UNFAIR TRADE PRACTICES IN INDIA

A STUDY ON UNFAIR TRADE PRACTICES IN INDIA

Chitra C1
Hariraman B2

Abstract
An Unfair trade follow suggests that a trade follow, which, for the aim of promoting any sale,
uses or offers of any product or services, adopts unfair methodology, or unfair or deceptive
follow. Unfair Trade follow encompasses a broad array of tortes, all of that involves social
science injury brought on my deceptive or Actus Reus. Unfair trade practices will arise in
any field of technology and often seem in reference to the additional ancient property claims
of patent, logos and violation. Unfair Trade follow loosely refers to any deceitful, deceptive
or dishonest trade follow or business false statement of the product or services that area unit
being sold that is prohibited by a statute or has been recognized as unjust underneath law by a
judgment of the Court. The impacts of Unfair Trade Practices on business and additionally
economy result in a circumstance wherever open mindfulness or seeing regarding the
problem is low, customers area unit deceived, very little organizations area unit controlled
inexcusably, general welfare of the final public crumbles. Unfair trade follow refers to the
employment of varied deceptive, dishonourable or unethical strategies to get business. Unfair
trade practices embody deceit, false advertising or illustration of an honest or service, tied
marketing, false free prize or gift offers, deceptive evaluation and non-compliance with
producing standards. The present paper discusses about the Unfair Trade Practices, the
various sectors in which the Unfair Trade Practices is involved and finally the general and
Special Laws and Practices for Unfair Trade Practices.

Keywords:-Unfair Trade Practices, false misrepresentation, business ,products, services.

1
3rd year, BBA LL.B., Saveetha School Of Law, Saveetha Institute Of Medical and Technical Science , Tamil
Nadu, India.(chitrac11898.cc@gmail.com)
2
Assistant Professor, Saveetha School Of Law, Saveetha Institute Of Medical and Technical Sciences, Tamil
Nadu, India.(hariramanb.ssl@saveetha.com)
 UNFAIR TRADE PRACTICES IN INDIA

Introduction
The term Unfair Trade follow (UTP) extensively alludes to any deceitful, dishonourable or
deceptive exchange practice; or business deception of the things or administrations that area
unit perpetually sold; that is disallowed by a statute or has been perceived as important
beneath law by a judgment of the court. In any case, the term doesn't have Associate in
nursing all comprehensive normal definition. 3 Misrepresentations are often concerning any
characteristic of a product or services, real or notional. Consequently laws prohibiting unfair
trade practices typically embody a general provision and a lot of specific provisions
addressing a number of the a lot of common varieties of misrepresentations.
Unfair trade practices enwrap a large cluster of torts, all of that embody monetary hurt
brought on by difficult or wrongful behaviour. The legitimate hypotheses which will be
Affirmed incorporate claim, maybe, competitive advantage misappropriation, unwarranted
contention, false promoting, palming-off, weakening and stigmatisation. Unfair trade
practices will arise in any line of business and additionally often seem in reference to the a lot
of ancient belongings claims of patent, trademark and infringement.

Objectives
 To study about the Unfair Trade Practices.
 To discuss about the performance of UTPs in various sectors.
 To analyse about the General and Special Laws and Practices for UTP.

Research Methodology
This study is doctrinal in nature. It is a descriptive method. The sources are collected from the
secondary data like books, e-sources etc.

Hypothesis
 Indian consumers are not exploited in Unfair Trade Practices.
 Indian consumers are exploited un Unfair Trade Practices.

3
http://journals.sagepub.com/doi/abs/10.1177/0003603X8703200409?journalCode=abxa
 UNFAIR TRADE PRACTICES IN INDIA

Review of Literature:-

The authors4 broadly explains about the problem of unfair trade practices and its impact on
society in relation to The Consumer Protection Act, 1986. In a brief it speaks about the
awareness of consumers about the misleading advertisements, and then exploiting the
consumers through it.

The author 5 in this article speaks about the new company and business world nowadays
wherever there's cut throat competition the business persons daringly use unfair trade
practices to edge over the opposite. This might provide them advantage for brief term
however in long haul it affects the organization and eventually the complete business

The author 6broadly explains about the Consumer means that an individual United Nations
agency buys product for a thought that has been paid or secure or part paid or part secure.
Unfair trade apply means that a trade apply, that for the aim of promoting any sale, use or
offer of any product or services, adopts unfair methodology or deceptive apply.

