Essential Commodities Act, 1955

(1) This Act may be called the Essential Commodities Act, 1955. (2) It extends to the whole of India [ 2 * * * 2 ].

In this Act, unless the context otherwise requires, - [ 3 ( ia ) "Code" means the Code of Criminal Procedure, 1973 (2 of 1973); 3 ] [ 4 5 ( iia ) "Collector" includes an Additional Collector and such other officer, not below the rank of Sub-Divisional Officer, as may be authorized by the Collector to perform the functions and exercise the powers of the Collector under this Act; 4 ] (a) "essential commodity" means any of the following classes of commodities ( i ) cattle fodder, including oilcakes and other concentrates, (ii) coal, including coke and other derivatives, (iii) component parts and accessories of automobiles; (iv) cotton and woolen textiles; [ 6 (iv-a) drugs; Explanation : In this sub-clause, "drug" has the meaning assigned to it in CI.(b) of Sec. 3 of the Drugs and Cosmetics Act, 1940 (23 of 1940); 6 ] (v) foodstuffs, including edible oilseeds and oils; (vi) iron and steel, including manufactured products of iron and steel; (vii) paper, including newsprint, paperboard and straw board; (viii) petroleum and petroleum products; (ix) raw cotton, whether ginned or unginned , and cotton seed; (x) raw jute; (xi) any other class of commodity which the Central Government may, by notified order, declare to be an essential commodity for the purposes of this Act, being a commodity with respect to which Parliament has power to make laws by virtue of entry 33 in List III in the Seventh Schedule to the Constitution; (b) "food-crops" include crops of sugarcane; (c) "notified order" means an order notified in the Official Gazette; [ 7 (cc) "order" includes a direction issued thereunder ; 7 ] [ 8 (d) "State Government", in relation to a Union territory, means the administrator thereof; 8 ] [ 9 (e) "sugar" means, - ( i ) any form of sugar containing more than ninety per cent of sucrose, including sugar candy; (ii) khandsari sugar or bura sugar or crushed sugar or any sugar in crystalline or powdered form; or (iii) sugar-in-process in vacuum pan sugar factory or raw sugar produced therein; 9 ] [ 10 * * * 10 ] [ 11 (f) Words and expressions used but not defined in this Act and defined in the Code shall have the meanings respectively assigned to them in that Code. 11 ]

