“INTERNSHIP- ANANLYSIS OF CLIENT ENQUIRY- 2”

by

G SHASHANK RAO

BBA LLB; Division C; PRN 17010324019

Batch 2017-22
 RESEARCH ON LEGAL METROLOGY

A. What is the scope of the power exercised by the inspecting authorities under labour
and legal metrology during an inspection? What is the general designation of inspecting
authorities under these laws?

The principal aim of the visits is to establish, through observation of the premises,
examinations of the records kept by the management of the workplace and talks with the head
of the workplace and the representatives of workers, whether the labour legislation is applied
and, if not, to ensure that it is.

S.No Legislation Scope of Power Designation

1. Legal Metrology Act Section 15 of the Act- Director, Controller or
2009 If the Inspecting Authority has any reason to believe any legal metrology
that the weights and measures that are used are officer1
contravening the provisions of the act or has received
any information regarding the same, then an inspection
takes place in the premise.
 They have the power to enter into the premise at
any reasonable time.
 They can search for and inspect any weight,
measure or other goods in relation to which trade
and commerce has taken place.
 They possess the power to seize any weights,
measure or any other goods and record, register or
other documents or articles which we has reason to
believe may furnish evidence.
 Where any goods seized are subject to speedy or
natural decay, then the inspecting authority may
dispose of such goods.
 The employer and its representatives must produce
all documents and records relating to the weight or
measure.
 Every search and seizure must be in accordance to
the provisions of Cr.P.C.

2. Factories Act 1948 Section 9 of the Act- The State Government

An Inspector may, within the local limits for which he may, by notification in
is appointed- the Official Gazette,
 Enter the premise appoint such persons as
 Make examination of the premises, plant, possess the prescribed
machinery, article or substance qualification to be
 Inquire into any accident or dangerous occurrence Inspectors for the
 Require the production of any prescribed register purposes of this Act
or any other document relating to the factory and may assign to them
 Seize, or take copies of, any register, record or such local limits as it

1
Section 2(h) of the legal Metrology Act 2009- ‘legal metrology officer” means Additional Director, Additional
Controller, Joint Director, Joint Controller, Deputy Director, Deputy Controller, Assistant Director, Assistant
Controller and Inspector appointed’.
 other document or any portion thereof may think fit.
 Take measurements and photographs and make
such recordings as he considers necessary for the
purpose of any examination
 In the case of D.C. & G Mills and Co v Chief
Commissioner Delhi, it was held that the
inspectors appointed under the factories rules do
not simply carry out the duties laid down under the
Act. In the course of discharge of their duties and
obligations the Inspectors are expected to give
proper advice and guidance so that there may be
due compliance with the provisions of the Act

3. Karnataka Shops and Section 27 of the Act- Every Inspecting

Establishment Act Inspector may- authority appointed
1961  Enter into the premises at any reasonable hour shall be deemed to be a
 make such examination of the premises and of any public servant within
prescribed registers, records and notices, and take the meaning of section
on the spot or otherwise, evidence of any person as 21 of the Indian Penal
he may deem necessary, for carrying out the Code.
purposes of this Act
 Every employer shall on demand, produce for
inspection of an Inspector, all registers, records and
notices required to be kept under and for the
purposes of this Act.

Provided that no person shall be required under this

section to answer any question or give any evidence
tending to incriminate himself.

4. Payment of Wages Section 14 of the Act- Inspector of factories

Act 1936 An Inspector may- appointed under
 Make examination and inquiry as he thinks fit, Section 8(1) of the
 He may enter, inspect and search any premise of any Factories At shall be an
railway, factory or industrial or other establishments inspector for the
at any reasonable time. purpose of this act.
 Supervise the payment of wages to persons Every Inspector shall be
employed upon any railway, factory or industrial or deemed to be public
other establishments. servant within the
 Seize or take copies of such registers or documents meaning of the Indian
or portions thereof as he may consider relevant in Penal Code.
respect of an offence under this Act

