Satish Chandra, J. - (1.) THIS appeal raises an important question at to thepowers possessed by the Forward Markets Commission, appellant No. 2.
(2.) THE Bullion and Agricultural Pro duce Exchange Limited, the respondent, is a public limited company. It carried on the business of regulating and controlling forward contracts in various goods. The respondent made an application to the Fot-Ward Markets Commission for being registered under the Forward Contracts (Regula tion) Act, No. 72 of 1952, on 15-12-1962. The Commission issued a registration certi ficate to the respondent showing that the respondent was entitled to carry on busi ness in Arhar-ki-chooni. One of the condi tions mentioned in the certificate was that the respondent shall not conduct forward trading in any commodity other than those specified thereunder except with the previ ous approval of the Forward Markets Com mission. The respondent was, however, con tent with this condition and it permitted its members to do the business of forward trad ing in Arhar-ki-chooni only. On June 1, 1964, the Central Government issued a noti fication under section 17 (1) of the Forward Contracts (Regulation) Act the effect of which was that trading in Arhar-ki-chooni was prohibited. The respondent thereupon discontinued trading in this commodity. At that time forward contracts in linseed of was permissible. The respondent company permitted its members to trade in linseed oil. On 24th December, 1964, forward trading in linseed oil was also prohibited. At this time groundnut oil was not a prohi bited commodity. So, the respondent com menced business in groundnut oil. Meanwhile, on June 2, 1964, the Forward Markets Commission had issued a directive to the respondent company not to trade in non-transferable specific delivery contracts in any commodity without the prior approval in writing of the Commission. This apparently was a reminder to the ret- pondent company of the conditions contain ed in the certificate of registration. The res pondent, however, ignored this directive and continued its business in ground-nut oil. The Commission felt that the respondent had violated the conditions of the certificate of registration and was liable to be prose cuted under Sections 20 and 21 of the For ward Contracts Act. Apprehending this, the respondent company instituted a writ peti tion in this Court. The principal point urged in it was that the commission had no power to require a registered association to obtain the Commission's prior permission before permitting its members to carry on forward trading in non-transferable specific delivery contracts in a commodity like groundnut oil, the forward trading in which was not prohi bited under Chapter IV of the Act, even though such a commodity was not mentioned in the certificate of registration.
(3.) A learned Single Judge held that Section 14-A (1) prohibits an association concerned with regulation and control of business relating to forward contracts in carrying on such business except under and in accordance with the conditions of a certi ficate of registration. It was observed: "The conditions must be such as are re lated to the carrying on of the business. It is under those conditions and in accordance with them that the business must be carried on. It is the conduct of the business, and the manner of its conducting it, to which reference is made here. It is not contem plated that business shall be carried on relat ing to forward contracts only in respect of certain commodities and no other. That would not relate to the conduct of the busi ness or the manner of its being carried on. That would imply the curtailment of the business, the business being confined in rela tion to specific commodities only, and no business being permissible in relation to other commodities." It was held that Section 14-A (1) does not empower the Commission to prevent a regis tered association from carrying on its busi ness in any commodity without its prior ap proval;