The Legal Metrology (Packaged Commodities) Rules, 2011 (‘LMPC Rules’) enlists various declarations to be made on retail and wholesale packages. Of-late there is a surge in onsite inspections and issuance of notices alleging incorrect declarations, MRP and quantity declarations being prominent ones.

Vide this Outlook, we intend to apprise you on recent controversies emerging under the Legal Metrology law.

Applicability of Numeration Rules on MRP

• Section 52(2)(f) of the LM Act empowers the Government to make rules regarding declaration of weight or measure or number as per which any transaction, dealing or contract should be conducted. Accordingly, the Government enacted the Legal Metrology (Numeration) Rules, 2011 (‘Numeration Rules’).

• The expression used in Section 52(2)(f) covers ‘weight’, ‘measure’ and ‘number’. Consequently, issue often arises on scope of these three terms and specifically, applicability of Numeration Rules on MRP declaration.

NITYA Comments:

Section 10 of the LM Act stipulates that any weight, measure or number must be declared in prescribed manner (Numeration Rules). The term ‘number’ is employed throughout the Act. A careful examination of the Act indicates that term ‘number’ used within the LM Act is to signify quantity. 

Therefore, MRP do not fall under category of ‘number’ for purposes of Numeration Rules. This is also supported by recent judgment of Samsung India Electronics Private Limited v. State of Karnataka, C.P. No. 9771/2017 where the High Court held that Numeration Rules are not applicable to MRP.

Declaration of Number, Litre etc. on wholesale packages

• Chapter II of the LMPC Rules contains provisions applicable to retail packages and Chapter III contains provisions applicable to wholesale packages.

• Rule 13(5)(ii) of the LMPC Rules mandates mention of unit of quantity (Number, Litre etc.) on labels. Important to note that Rule 13(5) is part of Chapter II and Chapter III does not contain any such Rule. Consequently, issue often arises on whether unit of quantity needs to be declared on wholesale packages or not.

NITYA Comments: 

Legal Metrology law is meant for consumer protection and to ensuring fair trade practices & accurate measurements in commercial transactions. Consumer laws must be read in light of interest of consumers and consumers will cover distributors, retailers as well as end-customers. Although Rule 13(5) is part of Chapter II and do not apply to wholesale packages on strict reading. However, in our view, such an interpretation will be incorrect. This is because if merely a numeral is written without any qualification, this will be vague for consumers and frustrate true objective of law. 

In the light of above, in our view, aforesaid requirement equally applies to wholesale packages. Having noted above, in case of Samsung India (supra), the High Court held that Rule 13(5) is applicable only to retail packages. While this judgment is favorable, in our view, it is incorrect. 

Proceedings against Directors of the company for non-compliance under Legal Metrology Laws

• Section 49 of the LM Act deems following persons to be guilty of offences committed under these laws:

• Where any person is nominated, nominated person

• Where no person is nominated, every individual who was in charge and responsible to, the company, for its business conduct at time when offence was committed

• Practically, the Department initiates proceedings against top management (such as Chairman, Directors and Managers) of companies. Consequently, issue often arises whether phrase ‘every person who was in charge and was responsible to, the company for conduct of business of the company‘ covers every Director, Manager etc. Additionally, whether Department needs to make specific averments in complaint regarding involvement of a particular person.

NITYA Comments:

In our view, Directors like Managing Director, Whole Time Director responsible for overall management of a company, can be held liable for such offences as they are deemed to be in charge of conduct of company’s business. However, other Directors, Managers etc. can only be held liable if there are specific averments which can be proved on facts. 

Furthermore, Section 49(2) of the LM Act provides for nomination of person responsible for conduct of business for purpose of the Legal Metrology law. Businesses must nominate specific person to avoid initiation of criminal proceedings against their Directors & Officers.

Decriminalization of offences under the Legal Metrology law

• To curb web of outdated rules and regulations and to promote trust-based governance, Government has decriminalized various Acts vide The Jan Vishwas (Amendment of Provisions) Act, 2023 removing fear of imprisonment for minor offences. As part of this move, several offences under the LM Act will no longer attract imprisonment. Multiple provisions have been amended to remove imprisonment provision and increase monetary penalties instead.