Section 3
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 defence 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 licences, 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 genrally or of specified food-crops,
and for otherwise maintaining or increasing the cultivation
of food-crops genrally, or of specified foods-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 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 licences, 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 licence, 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
authorised 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
therefrom 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 authorised 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 neighbouring 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
foodgrains, 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 foodgrains, 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 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 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 foodgrains, 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 therefor
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 neighbourhood.

(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.