India: Expansion Of The Scope Of The Term ‘Unfair Trade Practice’ By The Proposed 2011 Amendment To The Consumer Protection Act, 1986

Last Updated: 29 November 2013
Article by Kasturika Sen

Consumer Protection Amendment Bill 2011:

The Consumer Protection (Amendment) Bill, 2011 ('the Bill') was introduced in the Lok Sabha on December 16, 2011 by Mr. K.V. Thomas. It has been referred to by the Standing Committee on Food, Consumer Affairs and Public Distribution.2 The amendments can be broadly classified into two categories: one, widen the scope of the law by adding some new definitions and expanding the scope of some existing provisions; and two, structuring and strengthening the implementation machinery.

A key change that has been proposed by this amendment is the much desirable expansion of the scope of the term 'Unfair Trade Practice'. Unfair Trade Practice can be broadly described as the use of various deceptive, fraudulent or unethical methods to obtain business. According to the Consumer Protection Act 1986, clause (r) of sub-section (1) of Section (2) listed 10 activities which would constitute an unfair trade practice but through the proposed amendment, the definition of unfair trade practice is to be expanded to include the unforeseen modus operandi of traders as offences. It will allow the law to not specify every unfair practice in the law. 3

This is a significant step towards safeguarding the consumers who are fleeced by the sellers through various contracts or conditions which place them in "unequal bargaining capacity" or puts the seller in an unfair strong position. The 199th report of the Law Commission had suggested bringing about this change to bring the consumers on a stronger footing to challenge any unfair practice.4 To ensure this, a new concept of 'unfair contracts' was included in the proposed amendments with a view to provide for a definite concept through which the consumers can be safeguarded and a category is created which would amount to unfair contracts.

According to the Bill, the term 'unfair contracts' includes a contract which has one or more of the following clauses

excessive security deposit;

imposition of disproportionate penalty;

refusal to accept early repayment of debt and;

termination of contract without reasonable cause.5

Background to Unfair Trade Practice:

The concept of Unfair Trade Practice draws a parallel from the previously applicable Monopoly Restrictive Trade Practice (MRTP) Act, 1969 which has now been replaced by the Competition Act, 2002. Section 36A of the erstwhile Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act), where 'unfair trade practice' was defined as a trade practice, which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any services adopts any unfair method or unfair or deceptive practice including oral, written or visible misrepresentations regarding standard, quality, status, condition usefulness and price of goods or services; false warranty, guarantee or promise regarding goods or services; disparaging of goods and services of another person; and false advertising and misrepresenting with regard to the gifts, prizes and offers in sale etc.6

But consequently, in the current Competition Act, there is no definition for the concept of unfair trade practices. In this situation it will be wrong to say that the concept is completely ignored, and hence it just has to be implicit that instead it is now categorized under other terms such as False Representation, False Offer, Price Scheme, Non-Compliance of prescribed standard, Hoarding etc of the Competition Act 2002.7

Therefore, it is apparent that there is a huge distance concept of Unfair Trade Practice as it was defined under the now-abolished Monopolies and Restrictive Trade Practices (MRTP) Act but finds no mention in the new Competition legislation.8 So it solely depends on the Consumer Protection Act for clarity of this term.

Changes proposed to Unfair Trade Practice:

When we look at the proposed expansion of the concept of Unfair Trade Practice in the 2011 Amendment Bill there is also an addition of three new clauses in the definition.

a) Failure to provide a bill, cash-memo or a receipt to a consumer will be deemed an unfair trade practice.

b) Failure to take back the goods or withdraw the services within a period of 30 days after the receipt of the goods by the consumer.

c) Disclosure of confidential personal information.9So in this way, the act of failing to issue a bill, cashmemo or a receipt would also constitute an Unfair Trade Practice and would in turn give the consumer a right to seek remedy for violation of such a right, and this privilege or protection was not given to the consumers earlier. The 2011 amendment also guarantees a right of return to the consumer and makes violation of this right an Unfair Trade Practice.

Necessity for expansion of the term:

We have seen the changes that are proposed to be made to the term, but to what end will they be effective. For this we need to look into the requirement for such a change and the need for which can be understood through the case of Akhil Bhartiya Upbhokta Congress vs Aggarwal Jewellers10where the respondent-jeweler issued cash memo which stated that in case of return of any of the products, only 80% value of the price will be returned. This consumer raised an objection to this condition, but the State Commission could not disallow the respondent-jeweler from having such a condition as there was no law which restricted this. But according to the proposed amendment, if the trader refuses or restricts the right to return the good or stops the service within 30 days, he would be liable for carrying on an unfair trade practice. Therefore, a requirement to improve the protection granted to consumers against unfair trade practices is gauged herein, which may be achieved by providing a wider scope to the term as proposed by the amendment.


The Consumer Protection Act and the Bill are designed so as to prevent any kind of trade that engage in unfair trade practices whether specified or not and more importantly provides for protection for the consumers who are subject to this trade. This amendment is a step towards the importance of recognition of the concept of unfair trade practice which shall not be neglected at any cost, especially with the Consumer Protection Act being the sole defining authority for it, where the term shall be given additional attention in its definition in order to protect all the requisite rights of consumers in order to avoid any ambiguities. For example, when we look into the right of return given to the consumers, we notice that this is only possible if the goods remain unused or if the service is continuous in nature. Whereas, in situations when the goods or services are used only once and are extinguished, there is no mention as to whether, on being unsatisfied, any facility or option for the money to be returned to the consumer is available. Even though there are still such questions which remain unanswered, we have to appreciate these changes being made in the Bill, as they bring to our attention the safeguards that need to be provided to the consumers against unfair trade practices.


1. 5th Year student of School of Law, Christ University.

2. Referred to protection-amendment-bill-2011-2123/

3. Sec c2 (1) (r) of Consumer Protection Act 1986

4. Referred to amendment-bill-2010/

5. Sec 2 (1) (s) of Consumer Protection Amendment Bill, 2011

6. Section 36A Monopoly Restrictive Trade Practice (MRTP) Act, 1969

7. Referred to ResearchReports/SanchitInt260811.pdf,

8. Referred to mrtpc-s--unfair-trade--practices-not-in-new-act-govttells- watchdog/791244/

9. Supra Note 1

10. I(2006)CPJ32(NC)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions