Legal Framework Of Business Module: 5 SY MBA 3RD SEM

Module 5: Consumer Protection Act 1986 & Information Technology Act 2000

5.1. Introduction, Definitions of consumer protection act

5.2. Consumer protection councils
5.3. Consumer Redressal Agencies (Basics of District Forum, State commission, National Commission)
5.4. Basics of law of Restrictive Trade Practices & Unfair Trade Practice
5.5. Information Technology Act 2000- Introduction, amendment, digital signatures, E- Governance

5.1. Introduction, Definitions of consumer protection act

INTRODUCTION

The industrial revolution and the development in the international trade and commerce has led to the
vast expansion of business and trade, as a result of which a variety of consumer goods have appeared
in the market to cater to the needs of the consumers and a host of services have been made available to
the consumers like insurance, transport, electricity, housing, entertainment, finance and banking. A
well organised sector of manufactures and traders with better knowledge of markets has come into
existence, thereby affecting the relationship between the traders and the consumers making the
principle of consumer sovereignty almost inapplicable. The advertisements of goods and services in
television, newspapers and magazines influence the demand for the same by the consumers though
there may be manufacturing defects or imperfections or short comings in the quality, quantity and the
purity of the goods or there may be deficiency in the services rendered. In addition, the production of
the same item by many firms has led the consumers, who have little time to make a selection, to think
before they can purchase the best. For the welfare of the public, the glut of adulterated and sub−standard
articles in the market have to be checked. Inspite of various provisions providing protection to the
consumer and providing for stringent action against adulterated and sub−standard articles in the
different enactments like Code of Civil Procedure, 1908, the Indian Contract Act,1872, the sale of
goods Act,1930, the Indian Penal Code, 1860,the Standards of Weights and Measures Act,1976 and
the Motor Vehicles Act,1988, very little could be achieved in the field of Consumers Protection.

Though the Monopolies and Restrictive Trade Practices Act,1969 and the Prevention of Food
Adulteration Act, 1954 have provided relief to the consumers yet it became necessary to protect the
consumers from the exploitation and to save them from adulteration and sub−standard goods and
services and to safe guard the interests of the consumers. In order to provide for better protection of the
interests of the consumer the Consumer Protection Bill,1986 was introduced in the Lok Sabha on 5th
December,1986.

STATEMENT OF OBJECTS AND REASONS

1. The Consumer Protection Bill, 1986 seeks to provide for better protection of the interests of
consumers and for the purpose, to make provision for the establishment of Consumer councils
and other authorities for the settlement of consumer disputes and for matter connected
therewith.
2. It seeks, inter alias, to promote and protect the rights of consumers such as−

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For the first time in the history of consumer legislation of India, consumer protection act, 1986 extended
a statutory recognition to the rights of consumers; section 6 of the act recognizes the following six
rights of consumers:

1. Right to safety

Right to safety that is right to be protected against the marketing of goods and services which are
hazardous to life and property.

2. Right to informed

Right to inform that is the right to be informed about the quality, quantity, potency, purity, standard
and price of goods or services, as the case may be, so as to protect the consumer unfair trade practices.

3. Right to choose

Right to choose means. It means right to assured, whenever possible access to a variety of goods and
services at competitive prices. In case of monopolies, say railways etc. it means right to be assured of
satisfactory quality and services at a fair price.

4. Right to heard

Right to heard that is consumers’ interest will receive due consideration at appropriate forums. It also
includes right to be represented in various forums formed to consider the consumers’ welfare.

5. Right to seek redressal

It means the right to seek redressal against unfair trade practices or restrictive trade practices or
unscrupulous exploitation of consumers. It also includes right to fair settlement of the grievances of the
consumers.

6. Right to consumer education

It means the right to acquire the knowledge and skill to be an informed consumer.

3. These objects are sought to be promotes and protected by the Consumer Protection Council to
be established at the Central and State level.

4. To provide speedy and simple Redressal to consumer disputes, a quasi−judicial machinery is

sought to be set up at the district, State and Central level. These quasi−judicial bodies will observe the
principles of natural justice and have been empowered to give relief of a specific nature and to award,
wherever appropriate, compensation to consumers. Penalties for non−compliance of the orders given
by the quasi−judicial bodies have also been provided.

