THE ESSENTIAL COMMODITIES ACT, 1955
SECTIONS
1. Short title and extent.
2. Definitions.
2A. Essential commodities declaration, etc.
3. Powers to control production, supply, distribution, etc., of essential commodities.
4. Imposition of duties on State Governments, etc.
5. Delegation of powers.
6. Effect of orders inconsistent with other enactments.
6A. Confiscation of essential commodity.
6B. Issue of show cause notice before confiscation of food grains, etc.
6C. Appeal.
6D. Award of confiscation not to interfere with other punishments.
6E. Bar of jurisdiction in certain cases.
7. Penalties.
7A. Power of Central Government to recover certain amounts as arrears of land revenue.
8. Attempts and abetment.
9. False statement.
10. Offences by companies.
10A. Offences to be cognizable.
10B. Power of court to publish name, place of business, etc., of companies convicted under the Act.
10C. Presumption of culpable mental state.
11. Cognizance of offences.
12. Special provision regarding fine.
12A. Power to try summarily.
12B. Grant of injunction, etc., by civil courts.
13. Presumption as to orders.
14. Burden of proof in certain cases.
15. Protection of action taken under Act.
15A. Prosecution of public servants.
16. Repeals and savings.
The Schedule
Introduction:
The Constitution of India originally had 395 articles, 22 parts, and 8 schedules when it was adopted in 1950. However, these numbers have changed over time due to amendments. As of now, the Constitution consists of 448 articles, 25 parts, 12 schedules, and 104 amendments.
The Article 246 deals with the distribution of legislative powers between the Union and the States and it explicitly refers to the three lists in the 7th Schedule.
The 7th Schedule is divided into three parts:
Union List (List I):
This list contains subjects on which only the Union Government can legislate. These are matters of national importance, such as defense, foreign affairs, atomic energy, banking, etc.
There are 100 items in this list (as per the original Constitution, though it has been amended over time).
State List (List II):
This list contains subjects on which only the State Governments can legislate. These are matters of local or regional importance, such as police, public health, agriculture, local government, etc.
The State List originally contained 61 items (now reduced through amendments).
Concurrent List (List III):
This list includes subjects on which both the Union and State Governments can legislate. In case of a conflict, the law made by the Union Government prevails.
There are 52 items in this list, such as education, marriage, trade unions, criminal law, etc.
In the Concurrent list, there is one entry no. 33, which is related to the Essential Commodity Act.
Entry No. 33. Trade and commerce in, and the production, supply and distribution of,—
(a) the products of any industry where the control of such industry by the Union is declared by
Parliament by law to be expedient in the public interest, and imported goods of the same kind as such
products;
(b) foodstuffs, including edible oilseeds and oils;(c) cattle fodder, including oilcakes and other concentrates;
(d) raw cotton, whether ginned or unginned, and cotton seed; and
(e) raw jute.
Why Invoking the Act?
In 1955, India was facing a food shortage and relied on imports, like wheat from the US, to feed the population. To prevent prices from rising during the busy festival season, the government took steps to make sure there was enough food, especially pulses. These measures were meant to stop traders from creating an artificial scarcity—a situation where they limit supply on purpose to raise prices.
Historical Background of the Act:
The Essential Commodities Act traces its origins to 1939, when the Government of India enacted rules under the Defence of India Act to regulate essential goods during World War II (1939 – 1945). In 1946, the Essential Supplies (Temporary Powers) Ordinance was introduced, later replaced by the Essential Supplies (Temporary Powers) Act, 1946. After India gained independence in 1947, the Act was further extended through two resolutions in 1948 and 1949.
In 1955, the government passed the Essential Commodities Act, which replaced earlier legislation and provided permanent measures for regulating the production, supply, and distribution of essential goods. The Act came into force on April 1, 1955.
Scope of this Act:
This Act extends to the whole of India. The Act was enacted to ensure the availability of essential commodities to consumers and protect them from the exploitation of unscrupulous traders.
The basic objective of this Act:
There are two main aims:
To prevent hoarding and black marketing of foodstuffs to maintain or increase the supply of these essential commodities, and
To secure equitable distribution and availability of these essential commodities.
What happens when a commodity is declared essential?
The Act empowered the government to:
Regulate the production, distribution, and supply of essential commodities.
Impose stock limits, price controls, and distribution restrictions.
Issue orders to prevent hoarding and black-marketing of essential goods.
