Unfair trade practice in plantation scheme found where insurance cover and land availability were misleading to investors.

The teak plantation scheme was found to be an unfair trade practice because the brochure and related assurances were materially misleading about investor protection and the scale of the land available. The Commission noted that the insurance covered only input costs and did not safeguard investors against plantation risks such as pests and drought, and that the land secured for the scheme was only about two acres, which was inadequate for the represented plantation and buffer stock arrangement. By projecting a remunerative venture while concealing these limitations, the respondent misled prospective investors. The scheme was therefore treated as an unfair trade practice under the Monopolies and Restrictive Trade Practices Act, 1969, and a cease-and-desist direction followed.

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Issues: Whether the respondent's teak plantation scheme, particularly the assurances on insurance protection and the adequacy of land held for plantation, amounted to an unfair trade practice by misleading prospective investors.

Analysis: The Commission examined whether the brochure and related representations were false or materially misleading in the light of the actual safeguards offered to investors. It found that the proposed insurance was confined only to input costs and did not provide meaningful protection against long-term plantation risks such as pests and drought. It also found that the land obtained for the scheme was only a sparse leasehold of about two acres, which was inadequate for the claimed plantation scale and for any buffer stock arrangement. In these circumstances, the Commission held that the scheme projected itself as a remunerative venture while concealing material risks and limitations, thereby misleading investors.

Conclusion: The scheme constituted an unfair trade practice under section 36A(1)(ii), (iv) and (viii) of the Monopolies and Restrictive Trade Practices Act, 1969, and the respondent was directed to cease and desist from continuing the practice.

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