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When all directors of company can not be directed to pay com

When all directors of company can not be directed to pay compounding fees for compounding offences under Legal Metrology Act, 2009?

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 the petitioner-company to pay the compounding fees, specially when the petitioner-company had nominated the Director under Section 49(2) of the Act. It is rightly submitted on behalf of the petitioner-

company that 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 the petitioner-company,. Under 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, the petitioner-company had 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 Appellate Authority-Deputy Controller of Legal Metrology could not not have held that all the Directors of the petitioner-company were 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 sub-section (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.

Bombay High Court

Maruti Suzuki India Ltd vs The State Of Maharashtra And Anr on 5 February, 2015

Bench: V.A. Naik

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

WRIT PETITION NO.2444 OF 2014