The Essential Commodities Act (ECA) was enacted by the Central Government in 1955 to regulate and control trade and prices of commodities declared essential under the Act. The Essential Commodities Act empowers the state and central governments simultaneously to control supply, production, and distribution of certain commodities in view of increasing prices. The measures that can be taken under the provision of the Act include, among others, distribution, licensing, and imposing stock limits. The governments also have the power to fix price limits, and selling the particular commodities above the limit will attract penalties. Black marketing of essential commodities was a major issue in the past and this has now been controlled to a huge extent. The Drug Price Control Order (DPCO) and such other orders have been issued under the powers of the Essential Commodities Act (ECA).

As per the Essential Commodities Act, essential commodities mean any commodity mentioned in the schedule. Thus, there are 7 commodities that are specified in the schedule which are as follows :

1. Petroleum and its products;
2. Fertilizers, whether organic, inorganic or mixed;
3. Hank yarn, made wholly with cotton;
4. Drugs (this is used in the same sense as defined under clause b of Section 3 of the Drugs and Cosmetics Act, 1940);
5. Foodstuffs, including edible oils and its seeds;
6. Jute, whether in the form of raw or textiles;
7. Seed, whether of fruits and vegetables, of cattle fodder, or of jute.

Powers of Central and States Governments

The Essential Commodities Act empowers the Centre to order states to impose stock limits and bring hoarders to the task, in order to smoothen supplies and cool prices. normally the Centre specifies upper limits in the case of stock holding and states prescribe specific limits. However in case, there is a difference between states and the Centre, this act specifies that the latter will prevail.

Execution of the Act

Execution of the provisions of the act is done by the Food and civil supply authorities. They normally raid the offices or premises of the businessmen to find out violations along with the local police, who have the authority to arrest. In case a state doesn’t want to accept the Centre’s suggestion on implementing any provision of the Act it can do so. There are reports of Maharashtra not imposing stock limits for onions and potatoes. Uttar Pradesh is not enforcing the Act itself.

Penalties

There are different kinds of penalties imposed upon different kinds of offences which are as follows :

1. Contravene the order made under SubSection(2)(h)(i): Imprisonment for a term which may extend to one year with the fine.
2. Fails to comply with the direction given under Sub-Section (4)(b): Imprisonment not less than three months which may extend up to seven years with fine.
3. If any person convicted for offences under Section(1)(a)(ii) or Sub-Section(2) again convicted on the same provision: Imprisonment not less than six months which may extend up to seven years with fine.
4. If the offences convicted under Section(1)(a)(ii) or Sub-Section(2) does not cause any substantial harm to any individual or the general public: Imprisonment for the term of three months or six months whichever is required as per the case.

Case Laws

Nathu Lal v. State of Madhya Pradesh (AIR 1966 SC 43)

Under this case, it was held that the mere fact that the nature of the statute is to develop welfare Activity and eliminate the social evil itself does not bar mens rea from its ambit. Thus when we read the object of the Essential Commodities Act which is “to control trade in certain commodities for the interest of the general public” we can not say that this would be defeated if the mens rea is read like an element of offences committed under it. Hence, in the offence under Section 7 would be committed only if a person intentionally contravenes the provision of Section 3 of the Act. However, in this case, the appellant successfully proved that he had no guilty intention at the time of having stored the seized essential commodities however despite having contravened the order issued under Section 3 he was not prosecuted for this offence.

State of Madhya Pradesh v. Narayan Singh & Ors (1989 AIR 1789)

In this case, The Supreme Court held that the primary reason to amend Section 7 in 1967 was to impose strict liability on the offender in contravention of the control order through adding the crucial words like “whether knowingly, intentionally, or otherwise”. Therefore now this Section is comprehensively worded so as to take within the fold of not only the offences of contraventions done intentionally or knowingly but even unintentionally. So, the mere fact that the respondent exports bags of fertilizers without authorization itself does not consider as a valid reason for convicting them in this case, the prosecution also failed to prove that there is any culpable innocuous purpose or mental state involved in the parts of the respondents. Thus, the Supreme Court did not award any punishment to the respondent for the commitment of the aforesaid offence.

Satpal Gupta v. the State of Haryana

In this case, it was established that poultry and cattle foods are involved within the meaning of the ‘foodstuff. Therefore, it concludes that the foodstuff is related to both animals and humans.

Conclusion

It can be concluded that The Essential Commodities Act,1955 is one of the principal laws of the country that is applicable for the protection of the interest of the general public. Under The Essential Commodities Act,1955, the Central Government possesses a wide range of authority to control the supply and production of essential commodities. Under this Act, the Central Government keeps in control the price of the seized or confiscated essential commodities. All these powers are necessary to maintain the market.