Q.1 Discuss the history and need of consumer protection act.

Ans. Consumer Protection is a concept that was first introduced by John Fitzgerald Kennedy, the 35th President
of the United States on 15th March 1962. He spoke about this concept in a special speech to the Congress. His
speech stressed protecting the consumer’s interest. Kennedy also spoke about the four basic rights of the consumer,
namely:
• Right to safety
• Right to be Informed
• Right to be Heard Right to Choose.
• In order to understand the development of consumer protection in India, it is important to trace the beginnings
of the formation of the concept.

Ancient India
Ancient India witnessed the supremacy of the Vedas as a religious text, coming from God himself. The Vedas
was strictly followed by the majority in the ancient Indian society.Apart from the Vedas, this period also gave
rise to the Code of Chanakya, Manu Smriti, Narada Smriti and so on. These ancient codes contained
provisions which sought to safeguard the interests of the consumer, with the aim of consumer safety. The
punishment was also granted when the consumer-related provisions were gone against. Among the Dharmas,
the most authoritative texts are:Manu Smriti
Yajnavalkya Smriti
Narada Smriti Bruhaspati Smriti Katyayana Smriti.
Among these, Manu Smriti was the most influenSmrit Manu
Smriti
Manu Smriti was all about the social, political and economic conditions of the society in the ancient times. It
stressed on ethical trade practices, punishing those who were unfair to the consumers. Its prescribed code of
conduct extended to adulteration as well, which is mixing of a commodity with another, resulting in impurity.
All goods had a market price or a sale price, as set by the king. All weights and measures were inspected every
six months, and the results of these inspections were kept a record of. Such efficient means of consumer
protection has developed in such an early stage of settlement is noteworthy. Kautilya’s Arthashastra Kautilya’s
Arthshastra clearly defined laws regulating weights and measures. A penalty was proposed traders who
indulged in adulteration of goods namely grains, medicine, perfumes, salt and sugar. Arthashastra describes
the role of the State in regulating trade and its duty to prevent crimes against consumers.[1] Black marketing
and unfair trade practices were strictly looked
condemned by Kautilya. There were punishments prescribed for different types of cheating, which were
stringent. These fines could be as severe as cutting off the cheater’s hand. The rights of the traders were also
well protected by the
Arthashastra. The Arthashastra was created during Chandragupta’s period. This period witnessed healthy trade
practices where traders were to possess a license to sell, which was given on permission. The king granted a
margin of profit to sellers while fixing sale prices. The State was responsible for protecting the consumers
against unfair prices and fraudulent transactions.
Such acts were punishable, including smuggling and adulteration, especially of food.Consumers were ensured
this protection by an easily accessible justice system through different sets of courts. Providing justice was
the duty of the king.
Medieval Period
A shift in the time period of India from ancient to medieval resulted in a focus on Islam as a religion and the
laws of Islam. The Holy Quran, the main text of the Muslims, also stressed the protection of consumers.The
Quran has verses that indicate that the use of unjust weights and measures is unacceptable. During the period
of the Sultanate, local conditions determined the price of commodities.[2] Hence, both the Hindu and the
Muslim scriptures that were being used together by the kings of different states of India promoted consumer
protection.
Like the Hindu texts, the Quran also contained various rules and regulations for protecting consumers from
the unfair and unjust malpractices indulged in by sellers.During the rule of Alauddin Khalji, the market had
been controlled by various injunctions and prescriptions. The king fixed prices of the grains. There was a
strict price control mechanism implemented in the market. Different shopping areas were established for
different goods, namely
Grains Cloth, sugar, butter, oil and so on Horses, slaves and cattle Miscellaneous commodities. Shopkeepers were
also punished for under weighing their goods.
Modern Period
In the modern period, the previous traditional legal systems established by Indian kings were replaced by
new modern laws. The British introduced the English Common Law in India along with other legislative
measures for the public and in turn, the consumers.Some of these legislations are as follows:
The Indian Contract Act, 1872 The Sale of Goods
Act, 1930 Indian Partnership Act,
1932
The Agricultural Produce(Grading and Marketing) Act, 1937 The Drugs
Act, 1940
The Drugs and Cosmetic Act 1940
These legislations proved to be immensely effective in saving the interests of the consumers during the time
of the British. The rules were now uniform across the country and not arbitrary to the opinions of the various
kings of the Ancient and Medieval periods.
Post-Independence Period
When India attained independence, it adopted the Anglo-Saxon system of administration of justice.Hence, the
previous legislation that was established by the British continued to function in independent India.Along with
the existing legislation, the country was on its path to more laws through the creation of the Indian Constitution
and its adoption in 1950. Due to the democratic nature of the Constitution, the prime focus of the laws was the
benefit of the general public, who were also consumers.Certain implications of the Indian Constitution that
may apply to consumers are as follows:Article 14 of the constitution implies equality before the law and equal
protection of laws. This results in manufacturers, producers, traders, sellers and consumers having an equal
position before the law.Article 39 has two clauses, (b) and (c), according to which the state is bound to direct
its policy to ensure the distribution of the ownership of the material resources of the society. This distribution
should be done to serve the common good.According to Article 43, the state must strive to develop an
economic organization or to make legislation in order to secure a decent standard of life to all the
workers.These workers are the ones who constitute the bulk of the consumers.The new legislation enacted
after Independence are as follows:
The Prevention of Food Adulteration Act, 1954 The
Essential Commodities Act, 1955
The Monopolistic Restrictive And Unfair Trade Practises Act, 1969 The
Standard of Weights And Measures Act, 1976
The Bureau of Indian Standards Act, 1986 The
Consumer Protection Act, 1986
The Trade Marks Act, 1999 The
Competition Act, 2002
The Consumer Disputes Redressal agencies- the National Commission, the State Commission, and the
District Forum soon started working and has rapidly resulted in quick action taken against those who exploit
the consumers.
The efficient justice system in the sphere of consumer protection that we see today is a resulted of all these
previous developments that have taken place in the past. This advanced system and its roots must be
appreciated.ch efficient means of consumer protection has developed in such an early stage of settlement is
noteworthy. Kautilya’s Arthashastra Kautilya’s Arthshastra clearly defined laws regulating weights and
measures. A penalty was proposed traders who indulged in adulteration of goods namely grains, medicine,
perfumes, salt and sugar
. Arthashastra describes the role of the State in regulating trade and its duty to prevent crimes against
consumers.[1] Black marketing and unfair trade practices were strictly looked condemned by Kautilya. There
were punishments prescribed for different types of cheating, which were stringent. These fines could be as
severe as cutting off the cheater’s hand. The rights of the traders were also well protected by the Arthashastra.
The Arthashastra was created during Chandragupta’s period. This period witnessed healthy trade practices
where traders were to possess a license to sell, which was given on permission. The king granted a margin of
profit to sellers while fixing sale prices. The State was responsible for protecting the consumers against unfair
prices and fraudulent transactions.
Such acts were punishable, including smuggling and adulteration, especially of food.Consumers were ensured
this protection by an easily accessible justice system through different sets of courts. Providing justice was
the duty of the king. Medieval Period A shift in the time period of India from ancient to medieval resulted in
a focus on Islam as a religion and the laws of Islam. The Holy Quran, the main text of the Muslims, also
stressed the protection of consumers.The Quran has verses that indicate that the use of unjust weights and
measures is unacceptable.
During the period of the Sultanate, local conditions determined the price of commodities.[2] Hence, both the
Hindu and the Muslim scriptures that were being used together by the kings of different states of India
promoted consumer protection. Like the Hindu texts, the Quran also contained various rules and regulations
for protecting consumers from the unfair and unjust malpractices indulged in by sellers.During the rule of
Alauddin Khalji, the market had been controlled by various injunctions and prescriptions. The king fixed
prices of the grains. There was a strict price control mechanism implemented in the market. Different
shopping areas were established for different goods, namely Grains Cloth, sugar, butter, oil and so on Horses,
slaves and cattle Miscellaneous commodities. Shopkeepers were also punished for under weighing their
goods. Modern Period In the modern period, the previous traditional legal systems established by Indian
kings were replaced by new modern laws. The British introduced the English Common Law in India along
with other legislative measures for the public and in turn, the consumers.
Some of these legislations are as follows:
The Indian Contract Act, 1872 The Sale of Goods
Act, 1930 Indian Partnership Act,
1932
The Agricultural Produce(Grading and Marketing) Act, 1937 The Drugs
Act, 1940
 The Drugs and Cosmetic Act 1940
These legislations proved to be immensely effective in saving the interests of the consumers during the time
of the British. The rules were now uniform across the country and not arbitrary to the opinions of the various
kings of the Ancient and Medieval periods.
Ques.2 Discuss the consumer disputes redressal commissions.

