Director Nomination under Legal Metrology Act
Every company in India requires to nominate one director to act as the compliance officer to comply with the Act and the Rules made thereunder. If no director is nominated, then the whole board of directors, manager, company secretary and all other officers of the company available at the time when the offence was committed will be held liable. Section 49(2) of the Act talks about such nomination of the director.
If such nomination is not done, then the company's entire officers, directors, etc., present at the time when the offence was committed, are punished accordingly.
Section 49 of the Legal Metrology Act
Section 49 states the director's nomination condition and reason under the Legal Metrology Act. According to this Section, when the company commits an offence, the person who is nominated by the company or if there is no nomination, every person in charge and responsible for the conduct of the company and the company are made accused/guilty for such offence and thereafter are liable as per the provisions of the Act.
Thus, every company needs to understand the regulations and obligations of the company clearly and mutually agree on the point of who will be held responsible in such a case, i.e., when the company will commit the offence.
The nomination of such a director continues until he ceases to be the director in the company or any cancellation notice is received from the company, or he himself requests to cancel such nomination.
In the case of nomination, when the company gets convicted and the penalty is imposed on it, then such penalty is published as an advertisement in newspapers at the company's expense under the direction of the court.
Reasons for Director nomination under Legal Metrology
The reasons for director nomination under Legal Metrology are looked upon in the following cases:
- Case 1:
If a director is appointed in a company and any offence is committed by the company that falls under the Legal Metrology Act, then such director is solely held responsible, and he has to deal with the penalty on his own. The company is not held responsible in such a case, and it remains safe.
- Case 2:
If any director in the company is not nominated in case of the commission of an offence falling under the Legal Metrology Act, then the entire company is held responsible, and the entire company faces the penalty.
The penalty charged here can be anything depending upon the degree of the offence.
This applies to companies and to firms or any association of individuals. And the director here also means partners.
The procedure for director nomination under Legal Metrology
The procedure of nomination of a director under the Legal Metrology is given under the Section 49(2) of the Act, which is as follows:
- Consent: The company or firm obtains the consent of the director or partner, as the case may be, who is going to be nominated under the legal metrology. Written consent of such a director is a must.
- Nomination: The company or firm nominates such director as a partner, as the case may be.
- Written Order: The company or firm passes a written order in regard to such nomination.
- Inform department: The company or firm then informs the director or the controller of the Legal Metrology Department regarding such nomination.
If a company or firm has multiple branches, then each branch has to nominate its own director under section 49 of legal metrology laws.
Cancellation of director nomination under Legal Metrology
The nomination of the director is called off under the following circumstances:
- When the legal metrology receives any notice from the directors of the company, the concerned controller or any authorised officer of the company.
- When the nominated director ceases to be the director of the company.
- When the nominated director files a request for cancellation of nomination to the department of legal metrology, the request is always required in written form.
The nomination of such a director is deemed to be cancelled from the date of request.
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Frequently Asked Questions
The nomination of the director is required to avoid the situation where the entire officers and directors of a company are held liable in case of an offence committed by the company.
Section 49(7) of the Act deals with the nomination of a director or partner of any kind of body corporate (including a firm or other association of individual) other than a company.
No, the company cannot nominate any person or director per se under section 49 as it requires written consent from such a director to be nominated.
A person cannot be held liable under section 49 of the Legal Metrology Act if he proves that the commission of the offence was without his knowledge and that he has exercised all the due diligence to prevent the offence.
The cancellation of the nomination of the director takes effect from the date when the request is made for such cancellation.
Rule 29 of Legal Metrology (General) Rules, 2011 deals with the nomination of a director in a company.
Every company informs the director, concerned controller or the authorised officer under rule 29 of Legal Metrology Rules by notice as per the format provided in the thirteenth schedule of the said Rules.
The notice contains the name and address of the nominated director of the company, establishment, unit or branch.
