Brief on Unfair Trade Practices

Unfair trade broadly refers to the deceitful practices like falsity, deceptive practices etc. that are prohibited by the statutes and varied laws of the country and becomes unjust beneath the court of law. The impacts of Unfair Trade Practices on business and additionally economy cause a circumstance wherever open mindfulness/seeing regarding the problem is low, customers are deceived, very little organizations are addressed inexcusably, general welfare of the final public crumbles.


The term Unfair Trade observe extensively explains 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 below law by a judgment of the court. one usually unfair trade practices might embody lawlessly refusing any group action, misleadingly soliciting customers, disrupting business activities of the rivals below the belt, below the belt excluding competitors. within 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 offer them advantage for brief term however in end of the day it affects the organization and eventually the whole trade and society. The deceit of the products is of any kind. The unfair trade practices conjointly invite a cluster of torts and may herald unwanted money losses to the sellers.

Unfair Trade Practice under The Consumer Protection Act, 2019:

Clause (47) of Section 2 of The Consumer Protection Act, 2019 defines ‘Unfair Trade Practice’ as: –

(47) “unfair trade practice” means 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 including any of the following practices, namely

(i) creating any statement, whether or not orally or in writing or by visible representation together with by means that of electronic record, which—

(a) incorrectly represents that the products square measure of a selected customary, quality, quantity, grade, composition, vogue[1] or model;

(b) incorrectly represents that the services square measure of a selected customary, quality or grade;

(c) incorrectly represents any re-built, second-hand, renovated, reconditioned or recent product as new goods;

(d) represents that the products or services have support, approval, performance, characteristics, accessories, uses or advantages that such goods or services don’t have;

(e) represents that the vendor or the provider contains a support or approval or affiliation that such trafficker or provider doesn’t have;

(f) makes a false or deceptive illustration regarding the necessity for, or the quality of, any product or services;

(g) provides to the general public any assurance or guarantee of the performance, efficacy or length of lifetime of a product or of any product that’s not supported an adequate or correct   take a look at thereof:

Provided that wherever a defence is raised to the result that such warranty or guarantee is predicated on adequate or correct take a look at, the burden of proof of such defence shall lie on the person raising such defence;

(h) makes to the general public an illustration during a kind that purports to


(A) a guaranty or guarantee of a product or of any product or services; or

(B) a promise to exchange, maintain or repair a piece of writing or any part therefrom or to repeat or continue a service till it’s achieved a specified result, if such supposed assurance or guarantee or promise is materially deceptive or if there is no affordable prospect that such assurance, guarantee or promise are going to be carried out;

(i) materially misleads the general public regarding the worth at that a product or like products or product or services, are or square measure, usually oversubscribed or provided, and, for this purpose, an illustration on value shall be deemed to visit the worth at that the product or product or services has or are oversubscribed by sellers or provided by suppliers typically within the relevant market unless it’s clearly such to be the worth at which the merchandise has been oversubscribed or services are provided by the person by whom or on whose behalf the illustration is made;

(j) provides false or deceptive facts uncomplimentary the products, services or trade of another person.

Explanation. —For the needs of this sub-clause, an announcement that’s,—

(A) expressed on a piece of writing offered or displayed purchasable, or on its wrapper or container; or

(B) expressed on something connected to, inserted in, or related to, an article offered or displayed purchasable, or on something on that the article is mounted for display or sale; or

(C) contained in or on something that’s oversubscribed, sent, delivered, transmitted or in any other manner whatever created offered to a member of the general public, shall be deemed to be an announcement created to the general public by, and solely by, the one that had caused the statement to be therefore expressed, created or contained;

(ii) allowing the publication of any ad, whether or not in any newspaper or otherwise, together with by manner of electronic record, for the sale or supply at a bargain price of products or services that don’t seem to be meant to be offered for sale or provide at the bargain price, or for an amount that’s, and in quantities that are, reasonable, having relevancy the character of the market during which the business is carried on, the character and size of  business, and therefore the nature of the advertisement.

