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TMI Blog1975 (3) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... a letter dated June 2, 1964 from the Commission to the company not to commence trading in non-transferrable specific delivery contracts in any commodity without obtaining the prior approval of the Commission in writing. 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 gatherings 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 goods 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction to be put on s. 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." Section 14B says that on receipt of an application under s. 14A, the Commission may, after making such enquiry as it considers necessary, by order in writing grant or refuse to grant the certificate. Section 15 says that the Central Government may, by notification in the official gazette, declare that section to apply to such goods or class of goods and in such areas as may be specified in the notification and thereupon, subject to the provisions contained in s. 18, every forward contract for the sale or purchase of any goods specified in the notification which is entered into in the area specified therein otherwise than between members of a recognised association or through or with any such m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets Commission." Conditions No. (i) and (ii) of the Certificate of Registration granted to respondent No. 1 are the same as those specified in Form F. The High Court was of the view that the conditions which the Commission could attach to the certificate of registration were those which relate to the manner and the method of carrying on the business of forward contract, that condition No.(ii) in the certificate did not relate to the manner or method of carrying on the business and that no power to impose such a condition could be implied as that would be repugnant to the power of government to control, regulate or prohibit forward trade in respect of any commodities vested in the Central Government under section 15 to 18 of the Act. Section 6 provides that the Central Government may, if it is satisfied that it would be in the interest of trade and also in public interest to, grant recognition to an association, grant recognition to the association in such form and with such condition as may be specified or prescribed and shall specify in such recognition the goods or classes of goods with respect to which forward contracts may be entered into between the members of such ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te, there can be no doubt as to the nature of conditions which might be attached, to a certificate of registration. Under clause (f) of s. 4, the Commission has "to perform such other duties and exercise such other powers as may be assigned to the Commission by or under this Act, or as may be prescribed." Dealing with the expression "by or under this Act or may be prescribed" in S. 4(f), this Court has said in I. P. Gupta v. W. R. Natu (A.I.R, 1963 S.C. 274) that there was no limitation upon the nature of the power that might be conferred except that which might flow from its having to be one in relation to the regulation of forward trading in goods which the Act is designed to effectuate. The Court observed that where the Court is concerned with the question whether it is legally competent to vest a particular power in a statutory body, the proper rule of interpretation would be that unless the nature of the power is such as is incompatible with the purpose for which the body is created, or unless the particular power is contra-indicated by any specific provision of the enactment bringing the body into existence, any power which would further the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct in conformity with the provisions of sections 15 to 18. Co-existence of these powers in the manner indicated is warranted by the rule of harmonious construction. It is not a relevant consideration that the imposition of condition as to the commodities in respect of which business of forward contract can be carried on would have the effect of curtailing the area of business of an association, for the very idea of setting up the Commission was to supervise and regulate the business of forward contract by imposing conditions subject to which alone the association can carry on business. Conditions are nothing but qualification, restriction or limitation modifying or even destroying to a certain extent the right to carry on the business. The commodities in which the association can carry on the business of forward contract is an integral part of its business activity. They are the subject matter or media for carrying on the business and specification of commodities in which business can be carried on is a condition sounding only in the realm of regulation and control of that business. We therefore bold that Rule 7A is intra vires the rule making power and that it was open to the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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