A Magistrate Court in Latur levied a fine of Rs4,000 after Hindustan Unilever pleaded guilty under the Legal Metrology Act and Rules
Consumer goods company Hindustan Unilever Ltd (HUL) has been fined Rs4,000 by a Court in Latur in Maharashtra after the company pleaded guilty of violating norms.
On 25 August 2013, HUL, owned by Anglo-Dutch company, Unilever, published an advertisement mentioning maximum retail price (MRP) of one of its product. However, it failed to declare net quantity of the product in the advertisement. This led to a complaint from BP Dhumal, Inspector of Legal Metrology (Weights & Measures) before the Judicial Magistrate.
In his judgement on 29 September 2014, Judge RA Malakolikar, said, "Accused (HUL) is convicted under section 252 of Code of Criminal Procedure (CrPC) and sentenced to pay a fine of Rs4,000 for the offence, in default of payment of fine, he shall to undergo Simple Imprisonment for eight days."
The Court had issued notice to Pradeep Banerjee, Director of HUL. However, Banerjee filed an application for being represented through a power of attorney (PoA) holder stating that since he resides in Mumbai, he could not be present in the Court at Latur. Banerjee's PoA holder Rajeshwari Shukla orally submitted before the Court that it was the first offence of the company and he will not repeat such type of offence hereafter. He also requested the Court to impose minimum fine.
Judge Malakolikar, in his order said, "It cannot be said that due to the offence of accused, there are any bad influence on the society. Hence, it will be just and proper to show leniency in prescribed punishment of payment of fine. This is a fit case to take some lenient view. Hence, fine of Rs4,000 for the offence will meet the end of justice."
What is interesting in this case is, why a company as big as HUL preferred to plead guilty instead of contesting the claims? There may be two reasons. One, the Unilever subsidy earned a net profit of Rs988.16 crore during the September 2014 quarter and a fine of just Rs4,000 is meagre for them. Secondly, instead of contesting the claims and spending more money on litigation with the Legal Metrology Organisation, they may have thought it wise to plead guilty and get away with a minimum fine.
However, they may be wrong. Inspector General Sanjay Pandey, who is Controller of Legal Metrology (Weights & Measures), while speaking at a Moneylife Foundation seminar, said, his department is raising the issue before the Registrar of Companies, Ministry of Consumer Affairs, and other Ministries. “What we are doing is that we are writing to ROC, Ministry of Consumer Affairs and Ministries that deal with them, saying that ‘look, this company is convicted so for future government deals you better beware," he added.
Essentially, this means that although the sum paid by HUL is trivial, it will have to mention the conviction in all its statutory and regulatory filings. In addition, since the company has pleaded guilty, there is not scope for it to file an appeal and have the conviction overturned.
Our mail sent to HUL remained unanswered till writing the story. We will incorporate their reply as and when we receive it.
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