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Issues Involved:
1. Constitutional validity of the operative provisions of the Forward Contracts (Regulation) Act, 1952. 2. Validity of the notification dated February 11, 1959, issued under Section 15 of the Act, bringing 'gur' within the purview of the Act. 3. Validity of the notification issued simultaneously by the Central Government fixing the price at which forward contracts subsisting on February 11, 1959, were to be settled. Detailed Analysis: 1. Constitutional Validity of the Forward Contracts (Regulation) Act, 1952: The Act was challenged on the grounds that it infringed on the freedom guaranteed by Article 19(1)(c) of the Constitution, which allows citizens to form associations or unions. The petitioners argued that the Act imposed unreasonable restrictions on the internal management of associations, violating their right to function effectively. Court's Analysis: - The Court held that the Act does not compel associations to seek recognition; it is a voluntary act. The restrictions imposed by the Act are for the purpose of recognition and ensuring effective control over forward trading. - The Court emphasized that the regulation of forward trading is a legitimate subject of legislative interference due to its potential to assume undesirable forms akin to gambling, affecting lawful trade and public interest. - The Court rejected the argument that the Act's provisions infringe on the freedom guaranteed by Article 19(1)(c), stating that the restrictions are reasonable and necessary for the effective regulation of forward trading. 2. Validity of the Notification Dated February 11, 1959, Issued Under Section 15 of the Act: The notification brought 'gur' within the purview of the Act, rendering forward contracts in 'gur' illegal unless conducted through recognized associations. Court's Analysis: - The petitioners argued that the notification was invalid as it was issued without first recognizing associations for dealing in 'gur,' which they claimed was a prerequisite under the Act. - The Court held that the existence of a recognized association is not a legal prerequisite for issuing a notification under Section 15. The Act does not contemplate the Central Government setting up associations but relies on voluntary associations seeking recognition. - The Court found that the urgent need to regulate forward trading in 'gur' justified the immediate issuance of the notification, even before recognizing associations. The situation necessitated prompt action to control speculative activities and stabilize prices. - The Court concluded that the notification was a reasonable restriction in the interest of public welfare and did not violate Article 19(1)(g) of the Constitution. 3. Validity of the Notification Fixing the Price for Settling Forward Contracts: The notification fixed the price at which forward contracts in 'gur' subsisting on February 11, 1959, were to be settled, based on the average closing rates of the preceding three months. Court's Analysis: - The petitioners contended that the provision allowing the Central Government to fix the price was arbitrary and lacked guiding principles, violating Article 14 of the Constitution. - The Court noted that the Essential Commodities Act, 1955, similarly empowers the government to fix prices to ensure they are reasonable, considering production costs and prevailing market conditions. - The Court found that the Act implicitly required the price fixed to be reasonable, taking into account relevant factors. The price-fixing power was necessary to prevent manipulation and ensure fair settlement of contracts. - The Court held that the actual price fixed in the notification was reasonable, aimed at curbing speculative activities and stabilizing the market. The provision and the notification were deemed constitutionally valid. Conclusion: The Court dismissed the petitions, upholding the constitutional validity of the Forward Contracts (Regulation) Act, 1952, and the notifications issued under Sections 15 and 16 of the Act. The restrictions imposed by the Act and the notifications were found to be reasonable and in the interest of public welfare, thereby not violating Articles 14, 19(1)(c), 19(1)(f), or 19(1)(g) of the Constitution.
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