A Delhi court on Monday remanded restauranter and businessman Navneet Kalra to three days police custody in connection with the oxygen concentrators row. The Delhi police arrested Kalra on Sunday for flouting the Essential Commodities Act, 1955. He had absconding since an FIR was filed on May 7 after the police recovered more than 500 oxygen concentrators were recovered from three of his restaurants — Nege Ju, Townhall and Khan Chacha, in the national capital.
Arguing for bail, advocate Vineet Malhotra submitted that Kalra's "arrest was malafide" since the high court was already hearing his plea seeking pre-arrest bail. Malhotra, who is representing Kalra, added that oxygen concentrators have not been added to the list of essential commodities. "The police have first registered FIR first, and now they're hounding people…".
What is the Essential Commodities Act?
While there is no specific definition of an essential commodity, the Centre can notify commodities it considers to be essential in order to control its production, supply, and distribution. The Centre can also crackdown on hoarders and black marketing by imposing a stock limit on essential commodities. States can also notify commodities as essential depending on prevailing situations.
Currently, there are nine items on the "Schedule" (list of essential commodities): drugs; fertilizers (inorganic, organic or mixed); foodstuffs—including edible oils; hank yarn made wholly from cotton; petroleum and petroleum products; raw jute and jute textiles; seeds of food-crops, fruits and vegetables, seeds of cattle fodder, jute seed, cotton seeds; face masks; and hand sanitizers.
The last two items—hand sanitizers and face masks—were added in March 2020 in light of the pandemic.
Over the years, the government has invoked this act several times to crack down on hoarding which results in an artificial rise in prices.
Any contravention of the law can attract a prison term of up to seven years and a fine.
What is black marketing and hoarding?
The Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 provides for the detention of people who indulge in black marketing of essential supplies. However, the law does not define what black marketing is, or what hoarding is for that matter.
On May 12, a Delhi court pointed this anomaly and observed that the legislature needs to plug this vacuum by issuing appropriate regulations. The court's observation came as it granted bail to Gaurav Khanna, CEO of Matrix Cellular Services, and three others who were arrested for allegedly hoarding oxygen concentrators. Gaggan Duggal, the managing director, is Navneet Kalra's business partner.
"Merely booking manufacturers/importers under the criminal law without a regulatory regime in place and without any evidence, just to show that the state is concerned about the problems of citizens in the procurement of life-saving medical devices, in my considered opinion is counterproductive and shall create a further scarcity of already scarce medical devices as it will discourage the manufacturers and importers from pushing their resources so as to make the essential medical devices available to the needy citizens," the bail order read.
History of the Act?
The act finds its genesis in a colonial law – Defence of India Act, 1939, that was brought in by the British during World War II. The act laid down rules for the control, production, supply, and distribution of specific commodities. The act was struck down in 1946, but the newly independent Indian government felt the need for one and the Essential Commodities Act was finally passed in 1955.
The EC act was to ensure the availability of essential commodities and to ensure consumer protection from unscrupulous traders. The act has two main goals: to maintain/increase the supply of essential commodities; and to secure equitable distribution and availability of the same.
Amendment to the Act
Last year, the Centre amended the provisions of the act as one of its three key reforms in farm laws. The enactment of the amendment, which removes cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities, triggered farmers protests across the country.