There is a particular kind of silence that falls over a boardroom when a court summons is passed around the table and one of the directors realises it carries their own name.
The charge is rarely dramatic. Somewhere in India, on a shelf in a store the director has never visited, a Legal Metrology inspector picked up a packet of the company’s product and found that a line was missing from its label. Perhaps the customer care number. Perhaps the manufacturer’s address. The director did not design the packaging, did not approve the print run and, quite possibly, could not say which factory packed it. And yet, there it is a criminal complaint, with their name on it.
For anyone who sits on the board of a company that makes, imports or sells packaged goods in India, this is not a far-fetched scenario. The provision that makes it possible is Section 49 of the Legal Metrology Act, 2009. It runs to only a few sub-sections, and most directors have never read it. They probably should, because it answers a question with very personal consequences as when a company breaks the rules on weights, measures and packaging, who actually has to stand in court?
One short section, one big question
A company cannot be sent to jail. So the law has to decide which human beings answer alongside it, and Section 49 of the Legal Metrology Act 2009, does that in a way that rewards companies that plan ahead.
The starting point is sub-section (2). It allows a company to authorise one of its directors, in writing, to take whatever steps are needed to stop the company from breaking the Act. The company then tells the Director of Legal Metrology or the State Controller, in the prescribed form, that this director has been nominated as the “person responsible”, and it files the director’s written consent along with the notice. If the company has several establishments, branches or units, it can nominate different people for each of them, so that the person answering for a plant in Baddi is not also answering for a warehouse in Hosur.
Once a valid nomination is in place, sub-section (1) makes the company and that nominated person liable for any offence the company commits. Everyone else on the board is, in principle, out of the frame.
If the company has not nominated anyone, the picture changes sharply. The same sub-section then reaches every person who, when the offence took place, was in charge of and responsible to the company for the conduct of its business. It is this fallback rule that has, over the years, encouraged inspectors to list entire boards in their complaints.
Two safety valves sit inside the section. The first is a defence, anyone charged escapes punishment if they can prove the offence happened without their knowledge and that they took all due diligence to prevent it. The second runs the other way. Sub-section (4) says that regardless of any nomination, a director, manager, secretary or other officer whose consent, connivance or neglect actually caused the offence can be prosecuted too. A nomination protects the board; it does not shelter someone who was genuinely at fault.
The nomination itself is not permanent. It ends when the company withdraws it, when the nominee leaves the board, or when the nominee asks in writing to be released, although such a request cannot be backdated. And if the worst happens and the company is convicted, sub-sections (5) to (7) let the court order the company’s name, address and the nature of its offence to be published in the newspapers at its own expense. For a consumer brand, that kind of headline can sting far more than the fine.
A familiar template with a twist
None of this will feel entirely new to anyone who has dealt with a cheque bounce case. Indian law is full of “offences by companies” clauses, and the best known of them, Section 141 of the Negotiable Instruments Act, 1881, works on much the same idea as when a company commits an offence, the people in charge of its business can be held answerable for it, subject to a defence of lack of knowledge and due diligence. It is no accident that the leading Supreme Court decisions courts rely on in legal metrology cases were actually decided under Section 141.
What makes Section 49 different is the nomination. Most of its cousins leave the question of “who was in charge” to be fought out in court after a complaint has been filed. Section 49 lets a company answer that question in advance, on paper, and have it recorded with the regulator. That is a genuinely useful tool, and it explains why so much of the litigation in this area turns not on the quality of a label but on whether a nomination existed, whether it was valid, and whether the complaint respected it.
It also explains why the provision is sometimes misunderstood. Some boards treat the nomination as a mere formality, a form to be filed and forgotten. Others assume that, once it is filed, no one else in the company can ever be touched. Neither view is quite right, as the courts have shown.
The courts push back
If Section 49 sounds tidy on paper, the reported cases show how messy it has been in practice. They also show the High Courts steadily drawing lines around it.
Take the case of Maruti Suzuki. The company had twelve directors, but it had done what the Act invites, it nominated one of them, Mr. Kazuhiko Ayabe, under Section 49(2), and the Director of Legal Metrology had certified the nomination. When an alleged contravention came up, the authorities nonetheless demanded compounding fees from all twelve. The Bombay High Court, in Maruti Suzuki India Ltd. v. State of Maharashtra, decided on 5 February 2015, would have none of it. With a valid nomination in place, only the company and the nominated director could be proceeded against. The Court also pointed out that compounding under Section 48 and liability under Section 49 are separate provisions that should not be run together.
Eight years later, the Karnataka High Court was confronted with a strikingly similar situation. An inspector visiting a Samsung distributor in Bengaluru alleged that the MRP on a Galaxy Tab had been printed in the wrong format and that a wholesale carton had described its contents as “20” without the unit symbol “N”. The complaint named every director of Samsung India. In Samsung India Electronics Pvt. Ltd. v. State of Karnataka, 2023 SCC OnLine Kar 29, decided on 31 May 2023, Justice Sachin Shankar Magadum found that neither allegation was legally sound. But he went further because Samsung had nominated a person under Section 49, a complaint against the whole board simply could not stand. The Court called the complaint frivolous and vexatious.