The author7 in his paper traces the evolution of law and practices within the past twenty years
specializing in one aspect of unfair trade practices unfairness in holding of games, contests,
lotteries, and similar schemes for promoting sales and services within the context of India
transitioning from a state controlled to a liberalized economy. With competition within the
economy, firms have got into aggressive and competitive trade practices to tempt the
shoppers.

4
Pro.Yogita V. Patil and Prof. Dakshata S. Gadiya, Unfair Trade Practices.
(http://www.ibmrdjournal.com/index.php/ibmrd/article/download/51971/41954)
5
Raviraj Wade Dhondy, Unfair Trade Practices (https://www.scribd.com/doc/18187078/716-Unfair-Trade-
Practice)
6
Prink Monga, Unfair Trade Practices in India ( www.lawresearchjournal.com)
7
Akhileshwar Pathak, Unfair Trade Practices in India
(http://www.vikalpa.com/pdf/articles/2004/2004_jul_sep_59_69.pdf)
 UNFAIR TRADE PRACTICES IN INDIA

Unfair Trade Practices

An unfair trade observe suggests that a trade observe, that for the aim of promoting any sale,
use or offer of any product or services, adopts unfair technique or deceptive observe. Unfair
trade observe is categorised as under-
 False Representation
 False offer of bargain price
 False gifts offers and prize scheme
 Non-Compliance of Prescribed Standards
 Hoarding, Destructions etc.

False Representation
Incorrect suggestions relating to quality, standard, quantity, grade, composition, vogue or
model of products or services.False illustration concerning approval, performance,
characteristics, accessories of products or services. False or dishonest illustration regarding
the requirement or the utility of products or services.Materially misleads concerning the costs
at that such merchandise or services are accessible within the market.

False offer of bargain price

wherever an advert is printed in an exceedingly newspaper or otherwise, whereby
merchandise or services are offered at a worth once of course there's no intention that
constant shall be offered at that price for an affordable amount or reasonable amount, it shall
quantity to Associate in Nursing unfair trade follow.

Free gifts offers and prize theme

The unfair trade practices underneath this class means that providing any gifts, prizes or
different things along side the products once the important intention is completely different,
making impression that one thing is being offered 8 free along with the products, once of
course the value is all or part coated by the prize of the article oversubscribed or providing
some prizes to the buyer by the conduct of any contest, lottery or game of likelihood or still
with real intention to market sales or business.

8
http://shodhganga.inflibnet.ac.in/bitstream/10603/52361/8/08_chapter%203.pdf
 UNFAIR TRADE PRACTICES IN INDIA

Non-compliance of Prescribed standards

Any sale or provide of products to be used by shopper, wittingly or having reason to believe
that the products don't go with the standards prescribed by some competent authority, in
reference to their performance, composition, contents, design, construction, finishing or
packing as are necessary to forestall or scale back the danger of injury 9 to the person
mistreatment such merchandise, shall quantity to unfair trade follow.

Hoarding, Destruction etc.

Any follow which allows the billboard or destruction or refusal to sell the products or
provides Associate in Nursings service with Associate in Nursing intention to lift the price of
these or different similar goods or services shall be an unfair trade practice.

UTPs in Various Sectors

It is evident that UTPs are perpetrated in an exceedingly manner as varied because the range
of merchandise and services in an exceedingly market place. UTPs are determined within the
pharmaceutical sector, food process trade, finance sector, education, etc. The UTPs are given
result through packaging and labelling, dishonest advertising, testimonials by trusty or
powerful individuals, parenthetically celebrities, experts, ‘satisfied consumers’, etc. Herein
below, bound incidences of UTPs in choose sectors in India are analysed.10

Pharmaceutical Sector
Competition amongst generic medication could be a fascinating objective because it usually
brings substantial savings to shoppers. However, it's needed that an equivalent stay balanced
against the incentives complete makers got to invest in developing innovative new
merchandise.Yet, it's usually noted that the specified degree of competition is commonly
missing from these markets. as an example, fewer new medicines are being dropped at
market, and also the entry of generic medicines is from time to time restricted through
anticompetitive practices. One incidence of such fight between the generic and branded
medication is that the case filed by nation Pharma Novartis. It is a well-documented proven
fact that pharmaceutical corporations pay Brobdingnagian sums of cash on drug promotion.
They use numerous tools and strategies appreciate sales representatives, samples,

