2013 (12) TMI 51 - AT - Companies Law

Unfair trade practice - false or misleading representation for the need or for the usefulness of the goods or services Goods of Particular standard u/s 36A(i) of MRTP Act manufacture and sale of kitchen chimneys - The main complaint appears to be on the terminology of Lifetime Warranty Chimneys and the seal bearing the words Lifetime Faber Warranty - Held that - There was no falsehood is proved in any manner during the enquiry - Question is about the warranty to be misleading on account of its silence. We do not think that any purchaser, who goes to the shop to purchase the domestic chimneys, will not enquire about the life of the chimney. That life is clearly indicated in owners manual. We refuse to believe the claim that the owners manual would be kept a secret till such time the sale is complete. If such a practice is adopted, that may amount to a separate unfair trade practice but that is also not a complaint that any customer has gone to a shop, demanded to see a manual and was refused by any shopkeeper or by the respondent company in any manner. This was certainly not a complaint which could have been referred to the Director General - the DG has wasted its energy in investigating such frivolous matters and thereby spending public money - Such complaints obviously should have been thrown out at the initial stage - Even on the question of investigation, the DG has remained very causal in not leading any evidence relating to any information or relevant facts Decided against Revenue.

Summary

Issues:
Allegations of unfair trade practice based on misleading advertisement regarding "Lifetime Warranty Chimneys" and failure to disclose product information.

Analysis:
The complaint alleged that the respondent engaged in unfair trade practices under various sections of the MRTP Act by misleadingly promoting "Lifetime Warranty Chimneys." The complaint contended that the respondent's advertisement created a false impression that the chimneys would last a lifetime, up to 100 years or more, without disclosing the actual warranty period. Additionally, it was claimed that the respondent concealed information about chimney quality and performance, potentially leading consumers to make uninformed decisions. The complaint further criticized the respondent for not clarifying the term "Lifetime Warranty" and for not providing necessary information about the product.

The Director General (DG) conducted an investigation and concluded that the respondent's actions constituted unfair trade practices under specific sections of the MRTP Act. The DG highlighted the omission of crucial information in the advertisement, such as the actual lifespan of the chimneys, as a form of misrepresentation. The DG argued that the respondent's failure to disclose relevant details in the pamphlets amounted to misleading advertising, influencing consumer decisions based on incomplete information.

In response, the respondent's counsel contended that the pamphlets were not advertisements in the traditional sense, as they were only available in shops upon customer request. The respondent maintained that the owner's manual, which clarified the term "Lifetime Warranty," was accessible to customers post-purchase. The respondent's defense centered on the availability of detailed product information through the manual, suggesting that customers could make informed choices after reviewing it.

The Tribunal deliberated on the evidence and arguments presented. It concluded that the complaint lacked merit and did not warrant any action. The Tribunal rejected the DG's findings, emphasizing that the complaint did not establish any false representation or misleading practices by the respondent. The Tribunal noted the absence of evidence showing that customers were deprived of access to the owner's manual before purchasing the chimneys, undermining the DG's assertions of misrepresentation.

Ultimately, the Tribunal dismissed the case, deeming it unfit for further action. It criticized the DG for initiating an investigation into what it deemed a frivolous complaint, highlighting the lack of substantial evidence to support the allegations of unfair trade practices. The Tribunal also questioned the DG's investigative approach, noting the absence of oral evidence or concrete proof to substantiate the claims made in the complaint. Consequently, the Tribunal discharged the Notice of Enquiry, effectively closing the matter without any adverse findings against the respondent.