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Class Notes ......

Consumer Protection Unit-III


Prepared By: Irshad Ahmad , Asst. Prof. Deptt. of Management Studies, AFU, Faridabad.

The Monopolistic and Restrictive Trade Practices Act


Introduction
The Monopolistic and Restrictive Trade Practices Act, 1969, was enacted
1. To ensure that the operation of the economic system does not result in the concentration of
economic power in hands of few,
2. To provide for the control of monopolies, and
3. To prohibit monopolistic and restrictive trade practices.
The MRTP Act extends to the whole of India except Jammu and Kashmir.
Unless the Central Government otherwise directs, this act shall not apply to:
1. Any undertaking owned or controlled by the Government Company,
2. Any undertaking owned or controlled by the Government,
3. Any undertaking owned or controlled by a corporation (not being a company established
by or under any Central, Provincial or State Act,
4. Any trade union or other association of workmen or employees formed for their own
reasonable protection as such workmen or employees,
5. Any undertaking engaged in an industry, the management of which has been taken over
by any person or body of persons under powers by the Central Government,
6. Any undertaking owned by a co-operative society formed and registered under any
Central, Provincial or state Act,
7. Any financial institution.
Restrictive Trade Practice
A restrictive trade practice is a trade practice, which
1. Prevents, distorts or restricts competition in any manner; or
2. Obstructs the flow of capital or resources into the stream of production; or
3. Which tends to bring about manipulation of prices or conditions of delivery or effected
the flow of supplies in the market of any goods or services, imposing on the consumers
unjustified cost or restrictions.
INQUIRY INTO RESTRICTIVE PRACTICES
The Commission may inquire into any restrictive trade practice
1. Upon receiving a complaint from any trade association, consumer or a registered
consumer association, or
2. Upon a reference made to it by the Central or State Government or
3. Upon its own knowledge or information
RELIEF AVAILABLE
The commission shall if after making an inquiry it is of the opinion that the practice is prejudicial
to the pubic interest, or to the interest of any consumer it may direct that
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Class Notes ...... Consumer Protection Unit-III


Prepared By: Irshad Ahmad , Asst. Prof. Deptt. of Management Studies, AFU, Faridabad.

1. The practice shall be discontinued or shall not be repeated;


2. The agreement relating thereto shall be void in respect of such restrictive trade practice or
shall stand modified.
3. The Commission may permit the party to any restrictive trade practice to take steps so that
it is no longer prejudicial to the public interest
However no order shall be made in respect of
1. any agreement between buyers relating to goods which are bought by the buyers for
consumption and not for ultimate resale;
2. a trade practice which is expressly authorised by any law in force.
Unfair Trade Practice
WHAT IS UNFAIR TRADE PRACTICE ?
An unfair trade practice means a trade practice, which, for the purpose of promoting any sale, use
or supply of any goods or services, adopts unfair method, or unfair or deceptive practice.
Unfair practices may be categorised as under:
1. FALSE REPRESENTATION
The practice of making any oral or written statement or representation which:
i.
Falsely suggests that the goods are of a particular standard quality, quantity, grade,
composition, style or model;
ii.
Falsely suggests that the services are of a particular standard, quantity or grade;
iii.
Falsely suggests any re-built, second-hand renovated, reconditioned or old goods as new
goods;
iv. Represents that the goods or services have sponsorship, approval, performance,
characteristics, accessories, uses or benefits which they do not have;
v. Represents that the seller or the supplier has a sponsorship or approval or affiliation which
he does not have;
vi.
Makes a false or misleading representation concerning the need for, or the usefulness of,
any goods or services;
vii.
Gives any warranty or guarantee of the performance, efficacy or length of life of the
goods, that is not based on an adequate or proper test;
viii.
Makes to the public a representation in the form that purports to be
a warranty or guarantee of the goods or services,

a promise to replace, maintain or repair the goods until it has achieved a specified
result,
if such representation is materially misleading or there is no reasonable prospect that such
warranty, guarantee or promise will be fulfilled
ix.
Materially misleads about the prices at which such goods or services are available in the
market; or
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Class Notes ...... Consumer Protection Unit-III


Prepared By: Irshad Ahmad , Asst. Prof. Deptt. of Management Studies, AFU, Faridabad.

x.

