Are oxygen concentrators essential commodity? Two Delhi courts think differently

Saket court says oxygen concentrators are covered in the definition of Essential Commodities & their price must be governed according to govt's directions. But Dwarka court doesn't think so.

An oxygen concentrator kept at an emergency Covid-19 care centre in New Delhi | Representational image | T. Narayan | Bloomberg

New Delhi: Are oxygen concentrators an essential commodity? Additional Sessions Judge at Saket court Sandeep Garg answered this question in the affirmative Thursday, while denying anticipatory bail to Delhi-based businessman Navneet Kalra in the alleged oxygen concentrator hoarding and black marketing case.

In his defence, Kalra has been contending that the allegations against him do not hold water as oxygen concentrators and thermal scanners have not been declared as ‘essential commodities’ under the law.

The court, however, opined otherwise. It relied on five notifications to conclude that “oxygen concentrators are covered in the definition of Essential Commodities and price of the same must be governed and regulated as per the directions of the Government”.

However, one of these notifications was referred to by a principal district and sessions judge in Delhi on 8 May, which had opined that this notification “does not in any case, declare oxygen concentrators to be essential commodity”.

While in Kalra’s case, the judge referred to already existing notifications to rule that oxygen concentrators are already covered under the definition of essential commodities, the Delhi High Court Wednesday continued to question the central as well as Delhi government on why it failed to classify the concentrators as essential commodities.

Kalra was arrested last week after the Delhi Police seized oxygen concentrators from his upscale restaurants, including ‘Khan Chacha’ in Khan Market.

Complaint ‘false and frivolous’: Kalra

The FIR against Kalra was filed on 5 May, under Sections 3 (powers to control production, supply, distribution, etc of essential commodities) and 7 (penalty) of the Essential Commodities Act, Section 3 (penalty for disobeying any regulation under the Act) of the Epidemic Diseases Act, and Sections 420 (cheating), 188 (disobeying an order duly promulgated by public servant), 120B (criminal conspiracy) and 34 (common intention) of the Indian Penal Code. The Delhi Police had alleged black marketing of oxygen concentrators, thermal scanners and N-95 masks.

He had filed an anticipatory bail application on 8 May, contending that the complaint was “false and frivolous”.

One of his major contentions was that oxygen concentrators and thermal scanners have not been notified by the central government as essential commodities and therefore, provisions of the Essential Commodities Act, Epidemic Diseases Act and Section 188 IPC cannot be invoked.

What is an essential commodity?

Section 3 of the Essential Commodities Act 1955 allows the central government to declare any commodity as an “essential commodity”, allowing it to control and regulate its price, sale, storage, distribution and acquisition.

Section 7 of this Act provides for an imprisonment of up to 7 years, along with fine, for violating the provisions of the Act.

The authorities can also hold the person liable under the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act 1980. This Act makes it a crime to deal in any essential commodity “with a view to making gain in any manner which may directly or indirectly defeat or tend to defeat the provisions of that Act or other law”.

The different interpretations

The court in Kalra’s case referred to five notifications. The first one was an office memorandum issued by the National Pharmaceutical Pricing Authority (NPPA) on 29 June last year, to regulate the price of pulse oximeters and oxygen concentrators. This memorandum had directed all manufacturers and importers to ensure that the maximum retail price of medical devices cannot be increased more than 10 per cent in a year.

However, on 8 May, principal district and sessions judge at Dwarka court, Narottam Kaushal, did not think that this memorandum places concentrators in the category of essential commodities. In this case, the judge was dealing with an order passed by a magisterial court, which had directed the distribution of oxygen concentrators seized by the Delhi Police among various courts and police personnel, saying that a judge has to act like a “selfless and dispassionate saint”.

Setting aside this order, judge Kaushal had then said that “when no notification declaring the Oxygen Concentrators to be essential commodity has been placed on record by the IO; evidently the provisions of Sec.-3/7 of the Essential Commodities Act are not attracted”.

The other 4 notifications

Besides the NPPA office memorandum, the court in Kalra’s case cited four other notifications.

The first one was an office memorandum issued by the Ministry of Health and Family Welfare on 11 February last year, notifying that all medical devices were now to be regulated by the government as drugs, for quality control and price monitoring.

The second was a notification issued by the NPPA on 31 March 2020, which was referred to in NPPA’s office memorandum issued on 29 June. This notification said all medical devices would now be governed by the Drugs (Prices Control) Order 2013, starting 1 April, allowing the government to monitor MRPs of all medical devices.

The third was a notification issued on 30 April this year, allowing imports of oxygen concentrators for personal use through post, courier or e-commerce portals under the gift category.

The fourth was an order passed by the Drugs Control Department on 7 May, directing retailers, wholesalers and distributors to not sell certain items over the MRP and to refrain from indulging in black marketing.

Referring to all these notifications, the court Thursday opined that oxygen concentrators were in fact covered under the definition of essential commodities. Accordingly, it noted that the accused had “never informed the concerned authorities about the MRPs labelled or pasted over the oxygen concentrator boxes”, as required.

It then went on to refuse Kalra anticipatory bail, saying that since he is a “very influential person”, he may tamper with evidence or influence witnesses, hampering the probe.

‘High time’ that MRPs be fixed: HC

While denying bail to Kalra, the court further cited an order passed on 2 May by the Delhi High Court, taking note of black marketing of oxygen cylinders, flowmeters and medicines required for treatment of Covid-19. The bench, comprising Justices Vipin Sanghi and Rekha Palli, had then directed the authorities to “ensure that none of the equipment, or medicines used in the treatment of Covid-19 disease are sold at prices above the MRP.”

“Any person found indulging in malpractice of either hoarding the equipment or medicines, or selling the same at prices above the MRP shall be booked, and brought to the notice of this Court for initiating independent contempt action against all such persons,” it had asserted.

The same high court bench had last week also pulled up both the central government and the Delhi government on 6 May, asking, “Why aren’t you classifying medical oxygen as an essential commodity?”

It had, however, issued contempt notices Wednesday to all the persons named in the cases filed after 2 May in connection with hoarding and black marketing of medicines and equipment required for treating Covid-19, and directed them to appear before it virtually on 19 May. In the meantime, it had told the Centre that it was “high-time” that the maximum retail price of oxygen concentrators and other equipment in demand for Covid treatment was fixed to immediately stop their hoarding and black marketing.