Ans. Anybody who uses certain goods or services, for self-consumption, is a consumer.
“Consumers” does not include, anyone who avails of goods or service free of charge, purchases for
commercial purposes, or someone who avails of service as an employer under a contract of service. With the
developing technology platforms, and various sources of supply, consumers are relying more on e-commerce
and digitalization. The ever-increasing demands and options have opened gates to frauds, unfair trade
practices, and deficiency of services to the consumers. Thus, to safeguard the consumers against such acts,
certain laws were formulated by the government. Out of these, one crucial Act to protect the transactions
related to e- commerce but owing to the growth of these platforms, the new Act i.e. the consumer protection
Act of 2019 was formulated which came into force on 20th July, 2020.

Section 10 of the new Act provides authority to the Central Government to incorporate the Central Consumer
Protection Authority (CCPA) which aims to protect the consumers from fraud, unfair trade practices,
misleading advertisements and violation of their rights as a consumer. CCPA can take cognizance of a
consumer complaint either on its own i.e. suo moto, or when directed by the central government or on the
receipt of consumer complaint by CCPA.

The new Act ensures that consumers are heard and that their complaints are duly redressed at appropriate
forums. A consumer can either himself file a complaint or through a legal representative. What are consumer
courts?
Though consumers are the main drivers of trade and commerce. Frauds committed on a consumer are not new.
There are other legislation and acts that protect the rights of innocent consumers such as, The Indian Contract
Act, the Sales of Goods Act, the Civil Procedure Code, etc. However, their execution is not done appropriately
which makes customers hesitant about filing complaints. The Consumer
Protection Act, 1986, was a marvellous achievement on the part of the government to this effect. The Act was
passed to protect the rights and interests of consumers. The Act directs the formation of statutory bodies known
as Consumer Courts to specifically deal with suits filed by consumers. This is a vital step under this Act, to
reduce the expense, time and burden on the consumer seeking appropriate redressal. For this purpose,
consumer courts are instituted at the three levels i.e. district, state and national levels.

The law provides for the establishment of Councils to educate and promote awareness among consumers against
the dishonest acts of traders or sellers.

A complaint can be filed under the act in cases of- unfair trade practices, restrictive trade practices, and unfair
contract, the higher price charged by the trader, goods that are hazardous to life and property are sold without
following the standards, etc.

Consumer Redressal Forums Jurisdiction

The consumer protection act, 2019 replaced the Act of 1986 to adapt to the changing environment. The
new Act includes, in its ambit, e-commerce transactions. The act has also modified the definition of the
complainant to include a parent or legal guardian in case the complainant is a minor.

Certain significant amendments have been brought by the 2019 Act, with respect to the Consumer Redressal
Forums, also. These are:-

1. Territorial Jurisdiction – The Consumer Protection Act, 2019 now provides that the consumers can
register their complaints at a place where all or one of the opposite parties resides or carries on
business, or the place of cause of action or where the complainant is residing or works for gain unlike
the 1986 Act (which mandated filing of a complaint by the complainant at a place of residence or
business of the respondent only), thus increasing the scope of territorial jurisdiction. The ultimate
objective behind this is to remove the difficulties and problems faced by the consumers in seeking
redressal against businesses.
The complaints are registered at appropriate forums based on the limit of pecuniary jurisdiction

2. Pecuniary Jurisdiction – Certain significant modifications have been brought forth by the Act of
2019 concerning the pecuniary jurisdiction for all the forums i.e. the District, State, and National
Commissions, respectively:
(A) The upper limit of pecuniary jurisdiction for the District Commission has been increased from
Rs.20,00, 000 to Rs.100,00,000 as per Section 34, Consumer Protection Act, 2019. (B) The
limit of pecuniary jurisdiction for the State Commission has been increased from
Rs.100,00,000 to Rs.10,00,00,000 as per Section 47, Consumer Protection Act, 2019 and,
(C) limit of pecuniary jurisdiction for the National Commission has been increased from above
Rs.10,00,00,000 to above Rs.10,00,00,000 as per Section 58, Consumer Protection Act, 2019.
These modifications have widened the scope of pecuniary jurisdiction to a much larger extent. Along with
the above-mentioned changes, the 2019 Act has also changed the means for the determination of the
pecuniary jurisdiction on the basis of the valuation of goods and services
payable as consideration, unlike the 1986 Act where, pecuniary jurisdiction was determined by the value of
the goods and services as well as the compensation sought, therefore not escalating the amount of
compensation claimed to bring the complaint within the pecuniary jurisdiction of State or National
Commission.

For determining the value of the complaint, the aggregate value of the goods or services and compensation
claimed by the complainant. This was held in the case of “M/s Pyaridevi Chabiraj Steels Pvt. Ltd. V. National
Insurance Corporation Ltd.

3. Alternate Dispute Resolution– Another crucial redressal mechanism incorporated by the 2019 Act,
is the alternate dispute resolution in the form of mediation. This is done to ensure speedy resolution
of disputes and is less expensive. As per the 2019 Act, the complaint may be referred to mediation
after the admission of the complaint or at the first hearing or at any time before the dispute is resolved.
The forum shall refer the matter to mediation with the written consent of both the parties, furnished
within 5 days.
 To this effect, the new act incorporates the establishment of a consumer mediation cell by the respective State
Government in each district and state as well as at the national commission by the central government and be
attached to the forums.

It is based on the principles of natural justice.

4. E-Complaints– The 2019 Act also includes the filing of Complaints before the District Forums
electronically. The rules regarding this are yet to be prescribed by the Government. This was done to
tackle problems related to the increase in digitalisation.Composition

Under section 28 District Consumer Dispute Redressal Forum

Each district forum would comprise of:

A President who is qualified, or has been qualified, to be a district judge, and Two other
members, having ability, integrity and standing and possess knowledge and experience in
dealing with problems related to economics, law, commerce etc. and one of whom shall be a
woman.

Under section 42 State Consumer Dispute Redressal Forum

The state consumer dispute redressal forum,established in each state, should comprise of:

A president, who is or a person who has been a Judge of a High Court and is appointed by the
government of the respective state. These appointments are made only after consultation with the
Chief Justice of the High Court, and
Two other members have ability, integrity and standing and also possess knowledge and experience in
dealing with problems related to economics, law, commerce, public affairs, administration, etc. and one
of whom shall be a woman. These appointments, as mentioned, shall be mandatorily made only after
consultation and recommendation of a selection committee comprising of:
President of the state commission,
Secretary of the law department of the State,
Secretary in charge of the department dealing with consumer affairs in the respective state.

Under section 54 Nation Consumer Dispute Redressal Forum

Over and above the state consumer forum, lies the national consumer dispute redressal forum. As per the Act,
the forum shall comprise of:

A president appointed by the central government, who is a judge or has been a judge of the Supreme court and
these appointments are to be mandatorily made after consulting the Chief Justice of India.
Four other members have the ability, integrity and standing and also possess knowledge and experience
in dealing with problems related to economics, law, commerce, public affairs, administration, etc. and
one of whom shall be a woman.
 The act provides that these appointments are to be made by the Central government on the recommendation
of a selection committee constituting of:

A person who is a judge of the Supreme Court to be nominated by the chief justice of India.
The secretary in the Department of legal affairs in the government of India.
Secretary of the Department dealing with consumer affairs in the Government of India.
Conclusion
Consumer Protection Act, 2019 is a law that protects the interests of consumers. This act was crucial to
resolve a large number of pending consumer complaints in consumer courts across the country. It has ways
and means to solve consumer grievances speedily. The basic aim of the Consumer Protection Act, 2019 is
to save the rights of the consumers by establishing authorities for timely and effective administration and
settlement of consumers’ disputes.
Q.3 What are the changes introduced in new act of Consumer Potection Act,2019.
Ans. Introduction
Consumer protection is the practice of safeguarding buyers of goods and services against unfair practices in the
market. It refers to the steps adopted for the protection of consumers from corrupt and unscrupulous malpractices
by the sellers, manufacturers, service providers, etc. and to provide remedies in case their rights as a consumer
have been violated.