Provided that no person shall be compelled under

this sub-section to answer any question or make
any statement tending to incriminate himself.
5. Minimum Wages Section 19 of the Act- Every Inspector shall be
Act 1948 The appropriate Government by a notification defines deemed to be a public
the local limits within which inspecting authority shall servant within the
exercise their functions. meaning of the Indian
 Inspecting authorities can enter the premise at Penal Code.
reasonable hours for the purpose of examining any
register, record of wages or notices required to be
kept or exhibited by or under this Act or rules.
 He can examine any person whom he finds in any
such premises or place.
 Require any person giving out- work and any out-
workers, to give any information which is in his
power to give, with respect to the names and
addresses of the persons.
 Seize or take copies of such register, record of
wages or notices or portions thereof as he may
consider relevant.

Any person required to produce any document or thing

or to give any information by an Inspector under sub-
section (2) shall be deemed to be legally bound to do
so within the meaning of section 175 and section 176
of the IPC.

6. Payment of Bonus Section 27 of the Act- Every Inspector shall be

Act 1965 The appropriate Government by a notification defines deemed to be a public
the local limits within which inspecting authority shall servant within the
exercise their functions. meaning of the Indian
 Require an employer to furnish such information as Penal Code.
he may consider necessary.
 He may enter the premise at any reasonable time and
the in-charge must produce before him all accounts,
books, registers and other documents relating to the
employment of persons or the payment of salary or
wage or bonus in the establishment.
 He possess the power to make copies of, or take
extracts from, any book, register or other document
maintained in relation to the establishment.

Person required producing any accounts, books,

register or other document or to give information by an
Inspector shall be legally bound to do so.
These documents can also be in electronic form.2

___________________________________________________________________________

2
Rule 5 of the Payment of Bonus Rules- For the purposes of this rule, the expression “electronic form” shall
have the same meaning as assigned to it in clause (r) of section 2 of the Information Technology Act, 2000 (21
of 2000).
 B. What are restrictions on inspecting authorities? What information they can ask and
what information can be withheld by the company representatives?

RESTRICTIONS

S.No Legislation Relevant Section Restrictions

1. Payment of Bonus Act 1965 Section 27 Nothing contained in this section shall enable an
Inspector to require a banking company to
furnish or disclose any statement or information
or to produce, or give inspection of, any of its
books of account or other documents, which a
banking company cannot be compelled to
furnish, disclose, produce or give inspection of,
under the provisions of Section 34-A of the
Banking Regulations Act, 1949.

2. Factories Act 1948 Section 118A Restriction on Disclosure of Information:

(1) Every Inspector shall treat as confidential the
source of any complaint brought to his notice on
the breach of any provision of this Act.
(2) No inspector shall, while making an
inspection under this Act, disclose to the
occupier, manager or his representative that the
inspection is made in pursuance of the receipt of
a complaint: Provided that nothing in this sub-
section shall apply to any case in which the
person who has made the complaint has
consented to disclose his name

INFORMATION THEY CAN ASK

1. Under Legal Metrology Act, there is a checklist for inspection. All such details mentioned
in the checklist can be asked by the inspector to the company representative.

Link of the Checklist - https://labour.tn.gov.in/docs/checklist.pdf

2. Inspector may discuss with or interrogate the employees employed therein regarding
compliance of various provisions of the respective Acts and related matters. Inspector should
preferably note in the inspection note the name of the workers interviewed, his / their nature
of work, matters connected to their employment, permanent address, etc.

3. He/she will inspect the establishment, check various records and registers.

4. The inspector will preferably make entries in the inspection note, which shall be prepared
in duplicate, the following;-
a) The details of the establishment with nature of business carried on

b) Categories of employees/workmen

c) Name of the persons present at the time of inspection

d) The name(s), nature of work, designation address etc. of the workers/employees engaged
therein.

5. Karnataka Minimum Wages Rules-

The registers, records and notices maintained as exhibited under the provisions of these rules
shall always be available at or as near as practicable, to the site of employment and shall be
produced or caused to be produced for inspection, at all reasonable hours by any inspector
having jurisdiction over the establishment.

