Case: Maruti Suzuki India Limited Vs. State of Maharashtra &amp; Others

A challan was issued to theunder Section 18(1) of the Legal Metrology Act, 2009, read with Rule 2(m) of the Legal Metrology (Packaged Commodities) Rules, 2011, as the prices of the goods were not rounded off. After panchnama, it was found that though a fraction of less than fifty paise was to be rounded off to the preceding rupee and the fraction above 50 paise and upto 95 paise was to be rounded off to fifty paise, thedid not round off the prices as per Section 18 of the Act read with Rule 2(m) of the Legal Metrology (Packaged Commodities) Rules, 2011. It was informed to theby the notice dated 02.01.2014 that the respondents were prima facie of the view that there was a contravention of the provisions of Section 18 of the Act read with Rule 2(m) of the Legal Metrology (Packaged Commodities) Rules, 2011 and the contravention is compoundable. The petitioner intimated the respondent that it was ready for compounding of the offence by paying the compounding fees.Though there are 12 directors on the board of directors of the petitioner company, thehad nominated the Director under Section 49(2) of the Act. The Director of the Legal Metrology had also certified the nomination of Shri Kazahiko Ayabe as the Director under Section 49(2) of the Act. Under Section 49(2) of the Act, when an offence under the Act was committed by the Company, a person, who has been nominated under Section 49(2) and where no such person is nominated, every person who is at the time of the commission of the offence in charge and responsible for the conduct of the business of the company is deemed to be guilty of the offence and is liable to be proceeded against and punished alongwith the company.

Court's reasoning:
On hearing the learned counsel for the parties and on a perusal of the provisions of The Legal Metrology Act, 2009, it appears that the Authorities were not justified in directing all the Directors of theto pay the compounding fees, specially when thehad nominated the Director under Section 49(2) of the Act. It is rightly submitted on behalf of thethat when only the director nominated under Section 49(2) of the Act and the Company could have been proceeded against and punished under Section 49(1) of the Act, there was no propriety in seeking the compounding fees from all the Directors of theUnder Section 49(1) of the Act, only the nominated Director and the Company is deemed to be guilty of the offence and is liable to be proceeded against and punished. Since, thehad nominated the Director under Section 49(2) and since, the nomination was certified by the Director of the Legal Metrology, only the nominated Director and the Company could have been proceeded against and punished. If, the other Directors could not have been proceeded against under Section 49(1) after the nomination of the Director under Section 49(2), the imposition of the compounding charges on the other Directors of the Company was not justified. The AppellateController of Legal Metrology could not have held that all the Directors of thewere liable to pay the compounding fees, as the provisions of Sections 48 and 49 of the Legal Metrology Act, 2009 are distinct and separate. If only the nominated Director of the Company and the Company could have been proceeded against and punished, the other Directors of the Company could not have been directed to pay the compounding fees. The provisions of Section 49(4) of the Act cannot be relied on, for supporting the impugned order, as it is not the case of the respondents that the offence was committed with the consent or connivance of, or is attributable to the neglect on the part of, any director, manager, secretary or other officer, not being a person nominated under(2) of Section 49 of the Act. In the absence of any allegation in regard to the commission of the offence by any director, manager, secretary or other officer, not being the person nominated under Section 49(2) of the Act, it cannot be said that the compounding charges should have been paid by all the Directors of the Company. Also, if compounding is permissible after the institution of the prosecution and if the prosecution could have been instituted only against the nominated Director, there was no propriety in directing all the Directors of the Company to pay the compounding fees.