In India, the protection of the rights of the consumers is administered by the Consumer Protection Act, 2019.
The Consumer Protection Act, 2019 was introduced to replace the Consumer Protection Act, 1986. The new
Act contains various provisions which incorporate the challenges faced by modern and technologydependent
consumers. The Act also contains various provisions for the protection and promoting the rights of the
consumers.

Meaning of the word ‘consumer

A consumer is an individual or group of individuals who purchase goods and services for their own personal
use and not for the purpose of manufacturing or resale. Section 2(7) of the Consumer Protection Act, 2019
defines a consumer as any person who buys goods or services in exchange for consideration and utilises such
goods and services for personal use and for the purpose of resale or commercial use. In the explanation of
the definition of consumer, it has been distinctly stated that the term ‘buys any goods’ and ‘hires or avails
any services’ also includes all online transactions conducted through electronic means or direct selling or
teleshopping or multi-level marketing.
Need for the Consumer Protection Act, 2019
The Consumer Protection Act, 2019 was enacted by the Indian legislature to deal with matters relating to
violation of consumer’s rights, unfair trade practices, misleading advertisements, and all those circumstances
which are prejudicial to the consumer’s rights. The intention of the Parliament behind enacting the Act was
to include provisions for e-consumers due to the development of technology, buying and selling of goods and
services online have considerably increased during the last few years.

The Act seeks to provide better protection of the rights and interests of the consumers by establishing
Consumer Protection Councils to settle disputes in case any dispute arises and to provide adequate
compensation to the consumers in case their rights have been infringed. It further provides speedy and effective
disposal of consumer complaints through alternate dispute resolution mechanisms. The Act also promotes
consumer education in order to educate the consumer about their rights, responsibilities and also redressing
their grievances.

Objective of the Consumer Protection Act, 2019

The main objective of the Act is to protect the interests of the consumers and to establish a stable and strong
mechanism for the settlement of consumer disputes. The Act aims to:

1. Protect against the marketing of products that are hazardous to life and property.

2. Inform about the quality, potency, quantity, standard, purity, and price of goods to safeguard the consumers
against unfair trade practices.

3. Establish Consumer Protection Councils for protecting the rights and interests of the consumers.

4. Assure, wherever possible, access to an authority of goods at competitive prices.

5. Seek redressal against unfair trade practices or unscrupulous exploitation of consumers.

6. Protect the consumers by appointing authorities for timely and sufficient administration
and settlement of consumers’ disputes.

7. Lay down the penalties for offences committed under the Act.

8. Hear and ensure that consumers’ welfare will receive due consideration at appropriate forums in case any
problem or dispute arises.
9. Provide consumer education, so that the consumers are able to be aware of their rights.

10.Provide speedy and effective disposal of consumer complaints through alternate dispute resolution
mechanisms.

What are consumer rights under Consumer Protection Act, 2019

There exist six rights of a consumer under the Consumer Protection Act, 2019. The rights of the consumers are
mentioned under Section 2(9) of the Act, which are as follows:

1. The right of a consumer to be protected from the marketing of goods and services that are hazardous and
detrimental to life and property.

2. The right of a consumer to be protected against unfair trade practices by being aware of the quality,
quantity, potency, purity, standard and price of goods, products or services.

3. The right of a consumer to have access to a variety of goods, services and products at competitive prices.

4. The right to seek redressal at respective forums against unfair and restrictive trade practices.
 5. The right to receive adequate compensation or consideration from respective consumer forums in case they
have been wronged by the seller.

6. The right to receive consumer education.

What are unfair trade practices under Consumer Protection Act, 2019
Section 2(47) of the Consumer Protection Act, 2019 defines the term ‘unfair trade practices’ which
include:

1. Manufacturing spurious goods or providing defective services.

2. Not issuing cash memos or bills for the goods purchased or services rendered.

3. Refusing to take back or withdraw the goods or services and not refunding the consideration taken for the
purchase of the goods or services.

4. Disclosing the personal information of the consumer.

Changes incorporated in Consumer Protection Act, 2019

The changes that were incorporated with the enactment of the Consumer Protection Act, 2019 are:

1. The District Commissions will have the jurisdiction to entertain complaints where the value of the goods,
services or products paid as consideration to the seller does not exceed 50 lakh rupees.

2. State Commissions will have the jurisdiction to entertain complaints where the value of the goods,
services or products paid as consideration to the seller exceeds 50 lakh rupees but does not exceed two
crore rupees.

3. The National Commission will have the jurisdiction to entertain complaints where the value of the goods,
services or products paid as consideration to the seller exceeds two crore rupees.

4. The Act further states that every complaint concerning consumer dispute shall be disposed of as
expeditiously as possible. A complaint filed under this Act shall be decided within the period of three
months from the date of receipt of notice by the opposite party in the cases the complaint does not require
analysis or testing of the goods and services and within a period of 5 months, if it requires analysis or
testing of the goods and services.

5. The Consumer Protection Act, 2019 also facilitates the consumers to file complaints online. In this
regard, the Central Government has set up the E-Daakhil Portal, which provides a convenient, speedy
and inexpensive facility to the consumers all over India so that they are able to approach the relevant
consumer forums in case of any dispute arises.

6. The Act lays down the scope for e-commerce and direct selling.
 7. The Consumer Protection Act, 2019 lays down provisions for mediation and alternative dispute
resolution so that the parties are able to dispose of the case conveniently without going through the
trouble of litigation.

8. The Consumer Protection Act, 2019 contains provisions for product liability, unfair contracts and it also
includes three new unfair trade practices. In contrast, the old Act just stated six types of unfair trade
practices.

9. The Act of 2019 acts as the advisory body for the promotion and protection of consumer rights.
10. Under the Consumer Protection Act, 2019 there is no scope for selection committees, the Act authorises
the Central Government to appoint the members.

Therefore, with the changes in the digital era, the Indian Parliament enacted and brought the
Consumer Protection Act, 2019 in force to include the provisions for e- commerce as digitalization
has facilitated convenient payment mechanisms, variety of choices, improved services, etc.

Q.4 Discuss the Essential provisions of Consumer Protection Act, 2019

Ans.The essential provisions of the Consumer Protection Act, 2019 are:

Consumer Protection Councils

The Act establishes consumer protection councils to protect the rights of the consumers at both the national
and state levels.

Central Consumer Protection Council

Under Chapter 2 Section 3 of the Consumer Protection Act, 2019 the
Central Government shall establish the Central Consumer Protection Council which is known as the
Central Council. It is an advisory body and the Central Council must consist of the following members;

1. The Minister-in-charge of the Department of Consumer Affairs in the Central Government will be
appointed as the chairperson of the council, and

2. Any number of official or non-official members representing necessary interests under the Act.

The Central Council may meet as and when necessary, however, they must hold at least one meeting
every year. The purpose of the Central Council is to protect and promote the interests of the consumers
under the Act.
State Consumer Protection Councils
Every state government shall establish a State Consumer Protection Council known as the State
Council having jurisdiction over that particular state. The State Council acts as an advisory body. The
members of the State Council are:
 1. The Minister-in-charge of the Consumer Affairs in the State Government will be appointed as the
chairperson of the council,

2. Any number of official or non-official members representing necessary interests under the Act, and

3. The Central Government may also appoint not less than ten members for the purposes of this Act.

The State Councils must hold at least two meetings every year.

District Consumer Protection Council

Under Section 8 of the Act, the state government shall establish a District Consumer Protection Council
for every district known as the District Council. The members of the District Council are:

1. The collector of that district will be appointed as the Chairperson of the District Council, and

2. Any other members representing necessary interests under the Act.

Central Consumer Protection Authority

The Central Government shall establish a Central Consumer Protection Authority which is known as
the Central Authority under Section 10 of the Consumer Protection Act, 2019, to regulate matters
relating to violation of the rights of consumers, unfair trade practices and false or misleading
advertisements which are prejudicial to the interests of the public and consumers and to promote,
protect and enforce the rights of consumers. The Central Government will appoint the Chief
Commissioner and the other Commissioners of the Central Authority as required under the Act.

