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CENTRAL UNIVERSITY OF SOUTH BIHAR

SCHOOL OF LAW AND GOVERNANCE

Topic: ROLE OF CONSUMER PROTECTION LEGISLATION IN

CURTALING UNFAIR TRADE PRACTICE.

SUPERVISOR: NAME: ANUPAMA VATS

Dr. DEO NARAYAN SINGH. PROGRAM: B.A.LLB (1st Semester)
 Table of Contents

INTRODUCTION …………………………………….,.,……………………………….. 3

DEFINITION OF UNFAIR TRADE PRACTICE……………………………………….. 4 - 5

ROLE OF C.P.ACT 1986…………………………………………………………………. 6 - 7

CASES ……………………………………………………………………………………. 8 – 11

CONCLUSION……………………………………………………………………………. 12
 INTRODUCTION

A person who purchase goods or services is called consumer. Ensuring the welfare of the

Consumer is one of the major responsibility of the government and hence the consumer

protection Act was introduced. The consumer protection Act, 1986 was enacted as a result of

wide spread consumer protection movement.

The purpose of the Act to provide consumers with effective safeguards against different

types of exploration such as defective goods, unsatisfactory services and Unfair Trade Practices.

It envisages following Rights of the consumes :

I. Right to protection

II. Right to information

III. Right of choice

IV. Right of hearing

V. Right of redressal

VI. Right of education

The main idea behind the enactment of this Act is to protect the consumer from Unfair

Trade Practices. The object and purpose of enacting the Act is to render simple,

inexpensive and speedy remedy to the consumer with complaint against defective goods

and deficient services. Prior to the Act the consumers were required to approach the civil

Court for securing justice for the wrong done to them and it is a known fact that decision

in a suit takes years.

 DEFINITION OF UNFAIR TRADE PRACTICE

Consumer Protection Act, 1986 defines Unfair Trade Practices under Section 2(1) ( r)

Which means a trade practice which for the purpose of promoting the sale, use or supply

of any goods or for the provision of any services, adopts any unfair method or Unfair or deceptive

practice including orally, written or by verbal representations.

The concept of Unfair Trade Practices originated from the Monopolies and Restrictive Trade

Practice (MRTP) Act, 1969 which was repealed be the Competition Act,2002.

• Section 36A of the previous Monopolies and Restrictive Trade Practice Act,1969

defined “Unfair Trade Practices” as a trade Practice which for the purpose of

promoting the sale, use or supply of any unfair method or Unfair or deceptive

practice including oral, written and verbal misrepresentation regarding standard,

quality, status, condition, usefulness and price of goods or services; false warranty,

guarantee or promise regarding goods or services; disparaging of goods and

services of another person; and false advertising and misrepresentation with regard

to the gifts, price and offers in sale etc.

Section 36A had six sub – sections that cover different issues such as :

1. False representation of products or services, including false description, or

guarantee, warranty or performance of product or service.

2. Advertisement of false bargain price.

3. Contest, lottery, game of chance or skill for promotion of sale.

4. Sale of goods not in conformity with safety standars provided by the law.

5. Hoarding or destruction of goods or refusal to sell goods.

6. Spurious goods or services.

Role of consumer protection Act, 1986

The consumer protection legislation gives rights to the consumer and protect their interest.

Consumes also have remedy to recover their loss suffered by any of the Unfair Trade Practices.

If the consumers are deprived of their rights they have different forums established by the

legislation to protect their rights.

A quasi – judicial machinery is sought to be set up at the District, State and Central levels. These

judicial bodies will observe the principle of natural justice and wherever provide appropriate

compensation to consumers. It provide speedy and simple redressal to consumer disputes.

A complain is to be made to the district forum of the concerned district where the value of goods

and services and compensation if any, is up to Rs 20 lakhs, to the State commission between Rs.

20 lakhs to 1cr and to the National commission for more than Rs. 1cr.

The Consumer Protection Act empowers the consumer forums to look into the matter relating to

Unfair Trade Practice and protect the consumers against such Practices. It also empowers the

consumers to approach the consumer forum established under COPRA upon being victimised by

a Unfair Trade Practice, based on the quantum of compensation asked for by the consumer. The

forum have been given Power to pass a cease and desist order against the wrongdoer under section

14(f) of COPRA.
COPRA also empowers a consumer to approach any of the forum on it’s own without being

represented by any advocate.

The Act seeks to be protect the consumer in the following respects:

1. The right to be protected against marketing of goods which are hazardous to life and

property.

2. The right to be informed about the quality, quantity, potency, purity, standard and price of

goods to protect the consumer against Unfair Trade Practices.

3. The right to be assured, whatever possible, access to a verity of goods at competitive prices.

4. The right to be heard and to be assured that consumers' interests will receive due

consideration at appropriate forums.

5. The right to seek redressal against Unfair Trade Practices or unscrupulous exploitation of

Consumers.

6. The right to consumer education.

Section 6 of the Act spells out these objects and charges the central council with the responsibility

of attaining these objects.

CACES OF UNFAIR TRADE PRACTICE

Miss Sonika Tandon & Ors. V. Rauf Muslim Jamia Bahera

In response to advertisement published by the opposite party, the complaint took admission to

B.D.S Course, and made payment of Rs. 40,000 as fees to the O.P The concerned institute was not

recognised by the Dental Council of India. There were no proper facilities like infrastructure and

teaching staff in the college. No examination was conducted for such students. There was held to

be UNFAIR TRADE PRACTICE and the opposite party was directed to refund Rs. 2 lakhs for

loss and injury to the complainant.

Procter & Gamble Home Product LTD. V Hindustan Lever LTD.

