LexThe Maharashtra Forward Contracts Control Act.
Maharashtra · state statute
Open in Lexace · Ask the AI about this act1947 : LXIV] 1
THE MAHARASHTRA FORWARD CONTRACTS CONTROL ACT
[Text as on 29th May 2024]
___________
CONTENTS
PREAMBLE.
SECTIONS.
1. Short title and operation.
2. Definitions.
3. Recognition.
4. Power of Provincial Government to supersede the governing body, and suspend business.
5. Power of Provincial Government to make rules and add to, etc., articles of association.
6. Power of recognised association to make, add to, vary or rescind bye-laws.
7. Power of Provincial Government to make bye-laws.
8. Illegal contracts and penalty.
9. Options in goods illegal.
10. Penalty for owing or keeping place used for entering into forward contracts in contravention
of Act, etc.
11. Jurisdiction under Act.
12. Offences by corporations and firms.
13. Bar of suits and proceedings against officers, etc.
14. Repeal of enactments.
15. Savings.
2 The Maharashtra Forward Contracts Control Act [1947 : LXIV
1947 : LXIV] The Maharashtra Forward Contracts Control Act 3
LIST OF AMENDMENT ACTS
1. Amended by Mah. 24 of 2012
4 The Maharashtra Forward Contracts Control Act [1947 : LXIV
1947 : LXIV] The Maharashtra Forward Contracts Control Act 5
MAHARASHTRA ACT No. LXIV OF 19471
[THE MAHARASHTRA FORWARD CONTRACTS CONTROL ACT.]
[7th February 1948]
An Act to provide for the regulation and control of forward contracts, for prohibition
of options and for certain other purposes In the Province of Bombay.
WHEREAS it is expedient to regulate and control forward contracts, to prohibit options and to
provide for certain other purposes hereinafter appearing ;
It is hereby enacted as follows :—
1. Short title and operation.— (1) This Act may be called the 2[Maharashtra Forward Contracts
Control Act].
(2) This section shall come into force at once.
(3) The Provincial Government may by notification in the Official Gazette direct that all the
remaining sections other than sections 4, 5 and 7 shall come into force in the whole of the Province of
Bombay or such part thereof and on such date and in their application to such goods as may be
specified in the notification.
(4) The Provincial Government may also by notification in the Official Gazette direct that section
4, 5 or 7 shall come into force in the whole of the Province of Bombay or such part thereof and on such
date and in its application to such goods as may be specified in the notification.
2. Definitions.— In this Act, unless there is anything repugnant in the subject or context,—
(1) “Association” means any association, organization or body of individuals whether
incorporated or not, established for the purpose of regulating and controlling business of the sale
or purchase of, or other transactions relating to any goods ;
(2) “Contract” means a contract entered into, made or to be performed in whole or in part in
any notified area relating to the sale or purchase of any goods to which this Act applies :
Provided that the Provinc ial Government may by notification in the Official Gazette direct
any contract or class of contracts to be excluded from the provisions of this Act, subject to such
conditions as the Provincial Government may deem fit to impose;
(3) “Forward contract” means a contract for the delivery of goods at a future date and which
is not a ready delivery contract ;
(4) “Goods” means any kind of moveable property and includes securities but does not
include money or actionable claims ;
(5) “Government security” means a Government security as defined in the Indian Securities
Act, 1920 (X of 1920) ;
(6) “Notified area” means any are a specified in the notification under sub -section ( 3) of
section 1 ;
(7) “Option in goods” means a contract for the purchase or sale of a right to buy, or a right
to sell, or a right to buy or sell goods in future a nd includes a gully, a teji, a mandi or a teji-mandi
in goods ;
(8) “Person” includes a firm ;
(9) “Ready delivery contract”, means a contract which provides for delivery and payment of
price either immediately or within such number of days not exceeding seven after the date of the
1 For Statement of Objects and Re asons see Bombay Government Gazette , 1947, Part V, page 274 ; for Report of the
Select Committee, see ibid., page 503 ; for proceedings in Assembly, see Bombay Legislative Assembly Debates, 1947,
Vol. XI ; and for proceedings in Council, see Bombay Legislative Council Debates, 1947, vol. XIII.
