Khadi commission seeks Rs 525 crore compensation from Fabindia | india news | Hindustan Times
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Khadi commission seeks Rs 525 crore compensation from Fabindia

The KVIC has alleged that Fabindia was misleading consumers by selling “factory made” cotton garments spun in mechanised charkhas (spinning wheels) as khadi.

india Updated: Feb 05, 2018 22:47 IST
Moushumi Das Gupta
A Fabindia store in Goa. Fabindia described the notice as ‘baseless’ and denied any wrongdoing.
A Fabindia store in Goa. Fabindia described the notice as ‘baseless’ and denied any wrongdoing.(PTI File Photo)

The Khadi and Village Industries Commission (KVIC) has issued a fresh legal notice seeking damages of Rs 525 crore from the ethnic wear retail chain Fabindia over its allegedly unauthorised use of the registered trademark “khadi”.

The KVIC, an autonomous body under the Union ministry of micro, small and medium enterprises, which promotes the traditional homespun cotton identified with Mahatma Gandhi, issued the notice on January 29 through legal consultants Kochhar & Company, according to documents seen by Hindustan Times.

The KVIC has alleged that Fabindia Overseas Private Limited was using the word “khadi” on its price tags, and misleading consumers by selling “factory made” cotton garments spun in mechanised charkhas (spinning wheels) as khadi. The agency says that khadi can only be spun and woven in a hand-driven spinning wheel called Ambar charkha.

Fabindia described the notice as “baseless” and denied any wrongdoing.

Under the government’s Khadi Mark Regulations, 2013, no organisation/institute/company can sell products using the word “khadi” without getting a Khadi Mark certificate. This certificate is obtained by applying online at the KVIC site after paying a registration fee of Rs 10,000. It takes 40 days to grant the certificate, which is valid for a year.

Fabindia has been given seven days from the date of receipt of the notice to comply with KVIC’s demand, failing which legal proceedings will be initiated against the ethnic wear brand founded by American businessman John L Bissell in 1960.

The KVIC and Fabindia have been locked in a battle over the issue since 2015, when the body issued a notice to the retail chain for the first time on the grounds that it had not applied for a certificate. It sent two more notices in the two subsequent years.

“Your continued violation and unauthorised/illegal use has caused and continues to cause irreparable loss/harm and damage to our client’s khadi trademark and its goodwill and reputation… In these circumstances, you have rendered yourselves liable to institution of both civil and criminal proceedings, without prejudice to any other rights that our client (KVIC) may have in law or in equity,” the notice states.

The KVIC chairman Vinai Kumar Saxena declined to comment.

The body has demanded that Fabindia immediately surrender its entire stock bearing the “khadi” or “charkha” marks, including unused cartons, brochures, pamphlets, price lists, circulars and advertisements. It has also asked Fabinidia to hand over its inventory and profit-and-loss accounts for the last three years for inspection.

“We are in receipt of the notice from lawyers instructed by KVIC, and are surprised at its contents. We have made it clear to KVIC through extensive correspondence and in multiple meetings over the last two years that Fabindia is not in violation of any of the provisions of the KVIC Act or regulations framed thereunder. The claims made in the notice are baseless. The notice has been entrusted to our lawyers and any action taken in pursuance of the notice will be defended by us vigorously,” said a Fabindia spokesperson.

According to the notice, Fabindia officials met the KVIC chairman last year and assured him that they would comply with Khadi Mark Regulations.

A fashion industry insider said that as long as a designer is procuring the handloom from a credible source it should not matter if a weaver is spinning it in a mechanised or hand-woven spinning wheel. “As a consumer your only concern should be that you are getting a credible product,” said Sunil Sethi, president, Fashion Design Council of India, an independent association of fashion designers.

“Having said that, I do feel that you have to have a regulatory body to ensure that spurious material is not passed as khadi. If KVIC has set up norms, everybody including Fabindia should meet the requirement,” he added.