BUSINESS REGULATIONS

Unit -4
Competition Act 2002 and Consumer Protection Laws
COMPETITION ACT 2002
Introduction
The first step to success is competition. When markets stabilize, the economy gains sustainability,
earnings, effectiveness, advancement, and long-term advantages. One such law is the Competition Act,
of 2002, which aims to eliminate anti-competitive behavior by prohibiting anti-competitive agreements
and mistreating market domination situations. As long as it is done in a legal manner, competition is
regarded as a healthy practice for fostering chances and acting as a motivator in any profession.
Time line

Monopolistic and Restrictive Competition Act,

Trade Practices Act, 1969 2002

Liberalization 1991

Monopolistic and Restrictive Trade Practices (MRTP) Act

MRTP full form is Monopolistic and Restrictive Trade Practices. The MRTP act is no longer active in
India as it has been replaced by the Competition Act which came into effect on September 1st, 2002 by
the Competition Commission of India.

Monopolistic Trade Restrictive Trade Unfair Trade

Practices Practices Practices

Monopolistic Trade Practices - This refers to the misuse of one’s hold in the market to abuse the
market with respect to the production and sale of commodities and services. As part of this practice
companies:
1. Eliminated or prevented competition
2. Took advantage of their monopoly by charging consumers unreasonably high prices.
3. Deteriorated the quality of products
4. Limited technical development
5. Adopted unfair trade practices
Restrictive Trade Practices - In order to gain power in the market and maximize their profits traders
often indulged in activities that blocked the flow of capital into production. These traders also affected
supply by bringing in conditions for delivery which in turn gave rise to unjustified costs.
Unfair Trade Practices - Unfair trade practices are comprised of:
1. A false representation of second-hand goods and new goods.
2. Misleading representation of the quality of goods, their style, usefulness, need, standard, etc.
3. False claims or representation on the price of goods and services
4. False warranties and guarantees on goods and services without performing adequate testing on the
product.
5. False facts are given regarding affiliation, sponsorship, etc.
Competition Act 2002
According to Competition Act 2002, which begins with the statement an “Act to provide keeping in
view the economic development of the country for the establishment of a commission to prevent
practices having an adverse effect on competition, to promote and sustain competition in markets to
protect the interest of the consumer and to ensure freedom of trade carried in by other participants in
markets in India and for matter connected there with or incidental there to”.
Definitions
1. Acquisition: Acquisition is defined as the direct or indirect agreement to acquire shares, voting
rights, or control of assets over any enterprise.
2. Cartel: A cartel is defined as an association of producers, and sellers who limit control distribution,
sale, or promotions of goods through an arrangement previously made.
3. Position: A dominant position means a position of power held by an enterprise in the related market.
It enables the enterprise to function freely and influence the market to its direction.
4. Predatory pricing: Predatory pricing is where the price of goods and services is reduced to well
below the cost of production in order to eliminate competition.
5. Rule of reason: The interpretation of activity based on business justification, market impact on
competition, and on the consumer.
Scope of the Act
 It extends to the whole of India.
 It includes 66 sections
 It Covers definitions, Anti-Competitive agreement, abuse of dominance, competitive commission of
India etc
 It Covers financial and administrative powers and duties, and duties and functions of Commission
Objectives of the Act
 To Eliminate adverse practices having an adverse effect on competition.
 To Promote and sustain competition in markets.
 To Protect consumer’s interests.
 To Ensure freedom of trade carried on by other participants in markets, in India.
Importance of the Act
 It Prevent practices from having adverse effects on Competition.
 It Curtail abuse of dominance.
 It Promote and Sustain Competition in the Market.
 It Ensure quality of products and services.
 It Protect the interest of consumers.
 It Ensure freedom of trade in domestic industries.
 It aims at Quality of Products and Services.
 It Facilitate fast mergers and acquisitions of companies.
 It Regulate acquisitions and mergers coming within the threshold limits.
 Establishment of the Competition Commission of India.
 Repeal MRTP Act
 Transfer of Provisions relating to Unfair trade practices to the Consumer Protection Act.
Practices Prohibited
1. Price fixing - If two or more supplier fixes the same price for supply the goods then it will be
restricted practice.
 2. Bid rigging - If two or more supplier exchange sensitive information of bid, then it will also be
restricted practice and against competition.
3. Re-sale price fixation - If a producer sells the goods to the distributors on the condition that he will
not sell any other price which is not fixed by producer.
4. Exclusive dealing - This is also restricted practice. If a distributor purchases the goods on the
condition that supplier will not supply the goods any other distributor. Above all activities promote
