Misleading profit assurances and deposit retention can amount to unfair trade practice and justify compensation with interest.

Misleading representations that assured profits, risk-free dealings and capital repayment, when used to induce public deposits and left unfulfilled, were treated as an unfair trade practice under the Monopolies and Restrictive Trade Practices Act, 1969. The Commission found that the assurances were not honoured and were designed to attract investors, making the practice prejudicial to the public interest and investors. On compensation, it noted that the principal deposit had been returned and one amount was non-refundable, but the respondents had wrongfully retained the deposit for over two years. Compensation, interest at 18 per cent until recovery, and costs were therefore awarded under section 12B.

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Issues: (i) whether the respondents' representations regarding assured profits, risk-free dealings, and refund arrangements amounted to an unfair trade practice; (ii) whether the applicant was entitled to compensation, interest, and costs under section 12B.

Issue (i): whether the respondents' representations regarding assured profits, risk-free dealings, and refund arrangements amounted to an unfair trade practice.

Analysis: The respondents issued circulars and letters holding out that investors would receive profits on payout dates, that losses would be borne by the respondents, and that the capital could be encashed on the stipulated date. The applicant's uncontroverted affidavit and supporting correspondence showed that the promised services were not rendered and the representations were not honoured. Such misleading assurances were held to be designed to induce deposits from the public.

Conclusion: The representations constituted an unfair trade practice falling within section 36A(1)(vi) of the Monopolies and Restrictive Trade Practices Act, 1969, and were prejudicial to the public interest and the interest of investors.

Issue (ii): whether the applicant was entitled to compensation, interest, and costs under section 12B.

Analysis: The principal deposit of Rs. 10,000 had already been returned, and the separate amount of Rs. 1,200 was admitted to be non-refundable under the agreement. However, the respondents had retained the sum of Rs. 10,000 for more than two years without justification. The Commission treated this unauthorised retention as warranting compensation by way of interest, and also awarded costs.

Conclusion: The applicant was held entitled to compensation of Rs. 3,900, interest at 18 per cent until recovery of the decretal amount, and costs of Rs. 1,000 under section 12B of the Monopolies and Restrictive Trade Practices Act, 1969.

Final Conclusion: The application succeeded in part, with a finding of unfair trade practice and an award of monetary compensation, interest, and costs in favour of the applicant.

Ratio Decidendi: Misleading representations made to induce deposits, when unfulfilled and shown to be intended to lure investors, constitute an unfair trade practice and may justify compensatory relief for wrongful retention of money under section 12B.

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