The complainant made a grievance with respect to one advertisement by the respondent with

respect to it’s “New Ceramides Sunsilk extra Treatment Shampoo” stating that it not only repairs

but also “rebuilds, damaged hair back to life”. It was held that the advertisement would convey

that it would be able to bring back to life the dead hair, the claim was not only tall but highly

exaggerated and misleading. The MRTPC issued interim injunction restraining the respondent

from making that kind of advertisement.

The matter of Hindustan Oil Company

The Hindustan Oil advertised their cooking gas unit through the use of kerosene, and claimed that

it’s appliances are capable of providing 30% saving vis-à-vis the conventional LPG system. Such

a claims was found to be not based on any adequate test. Such false and tall claims we’re held to

be Unfair Trade Practice and desist from indulging in such Practices in future.

M. Balasundaram v. Jyothi Laboratories

In a complaint by a manufacturer of ultramarine blue, it was alleged that that respondent's

advertisement telecast on Doordarshan, Madras was calculated to disparage the complaint's

product, and hence was an Unfair Trade Practice under section 36 (1) (x) of the M.R.T.P. Act, 1969.

It was held that it could not be established that there was disarrangement of the goods, services or

trade of another. The bottle shown on the T.V. advertisement was not relatable to the product of

the complainant or the bottle in which the compliment marketed its product of any other

manufacturer, and hence there was no Unfair Trade Practice on the part of the respondent.
Director General ( I & R ) v. Usha International LTD

The respondents, manufacturer of Usha fans published an advertisement for promoting use or

supply of their fans. It announced prizes like Maruti car, Vijay Super Scooters and tape recorders,

etc. to be won by a game of chance. It increased prices also along with the scheme, and cost of the

prizes was partly / fully covered by the price increase. It was held that the respondent had indulged

in Unfair Trade Practice falling within the provision of section 36A or MRTP Act. The impugned

trade Practice had now been discontinued, the respondents we’re directed not to repeat the same

in future.

In re Polar Industries Ltd. And others

The respondent who was the manufacturer of fans under the trade name 'Polar' issued

advertisement offering off- season discount on the sale of fans. In an enquiry by the Director-

General under section 38B ( c ) of MRTP Act, it was found that the discount was measured not on

the current prices of the fans but with reference to prices which were expected to rule in future. It

was held that the concept of discount had been twisted in manner that could not attract the attention

of the consumers, and therefore, it amounted to Unfair Trade Practice. The respondent gave an

undertaking that he will not publish or issue in future any advertisement as regards off – season

discount relatable to future prices of it’s fans.

Society of Civic Rights v. Colgate Palmolive ( India ) Ltd.

The respondent company announced a contest called the “Colgate Trigard Family Good Habits

Contest”. There were a number of prizes payable to the contestants, but each entry for the contest

was to be accompanied by upper portions of two cartons with which their products, Colgate Trigard

tooth brushes we’re sold. The contest thus required every contents to buy at least two tooth brushes.

The contest was purely in the nature of lottery. A large number of persons we’re persuaded to part

with their money in the hope of getting some prizes, and this was prejudicial to the interest of

Consumers. It was held that the contest was for the purpose of promoting, directly or indirectly,

the sale of the products of respondent company, or it’s business interest, and the same was ,

therefore, an Unfair Trade Practice.

Procter & Gambler Home Product v. Raj Dev Bharadwaj

The complainant purchased Aerial super soaker detergent powder packet. The packet represented

the contents as 1 kg. detergent powder and an Aerial Bank Cake weighing 125 gms. Free, inside

the packet. The total contents were found to be 1 kg. and 75 gms instead of 1 Kg 125 gms. Thus,

each packet was underweight by 50 gms. It was held to be Unfair Trade Practice, as defined by

section 2 (1 ) (s) of the C.P. Act compensation of Rs. 2000/- was awarded to the complainant.
CONCLUSION

The Act has b come the vechicle for enabling people to secure speedy and inexpensive redressal

of their grievances with the enforcement of this law.

Consumers now feel that they are in a position to declare “Seller be aware” where as previously

the consumers were at the receiving end generally told “Buyer be aware”. Now the supplier is also

answerable for their Unfair Practices to the Consumers. This law made to control and punish

businessman involving in short wait or Unfair means of profit. It promotes honest businessman.

This Act is very important for the protection of Consumers from hoarding bad or Unfair Trade

Practice. In spite of a network of laws, regulations and guidelines being in existence to tackle

unfair Trade Practice under COPRA, the Unfair Trade Practice still exit and continue to adversely

affect the innocent Consumers as well as the competition in the market.

One of the ways to deal with the challenging situation will be by establishment of a

specialized enforcement body on consumer protection in India, i.e., the Consumer Protection

Agency (CPA), within the Ministry of Consumer Affairs, with horizontal powers for catering

to consumer protection in India, including UTPs, misleading advertisements and unsafe

products impacting a large number of consumers and having principle legal relevance. The

suggested CPA will also try to incorporate within itself the features which are lacking in
COPRA. CPA will have robust investigative powers, sufficient expertise, more stable

resources, continuity and effective enforcement of consumer protection legislation.

BIBLIOGRAPHY

BOOKS –

LAW OF TORT : P.S.A. Pillai, Ninth Edition, Eastern Book Company.

LAW OF TORTS, Including motor vehicle Act, Consumer Protection Act and Competition Act :

Dr. R.K. Bangia, Allahabad law agency.

Consumer Protection Act 1986. – Bare

INTERNATE SOURCES –

www.ssrana.in/ Unfair- Trade- Practice, aspx

Unfair Trade Practices and Institutional challenges in India – An analysis, PDF.