(1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, [ 12 or for securing any essential commodity for the defense of India or the efficient conduct of military operations 12 ], it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. (2) Without prejudice to the generality of the powers conferred by sub-section (1), an order made thereunder may provide, - (a) for regulating by licenses, permits or otherwise the production or manufacture of any essential commodity; (b) for bringing under cultivation any waste or arable land, whether appurtenant to a building or not, for the growing thereon of food-crops generally or of specified food-crops, and for otherwise maintaining or increasing the cultivation of food-crops generally, or of specified foods-crops; (c) for controlling the price at which any essential commodity may be bought or sold; (d) for regulating by licenses, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity; (e) for prohibiting the withholding from sale of any essential commodity ordinarily kept for sale; (f) [ 13 for requiring any person holding in stock, or engaged in the production, or in the business of buying or selling, of any essential commodity, - (a) to sell the whole or a specified part of the quantity held in stock or produced or received by him, or (b) in the case of any such commodity which is likely to be produced or received by him, to sell the whole or a specified part of such commodity when produced or received by him, to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government or to such other person or class of persons and in such circumstances as may be specified in the other. Explanation 1 : An order made under this clause in relation to food grains, edible oilseeds or edible oils, may, having regard to the estimated production, in the concerned area, of such food grains, edible oilseeds and edible oils, fix the quantity to be sold by the producers in such area may also fix, or provide for the fixation of, such quantity on a graded basis, having regard to the aggregate of the area held by, or under the cultivation of the producers. Explanation 2 : For the purpose of this clause, "production" with its grammatical variations and cognate expressions includes manufacture of edible oils and sugar; 13 ] (g) for regulating or prohibiting any class of commercial or financial transactions relating to foodstuffs or cotton textiles which, in the opinion of the authority making the order, are, or, if unregulated, are likely to be, detrimental to the public interest; (h) for collecting any information or statistic with a view to regulating or prohibiting any of the aforesaid matters; ( i ) for requiring persons engaged in the production, supply or distribution of, or trade and commerce in, any essential commodity to maintain and produce for inspection such books, accounts and records relating to their business and to furnish such information relating thereto, as may be specified in the order; [ 14 (ii) for the grant or issue of licenses, permits or other documents, the charging of fees therefor , the deposit of such sum, if any, as may be specified in the order as security for the due performance of the conditions of any such license, permit or other documents, the forfeiture of the sum so deposited or any part thereof for contravention of any such conditions, and the adjudication of such forfeiture by such authority as may be specified in the order 14 ]; (j) [ 15 for any incidental and supplementary matters, including, in particular, the entry, search or examination of premises, aircraft, vessels, vehicles or other conveyances and animals, and the seizure by a person authorized to make such entry, search or examination, - ( i ) of any articles in respect of which such person has reason to believe that a contravention of the order has been, is being, or is about to be, committed and any packages, coverings or receptacles in which such articles are found; (ii) of any aircraft, vessel, vehicle or other conveyance or animal used in carrying such articles, if such person has reason to believe that such aircraft, vessels, vehicle or other conveyance or animal is liable to be forfeited under the provisions of this Act; (iii) [ 16 of any books of accounts and documents which in the opinion of such person, may be useful for, or relevant to, any proceeding under this Act and the person from whose custody such books of accounts or documents are seized shall be entitled to make copies thereof or to take extracts there from in the presence of an officer having the custody of such books of accounts or documents. 16 ] 15 ] (3) Where any person sells any essential commodity in compliance with an order made with reference to Cl . (f) of sub-section (2), there shall be paid to him the price therefor as hereinafter provided :- (a) where the price can, consistently with the controlled price, if any, fixed under this section, be agreed upon, the agreed price; (b) where no such agreement can be reached, the price calculated with reference to the controlled price, if any; (c) where neither Cl . (a) nor Cl . (b) applies, the price calculated at the market rate prevailing in the locality at the date of sale. [ 17 (3-A) ( i ) If the Central Government is of opinion that it is necessary so to do for controlling the rise in prices or preventing the hoarding, of any foodstuff in any locality, it may, by notification in the Official Gazette, direct that notwithstanding anything contained in sub-section (3), the price at which the foodstuff shall be sold in the locality in compliance with an order made with reference to Cl . (f) of sub-section (2) shall be regulated in accordance with the provisions of this sub-section. (ii) Any notification issued under this sub-section shall remain in force for such period not exceeding three months as may be specified in the notification. (iii) Where, after the issue of a notification under this sub-section, any person sells foodstuffs of the kind specified therein and in the locality so specified, in compliance with an order made with reference to Cl .(f) of sub-section (2), there shall be paid to the seller as the price therefor , - (a) where the price can, consistently with the controlled price of the foodstuff, if any, fixed under this section, be agreed upon, the agreed price ; (b) where no such agreement can be reached, the price calculated with reference to the controlled price, if any; (c) where neither Cl .