monopoly so under competition act these are void and action of competition commission will not
entertain by civil court.
Features of the Act
1. Anti Agreements: Any individual or enterprise shall not deal in production supply or distribution
that may cause a negative impact regarding competition in India. Any existence of such agreements
is considered illegal.
Horizontal contract: This is an agreement between two or more entities or entities that are generally
equivalent in terms of production, distribution of supply, etc.
The Competition Act 2002 prohibits horizontal contracts that:
 A contract that fixes a direct or indirect price for the purchase or sale of a product.
 Agreements on the control of restrictions, production, supply, investment, and provision of
services in relation to specific products and selected quantities.
 Market sharing agreements;
 Agreement on Bidding Tactics.
 Agreements within the variety of Cartels.
Vertical contract: This is an agreement between two or more entities or entities that are different in
terms of production, distribution of supply, etc.
The Competition Act 2002 prohibits Vertical contracts that:
 Tie in Arrangements: Tie-in arrangements is an agreement wherein a seller sells one desirable
product on a precondition that buyers shall purchase a second less desirable product or service.
The former product shall be known as a tying product and the latter shall be known as a tied
product.
 Exclusive Supply Agreement: includes any agreement restricting in any manner the purchaser
in the course of his trade from acquiring or otherwise dealing in any goods other than those of
the seller or any other person
 Exclusive Distribution Agreement: includes any agreement to limit, restrict or withhold the
output or supply of any goods or allocate any area or market for the disposal or sale of the goods
 Refuse to Deal: Refusal to deal is a concept wherein one firm denies or refuses to sell to another
firm, desiring to sell only at a price that is recognized to be excessive pricing or is desiring to sell
under conditions that are implausible. The key point of competition uneasiness arises when a
firm has a dominant position and denies or refuses to deal with another firm and that refusal
proves to be detrimental to the competition and consumers.
 Re-Sale Price Maintenance: includes any agreement to sell goods on condition that the prices
to be charged on the resale by the purchaser shall be the prices stipulated by the seller unless it is
clearly stated that prices lower than those prices may be charged.
2. Abuse of dominant position: In the event, an enterprise or an associated individual is found to
indulge in practices that are unfair or discriminatory in nature shall be considered an abuse of the
dominant position. If a party is found to be in abuse of its position, then it will be subjected to an
investigation from the concerned authorities.
The Competition Act 2002 prohibits:
  Imposing unfair conditions.
 Limiting or Restricting production.
 Denial of Market Access.
 Using a dominant position to protect others
 Making any contract unrelated to the subject.
3. Combinations: As per the act, a combination is defined as terms that lead to acquisitions or
mergers. But should such combinations cross the limits as put forth by the Act, then the parties
involved would be under the scrutiny of the Competition Commission of India.
Types of Combinations
 Horizontal Combination – Same Industries – Cause Adverse effect on Competition.
 Vertical Combination – Different stages of Production – Appreciable Adverse effect on
competition.
 Conglomerate Combination – Not in the Same line of Business - Appreciable Adverse effect
on competition.
Regulations of Combinations
No person or enterprise shall enter a combination that causes or is likely to cause an adverse
effect on competition within the relevant market in India and such a combination shall be void.
any person or enterprise, who or which proposes to enter into a combination, may, at his or its
option, give notice to the Commission, in the form as may be specified, and the fee which may
be determined, by regulations, disclosing the details of the proposed combination, within
SEVEN days of—
(a) approval of the proposal relating to merger or amalgamation, by the board of directors of
the enterprises concerned with such merger or amalgamation, as the case may be;
(b) execution of any agreement or other document for acquisition or acquiring of control
The Commission shall, after receipt of the notice
The provisions of this section shall not apply to share subscription or financing facility or any
acquisition, by a public financial institution, foreign institutional investor, bank, or venture
capital fund, pursuant to any loan agreement or investment agreement.
The public financial institution, foreign institutional investor, bank, or venture capital fund, shall,
within SEVEN days from the date of the acquisition, file, in the form as may be specified by
regulations,
4. Competition Commission of India
The Competition Commission of India is an independent body with the power to enter into
contracts and should the contracts be broken they can sue the parties involved.
The objectives of the Act are sought to be achieved through the Competition Commission of India,
which has been established by the Central Government with effect from 14th October 2003.
CCI consists of a Chairperson and 6 Members appointed by the Central Government.
The term of the office is 5 years or till the attainment of the age of 65 years.

