As per a Government Press Release on o4 October, 2022, the Consumer Affairs Department, Indian Government has amended the Legal Metrology (General) Rules, 2011 for ease of doing Business & reducing the compliance burden for the industries. In this write-up, we will discuss the new amendment under Section 49 of the Legal Metrology Act, 2009.
Purpose of the Legal Metrology Department
- The main objective of the Legal Metrology Department is to govern the Laws set for measurements that have to be precise regarding actual measurements, reference material of instruments, instruments used for measurements, or the measuring framework which is required for characterisation, moderation, acknowledgement, or imitation of a unit of measurement.
- Measurement is applicable for multiple necessities like measuring food being sold in the market, measuring distance, temperature, the volume of fuel consumed for a vehicle or any other machinery, measurement of the commotion of the working environment, etc.
- For example, the unit for the amount for the reference of “Mass” is provided with a specific barrel-shaped structure for measuring a kilogram, which is also accepted as a global principle. The unit of the amount for the reference of “Length” is provided with a specific structure through the progression of measurement squares for addressing required qualities.
Old Guidelines for Nomination of Directors of Company under Section 49 of the Legal Metrology Act, 2009
According to Section 49 of the Legal Metrology Act, a company need to designate a director for its Business. The reasons behind this decision are best discovered by studying the following instances.
- In case the person is nominated as the Director of the Company, and there has been a violation committed by the Company which violates the Rules of the Legal Metrology Act, then being a Director of that Company, the person would be solely responsible and liable for any penalty accordingly. The person will be the one to pay the fines, while the Company’s security will be assured.
- In case the Company does not nominate the Director to handle the legal aspects of the Business’s products or services and the Company is found to have committed an act that directly violates the Legal Metrology Act. The entire Company will be responsible and also the Company will be subjected to a penalty.
Note: The penalty could range from a substantial penalty fee or, depending on the level of the offence, can result in the Company’s liquidation.
New Guidelines for Nominating Directors of the Company under Section 49 of the Legal Metrology Act, 2009
The Centre amends Legal Metrology Rules to enhance the ease of Business and reduce industries’ compliance burden. Section 49 of the Legal Metrology Act now allows the Company to appoint any of its directors as a person responsible and liable for the Business of the Company. Following are the new guideline for nominating Directors of the Company:
- The Consumer Affairs Department, Government of India, has amended the Legal Metrology (General) Rules, 2011, for ease of doing Business & reducing the compliance burden for the companies, as per a press release on 04 October 2022 (Tuesday).
- Section 49 of the Legal Metrology Act, 2009 now allows the companies to appoint any of its directors as a person responsible and liable for the Business of the Company. Earlier, in case of any violations held under the Legal Metrology Act, the prosecutions were initiated against the Director of the Companies even for the violation done by any establishment/branch/unit in any establishment/ branch of the Company.
- There was a request from several companies to allow nominating the person who has the responsibility and authority of the establishment/branch/unit in any establishment/branch & not the Director so that the notices for the violation done by any establishments/branches/units should not be granted to the Directors who are not responsible and liable for the violation of establishment/branch/unit in any establishment or branch.
- The Department of Legal Metrology, for the enhancement of the Ease of Doing Business & to reduce the compliance burden, altered the Legal Metrology (General) Rules, 2011, to provide for the companies to appoint an officer of the establishment/branch/unit in any establishment or branch who has the responsibility and authority for directing, controlling and planning the activities of the respective establishment/ branch/unit in any establishment or branch.
- With this amendment, companies with various establishments/branches/ units in any establishment or branch can now nominate or appoint an official who has the responsibility and authority for the operations and activities of the establishments/branches/different units.
- This will facilitate the Company to appoint a person who is responsible or liable for the activities of a branch or any establishment of the Company in place of the Company’s Director, who is not directly involved in the day-to-day activity of which establishment/branch thereof.
In a nutshell, the new guidelines under Section 49 of the Legal Metrology Act, 2009 are good because the old procedures for Nomination of Direction are very complex, and for all violations, only directors are responsible or liable. However, the new guidelines amend rules to enhance the ease of Business and reduce industries’ compliance burden.
Read our Article:Key Legal Metrology Rules Applicable in India