(a) nor Cl .(b) applies, the price calculated with reference to the average market rate prevailing in the locality during the period of three months immediately preceding the date of the notification. (iv) For the purposes of sub-clause (c) of Cl .(iii), the average market rate prevailing in the locality shall be determined by an officer authorized by the Central Government in this behalf, with reference to the prevailing market rates for which published figures are available in respect of that locality or of a neighboring locality; and the average market rate so determined shall be final and shall not be called in question in any Court 17 ]. [ 18 (3-B) Where any person is required, by an order made with reference to Cl .(f) of sub-section (2), to sell to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government, any grade or variety of food grains, edible oilseeds or edible oils in relation to which no notification has been issued under sub-section (3-A), or such notification having been issued, has ceased to be in force, there shall be paid to the person concerned, notwithstanding anything to the contrary contained in sub-section (3), an amount equal to the procurement price of such food grains, edible oilseeds or edible oils, as the case may be, specified by the State Government, with the previous approval of the Central Government having regard to, - (a) the controlled price, if any, fixed under this section or by or under any other law for the time being in force for such grade or variety of food grains, edible oilseeds or edible oils; (b) the general crop prospects; (c) the need for making such grade or variety of food grains, edible oilseeds or edible oils available at reasonable prices to the consumers, particularly the vulnerable sections of the consumers; and (d) the recommendations, if any, of the Agricultural Prices Commission with regard to the price of the concerned grade or variety of food grains, edible oilseeds or edible oils. 18 ] [ 19 (3-C) Where any producer is required by an order made with reference to Cl .(f) of sub-section (2) to sell any kind of sugar (whether to the Central Government or a State Government or to an officer or agent of such Government or any other person or class of persons) and either no notification in respect of such sugar has been issued under sub-section (3-A) or any such notification, having been issued, has ceased to remain in force by efflux of time, then, notwithstanding anything contained in sub-section (3), there shall be paid to that producer an amount therefore which shall be calculated with reference to such price of sugar as the Central Government may, by order, determine, having regard to, - (a) the minimum price, if any, fixed for sugarcane by the Central Government under this section; (b) the manufacturing cost of sugar; (c) the duty or tax, if any, paid or payable thereon; and (d) the securing of a reasonable return on the capital employed in the business of manufacturing sugar, and different prices may be determined, from time to time, for different areas or for different factories or for different kinds of sugar. Explanation : For the purposes of this sub-section, "producer" means a person carrying on the business of manufacturing sugar. 19 ] (4) If the Central Government is of opinion that it is necessary so to do for maintaining or increasing the production and supply of an essential commodity, it may, by order, authorize any person (hereinafter referred to as an authorized controller) to exercise, with respect to the whole or any part of any such undertaking engaged in the production and supply of the commodity as may be specified in the order such functions of control as may be provided therein and so long as such order is in force with respect to any undertaking or part thereof, - (a) the authorized controller shall exercise his functions in accordance with any instructions given to him by the Central Government, so, however, that he shall not have any power to give any direction inconsistent with the provisions of any enactment or any instrument determining the functions of the persons in-charge of the management of the undertaking, except in so far as may be specifically provided by the order; and (b) the undertaking or part shall be carried on in accordance with any directions given by the authorized controller under the provisions of the order, and any person having any functions of management in relation to the undertaking or part shall comply with any such directions. (5) An order made under this section shall, - (a) in the case of an order of a general nature or affecting a class of persons, be notified in the Official Gazette; and (b) in the case of an order directed to a specified individual be served on such individual, - ( i ) by delivering or tendering it to that individual, or (ii) if it cannot be so delivered or tendered, by affixing it on the outer door or some other conspicuous part of the premises in which that individual lives, and a written report thereof shall be prepared and witnessed by two persons living in the neighborhood. (6) Every order made under this section by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament, as soon as may be, after it is made. Comment : “The decision to prefer an uneducated person over an educated person amounts to allowing premium on ignorance, incompetence and consequently inefficiency. The only fault of the appellant is to have pursued his studies beyond 10th class of his school. If he had discontinued his career as a student even earlier, say after passing 7th or 8th class, he would have been running the shop today. This clearly amounts to gross arbitrariness and, therefore, illegal discrimination. Pursuing this line the State will have to be going in search of a more inefficient person and we do not know where this process would end. If we assume that since a better qualified person has got a better chance to succeed in life, an intelligent applicant who can run the shop efficiently should be rejected and a dim witted fellow should be selected. This is an absurd situation. Y. Srinivasa Rao , Appellant v. J. Veeraiah AIR 1993 SUPREME COURT 929

