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Report No. 29

Appendix 5

Existing Statutory Provisions as to Hoarding and Black-Marketing

Name of the Act

Section number

Gist of the section






1. The Essential Commodities Act, 1955 (10 of 1955).


Section 3(1) empowers the Central Government to regulate the production, supply, etc., of essential commodities. Section 3(2), in particular, states that such order may be,

"(c) for controlling the price at which an essential commodity may be bought, or sold;

(d) regulating by licenses, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity;

(e) for prohibiting the withdrawal from sale of any essential commodity ordinarily kept for sale; for requiring any person holding in stock any essential commodity to sell the whole or a specified part of the stock to the Central Government or to a State Government.

Section 3(1)-

"If the Central Government is of the opinion that it is necessary to do so for controlling the rise in prices, or preventing the hoarding of any foodstuff in any locality it may, by notification, direct that notwithstanding anything contained in subsection 3, the price at which a food stuff shall be sold in that locality in compliance with an order made with reference to clause (f) of sub-section 2, shall be regulated in accordance with the provision of the sub-section.

Section 7(1) prescribes penalties for violation of section 3: punishment for most of these offences is: upto 3 years' imprisonment and also liable for fine. But, the court can, for reasons to be recorded, award only fine if that can meet the ends of justice.

2. The Industries (Development and Regulation) Act, 1951(65 of 1951).


Section 15 empowers the Central Government to conduct an investigation into the affairs of a scheduled industry under certain specified contingencies.

Section 24 prescribes penalties for violation of such direction: imprisonment extending upto six months or with fine extending to Rs. 5,000 or with both. An additional fine may be levied for continuing contravention.


Section 16(1) provides that if by virtue of such investigation, the Central Government is satisfied that some action is desirable, it may issue directions to the said industries which may include "controlling the prices, or regulating the distribution of any article or class of articles which have been the subject-matter of the investigation".


A Section 18A provides that where such a direction is not complied with or where it is considered to be detrimental to the scheduled industry or to the public interest, the management of the industry may be taken under the control of the Government.


(1) The Central Government, if it considers necessary or expedient for securing the equitable distribution and availability at fair prices of any article or class of articles, may provide for regulating the supply and distribution thereof and commerce therein. (2) In particular, the Central Government may order for controlling the prices at which any such article or class thereof may be bought or sold; for regulating by licences, permits or otherwise the distribution, transport, disposal, possession of any such article; for prohibiting the withdrawal from sale of any such article or class thereof ordinarily kept for sale; for requiring any person manufacturing, producing or holding in stock any such article to sell the whole or part of the article to such persons as may be specified in the order; for requiring exhibition of the price-list etc.

3. The Tea Act, 1953 (29 of 1953) 30


Section 30 of this Act closely follows the provisions of the Industries (Development & Regulation) Act, 1951 as referred to above.

Section 41(1) prescribes similar punishment as is prescribed under section 24 of the Act 65 of 1951 referred to above with this different penalty for continuing contravention.

4. The Cotton Cloth Act, 1918 (23 of 1918)

The object of the Act is to encourage and maintain the supply of cloth to poorer classes at reasonable rates.


Section 4(2) empowers the Collector to issue orders inter alia requiring any person; who ordinarily manufactures cotton cloth, to manufacture standard cloth in such quantity and of such quality as the Collector may direct and fixing the prices to be paid to the manufacturer for standard cloth.

Section 8 prescribes punishment for contravention of section 4 with imprisonment upto six months or with fine or with both,


Section 9(1) empowers the State Government to "fix the price at which alone a standard cloth or any class of standard cloth shall be sold to the public".


No person shall sell or keep or offer or expose for sale to the public, standard doth otherwise than at which price as may be fixed by the State Government.....

Section 10(2) punishes those contravening sub-section 10(1) with imprisonment which may extend to six months or with fine or with both.

5. The Coffee Act, 1942(7 of 1942)


The Central Government may fix the prices at which coffee be sold wholesale or retail in the Indian market. No one can sell coffee at a price higher than the one fixed under this section.

Section 36(1) prescribes penalties for violationinter alia of sections 16-17. The punishment may extend upto a fine of Rs. 1,000.


Section 25 provides that any excess coffee produced, shall be delivered to the Board for inclusion in the surplus pool.

Section 38A prescribes punishment for violation of section 25(1): fine upto Rs. 1,000, and the excess produce may also be confiscated.

6. The Preventive Detention Act, 1950 (4 of 1950)


The Central Government or State Government may, with a view to prevent a person from acting prejudically to "the maintenance of supplies, and services essential to the community", direct that such a person shall be detained. Section 3(2) enumerates some other competent authorities to exercise similar powers.

7. The Rubber Act, 1947 (24 of 1947)


Section 13 empowers the Government to fix the maximum or minimum prices or the maximum and minimum prices to be charged in the course of a business of any class of rubber specified in the order.

Section 13(3) states that any person who buys or sells rubber at a price which is more than the maximum price or less than the minimum price, shall be punishable with imprisonment for a term which may extend to one year or with fine or with both.

8. The Drugs (Control)Act, 1950 (26 of 1950).


Section 4 empowers the Chief Commissioner to fix, in respect of any drug, the maximum price or rate to be charged by a dealer or a producer; the maximum quantity which may, at any time, be possessed by a dealer or a producer.

Section 13(1) prescribes that if any one violate the provision of the Act, shall be punishable with imprisonment for a term which may extend to 3 years, or with fine, or with both.


Section 5 prohibits sale of such drugs at a price higher than the fixed rate or to hold more than the quantity of the drugs exceeding the maximum quantity fixed by the Chief Commissioner under section 4.

Section 13(2) further empowers the competent Court to order the forfeiture.


Section 7 requires that excess stock should be reported to the chief Commissioner.


Section 8 prohibits the refusal to sell within the quantity prescribed.

9. The Sugarcane Act, 1934 (15 of 1934).


Section 3 empowers the State Government to declare any area to be controlled area, fix a minimum or maximum price of sugarcane etc.

Section 5 states that whoever purchases sugarcane at a lesser price than the one prescribed, shall be punished with fine which may extend to Rs. 2,000.

10. The Defence of India Act, 1962 (51 of 1962).

Section 3(2)(37) empowers the Central Government to frame rules for "the prevention of hoarding, profiteering, black-marketing, adulteration or any other unfair practices in relation to any goods procured by or supplied to the Government or notified by or under the rules as essential to the life of the community". Rules 125(2) (a)(b) (bb) (bc) (c) of the Defence of India Rules, 1962 may be seen.

Proposal to include certain Social and Economic Offences in the Indian Penal Code Back

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