9
http://www.arresearchpublication.com/images/shortpdf/1447868434_1205J.pdf
10
http://www.cuts-ccier.org/pdf/Unfair_Trade_Practices_and_Institutional_Challenges_in_India-
An_Analysis.pdf
 UNFAIR TRADE PRACTICES IN INDIA

advertisements in broadcast and medium and sponsorships for promoting medication. it's
conjointly illustrious that drug promotion is closely connected to unfair trade practices.
associate analysis of the drug promotion matrix in India reveals that there are numerous
unfair trade practices prevailing within the trade. Its wide determined that just in case of
prescription of a drug, wherever the doctor is top dog for the last word user, i.e., the patient,
the pharmaceutical trade features a powerful influence on prescribing habits of doctors.
there's an important distinction between promotion and knowledge. A medical representative
whereas delivering data to the doctors concerning new medication, as well as its quality and
effectuality could have pre competitive effects.11 The selling ways adopted by corporations
appreciate giving the doctors gifts like mobile, cars or perhaps sponsored home, could
downplay the demand facet and thus raise costs for consumers. In the case of Pooja Roy v.
Krishnango Bhattacharya, M/s Kasko Asian nation, a wholesale license criminal was charged
for partaking in sterilisation the initial labels of the manufacturer and pasting contemporary
written labels extending the ending date and mercantilism spurious medicine.

Food Processing Industry

There has been a worldwide concern concerning food safety and unfair trade practices in
quality and amount of the food merchandise. virtually everybody has come upon cases of
deliberate addition of chemicals like additives and adulterants, for the aim of disguising
inferior commodities, contaminating and/or earning undue profits or food contamination
throughout production, processing, packaging and storage. Such unethical and unfair trade
practices are of terribly serious nature since they create grave threat to consumer’s health
directly. Non-permissible food colours are used for providing visual effects. Also, there are
varied instances of adulteration of assorted food things by addition of harmful substances like
toxic chemicals and copper in milk, alcohol, mawa, rice, etc. to extend the number of the
food things and increase profit for the vendor, that has caused health hazards 12 at mass levels
in recent past. In May, the Food and medicines Administration (FDA) officers confiscate
five hundred weight unit mangoes price Rs. 25,000 that were being mature with the
employment of a chemical known as carbide throughout a raid at a store of a mango dealer in
Pune. Artificial ripening by mistreatment inorganic compound is prohibited below the bar of
Food Adulteration Act. The chemical, if consumed in giant quantities, damages internal
organs. The Food and Drug Administration officers destroyed the mangoes at a marketing

11
https://abhinavjournal.com/journal/index.php/ISSN-2277-1166/article/viewFile/871/pdf_195
12
https://www.ftc.gov.bb/library/2003-06-13_unfair_trade_practices.pdf
 UNFAIR TRADE PRACTICES IN INDIA

ground, whereas the chemical samples were sent to a city-based public health laboratory for
any investigations. 13 In 2011, false claims by water apparatus ‘Pureit’ (a complete of
geographic area Unilever) that it might “destroy one large integer viruses in one litre of
water” and announcement that National Institute of medical specialty (NIV) had confirmed
these claims, agitated the Pune-based NIV and a legal notice was served to HUL for creating
such unsupported claims. in a very letter to HUL dated two Gregorian calendar month 2011,
AC Mishra, the director of NIV, explained the main points of the tests conducted by the
Institute and conversant the corporate that its advertisements weren't supported facts and
requested the corporate to refrain 14 from twisting and misrepresenting the facts. NIV
additionally vulnerable to resort to action at law against the corporate upon its failure to
require immediate corrective measures.

Financial Sector
Consumers become a locality of insurance policies either by virtue of shopping for insurance
themselves or by being coated underneath insurance bought by either the govt or their
employers or by being a part of the other cluster that's insured. Insurance is a very important
monetary services sub-sector line of work to people and also the variety of insurance
shoppers is customer receives could be a piece of paper for the premium paid and doesn't get
any immediate profit for the thought paid. With the rise within the shoppers comes the
difficulty of unfair trade practices during this sector. Insurance offers a promise that, upon a
contingent event at a later date, the customer can get a specific profit or compensation for a
loss or harm. The insurance policies area unit complicated documents with a deluge of legal
jargon, convoluted terms and conditions, special inclusions and exclusions. it's troublesome
to assess and perceive by a commoner even once all the relevant info is disclosed to the
policy-taker. The favourable terms area unit 15typically in little prints that the individual
ne'er reads since it's a backbreaking and unrewarding task to find what these terms area unit.
thanks to all this, although a personal purchases Associate in Nursing insurance once a
radical review and understanding he misses out on one thing or the opposite and fails to form
a sophisticated call and falls prey to such unfair trade practices. the businesses additionally
don't provide correct and complete info regarding the policy at the time of commercialism or

