This article is written by Pranav Sethi, from SVKM NMIMS School of Law, Navi Mumbai. This article analyses the oxygen concentrator black marketing case in light of Navneet Kalra’s case.
“The greater the penalties laid on sellers in the black market… the higher the black market price.”
– Kenneth E. Boulding
In a pandemic crisis, fighting the coronavirus is similar to fighting a war of the government. However, because this is a different form of conflict in which the opponents are invisible and intangible, we must keep in mind that in an epidemic-like situation where disease spread occurs quickly, stopping control of the disease within a specific period becomes difficult. People must work together to assist the country in breaking the transmission chain. Using methods such as self-isolation, social separation, and the state’s quarantine measures. Many individuals lost their normal lives as a result of the devastating virus, and India’s economic situation deteriorated. Prime Minister Narendra Modi stated in an address that if the pandemic is not handled in time, it might set the country back 20 years.
The pandemic has had a significant effect on mental wellbeing, access, which has been aggravated by the parallel underground market. Despite the Covid-19 pandemic, the challenges experienced have only been worsened by institutional shortages of essential resources such as medicines, oxygen, oxygen cylinder refills, and hospital beds. People supporting each other find these important survival supplies is a positive aspect in such times of sorrow and suffering. For some, though, doing “business” and maximizing profits is the order of the day. With new cases of hoarding and black marketing of such services being reported every day, the Indian legal system is dealing with the definition and understanding of hoarding and black marketing to better execute its rules on the ground level.
Defining black marketing
Trading on the black market in contravention of publicly enforced restrictions such as rationing laws, legislation prohibiting the sale of specific items, and official currency exchange rates. In times of conflict, rationing is customary to level the transfer of scarce commodities and services; black-market activities may include demanding higher rates than the legal price, stealing or counterfeit ration funds, and arranging side payments in addition to the official exchange rate to receive a given amount of product.
When the lockdown was first implemented, individuals rushed to purchase masks and sanitizers, resulting in a shortage of masks and sanitizers in the market. Several medical establishments began black-marketing at that time. A regular Rs. 60 sanitizer was selling for 4-5 times its cost, and people could afford it out of fear. As a result, the impact began with the commencement of lockdown.
Black marketing of non-authenticated masks and sanitizers
People were so keen to buy masks and sanitizers that several people started selling non-authenticated masks and sanitizers because there was a shortage of masks and cleansers in the market at the moment. People began creating single-layered masks solely for profit, ignoring the general public’s health & wellbeing.
Moreover, when the government began providing food packages to the poor, people began to engage in unethical behaviours there as well. For example, if the government was releasing 50 thousand food packets per day, the authority would take control of the 50 thousand food packets from the government while simultaneously collecting thousands of food packets contributed by the general public and distributing those packets to the poor while keeping the money.
What legal recourse can the accused take in black marketing cases
Bail is a legal term that refers to an accused person’s temporary release from custody. Bail is derived from the French word bailer, which means “to deliver” or “to give.” Bail is a term that has been used for a long time. From Section 436 to 450 of the Criminal Procedure Code, 1973, the requirements for bail and bonds are specified. These Sections envisioned in the code provide a summary of the bail provisions.
Does bail have to be compulsorily granted
It is compulsory to give bail to the arrested person in the case of a bailable offence, but it is up to the court’s discretion in the case of a non-bailable offence. Section 436 of the Code discusses the circumstances in which bail may be granted, while Section 437 discusses the circumstances in which bail may be granted in non-bailable situations.
The order’s appealability (Section 439 of the code)
Certain decisions issued under Section 436 of the Code are subject to appeal, according to Section 439 of the Code.
- The magistrate’s decision to the session’s judge is appealable.
- If the court of sessions issues an order to the court from which an appeal is pending.
The maximum period of detention for a prisoner facing trial (Section 436-A of the Code)
According to Section 436-A of the Code, an undertrial prisoner who is not charged with criminal offences punishable by death or life imprisonment will be discharged after serving one-half of the maximum term specified for the crime committed by him.
Defining anticipatory bail
The word anticipatory bail can be defined using the expression anticipatory, according to Section 438 of the Code. Anticipatory bail is the bail granted by the court in anticipation of the arrest. When a person is granted this bail, it guarantees that if he or she is detained shortly they will be discharged on this anticipatory bail. No doubts may be raised about the release unless the person performing the bail is arrested, hence the decision granting such bail is completely dependent on the arrest.
The Law Commission recommended Section 438 of the Code. In its 48th report, they conveyed their concerns about the requirement of anticipatory bail, stating that while it is a great addition to the code, it should only be used in extraordinary or exceptional circumstances.
Oxygen concentrator black marketing case
524 oxygen concentrators were discovered in three of Navneet Kalra’s eateries, Khan Chacha, Nega Ju, and Town Hall, during a single raid. The matter was then handed over to the Crime Branch of the Delhi Police.
