The Essential Commodities Act, 1955

(1) This Act may be called the Essential Commodities Act, 1955. (2) It extends to the whole of India 1***.

In this Act, unless the context otherwise requires,-- 1[(ia) "Collector" includes an Additional Collector and such other officer, not below the rankof Sub-Divisional Officer, as may be authorised by the Collector to perform the functions andexercise the powers of the Collector under this Act;] 2* * * * * (b)"food-crops" include crops of sugarcane; (c) "notified order" means an order notified in the Official Gazette; 3[(cc) "order" includes a direction issued thereunder;] 4[(d) "State Government," in relation to a Union territory, means the administrator thereof;] 3[(e) "sugar" means-- (i) any form of sugar containing more than ninety per cent, of sucrose, including sugarcandy; (ii) khandsari sugar or bura sugar or crushed sugar or any sugar in crystalline or powderedform; or (iii) sugar in process in vacuum pan sugar factory or raw sugar produced therein.] STATE AMENDMENT Maharashtra Amendment of section 2 of Act 10 of 1955.--In section 2 of the Essential Commodities Act, 1955 (10 of 1955), in its application to the State of Maharashtra,-- (a) for clause (ia), the following clause shall be substituted, namely:-- "(ia) "Collector" in any Rationing Area means the Controller of Rationing designated for that area and includes the Deputy or Assistant Controller or Rationing; and elsewhere, the Collector of the District and includes Additional, Deputy or Assistant Collector, Sub-Divisional Officer and District Supply Officer within his respective jurisdiction;"; (b) clause (ai) shall be deleted. [Vide Maharashtra Act 6 of 2003, s. 2]. STATE AMENDMENT Uttar Pradesh.-- Amendment of section 2 of Act X of 1955.--In section 2 of the Essential Commodities Act,1955, as amended in its application to Uttar Pradesh, hereinafter called the principal Act, beforeclause (a), the following clause shall be inserted namely:-- "(aa) ‘Collector’ includes such officer not below the rank of an Assistant Collector of the firstclass as may be authorized by the Collector to exercise the powers conferred on him by or underthe provisions of this Act;" [Vide Uttar Pradesh Act 18 of 1975, s. 3] Amendment of section 2 of Act 10 of 1955.--In section 2 of the Essential Commodities act,1955 (hereinafter referred to as the principal Act). Clause (aa) as inserted by the EssentialCommodities (Uttar Pradesh Amendment) Act, 1975, hereinafter referred to as the Uttar PradeshAmendment, shall stand omitted with effect from September 2, 1976, the date of the commencementof the Essential Commodities (Amendment) Act, 1976, hereinafter referred to as the Central(Amendment). [Vide Uttar Pradesh Act XVI of 1978, s. 2]

1[2A. Essential commodities declaration, etc.--(1) For the purposes of this Act, essentialcommodity means a commodity specified in the Schedule. (2) Subject to the provisions of sub-section (4), the Central Government may, if it is satisfied thatit is necessary so to do in the public interest and for reasons to be specified in the notificationpublished in the Official Gazette, amend the Schedule so as to-- (a) add a commodity to the said Schedule; (b) remove any commodity from the said Schedule, in consultation with the State Governments. (3) Any notification issued under sub-section (2) may also direct that an entry shall be madeagainst such commodity in the said Schedule declaring that such commodity shall be deemed to be anessential commodity for such period not exceeding six months to be specified in the notification: Provided that the Central Government may, in the public interest and for reasons to be specified,by notification in the Official Gazette, extend such period beyond the said six months. (4) The Central Government may exercise its powers under sub-section (2) in respect of thecommodity to which Parliament has power to make laws by virtue of Entry 33 List III in the SeventhSchedule to the Constitution. (5) Every notification issued under sub-section (2) shall be laid, as soon as may be after it isissued, before both Houses of Parliament.]