Objectives of the Commission

 To eliminate practices having an adverse effect on competition,
 To promote and sustain healthy competition,
 To protect the interests of consumers, and
 To ensure freedom of trade in the markets of India.
Structure of Competition Commission of India
 Chairperson

Member
Member (Anti-trust-2 Member Member Member Member
(Anti-trust-1 or (Combination (Legal (Economic (Advocacy
Division) Combination 2 Division) Division) Division) Division)
1 Division)

Duties of the Competition Commission of India

 To promote and then sustain an enabling competition culture through engagement and enforcement
which would inspire businesses to be fair, competitive and innovative.
 To enhance consumer welfare.
 To support economic growth.
 The Competition Commission of India aims to establish a robust competitive environment through
proactive engagement with all the stakeholders including the consumers, industry, government as
well as international jurisdictions
 Ensuring fairness and equity in marketplace transactions.
 Protecting the 'public interest' including in some cases considerations relating to industrial
competitiveness and employment.
 Protecting opportunities for small and medium businesses.
Functions of the Competition Commission of India
 It is the duty of the CCI to eliminate such practices that have an adverse effect on competition.
 It is mandated to promote and sustain competition while protecting the interests of consumers.
 CCI ensures freedom of trade in the Indian market.
 The Commission also gives opinions on competition issues when asked by a statutory authority that
is established under law.
 It is also required to undertake competition advocacy.
 The CCI also creates public awareness and imparts training on competition issues.
 Additionally, an appellate body called 'Competition Appellate Tribunal (CAT) was also set up
based on the Amendment Act of 2009, which allows for a final appeal to the Supreme Court of
India.
 CCI is, therefore, fully empowered to carry out the mandated functions.
Powers of the Competition Commission of India
Sub Section 3 – Determining an agreement has an appreciable adverse effect on competition
 Creation of barriers to new entrants in the market.
 Driving existing competitors out of the market.
 Foreclosure of competition by hindering entry into the market.
Sub-Section 4 – Inquiring about an Enterprise enjoying a dominant Position
 Market Share of Enterprise
 Size and Resources of Enterprise.
 Size and importance of the competitors
 Commercial Advantage over competitors
Sub Section 5 – Determining Relevant Market, Relevant Geographic Market, Relevant Product
Market
Sub Section 6 – Determining Market “Relevant Geographic Market”
 Regulatory trade barriers
 Local Specification requirements
 National Procurement Policies
 Adequate distribution facilities
Sub-Section 7 – Relevant Product Market
 Physical Characteristics of Goods or End use of Goods.
 Price of Goods and Services.
 Consumer Preferences.
 Existence of Specialized Product
 Classification of Industrial Product

Competition Appellate Tribunal

Under Section 53A of the Competition Act, the Central Government shall by notification, establish
Appellate Tribunal to be known as Competition Appellate Tribunal for the following:
 Tribunal is established by the Central Government to hear and dispose of appeals against orders
and directions passed by Commission.
 Adjudicates on Claims for compensation that may have arisen from findings of the commission.
Composition – 1 Chair Person and 2 Members Maximum.
Term of Office – 5 years or till they attain the age of 65 years. – Eligible for Re-appointment.
Offenses and Penalties

Infringement Fine or Penalty Who is Liable?

Anti –  Penalties of up to 10% of turnover  Enterprises who enter into an
Competitive (or 3x cartelized profits) anti-competitive agreement.
Agreements  Directors or officials also liable
Abuse of  Penalties of up to 10% of turnover  Enterprises abusing dominant
Dominance  Division of Dominant Enterprise. position
 Directors or officials also liable.
Failure to notify  Fine of up to 1% of Combined  Person or Enterprise
a reportable turnover or assets  Directors or officials also liable
combination
Contravention of  Imprisonment for 3 years. or  Any Person, or Company
Orders of  Fine of Rs.25 Crores or Both
Competition
commission
Failure to comply  A fine of Rs.1 Lakh for each day  Any Person or Company
with the direction  Non-Compliance subject to
of the Maximum of Rs.10 Crores
Commission

Difference between MRTP and Competition Act

MRTP Act (Monopolies and Restrictive Trade Competition Act, 2002

Practices Act)
The MRTP Act is a legislation that was The Competition Act, 2002 is legislation that
 established in 1969 with the primary objective was established in 2002 with the primary
of curbing monopolistic practices and objective of promoting and protecting
promoting competition in the Indian market. competition in the Indian market.
The MRTP Act is regulated by the Ministry of The Competition Act, 2002 is regulated by the
Corporate Affairs. Competition Commission of India (CCI).
The Competition Act, 2002 has provisions for
The MRTP Act has provisions for the regulation the prevention of anti-competitive agreements,
of monopolies and the prevention of restrictive the regulation of combinations (mergers and
trade practices. acquisitions), and the prevention of abuse of
dominant position.
Penalties for non-compliance under the
Penalties for non-compliance under the MRTP
Competition Act, 2002 include fines and
Act include fines and imprisonment.
penalties for individuals and companies.
The MRTP Act is not applicable to certain
The Competition Act, 2002 applies to all sectors
sectors like agriculture, small-scale industries
of the economy.
and services.
The MRTP Act does not have provision for The Competition Act, 2002 has provision for
leniency policy. leniency policy.
The MRTP Act does not have provision for The Competition Act, 2002 has provision for
settlement of cases. settlement of cases.

