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TMI Blog2024 (11) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... bration Laboratories ('Opposite Party'/ 'OP'/ 'NABL'). 2. The Informant is a registered non-profit organization with the aim to serve as a common platform for laboratories, which are operating in private as well as public sector. OP is an accreditation body, with its accreditation system established in accordance with ISO/IEC 17011. It is a constituent of Quality Council of India ('QCI') and stated to have been established with the objective of providing accreditation of Conformity Assessment Bodies ('CAB'), which involves third-party assessment of the technical competence of testing including medical and calibration laboratories, proficiency testing providers and reference material producers. OP is further stated to be a self- financing b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e policy of impartiality of NABL i.e., to act impartially and avoid any conflict of interest that may compromise its ability to make impartial decisions. It has been stated that the said circular is discriminatory, favors big players and violates the rights of small entrepreneurs. As per the Information, most of the CABs are micro and small enterprises in India as it is easier to establish these labs under sole proprietorship, which provide ease of doing business. It has been stated that migrating these labs under any of the prescribed form/structure, as mentioned in the circular referred above, will pose many challenges and it may not be economically viable for the small and medium entrepreneurs to survive. It has been stated that transiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if similar name is not available for registration, the goodwill of a lab will be lost. 6. As per the Informant, around 50% of testing and calibration labs are MSMEs having small setup and Ministry of Corporate Affairs requires various complex compliances on regular basis, which are not feasible to maintain for a small entrepreneur and will lead to closure of several CAB businesses perpetually. It has been stated that it is not viable for a small player to change its constitution and survive in the business and that NABL, in imposing such a discriminatory condition, has ignored the interest of small players. 7. While placing reliance on Prem Prakash Vs. Chairman, Quality Council of India (Case No. 25 of 2020), the Informant has stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 33 of the Act by way of: (i) direction to NABL to withhold their instructions asking CABs to convert from Sole proprietorship to any other form of entity under the Companies Act, 2013 till the proceedings are pending before the Commission; and (ii) direction to NABL to make a detailed study on the impact of their directions on the small and medium entrepreneur on changing the entity and registering it under the Companies Act, 2013. 12. The Commission considered the matter in its ordinary meeting held on 13.03.2024 and decided to pass an appropriate order in due course. 13. The Commission has perused the Information as well as material available in public domain. The primary grievance of the Informant appears to be emanating from a cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ructure of a laboratory/CAB. While dealing with other allegations in the present case, the Commission had opined that accreditation of a CAB has an underlying trust element as regards the working of a CAB. On its website, in response to an FAQ, NABL has linked the enterprise form to the functioning of the CABs. Thus, as stated therein, the business entities that are not separate from their owners are required to review their business models and convert to such a model that the liability of the legal entity is not linked with that of the person running the business. In that context, a One Person Company (OPC) or any other form of legal structures, as mentioned in the Circular dated 22.03.2023, seem to have been suggested as a business model ..... X X X X Extracts X X X X X X X X Extracts X X X X
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