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Punishing Black Marketing & Hoarding of Essential Medical Supplies amid the Second Wave of Covid19

 > Criminal Law  > Punishing Black Marketing & Hoarding of Essential Medical Supplies amid the Second Wave of Covid19

Punishing Black Marketing & Hoarding of Essential Medical Supplies amid the Second Wave of Covid19

Here we will see laws against Black Marketing and Hoarding which is happening with respect to the essential medical supplies amid this Coronavirus pandemic. Then, we will see how we can register a complaint i.e. a criminal complaint against Black Marketing and Hoarding and what are the criminal defenses available to us in case we are booked under such laws. At last, judgement and order of the Court regarding Black Marketing and Hoarding of life-saving drugs oxygen cylinder, Favipirarvir, Remdesivir, Tocilizumab etc.

Definition of Black Marketing and Hoarding
The term ‘Black-Marketing’ has a very wide scope. It means illegal transactions of production and distribution of the services and goods that are prohibited by law or government.

The term ‘Hoarding’ is not defined in any Act that is enacted in India. Hoarding means purchasing a large quantity of any commodity and waiting for the price of such commodity to rise. In order to create a monopoly-like situation in the market, so the price of such commodity can be controlled. Hoarding can be considered as one part of Black marketing.

Central Laws on Black Marketing and Hoarding are:

  1. The Essential Commodities Act, 1955
  2. The Prevention of Black marketing and Maintenance of Supplies of Essential Commodities Act, 1980

The Essential Commodities Act, 1955: According to Section 2A of the Essential Commodities Act, 1955, “essential commodities” are those commodities that are mentioned in the schedule with the Act. In Schedule, Entry 1 is about Drugs and the explanation given in the same entry states that the meaning of the word “Drug” used in the entry is the same as given in section 3(b) of the Drugs and Cosmetics Act, 1940.

As per Section 3(b) of the Drugs and Cosmetics Act, 1940, “Drug” includes
i. All medicines used, externally and internally, for human as well as animal. Also, all substances used in or for prevention or mitigation of any disease or disorder in human beings or animals, diagnosis, treatment.
ii. All substance other than food that is used to affect the structure or any function of the human body or intended to be used for the destruction of insects or vermin which cause disease in human beings or animals,
iii. All materials that are used as a component of drugs.
iv. All devices used, externally and internally, for humans as well as animals for prevention or mitigation of any disease or disorder in human beings or animals, diagnosis, treatment, in accordance with the notification by the Central Government in Official Gazette from time to time.

Hence, life-saving drugs and essentials such as oxygen cylinder, Favipirarvir, Remdesivir, Tocilizumab etc. are essential commodities. Through Notification No. S.O. 1087(E) (w.e.f. 13-3-2020) Masks (2ply & 3ply surgical masks, N95 masks) and Hand Sanitizers were added. The Section 2A(2) empowers Central Government, after consultation with the State Government, to add or remove any commodities from the list of essential commodities given in the Schedule. To control or curb black marketing and hoarding of essential commodities, Section 3(1) of the Act empowers Central Government, if necessary and expedient, to pass an order for regulating and prohibiting distribution, supply and production and trade and commerce for the purpose of:
i. maintaining or increasing supplies of any essential commodity,
ii. securing their equitable distribution and availability at fair prices,
iii. securing any essential commodity for the defence of India or the efficient conduct of military operations.

The Central Government also has power under Section 3(2)(c) and under Section 3(2)(d) to control the price of essential commodities and to regulate licences, permit or otherwise for storage, acquisition, use or consumption of, disposal, distribution of essential commodities, respectively. black marketing and hoarding shall be a cognizable offence as per Section 10. Clause (h) and clause (i) of sec. 3(2) empowers the Central Government for collecting statics and information to keep a check on the essential commodities and for requiring any person who is engaged in supply or distribution of or trade and commerce of the essential commodities to show his accounts and books for inspection. The Central Government exercising its power under Section 3 of the Essential Commodities Act, 1955, has passed the Drugs (Prices Control) Order, 2013. This order keeps check on the pricing of any drug and also empowered to regulate the production, supply and transportation of drugs.

The Prevention of Black marketing and Maintenance of Supplies of Essential Commodities Act, 1980: According to sec. 3(1)(b) of the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980, “essential commodities” shall be defined as per the Essential Commodities Act, 1955 and any other laws for time being in force regarding control of the production, supply, distribution of, or trade and commerce of any commodity essential to the community. In order to control or curb black arketing and hoarding of essential commodities, Section 3(1) of the Prevention of Black marketing and Maintenance of Supplies of Essential Commodities Act, 1980, empowers:
i. Central Government
ii. Officers of the Central Government who should not be below the rank of a Joint Secretary
iii. State Government
iv. Officers of the State Government who should not be below the rank of a Secretary
to order ‘Detention’ of any person to prevent any act of such person which could be prejudicial to the maintenance of supplies of the essential commodities to the society.
After conviction, the maximum period for detention order under Section 12 could be upto 6 months from the date of detention. Such detention order can be revoked at any time under Section 14 by the State Government and/or the Central Government.

