A simmering two and a half year old battle between Fabindia and the Khadi Village Industries Commission (KVIC) boiled over as the latter sent a legal notice to the John Bissell-founded Fabindia, seeking Rs 525 crore as damages for misuing the khadi trademark.At the heart of the dispute, as alleged by KVIC in its legal notice, is the continued use of the khadi trademark on Fabindia products, despite a cease and desist notice issued last year. Fabindia, of course, has denied any wrongdoing on its part, while acknowledging receipt of the legal notice.
Khadi products in India constitute a Rs 2,000 crore industry for KVIC, which is looking at a turnover of Rs 5,000 crore in 2018-19.KVIC in fact is the sole authority to grant permission for the use of khadi trademark, subject to meeting some stringent norms - prime among them being that only cloth woven on handlooms in India from cotton, silk or woollen yarn, or from a mixture of any two or all of such yarns, handspun in India, may be classified as khadi.
Furthermore, KVIC has set a limit on turnover of a cooperative society, firm, partnership or company desirous of obtaining the Khadi trademark - which is no more than Rs 50 crore.Fabindia's revenue in the last financial year stood at Rs 1,200 crore - 24 times more than the upper limit set by KVIC.
KVIC guidelines for granting the khadi trademark also state that there need to be a minimum of 25 charkhas, operated by 25 spinners, along with five looms, operated by five weavers, in a common workshed or building.Any expansion of existing unit also needs to be in multiples of 25 charkhas and 5 looms, to be manned by new spinners and weavers.Alongwith that, there also need to be a minimum of two supervisors to start khadi production. It is not known whether Fabindia fulfills these criteria.