2 Short title “Bombay forward contracts control Act, 1947 was amended as ” Maharashtra forward contracts control Act,
1947 by Mah. 24 of 2012, s.3, schedule, entry 30, w.e.f. 1st May 1960.
6 The Maharashtra Forward Contracts Control Act [1947 : LXIV
contract and under such conditions as the Provincial Government may, from time to time, by
notification in the Official Gazette, specify in this behalf in respect of any particular goods ;
(10) “Recognised association” means an association which is for the time being recognised
by the Provincial Government as provided in section 3;
(11) “Securities” includes shares, scrips, st ocks, bonds, debentures, deben ture stocks, or
other marketable security of like nature in or of any incorporate company or other body corporate
and Government securities.
3. Recognition.— (1) Any association desirous of being recognis ed for the purposes of this Act
shall make an application in writing to the Provincial Government for such recognition and shall, along
with the application, s ubmit rules relating in general to its constitution and management and in
particular to—
(a) the mana gement of the association by a gove rning body and the constitution of such
governing body ;
(b) the powers and duties of the office bearers and the governing body and the manner in
which its business shall be transacted;
(c) the admission of various classes of mem bers by the associat ion and the exclusion,
suspension, expulsion and readmission of such members ;
(d) the formation and registration of partne rships and the appointment of authorised
representatives and clerks ;
(e) such other matters as the Provincial Government may by order direct.
(2) The association shall also furnish such othe r information in regard to such association as the
Provincial Government may require.
(3) The Provincial Government may direct that ther e shall be no lim itation of the number of the
members of the a ssociation or such limitation of the number as the Provincial Government may
impose, and may require the association to incorporate in the rules such direction and the conditions, if
any, accompanying it.
(4) The Provincial Government may require suc h association to provi de in its rules that the
Provincial Government may appoint any person, whether a member of the association or not, to be the
President or a member of the governing body of such association.
(5) If th e Provincial Government is satis fied that the rules of the association are suitable in the
interest of the trade and are in public i nterest, the Provincial Govern ment may recognise the
association. No alterations or additions shall be made in the rules of a recognised association without
the prior approval of the Provincial Government.
(6) If the Provincial Government considers th at the recognition given to any association should,
in the interest of the trade or in public interest, be withdrawn, the Provincial Government may, after
giving to the association an opportunity to explain why recognition should not be withdrawn, withdraw
the recognition given to the said association, and such association shall thereupon cease to be a
recognised association :
Provided that such withdrawal of the recognition of any association shall not in any manner affect
the validity of any contract entered into or made prior to the date of the withdrawal of the recognition
and the Provincial Government may make such provision as it deems fit for the due fulfilment of such
contracts which may be outstanding at such date.
4. Power of Provincial Government to supersede the governing body, and suspend
business.— (1) (i) Notwithstanding anything contained in this Act, or any other law for the time being
in force, the Provincial Government may, if it deems fit, by an order published in the Official Gazette,
declare the governing body of any recognised association to be superseded and may appoint any person
or persons to exercise and perform all the powers and duties of the governing body ; and when more
persons than one are appointed may appoint one of such persons to be the President :
1947 : LXIV] The Maharashtra Forward Contracts Control Act 7
Provided that a reasonable opportuni ty shall be given to the governing body to explain why it
should not be superseded unless the Provincial Government considers that an emergency has arisen
when in the interest of the trade or in public interest immediate supersession is necessary.
(ii) The members of the governing body which has been superseded shall, as from the date of the
order of supersession, cease to be such members.
(iii) The person or persons appointed under clause ( i) shall hold office for such period as the
Provincial Government may, by notification in the Official Gazette , appoint and the Provincial
Government may from time to time by like notification extend such period.