Gives false or misleading facts disparaging the goods, services or trade of another person.
2. FALSE OFFER OF BARGAIN PRICEWhere an advertisement is published in a newspaper or otherwise, whereby goods or services are
offered at a bargain price when in fact there is no intention that the same may be offered at that
price, for a reasonable period or reasonable quantity, it shall amount to an unfair trade practice.
The bargain price, for this purpose meansi.
the price stated in the advertisement in such manner as suggests that it is lesser than the
ordinary price, or
ii.
the price which any person coming across the advertisement would believe to be better
than the price at which such goods are ordinarily sold.
3. FREE GIFTS OFFER AND PRIZE SCHEMES
The unfair trade practices under this category are:
i.
Offering any gifts, prizes or other items along with the goods when the real
intention is different, or
ii.
Creating impression that something is being offered free alongwith the goods,
when in fact the price is wholly or partly covered by the price of the article sold, or
iii.
Offering some prizes to the buyers by the conduct of any contest, lottery or game
of chance or skill, with real intention to promote sales or business.
4. NON-COMPLIANCE OF PRESCRIBED STANDARDS
Any sale or supply of goods, for use by consumers, knowing or having reason to believe that the
goods do not comply with the standards prescribed by some competent authority, in relation to
their performance, composition, contents, design, construction, finishing or packing, as are
necessary to prevent or reduce the risk of injury to the person using such goods, shall amount to
an unfair trade practice.
5. HOARDING, DESTRUCTION, ETC.
Any practice that permits the hoarding or destruction of goods, or refusal to sell the goods or
provide any services, with an intention to raise the cost of those or other similar goods or
services, shall be an unfair trade practice.
6. INQUIRY INTO UNFAIR TRADE PRACTICES
The Commission may inquire into
Any unfair trade practice
i.
Upon receiving a complaint from any trade association, consumer or a registered
consumer association, or
ii.
Upon reference made to it by the Central Government or State Government
iii.
Upon an application to it by the Director General or
iv. Upon its own knowledge or information.
7. RELIEF AVAILABLE
After making an inquiry into the unfair trade practice if the Commission is of the opinion that the
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Class Notes ...... Consumer Protection Unit-III


Prepared By: Irshad Ahmad , Asst. Prof. Deptt. of Management Studies, AFU, Faridabad.

practice is prejudicial to the pubic interest, or to the interest of any consumer it may direct that
i.
The practice shall be discontinued or shall not be repeated;
ii.
The agreement relating thereto shall be void in respect of such unfair trade practice or
shall stand modified.
iii.
Any information, statement or advertisement relating to such unfair trade practice shall be
disclosed, issued or published as may be specified
iv. The Commission may permit the party to carry on any trade practice to take steps to
ensure that it is no longer prejudicial to the public interest or to the interest of the
consumer.
However no order shall be made in respect a trade practice which is expressly authorised by any
law in force.
The Commission is empowered to direct publication of corrective advertisement and disclosure
of additional information while passing orders relating to unfair trade practices.
Monopolistic Trade Practices
A monopolistic trade practice is one, which has or is likely to have the effect of:
1. maintaining the prices of goods or charges for the services at an unreasonable levelby
limiting, reducing or otherwise controlling the production, supply or distribution of goods
or services;
2. unreasonably preventing or lessening competition in the production, supply or
distribution of any goods or services whether or not by adopting unfair method or fair or
deceptive practices;
3. limiting technical development or capital investment to the common detriment;
4. deteriorating the quality of any goods produced, supplied or distribute; and
5. increasing unreasonablyi.
the cost of production of any good; or
ii.
charges for the provision, or maintenance,of any services; or
iii.
the prices for sale or resale of goods; or
iv. the profits derived from the production, supply or distribution of any goods or
services.
A monopolistic trade practice is deemed to be prejudicial to the public interest, unless it is
expressly authorized under any law or the Central Government permits to carry on any such
practice.
INQUIRY INTO MONOPOLISTIC TRADE PRACTICES
The Commission may inquire into
Any monopolistic trade practice,
1. Upon a reference made to it by the Central Government or
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Class Notes ...... Consumer Protection Unit-III