CONSUMER PROTECTION ACT 1986

Introduction
The Consumer Protection Act, implemented in 1986, gives easy and fast compensation for consumer
grievances. It safeguards and encourages consumers to speak against insufficiency and flaws in goods
and services. If traders and manufacturers practice any illegal trade, this act protects their rights as a
consumer. The primary motivation of this forum is to bestow aid to both parties and eliminate lengthy
lawsuits.
Need for Consumer Protection Act in India
The need for consumer protection arises from the need to protect consumers from loss or injury or other
prevailing malpractices and to ensure:
 Physical safety of a consumer.
 Access to information.
 Corporate Social Responsibility to provide quality and quantity of goods at fair prices.
 Consumer satisfaction.
 Social justice and Trusteeship.
 Survival and the Growth of businesses.

Objectives of the Act

 To Provide better and all-around protection to consumers.
 To Provide machinery for the speedy redressal of grievances.
 To create a framework for consumers to seek redressal.
 To provide rights to consumers.
 To safeguard the rights of consumers.

Importance of the Act

 Sale of adulterated goods such as adding inferior substances to the product being sold.
 Sale of counterfeit goods such as selling a product of lesser value than the real product.
 Sale of sub-standard goods such as the sale of products that do not meet the prescribed quality
standards.
 Sale of duplicate goods.
 Use of malfunctioning weights and measures that lead to underweight products.
 Black marketing and hoarding eventually lead to scarcity of the product and well as a rise in the price
of the same.
 Overcharging a product, i.e., charging a product above its Maximum Retail Price.
 Supplying defective goods.
 Advertisements that are misleading, i.e., advertisements that falsely claim a product or a service to be
shown as superior quality, grade, or standard when not in real.
 Supply of inferior services, i.e., quality of service lesser than the condition agreed.

Main Features of the Act

 It applies to all kinds of goods and services
 Provisions of this act are in addition to the provisions of any other Act in force in the country. Thus,
this act does not limit or reduce the scope of any other act.
 Under this act, there is a provision for the Centre and State Governments to set up Consumer
Protection Councils composed of both official and non-official members. The objectives of the
council are:
 To promote the rights and Interests of the consumers
 To educate and protect them.
 This act provides the rights to the consumer:
 This act is based on the principle of compensation wherein fair compensation is provided
 To redress the grievance, there is a provision for three-tier judicial machinery

Important Definitions
‘Consumer’ means any person who buys any goods for consideration which has been paid or promised
or partly paid and partly promised, or under buy deferred payment and includes any use of such goods
other than the person who buys such goods for consideration.
‘Service’ means service of any description which is made available to potential users and includes the
provision of facilities in connection with banking, financing, insurance, transport, processing, supply of
electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or
the purveying of news or other information.
‘Goods’ means every kind of movable property other than actionable claims and money, and includes
stock and shares, growing crops, grass, and this attached to or forming part of the land which are agreed
to be severed before sale or under the contract of sale.
‘Defect’ means any fault, imperfection or shortcoming in the quality, quantity, potency, purity, or
standard which is required to be maintained by or under any law for time being in force or under any
contract, express or implied, or as is claimed by the trader in any manner whatsoever in relation to any
goods.
“Deficiency” means any fault, imperfection shortcoming, or inadequacy in the quality, nature, and
manner of performance that is required to be maintained by or under any law for time being in force or
has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to
any service.
An “unfair trade practice” means a trade practice, which, for the purpose of promoting any sale, use,
or supply of any goods or services, adopts an unfair method, or unfair or deceptive practice. Some of
these practices include
a) False or misleading representation,
b) Bargain sale,
c) Offering of gifts, prizes, etc., and considering contents or lottery,
d) Non-compliance with product safety standards,
e) Hoarding or destruction of goods.

Complaint means any of the following and has made a complaint

i. A consumer, or
ii. Any voluntary consumer association registered under the Company Act, 1956 or under any law for
the time being in force, or
iii. The Central govt or any State govt, or iv. One or more consumers, where there are numerous
consumers having the same interest v. In case of death of a consumer; his legal heir or
representative.

Complaint means any allegation in writing made by a complaint that

i. An unfair trade practice or a restrictive trade practice has been adopted by any trader or service
provider;
ii. Goods bought by him or agreed to be bought by him suffer from one or more defects
iii. Services hired or availed of or agreed to be hired or availed of by him suffer from a deficiency in
any respect
iv. A trader or the service provider, as the case may be, has charged for the goods or for the services
mentioned in the complaint, a price in excess of the price
v. Goods that will be hazardous to life and safety when used are being offered for sale to the public
vi. Services that are hazardous or likely to be hazardous to the life and safety of the public when used,
are being offered by the service provider which such person could have known with due diligence
to be injurious to life and safety, with a view to obtaining any relief provided by or under this act.

