmed ticket of the British Airways flight departing from New Delhi on April l3, 1996, at 12.30 a.m. The flight had been overbooked and Mr. Bhatt was denied boarding. On being denied boarding, Mr. Bhatt left the airport

and had a legal notice served on the British Airways. The notice required the British Airways to ensure that he was allowed to catch a flight 'tonight or tomorrow', to travel to Mexico via London. The British Airways had its own policy on matters of 'No-Show' and overbooking of flights. The folder of the ticket read:
"'No-Show" Passengers On most major airlines, including British Airways, a proportion of passengers who have booked seats, do not present themselves for their flight. These passengers are known as "no shows". Their number varies from route to route, but may be substantial. If you have a booking on one of our flights, but know that you are not going to be able to travel on that flight, please let us know as early as possible. Knowing that you are not going to use your reservation, we can then offer the seat to another customer, who otherwise would be unable to travel. Remember that one day you may be the passenger needing a reservation on an already fully-booked flight. Overbooking In order to minimise the effect of "no-shows", and to enable their seats to be used by passengers who otherwise would not be able to travel on their chosen flight, British Airways, and most major airlines, may overbook services. By careful monitoring and control, we do our utmost to match the number of available seats to the number of passengers that we expect will appear for the flight. Whilst British Airways makes every effort to provide seats for which confirmed reservations have been made, no absolute guarantee of seat availability is denoted by the expression reservation, bookings, status OK and the timings attached to them. British Airways operates compensation schemes for passengers with confirmed reservations who are unjustifiably denied carriage because of non-availability of seats and details of these schemes are available at check-in. If you have any questions about our overbooking or denied boarding compensation policy, please write to Customer Relations Manager, British Airways, PO. Box 10, London Heathrow Airport, Hounslow, Middlesex TW6 2JA.'

Within its practice and policy, British Airways would have accommodated Mr. Bhatt in a hotel and provided facilities of food, drinks and telephone. However, this could not be done as Mr. Bhatt had left the airport. Mr. Bhatt was accommodated on the next flight on the night of April 14, 1996. He was also paid 150 as Denied Boarding Compensation. Mr. Bhatt moved the National Consumer Commission, claiming Rs. 25.00 lakh as compensation as he suffered loss and injury to his professional standing and reputation in the international community, and also for the mental anguish, harassment and inconvenience. Discuss.

Court Case: Air India Denies Boarding

Mr. A. Moideen Kutty was employed in Saudi Arabia since May 15, 1990.18 He took leave from his employer and came to India on a visit. Before leaving Saudi Arabia, Mr. Kutty obtained a re-entry endorsement. This allowed him to work in Saudi Arabia till December, 1994. Within this arrangement, he had to return to Saudi Arabia by September 23, 1992. His visa to enter Saudi Arabia was to expire on that day. To meet this requirement, Mr. Kutty booked a confirmed ticket on Air India from Bombay to Riyadh, for September 21, 1992. Mr. Kutty reached Bombay with his luggage. To his utter surprise and dismay, he learnt that his name was not there in the list of passengers. He explained to the officials, the consequences of his not reaching Riyadh before September 23, 1992. The Air India officials told him that he could fly by another flight of Air India on September 23, 1992. Mr. Kutty reached the counter on time to be told that his name was in the waiting list and he could not be accommodated. Mr. Kutty,

due to the prospect of losing his job, felt a great shock and became unconscious and fell down in front of the Air India counter. He had to be hospitalised. He remained sick and was admitted to a Bombay hospital for a week. Mr. Kutty had bought his ticket from Ashok Travels' branch in Ottapalam in Kerala. Ashok Travels, booking agents of Air India, has its head office in Coimbatore. The Coimbatore office purchased its tickets through the Chennai office of Air India. When Mr. Kutty had purchased the ticket, the computer system had been down. When the computer system was restored, the Coimbatore office took a followup action with Air India. The computer system failed again for several days. To find out the status of the booking, the Coimbatore office contacted the Space Control, Bombay, for name retrieval, since the P.N.R. (Computer Number) of this ticket was not available with the Coimbatore office at that time. The Space Control informed the Coimbatore office that A. Moideen Kutty had a confirmed seat on Flight No. AI-821, for September 21, 1992. Thus, Mr. Kutty was given an OK sticker. But the 'A. Moideen Kutty', whose seat the Space Control had confirmed, was a Mr. Anchukantan Moideenkutty, another person, who had booked his ticket from the Calicut office of Ashok Travels. In fact, Anchukantan Moideenkutty did travel on that flight. Now, Mr. Kutty has filed a complaint before the Kerala State Consumer Commission, claiming Rs. 10 lakh as compensation for the deficiency in service and consequent losses. Decide.