Prepared By: Irshad Ahmad , Asst. Prof. Deptt. of Management Studies, AFU, Faridabad.

2. Upon an application made to it by the Director General or


3. Upon it own knowledge or information
RELIEF AVAILABLE
1. Where the inquiry by the Commission reveals that the trade practice inquired into operates
or is likely to operate against public interest, the Central Government may pass such
orders as it thinks fit to remedy or present any mischief resulting from such trade practice.
2. On an inquiry report of the Commission, the Central Government mayi.
Prohibit the owner(s) of the concerned undertaking(s) from continuing to indulge
in a monopolistic trade practice; or
ii.
Prohibit the owner of any class of undertakings or undertakings generally, from
continuing to indulge in any monopolistic trade practice in relation to the goods or
services.
3. The Central Government may also make an order:
i.
Regulating the production, storage, supply, distribution, or control of any goods or
services by an undertaking and fixing the terms of their sale (including prices) or
supply;
ii.
Prohibit any act or practice or commercial policy which prevents or lessens
competition in the production, storage, supply or distribution of any goods or
services;
iii.
Fixing standards for the goods used or produced by an undertaking;
iv. Declaring unlawful the making or carrying out of the specified agreement;
v. Requiring any party to the specified agreement to determine the agreement within
the specified time, either wholly or to specified extent;
vi.
Regulating the profits which may be derived from the production, storage, supply,
distribution or control of any goods or services; or
vii.
Regulating the quality of any goods or services so that their standard does not
deteriorate.
Powers of The Commission
The MRTP Commission has the following powers:
1. Power of Civil Court under the Code of Civil Procedure, with respect to:
i.
Summoning and enforcing the attendance of any witness and examining him on
oath;
ii.
Discovery and production of any document or other material object producible as
evidence;
iii.
Reception of evidence on affidavits;
iv. Requisition of any public record from any court or office.
v. Issuing any commission for examination of witness; and
vi.
Appearance of parties and consequence of non-appearance.
2. Proceedings before the commission are deemed as judicial proceedings with in the
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Class Notes ...... Consumer Protection Unit-III


Prepared By: Irshad Ahmad , Asst. Prof. Deptt. of Management Studies, AFU, Faridabad.

meaning of sections 193 and 228 of the Indian Penal Code.


3. To require any person to produce before it and to examine and keep any books of accounts
or other documents relating to the trade practice, in its custody.
4. To require any person to furnish such information as respects the trade practice as may be
required or such other information as may be in his possession in relation to the trade
carried on by any other person.
5. To authorise any of its officers to enter and search any undertaking or seize any books or
papers, relating to an undertaking, in relation to which the inquiry is being made, if the
commission suspects tat such books or papers are being or may be destroyed, mutilated,
altered, falsified or secreted.
The Competition Act
The Competition Act, 2002 was enacted by the Parliament of India It replaced the old Monopoly
and Restrictive Trade Practices Act, 1969. Under this legislation, the Competition Commission
of India was established to prevent activities that have an adverse effect on competition in India.
Competition Act to provide, keeping in view of the economic development of the country, for the
establishment of a Commission to prevent practices having adverse effect on competition, to
promote and sustain competition in markets, to protect the interests of consumers and to ensure
freedom of trade carried on by other participants in markets, in India, and for matters connected
therewith or incidental thereto.
Competition
A situation in a market, in which sellers independently strive for buyers patronage to achieve
business objectives such as profits, sales or market share.
Objective of competition:
The ultimate objective of competition is to secure the interest of the Consumer - it
empowers the consumer, best guarantee for consumer protection.
It is a means of reducing cost and improving quality.
It also implies an open market where shortages are rapidly eliminated through the best
allocation of resources.
It accelerates growth and development; preserves economic and political democracy.

