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Report No. 199

Section 2(o) has laid down the principles and basis of determining what is a 'restrictive trade practice' as under:

"(o) "restrictive trade practice" means a trade practice which has, or may have, the effect of preventing, distorting or restricting competition in any manner and in particular, --

(i) which tends to obstruct the flow of capital or resources into the stream of production, or

(ii) which tends to bring about manipulation of prices, or conditions of delivery or to affect the flow of supplies in the market relating to goods or services in such manner as to impose on the consumers unjustified costs or restrictions."

The MRTP Act was amended in 1984 by introducing the concept of 'unfair trade practices' based on the recommendation of the high-powered Sachar Committee, and these are intended largely to protect consumer interest, public interest and to prevent, lessen or eliminate competition. Under the MRTP (Amendment) Act, 1984, section 33 was amended to provide that every agreement falling within one or more of the categories specified therein shall be deemed to be an agreement relating to restrictive trade practices and further, two new categories were added vide sub-clause (ja) (jb) under the said section. Restrictive trade practices are not banned or prohibited per se. Section 33 of the Act lays down in specific terms various 'restrictive trade practices', which are deemed to be restrictive (but not necessarily against public interest) which are as follows:

(a) any agreement which restricts, or is likely to restrict, by any method the persons or classes of persons to whom goods are sold or from, whom goods are bought;

(b) any agreement requiring a purchaser of goods, as a condition of such purchase, to purchase some other goods;

(c) any agreement restricting in any manner the purchaser in the course of his trade from acquiring or otherwise dealing in any goods other than those of the seller or any other person;

(d) any agreement to purchase or sell goods or to tender for the sale or purchase of goods only at prices or on terms or conditions agreed upon between the sellers or purchasers;

(d) any agreement to grant or allow concessions or benefits, including allowances, discount, rebates or credit in connection with, or by reason of dealings;

(e) any agreement to sell goods, on condition that the prices to be charged on re-sale by the purchaser shall be the prices stipulated by the seller unless it is clearly stated that prices lower than those prices may be charged;

(f) any agreement to limit, restrict or withhold the output or supply of any goods or allocate any area or market for the disposal of the goods;

(g) any agreement not to employ or restrict the employment of any method, machinery or process in the manufacture of goods;

(h) any agreement for the exclusion from any trade association of any person carrying on or intending to carry on, in good faith the trade in relation to which the trade association is formed;

(i) any agreement to sell goods at such prices as would have the effect of eliminating competition or a competitor;

(ja) any agreement restricting in any manner, the class or number of wholesalers, producers or suppliers from whom any goods may be bought;

(jb) any agreement as to the bids which any of the parties thereto may offer at an auction for the sale of goods or any agreement whereby any party thereto agrees to abstain from bidding at any auction for the sale of goods;

(j) any agreement not hereinbefore referred to in this section which the Central Government may, by notification, specify for the time being as being one relating to a restrictive trade practice within the meaning of this sub-section pursuant to any recommendation made by the Commission in this behalf;

(k) any agreement to enforce the carrying out of any such agreement as is referred to in this sub-section."

The MRTP Act, 1969 was directed against restrictive or monopolistic trade practices and had no provision for the protection of consumers against false or misleading advertisement or other similar unfair trade practices till the year 1984. Thus by way of an amendment, section 36A was introduced defining "unfair trade practices" which are of immediate concern to the consumer.

A complaint relating to any unfair trade practice and restrictive trade practice can be made by a consumer or trade association before MRTP Commission under section 36B(a) or under section 10(a) of MRTP Act .The Commission during the inquiry may grant a temporary injunction restraining such person from carrying on any trade or unfair trade practice until further orders.

Unfair (Procedural and Substantive) Terms in Contract Back

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