law: Essential Commodities Act, 1955 
  3. Powers to Control Production, Supply, Distribution, Etc. of Essential Commodities. 
  
  (1) If the Central Government is of opinion
  
  that it is necessary or expedient so to do for maintaining or increasing
  
  supplies of any essential commodity or for securing their equitable
  
  distribution and availability at fair prices, [ 12 or for securing any
  
  essential commodity for the defense of India or the efficient conduct of
  
  military operations 12 ], it may, by order, provide for regulating or
  
  prohibiting the production, supply and distribution thereof and trade and
  
  commerce therein.
  (2) Without prejudice to the generality of the
  
  powers conferred by sub-section (1), an order made thereunder 
  
  may provide, -
  (a) for regulating by
  
  licenses, permits or otherwise the production or manufacture of any essential
  
  commodity;
  (b) for bringing under
  
  cultivation any waste or arable land, whether appurtenant to a building or not,
  
  for the growing thereon of food-crops generally or of specified food-crops, and
  
  for otherwise maintaining or increasing the cultivation of food-crops
  
  generally, or of specified foods-crops;
  (c) for controlling the price at which any essential commodity may be bought or
  
  sold;
  (d) for regulating by
  
  licenses, permits or otherwise the storage, transport, distribution, disposal,
  
  acquisition, use or consumption of, any essential commodity;
  (e) for prohibiting the withholding from sale of any essential commodity
  
  ordinarily kept for sale;
  (f) [ 13 for requiring
  
  any person holding in stock, or engaged in the production, or in the business
  
  of buying or selling, of any essential commodity, -
  (a) to sell the whole
  
  or a specified part of the quantity held in stock or produced or received by
  
  him, or
  (b) in the case of any
  
  such commodity which is likely to be produced or received by him, to sell the
  
  whole or a specified part of such commodity when produced or received by him,
  
  to the Central Government or a State Government or to an officer or agent of
  
  such Government or to a Corporation owned or controlled by such Government or
  
  to such other person or class of persons and in such circumstances as may be
  
  specified in the other.
  Explanation 1 : An order made under
  
  this clause in relation to food grains, edible oilseeds or edible oils, may,
  
  having regard to the estimated production, in the concerned area, of such food
  
  grains, edible oilseeds and edible oils, fix the quantity to be sold by the
  
  producers in such area may also fix, or provide for the fixation of, such
  
  quantity on a graded basis, having regard to the aggregate of the area held by,
  
  or under the cultivation of the producers.
  Explanation 2 : For the purpose of
  
  this clause, "production" with its grammatical variations and cognate
  
  expressions includes manufacture of edible oils and sugar; 13 ]
  (g) for regulating or
  
  prohibiting any class of commercial or financial transactions relating to
  
  foodstuffs or cotton textiles which, in the opinion of the authority making the
  
  order, are, or, if unregulated, are likely to be, detrimental to the public
  
  interest;
  (h) for collecting any
  
  information or statistic with a view to regulating or prohibiting any of the
  
  aforesaid matters;
  ( i )
  
  for requiring persons engaged in the production, supply or distribution of, or
  
  trade and commerce in, any essential commodity to maintain and produce for
  
  inspection such books, accounts and records relating to their business and to
  
  furnish such information relating thereto, as may be specified in the order;
  [ 14 (ii) for the grant or issue of licenses, permits
  
  or other documents, the charging of fees therefor ,
  
  the deposit of such sum, if any, as may be specified in the order as security
  
  for the due performance of the conditions of any such license, permit or other
  
  documents, the forfeiture of the sum so deposited or any part thereof for
  
  contravention of any such conditions, and the adjudication of such forfeiture
  
  by such authority as may be specified in the order 14 ];
  (j) [ 15 for any incidental and supplementary
  
  matters, including, in particular, the entry, search or examination of
  
  premises, aircraft, vessels, vehicles or other conveyances and animals, and the
  
  seizure by a person authorized to make such entry, search or examination, -
  ( i )
  