Components of competition laws:


Anti-competitive agreement: Section 3 of The Competition Act 2002 deals with the anticompetitive agreements.
An agreement which adversely effect the competition. It includes but not limited to: AL-FALAH University, Faridabad, Haryana

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Class Notes ...... Consumer Protection Unit-III


Prepared By: Irshad Ahmad , Asst. Prof. Deptt. of Management Studies, AFU, Faridabad.

1. Agreement which limit the production.


2. Agreement which limit the supply.
3. Agreement to allocate market.
4. Agreement to fix prices.
5. Agreement to collusive bidding.
6. Conditional purchase (Or tie-in-agreements)
7. Refusal to deal.
8. Exclusive supply agreement.
9. Exclusive distribution agreement.
10. Condition sale agreement to by second products as well compulsorily.
Following are not an Anti competitive agreements:
1. Agreement to Protect IPRs. Viz trademark, copyright or patent.
2. Agreement to protect geographical indications.
3. Agreement to Design Act.
4. Agreement to lay out designs for Act 2000.
5. Agreement to export goods (with certain conditions).
Types of agreement : Competition law indentifies two type of agreement. First Horizontal
agreements which are among the enterprises who are or may compete within same business.
Second is the vertical agreement which are among independent enterprise. Horizontal
agreement is presumed to be illegal agreement but rule of reasons would be applicable for
vertical agreements.
Abuse of Dominant Position:
1. It is the misuse of an advantageous position by an enterprise to gain extra benefits but which
resultantly damage the consumer interest and make it difficult other players to compete.
2. Section 4 of Competition Act deals with abuse of dominant position.
It includes:- 3. Imposition of unjust conditions.
4. Imposition of unfair pricing.
5. Predatory pricing.

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Class Notes ...... Consumer Protection Unit-III


Prepared By: Irshad Ahmad , Asst. Prof. Deptt. of Management Studies, AFU, Faridabad.

6. Create hindrance in entry of new operators.


7. Abuse of market positing.
Predatory Pricing:
Predatory pricing is some thing called pricing below then the cost of the product. The objective
of pricing to elemenate the competition and then create dominant position in the market and put
the price so high to recover the earlier losses. It is sort of abuse of dominant position. There are
some methods in economics to establish that whether a pricing is predatory pricing or not. Once
the predatory pricing is fixed then the CCI can pass a order that enterprise has abuse its dominant
position in contravention of the competition act and pass the penal order for it.
Combination under Competition Act.:
Combination is legal concept of analyzing the merger, acquisition, acquisition of an enterprise
by a person having shares/ right to vote with the completion business enterprise. There are
threshold limits are defined viz 1500 Cr. For individuals in India. If such combination, merger
amalgamation create adverse impact on competition or consumers at large then such
combination it is prohibited by the competition law of India.
Notification: The desiring firm shall notify it is approval for combination to CCI within 30 days
of such board resolution. CCI shall pass the order within 210 to give effect to such combination
else it will deemed as approved after 210 days. In case such combination is not notified to CCI
then CCI shall have powers to inquiry such combination within 1 years of merger. Notification
is pre-requisite else there will be risk from legal behavioral aspect and may attract investigation
and objection.
Cartel:
Cartel is the group of enterprises which collectively make some agreement which adversely
effect the competition. The agreement between the cartel may be explicit or implicit. But it is
restricted by the competition law due the reasons of artificial price hike, collusive bidding,
competition law presumes the Cartel as injurious to competition. CCI has vide power to take the
cartel in their cognizance and refer it to director general for investigation. It further provides the
penalty provision upto three times of yearly profit to the offenders.
Bid rigging:

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Class Notes ...... Consumer Protection Unit-III


Prepared By: Irshad Ahmad , Asst. Prof. Deptt. of Management Studies, AFU, Faridabad.

