UNFAIR TRADE PRACTICES

Section 2(47) of the Consumer Protection Act, 2019 defines 'unfair trade practice'.

It includes practices such as:

 manufacturing or offering spurious goods for sale.
 Deceptive and unethical methods to conduct a business.
 adopting deceptive practices for providing service.
 falsely represents any re-built, second-hand, reno­vated, reconditioned or old goods as new goods.
 not issuing proper cash memo or bill for the services rendered and the goods sold.
 refusing to take back or discontinue defective goods and services and refund the consideration taken within the time period
 represents that the goods or services have sponsor­ship, approval, performance uses or benefits which such goods or services
do not have truly.
 Giving any standard assurance, warranty or guarantee of the performance or length of life of a product that is not based on
proper tests.
 distribution of false or misleading information that is capable of harming the business interests of another firm.

 fraudulent use of another’s trade mark, firm name, or product labelling or packaging.
 FALSE REPRESENTATION
• Falsely suggests that the goods are of a particular standard quality, quantity, grade, composition, style or mode.
• Gives any warranty or guarantee of the performance, that is not based on an adequate or proper test.
• False ads portray unobtainable results to the consumer and give a false impression of the product's true capabilities.
 FALSE OFFER OF BARGAIN PRICE
• Where an advertisement is published in a newspaper or otherwise, 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.
 OFFERS & FREEBIES
• The act of offering gifts, prizes or other items with the intention of not providing them as offered or creating impression
that something is being given for free when it is somehow covered by the amount charged in the transaction as a whole.
• The conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale,
use or supply of any product or any business interest.
 OMITTING INFORMATION
• An ad may omit or skim over important information.
• The ad's claims may be technically true, but the ad does not include information that a reasonable person would consider
relevant.
 DISPARAGING ADs
• prohibit the practice of making any statement which gives false or misleading facts disparaging the goods, services or trade
of another person.
• It may be direct statement or it may indirectly or inferentially disparage the trade or business of another.
• In re Bombay Tyres International Limited, the respondent company was supplying tyres ti TELCO under
the brand name ‘modistones’ which, however, were not manufactured by it, but by Modi Rubber Limited at
Modipuram. It was alleged that it was an unfair trade practice attracting clause (i) of Section 36 A(1). The
commission holding that no UTP was involved closed the enquiry with the following observations:

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

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

“We Bennett Coleman & Co. Ltd., the publishers of indrajal comics hereby undertake that whenever repeated
editions of a particular comic which was published earlier is again brought out, it will be printed in the cover
page that the edition is a repeated version of the story published on an earlier date under a particular name,
specifying the date and particular name of the earlier publication”.
• Represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or
supplier does not have;

In re Purshottam Thakurdas, the respondent, who is engaged in the business of marketing watches,
misrepresented that he is the authorised dealer of HMT, by so mentioning in the cash memos issued by him to
his customers. He was also charging more than the fixed retail prices of HMT watches. On the assumption
that the impugned trade practice is unfair and on the undertaking furnished by the respondent that he will
refrain from indulging therein, the Commission disposed of the enquiry U/S 36D (2) of the Act.
• gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of
any goods that is not based on an adequate or proper test thereof;

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

In re Gem India, the Commission held that making false claim regarding the quality of refrigerator as being
free from manufacturing defects and further is not providing satisfactory service by timely replacement in
terms of the warranty is a breach of clause (vii). Also that subsequent replacement of the machine after the
complaint has been filed with the Commission was too late and did not wipe out the unfair trade practice
indulged in by the respondent, as it deprived the consumer of the use of the refrigerator for a long period. A
“cease and desist” order was passed requiring the respondent to refrain from indulging in such unfair trade
practice amounting to breach of warranty on his part.
• a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it
has achieved a specified result, if such purported warranty or guarantee or prom­ise is materially misleading or
if there is no reasonable prospect that such warranty, guaran­tee or promise will be carried out;

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