Explanation. —For the aim of this sub-clause, “bargain price[2]” means that, —

(A) a value that’s explicit in any ad to be a bargain price, by respect to a standard value or otherwise; or

(B) a value that someone UN agency reads, hears or sees the ad, would moderately perceive to be a bargain price having relevancy the prices at that the merchandise publicised or like product square measure usually sold;

(iii) permitting—

(a) the giving of gifts, prizes or alternative things with the intention of not providing them as offered or making impression that one thing is being given or offered freed from charge once it’s totally or part lined by the amount charged, within the group action as a whole;

(b) the conduct of any contest, lottery, game of probability or talent, for the purpose of promoting, directly or indirectly, the sale, use or provide of any product or any business interest, except such contest, lottery, game of probability or talent as could also be prescribed;

(c) withholding from the participants of any theme giving gifts, prizes or alternative things freed from charge on its closure, the data regarding final results of the theme.

Explanation.—For the aim of this sub-clause, the participants of a theme shall be deemed to possess been hep of the ultimate results of the theme wherever such results square measure within an affordable time revealed, conspicuously within the same newspaper during which the theme was originally advertised;

(iv) allowing the sale or provide of products meant to be used, or are of a kind seemingly to be utilized by shoppers, knowing or having reason to believe that the goods don’t befits the standards prescribed by the competent authority regarding performance, composition, contents, design, constructions, finishing or packaging as square measure necessary to stop or scale back the chance of injury to the person victimisation the goods;

(v) allowing the billboard or destruction of products, or refusal to sell the goods or to form them offered purchasable or to produce any service, if such hoarding or destruction or refusal raises or tends to boost or is meant to boost, the cost of these or alternative similar product or services;

(vi) producing of spurious product or giving such product purchasable or adopting deceptive practices within the provision of services;

(vii) not issue bill or money memorandum or receipt for the products oversubscribed or services rendered in such manner as could also be prescribed;

(viii) refusing, when merchandising product or rendering services, to require back or withdraw defective product or to withdraw or discontinue deficient services and to refund the thought therefrom, if paid, inside the amount stipulated within the bill or money memorandum or receipt or within the absence of such stipulation, inside a amount of thirty days;

(ix) revealing to alternative person any personal info given in confidence by the buyer unless such revealing is formed in accordance with the provisions of any law for the nonce effective.

Unfair Trade Practices in Various Sectors:

In the recent past, there are several incidences of unfair trade practices bobbing up to light-weight. Unfair trade practices in India have penetrated through varied sectors to the Indian state of affairs. Some of them area unit through Food process business, Pharmaceutical business, Insurance, Education etc.

1.     Pharmaceutical Sector:

The competition among the generic medicine and name drug dealers has been ne’er ending. These competitions will someday flip ugly resulting in several incidents of unfair trade practices within the sector of medicines. it’s wide ascertained that in case of prescription of a drug, wherever the doctor is chief for the last word user, i.e., the patient, the pharmaceutical business incorporates a powerful influence on prescribing habits of doctors. there’s a necessary distinction between promotion and knowledge. A medical representative whereas delivering data to the doctors regarding new medicine, as well as its usefulness and effectiveness might have precompetitive effects. The promoting methods adopted by companies like giving the doctors gifts like mobile, cars or perhaps sponsored institution, may downplay the demand facet and therefore raise costs for consumers[3]. In the year 2003, Consumer Education and analysis Society, Ahmedabad, dropped at the notice of the regulatory authority in Gujarat, the sale and promotion of bound health gadgets by Conybio Health Care, in violation of the medicine and Magic Remedies (Objectionable Advertisements) Act. the corporate was found promoting and distributing sunglasses to cure migraines and sun strokes, socks for acidity, pillow covers for inflammation, palm guards for Parkinson’s unwellness, eye-shade for sinusitis, T-shirts for top, low blood pressure, trunks that cure gas, acidity, prostate, piles, genitourinary apparatus issues, ladies briefs for expelling issues, bed sheets for dysfunction strokes and brassieres for breast cancer. once the regulator asked the corporate to provide scientific proof to support the result of infrared rays that it claimed was gift within the product, the corporate aforementioned it had ne’er undertaken such studies by any recognized Indian institute. after, the regulator prohibited the sale and promotion of the product.