The Central Authority must have an ‘Investigative Wing’ under Section 15 of the Act to conduct an inquiry
or investigation. The investigative wing must comprise of the Director-General and the required number of
Additional Director-General, Director, Joint Director, Deputy Director
and Assistant Director possessing the required experience and qualifications to carry out the functions under this
Act.

Functions and duties of the Central Authority

The functions and responsibilities of the Central Authority are laid down in Section 18 of the Act
which includes;

1. To protect and promote the rights of the consumers as a class and to prevent violation of consumer rights,

2. To prevent unfair trade practices,

3. To ensure no false or misleading advertisements regarding any goods or services are promoted,

4. To ensure no person takes part in false or misleading advertisements,

5. Inquire or investigate in cases of violation of consumer rights or unfair trade practices.

 6. File complaints before the National, State or District Commission as the case may be,

7. To review matters relating to the factors hindering the enjoyment of consumer rights.

8. To recommend the adoption of international covenants and best international practices concerning
consumer rights

9. Promote research and awareness of consumer rights.

10.Lay down necessary guidelines to prevent unfair trade practices and protect the interests of the consumers.

Furthermore, the Central Authority also has the power to investigate after receiving any complaint or directions
from the Central Government or of its own motion in cases where there is an infringement of consumer rights
or unfair trade practices are carried out. And if the Central Authority is satisfied that infringement of consumer
rights or unfair trade practices has occurred then it may:

• Recall the goods or services which are hazardous and detrimental to the consumers,

• Reimburse the prices of the goods and services to the consumers, and
• Discontinue the practices that are prejudicial and harmful to the consumers.
Under Section 21 of the Act, the Central Authority is authorised to issue directions to false and misleading
advertisements which may extend to ten lakh rupees. While determining the penalty of the offence the Central
Authority must keep in mind factors such as; the population affected by the offence, frequency of the offence
and gross revenue from the sales of such product. The Central Authority can also direct search and seizure
for the purposes of this Act and in that case the provisions of the Criminal Procedure Code, 1973 will apply.

Consumer disputes redressal commission

The state government shall establish a District Consumer Disputes Redressal Commission, known as the
District Commission in each district of the state under the Consumer Protection Act, 2019. The District
Commission shall comprise of a President and not less than two members prescribed by the Central
Government.

Section 34 of the Act authorises the District Commission to entertain complaints where the value of the goods
or services paid as consideration does not exceed one crore rupees. The complaint relating to goods and
services can be filed to the District Commission by the consumer, recognized consumer association, Central
Government, Central Authority, State Government, etc.

Section 36 states that all the proceedings before the District Commission shall be conducted by the President and
at least one member of the commission.

Mediation
Chapter 5 Section 74 of the Consumer Protection Act, 2019 states that a Consumer Mediation Cell shall be
established by the Central Government at the national level and every state government shall establish
Consumer Mediation Cell exercising within the jurisdiction of that state. The mediator nominated to carry out
the mediation shall conduct it within such time and in such manner as may be specified by regulations.

Section 75 of the Act talks about the empanelment of the mediators. It states the qualifications, terms and
conditions of service, the procedure for appointing, and the fee payable to the empanelled mediators.

It is the duty of the mediator to disclose certain facts such as; any personal, financial or professional in the result
of the consumer dispute, the circumstances giving rise to their
independence or impartiality and any other necessary information for the protection of consumer rights.

Product liability
Under Section 83 of the Act, a product liability action may be brought by a complainant against a product
manufacturer, product service provider or product seller.

Liability of product manufacturer

A product manufacturer will be held liable in a product liability action under the following circumstances:

• The product contains manufacturing defects.

• The product is defective.

• There is a deviation from manufacturing specifications.

• The product does not conform to the express warranty.

• The product fails to contain adequate information for proper usage.

Liability of product service provider

A product service provider will be held liable in a product liability action under the following circumstances:

• The service provider will be responsible when the service provided by them is faulty or imperfect.

• There was an act of negligence on their part.

• The service provider failed to issue adequate instructions and warnings for the services.

• The service provider failed to conform to the express warranty or terms and conditions of the contract.

Liability of product seller

A product seller will be held liable in a product liability action under the following circumstances:
• They altered or modified the product which resulted in being detrimental to the consumer.

• They failed to exercise reasonable care in assembling, inspecting or maintaining such product

• They exercised substantial control over the product which resulted in causing harm to the consumer.
Exceptions to product liability
There are certain exceptions to product liability action mentioned in Section 87 of the Act, such as;

• The product was altered, modified or misused by the consumer,

• A consumer cannot bring product liability action when the manufacturer has given adequate warnings and
instructions for the use of the product,

• The manufacturer would not be liable in case of a product liability action for not warning about any danger
that is commonly known to the general public.

Offences and penalties under Consumer Protection Act, 2019

The offences and penalties listed under this Act are mentioned as follows.
1. Punishment for false and misleading advertisements: Under Section 89 of the Act any manufacturer
or service provider who promotes false or misleading advertisements will be punished with
imprisonment for a term that may extend to two years and with fine that may extend to ten lakh rupees.

2. Punishment for manufacturing, selling, distributing products containing adulterants: Under Section
90 of the Consumer Protection Act, 2019 any person who sells, manufactures, distributes products
containing adulterants shall be penalised in case of the following circumstances;

• If the adulterated product does not cause any injury to the consumer then the term for imprisonment will
extend to a period of six months and fine which may extend to one lakh rupees,
• If the product containing adulterant causes injury not amounting to grievous hurt then the term for
imprisonment will extend to a period of one year and fine which may extend to three lakh rupees,

• If the product containing adulterant causes injury amounting to grievous hurt then the term for
imprisonment will extend to a period of seven years and fine which may extend to five lakh rupees,

• If the product results in causing death to the consumer then the term for imprisonment will be for a period
of seven years which may extend to life imprisonment and fine not less than ten lakh rupees.

3. Punishment for manufacturing, selling, and distributing spurious products: Section 91 states that any person
who sells, manufactures, or distributes spurious products shall be punished for such acts.

How do consumers benefit from Consumer Protection Act, 2019

The Consumer Protection Act, 2019 is a significant piece of legislation brought as it is beneficial for
the consumers. The Act widens the scope of protection regarding the rights and interests of
consumers.
 1. Unfair contracts: The Act introduced ‘unfair contract’ under Section 2(46) of the Act, which includes
contracts requiring excessive security deposits to be given by the consumer for the performance of
contractual obligations. However, the inclusion of unfair contracts in the Act would enable the
consumer to file complaints in such cases and would also keep the fraudulent businesses in check.

2. Territorial jurisdiction: The Act enables the consumers to file complaints where the complainant
resides or personally works for gain thus it would benefit the consumers in seeking redressal for their
grievances when their rights have been violated.

3. False and misleading advertisements: The Act defines the term ‘false and misleading advertisements’
and also lays down strict penalties for such acts or omissions.

4. Product liability: The term ‘product liability’ has been defined by this Act, which states that it is the
duty of the product manufacturer, service provider or seller to compensate for any harm caused to a
consumer by such defective product manufactured or service provided to the consumer.
5. Mediation and alternative dispute resolution: The Act enables the consumer to opt for mediation and
alternative dispute resolution mechanisms for speedy and effective settlement of consumer disputes.

6. E-filing of complaints: The Act also facilitates e-filling of the complaints and seeking video
conference hearings by the Commission. Thus, providing convenient means for the consumers to
voice their grievances.

Landmark case laws

Horlicks Ltd. V. Zydus Wellness Products Ltd. (2020)

In this case, both parties are manufacturers of nutritional drinks, however, Zydus advertised a
television commercial trivialising the products of Horlicks
Ltd. The commercial was being telecasted in various languages including English, Tamil and Bengali.
Therefore, the Delhi High Court relied on various judgments on misleading advertisements, disparagement
and law governing
the publication of advertisements on television and held that the advertisement is disparaging as it does not
provide any concrete proof regarding the quality of the product. Further, electronic media leaves an impression
on the minds of the viewers thus, these types of advertisements would not only be detrimental to the consumers
but also the complainant would suffer irreparable damage.

