In this article, Bharti Thakur pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses Laws Prohibiting Hoarding or Black Marketing in India.

Introduction

The meaning of term “Black Marketing” is an illegal transaction of distribution and production of the goods and services, which are prohibited by law such as – drug trade, prostitution, illegal currency transactions, human trafficking etc. The purpose behind these transactions is generally to evade the tax levied by government of country. These kind of transactions usually done through cash only so that they can hide from the eyes of government. These kind of transactions also leads to money laundering. The people find this way easy to earn more money within less time period.  The “Black Market” can be identified by four kinds of economy –

1. The illegal economy

The meaning of illegal economy means when the people indulged in such activities which are related to production and distribution of the goods and services, prohibited by law to evade the taxes and earn money through simpler way. The purpose behind to prohibit such transaction is to protect the society against wrong but some people for their personal benefit harm the society as a whole.

2. The unreported economy

These are the activities consists of those transactions which should be reported to the government of country but actually are not so reported. These kind of transactions takes places without the interference of the government of country so this is called as unreported economy. The purpose behind these illegal transactions is also to evade the tax.

3. The unrecorded economy

This is in regards with the unrecorded income of people. According to the National income and product account (account managed by government of nation to identify the income of whole economy), some amount is to be expected as the income of economy must be recorded in such account every year, but actually are not so recorded because of black marketing through evading tax.

4. The informal economy

The informal economy includes that part of economy which is not taxed. This is called as informal economy. I t doesn’t cover the benefits and authority as rights provided by the government to the society in some transactions, such as – Property relationships, commercial licensing, labour contracts, financial credit, Social security system etc.

This is what all about the introduction or an idea about the “Black Market” and to prohibit such transactions government made some laws, but before going to this point we will understand the concept of “Hording” and how it is related to “Black Marketing” –

Meaning of “Hoarding”

The term of meaning “Hoarding” is the purchase of large quantity of commodity with the intention to sell it in future when it is understock or not available in the market at a higher price. We can say this as a kind of monopoly over market, when people do not have any option to purchase the same commodity with other buyer due to shortage of the same. This way the concept of hoarding is somehow related to black market as this kind of transactions are also prohibited by law. The same way as black marketing, people indulged in the hoarding business to maximize their profit by the unfair means of business. This commodity is generally a basic goods used in commerce by large number of people. The term hoarding is different from cartelization as in cartelization there are number of suppliers or manufacturer who come together and try to limit the supply of goods for some time so that at the event of shortage of such commodity they all can monopoly over the market and maximize their profits through raising the prices of the goods. On the other hand, in the process of Hoarding, there is individual participant who try to capture the market but the hoardings can easily be converted in to process of cartelization by come to an agreement by number of suppliers or sellers to limit the supply of any particular commodity used by public at large.

This is what the all about the concept of Hoarding and its direct relation with the Black marketing. Further we will discuss below the laws made by the government to prohibit such kind of illegal activities.

The prevention of Black Marketing and maintenance of supplies of Essential Commodities Act, 1980 –

The prevention of black marketing and maintenance of supplies of essential commodities Act, 1980 was enacted on 12^th February, 1980 and came into force on 5^th October 1979. This Act prohibit the participants to get indulge into black marketing or hoarding transactions by its provisions under which there are provisions for punishment against such persons who commits the same.

This Act empowers the state government or central government or an officer of rank not below the Joint secretary representing centre or state govt. in case has a reason to believe that a person is committing an against provisions of the Act shall make an order for detaining such person.

This Act also gives the similar power of district magistrates and commissioner of police to take any action against such participants.

Section 3 (2) – Any order taken by an officer under this Act shall be brought into the notice of government along with relevant details.

The order shall remain into force for not more than twelve days after making it within which the State govt. shall approve the order.

The State government shall within seven days’ report to central government along with the grounds of order where after detention order under Section 3(2) shall be carried.

Even if the order of detention was carried out outside the territorial jurisdiction of the government making order, it shall not be invalid merely on this ground.

Section 4 –  According to this Section if a person is found to avoid order of detention or is absconding, the Government or officer shall draft a report in writing to Metropolitan Magistrate or Judicial magistrate first Class who shall order against such person under section 82, 83, 84 and 85 of Code of Criminal Procedure which shall apply against the person and his property. Provisions of section 4 are also applicable once the authorities have an apprehension of absconding of person against whom orders of detention have been made.

In case of failure to make an appearance before the court such person shall be imprisonment extending one year and with fine or both. These offences fall within the category of cognizable offences. The detained person should be aware of the grounds of detention and shall be given an opportunity of fair representation.

Section 9 – This Section deals with the appointment of an advisory board consisting of three persons who is, are qualified or had been judge of a High Court, along with one another member who is, or has been Judge of High Court. This is the duty of the State government to refer the detained person before advisory board along with the representation of grounds of detention, where after the advisory board shall look into all aspects of the matter brought in front of it.

The advisory board shall draft a report after giving an opportunity to detained person, which shall be acted upon by the government. The report can either ask the government to revoke the detention orders or shall further continue the detention. The maximum period of detention shall be of six months from the date of detention. The order of detention may be revoked under provisions of section 21 of the General Clauses Act, 1897 only after confirmation from State or Central Government. Person detained may be temporarily released after imposing necessary conditions on release of such person one such condition may be filing of bond along with sureties. In case a person breaches conditions of release his bond shall be forfeited. The Act protects all acts and actions taken in good faith under the provisions of the Act.

Thus the Act is an effort to bring into hold of law person who in order to suffice their greed keep essential commodities out of the reach for other people.

This is all about the laws made by the government of country to prevent the participants from indulging into such kind of illegal activities as black marketing and hoardings, which is harmful for the economy of the nation. These kind of activities only provides the benefit to the participant in monetary terms but except the participants the whole society suffers a lot and also it has an adverse effect on the economy of the country because the money and the tax hide by the participants are actually the public money which can be use fairly by the government for the benefit of society.

This Article also tells about that how the two different concept of black marketing and hoardings are interrelated, illegal and punishable under the above mentioned Act.

There are some transactions such as Monopoly, Cartelization, Black marketing, Hoarding are directly or indirectly interrelated. These offences fall under the category of illegal and cognizable offences. These transactions lead to money laundering, which is the current issue in the country.