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B.A. LL.B. (Five Years) Sem 9 Competition Law 2023 Mar Question Paper with Solutions - KSLU

KSLU Solved Question Papers

Competition Law

Previous Year Question Paper with Solution

B.A. LL.B. (Five Years) · Sem 9

2023 Mar Examination

munotes.in

Mumbai

First published on munotes.in on 21 October 2026.

Published by munotes.in, Mumbai.

Model answers written and edited by the munotes.in editorial desk.

Passages from this volume may be quoted, in print, online or by an AI system, with credit: name munotes.in and link to this volume's page. The volume may not be reproduced as a whole. Full terms at munotes.in/content-license.

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The University does not publish an official answer key for this paper. The answers in this volume are model answers, written to show how a full-mark answer is built. They are a study aid, not an authority on what an examiner marked.

The question paper reproduced here is the paper as set by Karnataka State Law University at the 2023 Mar examination.

The Paper as Set

The questions in this volume are the questions asked at the 2023 Mar examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.

Duration 3 hours · Total marks 80 · 20 questions answered

Instructions printed on the paper

N.B. (1) Answer all five Units. (2) One essay type question and short note/problems is compulsory from each Unit. (3) Figures to the right indicate marks. (4) Answer should be written either in English or Kannada completely.

How to use this volume

Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.

Read the original question paper

Q1

Unit I

(a)Explain why trade shall be regulated in the interest of economy and consumer protection.[10]

Answer

For full marks, cover: the starting point (free trade is the rule, yet markets do not police themselves); Part I, the interest of the economy: market power, collusion, entry and innovation, concentration of economic power, the efficient use of resources and investment, with M/s Santuka Associates Pvt. Ltd. v. All India Organization of Chemists and Druggists and MCX Stock Exchange Ltd. v. National Stock Exchange of India Ltd.; Part II, consumer protection: unequal information, unequal bargaining power, safety, choice and price, redress, with the consumer rights in section 2(9) of the Consumer Protection Act, 2019 and Hamdard Dawakhana (Wakf) Lal Kuan v. Union of India; Part III, the limit (regulation must be reasonable: Article 19(6), Narendra Kumar v. Union of India); a table.

The starting point

The Constitution protects the freedom to carry on trade (Article 19(1)(g)) and keeps trade free throughout India (Article 301). Yet a free market does not stay free on its own. Sellers may combine against buyers. A strong firm may shut out weaker ones. A trader may know far more about his goods than the buyer does. Regulation corrects these failures. It protects two interests together: the health of the economy and the welfare of consumers.

Part I: In the interest of the economy

1. Market power must not be abused. A dominant firm can raise prices, cut quality or exclude rivals. Section 4 of the Competition Act, 2002 forbids the abuse of a dominant position, though not dominance itself. In MCX Stock Exchange Ltd. v. National Stock Exchange of India Ltd., decided by the Commission on 25 May 2011, NSE offered currency derivatives trading at zero price. It funded this from its other segments, to bleed a newcomer that had no other business. The Commission called the zero price "annihilating or destructive pricing". It held this an abuse and imposed a penalty of Rs 55.5 crore.

2. Collusion must be stopped. When competitors agree on prices or output, the market stops working. Section 3(3) therefore presumes such agreements harmful. In M/s Santuka Associates Pvt. Ltd. v. All India Organization of Chemists and Druggists, decided on 19 February 2013, a chemists' association controlled most of the medicine trade. No company could appoint a stockist without the association's "No Objection Certificate". It also fixed trade margins and boycotted those who refused. The Commission held this a contravention of section 3(3)(a) and (b). It ordered the association to tell members that they were free to give discounts.

3. Entry and innovation must stay open. New firms bring lower prices and new products. Rules against foreclosure keep the door open for them, as the MCX order showed.

4. Economic power must not concentrate. Article 39(c) directs the State to prevent "the concentration of wealth and means of production to the common detriment". The Act reviews large combinations before they take effect (sections 5, 6, 20 and 31).

5. Resources must be used efficiently. Competition pushes firms to cut costs and invest. That raises productivity and growth, which the Act's preamble links to "economic development of the country".

6. Investors need fair and certain rules. Domestic and foreign investors commit capital only where rivals cannot rig the market against them.

Part II: In the interest of consumer protection

1. Unequal information. The seller knows the product; the buyer often cannot test it. Section 2(9) of the Consumer Protection Act, 2019 gives the consumer "the right to be informed about the quality, quantity, potency, purity, standard and price" of goods. Unfair trade practices (section 2(47)) and misleading advertisements (section 2(28)) are controlled for this reason.

Hamdard Dawakhana (Wakf) Lal Kuan v. Union of India, AIR 1960 SC 554, decided on 18 December 1959, shows such regulation upheld. A 1954 Act banned advertisements commending drugs for listed diseases. The Supreme Court upheld it, because its object was to prevent self-medication. It held that a commercial advertisement of one's own business is not part of free speech under Article 19(1)(a).

2. Unequal bargaining power. A consumer cannot negotiate a standard form contract. The 2019 Act defines an "unfair contract" (section 2(46)). The State and National Commissions may declare its unfair terms "null and void" (sections 49(2) and 59(2)).

3. Safety. Consumers have the right to protection against goods and services "hazardous to life and property" (section 2(9)(i)). Product liability (section 2(34) and Chapter VI) makes makers and sellers answer for harm.

4. Choice and fair prices. Consumers have the right of access to a variety of goods "at competitive prices" (section 2(9)(iii)). Section 18 of the Competition Act makes it the Commission's duty to "protect the interests of consumers".

5. Redress. Consumers need a cheap and quick remedy. The 2019 Act gives them three tiers of Consumer Commissions and a Central Consumer Protection Authority.

Part III: The limit on regulation

Regulation is justified only if it is reasonable. Article 19(6) allows "reasonable restrictions" on trade "in the interests of the general public". Narendra Kumar v. Union of India, AIR 1960 SC 430, decided on 3 December 1959, concerned a control order fixing metal prices and requiring permits. The Supreme Court held that a restriction may even amount to a prohibition. But the greater the restriction, the stronger the justification needed. Over-regulation can itself harm both the economy and the consumer.

Interest	Failure of the market	Response of the law
Economy	Abuse of dominance	Section 4
Economy	Cartels and collusion	Section 3(3)
Economy	Concentration of power	Article 39(c); sections 5, 6, 20, 31
Consumers	Hidden facts and false claims	CPA 2019, sections 2(9), 2(28), 2(47)
Consumers	One-sided contracts	Sections 2(46), 49(2), 59(2)
Consumers	Unsafe goods	Product liability, Chapter VI

Conclusion. Trade must be regulated because markets left alone produce abuse of power, collusion and concentration. MCX and Santuka show both harming the economy. Consumers also need protection against hidden facts, one-sided contracts and unsafe goods, as Hamdard Dawakhana recognised for misleading drug advertisements. The Competition Act and the Consumer Protection Act do this together. Regulation must stay reasonable, as Narendra Kumar holds, so that it supports trade rather than smothers it.

B.A. LL.B. (Five Years) Sem 9 Competition Law 2023 Mar Question Paper with Solutions

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