Consumer Rights
1. The Right to be heard: The consumer has the right to be heard if he has any complaint or
grievance regarding the good or service received. This implies that consumers’ complaints and
grievances must receive due attention and consideration at an appropriate forum.
2. The Right to safety: The consumers are entitled to protection of their health and safety from the
goods and services they buy. They should not be supplied goods or services which are hazardous to
their health and safety.
3. The Right to Consumer Education: This covers right to creating an awareness to the consumers
on the safety measures and different product availability and quality.
4. The Right to be informed: This implies that consumers should be given correct and full
information about the quality of goods that they buy. They should be provided information about
the ingredients of the product, freshness of the product, any side effects that may occur as a result of
consumption of a commodity. This right applies especially to the drug manufacturers and suppliers.
5. The Right to choose: This implies that consumers should be provided a variety of products from
which they can make a choice of their liking. The opportunity to choose from limited options
restricts their right to choose.
6. The Right to get redress: This implies that consumers’ complaints and grievances about the
products and services supplied to them must be redressed. That is, they should not only be heard but
their complaints must be redressed and compensated adequately.
Consumer Complaints
1. Complaint against unfair Trade practice: It means a trade practice or a business 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. It may be as under:
a. Falsely suggests that the services are of a particular standard, quantity or grade;
b. Falsely suggests any re-built, second-hand renovated, reconditioned or old goods are new
goods
c. Falsely suggests that the goods are of a particular standard quality, quantity, grade composition
style or model
d. Represents that the goods or services have sponsorship, approval, performance, characteristics,
accessories, uses or benefits which they do not have
e. Represents that the seller of the supplier has a sponsor ship or approval or affilication which it
does not have
f. Makes a false or misleading representation concerning the need for , or the usefeulness of any
goods or services.
g. Give any warranty or guarantee of the performance, efficacy or length of life of the goods, that
is not based on an adequate or proper test
h. Makes to the public a representation in the form that purports to be a warranty of guarantee of
the goods or services
i. A promise to replace, maintain or repair the goods until it has achieved a specified result.
j. Materially misleads about the prices at which such goods or services are available in the
market.
2. Complaint Against Defective goods: a complaint may be filed in respect of the goods which suffer
from one or more defects. ‘Defect’ means any fault, imperfection or shortcoming in the quality,
quantity , potency, purity or standard which is required to be maintained by or under any law for the
time being in force or under any contract express of implied or as is claimed by any trader. The term
‘trader’ includes any seller, distributor, manufacturer and packer of goods.
3. Complaint Against Deficient Services: The complaint can be made in respect of any services
which suffer from deficiency in any respect. The term ‘deficiency has been defined in section the
quality, nature and manner of performance which is required to be contained by or under any law
for the time being in force or has been undertaken to be performed by a person in pursuance of a
contract or otherwise in relation to any service.
4. Complaint Against False Bargain price: Where an advertisement is published in a newspaper,
whereby goods or services are offered at a bargain price when in fact there is no intention that the
same may be offered at that price, for a reasonable period or reasonable quantity, a complaint can
be filed again the trader by the consumer.
5. Complaint Against Non-compliance of Prescribed Standards: Any sale or supply of goods, for
use by consumers, knowing or having reason to believe that the goods do not comply with the
standards prescribed by some competent authority, in relation to their performance, composition,
contents, design, construction, finishing or packing, as are necessary to prevent or reduce the risk of
injury to the person using such goods, a compliant can be filed against such a case.
Who can file a complaint?
 The consumer to whom the goods are sold or delivered, or agreed to be sold are delivered, or the
service has been provided or agreed to be provided.
 Any recognized consumer association, regardless of whether the consumer is a member of such
association or not.
 One or more consumers, where there is numerous consumer having the same interest with
permission of the district forum on behalf of or for the benefit of all consumer so interested.
 The state or central government either in its individual capacity or as a representative of the interest
of the consumer in general
Where to file a complaint?
 District Forum – If the cost of goods or services and compensation asked for is up to Rs. 20 lakhs,
the district where the cause of action has arisen or where the opposite party resides.
 State Commission – If the cost of goods or services and compensation asked for is more than
repress 20 lakhs, but less than rupees 1 Crore.
 National Commission at New Delhi – If the cost of goods or services and compensation asked for
exceeds rupees 1 Crore.

Time limitation to file complaints

 Consumer dispute can be filed within 2 years from the date on which the cause of action arises.
 Appeals are required to be filed within 30 days from the date of receipt of the court’s order.

