The document summarizes the key provisions of the Essential Commodities Act of 1955 in India. The act aims to ensure the availability of essential commodities to consumers and protect them from exploitation. It allows the central government to regulate and control the production, distribution, and pricing of essential commodities. The act defines essential commodities, provides for issuance of control orders, sets penalties for violations, and establishes procedures for seizure, appeal and prosecution related to essential commodities.

1. THE ESSENTIAL COMMODITIES
ACT, 1955
IMPORTANT PROVISIONS
SUBMITTED BY:
MEGHA ROY
MBA (RM)
203511
798/20
SUBMITTED TO:
DR. RAVI SHARMA

2. THE ESSENTIAL COMMODITIES ACT, 1955
(ACT NO. 10 OF 1955)
AN ACT TO PROVIDE IN THE INTEREST OF THE GENERAL PUBLIC FOR THE
CONTROL OF THE PRODUCTION, SUPPLY AND DISTRIBUTION OF TRADE AND
COMMERCE IN CERTAIN COMMODITIES.

3. OBJECTIVE 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.

4. IMPORTANT DEFINITIONS
ESSENTIAL COMMODITY
According to the Essential Commodities Act, essential commodities mean any commodity specified
in the schedule. Thus, there are 7 following commodities that are specified in the schedule:
• 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 its seeds;
• Hank yarn, made wholly with cotton;
• Petroleum and its products;
• Jute, whether in the form of raw or textiles;
• Seed, whether of fruits and vegetables, of cattle fodder,
or of jute.

5. “COLLECTOR”
• According to the Act, collector means an Additional Collector or such other officer, not
below the rank of the sub-divisional officer who is authorized by the Collector to
perform the powers and functions of the Collector.
‘’NOTIFIED ORDER’’
• This means an order which is notified in the Official Gazette.
“SUGAR”
• According to the Act, the word sugar includes any form of sugar which contains more
than ninety percent of sucrose, including sugar candy, khandsari sugar, bura sugar,
crushed sugar, crystalize or powder sugar or the sugar whether in a form of process in a
factory or raw produce.

6. LAWS RELATING TO MAINTENANCE OF ESSENTIAL
SUPPLIES
• Govt. enacted the Prevention of Black Marketing and Maintenance of Supplies of
Essential Commodities Act, in the year 1980.
• It was enacted in order to control illegal activities and offences under the Essential
Commodities Act, 1955.
• This Act provides powers to officers of both state and central govt. to pass the detention
order against the persons who seek to control production, distribution and supply, trade
and commerce of those essential commodities defined under section 2 of the Essential
Commodities Act, 1955.

7. POWERS OF CENTRAL GOVERNMENT UNDER THE
ESSENTIAL COMMODITIES (SECTION 3)
POWER TO NOTIFY THE ESSENTIAL COMMODITY
• Central govt. time to time adds and removes any commodity from the schedule for the interest of the
general public.
• The commodities must be given under entry 33, list 111 of the 7th schedule of the constitution.
POWER TO ISSUE A CONTROL ORDER
• Here the central govt. has the power to issue control orders which regulates and prohibits the essential
commodities scheduled in one of the following circumstances:
1. When the government finds that it is necessary and expedient to do in favor of the general public.
2. When they have to secure equitable distribution and availability of these commodities in the market.
3. When they have to secure any specific commodity for the Defence of India.

8. PURPOSES FOR PASSING CONTROL ORDER
• To regulate by license, permit or otherwise
• To bring under cultivation of any wasteland or arable land
• To control the buying and selling price of any essential commodity
• To determine entry, search, examine, seizure of any essential commodities
• To require any person to do specific works
• To regulate or prohibit any class of commercial and financial transactions

9. PRICE CONTROL UNDER THE ESSENTIAL
COMMODITIES ACT, 1955 [SECTION 3(3)]
Where any person sells any essential commodity in compliance of the order made under Section 3, the price of
that essential commodity shall be determined as:
• Agreed price– When the parties have already agreed upon the controlled price fixed under this Section.
• Controlled price– When no such agreement can be reached, the price is calculated with reference to the
controlled price.
• Market price– Where neither the above prices apply, then the price is calculated according to the average
market rate prevailing in the locality.