13
http://ijlljs.in/wp-content/uploads/2014/10/false_Advt.pdf
14
http://www.legalservicesindia.com/article/1861/Unfair-Trade-Practice-in-India.html
15
https://link.springer.com/article/10.1023/A:1014533317418
 UNFAIR TRADE PRACTICES IN INDIA

loves mis-selling by misrepresenting to the patron regarding policy’s risk, growth factors,
term of the policy, etc.

Educational Sector
Right to Education has been declared as a basic right in Republic of India by means of the
86th Constitutional change in 2002. Republic of India has one amongst the world’s largest
education systems, meet one. Three million faculties, 30,000 faculties and 542 universities.
The schooling section covers the most important population16 of our society as compared to
the other kind of education. With the new growth of education sector, the unfair practices
within the sector have additionally enlarged. In Republic of India there has been Associate in
Nursing atrocious increase within the variety of pretend universities and faculties. Such
establishments don't have approval from the govt. and needed permissions to supply courses
in numerous streams. Light large taxation and donation for securing admission, not
recording any payments created by the scholars by not issue receipts, non-transparent and
suspicious suggests that of admitting students for skilled courses, poor quality of education
imparted, deceptive students and oldsters by giving advertisements that aren't real in terms of
the standard of education and in terms of the facilities and infrastructure provided to students.
There are establishments that withhold the certificates of scholars to force them to create
payments or to create them work while not adequate compensation. In the year 2003, the
metropolis supreme court, in an exceedingly public interest proceeding filed during this
respect by the Forum for Fairness in Education and Prakash Sheth, a diamond businessperson
during this respect, dominated that faculties will not force oldsters to shop for writing paper
and uniforms from any explicit store.17 This has come back as a giant relief for the oldsters
specially. But, one observes that even once the supreme court judgement, the general state of
affairs has not improved and therefore the faculties still barefacedly impose such conditions
upon innocent oldsters. Another major reason for such practices to flourish is that the lack of
awareness among the oldsters World Health Organization accede to such demands to avoid
any unreasonable behaviour with the scholar within the faculty.

16
https://www.scribd.com/doc/111365479/Unfair-Trade-Practices-Ppt
17
https://www.winston.com/en/legal-glossary/unfair-trade-practices.html
 UNFAIR TRADE PRACTICES IN INDIA

The General and Special Laws and Practices for Unfair Trade Practices:-

Removal of Defects-if when correct testing the merchandise founds to be defective, then the
‘remove its defects’ order may be glided by the authority concern.
Replacement of products – order may be passed to interchange the defective product by a
brand new one product of identical kind.
Refund of Price – order may be passed to refund the worth paid by the plaintiff for the
merchandise.
Award of compensation – if due to the negligence of the deliverer product suffer physical or
the other loss, then compensation for that loss may be demanded. 18
Removal of deficiency in commission – if there's any deficiency in delivery of service, then
orders may be passed to get rid of that deficiency. as an instance, if Associate in Nursing
underwriter makes spare delay in giving the claim then orders may be passed to instantly
terminate the claim.
Discontinuance of Unfair Trade Practices–The sale of merchandise which may be
dangerous for health and life, their sale may be stopped and such product may be withdrawn
from the market.
Payment of adequate price–There is additionally a provision that the merchandiser ought to
pay adequate cost to the victim involved.
Criminal laws– it's necessary to grasp that beside on top of remedies a client has conjointly
criminal remedies, and just in case of forgery, cheating, mischief, misappropriation of
products, client aggrieved could approach to the right authority for violation of his rights.
Civil laws– Sales of products act, client protection act, and specific relief act conjointly
contain provisions relating to aggrieved client.
The MRTP Act, 1969- The noncompetitive and restrictive trade practices Act, 1969 was
enacted to confirm that the operations of the national economy doesn't end in the
concentration of economic power in hands of fews, 19 to supply for the management of
monopolies, to ban noncompetitive and restrictive trade practices and regulation of unfair
trade practices.