  of any articles in respect of which such person has reason to believe that a
  
  contravention of the order has been, is being, or is about to be, committed and
  
  any packages, coverings or receptacles in which such articles are found;
  (ii) of any aircraft, vessel, vehicle or other conveyance or animal used in
  
  carrying such articles, if such person has reason to believe that such
  
  aircraft, vessels, vehicle or other conveyance or animal is liable to be
  
  forfeited under the provisions of this Act;
  (iii) [ 16 of any
  
  books of accounts and documents which in the opinion of such person, may be
  
  useful for, or relevant to, any proceeding under this Act and the person from
  
  whose custody such books of accounts or documents are seized shall be entitled
  
  to make copies thereof or to take extracts there from in the presence of an
  
  officer having the custody of such books of accounts or documents. 16 ] 15 ]
  (3) Where any person sells any essential
  
  commodity in compliance with an order made with reference to  Cl . (f) of sub-section (2), there shall be paid to him the
  
  price therefor as hereinafter provided :-
  (a) where the price
  
  can, consistently with the controlled price, if any, fixed under this section,
  
  be agreed upon, the agreed price;
  (b) where no such
  
  agreement can be reached, the price calculated with reference to the controlled
  
  price, if any;
  (c) where neither  Cl . (a) nor Cl . (b) applies, the
  
  price calculated at the market rate prevailing in the locality at the date of
  
  sale.
  [ 17 (3-A) ( i ) If
  
  the Central Government is of opinion that it is necessary so to do for
  
  controlling the rise in prices or preventing the hoarding, of any foodstuff in
  
  any locality, it may, by notification in the Official Gazette, direct that
  
  notwithstanding anything contained in sub-section (3), the price at which the
  
  foodstuff shall be sold in the locality in compliance with an order made with
  
  reference to Cl . (f) of sub-section (2) shall be
  
  regulated in accordance with the provisions of this sub-section.
  (ii) Any notification issued under this
  
  sub-section shall remain in force for such period not exceeding three months as
  
  may be specified in the notification.
  (iii) Where, after the issue of a notification under this sub-section, any
  
  person sells foodstuffs of the kind specified therein and in the locality so
  
  specified, in compliance with an order made with reference to  Cl .(f) of sub-section (2), there shall be paid to the
  
  seller as the price therefor , - 
  (a) where the price
  
  can, consistently with the controlled price of the foodstuff, if any, fixed
  
  under this section, be agreed upon, the agreed price ;
  (b) where no such
  
  agreement can be reached, the price calculated with reference to the controlled
  
  price, if any;
  (c) where neither  Cl .(a) nor Cl .(b) applies, the
  
  price calculated with reference to the average market rate prevailing in the
  
  locality during the period of three months immediately preceding the date of
  
  the notification.
  (iv) For the purposes of sub-clause (c) of  Cl .(iii), the average market rate prevailing in the
  
  locality shall be determined by an officer authorized by the Central Government
  
  in this behalf, with reference to the prevailing market rates for which
  
  published figures are available in respect of that locality or of a neighboring
  
  locality; and the average market rate so determined shall be final and shall
  
  not be called in question in any Court 17 ].
  [ 18 (3-B) Where any person is required, by an
  
  order made with reference to Cl .(f) of sub-section
  
  (2), to sell to the Central Government or a State Government or to an officer
  
  or agent of such Government or to a Corporation owned or controlled by such
  
  Government, any grade or variety of food grains, edible oilseeds or edible oils
  
  in relation to which no notification has been issued under sub-section (3-A),
  
  or such notification having been issued, has ceased to be in force, there shall
  
  be paid to the person concerned, notwithstanding anything to the contrary
  
  contained in sub-section (3), an amount equal to the procurement price of such
  
  food grains, edible oilseeds or edible oils, as the case may be, specified by
  
  the State Government, with the previous approval of the Central Government
  
  having regard to, -
  (a) the controlled price, if any, fixed under
  
  this section or by or under any other law for the time being in force for such
  
  grade or variety of food grains, edible oilseeds or edible oils;
  (b) the general crop prospects;
  (c) the need for making such grade or variety
  
  of food grains, edible oilseeds or edible oils available at reasonable prices
  
  to the consumers, particularly the vulnerable sections of the consumers; and
  (d) the recommendations, if any, of the
  