Competition law provides on more legal concept and that is Bid rigging. This terms used for any
manipulation, conspiracy, infiltration etc which adversely affect the biding. Any agreement or
consent among the prospective bidder which affect the bidding process and causes or likely to
cause losses to the purchaser, is termed as bid rigging. Competition law prohibits bid rigging and
lays down provisions for penalty for such practices.
Rule of reasons: It is the analysis of any activity under the challenge on the basis of business
justification, competitive intent, market impact, impact on competition and on consumer. It is the
logic behind the conclusion for any order.
Market Power: It is the power to control market pricing and restrict competition.
Competition Advocacy:
Competition advocacy is one of the most significant feature in the Act. It is the obligation of
commission to create the awareness about the competition laws through non-enforcement
measures. It also includes training programs, seminar, educational workshops.
Remedies under the competition laws of India
Competition Commission of India is the statutory body to approach for unfair competition
practices. The relevant Act is Competition Act 2002 and its amendment act 2007. CCI has power
to act suo-mot or on the reference from Government. Consumer can directly approach the CCI
by filling an application with 5000/- prescribed fees in case of individual/huf/ngos. In case any
case is made out then, on receipt of such application, the CCI shall refer it to Director General
for opinion. Director General shall submit its report/finding to CCI for proper hearing and trial
for the case.
About Fines & Penalty: The competition laws lays down heavy penalty of 10% of total turn
over of preceding three years if any enterprises act or infringe the provision of competition act.

Consumer organization
Consumer organizations are advocacy groups that seek to protect people from corporate abuse
like unsafe products, predatory lending, false advertising, and pollution.
Role of Consumer organizations:
Consumer organizations may operate via protests, litigation, campaigning, or lobbying.
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Class Notes ...... Consumer Protection Unit-III


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One common means of providing consumers useful information is the independent


comparative survey or test of products or services, involving different manufacturers or
companies (e.g., Which?, Consumer Reports, etcetera).
Another arena where consumer organizations have operated is food safety.
The aim of consumer organizations may be to establish and to attempt to enforce
consumer rights. Effective work has also been done, however, simply by using the threat
of bad publicity to keep companies' focus on the consumers' point of view.
Consumer organizations may attempt to serve consumer interests by relatively direct
actions such as creating and/or disseminating market information, and prohibiting
specific acts or practices, or by promoting competitive forces in the markets which
directly or indirectly affect consumers (such as transport, electricity, communications,
etc.).

Formation and Registration of Consumer organizations


The consumer organizations
1)
2)
3)
Section-25
Company
Additional
Licensing/

Trust
Society
Registration

I.
Trusts
A public charitable trust is usually floated when there is property involved, especially in
terms
of
land
and
building.
Legislation : Different states in India have different Trusts Acts in force, which govern the
trusts in the state; in the absence of a Trusts Act in any particular state or territory the general
principles
of
the
Indian
Trusts
Act
1882
are
applied.
Main Instrument : The main instrument of any public charitable trust is the trust deed,
wherein the aims and objects and mode of management (of the trust) should be enshrined. In
every trust deed, the minimum and maximum number of trustees has to be specified. The
trust deed should clearly spell out the aims and objects of the trust, how the trust should be
managed, how other trustees may be appointed or removed, etc. The trust deed should be
signed by both the settlor/s and trustee/s in the presence of two witnesses. The trust deed
should be executed on non-judicial stamp paper, the value of which would depend on the
valuation
of
the
trust
property.
Trustees : A trust needs a minimum of two trustees; there is no upper limit to the number of
trustees.
The
Board
of
Management
comprises
the
trustees.
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Class Notes ...... Consumer Protection Unit-III


Prepared By: Irshad Ahmad , Asst. Prof. Deptt. of Management Studies, AFU, Faridabad.