A famous judgement relied on by Delhi High Court while deciding this case is Pepsi Co. Inc. v. Hindustan
Coca Cola Ltd., 2003 where the Delhi High Court held that there are certain important factors that are to
be kept in mind in case of disparagement which are; manner of the commercial, intent of the commercial
and storyline of the commercial.

Veena Khanna v. Ansal Properties & Industries Ltd, NCDRC (2007)

In this case, the complainant offered to purchase a flat from the respondent which the respondent agreed to
deliver on 1.6.1999 through a letter. However, the flat was not constructed within the specified date and
 hence it was not delivered. For such deficiency in services, the complainant demanded the refund of the
deposited amount with interest at the rate of 18% pa which was refused by the opposite party.
The National Commission observed that due to delays in construction and delivery of possession it is quite
difficult for a consumer to purchase a flat at market price. The National Commission stated that it is the duty
of the State Commission to direct the builders to deliver the possession of the flat as soon as it is completed
and the complainant should be awarded suitable compensation for the delay in construction. The complainant
just claimed the refund amount before the State Commission, but the case was pending before the commission
for five years and during that time there was a tremendous rise in the market prices of the immovable property.
The National Commission further stated that it was the duty of the State Commission to direct the respondents
to deliver the possession of the flat or any other flat of equivalent size to the complainant with appropriate
compensation, due to the delay in delivering the possession within the specified time. Or, adequate
compensation ought to have been provided to the complainant so that they could purchase a new flat of the
same size at the prevailing market rate in that same locality.

Sapient Corporation Employees v. Hdfc Bank Ltd. & Ors. (2012)

In this case, a consumer complaint was filed by Sapient Corporation Employees Provident Fund Trust against
HDFC bank Ltd. The complainant claimed that OP-Bank has committed deficiency of services by debiting
the account of the Complainant. The court in this case held that there was no deficiency of service on the part
of OP-bank and the arguments contented by the complainant are baseless. A behaviour that conforms to the
direction of regulatory authority cannot be said to be negligence or service deficiency.

Conclusion
The Consumer Protection Act, 2019 is a modified piece of legislation that offers the consumers a great variety
of benefits and rights to protect them from unfair trade practices, false or misleading advertisements, etc. The
Act enables the consumers to seek alternative dispute resolution mechanisms and mediation so that the parties
can opt for speedy and effective settlement of consumer disputes. The scope of e-filing of complaints and e-
consumers in the Act portrays forward-thinking in part of the legislature.
Furthermore, the Act also introduced new terms such as product liability, unfair contracts, etc.
thereby widening the scope of protection of consumer rights and enabling the consumers to file complaints when
their rights have been violated under the Act.

Thus, the inclusion of the provisions in this fills up the lacunae in the Consumer Protection Act, 1986. The
enactment of the Act was paramount and it changed the ambit of protecting the rights of consumers in the
country.

Q.5 Discuss the features of competition act, 2002 and powers and functions of commissions? Competition
is the act of the seller’s individually seeking to acquire the portoonage of buyer in order to achieve profits or
market share.The competition act 2002, was enacted by Parliament of india and replaced,the monopolies and
restrictive Trade practices act ,1969.It is in effect to govern india competition act ,2002 Has been amended
twice,the competition amendment act 2007 and the competition amendment act 2009,Two the main feature of
the competition act 2002, is the framework it provides for the establishment of the competition commission
and the tools .It provides to prevent anti-competitive practices and to the promote positive competition in the
Indian market.
.Features of the act
1. prohibition of certain organization to agreement while are consider to be anti-competitive in nature:for
eg.refusal to deal and trades, exclusive trading/dealing.
2. prohibition of abuse of dominant position:-If an enterprise by imposing unfair or discriminatory
condition on limiting and restricting production of goods or service or including in practices resulting in
denial of market access are prohibited.

3. Regulation of combination:-It says that any combination which causes to or is likely to cause an
appreciable adverse effect in competition within the market in india is also considerd to be void.
4. The establishment of competition commission of India:-The commission is interested with the
responsibility of understand undertaking competition advocacy, awareness and training about competition
issues.
.Powers and functions of the commissions.
1. To eliminate practices having adverse effect on competition promote and sustain competition, protect
interests of consumers and ensure freedom of trade by other participates.
2. Inquire in to certain agreements and to dominant position of Enterprise:It is Provides that the commission
may either sup moto or on receipt of any information of alleged contravention of section 3 (prohibits 4Anti
competitive agreements) may inquire into the same .

3. Inquiry into combinations:-section- 20 of the act entrusts the commission with the power to inquire into
any information relating to the acquisition and determine whether such combination or acquisition may an
appreciable adverse effect on competition.
4. Reference of an issue by a statutory authority to the commission:-Section-21 of the act enumerates that
in the course of a proceeding of any to issue is raised that any decision of a statutory authority will be in
conflict act,2002 the statutory authority shall make a reference in this regard to the commission.

5. Reference by commission:-Section-21 (A)of the act provides that if in the course of proceeding as issue
in raised by any party the any decision taken by the commission is an contravention of the provision of
competition act whose authority is the entrusted to the statutory authority then the commission make a
reference is respect of the issue to the statutory authority.
6. power to issue interim order :-sec -33 of the act empowers the commission to issue interim order in cases
of anti competitive agreements and abuse of dominant position there by temporarily restraining any party from
carrying on such an act .
7. competiton advocacy:-section-49 of the act Provides for competition advocacy and enumerates that the
central or the state government May while formulating any policy an competition or any other matter make
reference to the commission for it’s opinion on the possible effect of such policy on competition.However ,the
opinion given by commission is not binding on the central government.
Objective of the act

The act seeks to provides the legal framework and tools to ensure to competition policies are met and
to prevent for the penalisation of such acts.The act protects the free and fair competition which
protects the freedom of trade,which in term protects the interests of the consumer.The acts seeks to
prevent monoplies and also to prevent unnecessary intervention by the government. The main
objectives to the competition act are:-
 To provides the framework for the establishment of the competition to commission.
To prevent monoplies and to promote competition in the market.
To protect the freedom of trade for the participating individuals and entities in the market.
To protect the interest of the consumer.
Q.6 Discuss the concept of consumer participation in post globalised era?
Global economic is the resolt of the increasing economic inter dependence.National economic across the
world threw a rapid,increase in cross border moment of goods, services technology and capital.

Moreover because of these moment the goods trends have been changing since the left last two decade.And if we
talk about specifically about the Indian nation that with the foundation of the resolutionary policy of L.P.G. in
1991,

The Indian market has emerged as a powerful one in the picture of the global.As the prior to 1991,india had
limited number of the produces,so it was a type of the monopolistic market were seller were few and buyer
were many and certainly was a produce market,

Now with the removal of trade situation become opposite now it become a market of open competition,were
producers to be increased significantly where to producers, increased, because of it become a,'’consumer
oriented market”.

Legal protection

Legal protection of consumer mean’t the safeguard of innocent consumer from the greedy seller, through the
method of legal producers and ways:-

As a discussed earliest with the emergence of industrialisation and in profits the product many a time to
used surface trade practices which exploited the consumer,but the before it was too long the government
intervented and enacted to several legislation and not to only that is also strengthend to a number of a
existing to once.

And with the emergence of the new era it become all the more important to make to change in these existing to
laws and there by strength the consumer of the country .

Need for protection mechanism.

Nowadays,we have several legislation which are made solow for the purpose of the safeguard, the interest of the
consumer.

Then the question across'’why do we need such type of law? Now the answer finds its root way back in 1950’s
.After the end of world war-2 , when the peace process started many of the European were not econonicaly
strong, and to such type of nation the peace process gave a new platform.when there was development of relation
among the nation.
And it was the very first time when the concept of global village came in to picture,result of which slowly
and gradually many relations took away there consumer trade, barriers and when the stages was all sect these
arise is problem the developing nation who were not getting good response due to lack to innovation and
quality as compare to the wealth nation which used the capital intensive approach.

