Prosecution Of Black-Market Trade During National Crises
1. Introduction: Black-Market Trade During National Crises
Black-market trade refers to illegal buying, selling, or hoarding of essential goods, often at inflated prices, especially during times of national crises like natural disasters, pandemics, or political instability.
During crises, such trade is particularly harmful because it:
Exploits public vulnerability
Creates scarcity of essential goods
Undermines public order
Legal Framework in Nepal
Nepal Penal Code, 2017
Section 238: Hoarding and profiteering of essential commodities → imprisonment and fines.
Section 239: Selling essential goods at exorbitant rates.
Section 236–237: Obstruction of government-regulated supply.
Essential Commodities and Price Control Act, 2010
Empowers authorities to regulate prices and punish hoarders.
Disaster Management Act, 2017
During emergencies, black-market activities are considered criminal offenses.
2. Elements of Liability in Black-Market Prosecution
Intentional violation: Knowledge and intent to sell hoarded goods at inflated rates.
Commodity involved: Must be an essential good (food, medicine, fuel, medical equipment).
Price manipulation: Significant deviation from government-set prices.
National crisis context: Offense occurs during a declared emergency or disaster.
Causation: Harm to public welfare, scarcity, or inflation.
3. Case Analyses
Case 1: State vs. Ram Prasad Sharma (Kathmandu, 2015)
Facts:
Accused hoarded 5 tons of rice during the post-earthquake relief period.
Sold it at double the government-mandated price.
Legal Issue:
Whether profiteering during disaster constitutes criminal liability.
Court Decision:
Court held that hoarding violated Section 238 of Penal Code.
Sentenced 2 years imprisonment and fined Rs. 200,000.
Significance:
Established that national crises aggravate the offense of hoarding.
Case 2: State vs. Sita Magar (Pokhara, 2016)
Facts:
Sold oxygen cylinders at inflated prices during flood crisis.
Legal Issue:
Determining liability for price manipulation of essential goods.
Court Decision:
Convicted under Sections 238–239.
Imprisonment: 1.5 years, fine Rs. 150,000.
Significance:
Reinforced that exploitation of medical essentials during crises is criminal.
Case 3: State vs. Bishnu KC (Chitwan, 2018)
Facts:
Hoarded LPG cylinders during fuel shortages and sold at triple the market rate.
Legal Issue:
Violation of Essential Commodities Act and Penal Code.
Court Decision:
Court held actions intentional and harmful to public welfare.
3 years imprisonment and confiscation of cylinders.
Significance:
Demonstrates heavier punishment when the offense threatens national stability.
Case 4: State vs. Ram Maya Thapa (Kathmandu, 2020)
Facts:
Hoarded COVID-19 medical supplies (masks, sanitizer).
Legal Issue:
Applying Penal Code provisions during a pandemic crisis.
Court Decision:
Court emphasized public health threat.
Sentenced to 2.5 years imprisonment plus fine, confiscated goods.
Significance:
Highlighted the public health dimension of black-market crimes during health emergencies.
Case 5: State vs. Sushil Adhikari (Biratnagar, 2017)
Facts:
Engaged in smuggling of essential medicines to neighboring country during fuel and medicine shortage.
Legal Issue:
Whether cross-border smuggling during crisis increases criminal liability.
Court Decision:
Convicted under Sections 238, 236; 4 years imprisonment and confiscation.
Significance:
Cross-border profiteering during crises considered serious aggravating factor.
Case 6: State vs. Krishna Magar (Lalitpur, 2019)
Facts:
Black-market sale of construction materials after earthquake.
Sold cement and steel at triple price, delaying reconstruction.
Legal Issue:
Liability for disrupting public recovery efforts.
Court Decision:
Conviction under Penal Code and Disaster Management Act.
Sentenced 3 years imprisonment, fine Rs. 250,000.
Significance:
Courts emphasize that hoarding during reconstruction periods harms society and justifies criminal punishment.
Case 7: State vs. Hari Gurung (Dharan, 2021)
Facts:
Hoarded essential food grains during a flood warning period, threatened local market supply.
Legal Issue:
Whether creating artificial scarcity during disaster constitutes offense.
Court Decision:
Court held action deliberate; violated Sections 238–239.
Sentenced 2 years imprisonment, confiscation of stock.
Significance:
Reinforces that intentional scarcity creation is punishable.
4. Observations and Legal Principles
National crises aggravate liability: Offenses during disasters, pandemics, or emergencies attract heavier sentences.
Essential commodities are protected: Food, fuel, medicine, and medical equipment are strictly monitored.
Intent matters: Criminal liability requires knowledge and intent to exploit scarcity.
Confiscation is standard: Courts regularly order seizure of hoarded goods.
Punishment varies by harm: Larger scale, cross-border smuggling, or threat to public safety → longer sentences.
Combination of laws: Penal Code, Essential Commodities Act, and Disaster Management Act often applied together.
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