Automatic weighing machines used by financing companies must comply with the Legal Metrology Act, 2009 regulations regarding transactions involving bullion.

1. This writ petition is filed seeking mandamus to declare the action of the respondents in applying the provisions of Memo No.5309 / T1/2012 dated 16.08.2012, issued by the 1st respondent to the business activity of the petitioner, of using automatic weighing machines by its branches as illegal, arbitrary, unconstitutional and for consequential directions to the respondents not to insist the petitioner and its branches to comply the instructions issued in the aforesaid Memo, while verifying and stamping of automatic weighing machines.

2. Petitioner is a company, which is engaged in finance business. In the affidavit filed in support of the writ petition, it is stated that petitioner is having 555 branches in the State of Andhra Pradesh and its main business is to advance money against security of gold ornaments, as per the norms decided by the Reserve Bank of India. It is the case of the petitioner - company that they arrange gold loans against deposit of gold ornaments, by way of security and such ornaments deposited will be returned to the borrowers at the time of repayment of loans, by charging reasonable rate of interest on such loans.

3. The Controller of Legal Metrology, Hyderabad, issued the impugned Memo dated 16.08.2012, giving instructions to all the Assistant Controllers of Legal Metrology in the State of Andhra Pradesh, by referring to certain complaints against Bullion traders. By the said Memo, instructions were issued to all the Assistant Controllers of Legal Metrology in the State to convene meeting of the Association of Bullion traders and jewellery merchants in their jurisdiction and instruct them to follow the guidelines issued in the impugned Memo. Further, the Assistant Controllers of Legal Metrology were directed to apprise the Bullion traders to use only non - automatic weighing machines which are approved by the Government of India. Further instructions were issued to conduct inspections on Bullion trade and watch the functioning and machines used in Bullion trade and register cases against traders who are deviating such procedure.

4. It is the case of the petitioner that though it is using Government - approved automatic weighing machines in all its branches, respondents are interfering with their business for enforcement of instructions issued in the impugned Memo dated 16.08.2012. It is further the case of the petitioner that as they are not directly engaged in Bullion trade, their business will not attract the definition of "transaction" within the meaning of S.2(u) of the Legal Metrology Act, 2009 (for short 'the Act'). In the affidavit filed in support of the writ petition, it is stated that the weighing machines used by the branches of the petitioner - company are liable for verification under S.10 to 24 of the Act, but, basing on the instructions issued in the impugned Memo dated 16.08.2012, officials of the Legal Metrology Department are refusing to verify the weighing machines used by the branches of the petitioner, on the ground that they are using automatic weighing machines, which are not permitted to be used and they do not have verification interval of 1 mg. or less than 1 mg. It is the case of the petitioner that as the nature of its business does not amount to trading in Bullion and it is only doing money - lending business against security of gold ornaments, the impugned Memo cannot be insisted upon for compliance by it, in its branches.

5. The Deputy Controller (Hqrs.) Legal Metrology has filed counter - affidavit on behalf of the respondents