 Extent and coverage of consumer protection act

The CPA, Which has been amended in 2002. Extends coverage over the following:

1. The act covers all the sectors whether private, public or co-operative.

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2. The law is applicable to all kinds of goods and services except those, which are specifically exempted
by the central government.

3. The provisions of the act are compensatory in nature.

4. The act envisages establishment of consumer protection councils at the central and state levels;
whose main objects and protect the rights of the consumers.

5. The provisions of this act are in addition to and not in derogation of the provisions of any other law
currently in force.

It extends to the whole of India except the State of Jammu and Kashmir.

 Definitions (Sec.2)
1. Appropriate laboratory

“appropriate laboratory” means a laboratory or organisation—

(i) recognized by the Central Government;

(ii) recognized by a State Government, subject to such guidelines as may be prescribed by the Central
Government in this behalf; or

(iii) any such laboratory or organisation established by or under any law for the time being in force,
which is maintained, financed or aided by the Central Government or a State Government for carrying
out analysis or test of any goods with a view to determining whether such goods suffer from any defect;

2. Complainant

“complainant” means—

(i) a consumer; or

(ii) any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956) or under
any other law for the time being in force; or

(iii) the Central Government or any State Government; or

(iv) one or more consumers, where there are numerous consumers having the same interest;]

(v) in case of death of a consumer, his legal heir or representative;] who or which makes a complaint

 “Complaint”

means any allegation in writing made by a complainant that—

(i) an unfair trade practice or a restrictive trade practice has been adopted by [any trader or service
provider];]

(ii) the goods bought by him or agreed to be bought by him] suffer from one or more defects;

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(iii) the services hired or availed of or agreed to be hired or availed of by him] suffer from deficiency
in any respect;

(iv) a trader or the service provider, as the case may be, has charged for the goods or for the services
mentioned in the complaint, a price in excess of the price—

(a) fixed by or under any law for the time being in force;

(b) displayed on the goods or any package containing such goods;

(c) displayed on the price list exhibited by him by or under any law for the time being in force;

(d) agreed between the parties;

(v) goods which will be hazardous to life and safety when used are being offered for sale to the public

(vi) services which are hazardous or likely to be hazardous to life and safety of the public when used,
are being offered by the service provider which such person could have known with due diligence to
be injurious to life and safety;]

 “Complaint”

means any allegation in writing made by a complainant that—

(i) an unfair trade practice or a restrictive trade practice has been adopted by [any trader or service
provider];]

(ii) the goods bought by him or agreed to be bought by him] suffer from one or more defects;

(iii) the services hired or availed of or agreed to be hired or availed of by him] suffer from deficiency
in any respect;

(iv) a trader or the service provider, as the case may be, has charged for the goods or for the services
mentioned in the complaint, a price in excess of the price—

(a) fixed by or under any law for the time being in force;

(b) displayed on the goods or any package containing such goods;

(c) displayed on the price list exhibited by him by or under any law for the time being in force;

(d) agreed between the parties;

(v) goods which will be hazardous to life and safety when used are being offered for sale to the public

(vi) services which are hazardous or likely to be hazardous to life and safety of the public when used,
are being offered by the service provider which such person could have known with due diligence to
be injurious to life and safety;]

 Consumer

“consumer” means any person who,—

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(i) buys any goods for a consideration which has been paid or promised or partly paid and partly
promised, or under any system of deferred payment and includes any user of such goods other
than the person who buys such goods for consideration paid or promised or partly paid or partly
promised, or under any system of deferred payment,

but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid
and partly promised, or under any system of deferred payment and includes any beneficiary of such
services other than the person who hires or avails of the services for consideration paid or promised, or
partly paid and partly promised, or under any system of deferred payment

 Consumer Dispute

“consumer dispute” means a dispute where the person against whom a complaint has been made, denies
or disputes the allegations contained in the complaint;

 Defect

“defect” means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or
standard which is required to be maintained by or under any law for the time being in force or 15 [under
any contract, express or implied, or] as is claimed by the trader in any manner whatsoever in relation
to any goods;

 Deficiency

“deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and
manner of performance which is required to be maintained by or under any law for the time being in
force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in
relation to any service;

 District Forum

“District Forum” means a Consumer Disputes Redressal Forum established under clause (a) of section
9;

 Goods

“Goods” means goods as defined in the Sale of Goods Act, as “every kind of movable property other
than actionable claims and money.