INFORMATION WITHHELD BY THE COMPANY REPRESENTATIVES

1. The main object of the inspecting officer under labour law legislation is to ensure that all
the rules and regulations are strictly followed by the establishments. Keeping this in mind, no
inspecting authority can ask any details that are confidential to the establishment and are
unrelated with the compliance of the legislation.

2. Its main role is to convince the social partners of the need to observe the law at the
workplace and their mutual interest in this regard, through preventive, educational and, where
necessary, enforcement measures. These important information that serves the object of
inspection cannot be withheld by the company representatives.

3. Government of Telangana Notification No 3651/T/2020-1 3 states that ‘the inspections

shall be limited to prescribed Inspection procedure and checklist only’. Thus, any
information apart from the checklist can be withheld by the company representatives. The
checklist is provided in this link- https://labour.tn.gov.in/docs/checklist.pdf

___________________________________________________________________________

3
https://lm.telangana.gov.in/documents/lmdocs/3651-1%20Notification%20Legal%20Metrology-%20CIS-
converted.pdf
C. What are the obligations of the company during an unannounced inspection under
legal metrology and labour laws?

________________________________________________________________________

Under Indian Metrology Act 2009

Section -15 Power of inspection, seizure, etc.

(1) The Director, Controller or any legal metrology officer may, if he has any reason to believe,
whether from any information given to him by any person and taken down in writing or from personal
knowledge or otherwise, that any weight or measure or other goods in relation to which any trade and
commerce has taken place or is intended to take place and in respect of which an offence punishable
under this Act appears to have been, or is likely to be, committed are either kept or concealed in any
premises or are in the course of transportation,
(a) enter at any reasonable time into any such premises and search for and inspect any weight,
measure or other goods in relation to which trade and commerce has taken place, or is intended to take
place and any record, register or other document relating thereto;
(2) The Director, Controller or any legal metrology officer may also require the production of every
document or other record relating to the weight or measure referred to in sub-section (1) and the
person having the custody of such weight or measure shall comply with such requisition.
Section-17 Manufacturers, etc., to maintain records and registers.
(1) Every manufacturer, repairer or dealer of weight or measure shall maintain such records and
registers as may be prescribed.
(2) The records and registers maintained under sub-section (1) shall be produced at the time of
inspection to the persons authorised for the said purpose under sub-section (1) of section 15.
Section - 40 Penalty for obstructing Director, Controller or legal metrology officer .

Whoever obstructs the Director, the Controller or any legal metrology officer with intent to prevent or
deter the Director or the Controller or any legal metrology officer from exercising his powers or
discharging his functions, or in consequence of anything done or attempted to be done by the Director
or the Controller or any legal metrology officer in the lawful exercise of his powers or discharge of
his functions as such, or whoever obstructs the entry of the Director or the Controller or any legal
metrology officer into any premises for inspection and verification of any weight or measure or any
document or record relating thereto or the net contents of any packaged commodity or for any other
purpose shall be punished with imprisonment for a term which may extend to two years and for the
second or subsequent offence, with imprisonment for a term which may extend to five years.

“As per S. 48 of the Act, any offence punishable under section 25, sections 27 to 39, sections 45 to 47,
or any rule made under sub-section (3) of section 52 may, either before or after the institution of the
prosecution, be compounded, at various stages as enumerated therein by the Director or legal
metrology officer as may be specially authorized by him or in some other cases by the Controller or
legal metrology officer specially authorized by him subject to certain conditions. When the special
statute prescribe offences, its punishment and compounding procedure, and specifically excludes the
provisions of the Indian Penal Code and S. 153 of the Code, it was nothing but illegal on the part of
the Officer to carry out the surprise inspection and issue report directing necessary action by his
subordinate officer resulting in registration of a crime under S 420 of the IPC. Therefore, it appears
that the attempt of the investigating agency in by-passing the provisions of the Act was to prevent the
petitioner from exhausting the remedies provided for under law.”