Sections and Schedules in the Act: The Act comprises 16 main sections and 1 Schedule. The sections provide the framework for implementing control orders, and the Act includes one Schedule, listing the commodities subject to regulation. The Schedule lists the specific items deemed essential commodities (e.g., food grains, oils, medicines, fuels, etc.) which the government can control to ensure their availability and prevent scarcity, price hikes, or exploitation in the market.
Section 1 - Short title and extent:
This Act may be called the Essential Commodities Act, of 1955.
It extends to the whole of India.
Section 2 - Definitions:
Collector: This term refers to the main officer in charge, but it can also include an Additional Collector or other officers, such as a Sub-Divisional Officer, who are authorized by the Collector to do the same work and use the same powers under this law.
Food-crops: There is no specific definition of Food Crops. It is related to both humans and animals. This includes crops like sugarcane is in foodstuffs and tea is not a foodstuff.
Notified order: This means an order that has been officially published in the government’s Official Gazette.
Order: This includes any direction given under a Notified order.
State Government: When referring to a Union Territory, this means the administrator of that territory.
Sugar: This includes:
Any sugar that has more than 90% sucrose (including sugar candy).
Khandasari sugar, bura sugar, crushed sugar, or any sugar in crystals or powdered form.
Raw sugar is produced in a vacuum pan sugar factory.
Satpal Gupta v. State of Haryana: Foodstuff is related to both humans and animals. In this case, it was established that cattle and poultry foods are included within the meaning of the ‘foodstuff. Therefore, it concludes that foodstuff is related to both humans and animals.
State of Bombay v. Virkumar Gulab Chand Shah: Turmeric has been included in the scope of foodstuff. In this case, it was established that the foodstuff includes raw materials, things used in the process and things used in the preparation of food. Therefore, turmeric has been included in the scope of foodstuff.
S. Samuel, M.D., Harrisons v. Union of India: Tea is not a foodstuff. In this case, it was decided that tea is not a foodstuff and merely a stimulant. It is neither used in the preparation of food nor contains any nutritional value, however in general parlance also when a person takes tea doesn’t consider it as having food.
Section 2A - Essential Commodities:
What is an Essential Commodity? An "essential commodity" is a product listed in the Schedule (a list in the law).
Thus, the following seven commodities are specified in the schedule:
List of Commodities and Definitions:
Drugs, (this is used in the same sense as defined under clause b of Section 3 of the Drugs and Cosmetics Act, 1940).
Fertilizers, whether organic, inorganic, or mixed.
Foodstuffs, including edible oils and seeds.
Hank yarn, made wholly with cotton.
Petroleum and its products.
Jute, whether in the form of raw or textiles.
Seed, (i) seeds of food crops and seeds of fruits and vegetables, (ii) seeds of cattle fodder; and (iii) jute seeds.
The Essential Commodities (Amendment) Act, 2020 is a law that modifies the Essential Commodities Act, 1955. Here's the Changes:
Key Points:
Title & Commencement:
This law is called the Essential Commodities (Amendment) Act, 2020, and it came into effect on June 5, 2020.
Changes to Section 3 of the Essential Commodities Act, 1955:
New Provision (1A):
The government can only regulate the supply of certain foodstuffs (like cereals, pulses, potatoes, onions, edible oilseeds, and oils) under special situations, such as 1. war, 2. famine, 3. major price hikes, or 4. serious natural disasters.
Stock Limits: The government can only set stock limits for agricultural produce if:
Retail prices of certain products (like horticultural produce) increase by 100% or more.
Retail prices of non-perishable agricultural foodstuffs increase by 50% or more.
Exceptions: Stock limits do not apply to:
Processors or value chain participants (those involved in processing, packaging, storage, transport, or distribution) if their stock does not exceed the installed processing capacity or demand for export.
Orders related to the Public Distribution System (PDS) or Targeted PDS made by the government under this or any other law.
Changes to the List: The Central Government can change this list if it believes it is necessary for public interest. The government can:
Add a new item to the list.
Remove an item from the list.
This change will be made after consulting with State Governments.
Temporary Essential Commodities: The government can also declare a commodity as an "essential commodity" for up to six months. This can be extended beyond six months if needed, and the reason for this decision will be stated in an official notification.
Parliament’s Role: The government can make changes to the list based on laws that Parliament has the power to make under a specific part of the Constitution.
Parliament’s Oversight: Any changes made to the list must be presented to both Houses of Parliament after they are made.
Section 3 - Powers to Control Production, Supply, Distribution, etc:
Subsection (1): Central Government's Power to Regulate or Prohibit Essential Commodities
Purpose: If the Central Government believes that it is necessary to ensure a steady supply of essential commodities, to make sure these goods are available at fair prices, or to secure supplies for the defence of India (e.g., during war or military operations), it can issue orders to regulate or ban the production, supply, and distribution of essential goods.
