2. The Competition Act, 2002: Objectives of Competition Act, the features of Competition Act,
components of Competition Act, CCI, CAT, offences and penalties under the Act.
Consumer Protection Act, 1986: Definition of the terms consumer, consumer dispute, defect,
deficiency, unfair trade practices and services. Consumer Protection Act, Consumer Redressal
Agencies – District Forum, State Commission, National Commission.
UNIT - 4
3. To have in depth knowledge about the Competition Act, 2002.
To have in depth knowledge about Consumer Protection Act, 1986
LEARNING OBJECTIVES
6. Whole of India Except
J & K
66 sections
Anti competitive
agreements
Administrative Powers &
Duties
Investigation of Contraventions
offences and penalty
SCOPE COMPETITION ACT, 2002
7. 1) To ensure fair competition in India
2) To prohibits trade practices which cause adverse effect on competition in markets within India.
3) To curbe negative aspects of competition through the competition commission of India (CCI).
OBJECTIVESOFTHEACT
8. COMPETITION ACT :
Features:
Anticompetitive practices ( sec 3)
Abuse of Dominance ( sec 4)
Mergers and Acquisition ( sec 5 & 6)
Competition Advocacy ( sec 49)
What practices are stopped by it?
Price fixing
Bid rigging
Re- sale price fixation
Exclusive dealing
9. Establishment of Commission – With effect from such date as the Central Government may, by notification, appoint, there
shall be established, for the purposes of this Act, a Commission to be called the “Competition Commission of India.”
The head office of the Commission shall be at such place as the Central Government may decide from time to time. The
Commission may establish offices at other places in India
Composition of Commission: The Commission shall consist of a Chairperson and not less than two and not more than ten
other Members (Whole time) appointed by the Central Government. Provided that the Central Government shall appoint the
Chairperson and a Member during the first year of the establishment of the Commission.
Selection of Chairperson and other Members: The Chairperson and other Members shall be selected in the manner as may
be prescribed (S.9)
Term of office of Chairperson and other Members: (1) for a term of five years from the date on which he enters upon his
office and shall be eligible for reappointment Provided that no Chairperson or other Member shall hold office as such after he
has attained: (a) In the case of the Chairperson, the age of sixty-seven years; (b) In the case of any other Member, the age of
sixty-five years.
10. Director General:
Competition Act Bill provides Director General for investigation for the CCI. The Director General would be as to act
and if so director by the CCI but will not have any Suo - moto powers for training investigation.
Appointment of Director-General, etc:
(1) The Central Government may, by notification, appoint a Director-General and as many Additional, Joint, Deputy or
Assistant Directors etc - inquiry into contravention
(2) Every Additional, Joint, Deputy and Assistant Directors-General or such other advisers, consultants and officers
shall exercise his powers, and discharge his functions
(3) The salary, allowances and other terms and conditions of service-may be prescribed.
(4) experience in investigation, and knowledge of accountancy, management, business, public administration,
international trade, law or economics and such other qualifications as may be prescribed. (S.16)
Duties of Director-General :
Director-General to Investigate Contraventions: Duty of the Commission to eliminate practices having adverse effect
on competition, promote and sustain competition, protect the interests of consumers, and ensure freedom of trade
carried on by other participants, in markets in India.
Inquiry into Certain Agreements and Dominant Position of Enterprise
The Commission may inquire into any alleged contravention
It determines whether an agreement has an appreciable adverse effect on competition
It determines whether a market constitutes a “relevant market”
Penalties:
Penalty for failure to comply with directions of Commission and Director-General - Rs. 1,00,00 for each day during
which such failure continues (S. 43)
Penalty for making false statement or omission to furnish material information. - a penalty which shall not be less
than Rs. 50,00,000 but which may extend to rupees one crore, as may be determined by the Commission (S. 44).
Penalty for offences in relation to furnishing of information. - a penalty which may extend to Rs. 10,00,000 (S. 45).
22. Consumer Protection Act was enacted in the year 1986.
To provide a better protection of the interests of consumers.
To encourage the consumer movements through consumer
councils and other authorities for the settlement of consumer’s
disputes and for matters connected therewith..
The Act gives full freedom to consumers in getting legal protection
and free from fear, complexities and technicalities involved - legal
procedure in the regular course of action like complaints and so on.
There is no court fees or stamp duty to be affixed, no matter
whatever may be the amount involved in the complaints.
INTRODUCTION
23. The Right to be
assured’
The Right to be
protected
The Right to be informed
The Right to be heard
The Right to seek redressal
against unfair trade practices
The Right to consumer education
24.
