LexFIRM RAMDEO ONKARMAL & ANR. versus STATE OF U.P. & ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
14
B
c
D
E
F
G
H
FIRM RAMDEO ONKARMAL & ANR.
v.
STATE OF U.P. & ANR.
July 21, 1981
[R.S. PATHAK AND 0. CHINNAPPA REDDY, JJ.J
Forward Contracts
(ReJ.rulatio11)
Act.
1952 s. 18 (3)-Regufation and
Control of non-transferable specific delivery contracts-Notification issued-Area
over which regulation and control to extend-Whether to be expressly specified in
notification.
The Forward Contracts (Regulation) Act, 1952 by sub-section (1) of section
18 declares that the provisions of Chapters III and IV shall not apply to non·
transferable ~specific delivery contracts for the sale or purchase of any goods.
Sub-section (3) of section 18 however, provides that if the Central Government
is of opinion that in the interest of the trade or in the public interest, it is ex-
pedient to regulate and control such contracts in any area, it may by notification
in the Official Gazette, declare that all or any of the provisions of Chapters III
and IV shall apply to such class or classes of non-transferable specific delivery
contracts in such area and in respect of such goods or class of goods as may be
specified in the notification and may also specify the manner in which and the
extent to which all or any of the said provisions shall so apply.
On July 17, 1958 the Central Government issued three notifications under
the Act. The first notification S.0. 1384-B issued under section 17 read with
section l 6 of the Act prohibited forward contracts for the sale or purchase of
certain specified goods, including Tur (Arhar). The second notification S.0.
1384-C issued under sub-section (3) of section 18 declared that section 17 would
apply to non-transferable specific delivery contracts in resp~ct of the goods
specified in the notification, and these included Tur (Arhar). The third notifica-
tion, S.O. 1384-D. issued under sub-section (1) of section 17 declared that no
person could, save with the permission of the Central Government, enter into
any non-transferable specific delivery contracts for the s:ile or purchase of the
goods specified therein 1 and these included Tur { Arhar).
The appellants were prosecuted for various offences under section 20 and
section 21 of the Act on the ground that three transactions of purchase of Tur
(Arhar) were entered into by them in violation of the aforesaid notifications.
The appellants challenged the validity of the notifications but the Sub-Divisional
Magistrate and the Sessions Judge in revision took the view that the chal1enge
was premature.
A Division Bench of the High Court dismissed the appellant's petition
under section 561 A read with section 435 Code of Criminal Procedure, upheld
•
•
FIRM RAMDEO V. U.P. STATE
15
the validity of the notifications, and rejected the plea of the appellants that the
A
notifications were invalid as they did not specifically mention the area over which
they were to operate.
Dismissing the appeal to this Court,
HELD: 1. What sub-section {3) of section 18 requires is that before
issuing a notification under that provision the Central Government must satisfy
itself that the regulation and control of non-transferable specific delivery con-
B
tracts in a particular area are in the interest of the trade or in the public interest.
The determination of the area over which the regulation and control will extend
is a vital component to which the Central Government must apply its mind when
deciding to issue a notification, and when a notification is in fact issued the area
must be communicated by specifying it in the notification. [18 D]
2. The area specified may be comprehended from material expressed or
C
implied in the notification. The sub-section does not require that the area must be
expressly specified in the notification. If it is possible to define the area by
necessary implication, that is sufficient compliance with the requirement of the
sub-section. [18 E]
3.
A notification may operate over part only of the territory to which the
Act extends, or it may be intended to operate throughout that territory.
Ordinarily, whether the notification extends over part only of the territory or
throughout the territory would be specified in the notification. If the notification
is intended to operate over part only of the ,territory to \Vhich the Act extends,
the notification must necessarily define that lin1ited area. When it contains no
express signification of the area, it may be implied that it is intendExcerpt shown. Read the full judgment & AI analysis in Lexace.