 Manufacturer

“Manufacturer” means a person who—

(i) makes or manufactures any goods or parts thereof; or

(ii) does not make or manufacture any goods but assembles parts thereof made or manufactured by
others; or

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(iii) puts or causes to be put his own mark on any goods made or manufactured by any other
manufacturer

 National Commission

“National Commission” means the National Consumer Disputes Redressal Commission established
under clause (c) of section 9;

 Person

“Person” includes,—

(i) a firm whether registered or not;

(ii) a Hindu undivided family;

(iii) a co-operative society;

(iv) every other association of persons whether registered under the Societies Registration Act, 1860
(21 of 1860) or not;

 Restrictive Trade Practice

“Restrictive trade practice” means a trade practice which tends to bring about manipulation of price or
its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such
a manner as to impose on the consumers unjustified costs or restrictions and shall include—

(a) delay beyond the period agreed to by a trader in supply of such goods or in providing the
services which has led or is likely to lead to rise in the price;

(b) any trade practice which requires a consumer to buy, hire or avail of any goods or, as the
case may be, services as condition precedent to buying, hiring or availing of other goods or services;]

 Service

“Service” means service of any description which is made available to potential [users and includes,
but not limited to, the provision of] facilities in connection with banking, financing insurance,
transport, processing, supply of electrical or other energy, board or lodging or both, [housing
construction,] entertainment, amusement or the purveying of news or other information,

but does not include the rendering of any service free of charge or under a contract of personal service;

 Spurious goods and services

“Spurious goods and services" mean such goods and services which are claimed to be genuine but they
are actually not so

 State Commission

“State Commission” means a Consumer Disputes Redressal Commission established in a State under
clause (b) of section 9;

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 Trader

“Trader” in relation to any goods means a person who sells or distributes any goods for sale and includes
the manufacturer thereof, and where such goods are sold or distributed in package form, includes the
packer thereof

5.2 CONSUMER PROTECTION COUNCIL

The Central Consumer Protection Council.−

(1) The Central Government may by notification, establish with effect from such date as it may specify
in such notification, a Council to be known as the Central Consumer Protection Council ( hereinafter
referred to as the Central Council).

(2) The Central Council shall consist of the following members, namely:−

 according to rule 3 of the consumer protection rules, 1987, the central council consist of
following 150 members namely,

1. Minister in-charge of consumer affairs in central Gov. – Chairman

2. Minister of state or Deputy minister of civil supplier – vice- chairman

3. Minister of food & civil suppliers

4. 8 member of Parliament, 5 from lok sabha, 3 from Rajya sabha

5. Commissioner for scheduled castes & schedule tribes

6. Representatives of central government departments- <20

7. Representative of consumer organization- >35

8. Representative of women- >10

9. Representative of farmers, trade and industries- <20

10. Capable person of representing consumer intrested- <15

11. Secretary of civil supplier shall be member secretary of central council

Procedure for meetings of the Central Council.−

(1) The Central Council shall meet as and when necessary, but [at least one meeting] of the Council
shall be held every year.

(2) The Central Council shall meet at such time and place as the Chairman may think fit and shall
observe such procedure in regard to the transaction of its business as may be prescribed.

Objects of the Central Council.− The objects of the Central Council shall be to promote and protect
the rights of the consumers such as, −

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(a) The right to be protected against the marketing of goods [and services] which are hazardous to life
and property.

(b) The right to be informed about the quality, quantity, potency, purity, standard and price of goods
[or services, as the case may be] so as to protect the consumer against unfair trade practices.

(c) The right to be assured, wherever possible, access to a variety of goods [and services] at competitive
prices.

(d) The right to be heard and to be assured that consumer's interests will receive due consideration at
appropriate forums;

(e) The right to seek redressal against unfair trade practices [or restrictive trade practices] or
unscrupulous exploitation of consumers; and

(f) The right to consumer education.

The State Consumer Protection Councils.−

(1) The State Government may, by notification, establish with effect from such date as it may specify
in such notification, a Council to be known as the Consumer Protection Council for ....................
(hereinafter referred to as the State Council).

(2) The State Council shall consist of the following members, namely:−

(a) the Minister incharge of consumer affairs in the State Government who shall be its Chairman;

(b) such number of other official or non−official members representing such interests as may be
prescribed by the State Government.