(1) Ifthe Central Government is of opinion that it is necessary or expedient so to do for maintaining orincreasing supplies of any essential commodity or for securing their equitable distribution andavailability at fair prices, 1[or for securing any essential commodity for the defence of India or theefficient conduct of military operations], it may, by order, provide for regulating or prohibiting theproduction, supply and distribution thereof and trade and commerce therein. 2[***** (2) Without prejudice to the generality of the powers conferred by sub-section (1), an order madethereunder may provide-- (a) for regulating by licences, permits or otherwise the production or manufacture ofany essential commodity; (b) for bringing under cultivation any waste or arable land, whether appurtenant to a buildingor not, for the growing thereon of food-crops generally or of specified food-crops, and forotherwise maintaining or increasing the cultivation of food-crops generally, or of specifiedfood-crops. (c) for controlling the price at which any essential commodity may be bought or sold; (d) for regulating by licences, 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 forsale; 3[(f) for requiring any person holding in stock, or engaged in the production, or in the businessof buying or selling, of any essential commodity,-- (a) to sell the whole or a specified part of the quantity held in stock or produced orreceived 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 aCorporation owned or controlled by such Government or to such other person or class of persons andin such circumstances as may be specified in the order. Explanation 1.--An order made under this clause in relation to foodgrains, edible oilseeds oredible oils, may, having regard to the estimated production, in the concerned area, of such foodgrains,edible oilseeds and edible oils, fix the quantity to be sold by the producers in such area and may alsofix, or provide for the fixation of, such quantity on a graded basis, having regard to the aggregate ofthe area held by, or under the cultivation of, the producers. Explanation 2.--For the purpose of this clause, production with its grammatical variations andcognate expressions includes manufacture of edible oils and sugar;] (g) for regulating or prohibiting any class of commercial or financial transactions relating tofoodstuffs 4*** which, in the opinion of the authority making the order, are, or, if unregulated, arelikely to be, detrimental to the public interest; (h) for collecting any information or statistics with a view to regulating or prohibiting any ofthe aforesaid matters; (i) for requiring persons engaged in the production, supply or distribution of or trade andcommerce 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, asmay be specified in the order; 5[(ii) for the grant or issue of licences, permits or other documents, the charging of feestherefore, the deposit of such sum, if any, as may be specified in the order as security for the dueperformance of the conditions of any such licence, permit or other document, the forfeiture of thesum so deposited or any part thereof for contravention of any such conditions, and theadjudication of such forfeiture by such authority as may be specified in the order;] 5[(j) for any incidental and supplementary matters, including, in particular, the entry, search orexamination of premises, aircraft, vessels, vehicles or other conveyances and animals, and theseizure by a person authorised to make such entry, search or examination,-- (i) of any articles in respect of which such person has reason to believe that acontravention 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 sucharticles, if such person has reason to believe that such aircraft, vessel, vehicle or otherconveyance or animal is liable to be forfeited under the provisions of this Act; 7[(iii) of any books of accounts and documents which in the opinion of such person, maybe useful for, or relevant to, any proceeding under this Act and the person from whosecustody such books of accounts or documents are seized shall be entitled to make copiesthereof or to take extracts therefrom in the presence of an officer having the custody of suchbooks of accounts or documents.]] (3) Where any person sells any essential commodity in compliance with an order made withreference to clause (f) of sub-section (2), there shall be paid to him the price therefore as hereinafterprovided:-- (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 thecontrolled price, if any; (c) where neither clause (a) nor clause (b) applies, the price calculated at the market rateprevailing in the locality at the date of sale. 8[(3A) (i) If the Central Government is of opinion that it is necessary so to do for controlling therise in prices or preventing the hoarding, of any food-stuff in any locality, it may, by notification inthe Official Gazette, direct that notwithstanding anything contained in sub-section (3), the price at which the food-stuff shall be sold in the locality in compliance with an order made with reference toclause (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 notexceeding three months as may be specified in the notification. (iii) Where, after the issue of a notification under this sub-section, any person sells foodstuff ofthe kind specified therein and in the locality so specified, in compliance with an order made withreference to clause (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, fixedunder this section, be agreed upon, the agreed price; (b) where no such agreement can be reached, the price calculated with reference to thecontrolled price, if any; (c) where neither clause (a) nor clause (b) applies, the price calculated with reference toaverage market rate prevailing in the locality during the period of three months immediatelypreceding the date of the notification. (iv) For the purposes of sub-clause (c) of clause (iii), the average market rate prevailing in thelocality shall be determined by an officer authorised by the Central Government in this behalf, withreference to the prevailing market rates for which published figures are available in respect of thatlocality or of a neighbouring locality; and the average market rate so determined shall be final andshall not be called in question in any court.] 