(iv) The person or persons appointed under clause ( i) may exercise and perform all the powers
and duties of the governing body which has been superseded.
(v) When a person or persons have been appointed under clause ( i), all such property of the
recognised association as such person or persons may by order in writing declare to be necessary for
carrying out the p urposes of this Act, shall vest in such person or persons, as the case may be. The
property so vested, or which such person or persons may have acquired shall, on the determination of
the period of office of such person or persons, re -vest or vest, as the case may be, in the recognised
association.
(vi) On the determination of the period referred to in clause ( iii) the recognised association shall
forthwith re-constitute a governing body in accordance with its rules : provided that until the governing
body is so re-constituted the person or persons appointed under clause (i) shall continue to exercise and
perform their powers and duties.
(2) If, in the interest of the trade or in public interest, the Provincial Government considers it
necessary to do so, the Provincial Government may by an order published in the Official Gazette direct
a recognised association to suspend its business for suc h period and subject to such conditions as may
be specified in the order and the Provincial Government may from time to time by like order extend
such period.
5. Power of Provincial Government to make rules and add to, etc. articles of association.— (1)
If the Provincial Government is of opinion that it is expedient to do so, the Provincial Government may
at any time add to, vary or rescind any rules made by a recognised association or may make any rules
for all or any of the matters, specified in sub-sections (1) to (4) of section 3, or require such association
to add to, vary or rescind its articles of association.
(2) Rules, or any addition to, or variation or rescission of, rules made under sub -section (1) shall
be subject to the condition of previous publication :
Provided that the Provincial Government may in the interest of the trade or in public interest
dispense with the condition of previous publication.
(3) Rules or any addition to or variation or rescission of, rules made under this section shall be
published in the Official Gazette and shall be deemed to have been made by the recognised association.
6. Power of recognised association to make, add to, vary or rescind bye -laws.— (1) Any
recognised association may, subject to the sanction of the Provincial Government, make and, from time
to time, add to, vary or rescind bye -laws for the regulation and control of forward contracts in goods
for which such association has been recognised.
(2) In particular, and without prejudice to the generality of th e foregoing power, such bye -laws
may provide for—
(a) the opening and closing of markets and the times during which such market shall remain
open or closed and regulating the hours of trade ;
(b) a clearing house for the periodical settlement of contracts and the differences thereunder,
for the delivery of and payment for goods and for the passing on of delivery orders and the
regulation and maintenance of such clearing house ;
(c) the number an d c lasses of contracts in respect of which settlements shall be made or
differences paid through the clearing house ;
8 The Maharashtra Forward Contracts Control Act [1947 : LXIV
(d) fixing, altering or postponing settling days ;
(e) determining and declaring the market rates for goods ;
(f) the terms, conditions and incidents of contracts and the forms of such contracts as are in
writing ;
(g) regulating the entering into, making, performance, rescission and termination of
contracts, including contracts between members, or between a commission a gent and his
constituent or between a broker and his constituent or between a jatthawala or muccadum and his
constituent or between a member of the recognised association, and a person who is not a
member, and the consequences of insolvency on the part of a seller or buyer or intermediary, the
consequences of a breach or omission by a seller or buyer and the responsibility of commission
agents, muccadums and brokers not parties to such contracts ;
(h) the, admission and prohibition of specified classes or t ypes of goods or of dealings in
goods by a member of the recognised association ;
(i) the method and procedure for settlement of claims and disputes including settlement by
arbitration ;
(j) the levy and recovery of fees, fines and penalties ;
(k) regulating the course of business between parties to contracts in any Capacity ;
(l) fixing of a scale of brokerage and other charges ;
(m) the making, comparing. settling and closing of bargains ;
(n) the regulation of fluctuations in rates and prices ;
(o) emergencies and the exercise of powers in such emergencies ;
(p) the regulation of dealings by members for their own account.
