Relief for directors of retail firms as govt amends Legal Metrology rules

In a major relief to board members of retail companies and manufacturers of packaged goods, the government has amended the Legal Metrology (General) Rules, 2011, removing the mandatory clause of holding its nominated directors accountable for any violation under the rules. The government has pointed out that the changes are being made as part of the ease of doing business.

The move will facilitate retailers to nominate a store manager or a person responsible for the activities of a retail store in place of the director of the company, who is not directly involved in the day-to-day activity of retail stores.

The rules include directives on packaged products, including labelling, weights and measures, details of manufacturers, proper representation of the maximum retail price, date of manufacturing, etc.

Earlier in the case of violations under the Legal Metrology Act, prosecution was initiated against directors of companies for any violation done by any establishment, branch or unit in any establishment or branch of the company.

Under the amended rules, companies with different establishments or branches or different units can now nominate a person vested with the authority and responsibility for the operations and activities of the establishments or branches thereof, so that notices for violations by an establishment are not issued to the directors.

A notification of amendment to this effect was issued by the Ministry of Consumer Affairs on Thursday.  

“If there is any wrongdoing under the Act and the labelling is not right, the notice of violation will now not go to a director but to a nominated official, which for a retail outlet could be the store manager,” said a senior executive of a retail company.

Said an elated Kumar Rajagopalan, chief executive officer, Retailers Association of India: “The amendment strikes a balance between consumer interest being protected and affixing responsibility in case of violation. Nominating any company officer in place of the director is in line with modern business needs, as the director is not involved in day-to-day activity.”  

This has been a long-standing requirement from retailers across the country. They pointed out that directors cannot be held responsible for any wrongdoing on weights or on product labelling, more so when factories/retail outlets are in far-flung areas.

Playing by the rules

• Amendments made by Department of Consumer Affairs allow retailers to nominate an officer with the responsibility for planning, directing, and controlling activities of an establishment instead of prosecuting directors of the company in case of violation
• Earlier in case of violations under the Legal Metrology Act, prosecution was initiated against directors of the companies for any violation done by any establishment or branch or unit in any establishment or branch of the company