Application
for
Registration
:
The application for registration should be made to the official having jurisdiction over the
region
in
which
the
trust
is
sought
to
be
registered.
After providing details (in the form) regarding designation by which the public trust shall be
known, names of trustees, mode of succession, etc., the applicant has to affix a court fee
stamp of Rs.2/- to the form and pay a very nominal registration fee which may range from
Rs.3/- to Rs.25/-, depending on the value of the trust property.
The application form should be signed by the applicant before the regional officer or
superintendent of the regional office of the charity commissioner or a notary. The application
form should be submitted, together with a copy of the trust deed.
Two other documents which should be submitted at the time of making an application for
registration
are
affidavit
and
consent
letter.
II.
Society
According to section 20 of the Societies Registration Act, 1860, the following societies can
be registered under the Act: charitable societies, military orphan funds or societies
established at the several presidencies of India, societies established for the promotion of
science, literature, or the fine arts, for instruction, the diffusion of useful knowledge, the
diffusion of political education, the foundation or maintenance of libraries or reading rooms
for general use among the members or open to the public, or public museums and galleries of
paintings and other works of art, collection of natural history, mechanical and philosophical
inventions,
instruments
or
designs.
Legislation : Societies are registered under the Societies Registration Act, 1860, which is a
federal act. In certain states, which have a charity commissioner, the society must not only be
registered under the Societies Registration Act, but also, additionally, under the Bombay
Public
Trusts
Act.
Main Instrument : The main instrument of any society is the memorandum of association and
rules and regulations (no stamp paper required), wherein the aims and objects and mode of
management
(of
the
society)
should
be
enshrined.
Trustees : A Society needs a minimum of seven managing committee members; there is no
upper limit to the number managing committee members. The Board of Management is in the
form of a governing body or council or a managing or executive committee
Application

for

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Registration

:
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Class Notes ...... Consumer Protection Unit-III