Navneet Kalra’s arrest and observations by Delhi Police
Navneet Kalra, a businessman charged with black marketing oxygen concentrators in the capital with a foreign SIM company called Matrix Cellular Services Ltd, was detained by Delhi Police on May 16. He was apprehended in Gurugram, at his brother-in-law’s farmhouse. Authorities investigated the farmhouse after discovering that Kalra’s brother-in-law, who had only visited the property once in the previous month, had returned three times in the last ten days, according to police. On May 5, DCP (south) Atul Kumar Thakur revealed that during an investigation at Nege Ju Restaurant and Bar, officers from the Lodhi Colony police station found 419 oxygen concentrators.
The event of repeated calls to two IPS officers
During the search, Kalra turned off his cellphone later that evening. However, authorities discovered that Kalra had made repeated calls to two IPS officers, along with a former Delhi Police Commissioner and a senior IAS officer, before doing so.
Kalra and a group of friends left his house in two vehicles: a Range Rover and a Thar jeep. In Gurgaon, he was last seen at the Damdama resort. Police discovered that on May 5, he turned off his phone and began using his domestic help’s phone to make WhatsApp and Facebook calls.
The investigation had been handed up to the Crime Branch’s interstate cell. A case under Sections 420 (cheating), 120-B (criminal conspiracy), 188 (disobedience to order duly promulgated by public servant) of the Indian Penal Code, 1860, Sections 3 and 7 of the Essential Commodities Act, 1955, and Section 3 of the Epidemic Diseases Act, 1897 was registered. Four men were apprehended, such as the restaurant’s supervisor. 96 more oxygen concentrators were retrieved from Khan Chacha Restaurant and nine from Town Hall Restaurant in Khan Market at the incident of one of the defendants.
During the examination, it was discovered that Matrix purchased over 7,000 devices from local vendors and Chinese companies and sold them to Covid patients and their families at “exorbitant prices.” The company’s CEO Gaurav Khanna and Vice President Gaurav Suri, as well as three other workers, were arrested previously. The defendants have been charged with deception, the Epidemic Diseases Act, and the Essential Commodities Act.
Investigation team observations
According to officials, businessman Navneet Kalra was arrested in Delhi for suspected black marketing and stockpiling of oxygen concentrators during the coronavirus outbreak. Ever since seizing more than 500 oxygen concentrators from three of his establishments in the nation’s capital, the businessman had been on the run for more than one week. Concentrators were essential medical supplies for COVID-19 patients and are in increasing demand as the pandemic enters its second wave. The concentrators, according to the police, were imported from China and sold at an extravagant price of Rs 50,000 to 70,000 each unit, as opposed to a cost of Rs 16,000 to Rs 22,000 per unit.
Timeline of events
- On Thursday 20th of May, a Delhi court ordered Navneet Kalra to 14 days in judicial imprisonment for his role in the recovery and possession of Oxygen Concentrators by the Delhi Police from the ‘Khan Chacha’ cafe, which he owns. After the Court denied the Delhi Police’s appeal for a 5-day police custody remand for Kalra, Duty Metropolitan Magistrate Akansha Garg sent him to judicial detention. On the expiration of the Court’s previous order of 3 days police custody, the police filed a new application for 5 days police custody remand.
- On Saturday 22nd of May, the Delhi court refused to keep suspected businessman Navneet Kalra in police detention for five days in respect to the Delhi Police’s recent recovery and confiscation of Oxygen Concentrators from the ‘Khan Chacha’ cafe in his possession. After hearing the views of Advocate Vineet Malhotra and Additional Public Prosecutor Atul Shrivastava, Duty Metropolitan Magistrate Vasundhara Azad denied Delhi Police’s appeal for a 5-day police custody remand for Kalra. The court ordered, “At this stage, I don’t feel the police custody remand is warranted. I am dismissing this application.”
- Navneet Kalra, a businessman charged in connection with the Oxygen Concentrators hoarding case, told Delhi court on Friday 28th May, that the Delhi Police had no authority to scrutinize or imprison him in the current case under the Drugs and Cosmetics Act, 1940, and that he could not be held in pre-trial detention. Senior Advocate Vikas Pahwa ended his pleadings in favour of Navneet Kalra in his regular bail request, claiming that it was a case of “high-headedness” and “making Kalra a scapegoat.”
- Senior Advocate Vikas Pahwa relies significantly on the Supreme Court’s decision in the matter of Union of India v. Ashok Kumar Sharma (2020) and stated that “Delhi Police has no jurisdiction to either include these offences in the FIR or to investigate or to even arrest me. The law has been settled that they cannot include the case in the FIR. Only the Drug Inspector can arrest me under the Drugs and Cosmetics Act. They don’t file a charge sheet and file a complaint.”