Court Case: DHL Courier

Bharati Knitting Company is a manufacturer of apparel. 19 A German buyer had agreed to buy from the company, goods for the summer season of 1990. Bharati Knitting Company exported a consignment and sent a courier containing all the relevant documentation. This included the invoice, the packaging list, the Original Export Certificate and the Certificate of Origin. The couriered packet did not reach its destination. As a result, the German buyer could not obtain the consignment. Subsequently, duplicate copies ofthe documents were sent. By then, the summer season was over. Due to the delay, the German buyer paid only DM 35,000, instead of the invoice value ofDM 56,469. Bharati Knitting Company moved the State Commission ofTarnil Nadu to claim the loss incurred, DM 21,469, equivalent to Rs. 4,29,392. The terms and conditions printed on the consignment note contained the following clauses:
'Clause 6 Limitation of liability: Without prejudice to Clause 7, the liability of DHL for any loss or damage to the shipment, which term shall include all documents or parcels consigned to DHL under this Air bill and shall not mean anyone document or envelope included in the shipment, is limited to the lesser of (a) US$100; (b) the amount of loss or damage to a document or parcel actually sustained; or (c) the actual value of the document or parcel as determined under Section 6 hereof, without regard to the commercial utility or special value to the shipper. Clause 7 Consequent damages excluded: DHL shall not be liable in any event, for any consequential or special damages or other indirect loss however arising, whether or not DHL had knowledge that such damage might be incurred, including but not limited to loss of income, profits interest, utility or loss of market. Important Notice: By the conditions set out below, DHL and its servants and agents are firstly, not to be liable at all for certain losses and damages, and secondly, wherever they are to be liable, the amount of liability is strictly limited to the amount stated in the condition and customers are therefore advised to purchase an insurance cover to ensure that their interests are fully protected in all events.'

Decide.

~ Court Case: Trustwel Inc.

Trustwel Inc., Bombay, put out the following advertisement in the 'Taj'! and the 'Swagat' magazines of the Indian Airlines. 2
'Need ready capital to develop your business or industry? Achieve real results through Trustwellnc. Specialists in business and industrial finance. We can advance you term loans at easy rates of interest, against mortgage of immovable property-land, buildings, factory and project finance. And we have loans tailor-made for a variety of needs. For business expansion or diversification, for new ventures or new projects, for additional working capital or to purchase existing property, come to Trustwellnc. We're on your side. Trust us. We'll help you build a better life.'

Ajanta Chemicals Pvt. Ltd. responded to the advertisement. It asked for a loan of Rs. 50 lakh. For the processing of the loan, Ajanta Chemicals had to first pay a fee to Trustwel Inc. It paid inspection charges of Rs. 85,000. This was followed by Rs. 4,20,000 towards stamp duty, registration charges, legal fees and miscellaneous expenses, etc. The loan never came. Ajanta Chemicals got suspicious and apprehensive. It learnt that the loan would never come. Could this be a case of an unfair trade practice? Companies registered in the USA, use 'Inc.' in their name. Trustwel had also used the word 'Inc.' Is this an unfair trade practice? ~ Court Case: Novino Batteries ~

Lakhanpal National Limited manufactures 'Novino' batteries, in collaboration with Mitsushita Electric Industrial Co. Ltd., Japan? It put out advertisements stating that 'Novino' batteries were being manufactured in collaboration with National Panasonic of Japan, using National Panasonic's techniques. There was no entity called 'National Panasonic' with which Lakhanpal National Limited could have got into collaboration. Mitsushita Electric Industrial Co. Ltd. manufactured products which it used to call 'National' and 'Panasonic'. It was alleged that claiming collaboration with 'National Panasonic' was an unfair trade practice within Section 36-A of the MRTP Act. Decide.