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Registration can be done either at the state level (i.e., in the office of the Registrar of
Societies) or at the district level (in the office of the District Magistrate or the local office of
the
Registrar
of
Societies).(2)
The procedure varies from state to state. However generally the application should be
submitted together with: (a) memorandum of association and rules and regulations; (b)
consent letters of all the members of the managing committee; (c) authority letter duly signed
by all the members of the managing committee; (d) an affidavit sworn by the president or
secretary of the society on non-judicial stamp paper of Rs.20-/, together with a court fee
stamp; and (e) a declaration by the members of the managing committee that the funds of the
society will be used only for the purpose of furthering the aims and objects of the society.
All the aforesaid documents which are required for the application for registration should be
submitted in duplicate, together with the required registration fee. Unlike the trust deed, the
memorandum of association and rules and regulations need not be executed on stamp paper.
III.
Section-25
Company
According to section 25(1)(a) and (b) of the Indian Companies Act, 1956, a section-25
company can be established for promoting commerce, art, science, religion, charity or any
other useful object, provided the profits, if any, or other income is applied for promoting
only the objects of the company and no dividend is paid to its members.
Legislation : Section-25 companies are registered under section-25 of the Indian Companies
Act.
1956.
Main Instrument : For a section-25 company, the main instrument is a Memorandum and
articles
of
association
(no
stamp
paper
required)
Trustees : A section-25 Company needs a minimum of three trustees; there is no upper limit
to the number of trustees. The Board of Management is in the form of a Board of directors or
managing
committee.
Application
for
Registration
:
1.An application has to be made for availability of name to the registrar of companies, which
must be made in the prescribed form no. 1A, together with a fee of Rs.500/-. It is advisable to
suggest a choice of three other names by which the company will be called, in case the first
name which is proposed is not found acceptable by the registrar.
2.Once the availability of name is confirmed, an application should be made in writing to the
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regional director of the company law board. The application should be accompanied by the
following
documents:
Three printed or typewritten copies of the memorandum and articles of association of the
proposed company, duly signed by all the promoters with full name, address and occupation.
A declaration by an advocate or a chartered accountant that the memorandum and articles of
association have been drawn up in conformity with the provisions of the Act and that all the
requirements of the Act and the rules made thereunder have been duly complied with, in
respect of registration or matters incidental or supplementary thereto.
Three copies of a list of the names, addresses and occupations of the promoters (and where a
firm is a promoter, of each partner in the firm), as well as of the members of the proposed
board of directors, together with the names of companies, associations and other institutions
in which such promoters, partners and members of the proposed board of directors are
directors or hold responsible positions, if any, with description of the positions so held.
A statement showing in detail the assets (with the estimated values thereof) and the liabilities
of the association, as on the date of the application or within seven days of that date.
An estimate of the future annual income and expenditure of the proposed company,
specifying the sources of the income and the objects of the expenditure.
A statement giving a brief description of the work, if any, already done by the association and
of the work proposed to be done by it after registration, in pursuance of section-25.
A statement specifying briefly the grounds on which the application is made.
A declaration by each of the persons making the application that he/she is of sound mind, not
an undischarged insolvent, not convicted by a court for any offence and does not stand
disqualified under section 203 of the Companies Act 1956, for appointment as a director.
3.The applicants must also furnish to the registrar of companies (of the state in which the
registered office of the proposed company is to be, or is situate) a copy of the application and
each of the other documents that had been filed before the regional director of the company
law
board.
4.The applicants should also, within a week from the date of making the application to the
regional director of the company law board, publish a notice in the prescribed manner at least
once in a newspaper in a principal language of the district in which the registered office of
the proposed company is to be situated or is situated and circulating in that district, and at
least
once
in
an
English
newspaper
circulating
in
that
district.
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5.The regional director may, after considering the objections, if any, received within 30 days
from the date of publication of the notice in the newspapers, and after consulting any
authority, department or ministry, as he may, in his discretion, decide, determine whether the
licence
should
or
should
not
be
granted.
6.The regional director may also direct the company to insert in its memorandum, or in its
articles, or in both, such conditions of the licence as may be specified by him in this behalf.

Self Regulation
Self regulation is a situation in which an industry, profession, etc. checks that its members act
according to particular rules, rather than having this done by another organization.
A self-regulatory organization (SRO) is an organization that exercises some degree of
regulatory authority over an industry or profession. The regulatory authority could be applied
in addition to some form of government regulation, or it could fill the vacuum of an absence
of government oversight and regulation. The ability of an SRO to exercise regulatory
authority does not necessarily derive from a grant of authority from the government.
Consumer awareness:
Consumer awareness is about making the consumer aware of his/her rights. It is a marketing
term which means that consumers are aware of products or services, its characteristics and
the other marketing Ps (place to buy, price, and promotion).
In India, the concept of consumer protection is not new. References to the protection of
consumers interest against exploitation by trade and industry, underweight and
measurement, adulteration and punishment for these offences, were made in Kautilyas
Arthashastra. However, an organized and systematic movement to safeguard the interest of
consumers, is a recent phenomenon. The consumers have to be aware not only of the
commercial aspects of sale and purchase of goods, but also of the health and security aspects.
Food safety has become an important element of consumer awareness these days. In case of
food products, its quality depends not only on its nutritional value, but also on its safety for
human consumption. Consumption of contaminated or adulterated food is a major cause of
human illness and suffering.
The Role of Media in Consumer Awareness
Media Formats
The types of media which can influence consumer awareness are more numerous than ever. Older
media platforms, including newspapers, radio and television, are still available but have lost