9[(3B) Where any person is required, by an order made with reference to clause (f) of sub-section(2), to sell to the Central Government or a State Government or to an officer or agent of suchGovernment or to a Corporation owned or controlled by such Government, any grade or variety offoodgrains, edible oilseeds or edible oils in relation to which no notification has been issued undersub-section (3A), or such notification having been issued, has ceased to be in force, there shall be paidto the person concerned, notwithstanding anything to the contrary contained in sub-section (3), anamount equal to the procurement price of such foodgrains, edible oilseeds or edible oils, as the casemay be, specified by the State Government, with the previous approval of the Central Governmenthaving regard to-- (a) the controlled price, if any, fixed under this section or by or under any other law for thetime being in force for such grade or variety of foodgrains, edible oilseeds or edible oils; (b) the general crop prospects; (c) the need for making such grade or variety of foodgrains, edible oilseeds or edible oilsavailable at reasonable prices to the consumers, particularly the vulnerable sections of theconsumers; and (d) the recommendations, if any, of the Agricultural Prices Commission with regard to theprice of the concerned grade or variety of foodgrains, edible oilseeds or edible oils.] 10[(3C) Where any producer is required by an order made with reference to clause (f) of subsection(2) to sell any kind of sugar (whether to the Central Government or to a State Government orto an officer or agent of such Government or to any other person or class of persons) whether anotification was issued under sub-section (3A) or otherwise, then, notwithstanding anything containedin sub-section (3), there shall be paid to that producer only such amount as the Central Governmentmay, by order, determine, having regard to-- (a) the fair and remunerative price, if any, determined by the Central Government as the priceof sugarcane to be taken into account under this section; (b) the manufacturing cost of sugar; (c) the duty or tax, if any, paid or payable thereon; and (d) a reasonable return on the capital employed in the business of manufacturing of sugar: Provided that the Central Government may determine different prices, from time to time, fordifferent areas or factories or varieties of sugar: Provided further that where any provisional determination of price of levy sugar has been done inrespect of sugar produced up to the sugar season 2008-2009, the final determination of price may beundertaken in accordance with the provisions of this sub-section as it stood immediately before the 1stday of October, 2009. Explanation 11[I].-- For the purposes of this sub-section,-- (a) "fair and remunerative price" means the price of sugarcane determined by the CentralGovernment under this section; (b) "manufacturing cost of sugar" means the net cost incurred on conversion of sugarcane intosugar including net cost of transportation of sugarcane from the purchase centre to the factorygate, to the extent it is borne by the producer; (c) "producer" means a person carrying on the business of manufacturing sugar; (d) "reasonable return on the capital employed" means the return on net fixed assets plusworking capital of a producer in relation to manufacturing of sugar including procurement ofsugarcane at a fair and remunerative price determined under this section.] 12[Explanation II.--For the removal of doubts, it is hereby declared that the expressions "fair andremunerative price" referred to in clause (a), "manufacturing cost of sugar" referred to in clause (b)and "reasonable return on the capital employed" referred to in clause (d), of this sub-section do notinclude the price paid or payable under any order or any enactment of any State Government and anyprice agreed to between the producer and the grower or a sugarcane growers' co-operative society.] 13[(3D) The Central Government may direct that no producer, importer or exporter shall sell orotherwise dispose of or deliver any kind of sugar or remove any kind of sugar from the bonded godowns of the factory in which it is produced, whether such godowns are situated within the premisesof the factory or outside or from the warehouses of the importers or exporters, as the case may beexcept under and in accordance with the direction issued by the Government: Provided that this sub-section shall not affect the pledging of such sugar by any producer orimporter in favour of any scheduled bank as defined in clause (e) of section 2 of the Reserve Bank ofIndia Act, 1934 (2 of 1934) or any corresponding new bank constituted under section 3 of theBanking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), so, however,that no such hank shall sell the sugar pledged to it except under and in accordance with a directionissued by the Central Government. (3E) The Central Government may, from time to time, by general or special order, direct anyproducer or importer or exporter or recognised dealer or any class of producers or recognised dealers,to take action regarding production, maintenance of stocks, storage, sale, grading, packing, marking,weighment, disposal, delivery and distribution of any kind of sugar in the manner specified in thedirection. Explanation.