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2023 Supreme(Online)(Ker) 60934

IN THE HIGH COURT OF KERALA AT ERNAKULAM
VIJU ABRAHAM, J
KERALA GOLD AND SILVER DEALERS ASSOCIATION, REG.NO.65/99, THRISSUR, KERALA – Appellant
Versus
UNION OF INDIA – Respondent
WP(C) NO. 14688 OF 2021 | WP(C) NO. 16839 OF 2021



Advocates:
For the Appellants/Petitioners: BABU KARUKAPADATH, M.A.VAHEEDA BABU, P.U.VINOD KUMAR, ARYA RAGHUNATH, VAISAKHI V., T.M MUHAMMED MUSHTHAQ MOHAMED HISHAM P
For the Respondents: SRI.SUVIN R.MENON, MANOJ RAMASWAMY

The introduction of Unique Alphanumeric ID for hallmarking gold articles is valid and serves consumer protection without infringing upon the trade rights of the merchants.

Headnote:(A) Bureau of Indian Standards Act, 2016 - Section 3, Section 2(16), Section 14 - Introduction of Unique Alphanumeric ID Code (UAID Code) for hallmarking gold articles - Petitioners argue that it restricts their right to trade and is arbitrary - Respondents maintain that it improves traceability and combats counterfeit hallmarking. (Paras 2-12)

(B) Fundamental Rights - Article 19(1)(g) - Right to carry on trade - Court considers the balance between consumer protection and business freedoms - The introduction of new requirements deemed not an infringement on rights but a measure to ensure purity and authenticity of precious metals. (Paras 12-13)

Facts of the case:
The petitioners, representing associations engaged in gold and silver trade, challenge the mandatory implementation of UAID for hallmarking, citing it as arbitrary and detrimental to their business, particularly affecting small-scale merchants.

Findings of Court:
The introduction of UAID does not fundamentally alter the hallmarking process but adds a layer of identification for consumer protection, without significantly increasing processing time. No compelling evidence was found of delays beyond standard operational timelines.

Issues: Whether the imposition of UAID codes constitutes an unreasonable restriction on the right to trade, and whether the regulatory changes exceed the powers granted by the BIS Act.

Ratio Decidendi: The court affirms the validity of UAID's introduction, stating it serves consumer interests without breaching existing trade rights and falls well within the regulatory framework of the BIS Act. Previous judicial precedents are addressed to reinforce this analysis. (Paras 7-11)

Result: Both writ petitions are disposed of with directions to consider grievances about the implementation timely.

Table of Content
1. introduction of uaid code and its impact on trade rights. (Para 2)
2. petitioners argue about the consequences of uaid on business. (Para 3)
3. court's rationale supporting uaid for consumer protection. (Para 4 , 6 , 12)
4. legality of the regulatory changes under bis act. (Para 7 , 8 , 11)
5. disposal of writ petitions with directions. (Para 13)

JUDGMENT

Since common issues are raised in both these writ petitions, they are heard and disposed of by this common judgment. W.P (C) No.16839 of 2021 is treated as the leading case and the facts in the said writ petition will be adverted to in this judgment.

2. Petitioner is an association of persons engaged in the business of precious metals of Gold and Silver in the State of Kerala. About 5000 merchants doing business of gold and silver in the State of Kerala are members of the 1st petitioner. The 2nd petitioner is the President of 1st petitioner and is engaged in the business of gold/jewellery. Petitioners are aggrieved by the recent amendments made by respondents 1 and 2 in the relevant Specification (IS 1417- 2016) whereby Unique alphanumeric ID Code (UAID Code) was insisted for every gold article as it unreasonably restricts the right to trade/business and the same is illegal and manifestly arbitrary. The 2nd respondent - the Bureau of Indian Standards (BIS) is established under Section 3 of the Bureau of Indian Standards Act 2016 (hereinafter referred to as “the BIS Act”) inter alia for the purpose of standardizing and ensuring quality assurance of goods, processes, systems and services and also for ensuring the purity of precious metals. The Act provides for the hallmarking of precious metal articles in terms with Section 2 (16). The BIS Act mandates for establishment of Assaying and Hallmarking Centers as defined under (2) of the Act in terms of Section 14 (5) for the purpose of testing the precious metal articles and applying the mark under the Act to deal with hallmarked products. In exercise of the powers conferred by 9 read with Sections 13 and 14 of the Act, the 2nd respondent, with the previous approval of the 1st respondent notified the Bureau of Indian Standards (Hallmarking) Regulations, 2018 (hereinafter referred to as “BIS Hallmarking Regulations”). As per notification dated 14.06.2018, gold jewellery and gold artefacts and silver jewellery and artefacts were notified as precious metal articles that are to be marked with hallmark for the purposes of (1) of the Act. It is submitted that though notification was issued, the same was not made compulsory. Despite this many members of the 1st petitioner accepted the Hallmarking. However, as per Ext.P3 order, the selling of precious metal articles of gold marked with hallmark through certified sales outlets was made compulsory. Later by Ext.P5 order, the hallmarking order 2020 was made applicable only to just 256 (out of 742) districts in the country due to lack of hallmarking facilities in the country. The 2nd respondent has earlier issued Ext.P6 wherein it is specified that the hallmarking articles shall carry four markings, i.e., 1. BIS Standard Mark, 2. Purity in Carat and fineness. 3. Assay Centers Identification Mark and Number. 4. Jeweller’s Identification Mark. But Ext.P6 was amended as per Ext.P7 whereby a “Unique Alpha Numeric ID” (UAID) was made mandatory for each gold article and the same was intimated as per Ext.P8. Petitioners submit that making the Unique Alpha Numeric ID mandatory is manifestly arbitrary and is an unreasonable restriction to the fundamental right to carry business to the petitioners. It is further submitted that Clause 6.1(a)(3) of Ext.P7 is manifestly arbitrary and is an unreasonable restriction to the fundamental right to carry business to the petitioners. Unique identity presupposes uniqueness of the identified material all throughout. If a particular subject could be validly alerted/modified/customized then assigning a unique identity would be counterproductive. So

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