introduc on:
Unfair trade prac ces refers to use of various unethical,
dishonest, decep ve, fraudulent or dishonourable methods
to promote the trade goods or services to gain profits. It
includes misleading adver sing of a goods or services,
misrepresenta on of the goods or services and as well as
commercial decep on of goods or services that are sold in
the market. In India there are no separate Laws related to
Unfair trade prac ces but there are some provisions for
unfair trade prac ce in the Consumer Protec on Act, 2019.
Defini on of Unfair trade prac ce:
Unfair trade prac ce is defined under Clause (47) of Sec on 2
of the Consumer Protec on Act, 2019. Clause (47) of Sec on
2 of the Consumer Protec on Act, 2019 begins with the
words: “unfair trade prac ce means a trade prac ce which,
for the purpose of promo ng the sale, use or supply of any
goods or for the provision of any service, adopts any unfair
method or unfair or decep ve prac ce.”
Some Examples of Unfair trade prac ces:
1. False Adver sement: False adver sing refers to any act of
misleading adver sement or misleading claim which is
published inten onally to promote the sale of goods or
services to gain profits. An adver sement or claim can be
referred as false adver sing when the adver ser knowingly
adver ses false informa on and misleads the consumer. In
India there are many laws which regulates adver sement.
Punishment for False or Misleading Adver sement is given
under Sec on 89 of Consumer Protec on Act, 2019.
According to the Sec on 89 of the act, any person who uses
false or misleading adver sement to promote the sale of
goods or services should be punished with imprisonment up
to 5 years or the person can be fined up to ₹50 Lakhs or both.
For example, in 2022 the Central Consumer Protec on
Authority (CCPA) had taken a Suo-moto ac on against
Naaptol Online Shopping Ltd and it imposed a fine of Rs 10
lakh for failing to disclose that the adver sements on their
24×7 channel are pre-recorded adver sements and it is not
live telecast. CCPA also slammed Naaptol Online Shopping Ltd
for crea ng ‘ar ficial scarcity’ by claiming that a product is
available only for a limited period of me.
2. Spurious Goods: Spurious goods are defined under Clause
(43) of sec on 2 of the Consumer Protec on Act, 2019 the
term ‘spurious goods’ means such “goods which are falsely
claimed to be genuine”. The goods which are claimed to be
genuine but they are actually not and the claim made is false,
such goods are referred as spurious goods. It is a kind of
duplica on of goods which are similar to some other original
goods. The manufacturing or storing or trading or impor ng
spurious goods comes under the unfair trade prac ce. The
Punishment for it is given under Sub-Sec on (1) of Sec on 91
of the Consumer Protec on Act, 2019. The punishment is
propor onate to the nature of injury caused to the consumer
by the spurious goods. In a joint report issued by Credit
Ra ng Informa on Services of India Limited (CRISIL) and the
Authen ca on Solu on Providers Associa on (ASPA) in
January 2024 highlighted that 25% to 30% of all products sold
in India were spurious. For example, some shops trade First
Copy watches at very low prices in market, the watch looks
same as original but it is the copy of the original watch which
is costlier than the first copy watch and manufacturing or
trading of adulterated goods like spices or milk also comes
under spurious goods.
3. Disclosure of Personal Informa on of Consumer: Disclosing
of any personal informa on of the consumer including name,
date of birth, address, Personal or Government Iden ty Card,
Educa on, Profession, Occupa on, mobile number or email is
an unfair trade prac ce. The Clause [(47)(ix)] of Sec on 2 of
Consumer Protec on Act, 2019 it says — “disclosing to other
person any personal informa on given in confidence by the
consumer unless such disclosure is made in accordance with
the provisions of any law for the me being in force”.
Disclosing personal informa on without consent is
considered an unfair trade prac ce. The Central Consumer
Protec on Authority (CCPA) can impose penal es, including
fines to such prac ces. For example, A Hotel company selling
their customers data including name, date of birth, address,
Personal or Government Iden ty Card, Educa on, Profession,
mobile number or email to different companies, this is a
punishable offense.
4. Refusal to take back Defec ve Goods: The word defect is
defined under Clause (10) of Sec on 2 of the Consumer
Protec on Act, 2019 it says “”defect” means any fault,
imperfec on or shortcoming in the quality, quan ty, potency,
purity or standard which is required to be maintained by or
under any law for the me being in force or under any
contract, express or implied or as is claimed by the trader in
any manner whatsoever in rela on to any goods or product
and the expression “defec ve” shall be construed
accordingly”. Clause [(47)(viii)] of sec on 2 of the Consumer
Protec on Act, 2019 is a new addi on which was not exis ng
in the old Consumer Protec on 1986, Act. It provides that if
the seller refuses to take back or withdraw defec ve goods or
refuses to replace defec ve goods or discon nue deficient
services and does not refund the full considera on within the
period s pulated in the bill or cash memo or receipt or in the
absence of such s pula on, within a period of thirty days;
will fall within the ambit of unfair trade prac ce. The seller of
defec ve goods or supplier of deficient services are under the
obliga on to take back or replace such defec ve goods or
withdraw such goods or services from the consumer. Such a
seller or supplier are under further obliga on to refund the
considera on, if paid by the consumer. For Example, if I
purchase a new mobile and a er purchasing, I found that the
mobile is a defec ve, the mobile company should replace the
defec ve mobile with a new mobile or refund the money
which I paid for it.
Remedies available for consumers for addressing Unfair trade
prac ces:
In India the consumers have remedies to address Unfair trade
prac ces under the Consumer Protec on Act, 2019. Some
remedies are given:
1. Filing a Complaint: The consumer can approach the
Consumer Dispute Redressal Commission and file a complaint
against Unfair trade prac ces at district, state or na onal
level depending upon the value of case. Nowadays the
complaint can be registered online also.
2. Compensa on: The consumer can ask for compensa on if
consumer had suffered any loss or injury due to Unfair trade
prac ces. Based on the nature of loss or injury caused to
consumer the Consumer Dispute Redressal Commission
determines the amount of compensa on.
3. Appeals: The consumer can appeal to a higher authority
State commission or Na onal Commission if the consumer is
not sa sfied with the decision of district commission.
4. Refund or Replacement: If there is a defect in goods or
there is an deficiency in services the consumer has right to
demand refund of considera on which is paid or replacement
of the product. The consumer can also demand in case of
false adver sement or misrepresenta on.
Horlicks Ltd. v. Zydus Wellness Products Ltd. – Case
Summary (Paragraph)
In the case of Horlicks Ltd. v. Zydus Wellness Products Ltd.,
the issue arose when Zydus ran an adver sement comparing
its product Complan with Horlicks, claiming that Complan
helps children grow faster. The adver sement suggested that
a child would need to consume several cups of Horlicks to
match the benefit of one cup of Complan, implying that
Horlicks was less effec ve. Horlicks Ltd. filed a case, arguing
that the comparison was misleading, exaggerated, and
disparaging. The Delhi High Court held that while
compara ve adver sing is allowed, it should not mislead the
public or disparage a compe tor’s product. Since the ad
portrayed Horlicks in a nega ve and unfair light without
scien fic backing, the court ruled it as an unfair trade
prac ce. The court directed Zydus to modify or stop the
misleading adver sement.