This can include controlling trade and commerce in these goods.
Subsection (2): Specific Powers the Government May Use
In addition to the powers in Subsection (1), the Central Government can make specific rules about essential commodities. These rules can include:
Regulating Production:
The government can require licenses or permits for producing or manufacturing essential commodities (like food, medicine, etc.).
Using Wasteland (Restricted) or Arable (Unused) Land for Farming:
The government can require that unused land be used to grow food crops. This helps to grow, maintain and increase cultivation of any general or specific food crop..
Controlling Prices:
The government can control how much essential goods (like food and fuel) can be bought or sold for, to keep prices fair.
Regulating Storage and Distribution:
The government can regulate how goods are stored, transported, sold, and consumed. This may include requiring permits or licenses for these activities.
Preventing Hoarding:
The government can stop people or businesses from withholding essential goods that are typically for sale, to prevent shortages and unfair price hikes.
Selling to the Government:
If someone is holding a stock of essential goods (or producing them), the government can require them to sell part or all of their stock to the government or government-controlled entities.
The government can also specify how much a producer should sell, depending on the local supply and demand.
Regulating Harmful Transactions:
The government can restrict or stop certain business activities involving foodstuffs or essential commodities if it believes these activities might harm the public.
Collecting Information:
The government can require businesses to provide data and statistics related to the production, sale, and distribution of essential goods. This helps with effective regulation.
(i) Record-Keeping and Inspections: The government can require people and businesses involved in essential goods to maintain records and books (like financial accounts) and allow inspectors to check them. They may also need to provide specific information when asked.
Issuing Licenses and Permits: The government can issue licenses, permits, or other official documents for businesses, and charge fees for these. They may also require a security deposit, which can be taken if the conditions of the license or permit are violated.
Search and Seizure:
Authorized officials (like inspectors) can enter and search premises, vehicles, ships, or even animals if they suspect a violation of the rules.
If the inspector finds illegal goods or contraband, they can seize the goods.
The government can also seize books, accounts, or documents related to the business if they are relevant to any legal proceedings. The business owner can take copies of these documents while they are being inspected.
Subsection (3): Price Payments for Essential Commodities
If someone sells an essential commodity following a government order (like selling stock to the government), the price they get is based on:
Agreed Price: If the buyer and seller can agree on a price that follows the controlled price rules, that's the price they get.
Controlled Price: If no agreement can be made, the controlled price (if set by Govt.) will apply.
Market Price: If no controlled price is set, the price will be based on the market rate at the time of sale.
Subsection (3A) Special Provisions for Foodstuffs
(i) If the Central Government believes it's necessary to control rising prices or prevent hoarding of food in a certain area, it can issue a notification in the Official Gazette. This notification will regulate the price at which food is sold in that area, even if it contradicts earlier rules.
(ii) Any notification issued under this rule will be valid for a period of up to three months, as mentioned in the notification.
(iii) After the notification is issued, if someone sells the specified food in the mentioned area, the price they charge will be:
(a) If the price can be agreed upon, it will be the agreed price, but it must be consistent with any controlled price.
(b) If no agreement on price can be reached, it will be the price based on the controlled price, if one exists.
(c) If neither of the above applies, the price will be based on the average market rate for the food in that area during the three months before the notification was issued.
(iv) For determining the average market rate, an officer appointed by the Central Government will check the market prices in the area or a nearby area. The determined average market rate will be final and cannot be disputed in court.
Subsection (3B): Compensation for Sale of Food Items to Government Without Notification.
If someone is ordered to sell a certain type of foodgrain, edible oilseed, or edible oil to the Central or State Government (or to a government officer, agent, or a government-owned corporation), and no price notification has been issued for it, or if the notification has expired, the person will be paid a procurement price. This price is set by the State Government with prior approval from the Central Government, and the price will be based on the following factors:
(a) Any controlled price that is already set for that specific foodgrain, oilseed, or oil, either under this law or another law.
(b) The overall crop prospects (how good the harvest is expected to be).
(c) The need to ensure that this food is available to consumers at reasonable prices, especially for vulnerable groups.
(d) Any recommendations from the Agricultural Prices Commission about the price of the foodgrain, oilseed, or oil.
Subsection (3C) - Price Determination for Sugar Sale
If a sugar producer is required by the government to sell sugar (whether to the Central or State Government, its officers, or other buyers) under a government order, the price for that sugar will be decided by the Central Government. This applies whether there was a prior notification under Subsection (3A).