2.     Food process Sector:

There has been a worldwide concern regarding food safety and unfair trade practices in quality and amount of the food product. virtually everybody has come back across cases of deliberate addition of chemicals like additives and adulterants, for the purpose of disguising inferior commodities, contaminating or earning undue profits or food contamination throughout production, processing, packaging and storage. Such unethical and unfair trade practices area unit of terribly serious nature since they create grave threat to consumer’s health directly. In May, the Food and medicines Administration (FDA) officers taken five hundred weight unit mangoes value Rs. 25,000 that were being aged with the employment of a chemical known as calcium carbide throughout a raid at a store of a mango dealer in Pune. Artificial ripening by using inorganic compound is prohibited beneath the bar of Food Adulteration Act. The chemical, if consumed in giant quantities, damages internal organs. The FDA officers destroyed the mangoes at a merchandising ground, whereas the chemical samples were sent to a town based mostly public health laboratory for more investigations.8 the foremost recent disputable case dealing with the unfair trade practices is that the Nestle Maggi case. the govt. of India had filed suit of unfair trade observe against the corporate beneath Sec12 (1)(d) within the National Consumer Dispute Redressal Commission[4]. the problem was relating to the dishonest advertisements of the merchandise. before that the Food Safety and Standards of India have asked the corporate to withdraw from the market the freshly introduced forms of Maggi Noodles alleging it not suited consumption thanks to non-maintenance of prescribed customary of quality in them, the surplus presence of lead and dishonest labelling relating to the presence of flavouring.

3.     Insurance:

Insurance is a vital monetary services subsector line of work to people and the range of insurance shoppers is steady increasing. With the rise within the consumers comes the problem of unfair trade practices during this sector. Insurance offers a promise that, upon a contingent event at a later date, the client can get a specific benefit or compensation for a loss or harm. A deficiency in commission would mean either a delay or a non-fulfilment of that promise. Thus, it’s seen that in insurance significant reliance is placed on the public’s trust that the guarantees created are delivered. firms usually lure shoppers with enticing schemes, however later attempt to lift their commitment. They contain several wide exclusion and exemption clauses favourable to giant enterprise. The favourable terms are usually in little prints that the individual ne’er reads since it’s a laborious and unrewarding task to find what these terms are.

Case Laws:

  1.  Godfrey Philips India Ltd v. Ajay Kumar[5]:

The suit was filed against the impugned advertising by the cigarette company. the merchandise was oversubscribed within the name of “red &White, beside the sentences stating, “Red &White smokers are one in every of kind” the packet additionally had an image of actor Akshay Kumar, and additionally contained a line stating the harmful effects of smoking. The litigant self-satisfied that, the image of a famous actor promoting the tag lined cigarette provides impression of the power to try to stunts like that of the actor. And this could draw away the customer’s attention from the warning. The complaint was rejected in district forum because it was filed in civil court furthermore. The case reached the National Commission, wherever the appellants declared that there’s no proof of any hurt or misfortune because of the advertising. It had been controlled by the National Commission that litigant couldn’t file because it wasn’t on behalf of any volunteer organisation. The attractiveness was allowed with no prices.

  •  N. Ravindranath Kamath v. Spice Communications Ltd[6]:

Kamath was approached by Spice Communications Ltd. WHO[7] provided type and folder wherein a map of Karnataka was written indicating that the tower would be erected at an area called Virajpet. on its assurance Kamath stuffed up AN application for the affiliation by paying Rs. 3,100/- to them. Sim card was provided at a value of Rs. 6,800/-. Spice Communications could not erect the tower and therefore Kamath couldn’t use the mobile phone from Virajpet despite a total of Rs. 22/- being charged per day. On the map of Karnataka that was written within the brochure it absolutely was assured by mid-99. Spice Communications didn’t construct the tower as a result of it was not viable. A consolidated quantity of Rs. 30,000/- alongside Rs. 10,000/- was paid to Kamath and therefore the Commission control that this was AN unfair trade follow

  •  Pooja Roy v. Krishnango Bhattacharya[8]:

M/s Kasko Asian country, a wholesale license pusher was charged for partaking in neutering the original labels of the manufacturer and pasting recent written labels extending the ending date and mercantilism spurious medicine. This was thought-about as an unfair trade follow within the pharmaceutical sector.