Procedure to filing complaint

 Notice has to be sent to the Opposite Party
 Prepare the consumer complaint in the required format
 Get the complaint affidavit notarized through a notary
 Submit the complaint and court fee to the receiving clerk in the consumer court who will give the
date for the admission hearing and complaint reference number
 On admission hearing, the consumer would be informed whether his case is fit for acceptance or not.
If accepted, he will be given the date for the next hearing
 The court will send a notice and complaint copy to the opposite party seeking a reply within 30 days.
 Where a complaint alleges a defect in the goods that can’t be determined without proper analysis, the
forum/commission sends it to the laboratory to find out whether there is any defect in it or not.
 The hearings will continue till the matter is decided
 The complaint should be decided within 90 days.

Consumer dispute
Consumer dispute refers to a dispute where the person against to whom a complaint has been made,
denies the allegations contained in the complaint. Thus, it is clear that if a person against whom
complaint is made does not agree to the complaint, there is ‘consumer dispute’.
Consumer disputes advisory bodies and redressal agencies

To Resolve Dispute

Advisory Bodies Redressal Agencies

Advisory Bodies: The Consumer Protection Councils are the advisory bodies under the CPA and have
been charged with promoting and protecting the rights of consumers. They give publicity to matters of
consumer concern, further consumer education, and protect consumers from unscrupulous exploitation.
The councils meet periodically to deal with consumer problems and take corrective measures for
protecting the rights of consumers.
The following are the three types of Consumer Protection Councils:
 a) Central Consumer Protection Council: Central Government has established, headed by the
Minister in charge of consumer affairs in the Central Government as Chairman of the Central
Council. They meet at least once every year.
b) The State Consumer Protection Councils: State Central Government, headed by the Minister in
charge of consumer affairs in the State Government as Chairman of the State Council. They meet at
least twice every year.
c) The District Consumer Protection Council: State Government, headed by the Collector of the
district as Chairman of the District Council. They meet at least twice every year.

Consumer Redressal Agency

The word ‘REDRESSAL’ means a ‘REMEDY’. Redressal means a remedy for the loss suffered by
consumers like us. These Forums (courts) award compensation to the consumer if the manufacturer or
the trader or the service giver is at fault.

(I) The District Forum: District forum is headed by district judge. Each district forum is to be
established by the State Government by notification to be published in Official Gazette.
a. Composition of the district forum: Each district forum shall consist of
 A person who is, or who has been or is qualified to be, a district judge, who shall be its President.
 There will be 2 other members who shall be persons of ability, integrity and standing and have
adequate knowledge or experience or have shown capacity in dealing with problems rebating to
economics, law, commerce, accounting, industry, public affairs or administration, one of whom
shall be a women.
 Every appointment shall be made by the State Government on the recommendation of Selection
Committee consisting of the following namely:
1. The President of the State Commission – Chairman,
2. Secretary, Law Department of the State- Member.
3. Secretary, in charge, of the Department dealing with consumer affairs in the state-member.
b. Terms and age: Provided that a member shall be eligible for re-appointment for another term of 5
years or up to the age of 65years whichever is earlier.
c. Jurisdiction of the district forum:
(a) Subject to other provisions of this Act, the District Forum shall have jurisdiction to entertain
complaints where the value of the goods or services and compensation if any, claimed does not exceed
rupees twenty lakhs.
(b) A complaint shall be instituted in a District Forum within the local limts of whose jurisdiction.
1. The Opposite part of each of the opposite parties, where there are more than one, at the time of the
institution of the complaint, actually and voluntarily resides or carries on business or has a branch office,
or personally works for gain
2. Any of the opposite parties where there are more than one, at the time of the institution of the
complaint, actually and voluntarily resides or carries on business or has a branch office, or personally
works for gain, provided that in such case either the permission of the District Forum is given.
3. The cause of action, wholly or in part arises

