Section 7A of ECA : Section 7A: Power Of Central Government To Recover Certain Amounts As Arrears Of Land Revenue

Explanation using Example

Imagine a scenario where a company, "X Grain Suppliers," is ordered under Section 3 of the Essential Commodities Act to sell a portion of its wheat stock at a controlled price to maintain supply in the market. The company is also required to deposit a certain amount of money into a government fund designed to stabilize food prices.

However, "X Grain Suppliers" fails to comply with the order and does not sell the wheat at the controlled price, nor does it deposit the required amount into the government fund. As a result, under Section 7A of the Essential Commodities Act, the government decides to recover the defaulted amount as arrears of land revenue.

The government calculates the interest on the defaulted amount at a rate of 15% per annum from the date of default until the amount is fully recovered. Despite the company's objections and attempts to seek an injunction from the court to prevent the recovery, Section 7A(3) of the Act prohibits the court from granting such an injunction.

After the amount is recovered, "X Grain Suppliers" challenges the order in court and the court finds the order to be invalid. Consequently, the government refunds the amount recovered from the company along with interest at the same rate of 15% per annum from the date of recovery to the date of refund, in accordance with Section 7A(4).

This example illustrates how Section 7A of the Essential Commodities Act empowers the government to recover amounts due from entities that fail to comply with orders under Section 3, and also provides for the refund of such amounts if the order is later found to be invalid.