Unfair trade practices

The term unfair trade practice refers to any fraudulent, deceptive or dishonest trade practice, or
misrepresentation of the product or service that are being sold, which is prohibited by a statute or
has been recognized as actionable under law by a judgment of the court.

Section 2(r) of the CPA defines the term UNFAIR TRADE PRACTICE as:

It means a trade practices which for the purpose of promoting the sale use or supplies any goods, or
for the provision of any service adopts any unfair method or unfair practice.

The methods of unfair trade practices are:

1. False representation: the practice of making any statement oral or written, or by verbal
representation, which falsely suggest that the goods and services are of a particular
standard, quality, grade etc. making a false or misleading representation concerning the
need or usefulness of any goods and service are known as false representation.
2. False offer of bargain price: it includes: the publication of an advertisement in a newspaper
by which the goods or services are offered at a bargain price, when infect it is the not the
intention. Bargain price means: a price that is stated in any advertisement by reference to an
ordinary price.
3. Scheme, offering, gift prizing etc.: the third category is UNFAIR TRADE PRACTICE includes:
offering gifts, prizes to the customer with the intention of providing them.
4. Non-compliance of prescribed standards: the 4 th category of UNFAIR TRADE PRACTICE
includes cases where goods are sold for use or likely use by consumer, knowing or having
reason to believe that they do not comply with safety standards prescribed by appropriate
competent authority.
5. Hoarding destruction or refusal: a practice will be unfair, if it permits the hoarding or
distraction of goods, or refusal sell the goods, or to provide any service, if such conduct is
intendant to raise or have the effect of razing the cost of similar goods and services.
6. Spurious goods and services: a practice will be unfair, if it permits the manufacture of
spurious goods or offering such goods for sale, or adopting deceptive practices in the
provision of services.

In case of proprietor united biscuits PVT. LTD. Vs. Ramanand Pnada: the complainant purchases a
packet of biscuit. If actual wait was 180 gram, as against 200 gram printed on packet. A complaint
was filed against the manufacturer for violating the packed commodities rules. It was held that the
manufacturers were liable for unfair trade practices.

In case of Maruti Suzuki India LTD. vs. Rajeev Kumar Lumba: the complainant purchases a car and
was charged an extra amount for a particular part which was neither demanded nor was fitted. The
dealer was held liable to refund extra amount charged, and such acts of dealer amounts to unfair
trade practices.
In the case of Society of Catalyst of New Delhi vs. star Plus T.V. star India PVT. LTD: During telecast of
program of Star T.V. KBC, there was a contest cold Har seat or Hot seat, in which the price money of
2 Lakh was given and viewers were require to send their answers by Messages. Price money was
distributed out of revenue collected from messages charges. The gross earning was far in access of
the cost of the price offered. It amounts the UNFAIR TRADE PRACTICE.
Restricted trade practices

According to section 2(1)(nnn), restrictive trade practice means: a trade practice which stands to
bring about manipulation of price or conditions of delivery, or to effect flow of supply in the market
relating to goods or services in such a manner as to impose on the consumer unjustified cost or
restriction. Where a sale or purchase of a product or services is made conditional, it amounts to
restrictive trade practices. The effect of such practices is that, a purchaser is forced to buy some
goods or services which he may not require along with the goods or services which he wants to buy.

Explanation: the restricted trade practice means:

1. Restricted trade practice is described under section 2(1)(nnn) of consumer protection act
1986.
2. A trade practice which stands to bring about manipulation of price or condition of delivery,
3. Effect flow of supply of any goods and service in a manner, which impose unjustified cost or
restriction on the consumer,
4. Where a sale or purchase of a product or services is made conditional, it amounts to
restrictive trade practices.