The Forward Contracts (Regulation) Act, 1952

(1) This Act may he called The Forward Contracts(Regulation) Act, 19521. (2) It extends to the whole of India; 2*** (3) Chapter I shall come into force at once, and the remaining provisions shall come into force onsuch date3or dates as the Central Government may, by notification in the Official Gazette, appoint, anddifferent dates may he appointed for different provisions of this Act, for different States or areas, and fordifferent goods or classes of good.

In this Act, unless the context otherwise requires,-- (a) "association" means any body of individuals, whether incorporated or not, constituted for thepurpose of regulating and controlling the business of the sale or purchase of any goods; (b) "Commission" means the Forward Markets Commission established under section 3; (c) "forward contract" means a contract for the delivery of goods 1*** and which is not a readydelivery contract; (d) "goods" means every kind of movable property other than actionable claims, money andsecurities; (e) "Government security" means a Government security as defined in the Public Debt Act, 1944(18 of 1944); (f) "non-transferable specific delivery contract" means a specific delivery contract, the rights orliabilities under which or under any delivery order, railway receipt, bill of lading, warehouse receiptor any other document of title relating thereto are not transferable; (g) "option in goods" means an agreement, by whatever name called, for the purchase or sale of aright to buy or sell, or a right to buy and sell, goods in future, and includes a teji, a mandi, ateji-mandi, a galli, a put, a call or a put and call in goods; (h) "prescribed" means prescribed by rules made under this Act; (i) "ready delivery contract" means a contract which provides for the delivery of goods and thepayment of a price therefor, either immediately or within such period not exceeding eleven days after the date of the contract and subject to such conditions as the Central Government may, by notificationin the Official Gazette, specify in respect of any goods, the period under such contract not beingcapable of extension by the mutual consent of the parties thereto or otherwise; 2[Provided that where any such contract is performed either wholly, or in part,-- (1) by tendering of the documents of title to the goods covered by the contract by any party thereto(not being a commission agent or a bank) who has acquired ownership of the said documents by purchase,exchange or otherwise, to any other person (including a commission agent but not including a bank); or (2) by the realisation of any sum of money, being the difference between the contract rate and thesettlement rate or clearing rate or the rate of any offsetting contract; or (3) by any other means whatsoever, and as a result of which the actual tendering of the goods covered by the contract or the payment of thefull price therefor is dispensed with, then, such contract shall not be deemed to be a ready deliverycontract. Explanation.-- For the purpose of this clause,-- (i) "bank" includes any banking company as defined in the Banking Regulation Act, 1949(10 of 1949), a co-operative bank as defined in the Reserve Bank of India Act, 1934 (2 of 1934), theSlate Bank of India and any of its subsidiaries and any corresponding new bank constituted undersection 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970(5 of 1970); (ii) "commission agent" means a person who, in the ordinary course of business, makes contractfor the sale or purchase of goods for others for a remuneration (whether known as commission orotherwise) which is determined in the contract itself or determinate from the terms of the contract, ineither case, only with reference to the quantity of goods or to the price therefor as stipulated in thecontract.] 3[(j) "recognised association" means an association to which recognition for the time being hasbeen granted by the Central Government under section 6 in respect of goods or classes of goodsspecified in such recognition; (jj) "registered association" means an association to which for the time being a certificate ofregistration has been granted by the Commission under section 14B;] (k) "rules", with reference to the rules relating in general to the constitution and management ofan association, includes in the case of an incorporated association its memorandum and articles ofassociation; (l) "securities" includes shares, scrips, stocks, bonds, debentures, debenture-stocks or othermarketable securities of a like nature in or of any incorporated company or other body corporate andalso Government securities; (m) "specific delivery contract" means a forward contract which provides for the actual deliveryof specific qualities or types of goods during a specified future period at a price fixed thereby or to befixed in the manner thereby agreed and in which the names of both the buyer and the seller arementioned; (n) "transferable specific delivery contract" means a specific delivery contract which is not anon-transferable specific delivery contract, 4[and which is subject to such conditions relating to itstransferability as the Central Government may, by notification in the Official Gazette, specify in thisbehalf.]