(3) The State Council shall meet as and when necessary but not less than two meetings shall be held
every year.

(4) The State Council shall meet at such time and place as the Chairman may think fit and shall observe
such procedure in regard to the transaction of its business as may be prescribed by the State
Government.

Objects of the State Council.− The objects of every State Council shall be to promote and protect
within the State the rights of the consumers laid down in clauses (a) to (f) of section 6.

 Meetings : the state council shall meet as and when necessary but not less than 2 meetings shall
be held every year.

 Time and place : the state council shall meet at such a time and place as the chairman may
think fit and shall observe such procedure in regard to the transaction of its business (prescribed
by state government)

The District Consumer Protection Council

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The state government shall establish for every district by notification, a council to be known as district
consumer protection with effect from such date as it may specify in such notification .

 It consist of following members namely

1) Collector of the District

2) Other official and Non official members.

It shall meet as and when necessary but not less than 2 meetings shall be held every year.

5.3 CONSUMER DISPUTE REDRESSAL AGENCIES IN INDIA

CONSUMER DISPUTE REDRESSAL AGENCIES IN INDIA: INTRODUCTION

The consumer protection act, 1986 provides for the establishment of the following agencies for the
settlement of consumer disputes:

• A Consumer Disputes Redressal Forum or ‘District Forum’ to be established by the State

Government in each district of the State by notification subject to the provisions that the State
Government may if it deems fit, establish more than one District Forum in a district.

• A Consumer Disputes Redressal Commission or ‘State Commission’ to be established by the

State Government in the State by notification; and

• A National Consumer Disputes Redressal Commission to be established by the Central

Government by notification.

Redressal Forums have been established at three different levels :-

- "District Forum" by State Government. At least one in each district or in certain cases one
District Forum may cover 2 or more districts.

- "State Commission" by State Government.

- "National Commission" (National Consumer Disputes Redressal Commission ) by Central

Government.

The establishment of these forums has provided an alternative remedy to the jurisdiction of the
civil courts.

 District Forum entertains the cases where the value of claim is upto Rs.5 Lakh.

 State Commission entertains the cases where the value of claim is upto Rs.20 Lakh.

 State Commission has power to settle the appeals made against the order of the District Forums.

 State Commission may call for the records and pass appropriate orders in any consumer dispute
which is pending before or has been decided by any District Forum within the State.

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 Being the highest Consumer Forum, the National Commission may entertain all the matters
where the value of claim exceeds Rs.20 lakh. The National Commission also has the appellate
and revisional jurisdiction.

1. DISTRICT FORUM

This shall consist of :

1. a person who is, or has been, or is qualified to be a District judge, its President

2. two other members shall be persons of:

• ability, integrity and standing and

• have adequate knowledge or experience or

• have shown capacity, in dealing with problems relating to

economics, law, commerce, accountancy, industry, public affairs or administration, one of whom
shall be a woman.

JURISDICTION OF THE DISTRICT FORUM

The District Forum shall have jurisdiction to entertain complaints where the value of services and
compensation claimed does not exceed Rupees Five Lakhs.

Manner in which complaint shall be made

A complaint may be filed with a District Forum by –

1. the consumer to whom such service is provided or is agreed to be provided;

2. any recognized consumer association, whether the consumer to whom the service is provided
or is agreed to be provided is a member of such association or not ;

3. one or more consumers, where there are numerous consumers having the same interest, with
the permission of the district forum, on behalf of or for the benefit of all consumers so interested

4. Procedure on receipt of Complaint

5. The District Forum shall on receipt of a complaint -

6. 1. refer a copy of such complaint to the opposite party directing him to give his version of the
case within a period of 30 days or such extended period not exceeding 15 days as may be
granted by the District Forum ;

7. 2. Where the opposite party, on receipt of a copy of the complaint, denies or disputes the
allegations contained in the complaint, or omits or fails to take any action to represent his case
within the time given by the District Forum, the District Forum shall proceed to settle the
consumer dispute,

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8. (i) On the basis of evidence brought to his notice by the complainant and the opposite party,
where the opposite denies or disputes the allegations contained in the complaint ; or

9. (ii) On the basis of evidence brought to its notice by the complainant where the opposite party
omits or fails to take any action to represent his case within the time given by the Forum ;

10. days if it requires analysis or testing of the goods.