.The capitalist started be fooling the consumer’s by different strategies and due to their govt had to take steps in
safeguards the consumer’s.
 And by way the down of 21th country.which was also said as the age of information every country had its
production mechanism remedy.But in plea of reduction the rate of consume , exploitation increased with an
rate consumer and today if we take a look on consumer down.we would find long leape of files and
innumerable causes of exploitation so it would we said that even affect having a strong in infrastructure for
the protection of the consumer,we still lack in its proper execution as most of the people do not even have only
knowledge about the existences of any law for the protection of the consumer.

Recent approaches
Today the amendment to atmosphere or the business environment is totally different,if we compare it from
the last decades we would find that competition in the international market which has resulted into law profit
margins and it’s is proved theory of business that whenever them would be law profit levels the only way to
compensate it would be a not able in the sales level
.

The consumer protection act for exemples in the last 5 year’s has been to amended a couple’s of timer in 2011 it
restricted the disclosure if personal information of a person to any other person.

These amendments have to be undoubtedly strengthed the public as in the our country most of the populations
is either.It negligent or is illiterate so it fine most thus for us mest to the creatures awareness away the masses.

Ways forward:-Now after talking to analysis on the past and present we have to make ways better for the
consumer in future.There are some following to duties, which are to be followed strictly and as a consumer these
duties can be:-

Buying quality products at resources:-It is the responsibility of a consumer to buy a product after having
a through knowledge of its price and quality.He should enquired about the price from 2-3 shopes and if
possible from govt store’s to get an idea of its price.

To check the weights measure before making purchases:-Generally, the release after cheat consumers by
using unfair weight and measure.The consumer should ensure to be that he is getting the product of Right
weight and measures.He should check the weight and balance.

Reading the label carefully:-It is the duty of the consumer to read the label of the product.It should have complete
and true information about the product.

Beware of false and attractive advertise:-often the product is not that attract as it is made out in the to be
advertisements by the seller.Hence the duty of consumer is not to be misleading to the attraction and advertisement.

Q7) Discuss the concept of Emergence of the movement for Green consumerism?
Green consumerism refers to a states in which consumer green demands products and services that have
undergone an eco- friendly preduction process on one that muowes recycle ,in other and safe guarding the
plants resources.In other words green consumerism entials the preduction promotion,and advancement of the
utilisation or use of goods and services based on their environment benefit.
Economic, social and cultural courses have set the framework for green consumerism.This is because it is a
social attitude and movement in the modern era specially aimed at encouraging people to be more aware of
the firm’s production process and only to lay or use . product and services that do not harm the
environment.for this reason green consumerism has created a balance between the buyers behavior and
mostly basis on the sustainable and pro environmental behavior of consumers.
 Importance of green consumerism
Green consumerism is a holistic and responsible process of Ngts.That satisfies, identifies,fulfilles and
anticipate the needs of the any stake holders in maintaining the natural well being of the environment and
one does not endanger the health of human.The importance of green consumerism therefore to include:-

Reduce waste in packaging.

Increase energy efficiency.
Decreased release of emission and other pollutants during production and transporting process.
How to become a green consumer?
Although the depletion of the green cover and it’s effect on the nature labitated away look ordinary and less
important,but in many year to come people will raise to how beneficial it would have to be to consumer the
plant.To avoid rights into the future,we can begin to conserer the green cover and the nation to natural
resources by becoming green to consumer.The following one possible ways :-

.saving energy consumption in your surroundings:-It is a challenging act to save energy in every
possible manner.Both we can save lot of energy we at home and work. This involves switching of
lights and other to sources of power when they are not in use .
Change of mindset:-it is difficult to Force people to consumer products or use services that prevents
the depletion of natural resources and result in habitual loss or environment degration as such every
person needs to change their mind set regarding green conservation and know the dangerous of
environmental degration.
Use of solar products and renewable energy sources:-using solar pollution or product’s that ruly on the
sun’s energy rather than electricity Major way to prevent environment depletion.
Checking energy labels in daily utility products:-one can become a green to consumer by checking
the energy to lables on application before their purchase products that consumer’s too much energy
should be boycotted and replaced by equipment that uses laws energy.
Recycling and using eco friendly products:-one can energy easily become a green consumer by opting for
the recycling of the products you we or using those that are eco friendly.
For eg:- Instead of buying to bottle rules water you can option for a matter bottle which can you always
use to carry water and instead of using paper wipes ,you can have a cloth wipe or hand kerchief that
you can wash and use over and over .
Buy locally green and organic food:-By buying locally grown and organic food you can significantly
to contribute to lowrring the effect of carbon emissions during to transportations and the effect of
artificial pesticides or fortilizer use on the environment.
Q.8 Discus the Group actions and consumer protection law?

Group action:- group action means permitting a group of consumers to jointly file a complaint where they
have a common grievance.Tihis concept is similar to that of public interest litigation.PIL also recognition
in permitting duly to registered voluntary consumer to organisation to file complaints on behalf of
consumer.
Objects and requirements:-
1.A complaint sec 12(1)(c) of the CP act can be filed only on behalf of the act or for the benefit of all the
consumer having a common interest or a common grievance and seeking the same relief against the same person.
 2. A complaint sec 12 of C.P.A is to
maintainable before the NCDRC where the aggregate of the value of the goods
purchased on service hired,or availed by all the consumer or where behalf the complaint is instituted and the
total compensation if any claimed in respect of all to such consumer exceeds Rs.1 crore .
3. It
is necessary to exercise due to care and caution while considering such a complaint requisite permission only
where the complaint fulfill all the condition given u/s/2.
4. Ina group action it is also necessary that a public notice or individual notice about the complaint is given to all
the person’s
on whose behalf or for whose to benefit the complaint is institute.

Imposition of self regulation and decided Discipline by manufacturers and others :-

The important way for consumer to protection is the voluntary imposition self regulation and discipline by
the manufacture other engaged in supplying and disturbing goods and services .If they are self -enlightened
they would pay due to products main to aim is to maximize their profit.But this should be achieved by raising
their efficiency in the production and quality of theury product’s rather than deceiving to exploiting
consumers.
.The socially responsible to produce and distribution must be not form cartel’sto adopt to monopolistic practices to
the consumer by charging high price formed.

Q 9 Discuss the procedure for sec.4,5 and 6 of Competition Act, 2002.

Ans It was enacted to fill the gaps left open by the MRTP Act — certain offending trade practices such as
1.abuse of dominance,
2.cartels,
3.bid rigging,
4.collusive agreements,
5.price fixing,
6.Predatory pricing, etc.

5. Salient Features of the Competition Act, 2002Objective of the Act

•Facilitate & Foster Competition
•Establish a Commission to prevent practices having adverse effect on competition
•Promote and sustain competition in markets
•Protect the interests of consumers
•Ensure freedom of trade in the Indian markets Duties of the Commission [Sec 18]
•Eliminate Practices that have an adverse effect on competition
•Promote & Sustain Competition
•Protect the interest of Consumers, economy and nature

Scope or Focus of the Act

1.Enquire into Anti Competitive Agreements [Section - 3]
2.Enquire Abuse of Dominant Position [Section – 4]
3.Regulation of Combination & Mergers [Section – 5 to 6]
4.Undertake Competition Advocacy [Section – 49]

Exclusion from Jurisdiction

1.Those right protected as intellectual property
2.Agreement exclusively for experts
6.Anti-competitive agreements [Section 3]Any agreement for goods or services which has appreciable adverse
effect on competition in India is prohibited. These kinds of agreements are known as anti-competitive agreements.
Anti competitive agreement of entered into shall be void Section 3 of the Act states that no enterprise shall enter
into:
1.Any agreement With respect to production, supply distribution, storage, acquisition orcontrol of goods/provision
of services which is anti-competitive is prohibited and void.
2.Such agreements must cause or be likely to cause appreciable adverse effect oncompetition (AAEC) in a relevant
market in India.

The relevant market may be a geographical or a products market.