The price the producer receives will consider:
The cost of producing sugar, including the cost of converting sugarcane into sugar and transporting it to the factory.
A reasonable profit or return on the money invested in the sugar business.
The Central Government may set different prices for different areas, factories, or types of sugar.
Provisional Price Determination for Earlier Seasons:
If the price for sugar produced up to the 2008-2009 season was decided provisionally, the final price will be set based on the rules that applied before October 1, 2009.
Section - 3(3D) - Control Over Sale and Movement of Sugar
The Central Government can order that no producer, importer, or exporter of sugar can sell, give away, or move sugar from their factory's storage (whether inside or outside the factory) or the warehouses of importers or exporters, unless they follow specific government directions.
Exception:
This rule does not apply if the sugar is pledged (used as collateral) by
the producer or importer to a scheduled bank (a bank
recognized by the Reserve Bank of India) or a similar bank. However,
even in this case, the bank can only sell the pledged sugar if the
Central Government gives permission.
Section - 3(4) - Appointment of an Authorized Controller
If the Central Government believes that it is necessary to maintain or increase the production and supply of an essential commodity, it can issue an order to appoint a person (called an authorized controller) to oversee and manage part or all of the operations of a business involved in producing and supplying that commodity.
The authorized controller will have the following powers and responsibilities while the order is in effect:
Following Government Instructions:
The controller must carry out their duties based on instructions from the Central Government. However, they cannot give directions that go against any law or rules that govern the management of the business, unless the order specifically allows them to do so.Managing the Business:
The business (or the specific part of the business) must be run according to the directions given by the authorized controller. Any manager or person in charge of the business must follow these directions.
Section - 3(5): Notification of Orders
General Orders: If the order affects many people, it must be published in the Official Gazette (public notice).
Orders to Individuals: If the order affects a specific person or business, it must be served directly to them. If that’s not possible, the order can be posted on their premises, with proof from witnesses.
Section - 3(6): Parliament Oversight
Any order made by the government must be laid before both Houses of Parliament after it is issued. This ensures that lawmakers can review the government's actions.
Section 4: Imposition of Duties on State Governments, etc.
An order made under Section 3 can delegate (give) powers and responsibilities to the Central Government, State Government, or their officers. It also allows these orders to give directions to government officers and authorities on how to exercise their powers or perform their duties.
In simpler terms, this section allows the government to create specific rules or orders that may require state or central government bodies and officials to take certain actions related to the control or regulation of essential commodities (like food items, medicines, etc.). It also means that these orders can be used to direct the governments or their officers to carry out tasks in a particular way to ensure that essential commodities are handled properly.
So, if the government wants to control the production, supply, or distribution of essential goods, this section allows them to instruct the relevant authorities at the national or state level on how to do so.
Section 5: Delegation of Powers.
The Central Government can, through an official order, decide that certain powers given to them under Section 3 of the Essential Commodities Act can also be used by other people or organizations, such as:
Any Officers or Authorities under the Central Government: The Central Government can give its powers to lower-ranking officials or departments working under it.
State Governments or Their Officers: The Central Government can also allow State Governments or their officials to use these powers.
Conditions:
The order will clearly state which powers are being given to these officials and under what conditions they can use them.
Section 6 - Effect of Orders Inconsistent with Other Laws:
Meaning:
If an order is made under Section 3 of the Essential Commodities Act (e.g., controlling the production or supply of essential goods), it will override any conflicting rules or laws that are not part of this Act. This means that even if other laws say something different, the order under the Essential Commodities Act will still apply.
Section 6A: Confiscation of Essential Commodities:
This section outlines what happens if essential commodities are seized (taken) under an order made in connection with Section 3. Here's a breakdown:
Seizure and Reporting
If essential commodities are seized (taken) based on an order under Section 3, a report of the seizure must be made without unnecessary delay to the Collector (the official in charge of the district or city).
The Collector may inspect the seized goods. If the Collector finds that the order has been violated, he can order the following:
Confiscation (taking away) of the seized essential commodity.
Confiscation of any containers (like packages or boxes) that were holding the seized goods.
Confiscation of any vehicles, animals, or vessels used to transport the seized goods (e.g., trucks, boats, or animals).
Exception:
If foodgrains or edible oilseeds are seized from a producer (a farmer who made them), they cannot be confiscated, as long as the producer owns them and they are being used for personal purposes.
Further Exception:
If an animal, vehicle, or vessel is used to carry essential commodities for commercial purposes (like transporting goods for hire), the owner of the transport vehicle has the option to pay a fine instead of having the vehicle or animal confiscated. The fine will be based on the market price of the seized goods at the time of seizure.
