Nomination of a Director under S. 49 of the Act.

Who will be liable for any offense committed by a company

Section 49(1)
1. (a) The person who has been nominated by the company, or
(b) Where no person has been nominated, every person in charge and responsible to the company for conduct of its business, and
2. the company.

Company

Company means any corporate body and includes a firm or other association of individuals.

 

Director

Director means a partner in the firm but excludes nominated, honorary or Government nominated directors.

i am one of the directors, nominated to face any music for violation of legal metrology rules by the company. It will spare other directors from any trouble, though not the company.

Nominating of a director

Section 49(2)

  • A company may authorize any of its Directors to exercise any power to prevent commission of an offense by the Company.
  • A notice communicating such authorization should be sent to the Director as well as Controller of Legal Metrology of the concerned State.
  • The written consent of the authorized Director should be enclosed with the notice.
  • Different persons may be nominated for different branches, establishments or units.

 

Validity of Nomination

Section 49(3)

The nomination shall remain valid, until

  • A cancellation notice has been sent by the Company.
  • An intimation has been sent that the nominated person ceases to be a director of the company.
  • The nominated director requests the Director and controller for cancellation of his nomination under intimation to the company.
The nomination will be cancelled from the date of request.

How and where to send nomination papers

Rule 29 of the LM (General) Rules, 2011

Every company shall inform the Director or the concerned Controller or his authorized officer, by a notice in duplicate, in the format specified in Thirteenth Schedule. It should contain the name and address of the Director, who has been nominated by it to be in-charge of and responsible to the company for the conduct of the business of the company or any establishment, branch or unit thereof.

This provision is in sharp contrast to Section 49(2) of the Act, the word used being "may" there instead of "shall" here. Obviously, the provision of the Act will prevail.

Download Thirteenth Schedule (Nomination Format)

Address of the Director and Controllers of Legal Metrology.

Liability of the company itself

Section 49 (1), (5) and (7)

The company itself is always liable for violation of any offence, irrespective of whether a director has been nominated for the purpose or not.

When an offense has been committed by a company and the offense has not been compounded and the company is prosecuted before a Court of Law, the Court may order publication in a newspaper - name and place of the company, nature of the contravention, the fact that the company has been convicted and other details. The expense of such publication will be realized from the company as fine.

 

Liability of other officers of the company

Section 49(4)

Where an offense is committed by a company, and it is found that the offense has been committed with the consent or connivance of any official or due to his negligence, he may be held liable even if he is not the nominated director.

When an offence is compounded, the compounding fee is multiplied by the number of persons mentioned in the notice by the Authority.