25. Complaint -allegation in writing
(a) an unfair trade practice or restrictive trade
practice adopted by any trader burdening a
consumer with loss or damage
(b) defective goods bought or agreed to be
bought
(c) deficiency in service availed or agreed to be
availed
(d) price charged in excess of fixed or displayed
price
(e) hazardous goods and services being offered
for sale.
The compliant can be attached with receipt, invoice
guarantee or warranty cards, correspondence and so
on
Who can file a Complaint
(a) A consumer
(b) Any voluntary organisation, registered
under
(c) The Central Government.
(d) The State Government or Union
Territory Administrations
(e) One or more consumers, where there
are numerous consumers having the
same interest.
Consumer: Sec 2 (1) (d), “Any person, who buys any goods against consideration is a consumer.”
26. Who can file a Complaint [Sec. 2(1) (B) and Sec. 12(1)]
A consumer.
Any recognised consumer association, any voluntary consumer association registered
under the Companies Act.
One or more consumers, where there are numerous consumers having the same interest.
The Central Government or the State Government.
In case of death of a consumer, his legal their or representative.
Grounds on which a complaint can be made [Sec. 2(1)(C)]
Example: A sold a second-hand computer to B representing it to be a new one. Here B can make a
complaint against A for adopting an unfair trade practice.
Example:A bought a maruti Car from an authorised dealer of the company who charged him Rs. 4,000
over and above the price displayed on the price list of the Maruthi Company. A can file a complaint
against the dealer.
27. Deficiency :[Sec. 2 (1) g] under this, deficiency in relation to any service means any fault, imperfection, short-coming or inadequacy in the quality, nature and
manner of performance which is required to be maintained under law or has been undertaken by the opposite party to be performed under a contract or
otherwise.
Service:- 2 (1) (0) of this Act, a very comprehensive definition has been incorporated for service. It says “Service of any description which is made available
to potential users”.
Consumer Dispute: 2 (1) (e), It refers to a dispute where the person against to whom a complaint has been made, denies or disputes the allegations
contained in the complaint. Thus it is clear that if a person against to whom complaint is made agrees to the compliant, there is on ‘Consumer dispute’.
Restrictive Trade Practice: 2 (1) (nn) – Under this section Restrict Trade Practice has been defined as any trade practice which requires a consumer to
buy, hire or avail of any goods or, as the case may be, services as a condition precedent for buying, hiring or availing of any other goods or services.
Unfair Trade Practice:‘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.
Appropriate Laboratories: There is provision for laboratory test of sample goods also for which parties has to pay a prescribed fee in such a situation.
These tests are conducted by the appropriate laboratories. For the purpose of the Act, the term appropriate laboratory under Sec. 2 (1) (a) means: (a) A
laboratory or organisation recognised by the Central Government. (b) Recognised by a State Government, subject to such guidelines as may be prescribed
by the Central Government in this behalf. (c) Any such laboratory, or organisation established by or under any law for the time being in-force which is
maintained, financed or aided by the Central Government or a State Government for carrying out analysis or test of any goods with a view to determine
whether such goods suffer from any defect. It also include, laboratories established under the Prevention of Food & Adulteration Act.
DEFNITIONS
28. The National Consumer Disputes Redressal Commission, India is a quasi-judicial commission in India which
was set up in 1988 under the Consumer Protection Act, 1986. Its head office is in New Delhi. The commission
is headed by a sitting or retired judge of the Supreme Court of India
1.District Forum:
3. National Commission:
2. State Commission:
29. District Commission:
Composition - It consists of a president
and two other members.
President -A working or retired judge of
District Court.
The president is appointed- by the state
government on the recommendation of the
selection committee.
Jurisdiction- In 1986, it had jurisdiction to
entertain complaints where the value of
goods or services does not exceed Rs 5,
00,000 but now the limit is raised to 20
lakhs.
Appeal against orders- Any person who is
aggrieved by the order of District Forum can
appeal against such order to State
Commission within 30 days and by
depositing Rs 25000 or 50% of the penalty
amount whichever is less.
State Commission:
Composition -It consists of a
president and two other
members.
President -A working or retired
judge of High Court.
The president is appointed-
The president is appointed by
the state government after
consultation with the chief
justice of the High Court.
Jurisdiction- In 1986, it had
jurisdiction to entertain
complaints when the value of
goods or services exceeds Rs
5,00,000 and does not exceed
Rs 20,00,000 but now it is raised
to more than Rs 20,00,000 and
up to Rs1 crore.
Appeal against orders- Any
person who is aggrieved by the
order of State Commission can
appeal against such order to
National Commission within 30
days and by depositing Rs
35000 or 50% of penalty amount
whichever is less.
