Notification on Nomination of Directors- Section 49(2) of Legal Metrology Act, 2009

Notification on Nomination of Directors- Section 49(2) of Legal Metrology Act, 2009

Notification on Nomination of Directors- Section 49(2) of Legal Metrology Act, 2009

As per the notification from the Ministry of Consumer Affairs, Food and Public Distribution, vide dated 4th October 2022 (G.S.R.763.E)

Any company having different branches/establishments/ units in different cities or places may nominate an authorized person who has the authority and responsibility for taking care (planning, directing, and controlling) of all the activities of that particular establishment or branch, or unit under section 49(2) of the Legal Metrology Act, 2009. The person nominated shall from now onwards be responsible for the conduct of the business of that particular establishment, branch, or unit.

Previously, the onus of responsibility was solely on the director of the company who may or may not be the responsible person for a particular establishment, branch, or unit along with the company.

In this case, the liability shall shift to the authorized person nominated for the establishment, branch, or unit along with the Company.

A copy of the notification is attached here for your ready reference.

Let’s understand it with an example-

PRE-AMENDMENT SCENARIO

Company A with 3 Directors having 4 different manufacturing units/ plants. As per the current scenario and considering section 49(2), 1 Director who has been nominated shall remain responsible for all the activities/ non-compliances as per the Legal Metrology Act, 2009.

In this scenario, the above nominated Director and Company shall be receiving the penalty notices/challans from LM Department for any non-compliance in regard to law/declarations/compliances for all 4 different manufacturing units.

POST- AMENDMENT SCENARIO

Now, as per the amendment dated 4th October’22, a Company can also nominate an authorized person unit/plant-wise. In the above example, now Company A can appoint and nominate 4 different authorized persons for their different manufacturing plants/ units as per sec 49(2). 

After the amendment and nomination of different authorized persons (plant-wise), Director shall not be responsible for any non-compliance in regard to law/declarations/compliances for all 4 different manufacturing units. 

The benefit of this amendment is that the Director shall be free from receiving the penalty notices/challans from the LM Department for any non-compliance in regard to laws/declarations/compliances for different manufacturing units rather than the Person in charge (nominated person) who has the authority and responsibility for taking care like planning, directing, and controlling of all the activities of that particular establishment or branch, or unit and the Company shall be held responsible for all non-compliances in the eyes of the Legal Metrology (LM) Department.

This is a big relief to the Nominated Directors who are relieved from the burden of facing the penalty notices even in situations when they may or may not be the responsible person for a particular establishment, branch, or unit. It is advisable to change and appoint the nominated person plant/unit-wise.

In case of any queries in regard to Legal Metrology Act please feel free to connect with professionals at ASC Group.  

 

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