Those two cases tell us what a nomination is worth. The more interesting question is what happens when a company has not made one. Does every director then become fair game?
The Raymond case suggests not. It began in Nagpur, at a Reliance Trends store, where an inspector found a cardboard package of Raymond fabric missing the declarations the rules require, such as the name of the commodity and the manufacturer’s details. Raymond had not nominated anyone. The complaint named the company, its Chairman and Managing Director, Mr. Gautam Singhania, and the rest of the board, and in May 2014 the magistrate issued process against them all. Nine years later, in Gautam Hari Singhania v. State of Maharashtra, 2023 SCC OnLine Bom 1254, decided on 8 June 2023, Justice G.A. Sanap of the Bombay High Court’s Nagpur Bench quashed the case against him. The complaint had done little more than describe him, vaguely, as an owner, partner or director. It attributed no role to him at all. Section 49, the Court said, sets out a complete mechanism for fixing vicarious liability, and a magistrate must form a prima facie view of what each accused actually did before issuing process. Here, process had been issued mechanically. Eight other Raymond directors had already obtained similar relief from another bench.
The Bombay High Court was not inventing new law. It was applying principles the Supreme Court had laid down years earlier in other statutes with similar “offences by companies” clauses. In S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89, the Court held that a complaint must specifically state that the director was in charge of, and responsible for, the conduct of the company’s business when the offence took place; holding the title of director is not enough. And in Aneeta Hada v. Godfather Travels & Tours Pvt. Ltd., (2012) 5 SCC 661, a three-judge bench held that directors cannot be prosecuted vicariously unless the company itself is also made an accused. Both principles fit naturally into Section 49, which makes directors liable only because, and only when, the company has committed the offence.
Read together, these judgments reveal something slightly uncomfortable. Many legal metrology prosecutions against directors did not fail because the labels were perfect. They failed because the wrong people were named, or the right people were named in the wrong way.
Spare a thought for the independent director
If anyone has reason to feel aggrieved by the old way of doing things, it is the independent or non-executive director. These are people who attend a handful of board meetings a year, bring outside judgment to strategy and governance, and have no hand whatever in deciding what goes on a carton. Yet when complaints were drafted by listing every name on the company’s records, they were swept in alongside everyone else.
The law has never really supported that approach. The phrase at the heart of Section 49’s fallback rule, “in charge of, and responsible to, the company for the conduct of the business”, describes the people who actually run the company day to day. It is not a description of a board seat. The Supreme Court made a closely related point in Pooja Ravinder Devidasani v. State of Maharashtra, (2014) 16 SCC 1, another case under the cheque bounce law, where it held that a non-executive director who played no part in the company’s day-to-day affairs could not be held vicariously liable merely because of her position.
That reasoning carries over comfortably to legal metrology prosecutions. For an independent director named in a complaint, the first questions to ask are straightforward. Does the complaint say anything at all about what they did? Does it explain how they were in charge of the business? Was the company itself made an accused? And had the company nominated someone under Section 49(2)? If the answers point the wrong way for the prosecution, there is a real chance of having the case quashed before it goes any further.
None of this means independent directors can ignore the subject entirely. Asking management, at least once a year, whether a valid Legal Metrology nomination is on file is a small question that can save a great deal of trouble.
A shifting backdrop
The government has not been blind to these problems, and two changes in recent years have altered the ground on which Section 49 stands.
The first came quietly in October 2022, through an amendment to the Legal Metrology (General) Rules, 2011. Industry bodies had complained for years that directors were being dragged into proceedings over lapses at a branch or unit they had nothing to do with. The amended rules now let a company with several establishments nominate, for each one, an officer who actually has the authority to plan, direct and control its activities. The logic is hard to argue with as the plant head in Pantnagar is far better placed to answer for what happens in Pantnagar than an independent director sitting in Mumbai.
There is a wrinkle, though. The Act itself, in Section 49(2), still speaks of nominating one of the company’s “directors”. Whether a rule can stretch that word to cover officers who are not on the board is a question that has been debated among practitioners and has not yet been squarely answered by a court. Companies that rely on officer-level nominations should keep that uncertainty in mind and, where possible, make sure a director-level nomination sits alongside them.
The second change is bigger. Under the Jan Vishwas (Amendment of Provisions) Act, 2026, whose Legal Metrology provisions took effect on 1 May 2026, a Legal Metrology Officer can now issue an improvement notice for specified first-time procedural and regulatory lapses, including non-conforming declarations on packaged goods under Section 36(1). Fix the problem in time, and penal proceedings may never begin.