10. FIXING THE PRICE OF ESSENTIAL COMMODITIES
DURING AN EMERGENCY (SECTION 3A)
• The Central Government, when finds necessary to control the emergency situation, may issue a notification
regarding the selling price of any foodstuff in any locality.
• The price of such food-stuff would be determined according to the following rule:
1.If the foodstuff constantly falls under the category of controlled price and the parties have already agreed upon
it then the price is calculated according to that agreement.
2.If there is no such agreement related to the foodstuff can be reached then the price is calculated with reference
to the controlled price.
3.When there is a situation where condition 1 and condition 2 do not apply then the price of such foodstuff is
calculated according to the average market rate prevailing in the locality.
• The notification issued under this Section shall remain in force for 3 months only.

11. PAYMENT OF PROCUREMENT PRICE (SECTION 3B)
• When there is no aforesaid notification issued regarding the price of any food crop, edible
oilseeds or edible oils the price of such would be determined after keeping in the mind:
• The controlled price, fixed under this law or any other law for the time being in force such food
crop, edible oilseeds or edible oil;
• The general crop prospects;
• The need for such grade or variety;
• Recommendation of the Agriculture Price Commission.

12. FIXING A PRICE FOR SUGAR TO BE PAID TO THE
PRODUCER (SECTION 3C)
When there is no aforesaid notification issued regarding the price of sugar, then the
price of sugar would be determined after considering the following:
• The price of sugarcane.
• The manufacturing cost
• The duty and tax
• The reasonable return to the business and manufacturers

13. POWER TO APPOINT AUTHORIZED CONTROLLER
[SECTION 3(4)]
• The Central Government has the power to authorize any person to undertake
powers and functions for maintaining or increasing the production, supply and
equal distribution of any essential commodity.
• The authorized controller empowered only to exercise such power and function
which may be provided in the undertaking.
• Thus the authorized controller empowered would continue his function as long as
such order remains in force.

14. ISSUANCE AND SERVICE OF CONTROL ORDERS
UNDER (SECTION 3)
The control orders which are issued by the government is notified in the following manner:
1.If the order is directed to the general public, it will be notified in the Official Gazette, and
2.If the order is directed to a specific person, it will be served to such individual:
• by delivering and tendering it to that specific person, or
• if it cannot be so delivered or tendered, it can be served by affixing it on the outer side or any other
conspicuous part of the premises in which such person lives. A written report thereof shall also be
prepared and witnessed by two persons living in the neighborhood.

15. THE IMPOSITION OF DUTIES ON STATE GOVERNMENT
(SECTION 4)
• The Central Government or officer or authority of the Central Government or any State Government has
the power to, direct any state government or officer or authority of that State Government to exercise any
such power and discharge any such duties in which the direction confers.
DELEGATION OF POWERS (SECTION 5)
The central government by issuing notified order may delegate its power to make orders and issue
notifications to
• Any authority and officer of the central government or to any State Government; or
• Any state government or any authority or officer of such state government.

16. SEIZURE AND CONFISCATION OF ESSENTIAL
COMMODITIES (SECTION 6A)
• It talks about the power of the collector to confiscate or seize any essential commodity.
• The collector may pass orders to confiscate any package/covering/receptable under which such
commodity was packed or to confiscate any animal, vehicle, or any other conveyance of such
commodity.
• No order of confiscation will be passed against any person if such food grains or foodstuffs are
produced by himself.
• When order of seizing and confiscation is made for the animal, vessels or other conveyances
which are owned or hired by the owner then it is necessary to give the offender an option to pay
in lieu of such seizure or confiscation.
• However, the fine imposed does not exceed the market price of the commodity sought to be
carried by such conveyance.