An order made under Sec. 3 may confer powers and impose duties upon the Central Government or the State Government or officers and authorities of the Central Government or State Government, and may contain directions to any State Government or to officers and authorities thereof as to the  exercise of any such powers or the discharge of any such duties.

The Central Government may, by notified order, direct that [ 20 the power to make orders or issue notification under Sec. 3 20 ] shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also by, - (a) such officer or authority subordinate to the Central Government, or

Any other made under Sec. 3 shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act.

[ 47 (1) If any person contravenes any order made under Sec. 3, - (a) he shall be punishable, - ( i ) in the case of an order made with reference to Cl .(h) or Cl .( i ) of sub-section (2) of that section, with imprisonment for a term which may extend to one year and shall also be liable to fine, and

Any person who attempts to contravene, or abets contravention of any order made under section 3 shall be deemed to have contravene that order: [ 60 PROVIDED that where a person has abetted the contravention of any order for the purpose of procuring any essential commodity of the nature mentioned in sub-clause ( iva ) or sub-clause (v) of clause (a) of section 2 for his own use or for the use of any member of his family or for the use of any person dependent on him, and not for the purpose of carrying on any business or trade in such essential commodity, the court may notwithstanding anything contained in section 7 and for reasons to be mentioned in the judgment, impose a sentence of fine only. 60 ]

If any person. – ( i ) when required by any order made under Sec. 3 to make any statement or furnish any information, makes any statement or furnishes any information which is false in any material particular and which he knows or has reasonable cause to believe to be false, or does not believe to be true, or (ii) makes any such statement as aforesaid in any book, account, record declaration, return or other document which he is required by any such order to maintain or furnish, he shall be punishable with imprisonment for a term which may extend to [ 61 five years, 61 ] or with fine, or with both.

(1) If the person contravening an order made under Sec. 3 is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly : Provided that nothing contained in this sub-section shall render any such person liable to  any punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any Director, Manager, Secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation : For the purposes of this section, - (a) "company" means any body corporate, and includes a firm or other association of individuals; and (b) "director" in relation to a firm means a partner in the firm.

No Court shall take cognizance of any offence punishable under this Act except on a report in writing of the facts constituting such offence made by a person who is a public servant as defined in Sec. 21 of the Indian Penal Code (45 of 1860) [ 68 or any person aggrieved or any recognized consumer association, whether such person is a member of that association or not 68 ]. [ 69 Explanation : For the purposes of this section and Sec. 12-AA. 70 "recognized consumer association" means a voluntary consumer association registered under the Companies Act, 1956(1 of 1956) or any other law for the time being in force. 69 ]

Section 12 12 [ 70 * * * 70 ]

Where an order purports to have been made and signed by an authority in exercise of any power conferred by or under this Act, a court shall presume that such order was so made by that authority within the meaning of the Indian Evidence Act, 1872 (1 of 1872).

Where a person is prosecuted for contravening any order made under Sec. 3 which prohibits him from doing any act or being in possession of a thing without lawful authority or without a permit, license or other document, the burden of proving that he has such authority, permit, license or other document shall be on him.

(1) No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done in pursuance of any order made under Sec. 3. (2) No suit or other legal proceeding shall lie against the Government for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of any order made under Sec. 3.

(1) The following laws are hereby repealed, - (a) The Essential Commodities Ordinance, 1955 ( Ord . 1 of 1955); (b) any other law in force in any State immediately before the commencement of this Act in so far as such law controls or authorizes the control of the production, supply and distribution of, and trade and commerce in, any essential commodity. (2) Notwithstanding such repeal, any order made or deemed to be made by any authority whatsoever, under any law repealed hereby and in force immediately before the commencement of this Act, shall, in so far as such order may be made under this Act, be deemed to be made under this Act and continue in force, and accordingly any appointment made, license or permit granted or direction issued under any such order and in force immediately before such commencement shall continue in force until and unless it is superseded by any appointment made, license or permit granted or direction issued under this Act. (3) The provisions of sub-section (2) shall be without prejudice to the provisions contained in Sec. 6 of the General Clauses Act, 1897 (10 of 1897), which shall also apply to the repeal of the Ordinance or other law referred to in sub-section (1) as if such Ordinance or other law had been an enactment.