Unfair trade practice broadly refers to any fraudulent, deceptive or dishonest trade practice or business misrepresentation of the products or services that are being sold; which is prohibited by a statute or has been recognised as actionable under law by a judgement of the court. However, the Indian statute dealing with the term is Consumer Protection Act, 1986.
General unfair trade practices may include unfairly refusing a transaction, discriminating against a transacting party, unfairly excluding competitors, unfairly soliciting customers, unfairly coercing customers, trading with a transacting party by unfairly taking advantage of one’s bargaining position, trading under terms and conditions which unfairly restrict business activities of a transacting party, disrupting business activities of another enterprise, and unfair provision of capital, assets, manpower, etc.
In India, till 2002, the Monopolies and Restrictive Trade Practices Act (MRTP), which was enacted to prevent monopolies and restrictive trade practices, was the foremost legislation to deal with unfair trade practices in the country. The MRTP Act was repealed giving way to the Competition Act, 2002, thus transferring all the pending cases in the MRTPC to Competition Commission of India (CCI) for adjudication from the stages they were in. However, no provision to deal with unfair trade practice was incorporated in the Competition Act and thus this was, instead, given effect under Consumer Protection Act, 1986 (COPRA) which was already dealing with unfair trade practices. Section 2(1)(r) of COPRA defines unfair trade practice as: “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.
In an unfair trade practice case against ‘ Maggi’, a bench of the National Consumer Disputes Redressal Commission, comprising Justice VK Jain and Justice BC Gupta, directed Nestle to respond to the notice by September 30 and allowed the Government to send samples of Maggi noodles to an accredited laboratory for tests on lead content and MSG. The court has accepted to hear the case for unfair trade practice and misleading consumers through advertisements and packaging.
In the recent past, the prevalence of unfair trade practice has been on a rise and various instances have come to light bringing the issue at hand in discussion.
In a case, leading real estate firm Unitech limited has been held guilty of resorting to unfair trade practice by a consumer forum and directed to pay a customer Rs 660,000 for making “illegal demands” from him after he booked a flat with it and paid the booking amount. The District Consumer Disputes Redressal Forum, in its order, observed that the firm and its agent made “unjustified” demands from the customer and also threatened to forfeit his deposited money.
In another case, SpiceJet was directed by a consumer forum to `100,000 to a passenger for not allowing all members of his family to board the plane despite having confirmed tickets and making them travel on two different flights while returning to Delhi from Goa. The East District Consumer Disputes Redressal Forum noted that it was “cruelty” on the part of SpiceJet to split the family into two groups especially when they had children with them and held it guilty of unfair trade practice.
The awareness among consumers in today’s modernized world is giving way to consumers ascertaining the rights provided to them under Consumer Protection Act and seeking redressal against the unfair trade practice. The prospect of the consumer justice system in our country appears to be bright in view of the provisions available in the Indian statutes and legislation and various proactive policies, schemes/ programmes being adopted by the Government.
Involvement of trade and industry, civil society organisations and above all consumers themselves is vital to keep a check on the practice of unfair trade in the years to come.