FabIndia under fire from KVIC for 'Khadi' mark violations

The Khadi and Village Industries Commission has come down strongly on FabIndia for selling its readymade cotton garments as Khadi products without getting proper approvals, and threatened legal action if the organisation did not stop the practice immediately.

In a strongly worded legal notice to FabIndia Chief Executive Officer Viney Singh, KVIC's director (legal affairs), noted that the organisation was continuing to sell its garments in the name and style of Khadi despite earlier warnings by KVIC and assurances by FabIndia that it will not continue do so.

"It is an illegal act and, in other words, amounts to indulging in unfair trade practice," the notice said.

As per Khadi Mark Regulations, 2003, notified by the Union ministry of micro, small and medium enterprises, no textile shall be sold or otherwise traded by any person or certified Khadi institution as 'Khadi' or 'Khadi products' in any form or manner without it bearing a 'Khadi Mark' tag or label issued by a committee under the regulation.

The regulation, among other things, enforces certain obligations on every person or certified Khadi institutions engaged in the business of sale of products as Khadi or Khadi products.

The legal notice has pointed out that KVIC had drawn the attention of FabIndia to this aspect in August 2015 itself, when the company had issued some advertisements for selling/ trading of fabric in the name of Khadi and in a letter dated August 13, 2015, asked it to stop further advertisement and sale.

FabIndia had agreed to do so and vide letter dated October 16, 2015, informed KVIC:

"As per direction issued by your office, we have stopped advertisement campaign in all media. We have also sent internal directions to stop selling the cloth with reference to Khadi."

Consequently, KVIC held discussions with representatives of FabIndia on the details of the procedural requirements for issuing Khadi mark certificate. But, as FabIndia did not adhere to the procedural formalities/requirements of Khadi Mark certificate, KVIC denied the certificate and this was conveyed to FabIndia in a letter dated September 29, 2016.

However, despite written assurances, FabIndia is selling readymade garments at its outlets under the name of 'Khadi' and have also put up prominent Khadi display panels at their sales outlets.

The legal notice noted that a close scrutiny of garments sold by FabIndia and their price tag showed that while the labels stitched on the garments mentioned them as 'FabIndia Cotton', however the price tag, which were removable, had the word 'Khadi' and pointed out that this proved that FabIndia was misleading the consumers.

The notice has asked FabIndia to explain its position within 15 days from the date of receipt of the notice and said failing that KVIC will be constrained to proceed against it, as per Law, for the violation of Khadi Mark Regulations.

KVIC chairman, V K Saxena, said the corporation was very keen to protect its reputation and would take stringent measures against those who violated rules and regulations that have been framed for the benefit of rural artisans attached to it.