In a swift and stern action taken by the management of Khadi & Village Industries Commission (KVIC), 11 out of 13 outlets of Mumbai Khadi & Village Industries Association (MKVIA) were sealed for indulging in unfair trade practice.
Mumbai Khadi association is one of the oldest directly aided Khadi institutions associated with KVIC. The revelations began to surface when, during the year 2017-18, as part of a regular physical verification of Khadi Bhawans of the association, the KVIC officials took several samples of the fabric. On testing of the samples, the samples were proved to be non-Khadi. The KVIC, taking serious note of this malpractice, issued a show-cause notice to the Mumbai Khadi association and warned against stern action. A complaint was also filed by a consumer against the same store, for selling non-Khadi products in the name of Khadi.
The KVIC management took this matter very seriously and in June 2019, revoked the Khadi Mark and Khadi Certificate given to the association, after giving due opportunity to the Mumbai Khadi Association to explain their conduct. However, it was found that despite suspension of Khadi Mark and Certificate the Mumbai Khadi Association continued to sell products with Khadi Mark and labels. Besides the fraudulent practices, it was also found that Mumbai Khadi Association has not paid more than Rs. 2 Crore to KVIC towards the loan given by the KVIC to the association for Khadi activity.
KVIC, by invoking the powers conferred under the provisions of Hypothecation Deed and also the KVIC Loan Rules, 1958, also froze all bank accounts of the association and sealed all 13 outlets operated by it on 11th November, 2019. A senior official of KVIC said “Such malpractices within KVIC system shall not be tolerated. This is a strong message for all the institutions engaged in any form of malpractice. Any irregularities in the system if found would be severely penalized”.