(3) The bye-laws may provide that the contravention of any of the bye-laws shall—
(i) make a contract which is entered into, made or is to be performed otherwise than in
accordance with the bye-law void or illegal ;
(ii) render the member liable to expulsion, suspension, fine or other non-monetary penalty.
(4) Bye -laws or any addition to or variation or rescission of such bye -laws ma de under this
section shall be subject to the condition of previous publication unless such condition is dispensed with
by the Provincial Government in the interest of the trade or in public interest and when sanctioned by
the provincial Government shall be published in the Official Gazette.
7. Power of Provincial Government to make bye -laws.— (1) If the Provincial Government is
of opinion that it is expedient to do so, the Provincial Government may at any time add to, vary or
rescind any by-laws made by a recognised association under section 6 or may make any bye -laws for
all or any of the matters specified in the said section 6.
(2) Bye-laws, or an y addition to, o r variation or rescission of bye -laws made under sub-section
(1) may provide for the re gulation and co ntrol of contracts entered into or made previously to and
subsisting at the date of making of the bye-laws, addition, variation or rescission, but not so as to affect
contracts entered into or made before a week previous to such date, and all rights and obli gations in
respect of contracts so regulated and controlled shall thereafter be determined accordingly.
(3) Bye-laws or any addition to, variation or re scission of bye -laws made under sub-section (1)
shall be subject to the condition of previous publication :
Provided that the Provincial Government may, in the interest of the trade or in public interest,
dispense with the condition of previous publication.
(4) Bye-laws or any addition to, or variation or re scission of bye -laws made under this section
shall be pub lished in the Official Gazette and shall be deemed to have been made by the recognised
association.
1947 : LXIV] The Maharashtra Forward Contracts Control Act 9
8. Illegal contracts and penalty. — (1) Every forward contract f or the sale or purchase of, or
relating to; any g oods, specified in the notifica tion under sub-section (3) of section 1 which is entered
into made or to be performed in any notified area shall be illegal if it is not entered into, made or to be
performed—
(a) in accordance with such bye -laws, made under se ction 6 or 7 relating to the ente ring
into, making or performance of such contracts, as may be specified in the bye-laws, or
(b) (i) between members of a recognised association,
(ii) through a member of a recognised association, or
(iii) with a member of a recognised associa tion, provided that such member has previously
secured the written authority or con sent, which shall be in writing if the bye-laws so provide, of
the persons entering into or making the contract,
and no claim of any description in respect of such contract shall be entertained in any civil court.
(2) Any person entering into or making such illega l contract shall, on conviction be punishable
with imprisonment for a term which may extend to six months or with fine or with both.
9. Options in goods illegal.— (1) Notwithstanding anything contained in this Act or in any other
law for the time bei ng in force on a notification be ing issued by the Provincial Government in the
Official Gazette, options or such kinds of options in such go ods and in the whole of the Province of
Bombay, or such part thereof as may be specified in the notifications shall be illegal.
(2) Any person entering into any option m ade illegal under sub -section (1) shall, on conviction,
be punishable with imprisonment which may extend to six months or with fine or with both.
10. Penalty for owing or keeping place used for entering into forward contracts in
contravention of Act, etc.— Any person who in any notified area—
(1) owns or keeps a place, other than that of a recognised association, which is used for the
purpose of entering into or maki ng or performing in whole or in part forward contracts in goods
specified in the notification under sub-section (3) of section 1 and knowingly permits such place
to be used for such purposes ; or
(2) without the permission of the Provincial Government organises, or assist in or ganising
or becomes a member of any assoc iation, other than a recognized association, e stablished for the
purpose of assistin g in entering into or making or performing in whole or in part forward
contracts such goods ; or
(3) manages, controls or assists in keeping any p lace, other than that of a recognised
association, which is used for the purpose of entering into or making or performing in whole or in
part forward contracts in such goods or at which such contracts are recorded or adjusted or rights
or liabilities ari sing out of such contracts or op tions are adjusted, regulated or enforced in any
manner whatsoever ; or
(4) not being a member of a recognised association wilfully represents to o r induces any
person to believe that he is a member of a recognised association or that a forward contract can be
entered into or made or performed in whole or in part under this Act through him, or
(5) not being a member of a recognised association or his agent authorised under the rules or
bye-laws of such association canvasses, advertises or touts in any manner either for himself or for
any other person, for any business connected with forward contracts in such goods; or
(6) joins, gathers or assists in gathering any pe rson or persons for making bids o r offers of
for entering into or making any forward contracts in such goods at a place other than the place o f
business specif ied in the bye -laws of any recognized association, shall, on conviction, be
punishable with imprisonment which may extend to six months or with fine or with both.