Sale of Seized Commodities
If the seized goods are perishable (they will spoil quickly) or it’s in the public interest, the Collector can:
Sell the goods at a controlled price (if a price is fixed for such goods under this Act or any other law).
If no price is fixed, the Collector can sell the goods at a public auction.
For Foodgrains:
In the case of foodgrains, the Collector may sell them through fair price shops (government-regulated shops) at the price fixed by the Central or State Government to ensure that they are available at fair prices to the public.
Handling the Sale Proceeds
If the seized goods are sold (either at a controlled price or through auction), the proceeds (money from the sale) will be handled in the following ways:
If the Collector doesn't confiscate the goods, the proceeds will go to the owner of the goods.
If the Collector's confiscation order is appealed and overturned, the proceeds go to the owner.
If a person is acquitted (found not guilty) in a court case related to the seized goods, the proceeds from the sale will also go to the person who owned the goods.
Section 6B - Issuance of Show Cause Notice before Confiscation of Essential Commodity:
There is no order for confiscation of any essential commodity that is passed against any person without giving him a written notice that informs him about the grounds on which such order is proposed and provides him an opportunity to make his presentation in writing.
Section 6C - Appeal Against Confiscation Order
Appeal Process:
If someone is unhappy with an order of confiscation (where their goods are taken by the government) under Section 6A, they can appeal to a judicial authority (District and Sessions Judge) appointed by the State Government. The appeal must be made within one month from the date they are informed of the confiscation order. The judicial authority (District and Sessions Judge) will hear the case and can either:
Confirm the confiscation order,
Change (modify) the order, or
Cancel the order.
Compensation After Modification or Acquittal:
If the judicial authority changes or cancels the confiscation order, or if a court finds the person not guilty in a related prosecution, and the seized goods cannot be returned for some reason, then the person is entitled to be paid for the goods. The payment will be calculated as though the goods were sold to the government.
The payment will include the price of the goods, along with reasonable interest starting from the day the goods were seized.
The price will be decided based on the type of goods:
Foodgrains, edible oilseeds, or edible oils: As per Section 3(3B).
Sugar: As per Section 3(3C).
Other essential commodities: As per Section 3(3).
Section 6D - Award of confiscation not to interfere with other punishments:
If the Collector orders the confiscation (seizure) of goods under this Act, it does not mean that the person who owned the goods is free from other punishments.
The confiscation of goods (which is another form of punishment) does not prevent the imposition of other penalties, such as imprisonment or fines, under Section 7.
Section 6E - Bar of Jurisdiction in Certain Cases:
When the government seizes an essential commodity (like food, fuel, etc.) under an order, or when it seizes things related to it (like a vehicle, animal, or packaging used to carry the goods), these items are taken pending confiscation (pending the decision to permanently take them away).
In such cases, only the Collector (or the State Government) has the authority to decide what happens to these seized goods.
No other court, tribunal, or authority (such as any judge or other legal body) can interfere or make any decisions on:
Who gets the goods
What happens to the goods
When or how they are returned or disposed of
This rule applies even if other laws say otherwise.
Section 7 – Penalties for Violating Orders:
If a person breaks an order under Section 3:
Imprisonment and Fine:
For orders related to clauses (h) or (i) (which involve business transactions or record-keeping), the punishment can be:
Imprisonment for up to one year.
A fine.
For other types of orders (such as those involving price control, hoarding, or storage), the punishment can be:
Imprisonment for at least 3 months, but up to 7 years.
A fine.
However, the court can reduce the sentence to less than 3 months if there are special reasons (which must be explained in the judgment).
Confiscation of Property:
Any property involved in the violation will be forfeited (taken by the government).
This also includes vehicles, animals, or other conveyances used to carry the goods if the court orders it.
-
If a person fails to follow a direction under clause (b) of sub-section (4) of Section 3:
-
The punishment can be:
Imprisonment for at least 3 months, up to 7 years.
A fine.
The court can reduce the sentence to less than 3 months if there are special reasons.
-
Repeat Offenders:
If a person is convicted of a violation under Section 3(1)(ii) (the more serious violations) or Section 3(2) and is convicted again for the same type of offence:
They will face:
Imprisonment for at least 6 months, but up to 7 years.
A fine.
The court may again reduce the sentence to less than 6 months if there are special reasons.
Special Reasons for a Lighter Sentence:
If the offence caused no significant harm to the public or individuals, the court may impose a shorter sentence (less than 3 months or 6 months, depending on the case).