National Commission:
Composition - It consists of a
president and four other
members.
President - A working or retired
judge of Supreme Court.
The president is appointed-
The president is appointed by
the central government after
consultation with the chief
justice of India,
Jurisdiction- In 1986, it had
jurisdiction to entertain
complaints where the value of
goods or services exceeds Rs
20 lakhs but now the limit is
raised and it entertains the
complaints of goods or services
where the value exceeds Rs 1
crore.
Appeal against orders- Any
person who is aggrieved by the
order of the National
Commission can appeal against
such order to Supreme Court
within 30 days and by depositing
50% of penalty amount but only
cases where value of goods or
services exceeds Rs 1 crore can
file appeal in Supreme Court.
Article shared by-Utkarsh Dayal
30. The Central Consumer Protection Council:
Section 4 of the Act provides that
(1) The Central Government may, by notification, establish with effect from such date as it may specify in such notification, a council to be known as the ‘Central Consumer Protection
Council’.
(2) (2) The Central Council shall consist of the following members namely; ( a) The minister incharge of the ‘Consumer Affairs’ in the Central Government, who shall be its chairman,
and (b) Such number of other official or non - official members representing such interests as may be prescribed.
(3) [Note: The word “Consumer affairs” has been substituted by the “Consumer Protection”and the same is known as The Consumer Protection (Amendment) Act, 1993
with effect from 18th June 1993. The Consumer Protection Rules were formulated in the year 1987. It Provides that the Central Council shall consist of the following
150 members namely:-
(i)The minister -Chairman of the Central Council.
(ii) The minister of State or Deputy minister incharge -Vice-Chairman.
(iii) The minister of Food and Civil Supplies -State.
(iv) Eight members of the Parliament:– Five from Lok Sabha and three from Rajya Sabha.
(v) The Secretary of the National Commission for Scheduled Castes and Scheduled Tribes.
(vi) Representatives of the Central Governmental Departments and autonomous organisations concerned with consumer interests not exceeding twenty.
(vii) Representatives of women not less than ten.
(viii) Representatives of farmers, trade and industries not exceeding twenty.
(ix) Persons capable of representing consumer interest not specified above, not exceeding fifteen.
(x) The secretary in the Department of Civil supplies shall be the member secretary of the Central Council.
The Consumer Protection Council
31. Meeting of The Central Council: (Section 5)
(i) The Central Council shall meet as and when necessary, but at least one meeting of the Council shall be held every year.
(ii) (ii) The Central Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure
in regard to the transaction of its business as may be prescribed.
Objects of The Central Council: (Sec 6)
Object is basically to promote and protect the rights of the consumers
(i) Right to Safety
(ii) (ii) Right to Information
(iii) (iii) Right to Choose
(iv) (iv) Right to be Heard
(v) (v) Right against exploitation
(vi) (vi) Right to Education
Continued….
32. • The State Consumer Protection Councils Section 7:
• (i) The State Government may, by notification, establish with effect from such date as it may specify in such
notification a council to be known as the Consumer Protection Council for ….. (E.g. Karnataka), there in after
referred to as the State Council.
• (ii) The State Council consist of the following members, namely –
• (a) The minister incharge of consumer affairs in the State Government who shall be its chairman.
• (b) Such number of other official or non–official members representing such interests as may be prescribed by the
State Government.
• (iii) The State Council shall meet as and when necessary but not less than two meetings shall be held every year.
(iv) The State Council shall meet at such time and place as the chairman may think fit and shall observe such
procedure in regard to the transaction of the business as may be prescribed by the State Government.
Object of the State Council Act provides under Section 8, the objects of the State Council, to promote and to
protect, the rights of the consumers within the state laid down in clauses (a) to (f) of Section-6.
District Forums
The formation of District Forums and other relevance given in the Sec 10 of the Consumer Protection Act. According
to this,
(1) Each District Forum shall consist of:
(2) (a) a person who is, or has been, or is qualified to be a District Judge, who shall be its president.
(3) (b) two other members shall be persons of ability, integrity and standing, and have adequate knowledge or
experience, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy,
industry, public affairs or administration, and one of whom shall be a women
33. The complainant was engaged in the medical profession and running a nursing home and Clinic .He had purchased from the
appellant company the equipment at a price of Rs. 3.85 lakhs in July 1990 with a warranty. The machine started giving
problems which could not be rectified. Consequently, the doctor (complainant), after serving a notice on the manufacturer, filed
a complaint before the state commission at lucknow and obtained a favourable order. The manufacturer appealed to the
National Commission which upheld the verdict of the State Commission, as the equipment was used personally by the
complainant for earning his livelihood. [KodyElcot Ltd .v .DR.C.P Gupta (1996) NCDRC -4CTJ48].