17. DISPOSAL OF SALE PROCEEDS OF CONFISCATED
GOODS (SECTION 6A)
The collector, on receiving the report of seizure or on inspecting such essential commodity finds that if
it is necessary and expedient in the public interest so to do, he may:
• Immediately pass the Order to sell that commodity at the controlled price. if fixed
• Where no such price is fixed then pass the order to sell it on a public auction.
The sale proceeds of aforesaid confiscated good after deducting necessary expenses shall be paid to
the owner or person from whom it is seized and in the following circumstances:
• Where no order is ultimately passed by the collector;
• Where the order passed is on appeals;
• Where in the prosecution of contravention of the order, the person concerned is acquitted.

18. ISSUANCE OF SHOW CAUSE NOTICE BEFORE
CONFISCATION OF ESSENTIAL COMMODITY (SECTION 6B)
• There is no order for confiscation of any essential commodity is passed against any person without
giving him a written notice which informs him about the grounds on which such order is proposed
and to provide him an opportunity to make his presentation in writing.
AN APPEAL AGAINST CONFISCATION ORDER (SECTION 6C)
• Any person aggrieved by any order of confiscation is entitled to appeal to the judicial authority
appointed by the government within one month from the date of the communication. And the
appellate Court, after hearing the case, may confirm, modify, or annul such an order.

19. OFFENCES AND PENALTIES
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)
Imprisonment not less than 3 months which may extend
up to 7 years with fine
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.

20. OFFENCES BY THE COMPANY (SECTION10)
• When the offences mentioned in section 7 are committed by any company then every person who
is in charge or responsible for the conduct and business of the company is held guilty for the
offences and is liable for the punishment.
• It is provided that when any person liable for punishment successfully proved that the
contravention has been taken place without his knowledge and he exercised due diligence at the
time of contravention to prevent it then he would not become liable for any punishment for such
offence.

21. COGNIZANCE OF OFFENCES (SECTION
10AAND SECTION 11)
According to these above Sections it is held that notwithstanding anything contained in the Code of
Criminal Procedure, every offence punishable under this Act, shall be cognizable, but the Court
shall not take cognizance of any such offence except on the report, made by a public servant,
defined under Section 21 of the Indian Penal Code.
BURDEN OF PROOF IN CERTAIN CASES (SECTION 14)
Under this Act, it is said that the burden of proof shall always lie upon the person who possesses
any essential commodity without having any lawful authority or permit or license.

22. PRESUMPTION OF CULPABLE MENTAL STATE
(SECTION 10C)
• The culpable mental state means having a mala-fide intention under which any person commits
offences. Under this Act, the Court always presumes that the culpable mental state exists at the time of
commitment of every offence.
• However, the defense has to prove that he does not have any such intention. So we can conclude that at
earlier the burden of proof is always upon the prosecution. In the Essential Commodities Act, 1955 the
culpable mental state of any person shall be presumed under the following two situations.
ATTEMPT OR ABETMENT
• If any person is found guilty of attempts to contravene or abets to contravene any order made
under Section 3 of the Act, then it will be presumed that such person has a ‘culpable mental state’.
FALSE STATEMENT
• If any person, when required by the law, makes any statement that is false or presumed to be false or
presents any false statement in any book, account, record, declaration, etc then it shall be presumed
that he has a culpable mental state.

23. PROSECUTION OF ACTION TAKEN UNDER THE ACT
(SECTION 15)
This section provides that no prosecution or proceeding shall be instituted against the person who
acted in good faith or in pursuance of the order made under Section 3.
COGNIZANCE OF OFFENCES AGAINST THE PUBLIC
SERVANTS (SECTION 15A)
When any public servant alleged to have committed any offence while discharging of his duty given
under Section 3 of this Act, In that case, the Court of law can take cognizance, only after taking
sanction from the Central Government, or state government under whose authority such a person is
employed.

24. 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.