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PROVISIONS AND REMEDIES FOR UNFAIR TRADE PRACTICES IN CONSUMER LAW


Posted By Shrihar on 01 Aug 2017

The most important aim of consumer law is to protect the interest of innocent consumers who have been wronged by the sellers in terms of quality, quantity, price etc. In India, Consumer Protection Act, 1986 was enacted to achieve this aim.

Who can file a complaint?

Under the Consumer Protection Act, consumer is defined under Section 2(d) as follows:

 Consum­er means any person who—

    (i)   buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment, and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approv­al of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

   (ii)   hires or avails of any services for a consideration which has been paid or promised or partly paid and partly prom­ised, or under any system of deferred payment, and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred pay­ment, when such services are availed of with the approval of the first mentioned person;

Explanation.—For the purposes of the sub-clause (i), “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 self-employment.

This definition indicates that a consumer can only be a person who ultimately uses the product and had paid a consideration to acquire it and not the intermediary who buys it for commercial purpose. Further a beneficiary can also be treated as a consumer under certain circumstances.  

As per the Act, complaint can be filed by:

  1. A consumer.
  2. Relative of the consumer
  3. Any voluntary consumer association registered under the Companies Act, 1956 or any other law for the time being enforced.
  4. Beneficiary of goods and services
  5. The Central Government.
  6. Any State Government.
  7. Insurance Company
  8. A legal heir or representative of a deceased consumer.[1]

Unfair trade practices under the Act

According to Section 2(1) (r) of Consumer Protection Act, 1986 ‘unfair trade practice’ means:
"unfair trade practice" means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely;—
(1) the practice of making any statement, whether orally or in writing or by visible representation which,-

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

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

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

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

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

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

.....                                                       

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

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

Jurisdiction of different forums

DISTRICT FORUM:  upto 20 lakhs

STATE COMMISSION: 20 lakhs-1 crore, appeals from lower forums

NATIONAL COMMISSION: more than 1 crore, appeals from lower forums

Remedies

  • Removal of the defect pointed out by the appropriate laboratory from the goods.
  • Replacement of the goods with the new goods of similar description, which are free from similar defects.
  •  Refund to the complainant.
  • Compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party.
  • Removal of the defects or deficiencies in the services in question;
  •  Discontinuation of the unfair trade practice or the restrictive trade practice or not to repeat.
  • Not to offer the hazardous goods for sale.
  •  Withdrawal the hazardous goods from being offered for sale and
  • To provide for adequate costs to parties.

Cases

In Microsoft Corporation vs Mr. Kiran And Anr[2]. Microsoft alleged selling of counterfeit products by the defendant. The defendant sold pirated versions of Microsoft’s operating systems. The court awarded compensatory damages of Rs. 5 lakhs, costs and permanent injunction against the defendant.

In Relaxo Rubber Limited & Anr. vs Selection Footwear & Anr.[3] Delhi High Court granted similar reliefs. In this case, the defendant was selling his own footwear under the name and trademark of RELAXO. The case of passing off was made out by the plaintiff and it succeeded in the court of law.

In Time Warner Inc. vs. Lokesh Srivastava & Anr [4] the defendant started publishing a magazine TIME ASIA SANSKARAN whose cover was similar to that of TIME magazine. It gave an impression that the first mentioned magazine is an Indian edition of world famous TIME magazine. In this case also all the above mentioned reliefs were granted.

 

[1] Section 2(b) & 12 of Consumer Protection Act, 1986

[2] MIPR 2007 (3) 214

[3]  1999 VAD Delhi 292

[4] 2006 131 CompCas 198 Delhi

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