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Class Notes ...... Consumer Protection Unit-III


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popularity since the advent of the Internet. Within the category of Internet media, a consumer finds
respected sites such as web versions of print newspapers and government websites alongside opinionbased sites such as blogs and message boards. Advertising exists on nearly all media platforms,
whether print, television or Internet, further bombarding the consumer with information that may or
may not be accurate.
Effects of Media
As consumers turn more frequently to Internet sources for purchase advice, they're able to keep up
with recent developments faster than ever. This means, for instance, that companies have the ability to
use Internet media to distribute news of product recalls almost as soon as they know a recall is
necessary. It also means that unfounded information can be distributed before reliable journalists have
a chance to confirm it.
Responsibility
Journalists have the responsibility to practice the same ethics when publishing online that they use for
print media, including double-checking facts and reporting without bias. Even though online media
may seem less permanent than print, it actually reaches more consumers in a shorter time. Consumers
have the responsibility to ensure any website they take advice from practices journalistic standards
rather than simply publishes opinions. Government websites or online versions of print publications
are good starting sources.
Considerations
Since online publishing is still new to many journalists in 2010, journalists are moving through a
transition period as they learn to balance the techniques used for newspaper reporting with the new
demands of Internet media. For example, in previous times, when a journalist found an error printed
in one of his newspaper stories, he would run a correction in the next edition. Online, he has the
opportunity to change the fact in the story, but he may be left wondering whether he needs to point
out the change. Adding links to stories is another gray area, as journalists have to decide how much
responsibility they bear for the accuracy of the websites they link to.
The Role of Government in Consumer Awareness
[1] Promote General Awareness of the rights of the consumer by encouraging consumer education and
supplying information.
[2] Publish periodical and product specific booklets, pamphlets, cassettes, CDs, slides, documentary
films and other devices
of mass communication for promoting consumer awareness in English
and regional languages, highlighting the problem in specified areas like real estate, public utilities,
non-banking financial agencies etc.
[3] Enlighten the business community on its ethical and legal obligations to maintain quality of the
products or services and to
be transparent in dealing with consumers.
[4] Encourage consumer activities to strengthen the existing institutional set up of consumer dispute
redressal by acting as a facilitator between consumer and the institution.

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Class Notes ...... Consumer Protection Unit-III


Prepared By: Irshad Ahmad , Asst. Prof. Deptt. of Management Studies, AFU, Faridabad.

[5] Study the available legal remedies, analyze and suggest new measures for the effective and better
consumer protection.
[6] Bring together the consumer, traders and policy makers to exchange information of mutual interest
for better coordination. Bring together the NGOs/Consumer activities operating in different areas
and equip them with suitable and required nformation and knowledge to enable them to act as
nodal agents of change in rural areas.
[7] Organize and conduct seminars, workshops and group discussions and thus provide a platform for
threadbare discussion
of the issues and evolve suitable remedial action. Conduct
motivational campaigns for groups of potential customers both
in urban and rural areas.
[8] Coordinate programmes organized by Central and State Governments, State Legal Aid Authorities,
Academic Institutes, National and International Consumer Organizations.
[9] Periodic interaction with electronic & print media on success stories of consumers.
[10] Establish links with educational institutions like universities, colleges, high schools to emphasize the
need
for improving
consumer education in the curriculum. Consumer clubs which were started
recently by the
A.P. Consumer affairs, Food & Civil Supplies Dept. would go a long way in
acheiving this.
[11] Interact with national level organizations like NISIET, NIRD, ASCI etc. to explore possible
collaboration
and organize awareness programmes for their clientele and undertake research
projects.
[12] Organize a database enabling the consumer retrieve the required information in a less expensive and
quick way. Set up a website http://scdrc.ap.nic to publish information, news including
judgments,
articles, on product analysis and related
matters for the guidance of consumers to
have informed
choice of product services, redressal agencies and mechanisms.

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