- Senior Advocate Vikas Pahwa made the following argument about the entire procedure being pre-arrest detention, “I can’t be put to pre-trial detention stage. All the recoveries have been made. When there are efforts by the Supreme Court and HCs to decongest the jails, why are the police going on a spree to arrest people?”
- At this point, the Court asked Pahwa if the fact that he bought supplies from Matrix Cellular and subsequently sold them for greater prices than the Matrix set was covered by black marketing or not.
- Pahwa argued as he concluded up his arguments by stating that, “Why does the government not regulate it? Why doesn’t it say that only the government will sell it? I have deep roots in society. My lord may impose any conditions particularly when 5 other co-accused were given bail by this Court. This denial of bail at this stage particularly when I’m not required for custodial interrogation, I am with folded hands praying bail on the grounds of parity and principles of bail.”
Bail of businessman Navneet Kalra
On 29th may in a Delhi Court while addressing Senior Advocate Vikas Pahwa and Advocate Vineet Malhotra representing Navneet Kalra and APP Atul Shrivastava representing the prosecution, Chief Metropolitan Magistrate Arun Kumar Garg issued the order. Kalra was granted bail after submitting a personal bond of Rs. 1 lakh each from two sureties. Additionally, the Court has placed certain restrictions on Kalra, including that he should not approach the concentrator customers, that he will not alter any evidence or mislead witnesses, and that he join the investigation whenever necessary.
Senior Advocate APP Atul Shrivastava’s arguments
During the hearing, APP Atul Shrivastava told the Court that it was a clear case of deceiving and inducing people to buy low-quality oxygen to make a lot of money and that he was a member of a conspiracy.
Shrivastava contended that the concentrators were acquired and delivered to covid care facilities after Kalra marketed items under the pretext of “premium German-made quality,” rejecting the defence’s claim that police officers bought and distributed them.
Shrivastava submitted in the case that, “I’m giving an example. If I’ve opened my door in the night. Will it give the right to the thief to come and rob the house? The government has liberalized the policy. They’ve given an example of Salman Khan. Salman Khan has not sold it at higher prices.”
Senior Advocate Vikas Pahwa’s arguments
Senior Advocate Vikas Pahwa’s representations to the Court stated that the Delhi Police had no jurisdiction to examine or detain him in the current case involving the Drugs and Cosmetics Act and that he could not be held in pre-trial detention. Pahwa made a comparison between the price of oxygen concentrators he supplied and those sold at Amazon and India Mart, claiming that it was a case of “high-headedness German-made” and making Kalra a scapegoat. “Admittedly, the oxygen Concentrators of the same make are available on Amazon and India Mart at 95,000 and 89,000 respectively whereas I’m selling them for 60,000.” Pahwa submitted.
Pahwa moved on and submitted a response to the charges that the products were of poor quality by stating that, “If the products were substandard, would the Delhi Police have given the same to covid care centres? I’m only cheating. It’s a clear case of high-headedness. It’s a clear case of making somebody a scapegoat. If they are conducting it, they are seizing it from me and then giving the same to covid care centres for saving the lives of people. If the government can do this, why can’t I?”
Legislations involved & refusal of interim protection by Delhi High Court
In this case, Navneet Kalra is currently being held in judicial custody. The Delhi Police has filed a case under Sections 420, 188, 120B, 34 of the IPC, as well as Sections 3 and 7 of the Essential Commodity Act, to seize around 500 oxygen concentrators from restaurants around the country. The investigation has been handed up to the Crime Branch.
After a two-day hearing, the Delhi High Court refused to grant Kalra interim protection from arrest after he asked the court for anticipatory relief in the case. Senior Advocate, Abhishek Singhvi’s request was denied by a single judge bench led by Justice Subramonium Prasad, who orally stated, “I’m persuaded by the trial court’s order. Interim protection cannot be given at this stage.”
In a democracy often in these times of pandemic people have been doing black-marketing and want to use such times as an opportunity to escalate their business in indulging various malpractices. The accused was ordered not to approach the clients to whom he sold the concentrators, and not to fabricate evidence or mislead the witnesses by Chief Metropolitan Magistrate Arun Kumar Garg. “Accused is having clean antecedents, in as much as, no previous involvement of the accused in any criminal case has been reported. No purpose will be served by keeping the accused behind bars,” stated the Chief Metropolitan Magistrate.
The state’s appeal that the suspect may interfere with the evidence is without validity, according to the 23-page court judgment because all essential evidence has been already recovered from Kalra’s ownership. The magistrate, however, stated that the culprit was implicated in the execution of violations such as defrauding that under the Indian Penal Code and other parts of the Essential Commodities Act, both of which are punishable by up to seven years in jail.
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