Decided on June 25,1996

STATE Respondents


S.Chakravarthy, Member - (1.) THIS enquiry commenced with a complaint in the Commission addressed by the Assistant Director, Directorate of Revenue Intelligence, Jam Nagar charging the respondent M/s. Television and Components Limited, of having misled the consumers by making false and incorrect claims regarding the quality of its Video Cassette Recorder (VCR). The complaint was got investigated by the Director General of Investigation & Registration (DG) who submitted his Preliminary Investigation Report (PIR). The facts reported by the DG in his PIR are summarised herein below:
(2.) THE respondent is engaged in the manufacture and marketing of VCRs under the brand name "Crown". The Assistant Director, Directorate of Revenue Intelligence, Jam Nagar has complained to the Commission that during the investigations conducted by the Directorate, it had come to notice that the respondent while defending the low price of its imported Tape Deck Mechanism (TDM) had contended that its declared low price was on account of the inferior quality of the TDMs. Contrary to the above contention, while advertising its product, namely VCR, the respondent made "tall claims as to the high quality" of its product. The Assistant Director has added in his complaint letter that the claim of the respondent that the TDMs are of N.E.C. make is also "doubtful" as none of the import documents carry evidence that the TDM imported is of N.E.C. make. Nor do the TDMs bear any N.E.C. markings. The Assistant Director has observed that the claims of the respondent referred to above are false and misleading the consumers. The DG while investigating into the complaint of the Assistant Director has noted that TDM is one of the major components of a Video Cassette Recorder and that the respondent introduced a new model Crown N9063E claiming that it contains TDM of N.E.C. make. The DG has observed that the respondent after having admitted before the Customs Authorities at Kandla that the TDM used in the VCR is of "very inferior quality", has made a tall claim about the quality of its product in its advertisement and also in the owner's operation manual, which is false and misleading attracting the provisions of Section 36(A)(1)(i) of the MRTP Act, 1969. Furthermore, the claim of the respondent that the product in question namely the VCR is backed by N.E.C. technology and technical assistance from N.E.C. of Japan "is not supported by any documentary evidence and thus is false". The Managing Director of the respondent -Company in his statement under Section 108 of the Customs Act has admitted that the TDMs may not have been manufactured by N.E.C. of Japan. Thus the claim of the respondent is false and misleading attracting the provisions of Section 36A(1)(iv) & (v) of the MRTP Act.
(3.) YET another charge made by the DG in his PIR, is that when the respondent has brought down the price of its VCR by Rs. 1,000/ - from Rs. 15,300/ - in 1989 to Rs. 14,300/ - in 1990, its advertisement issued in October, 90 gives a wrong message to the consumers that if they visit the dealer's shop, fill up the order form and make an advance payment, they can save Rs. 1,000/ -. As the reduction or discount of Rs. 1,000/ - is already available to them, the respondent's advertisement is an unfair trade practice in terms of Section 36A(1)(ix) and Section 36A(2) of the Act.;

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