H&M got penalty notice because cardigan didn’t mention size in metres. 5 yrs on, HC quashed complaint

HC observes items did not fall into category of ‘pre-packaged commodity’ to which the rules apply & are 'sold as loose articles and the customers are free to try or inspect the same'.

File photo of an H&M store in Delhi | ANI

New Delhi: In January 2016, retail giant Hennes & Mauritz (H&M) was served with a penalty notice in India for allegedly violating the rules of the land. The reason? During an inspection at an H&M store in Delhi’s Saket, one of its cardigans was found to not have its size converted into metres. Delhi’s Legal Metrology Department thought this to be a violation of the law and rules that enforce standards of weights and measures in the country, and regulate trade and commerce for any goods sold or distributed in India through weight, measure or numbers.

It took five years for the Delhi High Court to step in and quash the complaint against H&M. Here is what happened.

According to the Delhi HC order of 24 July, H&M was issued a notice in January 2016 alleging violation of provisions of the Legal Metrology (Packaged Commodities) Rules, 2011. This was after an inspection was carried out at the H&M store at Delhi’s Select Citywalk Mall in Saket, by an inspector of the Legal Metrology Department.

The inspector noted that the size of a cardigan at the store was not converted into metres. His report, therefore, alleged that H&M had committed an offence under Rule 13(3)(b) (statement of units of weight, measure or number) of the Legal Metrology (Packaged Commodities) Rules, 2011, which states that “when expressing a quantity of equal to or more than one metre, the unit of length shall be the metre and any fraction of a metre shall be expressed in terms of decimal of sub-multiples of the metre or in terms of centimetre”.

The department’s notice asked H&M to pay a penalty of Rs. 2,000 under Section 32 (penalty for failure to get model approved) of the Legal Metrology Act, 2009.

In response, the HC order noted, H&M made a representation to the secretary, Consumer Affairs, in February 2016, asserting that the 2011 rules don’t apply to the products sold by it, because they are not “pre-packaged commodities” and the rules apply only to such products.

However, in May 2016, a complaint was filed against H&M by the Legal Metrology Department of the Delhi government, and summons were issued to H&M the same month. H&M then filed a petition in the high court on 6 July 2018, demanding quashing of the proceedings as well as summons issued to it. The court stayed the proceedings in the case in July 2018.

Setting aside the complaint as well as the summons in the order passed on 24 July, Justice Amit Bansal has now asserted that the summoning order was issued in a “mechanical manner without examining the relevant provisions of law in relation to the complaint”.

“The impugned summoning order fails to appreciate that the goods of the petitioner company are sold as loose articles and the customers are free to try or inspect the same. Thus, they would not fall within the ambit of the 2011 Rules and no proceedings can be initiated thereunder,” the court observed.

‘In the interest of justice’

According to a 2018 high court order, the complaint filed by the Legal Metrology Department alleged offences under Sections 15(2) (power of inspection, seizure etc), 31 (penalty for non-production of documents), 24(1) (verification and stamping of weight or measure), 33 (penalty for use of unverified weight or measure), 22 (approval of model) and 23 (prohibition on manufacture, repair or sale of weight or measure without licence) of the 2009 Act. According to the 9 July, 2018, order the complaint claimed that the label of the H&M product which was on display for sale specified the width of the product as “122 cm” and not as “1.22m”, as required by Rule 13 of the 2011 rules.

Senior advocate N. Hariharan appearing for H&M cited an advisory issued in March 2017 by the Ministry of Consumer Affairs, Legal Metrology Division, according to which loose garments which are sold would not constitute a “pre-packaged commodity” in terms of the Legal Metrology Act 2009.

In its 24 July order, the court began with the definition of ‘pre-packaged commodity’ under the 2009 Act. The definition says that “pre-packaged commodity means a commodity which without the purchaser being present is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a predetermined quantity”.

The court then asserted that “a reading of the Rules would also make it evident that the aforesaid Rules are only applicable in respect of ‘pre-packaged commodities’,”.

It further pointed out that the reply filed on behalf of the respondent Legal Metrology Department of the Delhi government also admitted that the mandatory labelling requirement for “pre-packaged commodities” is not applicable to garments sold in loose form.

“It cannot be disputed that the goods of the petitioner company are sold in a loose form and would therefore not fall into the category of the ‘pre-packaged commodity’,” the court then observed, quashing the complaint against H&M.

It opined that the continuation of the proceedings “would be an abuse of the process of law and the complaint deserves to be quashed in the interest of justice”.

(Edited by Poulomi Banerjee)