2. Sigma Diagnostic Ltd. Of Ludhiana is running a hospital in the city of Ludhiana which is owed by Dr. S and her husband
DR.A. The said hospital was insured with the insurance company named Bajaj Allianz Afire broke out in Sigma New life
Hospital, a unit of Sigma Diagnostic Ltd., Ludhiana in January, 2005. Sigma Diagnostic Ltd filed a claim of Rs. 1.6 crore with
the Insurance company Bajaj Allianz.The surveyor pressurized the doctor couple allegedly by threatening along legal battle
and offered them a merger sum of only Rs. 25 Lakh. Though amazed at that offer they had no choice but to accept the offer as
they were in bad shape and they were even not in a position to pay the electricity bills of the hospital. At this doctor Couple
decided to file a complaint with the Punjab State Consumer Dispute Redressal Commission. Bajaj Allianz assertion Sigma
Diagnostic Ltd., is a commercial organization and the consumer was declared as ill found. Punjab State Consumer Dispute
Redressal Commission referred to a decision given by thCommissionin which an Insurance dispute is essentially a Consumer
dispute and awarded a compensation of Rs. 90 lakh one of the highestever awards at the State level Consumer Dispute.
3. In the case of Manjeet Kumar, he had purchased a Nokia set for Rs. 1,750 in 2004. When someone broke open the door of
his car and stole the mobile, he sought reimbursement of the cost of the mobile from the insurance company as the Mobile
dealer told him that the handset carries free insurance cover during purchase. Here he was told that the in the absence of ‘
forced and violent entry or exit’ he would not get money. He filed a complaint in Consumer court being disguised with this kind
of fraud. In its verdict delivered on May 15, the apex customer court asked the Insurance Company not only to pay the loss
amount but also the Compensation and the cost of litigation. e National
New issues relating to consumer safety can be discussed in class
Case Law
34. M/S. OM SURGICALS, MUMBAI VS DEPARTMENT OF POSTS, INDIA. On recieving a complaint from M/s. Om Surgicals
regarding non-delivery of a post parcel to their client in Hameerpur (U.P.) valued at Rs. 42,603/-, CFBP was asked to intervene.
The parcel was dispatched on 12/4/2003. Efforts to trace the parcel were ongoing and inter-departmental enquiries resulted in a
thick file of correspondence exchanged, personal visits to the offices of Post Departments and even attendance at a DakAdalat
failed to yield results. After four months, a distressed Mr. Rashmikantgangar of M/s. Om Surgicals asked CFBP's assitance in
locating the missing parcel. On being contacted, the Asstt. Director Postal Services, Business Development Cell, Mumbai,
promptly replied acknowledging that the enquiries revealed that the parcel had been lost, and their office had directed the Sr.
Supdt. of Post Offiices, Mumbai tp pay the justified compensation.
BAJAJ ELECTRICALS LTD., MUMBAI VS MR. RAJESH GUPTA, DELHI Mr. Rajesh Gupta purchased a Steam Iron of Bajaj
make in Feb 2010. Since the iron was defective he lodged a complaint with Bajaj Electricals as well as with CFBP. The matter
was taken up with Bajaj Electricals Ltd. who immediately repaired the steam iron. Mr. Rajesh Gupta in his letter to CFBP stated
that – "I made a complaint on 07/03/2010 and also on 18/3/2010 and at last my steam iron is properly repaired. Thanks for the
efforts made by you and hope I will receive the same co-operation in future also.
MR. NAROTTAM TOLA, MUMBAI VS BEST, MUMBAI Mr. NarottamTola lodged a complaint with CFBP in December 2009
about collection of payment twice by BEST for the Electricity Bill in July – Sep 2009. The matter was referred to BEST. Upon
receipt of CFBP’s letter, BEST deputed their representative to Mr. NarottamTola’s residence and clarified that they did not
charge twice to the customer. Mr. Tola in his letter to CFBP stated that he was satisfied with the explanation and thanked CFBP
for taking the matter
MRS. D.P. ELAVIA, MUMBAI VS GANDHIMATHI APPLIANCES LTD., CHENNAI Mrs. D.P. Elavia who purchased a Butterfly
Gas Stove from a shop in Mumbai had problem in the two Burner of the stove. She lodged a complaint with CFBP. The matter
was referred to Gandhimati Appliances, Chennai who immediately taken action and replaced with a brand new stove. Mrs.
Elavia thanked CFBP for taking prompt action.
New issues relating to consumer safety and protection can be
discussed in class
