Written by: Lex Protector|March 13, 2015
The recent judgment delivered by the Delhi State Consumer Forum against woodland is an eye opener for entities operating in single brand retail. In a short judgment, the forum reprimanded woodland by imposing a fine of INR One lakh for selling goods of a brand other than its own without giving consumers any intimation about the same. The observation with respect to unfair competition was in addition to the court’s assessment of the situation. As per the facts of the case, the defendant refused to collect goods back from the complainant after they were found faulty, which compelled latter to knock Consumer forum’s doors. However, the whole scenario surfaced only when the customer observed that not only the goods were faulty, they also didn’t belong to the brand woodland, which lead the court to opine that woodland has also resorted to unfair trade practice.
Unfair trade Practices is a wide term that is used to denote numerous activities that run contrary to the fair trade norms and thus effect the consumers in a negative manner. Both the Competition Act 2002 and the Consumer Protection Act 1986 are concerned with consumer interest. The basic difference in both these Acts lies in the kind of protection accorded to the consumer, which can be inferred from the definition of consumer under the two legislation. Definition of consumer under Competition Act is quite wide and includes a person who buys goods and services for commercial use also. But consumer’s definition under consumer protection law is limited to person who buys goods and services only for personal use. But when the relief sought is concrned with the market as a whole, only Competition Commission of India (CCI) has the power to decide. While the CCI aims at both competition and consumer interest, the consumer forum is only concerned with individual consumer interest.
India follows a very strict FDI policy for both single and multi-brand retail. After the recent political fuss about UPA government’s decision to increase FDI limit in muti-brand retail and its vehement opposition by the current government (then in opposition), the desired change seems pretty unlikely for now. Though India has cleared the road for foreign brands by allowing 100% FDI in single brand retail four year ago, it has deliberately created some potholes to ensure that MNCs don’t surpass their Indian counterparts that easily. One of the conditions as per the press note obligates MNCs to sell only single brand goods, which means that they cannot sell any other good even if it is manufactured by them only. The current case is a fine example of the said policy wherein the defendant Woodland was selling its own good under the brand ‘Woods’ without procuring necessary permission from the government, thus subverting the interest of other competitors.
Albeit, the current NDA government has given some indications about easing the norms for foreign entities to do business in India, it is still unclear as to what extent it will divert from its own election manifesto wherein it had accredited its stance on FDI policy to be one of its major reasons behind its poll victory.
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