Further Punishment for Repeat Offenders:
If someone is convicted again for violating the same order:
The court can ban them from doing business in that essential commodity for at least 6 months or a longer period if specified.
| OFFENCES | PENALTIES |
|---|---|
| Contravene the order made under clause (h) and (i) of the Sub-Section(2) | Imprisonment for a term which may extend to 1 year with fine |
| Contravene the other orders except above two. | Imprisonment not less than 3 months which may extend up to 7 years with fine |
| Fails to comply with the direction given under clause (b) of Sub-Section (4) | with fine Imprisonment not less than 3 months which may extend up to 7 years |
| If any person convicted for offences under Section Sub-clause (ii) of clause (a) of Sub-Section (1) or under Sub-Section (2) again convicted on the same provision | Imprisonment not less than 6 months which may extend up to 7 years with fine |
| If the offences convicted under Sub-clause (ii) of clause (a) of Sub-Section (1) or under Sub-Section (2) does not cause any substantial harm to any individual or the general public. | Imprisonment for the term of 3 months or 6 months whichever is required as per the case. |
Section - 7A: Power of the Central Government to Recover Amounts as Land Revenue:
1. Recovery of Defaulted Amounts (Sub-section 1):
Scope of Recovery: This part allows the government to recover amounts owed by individuals or entities when they fail to pay or deposit the amounts required under an order made under Section 3 of the Essential Commodities Act.
Applicability: It applies regardless of whether the order was made before or after the Essential Commodities (Amendment) Act, 1984, and regardless of when the liability arose.
Interest: The amount due will be recoverable along with simple interest at the rate of 15% per annum, calculated from the date of default until the amount is recovered.
Mode of Recovery: The government can recover this amount in the same manner as arrears of land revenue or as a public demand. This means the recovery process is treated similarly to how the government recovers unpaid taxes or other public dues.
2. Dealing with Recovered Amounts (Sub-section 2):
The recovered amounts must be dealt with in accordance with the original order under which the payment or deposit was due. This ensures that the recovery process aligns with the legal context in which the liability arose.
3. No Injunction or Restraining Order (Sub-section 3):
This sub-section states that no court, tribunal, or other authority can prevent or restrain the government from recovering the amount as arrears of land revenue or a public demand. Essentially, it gives the government the power to recover the money without interference from other legal authorities or courts.
4. Refund of Invalid Recovery (Sub-section 4):
If the order under which the government collected the amount is later declared invalid by a competent court (after giving the government a chance to present its case), the government must refund the amount recovered.
The refund must be made along with simple interest at 15% per annum, calculated from the date of recovery until the refund is made.
Explanation:
For this section, the term “Government” refers to the government that issued the order under Section 3 of the Essential Commodities Act. If the order was made by an officer or authority subordinate to a government, then it refers to that government.
Section 8 - Attempts and Abetment:
Breakdown:
Attempt to Contravene: If a person tries to violate (or contravene) an order made under Section 3 of the Act, even if the violation isn't completed, the law treats it as if the violation has already occurred.
Abetment: If a person encourages, assists, or incites another person to violate the order (known as abetting), they will also be treated as having violated the order themselves.
Consequence:
Deemed to Have Contravened: Both the person attempting the violation and the one abetting it will be deemed to have contravened the order, meaning they can be held legally responsible and face penalties, as if they had fully violated the order.
Section 9 - False Statement:
If a person:
Gives false information when they are required to provide information or make a statement under any order made under Section 3 of the Act, and they know or have reasonable cause to believe that the information is false, or they do not believe it to be true, or
Records a false statement in any book, account, record, declaration, return, or any other document they are required to maintain or submit under the Act,
Then, that person can be punished with:
Imprisonment for up to five years, or
A fine, or
Both imprisonment and fine.
Section 10 - Offences by Companies:
If a company breaks the law (violates an order under Section 3 of the Act):
Every person who was in charge of, and responsible for, running the company at the time the violation happened will also be considered guilty of the offence.
This means that both the company and the responsible individuals can be punished.
However, if the person in charge can prove that the violation happened without their knowledge, or that they did everything possible to prevent it, they won’t be punished.
If the violation was caused by a director or other officer of the company:
If it can be proven that the violation happened because of the approval, help, or negligence of any director, manager, or other officer of the company, that person will also be guilty and can be punished as well.
Section 10A - Offences to be Cognizable:
This section means that any offence under the Essential Commodities Act is a cognizable offence.
In simple terms, a cognizable offence is one where the police can arrest the person without a warrant and start an investigation without permission from a court.