  Agricultural Prices Commission with regard to the price of the concerned grade
  
  or variety of food grains, edible oilseeds or edible oils. 18 ]
  [ 19 (3-C) Where any producer is required by
  
  an order made with reference to Cl .(f) of sub-section
  
  (2) to sell any kind of sugar (whether to the Central Government or a State
  
  Government or to an officer or agent of such Government or any other person or
  
  class of persons) and either no notification in respect of such sugar has been
  
  issued under sub-section (3-A) or any such notification, having been issued,
  
  has ceased to remain in force by efflux of time, then, notwithstanding anything
  
  contained in sub-section (3), there shall be paid to that producer an amount
  
  therefore which shall be calculated with reference to such price of sugar as
  
  the Central Government may, by order, determine, having regard to, -
  (a) the minimum price,
  
  if any, fixed for sugarcane by the Central Government under this section;
  (b) the manufacturing
  
  cost of sugar;
  (c) the duty or tax,
  
  if any, paid or payable thereon; and
  (d) the securing of a
  
  reasonable return on the capital employed in the business of manufacturing
  
  sugar, and different prices may be determined, from time to time, for different
  
  areas or for different factories or for different kinds of sugar.
  Explanation : For the purposes of
  
  this sub-section, "producer" means a person carrying on the business
  
  of manufacturing sugar. 19 ]
  (4) If the Central Government is of opinion
  
  that it is necessary so to do for maintaining or increasing the production and
  
  supply of an essential commodity, it may, by order, authorize any person
  
  (hereinafter referred to as an authorized controller) to exercise, with respect
  
  to the whole or any part of any such undertaking engaged in the production and
  
  supply of the commodity as may be specified in the order such functions of
  
  control as may be provided therein and so long as such order is in force with
  
  respect to any undertaking or part thereof, -
  (a) the authorized
  
  controller shall exercise his functions in accordance with any instructions
  
  given to him by the Central Government, so, however, that he shall not have any
  
  power to give any direction inconsistent with the provisions of any enactment
  
  or any instrument determining the functions of the persons in-charge of the
  
  management of the undertaking, except in so far as may be specifically provided
  
  by the order; and
  (b) the undertaking or
  
  part shall be carried on in accordance with any directions given by the
  
  authorized controller under the provisions of the order, and any person having
  
  any functions of management in relation to the undertaking or part shall comply
  
  with any such directions.
  (5) An order made under this section shall, -
  (a) in the case of an
  
  order of a general nature or affecting a class of persons, be notified in the
  
  Official Gazette; and
  (b) in the case of an
  
  order directed to a specified individual be served on such individual, -
  ( i )
  
  by delivering or tendering it to that individual, or
  (ii) if it cannot be
  
  so delivered or tendered, by affixing it on the outer door or some other
  
  conspicuous part of the premises in which that individual lives, and a written
  
  report thereof shall be prepared and witnessed by two persons living in the
  
  neighborhood.
  (6) Every order made under this section by the
  
  Central Government or by any officer or authority of the Central Government
  
  shall be laid before both Houses of Parliament, as soon as may be, after it is
  
  made.
  Comment  : “The decision to prefer an uneducated person
  
  over an educated person amounts to allowing premium on ignorance, incompetence
  
  and consequently inefficiency. The only fault of the appellant is to have
  
  pursued his studies beyond 10th class of his school. If he had discontinued his
  
  career as a student even earlier, say after passing 7th or 8th class, he would
  
  have been running the shop today. This clearly amounts to gross arbitrariness
  
  and, therefore, illegal discrimination. Pursuing this line the State will have
  
  to be going in search of a more inefficient person and we do not know where
  
  this process would end. If we assume that since a better qualified person has
  
  got a better chance to succeed in life, an intelligent applicant who can run
  
  the shop efficiently should be rejected and a dim witted fellow should be
  
  selected. This is an absurd situation. Y. Srinivasa Rao , Appellant v. J. Veeraiah AIR 1993 SUPREME COURT 929