How to lodge or register a Complaint against Black Marketing and Hoarding
Anywhere India, any person can take any of the following steps to complain:
 Dial 100 or visit near Police Station under whose jurisdiction such offence is taking place and give information regarding Black Marketing and Hoarding to the Officer in charge of that Police Station under Section 154(1) of the Code of Criminal Procedure, 1973. Code of Criminal Procedure, 1973 under Section 154(1) empowers every person to give information to an Officer in charge of a Police Station which in other word is called First Information Report. The complaint can be made in both forms i.e., written as well as oral form.
 If the Officer in charge of a Police Station refuses to act on the complaint, then under Section 154(3) Code of Criminal Procedure, 1973 complaint in writing can be sent by post to the Superintendent of Police under whose jurisdiction offence of Black Marketing and Hoarding is taking place.
 Write application regarding Black Marketing and Hoarding to the District Magistrate or Add. District Magistrate of the district where the offence is taking place.
 Complaint of Black Marketing and Hoarding can be made through:
i. National Consumer Helpline No. 1800114000 OR 14404
ii. By registering complaint online through https://consumerhelpline.gov.in/
iii. By registering complaint through NCH APP OR Consumer App OR UMANG APP. These apps are available in Playstore
 A complaint can be made to the Ministry of Consumer Affairs via email: dsadmin-ca@nic.in, dirwm-ca@nic.in and secy.doca@gov.in.
Various State Government due to the exponential rise in cases of Black-marketing and Hoarding of life-saving drugs such as oxygen cylinder, oximeter, Remdesivir, Tocilizumab etc. have launched helpline no. to take action swiftly. The Delhi Government has launched helpline no. 011-23469900 for complaining against Black-marketing and Hoarding. The Haryana Government has launched helpline no. 7087089947 and 1800-180-1314 for complaining against black-marketing and Hoarding.

Criminal Defenses available to an Accused against the charges of Black Marketing & Hoarding
If you are caught or arrested by the Drug Control Inspector or Police, then what you can do is stated below:

  1. Detention Order of the Accused: If an order of the Detention under Section 3(1) of the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 is passed against the accused, then the accused have Right of Representation before the Advisory Board. Before passing the order of detention, the Advisory Board must give a reasonable opportunity to the accused of representation. The Advisory Board constituted by the Central Government, or by the State Government, excising power under Section 9 of the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980. This board holds the accused guilty or acquits him under Section 12 of the aforementioned act after hearing both sides, examining the fact report, grounds of detention and all other relevant materials submitted before it by the Collector.
  2. Revocation of Detention Orders: As per the Section 14 of the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980, confers power to the Central Government and the State Government to revoke or modify the order of detention, at any time.
  3. Temporary Release of the Detained Person: As per the Section 15 (1) of the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980, confers power to the Central Government and the State Government to temporary release, at any time, any detained person under this act. Such temporary release can be grant either without conditions or upon such conditions specified in the direction as that person accepts, and may, at any time, cancel his release. The Appropriate Government while granting release under Section 15(1) of the aforementioned act to the detained person may require him to enter into a bond with or without sureties for the due observance of the conditions specified in the direction.
  4. Representation before Confiscation Order: If any life-saving drugs such as oxygen cylinder, Favipirarvir, Remdesivir, Tocilizumab etc. is seized by Drugs Control Inspector or Police, then it is mandatory for the collector under Section 6B(1)(c) of the Essential Commodities Act, 1955 that before passing an order of confiscation under Section 6A(1) of the aforementioned Act, he/she shall give a reasonable opportunity to the accused representation. No confiscation order shall be made unless the accused is given a reasonable opportunity of representation.
  5. Appeal: In case of confiscation, any person aggrieved by the order of confiscation under Section 6A may appeal in the Judicial Authority (Stands for District and Session Court) appointed by the government in this behalf within 30 days from the date of communication of the order. The Judicial Authority has the power to modify, confirm and annul the order of the collector after considering reports and hearing the appellant. If in case Judicial authority modifies or annul confiscation order, then essential commodities which are confiscated shall be returned under Section 6C with reasonable interest calculated from the day of the seizure, as the case may be. The Court while hearing shall presume that the accused has culpable mental, as per Section 10C, and order issued by the authority within the meaning of the Indian Evidence Act, 1872, as per Section 13. In case of an order of the Detention under Section 12 of the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 is passed, then Appeal can be made to Court of Session under Section 382 of the Code of Criminal Procedure, 1973. No further appeal can be made for the order of the Detention under Section 12 of the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 as well as Order of Confiscation under Section 6B(1)(c) of the Essential Commodities Act, 1955.
  6. Filing of a Revision Application: A Revision Application under Section 397(3) of the Code of Criminal Procedure, 1973 may be made to the High Court having jurisdiction. Revision Application is made for requesting the Court to revise judgement or decree passed by the inferior Court. Revision Application can be made for the Order of the Detention under Section 3(1) of the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 as well as Order of Confiscation under Section 6B(1)(c) of the Essential Commodities Act, 1955.
  7. Filing a Special Leave Petition: A Special Leave Petition under Article 136 of the Constitution of India, 1950 can be made to the Supreme Court of India. Article 136 confers power to the Supreme Court to provide special leave for appeal from any decree, judgment, sentence, determination, or order in any matter or cause passed or made by any tribunal or Court in the territory of India. Special Leave Petition can be made for the order of the Detention under Section 12 of the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 as well as Order of Confiscation under Section 6B(1)(c) of the Essential Commodities Act, 1955.