--For the purposes of sub-section (3D) and this sub-section,-- (a) "producer" means a person carrying on the business of manufacturing sugar; (b) "recognised dealer'" means a person carrying on the business of purchasing, selling ordistributing sugar; (c) "sugar" includes plantation white sugar, raw sugar and refined sugar, whetherindigenously produced or imported.] (4) If the Central Government is of opinion that it is necessary so to do for maintaining orincreasing the production and supply of an essential commodity, it may, by order, authorize anyperson (hereinafter referred to as an authorized controller) to exercise, with respect to the whole orany part of any such undertaking engaged in the production and supply of the commodity as may bespecified in the order such functions of control as may be provided therein and so long as such orderis in force with respect to any undertaking or part thereof,-- (a) the authorized controller shall exercise his functions in accordance with any instructionsgiven to him by the Central Government, so, however, that he shall not have any power to giveany direction inconsistent with the provisions of any enactment or any instrument determining thefunctions of the persons in-charge of the management of the undertaking, except in so far as maybe specifically provided by the order; and (b) the undertaking or part shall be carried on in accordance with any directions given by theauthorised controller under the provisions of the order, and any person having any functions ofmanagement 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 theOfficial 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 otherconspicuous part of the premises in which that individual lives, and a written report there ofshall be prepared and witnessed by two persons living in the neighbourhood. (6) Every order made under this section by the Central Government or by any officer or authorityof the Central Government shall be laid before both Houses of Parliament, as soon as may be, after itis made. STATE AMENDMENTS Uttar Pradesh.-- Amendment of section 3 of Act X of 1955.--In section 3 of the principal Act, in sub-section (2),after clause (f), the following clause shall be inserted, namely:-- "(ff) for preventing the hoarding of any essential commodity;" [Vide Uttar Pradesh Act 9 of 1974, s. 2] Amendment of section 3.--In section 3 of the principal Act,-- (a) in sub-section (2), for clause (f), the following clause shall be substituted and be deemedalways to have been substituted namely-- "(f) for requiring any person holding in stock, or engaged in the manufacture or production of,or in the business of buying or selling, any essential commodity to sell the whole or a specifiedpart of the quantity held in stock or manufactured or produced or likely to be manufactured orproduced by him or received or likely to be received by him in the course of said business ofbuying or selling, to the Central Government or a State Government or to an officer or agent ofsuch Government or to such other person or class of person and in such circumstances as may bespecified in the order; Explanation.--An order relating to food grains made with reference to this clause,-- (i) may specify the prices, fixed by the State Government in this behalf, after taking intoaccount the recommendations, if any, of the Agricultural Prices Commission and with the priorconcurrence of the Central Government, as the amount which shall be paid for the food grainrequired to be sold under the order, (ii) may fix or provide for the fixation of the quantity to be sold by a producer with referenceto the area under cultivation and the availability of irrigation for production of the particular foodgrain to which the order relates, and also fix or provide for the fixation of such quantities on agraded basis having regard to the aggregate area held by or under the cultivation of differentproducers." (b) in sub-section (3), for clause (c), substitute the following clauses which shall be Fooddeemed always to have been substituted, namely:-- "(c) in the case of food grains, where neither clause (a) nor clause (b) applies, the price, ifany, specified in the said order; (d) where neither clause (a) nor (b), nor (c) applies, the price calculated at the market rateprevailing in the locality at the date of sale." (c) in sub-section (3B), after clause (i), insert the following clause which shall be deemedalways to have been inserted, namely:-- "(ia) in the case of food grains, where no controlled price is fixed by an order made withreference to clause (c) of sub-section (2), the amount specified in the said Order made withreference to clause (f) of sub-section (2) for such grade or variety of food grains; or"[Vide Uttar Pradesh Act 18 of 1975, s. 4] Amendment of section 3 of Act X of 1955.--In section 3 of the Essential Commodities Act,1955, as amended in its application to Uttar Pradesh, in sub-section (2), in clause (f), as substituted bythe Essential Commodities (Uttar Pradesh Amendment) Act, 1975, in the Explanation thereof, forsub-clause (II), the following sub-clause shall be substituted and be deemed always to have beensubstituted Namely:-- "(II) may fix or provide for the fixation of the quantity to be sold by a producer with reference tothe area under cultivation for production of the particular (foodgrains to which the order relates, andalso fix or provide for the fixation of such quantities on a graded basis having regard to the aggregatearea held by or under the cultivation of different producers." [Vide Uttar Pradesh Act 39 of 1975, s. 2] Amendment of section 3 of Act no. 10 of 1955.--(1) In section 3 of the principal Act, in subsection (2), clause (f), as substituted by the Uttar Pradesh Amendment read with the EssentialCommodities (Uttar Pradesh Second Amendment) Act, 1975 shall be omitted and deemed to havebeen omitted with effect from the date of the commencement of the Central Amendment. (2) In the said sub-section, in clause (f), as substituted by the central Amendment, afterExplanation 1, the following Explanation shall be inserted, namely:-- "Explanation I-A.--An order made this clause in relation to rice may, having regard to the millingcapacity of a rice mill, fix the quantity to be sold by the licensed miller and may also fix or providefor the fixation of such quantity on a graded basis." (3) In the said section 3, sub-section (3-B), as amended by the Uttar Pradesh Amendment, shall becommitted and deemed to have been omitted with effect from the date of commencement of thecentral Amendment. [Vide Uttar Pradesh Act XVI of 1978, s. 3]

An order made under section 3 mayconfer powers and impose duties upon the Central Government or the State Government or officersand authorities of Central Government or State Government, and may contain directions to any StateGovernment or to officers and authorities thereof as to the exercise of any such powers or thedischarge of any such duties.