An amendment in 1993 of the Consumer Protection Act (CPA),1986 led to the ad verbatim incorporation of the definition of unfair trade practices from the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969. This was cause for much jubilation amongst consumers and consumer groups, especially those residing outside New Delhi. The reason: earlier, it was difficult to attend all the hearings related to unfair trade practices as they were conducted by the MRTP Commission (MRTPC), New Delhi. The consumer courts, on the other hand, are located in every district of the country. However, the consumer courts do not have the power to issue interim orders such as the cease and desist order under the MRTP Act. It is necessary that the consumer courts are given these powers to ensure quick redressal of consumer grievances pending the final decision of their cases.
Till the consumer courts are armed with such powers, consumers and consumer groups have no other recourse but to approach the Director-General (DG) of the MRTPC (Investigation and Registration), Bikaner House, Shahjahan Road, New Delhi.
An interesting case invoking the provisions of Section 36A (3) (a) and (b) and Section 36B (c) of the MRTP Act, dealing with unfair trade practices, was decided by the MRTPC on October 31, 1996.
In this case, the DG (I&R), MRTPC, the complainant under Section 36B (c) of the MRTP Act, filed a case against M/s Usha International Ltd (Respondent 1) that markets Usha fans manufactured by M/s Jay Engineering Works Ltd (Respondent 2). M/s Usha International Ltd had issued an advertisement in a leading national daily under the caption, Better fans, better gifts! for promoting the use of Usha fans.
The advertisement announced a scheme for winning prizes in the form of Maruti cars, Vijai Super scooters, tape-recorders etc. A prospective customer simply had to purchase an Usha fan to be eligible for participating in the scheme. The advertisement mentioned that the dealer from whom the fan was purchased would hand over a sealed envelope bearing the name of the gift won by the purchaser.
The DG, after inspecting the records of one of the outlets of M/s Usha International Ltd, noted that the prices of various categories of fans had been increased simultaneously from the date of commencement of the advertised scheme. The DG also noted that the cost of the prizes was fully or partially covered by the increase in the price of the fans. This attracted section 36A (3) (a) of the MRTP Act.
The other allegation against the respondents was that the prizes or gifts offered by them depended upon chance rather than on skill. According to Section 36A (3) (b) of the MRTP Act, conduct of any contest, lottery, or game of chance for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest is an unfair trade practice.
Thus, the MRTPC held that the receipt of a prize in a game of chance was not a result of human reason, foresight or sagacity but is a result of chance. In this case, bigger prizes like Maruti cars were secured by purchasers only by chance, even though every purchaser got a small cash prize or discount. Furthermore, the respondents witness stated that the impugned scheme was introduced to promote Usha fans and increase inter-brand competition. It was held that the scheme attracted Section 36A (3) (b) of the MRTP Act. Further, the main complainant, along with another witness, had been lured by the prize scheme and were offered the regular cash discounts which were represented to them as prizes under the scheme. The MRTPC thus held that both public and consumer interest had been thwarted
The MRTPC held that the respondents were severally and jointly liable for the unfair trade practices indulged in by them, attracting the provisions of Sections 36A (3) (a) and (b) of the MRTP Act. The respondents had already discontinued the trade practice but were directed by the MRTPC not to repeat the same in future.
The above case is not an isolated case of its kind in the MRTPC. Many such complaints are being filed. Hence, manufacturers will do well to note the points raised in this article so as to avoid being hauled up by the Commission. On the other hand, if such schemes come to the notice of the public, they should take it up with the MRTPC in the interest of consumers at large.
