TRADE AND COMMERCE UNDER THE INDIAN CONSTITUTION
By ASHOK PRIYADARSHI .
The Indian Constitution guarantees freedom of Trade and Commerce or carrying on any occupation vide Articles 19 (1) (g) read along with Article 19 (6) and Articles 301 to 306 to Indian citizen as fundamental rights, with certain restrictions. . The restrictions are to be imposed a) in the interest of general public b) in the form of professional or technical qualification or under any law regarding carrying on of any trade or business by the state. It is thus specific that the courts can only interfere, where the
restriction has been imposed and even set aside, if it is proved to be illegal and uncalled for. The Supreme Court holds that there is no general test of reasonableness of restriction (State of Madras vs. V.G. Row AIR 1952 SC 196) it may also include prohibition (Naresh Kr. Vs. Union Of India 1960 SC 430) but a caution has to be taken that the test of reasonableness is satisfied, when the restriction reaches the stage of prohibition. It has even made clear in Dwarka Prasad vs. State of U.P. AIR 1954 SC 224 fixing of maximum price by the state along with a requirement from licence in engagement in trade (State Of Rrajasthan vs. Nathmal AIR 1954 SC 307 and a permit for transport of essential commodities by rail or transport ( Hari Shankar Bagla vs. State Of M.P. AIR 1954 SC 465) is not a unreasonable restriction. The creation of monopoly in trade amounts to denial of right to carry trade and cannot be taken as a reasonable restriction (Rashid Ahmed vs. Municipal Board AIR 1950 SC 163 until and unless it is from the point of view of social control. The legislature thus has enacted the Monopolies and
Restrictive Trade Practices Act, 1969 and by virtue of the said law the Government of India has banned and restricted all provisions and methods adopted by traders to create monopoly in the market. It also deals with the obstruction in the flow of the capital and the resources used for production. In TELCO vs. Registrar Restrictive Trade Agreement (1977) 2 SCC 55 the apex court holds that the definition restrictive trade practices is exhaustive. Three points are to be considered to determine the question of restrictive trade a) what facts are peculiar to the business to which the restraint is applied. b) What was the condition before and after the restraint was imposed. c) What is the nature of the nature of the restraint and what is its actual and probable effect. In Mahendra & Mahendra Ltd. vs. Union of India (1979) 2 SCC 529 the Supreme Court holds that the proportion where the clause is theoretically capable of being so utilized as to unjustifiably restricted competition is not acceptable as it will constitute a restrictive trade practices. But in Gujarat Bottling Co. Ltd. Vs. Coca Cola Co. (1995) 5 SCC 545 it holds that a stipulation cannot be regarded as in restraint of trade under section 2(i) of the Monopolies And Restrictive Trade Practices Act,1969 when the operation of stipulation is confined only during subsistence of an agreement and not after termination thereof . The impression drawn is that the right guaranteed under Article 19 (1) (g) of the Constitution of India cannot be lost by a waiver. But this will not give a free hand in trade like betting and gambling, medicines and intoxicants business in the streets or at any time The Constitution will further not give a right to an individual to carry on trade with the government or an individual and compel them to enter to trade with him, as the government and the said individual has a similar right to trade according to its own choice. Trade and Merchandise Marks Act, 1958 deals with the registration and better protection of trades and for the prevention of the use of fraudulent marks on merchandise. The Supreme Court holds that if there is an allegation that a trade mark is creating a confusion it has to be tested as a whole and compared with the register and then only an action be taken, if the said trade mark is likely to cause confusion or create a doubt in the mind of the accustomed user. The trade mark can be in a form of a word, name, letter, number, signature etc. used by a company for its product and can be registered to prevents its fraudulent use and it gives the implied warranty on sale of marked goods as it is distinguishable to an extent that it has been manufactured by a particular company. It helps the traders in advertising their product or carrying on any occupation but it cannot allow the traders to cheat its consumers . The Consumer Protection Act of 1986 i provides for compensation to effected citizens. It covers all types of trade including insurance, banking, sale, supply etc. A limitation of two years has been fixed in filing of complainants. .The Consumer District Forums and the State Commissions on a complainant of deficiency of service settles the disputes and also awards interest in accordance to the current rate payable on different classes of deposits other than those maintained in the savings account in accordance with direction of the Reserve Bank of India as under the Bank Regulation Act 1949.