Think about what that means for the cases above. Each of them started with a first-instance labelling lapse that went straight to a criminal complaint. Under today’s framework, many such lapses should start with a notice instead. Fewer complaints means fewer occasions on which anyone has to ask which director belongs in the dock.
None of this makes Section 49 obsolete. Repeat offences, ignored notices and provisions outside the improvement notice scheme still carry penal consequences, and when they do, Section 49 remains the route by which individuals are brought in. If anything, the cases that reach court from now on are likely to be the repeat or more serious ones, which makes it even more important that the right person, and only the right person, is answerable.
A tale of two companies
To see how much difference a nomination can make, imagine two mid-sized food companies. Both are fictional, but the situation will be familiar to anyone who has advised a consumer business.
Each company sells namkeen in pouches across north India. Each has a nine-member board. And in the same month, an inspector in Lucknow picks up a pouch from each of them and finds that the batch was printed without the consumer care details the rules require.
The first company nominated its Director of Operations under Section 49(2) two years ago, filed the consent with the authorities and kept the acknowledgement. It also nominated the head of its Lucknow-area packing unit under the 2022 rules. When the inspector looks into the matter, the position is clear on the record. Under today’s framework, the first-time lapse is likely to draw an improvement notice. The unit corrects the artwork, reprints the pouches and files proof. If the matter ever did escalate, the people answerable would be the company and its nominee, not the chairperson or the independent directors.
The second company never got around to a nomination. It, too, may receive an improvement notice, and if it fixes the problem promptly, it may hear nothing more. But suppose it misses the deadline, or the same lapse turns up again in another city a few months later. Now there is no nominated person to anchor the proceedings, and the fallback rule applies. The complaint may well list every director. Even if the courts eventually narrow it down, as they did in the Raymond case, each director will need to engage lawyers, file applications and wait. The outcome may be the same in the end; the experience of getting there will not be.
The label was identical. The paperwork made all the difference.
What a sensible board does now
Strictly speaking, nothing in the Act forces a company to nominate anyone; Section 49(2) says a company “may” do so. But a company that skips this step is, in effect, choosing to leave its entire leadership exposed. Very few boards would make that choice if they understood it.
Doing it properly is not complicated, but it does need to be complete. The company should pass a written authorisation, obtain the nominee’s written consent and give notice to the Director of Legal Metrology or the relevant State Controller in the form the Legal Metrology (General) Rules, 2011 prescribe. The acknowledgement or certificate that comes back is worth keeping somewhere safe. In the Maruti Suzuki case, the fact that the nomination had been certified by the authority carried real weight.
The choice of nominee deserves more thought than it usually gets. The law assumes this person actually has the power to prevent offences, and the due diligence defence will only ever be as strong as the systems they ran. A nominee who can point to regular label audits, trained staff and quick responses to notices stands on far firmer ground than one who signed a consent form years ago and never looked at it again. For groups with several plants or branches, separate nominations for each establishment are worth considering, bearing in mind the open question about nominees who are not directors.
Nominations also have a habit of quietly going stale. The moment a nominated director leaves the board, the nomination ends, and if no one notices, the company slips back into the default rule without realising it. Board changes and restructurings should trigger a check of the Legal Metrology nomination as routinely as they trigger updates to bank mandates.
And when a complaint does arrive, it should be read closely, not just forwarded to the legal team. If it names directors despite a valid nomination, or names them without saying anything about their role, or leaves out the company altogether, the judgments discussed above suggest there may be strong grounds to challenge it at the very first stage. Acting early can save years.
Conclusion
Section 49 is, at bottom, a provision about accountability. It asks companies to decide in advance who will answer if something goes wrong, and it penalises indecision by spreading the risk across everyone at the top. The courts, for their part, have made clear that it is not a licence to haul entire boards into court on the strength of a job title.
For directors, the takeaway is reassuringly simple. A single, properly filed nomination can do more to protect them than years of litigation after the fact. So the next time a summons is passed around a boardroom table, the most useful question may not be “what went wrong with the label?” It may be “did we ever nominate anyone?”
Cases and materials referred to
Cases and materials referred to
The Legal Metrology Act, 2009, Section 49
The Legal Metrology (General) Rules, 2011, as amended in October 2022
The Jan Vishwas (Amendment of Provisions) Act, 2026
The Negotiable Instruments Act, 1881, Section 141
Maruti Suzuki India Ltd. v. State of Maharashtra, Bombay High Court, decided on 5 February 2015
Samsung India Electronics Pvt. Ltd. v. State of Karnataka, 2023 SCC OnLine Kar 29
Gautam Hari Singhania v. State of Maharashtra, 2023 SCC OnLine Bom 1254
S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89
Aneeta Hada v. Godfather Travels & Tours Pvt. Ltd., (2012) 5 SCC 661
Pooja Ravinder Devidasani v. State of Maharashtra, (2014) 16 SCC 1
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