HC relief for khadi association as 14 city outlets to be de-sealed

In a major reprieve for Mumbai Khadi and Village Industries Association, the Bombay high court (HC) ordered de-sealing of 14 of its outlets in the city as well as de-freezing of its bank accounts. The order was passed on November 20.

The action was taken after the Khadi and Village Industries Commission issued a show-cause notice on March 12, 2018, to the association, asking why its khadi certificate should not be suspended or cancelled for the possession of non-khadi textiles.

The notice was issued on the grounds that consumers had complained that the textile sold by the association was not khadi and that one of the suppliers did not have valid registration. On April 18 this year, the director of khadi certification suspended the association’s khadi certificate.

The association then challenged the order before the chairperson of the Khadi and Village Industries Commission, contending that it was passed without taking their reply into consideration and that it did not elaborate the reasons for the suspension.

Under regulation 23(1) of the Khadi Mark Regulation, 2013, suspension of a khadi certificate cannot exceed six months, and therefore, the director of khadi certification, issued a second suspension order on October 24. The Khadi and Village Industries Commission also ordered the freezing of the association’s bank accounts and sealed 14 of its outlets in Mumbai.

HC judge justice Ujjal Bhuyan stayed the October 24 order, stating that there was no additional reason to pass the second suspension order. The judge noted that the order was passed without any notice to the petitioner.

“The sealing of the outlets and freezing of the bank accounts of the petitioner appears to be without jurisdiction and grossly disproportionate,” justice Bhuyan said, and ordered that the bank accounts be de-freezed and the outlets be de-sealed.