[COVID] Plea In SC Seeks Consecutive Sentences For Hoarding, Profiteering, Adulteration, Black Marketing; Invocation of NSA, Seizure Of Benami Properties

Mehal Jain

28 May 2021 3:04 PM IST

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Petitioner Ashwini Upadhyay, Supreme Court advocate, also prays for direction to the Centre and States to invoke NSA against the person involved in hoarding, profiteering, adulteration and black marketing and seize their 100% benami properties and disproportionate assets.

Further, a direction is sought to the Centre to examine the International Laws relating to hoarding, profiteering, adulteration and black marketing and take appropriate steps to insert a Chapter for these offences in IPC. In alternative, it is prayed that the Court direct the Law Commission of India to examine International Laws related to Hoarding, Adulteration, Profiteering and Black Marketing and prepare a Report within three months.

"Facts constituting cause of action accrued on 1.4.2021 and continues when petitioner came to know through leading Hindi-English News Paper that many EWS and BPL citizens died out side hospital though beds were available. It is duty of the State to protect life of citizens, but it has totally failed in its obligation during this time of crisis. Thousands of EWS and BPL citizens died on streets, in vehicles, in hospitals compounds and their homes due to hoarding of hospital beds, adulterated COVID medicines, black marketing of medical equipment's like oxygen cylinder and huge profiteering in the sale of life saving injections like Remdesivir, Tocilizumab etc", it is submitted.

It is advanced that the quantum of fine prescribed under the Essential Commodities Act is too meager to have any deterrent effect and the sentence for hoarding and black marketing is also neither stringent nor adequate to tackle these menaces.

It is indicated that under the Drugs and Cosmetics Act, sale of spurious drugs likely to cause death or grievous hurt carries a sentence of ten years, besides fine of ₹10 Lakhs or three times the value of the drugs seized. The Petitioner submits that the sentence and financial penalties must be stiff enough to pay for reimbursement and compensation to victims. If there is a direct link between loss of life and hoarding, profiteering, adulteration and black marketing, then financial penalty must cover the compensation to the victim's family.

The Petitioner submits that hoarding profiteering adulteration and black marketing is done through cash. Hence, respective agencies must investigate Black Money, Benami Property and disproportionate assets.

"The Essential Commodities Act of 1995 is for the control of production, supply and distribution of certain commodities. The Act does not deal with term "Black Marketing" in particular but Section 7 prescribes the penalty for violation of government notification issued under Section 3. In the Schedule of the Act, drugs are included in essential commodities, and definition of drug is to be taken from Section 3 of the Drug and Cosmetic Act to include medical devices. The act was enacted to regulate import manufacturing and distribution of drugs, but the mechanism is not adequate and capable enough to curb hoarding, profiteering adulteration, black marketing, which has deprived thousands of citizens of their fundamental rights guaranteed under Articles 14, 15 and 21 of the Constitution", it is pointed out.

The petitioner urged that the Santhanam Committee classified socio-economic offences into 8 categories and the 5th and 6th are Hoarding, Profiteering, Adulteration, Black marketing of food and drugs. The Committee recommended that a new chapter should be added in Indian Penal Code to deal with Socio- Economic offences, "but the suggestion went futile and fell on deaf ears". The Law Commission in its 29th and 47th Report suggested the revision of IPC and recommended inclusion of social-economic offences, "but it went futile and expected change and development didn't happen".

"The Indian Penal Code was enacted in 1860, and most of its provisions are as simple today as they were a century ago, when they were formulated in 1860, but the economic aspect of India has so dynamically changed in last 70 years that in many ways it does not reflect need of society. Indian Penal Code consists offences of all major kinds, as crime against State, against Human Body, against property. However, it does not deal with socio-economic offences i.e. hoarding profiteering adulteration and black marketing. Hence, it's time to make requisite amendments in IPC as suggested by Santhanam Committee and Law Commission", it is pressed.

It is urged that due to ineffective, outdated and vague laws, the government has totally failed to control hoarding of beds in hospitals, spurious medicine generation, profiteering, adulteration and black marketing since this pandemic has started. The District Administration has even failed to control manufacture and sale of fake sanitizers, masks, thermometer, oximeter, nebulizer etc. Though, around 300 FIRs have been lodged for hording, profiteering, adulteration and black-marketing, but neither the NSA has been invoked nor their assets have been seized.