So, if someone breaks the law under this Act, the police have the authority to take action immediately, arrest the person, and investigate the offence without needing to get a court order first.
Section 10B - Power of Court to Publish Information About Convicted Companies:
When a company is convicted under this Act, the court has the power to make public certain details about the company, such as:
The company’s name and place of business,
The nature of the offence (what the company did wrong),
The fact that the company has been convicted,
And any other details the court thinks are important.
This information will be published at the company’s expense, in newspapers or in any other way the court decides.
However, the court can’t publish this information until:
The time for the company to appeal the court’s decision has passed, or
If an appeal is made, it has been decided.
The cost of publishing this information will be charged to the company as if it were a fine imposed by the court.
Section 10C - Presumption of Culpable Mental State:
In any case where a person is being prosecuted for an offence under the Essential Commodities Act that requires a "culpable mental state" (meaning the person must have had a guilty mind, such as knowing they were breaking the law or intending to do something wrong), the court will assume that the person had that mental state.
However, the accused person can defend themselves by proving that they did not have that guilty mind when committing the act.
What does "culpable mental state" mean?
It includes things like:
Intention (they meant to break the law),
Motive (the reason they did it),
Knowledge of the fact (they knew something was true that made the act wrong),
Belief or reason to believe in something that makes the act unlawful.
In court, a fact is considered proven only if the judge is completely convinced (beyond a reasonable doubt), not just if it seems likely or probable.
Section 11 - Cognizance of Offences:
A court cannot start a case or take action against someone for breaking the law under this Act unless:
A report is made in writing that describes the offence, and
The report is made by one of the following:
A public servant (someone working for the government as defined under Section 21 the Indian Penal Code), or
A person who has been harmed by the offence, or
A recognised consumer association (an organization that represents consumers), even if the person making the report is not a member of that association.
Section 12 - Special Provision Regarding Fine:
Even though Section 29 of the Code of Criminal Procedure, 1973 sets a limit on fines, this section allows certain judges to impose a fine greater than 5,000 rupees on someone who violates an order made under Section 3 of the Essential Commodities Act.
This can be done by:
A Metropolitan Magistrate, or
A Judicial Magistrate of the First Class who has been specially given the power by the State Government.
Section 12A - Power to Try Summarily:
This section gives the Central Government the power to decide if a violation of an order under Section 3 of the Essential Commodities Act should be dealt with quickly (summarily). Here’s how it works:
Summary Trial:
If the Central Government believes that it's important to quickly address violations related to certain essential commodities, it can issue a notification in the Official Gazette to treat such cases as "special orders" for summary trial.
A summary trial means the case is handled faster, with simpler procedures, and usually with a quicker judgment. (A summary trial is typically used for less serious offenses)
Notification and Its Duration:
The notification will specify which orders are to be treated as special orders and should be tried summarily.
The notification is valid for two years, after which it will automatically end unless cancelled sooner.
If the notification ends, any cases that have already started under the summary trial process will continue to be handled as summary trials.
Who Can Handle These Cases:
Judicial Magistrates of the First Class or Metropolitan Magistrates who are specially empowered by the State Government can handle such summary trials.
The trial will follow certain sections (262 to 265) of the Criminal Procedure Code, which deals with the basic process for summary trials.
Punishments for Summary Trials:
The maximum punishment a judge can impose in a summary trial is 1 year in prison or a fine up to ₹5,000, or both.
However, if the case is more serious, the judge can choose to change the process to a regular trial, which allows for a higher sentence.
No Appeal for Certain Cases:
If the punishment in a summary trial is one month in prison or less, and a fine of up to ₹2,000, the convicted person cannot appeal.
If the punishment is higher than these limits, the person can appeal the decision.
Pending Cases:
If any cases are already ongoing when this law comes into effect (or when a notification is issued), and no witnesses have been examined yet, those cases will be handled through summary trial.
If a case is before a judge who cannot conduct a summary trial, it will be transferred to a judge who is authorized to do so.
Section 12B - Grant of Injunction by Civil Courts:
Civil courts (courts that deal with non-criminal matters) cannot block or stop any action taken by the Central Government, State Government, or a Public Officer under this Act, unless:
The person asking for the injunction (or legal relief) first gives notice to the government or officer about their request.
Section 13 - Presumption as to Orders:
Breakdown:
Presumption as to orders means that: when an order is presented in court, the court will assume that the order was made by the proper authority under the powers granted by the relevant Act, and it was properly executed according to the law.
Order Made and Signed by Authority: If an order is signed and appears to be issued by an authority exercising powers under the Act, it is presumed to have been made by that authority.