11. Jurisdiction under Act. — No court inferior to that of a Presidency Ma gistrate or a
Magistrate of the First Class shall take cognizance of or try any offence punishable under this Act.
10 The Maharashtra Forward Contracts Control Act [1947 : LXIV
12. Offences by corporations and firms. — Where a person committing an offence under this
Act is a company, or other body corporate, or an association of person (whether incorporated or not) or
a firm, every director, manager, se cretary, agent or ot her officer or person concerned with the
management thereof and every part ner of t he firm shall, unless he proved that the of fence was
committed without his knowledge or consent, be deemed to be guilty of such offence.
13. Bar of suits and proceedings against officers, etc. — No suit, prosecution, or other legal
proceedings whatsoever shall be entertained in any Court against the governing body or any office -
bearer or servant of a recogniscd association or against the person or persons appointed under clause
(i) of sub-section (1) of section 4 for anything in good faith done or intended to be done in pursuan ce
or execution of this Act or rules or bye-laws made thereunder.
14. Repeal of enactments. — (1) On the date on which an association is re cognised under
section 3 in any area in respect of securities, the Bombay Securities Contracts Control Act, 1925 (Bom.
VIII of 1925), and when an association is recognised under section 3 in the City of Bombay and the
Island of Salsette in respect of cotton, the Bom bay Cotton Contracts Act, 1932 (Bom. IV of 1932),
shall cease to have force in such area.
(2) On the date o n which an association is recogni sed under section 3 in any area in respect of
cotton, the Bombay Options in Cotton Prohibition Act, 1939 (Bom. XXV of 1939), shall cease to have
force in such area.
15. Savings.— (1) Nothing in this Act or any repeal effected thereby shall affect or be deemed to
affect—
(a) the terms and incidents of any forward co ntracts in cotton or securities entered into or
made before the date on w hich the provisions of this Act come into force and to which t he Acts
hereby repealed applied ;
(b) the terms and incidents of any options in cot ton entered into or made before the date on
which the Bombay Options in Cotton Prohibition Or dinance, 1939 (Bom. Ordinance II of 1939),
came into force ;
(c) the validity, invalidity, effect or con sequences of anything already done or suffered , in
case of such contracts before the comi ng into force of the provisions of this Act, an d in the case
of such options before the date of the coming into force of the said Ordinance ;
(d) any right, title, ob ligation or liability alread y acquired, accrued or incurred in regard to
such contracts before the date of th e coming into force of the pro visions of this Act and in regard
to such options before the date of the coming into force of the said Ordinance ;
(e) any remedy or proceeding in respect of such right, title, obligation or liability ;
(f) anything done in the course of any p roceeding pending in any Court, in case of such
contracts on the date of the coming into force of the provisions of this Act and in the case of such
options on the date of the coming into force of the said Ordinance, and any such remedy or
proceeding may be enforced, instituted or continue d, as the case may be, as if this Act had not
been passed.
(2) The provisions of sub -section (1) shall apply to forward contracts for the purchase or sale of
any other goods to which the p rovisions of this Act may, from time to time, be applied under sub -
section (3) of section 1 entered into or made before the date on which a notification in respect of such
goods may be published under the said sub-section.