(iii) Where the complainant or his authorized agent fails to appear before the District Forum on such
day, the District Forum may in its discretion either dismiss the complaint in default or if a
substantial portion of the evidence of the complainant has already been recorded, decide it on
merits.

Where the opposite party or its authorized agent fails to appear on the day of hearing, the District
Forum may decide the complaint ex-parte.

(iv) Where any party to a complaint to whom time has been granted fails to produce his evidence or
to cause the attendance of his witnesses or to perform any other act necessary to the further
progress of the complaint, for which time has been allowed, the District Forum may
notwithstanding such default :-

(a) If the parties are present, proceed to decide the complaint forthwith ; or

(b) if the parties or any of them is absent, proceed as mentioned above in (b) (iii) ;

(v) The District Forum may, on such terms as it may think fit at any stage, adjourn the hearing of the
complaint but not more than one adjournment shall ordinarily be given and the complaint should be
decided within 90 days from the date of notice received by the opposite party where complaint does
not require analysis or testing of the goods and within 150

Findings of the District Forum

If, after the proceedings, the District Forum is satisfied that any of the allegations contained in the
complaint about the services are proved, it shall issue an order to the opposite party directing him to do
one or more of the following things :

 To return to the complainant the charges paid.

 Pay such amount as may be awarded by it as compensation to the consumer for any loss or
injury suffered by the consumer due to the negligence of the opposite party.

 To remove the deficiency in the services in question.

 To provide for adequate costs to parties.

Appeal against orders of the Dist. Forum

 Any person aggrieved by an order made by the District Forum may appeal against such order
to the State Commission within a period of 30 days from the date of the order.

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 The State Commission may entertain an appeal after 30 days if it is satisfied that there was
sufficient cause for not filing it within that period.

2. STATE COMMISSION

It shall consist of -

1. a person who is or has been a Judge of a High Court , who shall be its President ;

2. two other members ( as for District Forum).

Jurisdiction of the State Commission

The State Commission has jurisdiction to entertain -

1. Complaints where the value of services and compensation claimed exceeds rupees 5 lakhs but
does not exceed rupees 20 lakhs;

2. appeals against the orders of any District Forum within the state ;

3. revision petitions against the District Forum.

Procedure to be followed by State Commission

Same as for District Forum.

Procedure for hearing appeals

The State Commission may, on such terms as it may think fit and at any stage, adjourn the hearing of
appeal, but not more than one adjournment shall ordinarily be given and the appeal should be decided
within 90 days from the first date of hearing.

Appeals against orders of State Commission

Any person aggrieved by an order made by the State Commission may appeal against such order to the
National Commission within a period of 30 days. The National Commission may entertain an appeal
after 30 days if it is satisfied that there was sufficient cause for not filing it within that period

3. NATIONAL COMMISSION

This shall consist of -

1. a person who is or has been a Judge of the Supreme Court, who shall be its President. (No
appointment under this clause shall be made except after consultation with the Chief Justice of
India) .
2. 4 other members ( qualifications : As for District Forum /State Commission ).

Jurisdiction of the National Commission

The National Commission shall have jurisdiction -

(a) To entertain

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(i) Complaints where the value of services and compensation claimed exceeds rupees 20 lakhs

(ii) Appeals against the orders of any State Commission.

(b) To entertain revision petition against the State Commission.

Procedure to be followed by the National Commission

A complaint containing the following particulars shall be presented by the complainant in person or by
his agent to the National Commission or be sent by registered post, addressed to the National
Commission :-

1. The name, description and the address of the complainant;

2. The name, description and address of the opposite party or parties, as the case may be, so far as they
can be ascertained;

3. The facts relating to the complaint and when and where it arose;

4. Documents in support of the allegations contained in the complaint;

5. The relief which the complainant claims.

The remaining procedure and the procedure for hearing the appeal is similar to that for State
Commission.

Appeal against orders of the National Commission

Any person, aggrieved by an order made by the National Commission, may appeal against such order
to the Supreme Court within a period of 30 days from the date of the order. The Supreme Court may
entertain an appeal after 30 days if it is satisfied that there was sufficient cause for not filing it within
that period.