18
https://accountlearning.com/what-are-unfair-trade-practices/
19
http://epgp.inflibnet.ac.in/epgpdata/uploads/epgp_content/law/03._competition_law/08._unfair_and_
restrictive_trade_practices/et/5651_et_08et.pdf
 UNFAIR TRADE PRACTICES IN INDIA

The Competition Act, 2002- This act was enacted by the Parliament of Bharat and governs
Indian competition law. It replaced the archaic the Monopolies and Restrictive Trade
Practices Act, 1969. below this legislation, the Competition Commission of India was
established to forestall activities that have Associate in Nursing adverse impact on
competition in India. This act extends to whole of Bharat except the State of Jammu and
Kashmir. 20 it's a tool to implement and enforce competition policy and to forestall and
penalise anti-competitive business practices by companies within the market. a contest law is
equally applicable on written likewise as oral agreement, arrangements between the
enterprises or persons.

20
https://covelaw.com/5-examples-unfair-trade-practices-avoid/
 UNFAIR TRADE PRACTICES IN INDIA

Conclusion
From the top of discussion it's clear that customers area unit regularly subjected to control
and non-manipulate unfair trade similar to monopoly things cut throat competition,
substandard quality, untruth etc. extraordinary significance of client is that age, competency,
soundness of mind isn't necessary.21 The word client conjointly includes associations. On the
opposite hand unfair trade observes means that adopting unfair technique or deceptive
practice for the promotion of sale or use or provide of any merchandise or services. It
includes false illustration false provide of value price, free gifts offers and prize schemes
rebelliousness of prescribed standards etc. There area unit some legal remedies area unit
accessible in Asian nation for unfair trade practices.22 These area unit removal of defects,
replacement of products, refund of value, award of compensation, removal of deficiency in
commission, conclusion of unfair trade observe, stopping of sale and withdrawal of
venturesome merchandise, payment of adequate price etc. Beside these remedies The
Competition Commission of Act, 2002 and client protection Act, 1986 play an important role
in protection of client rights just in case of unfair trade practices in Asian nation.

21
https://www.legalmatch.com/law-library/article/deceptivetradepractices.html.
22
Shodhganga.inflibnet.ac.in.bitstream/10603/7880/5/05-summary.pdf.
 UNFAIR TRADE PRACTICES IN INDIA

References
1. http://journals.sagepub.com/doi/abs/10.1177/0003603X8703200409?journalCode=ab
xa
2. Pro.Yogita V. Patil and Prof. Dakshata S. Gadiya, Unfair Trade Practices.
(http://www.ibmrdjournal.com/index.php/ibmrd/article/download/51971/41
954)
3. Raviraj Wade Dhondy, Unfair Trade Practices
(https://www.scribd.com/doc/18187078/716-Unfair-Trade-Practice)
4. Prink Monga, Unfair Trade Practices in India ( www.lawresearchjournal.com)
5. Akhileshwar Pathak, Unfair Trade Practices in India
(http://www.vikalpa.com/pdf/articles/2004/2004_jul_sep_59_69.pdf)
6. http://shodhganga.inflibnet.ac.in/bitstream/10603/52361/8/08_chapter%203.pdf
7. http://www.arresearchpublication.com/images/shortpdf/1447868434_1205J.pdf
8. http://www.cutsccier.org/pdf/Unfair_Trade_Practices_and_Institutional_Challenges
_in_India-An_Analysis.pdf
9. https://abhinavjournal.com/journal/index.php/ISSN-2277-
1166/article/viewFile/871/pdf_195
10. https://www.ftc.gov.bb/library/2003-06-13_unfair_trade_practices.pdf
11. http://ijlljs.in/wp-content/uploads/2014/10/false_Advt.pdf
12. http://www.legalservicesindia.com/article/1861/Unfair-Trade-Practice-in-
India.html
13. https://link.springer.com/article/10.1023/A:1014533317418
14. https://www.scribd.com/doc/111365479/Unfair-Trade-Practices-Ppt
15. https://www.winston.com/en/legal-glossary/unfair-trade-practices.html
16. https://accountlearning.com/what-are-unfair-trade-practices/
17. http://epgp.inflibnet.ac.in/epgpdata/uploads/epgp_content/law/03._competitio
n_law/08._unfair_and_restrictive_trade_practices/et/5651_et_08et.pdf
18. https://covelaw.com/5-examples-unfair-trade-practices-avoid/
19. https://www.legalmatch.com/law-library/article/deceptivetradepractices.html.
20. Shodhganga.inflibnet.ac.in.bitstream/10603/7880/5/05-summary.pdf