Bombay High Court restrains Centre from coercive action against jewellers not following ‘compulsory hallmarking’ till June 29, refuses to stay decision

The High Court said it is not inclined to stay the effect and operation of the January 15 order.

In an interim relief to jewellers in India, the Bombay High Court recently directed the central government not to take coercive action or impose penalty against any jeweller till June 29, for non-compliance of its order that mandated compulsory hallmarking and prohibited selling and stamping of higher purity (above 22 carat) gold ornaments. The order, dated January 15, was to come into effect from June 1.

The High Court said it is not inclined to stay the effect and operation of the January 15 order. The court also directed the Centre to take steps to set up hallmarking centres across 22 out of 26 districts in Maharashtra, which do not have such centres as of now.

According to the notification, jewellers can sell only hallmarked jewellery and artifacts made of 14, 18 and 22 carat gold from June 2021, and violations will attract penalty and imprisonment of one year. Gold hallmarking is a purity certification and voluntary at present.

Jewellers had a year’s time to register with Bureau of Indian Standards (BIS) and implement mandatory hallmarking of gold jewellery to ensure the purity of the precious metal. The deadline, however, was extended to June 2021 in view of the Covid-19 pandemic.

On May 21, a vacation bench of Justice S J Kathawalla and Justice S P Tavade heard a plea filed by Pune Saraf Association, through senior advocate Anil V Anturkar and advocate Shubham H Misar. The bench reserved its order on the same day, which it pronounced on May 27.

The bench was informed that Ministry of Consumer Affairs, Food and Public Distribution had rejected the representation by the jeweller’s body from Pune and urgent relief was being sought by petitioners seeking a stay on the decision owing to “complete lack of infrastructure” to implement it.

The bench noted, “Whilst we appreciate hallmarking is essential for consumer protection and to prevent unfair trade practices, adequate and necessary infrastructure need to first be put in place prior to imposing such strict consequences on petitioners… Considering the purpose for which the impugned order has been issued, we are not inclined to stay its effect and operation.”

The bench noted that during the pandemic, “it would be inequitable for certain jewellers to travel outside their district” to get ornaments hallmarked. “Owing to the ongoing pandemic, coupled with the admitted lack of infrastructure of hallmark centres, we deem it fit to restrain the respondents (authorities) from taking coercive action against the petitioners,” the HC held.

Requesting jewellers to ensure maximum hallmarking at operational centres, the HC posted further hearing to June 29.

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