HC stays BIS Act clause on impure gold sale

Madras High Court today stayed the operation of a new clause in the Bureau of Indian Standards Act, according to which jewellers are responsible for purity of hallmarked gold jewellery and that they are liable to pay compensation for impure gold.
Justice B Rajendran granted the stay on a writ petition filed by the Coimbatore Jewellery Manufacturers Association, which challenged the new policy of the BIS, holding jewellery traders and outlets responsible for the purity of hallmarked gold ornaments.
A L Somayaji, senior counsel appearing for the association, said traders could not be held accountable for the purity and quality of the jewellery they sell and the responsibility vested with manufacturers and hallmarking centres to ensure the purity.

On May 1, 2014, BIS came out with the Policy of Licensing of Jewellers and said jewelers were "fully responsible" for the declared fineness of hallmarked jewellery/artefacts sold by them.
Besides asking them to redress complaints of substandard quality of gold, BIS said guilty jewelers must pay compensation to the buyer.
Assailing this clause and blaming manufacturers and hallmarking centres for impure gold jewellery masquerading as pure 916-grade gold, Association's President B Muthuvenkatram said, "Even jewellery having purity content of 78 per cent or 85 per cent are simply hallmarked as 916 in the jewellery and sometimes even 1 gm gold jewellery is also hallmarked as 916. There is no guarantee that all the jewellery which is sent for hallmarking contains same purity."

Instead of reining in the manufacturers who violate BIS rules, the central agency issues warning notice of cancelling the BIS licence given to jewelers in case an impure gold jewellery is found at the trading outlets, the petition said.

"Hallmarking centres are doing unhealthy practice by not adhering to the BIS rules and regulations, and are hallmarking the jewellery for Rs 8 to Rs 10 per piece," it said.
Calling for fool-proof hallmarking procedures to save innocent jewelers and consumers, petitioner said, "Nowadays, a lot of iridium and osmium metals are mixed in jewellery manufacturing. Most of the jewellers are not aware of this, and they are dependent upon only hallmarking centres to help them out. When hallmarking centres do not conduct proper test, there is no safety for the jewelers."

The XRF machines test only one place in the jewellery, and hence iridium and osmium adulteration would go undetected if the metals were not mixed at the particular point in the jewellery which is scanned by the machine, the petition said.
"Jewellers, who are merely traders, cannot be held responsible for any defect or adulteration, especially when jewelleries were given hallmark by BIS-licensed hallmark agents after verifying the quality and weight of the gold," the petition said.