The review of digitization under the law is also eagerly awaited, and their ignorance of the proposal has left many questions unanswered. The government needs to consider digitizing the entire process as part of the law. In this respect, the future already looks promising. With a recent communication dated October 13, 2020, announcing the development of an online system for appointing directors and submitting an online application, the government is already demonstrating its commitment to improving efficiency and transparency through digitization. With regard to the second axis of the proposal, although directors should not interfere in the day-to-day work of a company, they should face consequences in case of non-compliance, as they receive a share of the profits compared to managers who only receive a salary. Today, with the board`s involvement, the industry is taking this compliance seriously. However, if the burden of prosecution is completely shifted to the manager, the intent of this amendment could really be rejected. While the entire board should not be affected, there must be a mechanism to ensure accountability. The proposals address section 49 of the Act, which requires that a director be appointed as a “person responsible for the management of affairs” and suggest that appointments be made at the executive level instead.
The reason for this is that managers, not directors, are responsible for day-to-day operations. Section 49 of the 2009 Act corrected the error of the 1976 Act by providing for the appointment of a director or partner (as opposed to all in the latter) against whom criminal proceedings could be brought. The proposal aims to go further and absolve directors of their responsibility by putting managers in the crosshairs. Companies may appoint a director responsible for the management of the business of the company or any institution, branch or unit thereof in order to prevent the company from committing a criminal offence under the Legal Metrology Act 2009. This department shall apply for the appointment of the Director by the Company in accordance with subsection (2) of the Legal Metrology Act 2009 from the Controller of Legal Metrology – Head Office – Legal Metrology. This is a G2B service. Applicants must register to request this service. Institutions can apply for this service.
Trade in goods is and has been the basis of any economy. When people exchanged goods, they felt the need for uniformity, which led to the use of coins. As coins became the standardized means of payment, the two concepts of price and quantity crystallized. It was the era of localized markets, limited communication and technology-limited advertising. Traditional methods of measuring volume, such as using pebbles in scales, quickly proved ineffective, as they offered a wide range of commercial abuse and affected customer welfare. The need to standardize units of weight and measurement has therefore been felt throughout history. As the world grew smaller, economies became interconnected, and international organizations such as the International Organizations of Legal Metrology emerged, the government enacted the Weights and Measures Standards Act as early as 1956. To keep up with the latest standards, the government regulated these laws in 1977 and 1985, recognizing the need for flexibility and a dynamic approach to keep pace with rapid changes in the economy. Globalization has brought its own list of challenges, as manufacturers have become smarter and customers have remained naïve lambs. The legal metrology law of 2009 with all its draconian measures to protect the vulnerable party, the customer. However, since the law came into effect, social media platforms have exploded and creating and receiving information has become effortless.
A message is all it takes for bad publicity to infect businesses. The availability of countless substitutes screams that quality compromises can lead to sudden death. This is the era of multinationals and outsourcing. The iron fist of the law, by slandering a single name, can now affect the livelihoods of millions of people around the world. That is why the time for change has returned. The 2009 Law on Legal Metrology, which sets and enforces the standard for weights and measures in the commercial sector, has long been subject to censorship for its harsh punitive measures. More recently, the Ministry of Consumer Affairs published a stakeholder consultation on the proposed decriminalization of the 2009 Legal Metrology Act. It seems that the long-awaited respite that directors who work under duress and try to dodge the noose of “crime” are eagerly waiting for is one more step towards realization. While decriminalization is desirable in some respects, it is not a “one-size-fits-all” mantra of improvement.
Some crimes are of such a nature that they require a more severe form of atonement, namely imprisonment. The sale of goods above the MRP is a flagrant violation of consumer rights and an attack on transparency and clean business processes. It is the coronavirus of daily commercial abuse, i.e. highly transmissible between sectors and commercial structures. Paying puny lakhs would not be taken seriously in crore scams. The government needs to think and develop strategies to introduce the harsh penalties needed to prohibit such practices. The law in its current version includes criminal and civil measures to address grievances in connection with its move. Criminal consequences usually arise in the event of non-aggravation of criminal offences. This has a double impact. First, it raises the standard of proof to prove the crime and thus creates an escape route for perpetrators.
The failure to prove commission “beyond doubt” – particularly with the essential component of mens rea or criminal intent – impedes compliance with the law. This undermines consumer rights at the micro level and the Indian market at the macro level by creating a general mistrust of the authenticity of the goods sold (suspicion of the printed date of manufacture, the date of importation, the claimed weight marketed by, etc.). Interestingly, mens rea is not only too high a standard to establish liability, but it also leads to prosecution in cases where the deference does not necessarily have to be intentional. Second, the Act has a direct impact on the ease of doing business in India, as evidenced by fluctuations in its definition of the meaning of “responsible person(s) of the company”, i.e. the board`s involvement in reducing them to a single appointed director in order to make them criminally liable for most breaches of the Act. Finally, the proposal proposes to add section 36(1)(A) to target the sale of goods beyond MRP.As, but it is only under section 32(3) of the Legal Metrology (Packaged Products) Regulations 2011, as amended in 2013, that the sale is regulated by MRP, which it considers a composite offence punishable by a fine of Rs.