I Court

Case: Defective Ambassador

Car

I,

Mr. Sanghi purchased a Deluxe Ambassador car from Mr. B. Malani, dealer of Ambassador cars, in March, 1989. The deluxe Ambassador car was marketed as an elegant and luxury car, superior to the ordinary Ambassador. The superior quality of the car was highlighted in the pamphlets, which contained the features of the two models. Mr. Sanghi wanted to buy a Contessa, but the dealer advised him to buy an Ambassador deluxe. After purchase, Mr. Sanghi found out that the car had several manufacturing defects, including an engine that used to get overheated, poor quality of the hand brake, poor pick up, uneven edge cuttings, poor pressing of sheets, improper alignment of bonnet and poor door alignment. Within 15 days of the delivery of the car, it was sent to the dealer for rectification of the defects. The defects were rectified during the warranty period, but not to the satisfaction of the customer. Following Mr. Sanghi' s complaint, the Director General of Investigations and Research sent letters to 68 customers, who had purchased the deluxe car. Eleven people said that the allegations made by Mr. Sanghi were substantially correct. Three buyers said that they were satisfied with the car, as well as by the services provided by the dealer. Has the dealer indulged in an unfair trade practice? Court Case: Jamila Khatoon v. Jaynco Engineering Company Jarnila Khatoon purchased a five horsepower pumpset for Rs. 5,208, from Jaynco Engineering Company, on June 9, 1989.4 Jaynco gave a one-year guarantee for the satisfactory performance of the pumpset, including timely repair or replacement in case of any defect. The machine went out of order within a few months of the purchase. Despite repeated requests by Jamila Khatoon, Jaynco neither set the machine right, nor did it replace it. Thus, the pumpset almost did not work at all. Jamila Khatoon had claimed the following damages before the Monopolies and Restrictive Trade Practices Commission: 1. Cost of the pump (mono-block) set: Rs. 5,208.00 2. Interest at 12 per cent, for 24 months: Rs. 1,249.92 3. Loss of crop for four seasons: Rs. 24,000.00 Total: Rs. 30,457.92 Examine the claim with reference to the provisions on unfair trade practices.

Court Case: The New Pepsodent

Hindustan Lever Limited came up with a new version of its toothpaste, called the 'New Pepsodent'r' Hindustan Lever Limited advertised in print, visual and hoarding media, claiming that its toothpaste, 'New Pepsodent', was' 102% better than the leading toothpaste'. The Supreme Court thus described the advertisement:
The advertisement contains a schematic picture, supposedly of samples of saliva/smear. It depicts on one side of the advertisement, a pictorial representation of the germs in a sample taken from the mouth of a person, hours after brushing with the leading toothpaste, and another pictorial representation is of the germs from a similar sample taken from the mouth

of another person using the 'New Pepsodent'. The former shows a large number of germs remaining in the sample of saliva where the leading toothpaste is used and the latter shows almost negligible quantity of germs in the sample of saliva where New Pepsodent is used. The advertisement also speaks of tests conducted at the Hindustan Lever Dental Research Centre . and says that the appellant's (Hindustan Lever Limited) product is based on a germ check formula, which is twice as effective on germs as the leading toothpaste and that it was in fact, 102% better in fighting germs. In the TV advertisement of the appellant (Hindustan Lever Limited), two boys are asked the name of the toothpaste with which they had brushed their teeth in the morning. The advertisement shows Pepsodent as being 102% superior in killing germs, which is being used by one of the boys. So far as the other boy is concerned, who is using another toothpaste, which is inferior in killing germs, the lip movement, according to one respondent, indicates that the boy was using Colgate, though the voice is muted. Additionally, when this muting is done, there is a sound of the same jingle as is used in the usual COlgate advertisement.

The manufacturers of Colgate, the Colgate Palmolive (1)Limited, took objection to the advertisement. After all, in 1997, Colgate had 59 percent of the market share, while Pepsodent had a 27 percent share. The advertisement did have an effect. There was a reduction of 5 percent in the sales of Colgate in August, 1997, and of 8 percent in September, 1997. Is the advertisement an unfair trade practice? Court Case: Clinic Plus v. Parachute Coconut Oil The Hindustan Lever Limited (HLL) manufactures and sells hair oil under the brand name of 'Clinic Plus,.6 It calls the product- 'coconut hair oil'. The HLL advertised in the press and electronic media about its coconut hair oil, emphasising that the oil was non-sticky. In the TV advertisement, a boy would say 'Chi School mein sub muzhe chipku chipku kahte hain', (In school everyone calls me 'the sticky one' as my hair sticks together). The oil actually, was a mixture of coconut oil and paraffin, a substance used in the manufacture of cosmetics. Marico Industries manufactures and sells coconut oil under the brand name 'Parachute'. It put up several newspaper and television advertisement campaigns that stated:
'When they say plus, they mean 42 percent coconut hair oil + 58 percent paraffin. And when we say Parachute, we mean 100 per cent coconut oil. ... when you use coconut oil, don't buy diluted, buy 100 percent pure.... 100 percent coconut oil, 0 percent paraffin.'

In another advertisement, there is an arrow pointing towards a can and the text reads:
'... this coconut oil has an added ingredient-paraffin ... when you use coconut oil, do not buy diluted, buy 100 percent pure ... 100 percent coconut oil, 0 percent paraffin.'

