Mathew, J. - (1.) Respondent No. 1, a company registered under the Companies Act, together with respondents Nos. 2 and 3, members of the company, filed a writ petition before the High Court of Delhi praying for quashing condition No. (ii) specified in the certificate of registration granted to respondent No.1 under Sec. 14B of the Forward Contracts (Regulation) Act, 1952 (hereinafter referred to as 'the Act' ) to the effect that the company shall not commence trading in non-transferable specific delivery contracts in any commodity without obtaining the prior approval of the Forward Markets Commission (hereinafter referred to as the commission') in writing as also a direction contained in a letter dated June 2, 1964 from the commission to the company not to commence trading in non-transferable specific delivery contracts in any commodity without obtaining the prior approval of the commission in writing.
(2.) A learned Single Judge of the High Court allowed the writ petition and quashed the condition in the certificate and the direction in the letter. The appellants preferred an appeal against the order before a Division Bench. That was dismissed. This appeal, by certificate, is against the order of the Division Bench. To appreciate the controversy in this case it is necessary to have an idea as to the object of the Act gatherable from the preamble and its provisions. The preamble to the Act states that the object of the Act is to provide for regulation of certain matters relating to forward contracts the prohibition of options in goods and for matters connected therewith. The Central Government is given power under the Act to extend its provisions by notification to various classes of good and to different areas as and when necessary. The general scheme of the Act is that forward contracts should be allowed to be entered into only in accordance with the rules and bye-laws of recognized associations. Section 2 (a) defines an 'association' as meaning a body of individuals whether incorporated or not 'constituted' for the purpose of regulating and controlling the business of the sale or purchase of any goods. A 'registered association' is defined in section 2 (ii) as meaning an association to which for the time being a certificate of registration has been granted by the Commission under Section l4 B Section 2 (c) of the Act defines 'forward contract' and Sections 2 (f), 2 (i) 2 (m) and 2 ((n) respectively define, nontransferable specific delivery contract,'' "ready delivery contract':specific delivery contract" and transferable specific delivery contract" It is clear from these definitions that specific delivery contract, " transferable specific delivery contract and non-transferable specific delivery contract are all different forms of forward contract. Chapter II of the Act concerns the establishment and constitution of the Commission and Section 4 occurring in that chapter enumerates the functions of the Commission. Chapter III provides for recognition of associations concerned with regulation and control of forward contracts and deals with the rights, duties and obligations of recognized associations as also the powers of the Central Government in relation to them. Chapter III A was inserted in the Act by Act 62 of 1960 as Parliament found after watching the working of the Act for six years that the provisions of the Act as it stood were not adequate to cope with the evil of excessive speculation and other malpractices prevalent in forward markets. Section 14A in that chapter provides for the certificate of registration being obtained by all associations concerned with the regulation and control of business relating to forward contracts and the power of the Commission to grant or refuse such certificate of registration. Chapter IV which contains Sections 15 to 19 of the Act deals with regulation, control and prohibition of forward contracts in any goods, class of goods by the Central Government and also makes special provisions in respect of non-transferable specific delivery contracts and transferable specific delivery contracts and for prohibition of option in goods. Chapter V of the Act deals with penalties and procedure.
(3.) The controversy in this case centers round the correct construction to be put on Section 14A of the Act. The material portion of the section reads: "14A (1) No association concerned with the regulation and control of business relating to forward contracts shall, after the commencement of the Forward Contracts (Regulation) Amendment Act, 1960 (hereinafter referred to as such commencement ) carry on such business except under, and in accordance with , the conditions of a certificate of registration granted under this Act by the Commission".;