Court's Role: The court will presume that the order was legally made by the authority and follows the relevant rules and procedures outlined in the Act.
Indian Evidence Act, 1872: The presumption is based on the principles of the Indian Evidence Act. Specifically, this is about Section 114 of the Indian Evidence Act, which allows courts to presume certain facts unless there is evidence to the contrary. In this case, the court presumes that an order made by the specified authority is valid and legally binding unless evidence suggests otherwise.
Meaning:
The burden of proof shifts to the party challenging the order. The person challenging the validity of the order must provide evidence to show that it was not made by the correct authority or that it was made improperly.
This presumption ensures that the legal process is streamlined and prevents unnecessary delays in enforcing orders, as it assumes the authority of the order to be valid until proven otherwise.
Example:
Let’s say a government officer issues an order under a specific law, and it is challenged in court. The court will presume that the officer had the legal authority to make that order and followed proper procedures, unless there is sufficient evidence to show otherwise (such as proving the officer lacked the authority or the order was improperly made).
In short, presumption here means that, by default, the court assumes the order is valid and made correctly, shifting the burden of proof onto the party challenging the order to show that it is invalid.
Section 14 - Burden of Proof in Certain Cases:
If someone is charged with breaking an order under Section 3 (like having something without the proper permit or license), it is up to the person charged to prove that they had the necessary permit, license, or authority to do what they did.
Section 15 - Protection of Action Taken Under the Act:
No one can be sued or prosecuted for anything they did in good faith while carrying out an order under Section 3.
The Government also cannot be sued for any damage caused by actions taken in good faith under this Act.
Section 15A - Prosecution of Public Servants:
If a public servant (someone working for the government) is accused of an offence while doing their official duties under Section 3, no court can start the case against them unless:
The Central Government gives permission (if the public servant works for the Union Government), or
The State Government gives permission (if the public servant works for the State Government).
Section 16 - Repeals and Savings:
Repeals:
The following laws are officially repealed (canceled):
The Essential Commodities Ordinance, 1955.
Any other law in any State that controlled or allowed control over the production, supply, distribution, or trade of essential goods, before this Act started.
Savings (What continues):
Even though these laws are repealed, any orders, licenses, permits, or appointments made under those old laws before this Act started will still be considered valid and continue to be in effect under this new Act.
These will remain in force until they are replaced by new orders, licenses, or appointments under this Act.
General Clauses Act:
The repeal of the laws mentioned in this section is also subject to the rules in Section 6 of the General Clauses Act, 1897, which explains how laws continue to apply even after they are repealed. The rules will apply as if the laws that were repealed were full Acts of Parliament.
Landmark Judgments under the Essential Commodities Act
1. Nathu Lal v. State of Madhya Pradesh (AIR 1966 SC 43)
Facts:
The appellant, Nathu Lal, was a foodgrain dealer in Dhar, Madhya Pradesh.
He was found storing 885 maunds and 2¼ seers of wheat without a license, which was required under Section 7 of the Essential Commodities Act, 1955.
He claimed that he had already applied for the license and believed it would be issued soon, as assured by government authorities.
Held:
The Supreme Court held that mens rea (guilty mind) is a necessary component for proving an offence under Section 7.
Just because a law is meant for public welfare doesn’t mean that intent can be ignored.
The purpose of the Act would not be defeated by requiring proof of intention.
Since Nathu Lal had no guilty intention, he was not punished, even though he technically violated the law.
2. State of Madhya Pradesh v. Narayan Singh & Others (AIR 1989 SC 1789)
Facts:
The respondents were truck drivers, cleaners, and helpers.
They were caught transporting fertilizer bags from Indore to Maharashtra without a permit, as required by the Fertilizers (Movement Control) Order, 1973.
Although they had invoices, they lacked proper permits. They claimed they didn’t know the content of the goods or the required permits.
Held:
Section 7 of the Essential Commodities Act was amended in 1967 to include the words: “whether knowingly, intentionally, or otherwise.”
This amendment introduced the idea of strict liability, meaning a person can be held responsible even without knowing or intending to break the law.
However, the Court found that the prosecution failed to prove any wrongful intention or even carelessness.
Hence, no punishment was given to the respondents.
Conclusion:
The Essential Commodities Act, 1955 is a key law aimed at protecting public interest by controlling the production, supply, and pricing of essential goods.
The Central Government has broad powers under this Act to ensure fair distribution and prevent hoarding.
While mens rea (intention) was important in earlier cases, later amendments introduced strict liability for certain offences, reducing the need to prove intent.
Still, courts require clear evidence before convicting someone under the Act.
THE END