"In 1897, British enacted the Epidemic Diseases Act which empowered the government to implement any measures that would prevent the outbreak or spread of any disease. According to the law, anyone disobeying the orders of any public servant can be punished under Section 188 of the IPC, which is not enough in today's scenario. Since exploiting the common man in such times has to be sternly dealt with, a provision ought to be incorporated in the Disaster Management Act of 2005 to make overcharging the public a serious offence. Denying admission in hospitals, refusing to bury the dead in cemeteries, etc. need to be made punishable offences", it is suggested.

It is advanced that amid a surge in Covid cases in India, the demand for oxygen supply has soared in hospitals across the country. Several hospitals have reported an acute shortage of medical oxygen, an essential resource needed for the treatment of coronavirus patients. As demand increased, the black market for medical oxygen grew exponentially. As India faces a shortage of oxygen supply, profiteers are using this public healthcare crisis to charge exorbitant prices, sometimes even hundred times the marked price. One News channel conducted an investigation in Delhi and found out that an oxygen vendor was selling gas cylinders for fifty times the marked price. Therefore, the Centre must enact stern provisions against profiteering.

"The Drugs and Cosmetics Act (DCA) has different categories of misbranded, adulterated, spurious drugs. But the Act is not stringent. In 2003, the Mashelkar Committee noted that though the Drugs and Cosmetics Act has been in force for the past 56 years, the level of enforcement in many States has been far from satisfactory. The non-uniformity in the interpretation of the provisions of laws and their implementation and the varying levels of competence of the regulatory officials were the main reasons for this less than satisfactory performance… the problems in the regulatory system in the country were primarily due to inadequate or weak drug control infrastructure at the State and Central level… The Committee noted with dismay that most of the prosecution cases pertaining to offences related to spurious drugs remain undecided for years. There is no greater deterrent than a 'severe', 'sure' and 'swift' punishment.", it is urged.

The Petitioner submits that offences of hoarding profiteering adulteration black marketing must be non-bailable, non compoundable with hefty fine. Additionally, there should be specially designated Fast Courts and regulatory infrastructure. There must be a whistle-blower scheme. "Pharmaceutical products shouldn't be produced in equivalent of garages. Good manufacturing practices, and their enforcement, is a generic issue, not something we wake up to amid a pandemic", it is stated.

"If governments purchase pharmaceutical products on L1 basis, it's understandable consumers must be price-sensitive, regardless of whether the drug is fake, sub-standard or expired. How many checks are there on chemists who sell without prescriptions and the nexus with doctors? Temporary outrage over fake RT-PCR test is misplaced, unless we decide to clamp down on everything fake.Selling a drug without a license is crime but data on prosecutions and convictions of crimes under Drugs and Cosmetics Act, are an unhappy revelation. Incidentally, Courts have ruled police officers can't register FIRs, arrest, prosecute under this law. That's the job of drugs inspectors. The notion of a black market is different, though the two are related. It can be a shadow market where one evades taxes. But it means charging a premium when there is a shortage. When there is a shortage, temporary or otherwise, prices will be higher. This is no different from surge pricing by ambulances charging exorbitant prices now. A black market occurs when the price at which a product is sold is higher than determined price. We are agitated at remdesivir selling for Rs 70,000 a vial because that price is significantly above MRP. Petitioner submits that action not taken in the best of times now strikes back at us in the worst of times", it is submitted.

The petition argues that while the health budget of India is a staggering amount of Rs 73,931.77 crores and was increased from Rs 67,484 crore last year, the total number of deaths are crossing 3,00,000. "While the government has provided adequate funds for tackling even an epidemic like covid, we have experienced nothing but failure. The reason behind this is the hoarding, profiteering, adulteration and black marketing of the health essentials which the government provides. Thus, instead of solving the health problems, the increased budget just fills the pockets of the middleman and not the needy. If the government wants to reap the benefits of money provided for 'us', it should enact stringent laws against hoarding, profiteering, adulteration & black marketing", it is stressed.

[COVID] Plea In SC Seeks Consecutive Sentences For Hoarding, Profiteering, Adulteration, Black Marketing; Invocation of NSA, Seizure Of Benami Properties

Mehal Jain

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