Authored by Mr. Vikrant Ahlawat, Legal Associate [Litigation & Compliance] of Mirza & Associates, Advocates & Attorneys
INTRODUCTION
The procedure for the nomination of a Director for Legal Metrology refers to the appointment of one of the company’s directors to ensure compliance with the provisions of the Legal Metrology Act, 2009, and its associated rules. These statutes encompass various aspects related to the functioning of companies, with one of the key requirements being the Nomination of a Director for compliance with Legal Metrology
Under the Legal Metrology Act, the nominated director assumes responsibility for ensuring the company’s adherence to the Act, including the correct use of weights and measures, accurate declarations on packaged goods, and compliance with regulatory updates. While the failure to nominate a director is not in itself an offence, it may result in the entire Board of Directors being held vicariously liable for any violation under the Act.
STATUTORY PROVISIONS FOR THE NOMINATION OF A DIRECTOR
The Legal Metrology Act, 2009 does not explicitly mandate a company to nominate a director; rather, it is merely an enabling statute. However, in the event of non-appointment or failure to nominate a director under the Act, the company is not absolved of liability. On the contrary, the liability may extend to the entire management, including those overseeing the company’s operations and business at that time.
Section 49(2) of the Legal Metrology Act, 2009 enables a company to appoint or nominate one of its directors as the Legal Metrology Director. It states that a company may authorize any of its directors in writing to exercise the necessary powers and responsibilities to prevent the commission of any offence under the Act. Additionally, a notice of nomination, along with the director’s written consent, must be submitted to the Director, Controller, or any authorized Legal Metrology Officer in the prescribed manner. Furthermore, the provision also states that in the case of a company with multiple establishments or branches, different officers may be nominated for the respective establishments, branches, or units.
Rule 29 of the Legal Metrology (General) Rules, 2011 outlines the procedure for notifying the Director, Controller, or any authorized Legal Metrology Officer. The notification must be made by way of a notice, in the format specified in the Thirteenth Schedule, containing details such as the name and address of the nominated director, along with his written consent to be responsible for the conduct of the business of the company or such establishment.
ELIGIBILITY AND RESPONSIBILITIES OF THE NOMINATED DIRECTOR
A company may nominate any of its directors or other officers for different establishments or branches under the Legal Metrology Act, regardless of the size or nature of its business. The nominated director shall be responsible for ensuring that the company complies with all regulatory provisions under the Act and its rules. Key responsibilities include:
Ensure the correct declarations on pre-packaged commodities, including their weight, volume, MRP, manufacturing date, expiry date, address of the company and customer care information.
Ensuring the use of verified and stamped weighing and measuring instruments in the company.
Ensuring periodic compliance with the amendments and new notifications issued under this Act.
STEP-BY-STEP PROCEDURE FOR NOMINATION OF DIRECTOR
The step-by-step procedure for the nomination of a director under the Legal Metrology Act is as follows:
• Company Decision: The company identifies a suitable director from the Board of Directors to be nominated as the Legal Metrology Director of the company.
• Written Consent: The company must obtain the written consent of the nominated director, confirming their willingness to accept the role and accountability for the company’s activities falling under the purview of the Legal Metrology Act.
• Company Resolution: The company passes a resolution in its board meeting appointing the nominated director. This resolution must be signed by both the company and the nominated director.
• Notification and Submission for the Certificate: The company notifies the Director of Legal Metrology or the Controller of such appointment by filling out the form specified in the Thirteenth Schedule of the Legal Metrology (General) Rules, 2011. The submission must include a certified copy of the board resolution and be made through the designated online portal of the Ministry of Consumer Affairs.
• Acknowledgment and Confirmation: After due scrutiny and verification by the Legal Metrology Authority, a certificate will be issued, acknowledging the appointment of the nominated director under the Legal Metrology Act.
LEGAL IMPLICATIONS OF NON-NOMINATION OR INVALID NOMINATION
The failure of a company to nominate a director under the Legal Metrology Act, 2009 is not an offence, nor does it create any direct liability for the company. However, such an omission can lead to serious legal and procedural consequences in the event of non-compliance or the commission of an offence under the Act.
According to Section 49 of the Act, when an offence is committed by a company, liability extends to both the company and the individuals responsible for the conduct of its business at the time of the offence. The primary objective of nominating a director is to shield the entire Board of Directors and senior management from vicarious liability in the event of a regulatory breach, while simultaneously creating a clear sense of accountability within the corporate structure.
Indian courts have also upheld the strict enforcement of Section 49, emphasizing that a company may claim the benefit of limited liability only when the statutory nomination process has been properly followed and documented. The Hon’ble High Court, in the case of Venkataswamy Sreenivasa Reddy v. State of Kerala, stated that since the Managing Director is responsible for the conduct of the company’s business and its day-to-day affairs, he may also be held liable for offences under the Act.
RECENT LEGAL AND ADMINISTRATIVE DEVELOPMENTS
As per a circular issued by the Department of Consumer Affairs, Legal Metrology Division, the process for obtaining a certificate for the nomination of a director has been fully digitized as of 13.10.2020. Companies may now apply through the official online portal of the Ministry/Department of Consumer Affairs to obtain the nomination certificate.
Furthermore, the Legal Metrology (General) Amendment Rules, 2022, amended Section 49 of the Act to empower a company to nominate any of its directors as a Legal Metrology Director. The amendment also allows the company to authorize an officer responsible for planning, directing, and controlling the activities of an establishment, branch, or unit to be nominated under subsection (2) of Section 49 for such respective entities.
Additionally, the phrase “name and designation of the officer nominated under Rule 29” has been substituted with the word “Director” in the format prescribed under the Thirteenth Schedule.
JUDICIAL REASONING ON SIGNIFICANT ASPECTS
TVS Motor Company Limited vs. State of Maharashtra:
This case addressed whether the applicants could be held vicariously liable for the alleged offence solely based on their position as members of the Board of Directors, despite the absence of specific allegations against them. The Hon’ble Court held that a person can only be held liable if it is demonstrated that, at the time of the offence, they were in charge of and responsible for the conduct of the company’s business. Directors cannot be made accused merely on the ground that a specific person or director was not nominated under subsection (2) of Section 49 of the Legal Metrology Act, 2009.
Mr. Rohit Gothi v. State:
This case examined whether both the company and the nominated person could be held vicariously liable if the company commits an offence under the Act. The Hon’ble Court held that when a company commits an offence, both the nominated person and the company are liable to be prosecuted. However, the vicarious liability of the nominated person—being in charge of and responsible for the conduct of the company’s business—arises only when the company itself is also made an accused.
CONCLUSION
In conclusion, the nomination of a director under the Legal Metrology Act, 2009 is an enabling provision that empowers a company to nominate any of its directors or officers to assume responsibility for ensuring compliance with the Act. Although the statute does not impose a mandatory obligation to nominate a director, failure to make a valid nomination can expose the entire Board of Directors to liability in cases of non-compliance.
Recent administrative reforms—extending the scope of eligible nominated persons and introducing an online nomination process—demonstrate a clear regulatory intent to strengthen compliance and establish accountability. Furthermore, judicial rulings have emphasized the need for companies to comply with the nomination requirements to limit the Board’s exposure to liability and ensure a designated individual is accountable for any breach of the Act.