C.P. Mohammedkutty vs. State of Kerala (16.07.2015 - KERHC) : MANU/KE/1280/2015

There is a certain checklist given to every officer which every company has to comply with Inspection
Procedure and Checklist. The inspections shall be limited to prescribed Inspection procedure and
checklist only has the company is only obligated to comply with the demands and documents related
to the satisfaction of the checklist and nothing beyond that. 4

“ii. Inspection Procedure and Checklist:

• Inspection procedure and checklist based on risk profile are annexed (I and II) to this circular. The
same should be uploaded in the website.

• The inspections shall be limited to prescribed Inspection procedure and checklist only.”

The following is given under the notification of “Ease of Doing Business Reforms- Implementing
Central Inspection System (CIS) orders issued-Reg.” which is given by OFFICE OF THE
CONTROLLER, LEGAL METROLOGY of each and every state and prescribes different checklists
for different industries present in that state.

https://lm.telangana.gov.in/documents/lmdocs/3651-1%20Notification%20Legal%20Metrology-
%20CIS-converted.pdf

Under various Labour laws as well two conditions to comply with the Inspection officer will be the
same i.e.

(a) enter at any reasonable time into any such premises and search for and inspect any weight,
measure or other goods in relation to which trade and commerce has taken place, or is intended to take
place and any record, register or other document relating thereto;
(2) The Director, Controller or any legal metrology officer may also require the production of every
document or other record relating to the weight or measure referred to in sub-section (1) and the
person having the custody of such weight or measure shall comply with such requisition.

This has to be obliged by every company along with the checklist used for the inspection under
various other labour laws.

(TO REFER TO THE CHECKLIST PLEASE GO THROUGH “CHECKLIST FOR JOINT

INSPECTION AND PROCEDURE UNDER LABOUR LAW” ATTACHED WITH THIS
HYPERLINK https://www.jklabour.com/welcome/getfile/CHECKLIST%20FOR%20JOINT
%20INSPECTION%20AND%20PROCEDURE%20UNDER%20LABOUR%20LAW.pdf)

__________________________________________________________________________________

4
C.P. Mohammedkutty vs. State of Kerala (16.07.2015 - KERHC) : MANU/KE/1280/2015
D. What are the obligations of a company post the inspection? What are the exit
formalities after completion of the inspection?

___________________________________________________________________________

Right after the completion of the Inspection the following is the procedure. The company has
to comply with the inspector with the same and follow up as per the instructions given:
 After obtaining the basic information about the establishment, the inspector will
physically verify the compliance under various provisions of the Acts and Rules made
thereunder including maintenance of Statutory Registers and Filing of Returns etc. In
case of detection of any infringements/violation, the inspector shall mandatorily
mention those in the Inspection Note.
 Thus the inspector shall prepare the inspection note ,in duplicate ,and on being
satisfied about the completeness of inspection note, shall sign on both the copies and
hand over one copy to the employer/representative of the employer with due
acknowledgement. Normally, the employer /owner of the establishment is/are
requested to remove the defects detected during inspection and report compliance
thereof within a specified date and time as mentioned in the inspection note.
 On the basis of information collected and infringements/violations detected during
inspection, the inspector is now required to fill up the fields with relevant data in
ESTABLISHMENT DETAILS, OWNERSHIP/EMPLOYER DETAILS and
INFRINGEMENTS tabs under Online inspection note.
 After verifying all the information with the hard copy of the original inspection note,
the inspector will mention the date, time and place where compliance could be
reported and submit the online inspection
 The inspector then will upload the scanned copy of the original inspection note and
click on the SUBMIT & SEND SMS button. This will trigger the system to send SMS
containing reference no in respect of the inspection to the mobile no of the
employer/owner or representative of employer/owner. However, the inspector can
prepare the inspection note directly through the system if facilities like connectivity,
printing, scanning etc. are available on spot.
 The employer/owner of the establishment may click on the View &Download on the
Homepage of URL: http://wblc/gov.in and after providing the reference no. may view
and also download the inspection report.
 The inspector is required to upload the inspection report within 48 hours of
conducting such inspection
Labour inspection is based on agreed, written procedures that have also been laid down in the
Operations Manual, which all inspectors in all field offices are required to follow, after having
received appropriate training. The company has to review the written submissions and procedures and
follow up with the suggestions and defaults as prescribed by the inspector. The main elements of these
new labour inspection procedures with regard to a first enterprise inspection visit are defined as
follows:

• On the occasion of the first visit to any enterprise in a given year, inspectors will make a full
assessment of the state of compliance with labour legislation, covering all relevant social
 relations and social protection provisions, and also assessing the employer’s ability and
apparent willingness to comply with these regulations.
• If the violations are not evidently serious, and if the inspector has grounds to believe that the
employer will correct them by a given deadline and be reasonably co-operative in future,
advocacy (structured information and advice on the best way of complying) will be the
primary means of intervention, together with clear, written instructions on how to comply,
and in what time frame to do so.
• If the inspector decides to prosecute the employer, structured advocacy on the reasons for
doing so will be given. This will include information on the employer’s legal obligations, on
the consequences of continued non-compliance, and on the time-frame for rectification. The
reasons for prosecution will be laid down in writing for him or her.
• If, on the occasion of a such follow-up visit, the inspector finds that the employer, in spite of
previous assurances, has taken no significant steps towards compliance and rectification of
the violations noted earlier, the inspector will as a matter of strict policy initiate prosecution
measures, again combined with structured advocacy, to inform the employer once more of his
legal obligations, and of the reasons for now prosecuting.
• Only in exceptional, clearly justified cases, when the employer shows valid reasons and
documentary evidence for having had to delay compliance (“force majeure”) will the
inspector once more give only structured advocacy, combined with a written warning to
comply, and a further, final deadline for doing so.
• Employers who are generally in conformity with the law, having shown evidence of their
willingness to comply, which inspectors must document in their reports, will not be inspected
again for a period of at least twelve months, unless a complaint has been received or an
accident has occurred.
• • Inspectors will document all the above steps, depending on their decision, in writing and
submit their first inspection visit report to the controlling officer for discussion and approval
in principle no later than 10 days after the visit.

Hence the company has to read the report and comply with the recommendations made in it and
rectify any default and also adhere to the suggestions made by the inspector in a stipulated time if
given.

__________________________________________________________________________________

E. What are the documents/information can the inspecting authorities seize/take away with
them?

__________________________________________________________________________________

Under section 15(b) of the Indian Metrology Act, 2009

“seize any weight, measure or other goods and any record, register or other document or article
which he has reason to believe may furnish evidence indicating that an offence punishable under this
Act has been, or is likely to be, committed in the course of, or in relation to, any trade and
commerce.”

In the case of Itc Limited vs The State Of Karnataka5 on 4 September, 2020 it was held that :

5
Itc Limited vs The State Of Karnataka WRIT PETITION NO.8954/2020 (GM-RES)
“10. Section 15 of the Act gives power to Respondent No.2 so as to enter the premises to search and
seize any weight, measure and other goods. Section 15 of the Act reads thus :
"Section 15. Power of inspection, seizure, etc.-(1) The Director, Controller or any legal metrology
officer may, if he has any reason to believe, whether from any information given to him by any person
and taken down in writing or from personal "knowledge or otherwise, that any weight or measure or
other goods in relation to which any trade and commerce has taken place or is intended to take place
and in respect of which an offence punishable under this Act appears to have been, or is likely to be,
committed are either kept or concealed in any premises or are in the course of transportation,
(a) enter at any reasonable time into any such premises and search for and inspect any weight,
measure or other goods in relation to which trade and commerce has taken place, or is intended to
take place and any record, register or other document relating thereto;
(b) seize any weight, measure or other goods and any record, register or other document or article
which he has reason to believe may furnish evidence indicating that an offence punishable under this
Act has been, or is likely to be, committed in the course of, or in relation to, any trade and commerce.
(2) The Director, Controller or any legal metrology officer may also require the production of every
document or other record relating to the weight or measure referred to in sub-section (1) and the
person having the custody of such weight or measure shall comply with such requisition. (3) Where
any goods seized under sub-section (1) are subject to speedy or natural decay, the Director,
Controller or legal metrology officer may dispose of such goods in such manner as may be
prescribed.
(4) Every search or seizer made under this section shall be carried out in accordance with the
provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches and seizures."

