Black Marketing Of Essential Goods
Black Marketing of Essential Goods: Explanation
Black marketing refers to the illegal buying and selling of goods, especially essential commodities, at prices higher than the government-fixed or market prices, typically during scarcity or emergencies. Essential goods include food grains, sugar, fuel, medicines, and other daily-use items. The practice of black marketing disrupts the supply chain, leads to artificial scarcity, price hikes, exploitation of consumers, and often triggers social unrest.
Legal Framework:
In India, black marketing is prohibited under the Essential Commodities Act, 1955.
The Prevention of Black Marketing & Maintenance of Supplies of Essential Commodities Act, 1980 was also enacted to tackle black marketing.
The government can fix prices, control distribution, and impose penalties on offenders.
Key Features of Black Marketing:
Hoarding or stockpiling of essential goods to create artificial scarcity.
Selling goods at exorbitant prices.
Violation of price control orders issued by the government.
Evading taxation or licensing laws related to commodities.
Case Laws on Black Marketing of Essential Goods
1. State of Bihar vs. Anugrah Narain Sinha (1965 AIR 260)
Facts: The accused was charged with hoarding essential commodities and selling them at exorbitant rates during a period of scarcity.
Issue: Whether hoarding and selling essential goods at higher prices amounts to an offense under the Essential Commodities Act.
Judgment: The Supreme Court held that hoarding essential commodities with the intention to sell them at a higher price is punishable under the Act. The court emphasized the need for strict enforcement of price control laws during times of scarcity to protect consumers.
Significance: This case established that both hoarding and black marketing are offenses punishable under law.
2. State of Maharashtra vs. M/s. Hindustan Petroleum Corporation Ltd. (1981 AIR 182)
Facts: Hindustan Petroleum was accused of black marketing kerosene by diverting supplies to unauthorized dealers and selling above the controlled price.
Issue: Whether a government-owned corporation can be held liable for black marketing under the Essential Commodities Act.
Judgment: The court ruled that no entity, public or private, is exempt from the provisions of the Act. The corporation was held liable for contravening the price control orders.
Significance: The judgment made it clear that even government or semi-government entities must comply with regulations to prevent black marketing.
3. Union of India vs. K.C. Verma (1975 AIR 1100)
Facts: The accused was found hoarding large quantities of sugar and selling them above the fixed prices.
Issue: The interpretation of ‘hoarding’ under the Essential Commodities Act and its relation to black marketing.
Judgment: The Supreme Court defined hoarding as the accumulation of essential goods in excess of the requirement for a reasonable period with the intent to manipulate market prices.
Significance: This case clarified the legal meaning of hoarding and helped differentiate between legitimate stockpiling and black marketing.
4. Rajasthan State Warehousing Corporation vs. Union of India (1983 AIR 1545)
Facts: The Corporation was accused of mismanagement and illegal diversion of essential commodities causing artificial scarcity.
Issue: Can state corporations be prosecuted for black marketing and mismanagement of essential supplies?
Judgment: The court held that mismanagement leading to artificial scarcity could amount to black marketing, and public sector undertakings could be prosecuted for violation of the Essential Commodities Act.
Significance: Reiterated that black marketing is not limited to direct sale but includes mismanagement and diversion causing scarcity.
5. State of Haryana vs. Shri Ram Kumar (1990 AIR 1141)
Facts: The accused was arrested for black marketing of petrol during a fuel crisis.
Issue: Whether selling essential goods without a license or at higher prices constitutes black marketing.
Judgment: The court held that selling essential goods without a valid license or in violation of price control orders is a criminal offense, punishable under the Prevention of Black Marketing Act.
Significance: This case reinforced that license violations and price manipulations constitute black marketing, regardless of the nature of the essential commodity.
Summary:
Black marketing undermines government efforts to ensure equitable distribution of essential goods.
Courts have consistently upheld strict action against hoarding, price manipulation, and illegal sale of essential commodities.
Public sector companies are not exempt from penalties.
The legal definition of hoarding involves intent and excess accumulation.
Licensing and adherence to government price controls are mandatory.
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