competition & consumer protection act

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COMPETITION ACT -2002

INTRODUCTION

Because of globalization ,India openedup its economy removing controls and

resorting to liberalization. The MRTP

Act 1969 has become obsolete and

there is need for new competition law.


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SALIANT FEATURES OF THE ACT

PROHIBITION OF ANTI COMPETITIVE

AGREEMENTS.

PROHIBITION OF ABUSE OF DOMINANCE. REGULATION OF COMBINATIONS.

ESTABLISHMENT OF COMPITITION

COMMISSION OF INDIA AND FUNCTIONS AND

POWERS OF CCI.


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PROHIBITION OF ANTI COMPETITIVE

AGREEMENTS.

The competition bill deals with those agreements between

enterprises which have an appreciable adverse effect on

competition. This means that all restrictive agreement are not

held to be Anti competitive. The agreements which have

appreciable adverse effect on competition are-

- If it directly or indirectly determines purchase or sale prices

- Limits or controls production ,supply, markets, technical

development, investment or provision of services.

- Shares the market or source of production.

- Directly or indirectly results in collusive bidding.


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PROHIBITION OF ABUSE OF

DOMINANT POSITION The competition bill regulates all agreements, which

could result in abuse of dominance.

The expression dominant position means a position ofstrength enjoyed by an enterprise in the relevant market

and also appreciably affect the relevant marketcompetition and consumers by its actions.

ABUSE would include agreements charging or payingunfair prices , restriction of quantities, markets andtechnical development. It includes discriminatory

behavior, predatory prices and any exercise of marketpower leading to the prevention and restriction ofcompetition.


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REGULATION OF COMBINATIONS

The acquisition of one or more enterprises by one ormore persons or merger amalgamation ofenterprises shall be a combination of such

enterprises and persons. Sec( 6) of the competition Act provides that

combinations that cause or likely to causeappreciable adverse impact on competition with inthe relevant market are void.

Sec6(2) makes it voluntary for the parties to notifythere proposed agreement or combination to thecompetition commission of India.


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Competition commission of India

Definition Sec-7- The commission shall be a bodycorporate by the aforesaid name having perpetualsuccession and a common seal with power to acquire,hold and dispose of property. The place of head office of

the commission shall be decided by the central govt. Composition Sec 8- The commission shall consist of a

chairperson and not less than two and not more than tenother members appointed by central govt.

A person who is qualified to be a judge of a high court or

is having special knowledge of international trade,economics,business,commerce,law, shall be eligible forappointment as a chairperson or as a member.


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DUTIES , POWERS AND FUNCTIONS OF

CCI DUTIES

To eliminate practices having adverse effect on

competition.

Promote and sustain competition.

Protect the interest of the consumer

Ensure freedom of trade carried on by other

participants in market.


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POWERS OF COMMISSION

Section 19 empowers the commission to conduct an inquiryeither on its own or on receipt of complaint from any person,consumer, trade association, central govt, state govt or astatutory authority in relation to an agreement having

appreciable adverse effect on competition, whether anenterprise enjoys the dominant position or whether a marketconstitute a relevant market.

Sec 33 empowers the commission to grant interim relief byway of temporary injunction. In other words during an inquirybefore the commission if it is proved to the satisfaction of the

comm that an act of contravention has been committedcommission can grant a temporary injunction restraining anyparty from carrying on such act until the conclusion of suchinquiry is reached.


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Section 34 empowers the commission to deal withapplications made to it by any applicant for recovery ofcompensation from any enterprise for any loss or damagesuffered by him as a result of any contravention of the

provisions and to award compensation to such applicant. Section 36 confers powers upon the commission to regulate

its own procedures while conducting inquires. Thecommission shall not be bound by the procedure laid down bythe code of civil procedure 1908 but shall be guided by the

principle of natural justice. Every order passed by the commission under the Act shall be

enforced by the commission in the same manner as if it is aorder made by a high court or the principal civil court.


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PENALTIES AND OFFENCES

OFFENCE

Failure to comply withdirections given by thecommission or the

director general. Making false statement or

omission to furnishmaterial information.

Failure to furnish any

particulars ,documents orinformation ,willfullyalters ,suppresses ordestroy any document

PENALTY

Rupees one lakh for eachday during which suchfailure continues.

Rupees fifty lakhs orrupees one crore , as maybe determined by thecommission.

Rupees ten lakhs.


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PENALTIES AND OFFENCES

Where any person

contravenes the order

of the commission or

any condition or anyrestriction subject to

which any approval

sanctioned or failure to

pay the penaltyimposed

Imprisonment for a

term up to one year or

penalty in lakhs.


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IMPORTANT DEFINITIONS

ACQUISITION-It means directly or indirectly acquiring or

agreeing to acquire-

Shares, voting rights or assets of any enterprise

Control over management or control over assets of any

enterprise.

