Unfair Trade Practices Policy in India

• Author: K. P. Sastry,P. V. Krishna Rao
• Date: 01 December 1987
• DOI: 10.1177/0003603X8703200409
• Published date: 01 December 1987
• Subject Matter: Foreign Antitrust

The Antitrust Bulletin/Winter 1987

Unfair trade practices policy

in India

BY DR. P. V. KRISHNA

RAO·

and K. P.

SASTRY··

1051

The policy toward unfair trade practices is of very recent origin in

India. Until 1977, the problem of unfair trade practices had not

attracted the attention

of

the government and hence there was no

specific policy toward curbing unfair trade practices. In 1977, the

government of India constituted a committee

of

distinguished

experts to review the Monopolies and Restrictive Trade Practices

Act (MRTP Act), which was enacted in 1970with the objective of

curbing monopolies and restrictive trade practices. The MRTP

Act did not contain provisions to curb unfair trade practices in

India. This deficiency was pointed out by the expert committee

when it submitted its report in

1978

recommending that con-

sumers in India need to be protected not only from the restrictive

business practices, but also from practices which are resorted to

by trade and industry to mislead or dupe consumers. The com-

mittee specified a number of unfair trade practices which it

Reader. Department of Commerce and Business Administration,

Nagarjuna University, Nagarjuna Nagar, India.

•• Research Scholar. Department of Commerce and Business Ad-

ministration, Nagarjuna University, Nagarjuna Nagar, India.

©1988 by Federal LegalPublications, Inc.

1052 The antitrust bulletin

considered notorious enough to prohibit.

It

suggested

that

the

MR

TP

Act should

not

only deal with monopolistic

and

restrictive

trade

practices,

but

also with unfair

trade

practices.

It

proposed

that

aseparate

chapter

should be

added

to

the

act to deal with

unfair

trade

practices.

The

MRTP

Commission, which administers

the

provisions

relating to monopolistic

and

restrictive

trade

practices, also em-

phasized the need

for

legal provisions to protect consumers

from

unfair

trade

practices

and

even suggested redrafting

of

the

pream-

ble to the act to include consumer protection as

one

of

its

objectives.

It

said:

the Act as it stands is not structured to effectively protect the

consumers from profiteering, interruption in the flow of goods and

services, adulteration, inferior quality of goods and services, hazard-

ous goods, lack of information or of misinformation about goods

and services. As a developingcountry, our country's biggest problem

is the perennial shortage of various types of consumer and industrial

goods. As a result, sellers' market situations frequently arise in

respect

of

various goods. In such a situation, the existing legislation

relating to restrictivetrade practices is of limited use. What the Act

has to provide is to protect the consumers from hoarding, profiteer-

ing, etc.

It

is necessary therefore that the preamble should first be

suitably modified so as to include consumer protection as one of its

principal aims and objects.I

Stressing the need to have a unified legislation to

control

all

types

of

trade

practices,

the

Commission observed:

One of the important instruments of achieving economic and social

justice is a comprehensive consumer protection legislation which is

absent in our country. Although the Commission has been receiving a

considerable number of complaints, it has been unable to be of any

assistance becauseof lack of jurisdiction to deal with them. The trend

in most of the countries where there is a well developed anti-trust

legislation, is to have unified legislation with provisions regarding

unfair and restrictivetrade practices and entrust enforcement through

a single agency. The reason behind this is that many of the unfair

trade practices represent unfair methods of competition and the

1

NINTH

ANNUAL

REPORT

on the working of the MRTP Commis-

sion for the period from January 1 to December 31,

1979,

at 89.