There are Two kinds of agreements
1.Horizontal agreements ( )
2.Vertical agreements. ( | )

Horizontal agreements They are Agreements Between Parties in the same line of production. Example - Agreement
between Manufactures, Agreement between Distributors. Horizontal agreements are presumed to have AAEC if
they:

1. Directly or indirectly determine purchase or sale prices 2.

Limit or control output, technical development, services etc.
3. Share or divide markets
4. Indulge in rigging or collusive bidding
Cartels prohibited (Use the same definition Cartel and Horizontal Agreement)+ Add 1.
Agree to limit,
2. Control or attempt to control production, distribution, sale or price

Types of Horizontal Agreements

1) Price Fixing Agreement a) Agreement to raise or stabilize price b)
Establish uniform discount or eliminate discount
c) Set uniform price as Starting point for negotiation
d) Discontinue free service
e) Impose Mandatorily surcharge
f) Restrict price advertising

2) Facilitating practices

This include agreements that make it easier for competitors to collectively exercise market power, and to avoid
competing with each other Eg- Agreements to share information Sellers agrees either to meet any price, The buyer
is able to obtain from another supplier or release the buyer to purchase from another seller 3) Quiet Life Agreements

They are Agreements that restrict competition by free competitors form some significant aspect of
competition Eg- Agreement not to advertise Agreements to limit business hours 4) Group Boycotts

These are agreements among competitors not to deal with other competitors, suppliers distributors or retailers 5)
Trade Associations
Vertical Agreements
Vertical agreement are those agreements between Non-Competition undertaking operating at different levels of
manufacturing and distribution process

EX- , the agreement between manufacturers of components , manufactures of products, between producers and
whole- sellers or between producers, whole sellers and retailers
They are prohibited if such agreements cause or are likely to cause AAEC
Types of Vertical Agreements
1.Tie-in arrangementAgreement between manufacturer and distributor not to sell manufactures product ator above
a price floor at or below a price ceiling (e.g. requiring a purchaser of goodsto purchase some other goods as condition
of such purchase)
2.Exclusive supply arrangementAgreement restricting the purchase in course of trade from acquiring the goods
oftrade from acquiring the goods of any other seller(e.g. restricting a purchaser in course of his trade from dealing
in any goods otherthan those of the seller)
3.Exclusive distribution arrangementAgreement to limit or restrict the output or supply of any goods to ant market
or area(e.g. limiting/restricting supply of goods or allocate any area or market for sale ofgoods) 4.Refusal to deal(e.g.
restricting by any method any person/classes of persons to whom goods aresold)
5.Resale price maintenance(e.g. selling goods with condition on resale at stipulated prices ) Horizontal
vs vertical agreements
• Horizontal agreements are presumed to have AAEC Vertical agreements, the onus / Burden of proving AAEC
lies on the CCI. Horizontal Agreement :- (Per Say) Vertical Agreement : (Rule or Reason)

• Joint venture agreements are an exception to horizontal agreements, provided such agreements increases efficiency
in production, supply, distribution, storage acquisition or control of goods or provisions of services.

• Export agreements and agreements to protect intellectual property are allowed to have protected clauses.

Anti Competitive Agreement [Vertical Agreement - Rule of Reason] ( Essay )

(ADD What is Anti competitive Agreements - Section 3 then )
Vertical agreement are those agreements between Non-Competition undertaking operating at different levels of
manufacturing and distribution process EX- , the agreement between manufacturers of components , manufactures
of products, between producers and whole- sellers or between producers, whole sellers and retailers
The Following Agreement may be considered as Ant Competitive by applying the rule of reason
1. Time in Arrangement Any agreement requiring a purchaser of goods as a condition to purchase some other
goods. Tie in agreement is also known as conditional sale or purchase
2. Exclusive supply agreement Agreement restricting the purchase in course of trade from acquiring the goods
of trade from acquiring the goods of any other seller (e.g. restricting a purchaser in course of his trade from dealing
in any goods other than those of the seller)
3. Exclusive distribution Agreement Agreement to limit or restrict the output or supply of any goods to ant
market or area (e.g. limiting/restricting supply of goods or allocate any area or market for sale of goods)
4. Refusal to deal Any agreement which restrict or is likely to restrict by any method any person/classes of
persons to whom goods are sold or from whom goods are brought

Resale price maintenance

Any Agreement to sell goods on condition that the price to be charged on the resale by the purchaser shall be
stipulated by the seller unless it is clearly stated that prices lower than those price may be charged (e.g. selling goods
with condition on resale at stipulated prices ) Enquiry under section 19 (Step -2)
In case on any agreement mentioned under Sec3, Comes before the CCI the CCI shall conduct an enquiry and
adjudicate on whether the agreement has any adverse effect on competition based on the following facts
1. Whether there is creation of any barrier to new entrants into market
2. Whether the agreement drives out existing competitors in the markets
3. Whether there is any foreclosure of competition by hindering the entry into market
4. Whether there is any accrual of benefits to the consumers
5. Whether the agreement can produce any improvement in production, distribution or supply of goods
6. Whether the agreement promotes technical scientific or economic development

Orders by Commission after inquiry onto agreements [Section 27 ](Step-3)

If the commission finds that the agreement under sec3 is Anti competitive, it can pass following orders
1. Direct any enterprise or person to engage in such agreement to discontinue such agreement
2. Impose penalty not more than 10% of the average turnover of last 3 financial years
3. Modified the agreement to such extent and manner specified by CCI
4. Order for payment of cost
5. Any other orders as the CCI thinks fit

Exception to Section 3 Any agreement protecting rights conferred under:

1. Copyright Act 1956 (1999)
2. Patent Act 2005
3. Trademarks Act
4. Designs Act
5. Geographical indication Act

7. Abuse of Dominant position (Section 4) (essay)

It means a position of strength, enjoyed by an enterprise, in the relevant market in India, which enables it to: •
Operate independently of competitive forces prevailing in the relevant market or,
• affects its competitors or consumers of the relevant market in its favor.
Meaning of Relevant Market sec 2 (r)
In order to ascertain whether an enterprise has a dominant position it is to be determined on what the
relevant market is. There are two kinds of relevant market
1. Relevant product Market sec 2 (t) On the demand side, Relevant product market include all the close
Substitutes to which the consumer will shift to, if the price of the product increases On Supply side, Relevant
product market include all the producers who can produce substitutes with the existing production facility 2.
Relevant Geographical Market sec 2 (s) The geographic dimension within which competition can take
place in the relevant market can be local ,National, International or global depending upon the product , Here
pattern of consumption , Transportation are important factors

Enterprise or group shall not abuse its dominant position. Agreement by enterprise or group abusing its dominant
position is prohibited
An Enterprise or group is said to have abused its dominant position if it directly or indirectly:
• Imposes unfair condition or price
• Predatory pricing
• Limit or restrict : • Production of goods or provision of services or market
• Technical or scientific development relating to goods or services
• Creating barriers to entry
• Denying of market access
• Uses its dominant position in one market to gain advantage in other market
Where there is abuse of dominant position then the CCI will issue the following orders Under Section 27 And Section
28
Criteria Considered by CCI while determining Abuse of Dominant position 1.
Market Share
2. Size & importance of competitors
3. Economic Power of enterprise including Commercial advantage
4. Vertical integration of the enterprise
5. Dependence of consumers
6. Monopoly enjoyed by means of being a Government company or PSU
7. Counter veiling buying power
8. Market Structure
9. Social Obligation & Social Cost
10. Relative Advantage by way of contribution to economic development.
11. Any other relevant factor considered by CCI
Orders by Commission after inquiry onto agreements [Section 27 ]
If the commission finds that the Act constitute Abuse of Dominant position, it can pass following orders
1. Direct any enterprise or person to engage in such agreement to discontinue such agreement
2. Impose penalty not more than 10% of the average turnover of last 3 financial years
3. Modified the agreement to such extent and manner specified by CCI
4. Order for payment of cost
5. Any other orders as the CCI thinks fit

If the commission finds any Division of Enterprise enjoying dominant position (Section 28)
Then the CCI can direct the Enterprise to divide in such manner that the Enterprise does not Abuse its dominant
position for this purpose the CCI Can Provide for
1. Transfer of any existing liability or property
2. Adjustment or discharge of any Contract
3. Any other orders as the CCI thinks fit