Limitation Period

The District Forum , the State Commission or the National Commission shall not admit a complaint
unless it is filed within 2 years from the date on which the cause of action has arisen. In case there are
sufficient grounds for not filing the complaint within such period, extension may be granted.

Dismissal of frivolous or vexatious complaints

Where a complaint instituted before the District Forum, the State Commission or the National
Commission, as the case may be, is found to be frivolous or vexatious, it shall, for reasons to be
recorded in writing, dismiss the complaint and make an order that the complainant shall pay to the
opposite party such cost, not exceeding 10,000 rupees, as may be specified in the order.

Penalties

Where a person against whom a complaint is made or the complainant fails or omits to comply with
any order made by the District Forum, the State Commission or the National Commission, as the case
may be, such person or complainant shall be punishable with imprisonment for a term which shall not

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be less than one month but which may extend to three years, or with fine which shall not be less than
2,000 rupees but which may extend to 10,000 rupees or with both. In exceptional circumstances the
penalties may be reduced further

 NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

The National Consumer Disputes Redressal Commission (NCDRC), India is a quasi-judicial

commission in India which was set up in 1988 under the Consumer Protection Act, 1986. Its head office
is in New Delhi. The commission is headed by a sitting or retired judge of the Supreme Court of India.
The present head is Justice D K Jain, former judge of the Supreme Court of India.

National Consumer Disputes Redressal Commission

Agency overview

Formed 1988

Jurisdiction India

Headquarters New Delhi

Agency executive Justice D K Jain, President, NCDRC

5.4 Unfair Trade Practices

It means trade practices which a trader, for the purpose of promoting the sale, use or supply of any
goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice.

The unfair trade practice means a trade practice which, adopts any unfair method or deceptive practice.

Unfair trade practice is not only related to goods but also to services rendered.

Example: Collecting service charges during free guarantee period or collecting repair and service
charges but not repairing the goods sold is unfair trade practice and deficiency of service.

 The practices included are:

1) The practice of making any statement,

 Falsely represents that the goods are of particular standard, quality, quantity, grade,
composition, style or model.

 Falsely represents that the services are of particular standard, quality or grade.

 Falsely represents any rebuilt, second hand, renovated, or old goods as new goods.

 Represents that the goods or services have sponsorship, approval, performance, characteristic,
accessories, uses or benefits which such goods or services do not have.

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 Represents that the seller or the supplier has sponsorship or approval or affiliation which such
seller or supplier does not have.

 Make a false or misleading representation concerning the needs for , or the usefulness of, any
goods or services.

 Gives to the public any warranty or guarantee of the performance or length of life of a product
or of any goods that is not based on an adequate or proper test thereof.

 Materially misleading the public concerning the price at which a product or like products or
goods or services, have been or are ordinarily sold or provided.

2) False offer of bargain price [section 2(1)(r)(2)]:

 A price that is stated in any advertisement to be a bargain price by reference to ordinary

price or otherwise

 A price that a person who reads, hears or sees the advertisement would reasonably
understand to be a bargain price having regard to the prices at which like products are
sold.

3) Schemes offering gifts or prizes [section 2(1)(r)(3)]:

 Offering gifts or prizes or other items with the intention of not providing them and
conducting promotional contests.

 Creating an impression that something is being given free of charge when it is fully or
partly covered by the amount charged in the transaction.

 Conducting of any contest, lottery or game of chances etc for the purpose of promoting-
directly or indirectly- the sale, use or supply of any product or any business interest.

4. Withholding any schemes [sec 2(1)(r)(3A)]:

■ Withholding from the participants of any scheme offering gifts, prizes or other items free of
charge, on its closure the information about final result of scheme.

■ The participants of a scheme shall be deemed to have been informed of the final results of the
scheme where such results are within a reasonable time published prominently in the same
newspapers in which the scheme was originally published.

5. Sale or Supply of goods:

■ A trader permits the sale or supply of goods intended to be used or are of a kind likely to be
used by consumers.

■ The prescribed standard may relate to performance, composition, contents, design, packaging
etc. as are necessary to prevent or reduce the risk of injury to the person using the goods.

6) Hoarding, destruction or refusal [sec 2(1)(r)(5)]:

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 Hoarding, destruction or refusal to sell the goods which raises or tends to raise the cost of those
or other similar goods or services shall amount to an unfair trade practice.