CARTEL-It includes an association of producers,

sellers,distributers ,traders or service producers,who,by

agreements amongst themselves,limit,control or attemptto control the production,distribution,sale or price of

goods and services.


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DEFINITIONS

ENTERPRISE-It means a person or department ofgovt.who or which is, or has been, engaged in anyactivity, relating to the production, storage,supply,distribution or control of articles or goods or theprovision of acquiring, holding, underwriting or dealingwith shares, debentures or other securities of any otherbody corporate, either directly or through one or more ofits units located at same place or different places.

RELEVANT MARKET-It means the market which may be

determined by the commission with reference to therelevant product market.

.


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CONSUMER PROTECTION ACT 1986

OBJECTIVES-

To provide for better protection of the interest

of the consumer and for that purpose, tomake provision for the establishment of

consumer protection councils and other

authorities for the settlement of consumer

dispute and for matters connected therewith.

To provide and protect the rights of consumer.


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OBJECTIVES

These objects are sought to promoted and

protected by the consumer protection

councils to be established at the centre and

state levels.

To provide speedy and redressal to consumer

disputes.


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RIGHTS OF THE CONSUMER

The right to be protected against marketinggoods, which are hazardous to life and property .

The right to be informed about the quality,

quantity, purity, standard and price of goods toprotect the consumer against unfair tradepractices.

The right to be assured, whenever possible accessto variety of goods at competitive prices.

The right to be heard and to be assured thatconsumers interest will receive due considerationat appropriate forums.


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RIGHTS OF THE CONSUMER

The right to seek redressal against unfair trade

practice or exploitation of consumers and

The right to consumer education.


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DEFINITIONS

CONSUMER- Consumer means any of thefollowing persons:

A person who buys any goods for a consideration,

which has been paid or promised or partly paidand partly promised or under any system ofdeferred payment.

A person who hires or avails of any services for a

consideration which has been paid or promisedor partly paid and partly promised, or under anysystem of deferred payment.


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COMPLAINT

Complaint means any allegations in writingare made by a complainant that:

An unfair trade practice has been adopted byany trader or service provider;

The goods bought by him suffer from one ormore defects;

Goods which will be hazardous to life; The trader has charged price in excess for the

goods.


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COMPLAINANT

A complainant means any of the following-

A Consumer

A voluntary consumer association

The central govt. or state govt.

One or more consumers where there are

numerous consumers having the sameinterest


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DEFECT AND DEFICIENCY

DEFECT means any fault , imperfectionor shortcoming in the quality, quantity,purity or standard which is required to

be maintained. DEFICIENCY means any fault ,

imperfection, shortcoming or

inadequacy in the quality, nature andmanner of performance which isrequired to be maintained.


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GOODS AND SERVICES

GOODS means every kind of

movable property other than

actionable claims and money;and includes stock and shares,

growing crops. which are agreed

to be served before sale or underthe contract of sale.


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SERVICE means service of anydescription which is made to

potential users and includes butnot limited to, the provision offacilities in connection withbanking, financing,insurance,transport,processing,supply of electrical or other energyboarding or lodging or both , housi

ng, construction , entertainment,amusement or other information.


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CONSUMER DISPUTE REDRESSAL

AGENCIES

For the purpose of speedy and

simple settlement of consumer

disputes sec 9 of the Act providesfor the establishment of thefollowing three agencies;

District Forums ,State commissionsand National commissions.


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DISTRICT FORUM

This is established by the State Govt. in eachdistrict of state.

Each district Forum shall consist of

District judge nominated by the State Govt. A person of eminence in the field of education

and

A lady social worker

Every member of the District Forum shall holdoffice of a term for 5 years or upto the age of65 years whichever is earlier.


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JURISDICTION OF THE DISTRICT

FORUM Subject to the other provisions of this act,

the district forum shall have jurisdiction toentertain complaints where the value of

the goods or services and thecompensation, if any claimed does notexceed rupees twenty lakhs.

A complaint shall be instituted in a district

forum with in local limits of whosejurisdiction.


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MANNER IN WHICH COMPLAINT

SHALL BE MADE

A complaint in relation to any goodssold or delivered or agreed to besold may be filed with DistrictForum by-

Consumer

Any recognized consumerassociation

The central govt. or state govt.


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Every complaint filed shall beaccompanied with such amount of feeand payable in such manner as may beprescribed.

On receipt of a complaint made,Forum may, by order, allow thecomplaint to be proceeded with or

rejected;

Where a complaint is allowed to be

proceeded with, the district forum mayproceed with the complaint in themanner provided under the Act.


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APPEAL

Any person aggrieved by an

order made by the district forum

may prefer an appeal againstsuch order to the state

commission with in a period of

twenty days from the date of theorder.


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competition & consumer protection act

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