Unfair Trade Practices

MRTP Act, 1969.

Monopolistic and Restrictive Trade
Practice under MRTP Act, 1969
The Monopolistic and Restrictive Trade Practices Act,
1969, was enacted :
To ensure that the operation of the economic system
does not result in the concentration of economic
power in hands of few,

To provide for the control of monopolies, and

To prohibit monopolistic and restrictive trade practices.

The MRTP Act extends to the whole of India except

Jammu and Kashmir
Unless the Central Government otherwise
directs, this act shall not apply to:

Any undertaking owned or controlled by the

Government Company,

Any undertaking owned or controlled by the

Government,

Any undertaking owned or controlled by a

corporation (not being a company established
by or under any Central, Provincial or State
Act,
Any trade union or other association of workmen or
employees formed for their own reasonable
protection as such workmen or employees,

Any undertaking engaged in an industry, the

management of which has been taken over by any
person or body of persons under powers by the
Central Government,

Any undertaking owned by a co-operative society

formed and registered under any Central,
Provincial or state Act,

Any financial institution.

Inquiry into restrictive
practices
The Commission may inquire into any restrictive
trade practice

Upon receiving a complaint from any trade

association, consumer or a registered consumer
association, or

Upon a reference made to it by the Central or

State Government or

Upon its own knowledge or information

Relief available
The commission shall if after making an inquiry it is of the
opinion that the practice is prejudicial to the pubic
interest, or to the interest of any consumer it may direct
that

The practice shall be discontinued or shall not be

repeated;

The agreement relating thereto shall be void in respect

of such restrictive trade practice or shall stand modified.

The Commission may permit the party to any restrictive

trade practice to take steps so that it is no longer
prejudicial to the public interest
However no order shall be made in
respect of

any agreement between buyers relating to

goods which are bought by the buyers for
consumption and not for ultimate resale;

a trade practice which is expressly

authorized by any law in force.
What is Unfair Trade Practice ?
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 unfair
method, or unfair or deceptive practice.

False Representation
The practice of making any oral or written
statement or representation which:

Falsely suggests that the goods are of a particular

standard quality, quantity, grade, composition,
style or model;
Falsely suggests that the services are of a particular standard,
quantity or grade;

Falsely suggests any re-built, second-hand renovated,

reconditioned or old goods as new goods;

Represents that the goods or services have sponsorship,

approval, performance, characteristics, accessories, uses or
benefits which they do not have;

Represents that the seller or the supplier has a sponsorship or

approval or affiliation which he does not have;

Makes a false or misleading representation concerning the need

for, or the usefulness of, any goods or services;

Gives 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;
Makes to the public a representation in the form that
purports to be-
a) a warranty or guarantee of the goods or services,

b) a promise to replace, maintain or repair the goods

until it has achieved a specified result,

if such representation is materially misleading or there

is no reasonable prospect that such warranty, guarantee
or promise will be fulfilled

) Materially misleads about the prices at which such

goods or services are available in the market; or

) Gives false or misleading facts disparaging the goods,

services or trade of another person
 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, for a reasonable
period or reasonable quantity, it shall amount to an
unfair trade practice.

The bargain price, for this purpose means-

a) the price stated in the advertisement in such manner

as suggests that it is lesser than the ordinary price, or

b) the price which any person coming across the

advertisement would believe to be better than the
price at which such goods are ordinarily sold.
 Free Gifts Offer and Prize Schemes

The unfair trade practices under this category are:

Offering any gifts, prizes or other items along with

the goods when the real intention is different, or

Creating impression that something is being offered

free alongwith the goods, when in fact the price is
wholly or partly covered by the price of the article
sold, or

Offering some prizes to the buyers by the conduct of

any contest, lottery or game of chance or skill, with
real intention to promote sales or business.
 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, shall
amount to an unfair trade practice.

Hoarding, Destruction, Etc.

Any practice that permits the hoarding or destruction
of goods, or refusal to sell the goods or provide any
services, with an intention to raise the cost of those
or other similar goods or services, shall be an unfair
trade practice.
Inquiry into Unfair Trade
Practices
The Commission may inquire into

Any unfair trade practice :

Upon receiving a complaint from any trade association,

consumer or a registered consumer association, or

Upon reference made to it by the Central Government

or State Government

Upon an application to it by the Director General or

Upon its own knowledge or information.

Relief Available
After making an inquiry into the unfair trade practice if the
Commission is of the opinion that the practice is prejudicial to the
pubic interest, or to the interest of any consumer it may direct that

The practice shall be discontinued or shall not be repeated;

The agreement relating thereto shall be void in respect of such

unfair trade practice or shall stand modified.

Any information, statement or advertisement relating to such

unfair trade practice shall be disclosed, issued or published as
may be specified

The Commission may permit the party to carry on any trade

practice to take steps to ensure that it is no longer prejudicial to
the public interest or to the interest of the consumer.
However no order shall be made in respect a
trade practice which is expressly authorized by
any law in force.

The Commission is empowered to direct

publication of corrective advertisement and
disclosure of additional information while
passing orders relating to unfair trade practices.
Powers of The Commission
The MRTP Commission has the following powers:
Power of Civil Court under the Code of Civil Procedure, with
respect to:
Summoning and enforcing the attendance of any witness and
examining him on oath;

Discovery and production of any document or other material

object producible as evidence;

Reception of evidence on affidavits;

Requisition of any public record from any court or office.

Issuing any commission for examination of witness; and

Appearance of parties and consequence of non-appearance.

 Proceedings before the commission are deemed as judicial
proceedings with in the meaning of sections 193 and 228 of
the Indian Penal Code.

To require any person to produce before it and to examine

and keep any books of accounts or other documents relating
to the trade practice, in its custody.

To require any person to furnish such information as respects

the trade practice as may be required or such other
information as may be in his possession in relation to the
trade carried on by any other person.

To authorize any of its officers to enter and search any

undertaking or seize any books or papers, relating to an
undertaking, in relation to which the inquiry is being made, if
the commission suspects tat such books or papers are being
or may be destroyed, mutilated, altered, falsified or secreted.
Preliminary Investigation
Before making an inquiry, the Commission may
order the Director General to make a
preliminary investigation into the complaint, so
as to satisfy itself that the complaint is genuine
and deserves to be inquired into.
Remedies Under The
Act :
Temporary Injunction
Where, during any inquiry, the commission is
satisfied that any undertaking or any person is
carrying on, or is about to carry on, any
monopolistic, restrictive or unfair trade
practice, which is a pre-judicial to the public
interest or the interest of any trader or class
of traders generally, or of any consumer or
class of consumers, or consumers generally,
the commission may grant a temporary
injunction restraining such undertaking or
person form carrying on such practice until
the conclusion of inquiry or until further
orders.
Compensation
Where any monopolistic, restrictive or unfair
trade practice has caused damage to any
Government, or trader or consumer, an
application may be made to the Commission
asking for compensation, and the Commission
may award appropriate compensation.

Where any such loss or damage is caused to a

number of persons having the same interest,
compensation can be claimed with the
permission of the commission, by any of them
on behalf of all of them.