NCDRC for compulsory hallmarking of gold

As gold prices are soaring in the domestic and international markets, the courts are taking up the vital issue of hallmarking in the country, to address quality issues.

The National Consumer Disputes Redressal Commission (NCDRC) has asked the central government to issue directions/notifications to jewellers to emboss their identification mark, which should indicate the fineness of an ornament till hallmarking is made compulsory.

On a complaint filed by Madhya Pradesh-based Akhil Bhartiya Upbhokta Congress seeking direction on declaring purity of precious metal (gold) ornaments, a division bench comprising Justice M B Shah and Rajyalakshmi Rao, observed that the object of the Consumer Protection Act (CPA), 1986 was apparently frustrated.

"There may be difficulties with regard to hallmarking. But, there cannot be any difficulty in issuing directions or notifications, for the time being, till the hallmarking is made compulsory...", the bench observed.

The complainant contended that consumers had right to be informed about the quality, quantity and price of goods and that consumers were being exploited in the absence of clear trade direction with regard to purity.

The Reserve Bank of India (RBI), in its reply, had stated that it had made a comprehensive set of recommendations for an integrated national gold policy.

The RBI Standing Committee on Gold and Precious Metals had identified Bureau of Indian Standards to standardise the quality certification of goods and operate hallmarking scheme for gold jewellery.

Besides, a committee was also set up under the chairmanship of secretary (ministry of consumer affairs) to examine the ways and means of securing consumer interest in the marketing of gold products, it had said.

BIS contends that its limited scope of functioning prevents its from emerging as a strong enforcement agency.

BIS neither has powers to formulate regulations not carry out search and seizure operations, investigations or arrests.

Case in point: the 1,700 standards that BIS established in hallmarking of jewellery, are optional, which means weather comply to the norms set is entirely at the discretion of the jewellers, as a result consumers are at the mercy of the traders, a majority of whom sell goods that do not conform to standards of purity declared in the bill/cash memos.