7) Manufacturing or sale of spurious goods [section 2(1)(r)(6):

 Spurious goods and services means such goods and services which are claimed to be genuine
but are not so.

 Who is trader?

A trader is a person who ---

 Sells goods or

 Distributes any goods for sale

 Manufacturer of goods for sale

 Packer of goods who sells or distributes goods in package form [Sec. 2 (1) (q)].

 A middleman who brings together the buyer and seller and receives commission for the service
rendered is not a trader.

 Who is manufacturer?

A manufacturer is a person who ---

 Makes or manufactures any goods or parts thereof or

 Assembles parts of the goods made or manufactured by others or

 Puts his own mark on any goods made or manufactured by any other manufacturer.

 Where a manufacturer dispatches any goods or parts thereof to any branch office maintained by
his such branch office is not the manufacturer.

 Branch Office

Branch office means any establishment described as a branch by the opposite party.

Any establishment carrying on either the same or substantially the same activity carried on by the head
office the establishment.

 Restrictive Trade Practice

“A trade practice which tends to bring about manipulation of price, or its conditions of delivery or to
affect flow of supplies in the market relating to goods or services in such a manner as to impose on the
consumers unjustified costs or restrictions”

Consumers Need Protection Against

 Price fixing or output restraint i.e delivery/flow of supplies to impose unjustified

costs/restrictions on consumers.

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 Collusive tendering; market fixing territorially among competing suppliers, depriving

consumers of free choice, fair competition.

 Supplying only to particular distributors or on condition of sale only within a territory.

 Delaying in supplying goods/services leading to rise in price.

 Requiring a consumer to buy/hire any goods or services as a pre-condition for buying/hiring

other goods or services.

5.5 Information Technology Act, 2000

 Introduction:

■ The modern age is the age of computers, new communication system, and digital technology.
Information stored in electronic form has many advantages.

■ International trade through the medium of e-commerce has been growing rapidly in the past few
years and many countries have switched over from traditional paper based commerce to e-
commerce.

Exceptions:

 The Act does not apply to-

a) A negotiable instrument (other than a cheque)

as defined in the Negotiable Instrument Act,1881

b) A trust as defined in the Indian Trusts Act, 1882

c) Any contract for the sale or conveyance of immovable property or any interest in such property;

d) Any such class of documents or transactions as may be notified by the central Government in
the official Gazatte

Digital Signature (Sec.3)

 Authentication of electronic records

Authentication is a process used to confirm the identify of a person or to prove the

integrity of information.

Message authentication involves determining its sources and verifying that it has not
been modified or replaced in transit.

The authentication shall be effected to the use of:

• Asymmetric crypto system

• Electronic record

• Digital signature

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• Hash function

Algorithm that translates one set of bits into another such a way that,

I. A message yields the same results every time executed by same message as input.

II. It is computationally infeasible for a message to be derived results.

III. It is computationally infeasible to find two different message that produce same
algorithm.

IV. verification

Electronic Governance

 Legal recognition of electronic records

(a) Rendered or made available in an electronic form

(b) Accessible so as to be usable for a subsequent reference.

 Legal recognition of digital signatures.

 Use of electronic records and digital signatures in Government and its agencies.

 Retention of electronic records.

 Publication of rule, regulation, etc., in Electronic Gazette.

 Sections 6,7 and 8 not to confer right to insist document should be accepted in electronic form.

 Power to make rules by Central Government in respect of digital signature

a) The type of digital signature;

b) The manner and format in which the digital signature shall be affixed;

c) The manner or procedure which facilitates identification of the person affixing the digital
signature;

d) Control processes and procedures to ensure adequate integrity, security and confidentiality
of electronic records or payments;

e) Any other matter which is necessary to give legal effect to digital signatures

Thank You
“There will be no more sunrises, no minutes, hours or days. All the things you collected, whether treasured or
forgotten, will pass to someone else. Your wealth, fame and temporal power will shrivel to irrelevance. It will not
matter what you owned or what you were owed. Your grudges, resentments, frustrations, and jealousies will finally
disappear. So, too, your hopes, ambitions, plans, and to-do lists will expire. The wins and losses that once seemed so
important will fade away. It won't matter where you came from, or on what side of the tracks you lived, at the end.
It won't matter whether you were beautiful or brilliant. Even your gender and skin color will be irrelevant.”

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