It was a fact that the HLL's product contained 58% paraffin. It is this which made the oil non-sticky. The HLL advertisement claimed that the hair oil was non-greasy and contained liquid protein. The HLL moved the MRTP, claiming that the advertisement was an unfair trade practice. Decide. Court Case: Colgate Dental Cream-Double Protection

The Colgate Palmolive Ltd., manufacturers of the Colgate brand of tooth-paste, introduced its toothpaste, styling it as 'Colgate Dental Cream-Double Protection (CDC-DP).7 The Colgate Palmolive Ltd. gave wide publicity to CDC-DP in print and television media, claiming it to be 2Y2 times superior to any

ordinary toothpaste, in fighting germs, giving protection from germs that cause bad breath, and tooth decay.The advertisement irked its competitor, the Hindustan Lever Ltd., who moved the Commission, alleging that the advertisements disparaged toothpastes manufactured by it under various brand names. It contended that a reference to 'ordinary' toothpastes was to all other brands than Colgate. Decide.

Court Case: Ekcco Herbs India

Vicco is a manufacturer of various ayurvedic products including 'Vicco Vajradanti' toothpowder.f The Viccotrademark has been registered with it since 1982. Over a period of time, Vicco has carved a niche for itself in the market and gained consumer acceptance. Ekcco Herbs (India) launched a toothpowder called 'Primo Vajradanti' toothpowder. It used an identical shape, size and colour of the containerlbottle as that of the 'Vicco Vajradanti'. Vicco's stockists reported that the packages were.so identical that not only the consumers, but even the retailers were getting confused. Vicco alleges that Ekcco i indulging in an unfair trade practice under the Monopolies and Restrictive Trade Practices Act. Decide.

Court Case: Horlicks Hidden Wealth Prize Offer


The HMM limited manufactures and markets consumer products, including Horlicks.9 In September, 1985, it advertised about a scheme called the 'Hidden Wealth Prize Offer' for buyers in Delhi. A lucky purchaser of a bottle of Horlicks could find a coupon inside the bottle. The coupon would indicate the prize. The prizes included 5 Hotline Colour TV s, 10 gift vouchers of Rs. 2,000 each for Hotline appliances and other cash prizes. The prizes were to be claimed by January 15, 1986. The advertisements stated that even if a buyer's coupon did not carry a winning message, he had 'several more chances to try. So get the goodness of Horlicks, now. Because with it, you surely can't lose!' The costs incurred for running the scheme were as follows: Expenditure on prizes: Rs. 52,250 Advertisements: Rs. 1,84,10 1 Published Material: Rs. 45,312 Miscellaneous Expenditure: Rs. 626.55 HMM had spent Rs. 2,33,33,637 and Rs. 2,96,69,208 respectively, in the years 1984-85 and 198586, on advertisements and marketing of Horlicks. A case was brought before the Supreme Court, in appeal from the MRTPC, that a scheme like this is just a lottery for the purposes of promotion of its sales. It was alleged that the scheme was intended to wean away the consumers from Bournvita, by allurements of lucky prizes of high value, rather than by fair means, which may benefit the general run of the consumers. Thus, it is an unfair trade practice within Section 36-A(3)(b) of the MRTP Act. Discuss.

Court Case: Nirma Detergent

Nirma Industries Limited manufactures and sells 'Nirma' washing powder, 'Nirma' detergent cakes and 'Nirma' bath soaps. 10 The company has been manufacturing these products since the 1970s. These products are marketed and sold all over the country. Ninna Industries, on April 29, 1991, floated a scheme of awarding and distributing prizes through a lottery. In each one kilogram pack of detergent powder, a coupon, bearing a number, was placed. A draw of lots was to be held on August 30, 1991. The coupons mentioned that prizes worth Rs. 71lakh were to be distributed, including a Contessa car,a Maruti 800 car, a BPL TV set, a gold chain, a Titan watch and a steel jug. The conduct of the scheme of prizes through a lottery was approved and authorised by the District Magistrate, Ahmedabad, under the Bombay Lotteries (Control and Tax) and Prize Competition (Tax) Act, 1958. Ninna Industries Limited had raised the prices of its detergent just a few days before the scheme was floated. This, it claims, had been necessitated due to an increase in the price of the raw materials. The Director General of Investigation and Registration has alleged that the scheme was an unfair trade practice under Section 36A(3)(a) of the MRTP Act. Decide. Court Case: National Panasonic Prize Contest National Panasonic India Private Limited issued an advertisement in the Hindustan Times, on July 20, 1997, announcing a prize contest. II The contest was to remain open till August, 15, 1997. The first prize was a trip for two persons to witness the Winter Olympics in Japan; the second prize was two Panasonic Mini Hi-Pi systems, with 5 CD changers; the third prize was three Panasonic G-400 cellular phones; and there were 500 exciting consolation prizes. In order to enter the contest, a person had to buy a Panasonic television, which was being offered at a special price of Rs. 2,000 below the normal price. The contest consisted of three simple questions, to be answered by the participants. It was alleged before the Monopolies and Restrictive Trade Practices Commission, that the prize contest constituted an unfair trade practice. Decide. ./