(II) The State Commission (State commission headed by Judge of High Court, jurisdiction whole
state).
a. Establishment: In every state, the state govt. by issuing a notification can establish consumer
Grievance Redressal Commission to be called ‘State Commission’.
b. Composition: Each state Commission shall consist of:
(a) A person who is or has been a judge of a High Court, appointed by the State Govt. who shall be its
President. But his appointment shall be made only after consultation with the Chief Justice of the High
Court.
(b) There will be 2 other members who shall be persons of ability, integrity and standing and have
adequate knowledge or experience or have shown capacity in dealing with problems rebating to
economics, law, commerce, accounting, industry, public affairs or administration, one of whom shall be
a women.
(c) Every appointment shall be made by the State Government on the recommendation of Selection
Committee consisting of the following namely:
1. The President of the State Commission – Chairman,
2. Secretary, Law Department of the State- Member.
3. Secretary, incharge, of the Department dealing with consumer affairs in the state-member.
c. Terms and Age: Every member of the State Commission shall hold office for a term 5years, or up to
the age of 67 years, whichever is earlier, and shall not be eligible for re-appointment.
d. Jurisdiction of the State Commission: Subject to other provisions of this Act, the District Forum
shall have jurisdiction
(a) to entertain
1. complaints where the value of the goods or services and compensation if any claimed exceed rupees
twenty lakhs but not exceed rupees one crore
2. appeals against the order of any District Forum within the State.
(b) To call for the records and pass appropriate and pass appropriate order in any consumer dispute
which is pending before or have been decided by any District forum within the State.
(III) The National Commission: National commission headed by Chief Justice of India, jurisdiction –
entire nation) Following are the provisions of the CPA in respect of National Commission:
a. Establishment: By issuing notification Central Government can set up a National Commission. This
commission has been established at New Delhi.
b. Composition: The National Commission Shall compose of:
(a) A person who is or has been a judge of the Supreme Court, shall be appointed by the Central
Government. He shall be is President.
(b) There shall be 4 other members including one woman. They shall be persons of ability integrity and
standing and have adequate knowledge or experience or have shown capacity in dealing with problems
rebating to economics, law, commerce, accounting, industry, public affairs or administration.
Every appointment shall be made by the Central Government based on Selection Committee consisting
of the following namely
1. A person who is a judge of the Supreme Court, to be nominate by the chief justice shall be its
Chairman.
2. The secretary Department of Legal Affairs in the government of India shall be its member
3. Secretary of the Department dealing with consumer affairs in the government of India shall be its
other members
c. Term of Members: Every member of the National Commission shall hold office for a term of 5 years
or up to the age of 70 years, whichever is earlier.
d. Jurisdiction of The National Commission: Subject to the other provisions of this Act, the National
Commission shall have Jurisdiction as under
1. To entertain complaints where the value of the goods or services and compensation, if any, claim
exceeds rupees 1 crore.
2. To entertain appeals against the orders of any State commission
3. To call for the records and pass appropriate orders in any consumer dispute which is pending before
or has been decided by any state commission where it appears to the National Commission that such
State Commission has exercise a jurisdiction not vested in it by Law, or has failed to exercise a
jurisdiction do vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity
Questions
Multiple Choice Questions (MCQ)
1. CCI consists of a ………… appointed by the Central Government:
a. Chairperson and six Members c. Director and 6 Members
b. Director and 4 Members d. Chairperson and 4 Members

2. ………………penalty for failure to comply with directions of Commission and Director General.
a. Rupees one lakh for each day during which such non-compliance occurs, subject to a maximum
of rupees 10 crore.
b. One per cent of the total turnover or the assets, subject to a maximum of rupees 10 crore.
c. Such person shall be punishable with fine which may extend to rupees 1crore.
d. Rupees one lakh for each day during which such failure continues, subject to a maximum
of rupees 1 crore.

3. ..……………has power to exempt enterprise, practice or agreement from application of

Competition Act, 2002.
a. Competition Commission c. Appellate Tribunal
b. Central Government d. State Government

4. What as per the Competitive Act 2002 refers to the sales of goods or provision of services, at a price
which is below the cost to eliminate the competitors?
a. MRP b. Predatory price c. Preparatory price d. GST price

5. The Monopolies and Restrictive Trade Practices Act, 1969 ("the MRTP Act") stands repealed and is
replaced by the Competition Act, 2002, with effect from:
 a. September 1, 2008. c. September 1, 2003.
b. September 1, 2009. d. September 1. 2002
6. Which of the following is not the duty of Competition Commission:
a. To protect the interests of investors;
b. To ensure freedom of trade carried on by other participants in markets in India and -for
matters connected therewith or incidental thereto;
c. To prevent practices having adverse effect on competition;
d. To promote and sustain competition in markets;

7. Who can make a reference on a competition policy in formulating a policy relating to competition
or in any other matter, may seek the opinion of the Commission by making a reference to it.
a. The Central Government
b. The State Government,
c. (A) and (B)
d. Chairperson & other Members of Competition Commission of India

8. What is the minimum number of member to be appointed by central government in CCI, as per the
Competition Act, 2002?
a. 2 b. 3 c. 4 d. 1

9. How may number of days for notice is to be given to CCI while an enterprise process to enter into
a combination, as per the Competition Act, 2002?
a. 45 days b. 30 days c. 7 days d. 15 days

10. CCI shall not initiate an inquiry into a combination after the expiry of ……… year from the date
on which the combination has taken effect:
a. 5 year b. 1 Year c. 3 Year d. None
11. An appreciable adverse effect on competition in the relevant market in India is said to take place
when:
a. An agreement referred to in section 3 has been entered into outside India.
b. Any enterprise abusing the dominant position is outside India.
c. Any enterprise abusing the dominant position in India.
d. All of the above

12. Competition Bill became an Act after receiving assent from the President on ________
a. 15th April 2002 c. 4th December 2005
b. 13th January 2003 d. 24th September 2006

13. Competition Appellate Tribunal bound by the procedure laid down in the Code of Civil Procedure,
1908
a. shall be b. shall not be c. may be d. may not be