  •  Consumer Guidance Society v. Amway India Enterprises[9]:

The Amway Enterprises WHO offers a range of shopper product and food supplements. It was found that some merchandise of Amway was mislabelled and conjointly debauchee. The merchandise like Nutrilite macromolecule, Amway national capital Safad Musli contained totally different quality of ingredients than mentioned within the label. On the findings it absolutely was control that Amway have restores to unfair means of business and were charged compensation charges and directed to get rid of their misbranded merchandise and renew their advertisements.

  • Bhupesh Khurana & Others v. Vishwa Buddha Parishad & Others[10]:

In this case, the opposite parties were running an institution in the name of Buddhist Mission Dental College and Hospital. They advertised in the national newspapers inviting applications for admission for B.D.S Course 1991-92. The advertisement falsely stated that the college is under Magadh University, Bihar and is recognised by Dental Council of India. The complainants in bona fide and good faith sought admission and paid substantial amount of fees. The National Commission allowed the complainants and directed the opposite parties to refund the fees with interest 12% per annum from the date of receipt of the amount till the date of payment and also to pay Rs. 20,000 to each of the complainants by way of compensation. The Commission observed[11]:

It is an obvious case of misrepresentation on the behalf of the respondents and tantamount to unfair trade practices. The complainants were admitted in the B.D.S. Course for imparting education for consideration for which the college of the respondents was not affiliated and recognised for imparting education. This clearly falls within the purview of deficiency as defined in the Consumer Protection Act.


Consumers are frequently being subjected to unfair trade practices by the enormous sellers and consumers are getting a prey to their cut throat business competition. The attention among consumers in today’s modernised world is giving thanks to shoppers ascertaining the rights provided to them underneath Consumer Protection Act and seeking redressal against the unfair trade practice. The prospect of the buyer justice system in our country seems to be bright in view of the provisions accessible within the Indian statutes and legislation and varied proactive policies, schemes being adopted by the govt. The illiterate cluster of shoppers ought to be created tuned in to their rights that they will use to safeguard themselves from such unfair practices by the monopolists. the govt ought to take measures to teach folks regarding the various redressal forms that they will approach on breach of their rights as a client.

Involvement of trade and business, civil society organizations and specially client themselves is significant to stay a check on the apply of unfair change the years to return.

Frequently Asked Questions (FAQs):

  1. What is the definition of ‘Unfair Trade Practice’ under Consumer Protection Act, 2019?
  2. Name the three unfair trade practices?
  3. If any seller provides goods to consumer which are re-built, second hand, renovated, reconditioned or recent goods as new goods, then it will fall under the ambit of ‘Unfair Trade Practice’ or not?
  4. Name the three Unfair Trade Practices in Various Sectors.
  5. Offering of Gifts and prizes with products is fall under ‘Unfair Trade Practice’ or not?


[1] the prevailing fashion or style at a particular time.

[2] sold at a low price, or a lower price than usual: bargainpriced stocks

[3] CENTAD, “Competition Law and Indian Pharmaceutical Industry”, 2010,

[4] The National Consumer Disputes Redressal Commission (NCDRC), India is a quasi-judicial commission in India which was set up in 1988 under the Consumer Protection Act of 1986. Its head office is in New Delhi.

[5] AIR 2008 SC 1828

[6] (2006) (4) CPJ 67 NC

[7] When diplomats met to form the United Nations in 1945, one of the things they discussed was setting up a global health organization. WHO’s Constitution came into force on 7 April 1948 – a date we now celebrate every year as World Health Day.

[8] (2008) C.R.R 2796 of 2008 Calcutta H.C

[9] (2007) C.C 140 of 2007

[10] (2001) I CPJ 74 (NCDRC)

[11] Ibid, at 80

Leave a Reply

Your email address will not be published. Required fields are marked *