(1) The CentralGovernment may, by notification in the Official Gazette establish a Commission to be called the ForwardMarkets Commission for the purpose of exercising such functions and discharging such duties as may beassigned to the Commission by or under this Act. (2) The Commission shall consist of not less than two, 1[but not exceeding four], members appointedby the Central Government 2[one of them being nominated by the Central Government to be theChairman thereof; and the Chairman and the other member or members shall be either whole-time orpart-time as the Central Government may direct]: 3[Provided that the members to be so appointed shall be persons of ability, integrity and standing whohave shown capacity in dealing with problems relating to commerce or commodity markets, or inadministration or who have special knowledge or practical experience in any matter which renders themsuitable for appointment on the Commission.] (3) No person shall be qualified for appointment as, or for continuing to be, a member of theCommission if he has, directly or indirectly, any such financial or other interest as is likely to affectprejudicially his functions as a member of the Commission, and every member shall, whenever requiredby the Central Government so to do, furnish to it such information as it may require for the purpose ofsecuring compliance with the provisions of this sub-section. (4) No member of the Commission shall hold office for a period of more than three years from thedate of his appointment, and a member relinquishing his office on the expiry of his term shall be eligiblefor reappointment. (5) The other terms and conditions of service of members of the Commission shall be such as may beprescribed.

The functions of the Commission shall be-- (a) to advise the Central Government in respect of the recognition of, or the withdrawal ofrecognition from, any association or in respect of any other matter arising out of the administration ofthis Act; 1[(b) to keep forward markets under observation and to take such action in relation to them as itmay consider necessary, in exercise of the powers assigned to it by or under this Act;] (c) to collect and whenever the Commission thinks it necessary publish information regarding thetrading conditions in respect of goods to which any of the provisions of this Act is made applicable,including information regarding supply, demand and prices, and to submit to the Central Governmentperiodical reports on the operation of this Act and on the working of forward markets relating to suchgoods; (d) to make recommendations generally with a view to improving the organisation and workingof forward markets; (e) to undertake the inspection of the accounts and other documents of 2[any recognisedassociation or registered association or any member of such association] whenever it considers itnecessary; and (f) to perform such other duties and exercise such other powers as may be assigned to theCommission by or under this Act, or as may be prescribed.

1[4A. Powers of the Commission.--(1) The Commission shall in the performance of its functions,have all the powers of a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying asuit in respect of the following matters, namely:-- (a) summoning and enforcing the attendance of any person and examining him on oath; (b) requiring the discovery and production of any document; (c) receiving evidence on affidavits; (d) requisitioning any public record or copy thereof from any office; (e) any matter which may be prescribed. (2) The Commission shall have the power to require any person, subject to any privilege which maybe claimed by that person under any law for the time being in force, to furnish information on such pointsor matters as, in the opinion of the Commission, may be useful for, or relevant to, any matter under theconsideration of the Commission and any person so required shall be deemed to be legally bound tofurnish such information within the meaning of section 176 of the Indian Penal Code (45 of 1860). (3) The Commission shall be deemed to be a Civil Court and when any offence described insection 175, section 178, section 179, section 180 or section 228 of the Indian Penal Code (45 of 1860) iscommitted in the view or presence of the Commission, the Commission may, after recording the factsconstituting the offence and the statement of the accused as provided for in the Code of CriminalProcedure, 1898 (5 of 1898), forward the case to a magistrate having jurisdiction to try the same and themagistrate to whom any such case is forwarded shall proceed to hear the complaint against the accused asif the case has been forwarded to him under section 482 of the said Code. (4) Any proceeding before the Commission shall be deemed to be a judicial proceeding within themeaning of sections 193 and 228 of the Indian Penal Code (45 of 1860). Explanation.--For the purposes of enforcing attendance of witnesses, the local limits of theCommission's jurisdiction shall be the limits of the territory of India.]