Hence according to the official notification of “Ease of Doing Business Reforms- Implementing
Central Inspection System (CIS) orders issued-Reg” there are two checklists given hence any
document pertaining to those criteria’s present in the checklist can be taken away or seized by the
inspection officer at the time of inspection.

https://lm.telangana.gov.in/documents/lmdocs/3651-1%20Notification%20Legal%20Metrology-
%20CIS-converted.pdf

___________________________________________________________________________

F. Can company authorities seek the help of outside legal counsel during an inspection?6

___________________________________________________________________________

Yes, even though the presence of an external counsel is not a compulsion, the company
authorities, i.e. the general counsel or the key managerial personnel can seek help and advice
from the external counsel. It is important to note that the external lawyer is representing the
company and not necessarily the company's employees or third parties. This is particularly
important where the applicable regime has personal as well as corporate liability. Therefore,
the general or in-house counsel needs to bear in mind that the employees may need to seek
separate legal advice. The external lawyers, if present, is required to take a detailed note of

6
https://poland.arcelormittal.com/fileadmin/Content/odpowiedzialnosc/program_zgodnosci/
6_Guidelines_for_unannounced_inspections.pdf  
what could be learned from the inspection. Very thorough notes should be taken of the
debrief because it will record the immediate reactions and information of those affected by
the inspection. When the representative or the general counsel contacts the external lawyers,
the counsel should be able to convey at least five items of data: (a) the entity or entities being
inspected; (b) the agency conducting the inspection; (c) how many inspectors there are; (d)
the location(s) which are being inspected; and (e) contact details for the location, the general
counsel and others.

___________________________________________________________________________

G. What are the basic training requirements that a person attending an inspection must
possess?7

___________________________________________________________________________

Basic requirements- Check parameters of the inspection, Identify the agency conducting the
inspection and its powers, Count and verify leadership, Identify subject matter of the
inspection, Take detailed notes and maintain a calm leadership. If an inspection occurs, the
general counsel should take charge, not panic, call external counsel, inform management and
corporate affairs, mobilise the internal team, follow internal protocols and ensure that key
internal messages are communicated. It is also crucial that the general counsel has briefed
staff about issues relating to legal professional privilege and the privilege against self-
incrimination both as part of training and at the beginning of the inspection. Before any
inspection occurs, it is useful for the representative to review the organisation’s records of
legal advice so as to ensure that it is separated into external legal professional privileged
advice and other forms of advice. In those jurisdictions where internal legal professional
advice is privileged then that should also be separated if there is a national inspection. The
general counsel should read the rules in advance, as there will not be enough time to go
through the documentation on the day. A compliance manual is prepared by external counsel
but key executives of the undertakings such as the general counsel do not read the rules in
advance. It would be wise for a general counsel to take a day out to read the rules in advance.

Before calling the external lawyers, count the number of inspectors, verify (and copy) the
identity cards of each inspector. Check the warrant and the identity cards – the general
counsel may need to be firm if there is any disparity. It is important to know what is involved.
It is critical to establish who in the organisation is “in charge” or “taking leadership” during
the inspection. Ideally, this needs to be someone who understands the inspection process. It
would be best if the leadership hierarchy in the organisation could be agreed in advance so
that no time is wasted on the day. It is very important for the general counsel to identify the
legal and factual subject matter of the inspection. The representative should note down
everything that is said (and not said), copied and seized. Record the timings of such events. It
is often useful to have someone accompany the representative to take notes. Such notes could
be useful in any litigation8.
7
https://poland.arcelormittal.com/fileadmin/Content/odpowiedzialnosc/program_zgodnosci/
6_Guidelines_for_unannounced_inspections.pdf
8
https://www.algoodbody.com/files/uploads/news_insights_pub/Dawn_raids_-
_practical_insights_for_general_counsel_2019.pdf