Introduction

Nowadays, every person’s life depends upon some essential commodities, which are used by
them every day. These commodities are the basic requirements to sustain a normal life.
Thus, the availability and price of such commodities impose a major effect on the life of the
general public. Therefore, to regulate the pricing, production, demand, and supply of these
products, The Essential Commodities Act, 1955 plays a major role.   

Historical Background of the Act

The roots of this Act can be traced back to 1939 when, the Government of India made rules
regarding control, production, supply, and distribution of certain specific commodities under
the Defence of India Act, 1939 during World War 2. The Act ceased to exist in 1946.
However, it was felt that certain regulations are needed urgently for the protection of some
essential commodities in the interest of the general public. Therefore, The Essential
Supplies (Temporary Powers) Ordinance passed in 1946, which was subsequently replaced by
the Essential Supplies (Temporary Powers) Act, 1946.

The provisions of this Act were further extended by two resolutions of the General
Assembly in 1948 and 1949. After independence, by the 3rd Constitutional Amendment, the
first Essential Commodities Ordinance was passed, which was subsequently replaced by the
present Act namely, The Essential Commodities Act, 1955.

Object and Scope of the 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, therefore, the Act provides rules related to the regulation and control of
production, pricing, and distribution of the essential commodities. 

There are two main aims of this Act: 

(1)To maintain or increase the supply of these essential commodities, and

(2)To secure equitable distribution and availability of these essential commodities.

Powers of Central Government Under the Essential Commodities ( Section 3)

The Central Government under this Act have two important powers: 

1. Power to Notify the essential commodity

Under this power, the Central Government from time to time adds and removes any
commodity from the schedule for the interest of the general public. However, the
commodities in regard to those such powers are exercise must have to be given under entry
33, list 111 of the 7th schedule of the constitution.

2. Power to issue a control order (Section 3)

Under this Act, the Central Government has the power to issue control orders. Such orders
provide for regulation and prohibition of essential commodities scheduled in one of the
following circumstances:

 When the government finds that it is necessary and expedient to do in favor of the
general public.

 When they have to secure equitable distribution and availability of these commodities
in the market.

 When they have to secure any specific commodity for the Defence of India.  

Purposes for passing control order

1. To regulate by license, permit or otherwise

The central government by issuing license and permit regulates the production, distribution,
supply, storage, transport, acquisition of any essential commodity. Therefore the government
issue ration/fair price shop license, importing/exporting license, etc.

2. To bring under cultivation of any wasteland or arable land

The Central Government by passing control order may bring any wasteland or arable land
under cultivation for the purpose of growing, maintaining and increasing cultivation of any
general or specific food crop.  

3. To control the buying and selling price of any essential commodity

The Central Government may pass any control order to control the buying and selling price of
any essential commodity. This type of control order can be issued: 

 To Improve domestic availability;

 Keep the price at a reasonable level, and

 Regulate the artificial inflation due to hoarding and black marketing.

Example- Drug Price Control Order(DPCO-2013), Kerosene (restriction on use and fixation of

ceiling price order )1994-2015

4. To determine entry, search, examine, seizure of any essential commodities

The Central Government by passing control order may determine entry, search, examination,
seizure of: 

 Any conveyance such as aircraft, vessels, vehicles used to carry essential commodity;

 Any packages, covering or receptacle in which any essential commodity are found or
packed;

 Any book of account and documents which gave the information about any essential
commodity.
 5. To require any person to do specific works

The central government may pass the control order for required any person who is engaged
in production or business of buying and selling of the essential commodity to sell whole or any
specific part of a commodity held in stock or when any commodity is likely to receive in
future whole or specific part of such commodity when received to the Central Government or
State Government or to the corporation owned or controlled by the government or to the
officer or agent of the government or to another person or class of person specified
thereof.

The Central Government also requires such a person to maintain and produce for inspection
such books, accounts, and records related to his business and furnish such information
specified under the order.

6. To regulate or prohibit any class of commercial and financial transactions

The Central Government may pass the control order to regulate or prohibit any class of
commercial or financial transactions relating to any foodstuff which is in the opinion of the
authority unregulated and is likely to be detrimental to the public interest.

Penalties (Section 7)

There are different kinds of penalties imposed upon different kinds of offences. 

OFFENCES PENALTIES

Contravene the  order made under clause (h) and (i) of Imprisonment for a term which
the SubSection(2) may extend to 1 year with fine

Imprisonment not less than 3

Contravene the other orders except above two. months which may extend up to
7 years with fine 

Imprisonment not less than 3

Fails to comply with the direction given under clause
months which may extend up to
(b) of Sub-Section (4)
7 years with fine 

If any person convicted for offences under

Imprisonment not less than 6
Section Sub-clause (ii) of clause (a) of Sub-Section (1)
months which may extend up to
or under Sub-Section (2)  again convicted on the same
7 years with fine 
provision
 If the offences convicted under Sub-clause (ii) of
Imprisonment for the term of 3
clause (a) of Sub-Section (1) or under Sub-Section
months or 6  months whichever
(2)  does not cause any substantial harm to any
is required as per the case.
individual or the general public.

Landmark Judgments

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

This case established the importance of the concept of mens rea under the essential
commodities Act,1996

 Facts 

In this case, the applicant was the dealer of foodgrains at Dhar in Madhya Pradesh. He was
prosecuted for having in stock 885 maunds and 21/4 seers of wheat without a license for the
purpose of sale thereby committed an offence under Section 7 of essential commodities
Act,1995. The appellant pleaded that he did not intentionally contravene the provision of the
Act, he said that he stored the goods after applying for the license and he was fully
convinced by the government authorities that it would be issued to him.

 Held 

In this case, it was held that the mere fact that the nature of the statute is to promote
welfare Activity and eradicate the social evil itself does not exclude mens rea from its
ambit. The elements of mens rea excluded from any statute only if it defeats the object to
such a statute. 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 ingredient of offences committed
under it. Therefore in 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 contravening of the order issued
under Section 3 he was not prosecuted for this offence. 

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

 Facts

In this case, the respondents who were lorry driver, cleaners and coolie were prosecuted for
the offence committed under Section 3 and Section 7 of the essential commodities Act.
They were carrying bags of fertilizers in trucks from Indore to Maharashtra. The lorry
driver possessed invoice and other records but they did not include a permit issued
under the Fertilizers (movement control) Order, 1973. However, the accused did not deny
the fact that they transport bags of fertilizers in their respective lorries and intercepts
the lorries at Sendhwa sales tax barrier but said that they had no knowledge about the
contents of the document so seized.
  Held

The Supreme Court, in this case, held that the main 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 to take within the fold of not only the offences of
contraventions done knowingly or intentionally but even unintentionally. In this case, the
mere fact that the respondent exports bags of fertilizers without permit 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 mental state or innocuous purpose involved in the parts of
the respondents. Therefore, the Supreme Court did not award any punishment to the
respondent for the commitment of the aforesaid offence.

Conclusion

The Essential Commodities Act,1955 is one of the important laws of the country that applies
for the protection of the interest of the general public. Under this Act, the Central
Government possesses a wide range of powers to control the production and supply of
essential commodities. Under this Act, the Central Government controls the price of the
confiscated or seized essential commodities. All these powers are necessary to maintain the
market.