Important Case Laws on Black Marketing & Hoarding:
In Re: Distribution of essential supplies and service during pandemic [SMWP (Civil) No. 3 of 2021] the Hon’ble Supreme Court took suo moto cognisance of the case after seeing a rise in cases of Black marketing and Hoarding of an oxygen cylinder, oximeter, Remdesivir, Tocilizumab etc. The apex observed that such acts are condemnable attempt to exploit people’s misery and profit from their helplessness. The apex Court to clamp down on such practises directed Central Government to constitute Special Team who can identify, prosecute and recover those who are selling life-saving drugs such as oxygen cylinder, Favipirarvir, Remdesivir, Tocilizumab etc. at an exorbitant price and also who are selling fake substances. The Court also directed Central Government to evolve a system of an ambulance to control the exploitation of poor by such Ambulance service providers.

The Court on its own motion v. State & Ors. [SMAP No. 01 of 2021 the Hon’ble Bombay High Court took suo moto cognisance of the case after observing an exponential increase in the price of life-saving drugs in ongoing pandemic such as oxygen cylinder, Favipirarvir, Remdesivir, Tocilizumab etc. The Court further observes that the time consumed for punishing offenders in such a case is too much and so it is not possible to dissuade such offenders from indulging in such activities. These are unprecedented times, so unprecedented measures are required to be adopted to deter such unscrupulous people from indulging in the black marketing of the life-saving drug. To create deterrence and send a loud and clear message to such offenders the Court is to make sure that trial should be completed swiftly in cases of black-marketing and hoarding of life-saving drugs such as oxygen cylinder, Remdesivir, Tocilizumab etc. That’s why the Court appointed an Advocate as an amicus curia to take action swiftly against such offenders based on newspaper reports.

In Hamida Sarfaraz Qureishi v. M.S. Kasbekar [CWP No. 3403 of 1981] the Hon’ble Supreme Court has held that if the Advisory Board under Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 not providing the detenu with the right of representation, then the order of detention passed by it shall become vitiated.

In Kundanbhai Dulabhai Shaikh v. Distt. Magistrate, Ahmedabad [CWP No. 491 of 1996] the Hon’ble Supreme Court has held that due to the lethargic attitude of the government, if Representation is pending without proper reason, then in such types of case Court may quash the order of detention to restore liberty and freedom.

In N. Nagendra Rao & Co. v. State of A.P. [WP (Civil) No. 3856 of 1994] the Hon’ble Supreme Court has held that if the confiscated commodity is damaged when it was in possession of the government and later on appeal the Court annuls confiscation order, then the government is liable to compensate for the damaged commodity.

The two acts i.e., The Essential Commodities Act, 1955 and The Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 are imposed to curb black marketing and hoarding of essential commodities. These laws play a vital role to tackle issues such as Black marketing and Maintenance. However, these laws are still failing to curb black-marketing and hoarding. For example, black marketing and hoarding cases are all-time high in the ongoing pandemic. Concerned authorities are struggling to control such cases. The legislature should add provisions in these laws for strictly monitoring of production, supply, and transportation of such essential commodities. Punishment for such offences should be increased. The most important thing, which is the main reason for the major set back for almost every Act, is the proper implementation of such acts. The Executive authorities should start focusing on the proper execution of such laws. Because without proper execution of law the act is useless.
Authored By: Adv. Anant Sharma & Satwik Sharma

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