8. Regulation of Combination (Section 5 to 6) What

is Combination
The Acquisition of one or more enterprise by way of merger or amalgamation or control over enterprise is regarded
as combination
A Combination is an acquisition of one or more enterprises by one or more persons, merger or amalgamation of
enterprises, if it meets the prescribed monetary thresholds and involves: • Any acquisition of control, shares, voting
rights or assets of any enterprise
• Any acquisition of control by a person over an enterprise, where such person already has direct/indirect control
over another enterprise in a similar business
• Any merger or amalgamation of enterprises

Combinations above the defined monetary thresholds require filing and prior approval of the CCI before they can be
made effective. CCI has powers to investigate combinations and modify/reject them.
Separate provisions exist in case of acquisitions pursuant to loan/ investment agreements of public financial
institutions, FII, banks or VC funds.
The CCI must be notified within 30 days of the ‘trigger event’ of such combinations Trigger
Event.
•Board approval of the enterprises in case of a proposed merger/ amalgamation; or
•Execution of any agreement or ‘other document’ in case of a proposed acquisition
Exemption of Notification to CCI
Under the Combination Regulations, Decision taken for the Amalgamation, Mergers, Acquisition prior to June 1,
2011 have been exempted from notifying to CCI
When acquisition, Mergers or Amalgamation would constitute a Combination :
When in individual
•If the parties to that process have an asset of more than 1000 Cr or turnover of morethan 3000Cr inside india or
•If it is an entity having operation inside & Outside india ,it has an asset of more than 500million $ including at least
500 crore in india or a turnover of 1500 Million USD of whichat least 1500 crore in india

The Value of Asset & Turnover is based on Book Value

When in Group, If one of the parties of Combination belongs to a Group which control it, •The
Threshold limits is 4,000 Cr in terms of asset & 12,000 Cr in terms of Turnover.
•If the group has asset or turnover inside & outside india then the threshold limit is2 billion $ of assets or 6 billion $
of turnover

Regulation of Combination (Section 6)

(ADD What is combination, then )
Any combination which has an adverse effect on competition can be declared void by the CCI.
Procedure to be followed for the combination
Any person or enterprise proposes to enter into combination shall give notice to competition commission in
prescribed form within 30 days to
•Approval of the Board of Directors of proposal relating to merger or amalgamation
•Execution of any agreement relating to acquisition or acquiring control

No combination shall come into effect until 210 days from the day on which notice has been given to commission
or order has been passed
Procedure for Investigation into Combination by CCI
Step 1
The CCI will issue a notice to the parties to the combination to reply within 30days of such combination for not
declaring it as Void The CCI will direct the Director General to submit a report on combination, on receipt of such
report, If the CCI is satisfied that the combination has an Adverse effect on competition, it can pass the following
order
Step 2 (Section 31) •It can direct the combination
shall not be in effect
•If the Adverse effect can be rectified by suitable modification the CCI will order suchmodification should be
performed by the parties. ( In this case the parties shall submitthe modified combination within 30 Working days if
the CCI agrees with the modification,It can accept the Combination)

Step 3
If the CCI is not satisfied by the modification effected by the parties, It can grant 30 Days further to the party to
accept that modification proposed by the commission
Step 4
If the part still falls to accept the modification the commission can declare the combination as void as well as it can
impose such penalties mentioned in the Act ( 1 % of Turnover)
9.Powers and Function of CCI
The CCI can exercise power subject to the Act and the Rules. It should be guided by the principles of natural justice
and provisions of the act
1.The Commission shall have the powers to regulate its own procedure. [Section 36 (1)]
2.Commission has a power of civil court [ Section 36 (2) ]A.Summon & Enforcing Attendance of any person on
oath
B.Requiring the Discovery and production of Document
C.Receiving evidence as affidavit
D.Issue commission for examination of witness or documents
E.Requisitioning any public record on document or copy of such document formany office F.Power
to conduct enquiry

3.Commission may call the experts on respective field i.e Economics’, Commerce,Accountancy which may be
necessary [ Section 36 (3)]
4.Direct any person [ Section 36 (4)]I.Produce Book , Accounts or other documents II.Furnish
information about trade in procession of such persons .

5.Issue cease and desist orders

6.Impose fines and penalties (Section 27)
7.Declare agreement having Appreciable adverse effect on competition (AAEC) void
8.Pass orders modifying agreement
In case of abuse of dominance
9.order for division of dominant enterprise (Section 28)

In case of combinations: (Section 31)

10.Approve Combination
11.Approve with modifications
12.Direct that combinations shall not take effect
13.To order demerger

Other Powers
14.In case of companies, individuals may also be held liable if consent, connivance orneglect is proved
15.CCI has extra-territorial reach
16.To order cost for frivolous complaint

Functions of CCI
1.Make the markets work for the benefit and welfare of consumers.
2.Ensure fair and healthy competition in economic activities in the country for faster andinclusive growth and
development of economy.
3.Implement competition policies with an aim to effectuate the most efficient utilization ofeconomic resources.
4.Develop and nurture effective relations and interactions with sectorial regulators toensure smooth alignment of
sectorial regulatory laws in tandem with the competition law.
5.Effectively carry out competition advocacy and spread the information on benefits ofcompetition among all
stakeholders to establish and nurture competition culture in Indianeconomy.

Competition Advocacy [sec 49]

•Central government may obtain opinion of CCI on the possible effect of the policy oncompetition while formulating
competition policy
•On receipt of deference, commission is required to give its opinion to centralGovernment within 60days
•The role of commission is advisory
•Opinion given by commission is not binding upon the central Government
•The commission has also been assigned the role to take following suitable measuredfor:oPromotion of competition
advocacy
oCreating awareness about competition
oImparting Training about competition issue

Q.10 Discuss the concept of Competition Appellant Tribunal and its major changes.
•Central Government shall by notification establish competition appellant tribunal •Any
person aggrieved by the order of the commission may appeal to CAT within 60days.
•CAT may accept the petition after 60days if it is satisfied that there was sufficient causefor not filling appeal with
in specified time
•CAT may confirm/modify/setting side decision of commission after giving opportunityto both parties
•CAT shall send copy of order to parties to appeal
•CAT shall dispose the appeal within six months.

Major changes made by the Competition (Amendment) Act, 2007

The Competition (Amendment) Act, 2007 was approved by the Parliament in September 2007 and received
Presidential assent on 24 September, 2007. The amendment brought significant changes in the then existing
regulatory infrastructure established under the Competition Act. The major changes are:
1.Notification of all “combinations” i.e. mergers, acquisitions and amalgamations to CCI madecompulsory.

2.CCI to be an expert body which will function as a market regulator for preventing anticompetitive practices in the
country and would also have advisory role and advocacyfunctions.

3.CCI to function as a collegium and its decisions would be based on simple majority. Omitspower of CCI to award
compensation to parties against proven anti competitive practicesindulged in by enterprises.

4.Establishment of a Competition Appellate Tribunal with a three-member quasi judicialbody to be headed by a

retired or serving Judge of the Supreme Court or Chief Justice of aHigh Court to hear and dispose of appeals against
any direction issued or decision made ororder passed by the CCI.

5.Competition Appellate Tribunal to also adjudicate upon claims of compensation and to passorders for the recovery
of compensation from any enterprise for any loss or damage sufferedas a result of any contravention of the provisions
of the Competition Act, 2002.

6.Orders of Competition Appellate Tribunal can be executed as a decree of a civil court.

7.Appeal against the orders of the Competition Appellate Tribunal to the Supreme Court.

8.New Powers upon sectorial regulators to make suo moto reference to CCI on competitionissues in addition to the
earlier provision of making a reference on a request made by anyparty in a dispute before it. Also, similar powers
conferred upon CCI.

9.Allows continuation of the MRTPC till two years after the constitution of CCI for tryingpending cases under the
MRTP Act and to dissolve the same thereafter.
With the enforcement of sections 3 and 4 of Competition Act, w.e.f. 20 May, 2009, there appeared no valid reason
to keep MRTPC functional any more. More so, in terms of Section 66 of the Competition Act, MRTPC has to be
dissolved within a period of two years of the constitution of the CCI and the MRTP Act repealed. The Government
has now decided to remove this anomaly and section 66 has been notified from 1 September, 2009.Consequently,
the MRTPC will cease to exist after a “sun set “period of two years i.e. on 31 August, 2011.