14. …………………is / are examples of agreement

a. Not intended to be enforceable by legal proceedings
b. Intended to be enforceable by legal proceedings
c. Oral agreement
d. All of the above

15. CCI stands for:

a. Container Corporation of India c. Competition Commission of India
b. Cricket Council of India d. None of the above

16. When was CCI established?

a. 14.10.2003 b. 14.03 2003 c. 02.10.2003 d. 14.05.2003
17. When was Consumer Protection Act 2019 ratified?
a. August 9th 2019 c. August 7th 2019
b. August 9th 2018 d. August 10th 2019

18. Which Consumers Right is not guaranteed under Consumer Protection Act, 2019?
a. Right to Choose c. Right to Exploitation
b. Right to be Heard d. Right to seek redressal

19. Who can make a complaint under this Act?

a. Consumer b. 3rd Person c. Company d. None of the above

20. Which of the following are Consumer Disputes Redressal Agencies?

a. Panchayat Commission c. Municipal Commission
b. State Commission d. None of the above.

21. Is an E-commerce website included in Consumer Protection Act?

a. Yes b. No c. Maybe d. Yet to Include

22. Consumer Protection Act is significant to

a. Immovable Goods c. Movable Goods
b. Particular Goods and Services d. All Goods and Service

23. How many rights does a consumer have under the Consumer Protection Act
a. 8 b. 6 c. 4 d. 5

24. Under the Consumer Protection Act, the rights of a consumer do not include to be
a. Safety b. Choose c. Presented d. Informed
25. In which forum is it compulsory to have a female member?
a. National commission c. District commission
b. State commission d. All of the above

26. Which one of the following statement is false regarding consumer rights?
a. The right to be informed about the quality, quantity, potency, purity, standard and price of
goods, products or services, as the case may be, so as to protect the consumer against unfair
trade practices
b. The right to be heard and to be assured that consumer's interests will receive due
consideration at appropriate level
c. The right to seek redressal against unfair trade practice or restrictive trade practices or
unscrupulous exploitation of consumers
d. There is no right to be protected against the marketing of goods, products or services
which are hazardous to life and property

27. If a consumer demands compensation of Rs.75 lakh, then the case will be wired under the
Consumer Protection Act
a. District Consumer Dispute Redressal Commission
b. State Consumer Dispute Redressal Commission
c. National Consumer Disputes Redressal Commission
d. Supreme Court

28. A complaint relating to which among the following can forwarded either in writing or in
electronic mode, to any one of the authorities, namely, the District Collector or the Commissioner
of regional office or the Central Authority?
 a. Violation of consumer rights c. Unfair trade practices
b. False or misleading advertisements d. All of these

29. When the seller manipulates the price, it is known as?

a. Unfair trade practices c. Restricted trade practice
b. Manipulated trade practices d. All the above
30. Rights of consumer are protected under __________
a. Consumer protection 1986 c. Consumer protection 1990
b. Consumer protection 1982 d. Consumer protection 1991

Two Marks Questions

1) Expand CCI and MRTP.

2) Give the meaning of Competition Act 2002.
3) What do you Acquisition?
4) What is Cartel?
5) Give the meaning of Position.
6) What is Predatory Pricing?
7) Give the meaning of Rule of Reason.
8) What do you mean by Competition Commission of India?
9) Who is Consumer?
10) What do you mean by Service?
11) Give the meaning of Goods.
12) What do you mean by Defect?
13) What is Deficiency?
14) Give the meaning of Consumer Dispute.

Five Marks Questions

1. Write a note on MRTP Act 1969.

2. Explain the scope and objectives of Competition Act 2002.
3. Explain the Prohibited practices under Competition Act 2002.
4. Write a note of Competition Commission of India.
5. Explain the Powers of Competition Commission.
6. Explain the Structure of Competition Commission.
7. Write a note on Competition Appellate Tribunal.
8. Explain the need for Consumer Protection Act.
9. Explain the objectives of Consumer Protection Act.
10. Explain the features of Consumer Protect Act.
11. Write a Note of Complaint.
12. Write a Note on Unfair trade practices.
13. Describe the Rights honoured to the consumers.
14. Explain who and where the consumer complaints can be made and what is the time limit?
15. Write a note on Consumer Advisory bodies.

Ten Marks Questions

1) Elucidate the importance of Competition Act 2002.

2) Explain the features of Competition Act 2002.
3) Explain the Power and Duties of Competition Commission.
4) Describe the Offences and Penalties under Competition Act 2002.
5) Distinguish between MRTP Act and Competition Act.
6) Explain the importance of Consumer Protection Act.
7) Explain the attributes or reasons for Consumer Complaint.
8) Explain the procedure of filing consumer complaint.
9) Explain the Consumer Redressal Agency.