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Rajasthan High Court · body

2005 DIGILAW 212 (RAJ)

Poonam Chand v. Union of India

2005-01-24

SUNIL KUMAR GARG

body2005
Judgment 1. The instant petition has been filed by the three residents of Bikaner namely Poonam Chand, Manoj Kumar and Gopi Kishan under the label of public interest litigation raising voice against the malfunctioning of the 10th respondent namely Bikaner Commodity Exchange Ltd. It is alleged that the members of the 10th respondent are engaged in false forward game locally known as “Satta” resulting into huge evasion of Mandi Tax, Income Tax and Sales Tax. It is pointed out that precondition for specific delivery contract is that a person entering into contract must have stock of that commodity in an authorized warehouse and then only the said contract can be entered into. But a false game is being introduced by the 10th respondent and forward trading for thousands of quitals of commodities without there being any stock of the commodities are being conducted with the result that the rates of those commodities fluctuate in the market and such fluctuation obviously affects the farmers who come from their agricultural lands to Bikaner Town for sale of their produce. It is further submitted that on account of forward contracts without there being any goods in stock also affect the consumers who has to pay higher prices of the commodities on account of price hike created by such false game contractors. Inspite of repeated representations made to the higher authorities no action has been taken. Thus, a direction is sought to the Sate as well as Central Government authorities to conduct a survey about the activities of the 10th respondent and ensure stoppage of illegal forward contracts being conducted by them. 2. In a counter filed by the 10th respondent a preliminary objection has been raised as to the maintainability of the instant petition as a PIL. It is averred that the petitioners are involved in forward trading and check has been put on their illegal activities and as such the instant petition has been filed. A counter has also been filed on behalf of 5th respondent namely Forward Markets Commission, New Delhi (hereinafter referred to as the Commission). 3. We have heard the learned Counsel for the parties and perused the materials on record. It appears that with a view to provide regulatory provisions to different classes of goods and to different areas the Forward Contract (Regulation) Act, 1952 (hereinafter referred to as the Act of 1952) was enacted. 3. We have heard the learned Counsel for the parties and perused the materials on record. It appears that with a view to provide regulatory provisions to different classes of goods and to different areas the Forward Contract (Regulation) Act, 1952 (hereinafter referred to as the Act of 1952) was enacted. The main principle underlying these provisions is that forward contracts should be allowed to be entered into only in accordance with the rules and bye-laws of a recognized association. The Central Government has been entrusted with powers to order an inquiry into the affairs of the recognized association or those of any of its members and to direct the Forward Markets Commission to inspite the accounts and other documents of the Association. The 5th respondent the Commission is established under Sec. 3 of the Act of 1952. The Commission functions under the administrative control of the Government of India. On the recommendations of the Commission the Government of India grants recognition to the commodities exchanges under Sec. 6 of the Act of 1952. The Government of India recognize the commodities exchanges to organize future trading in the permitted commodities under the bye-laws, rules, circulars and regulations of such exchanges to run under the regulations of the Commission. The 10th respondent Bikaner Commodities Exchange Ltd. is a company established on 30th January, 2002 and registered under the Companies Act. It was granted regulation under Sec. 6 of the Act of 1952 by the Government of India in respect of forward contracts in Rap Seed/Mustard Seed, its oil and Cake for a period of five years from 1st August, 2003 to 31st July, 2008. The Government has also granted recognition to the Exchange under a notification dated 20th January, 2004 for a period of three years in respect of forward contracts in Gram Seed, Guwar Seed, Guwar Gum. According to the respondents No. 4 and 5 appropriate steps are being taken to regulate the functioning of the 10th respondent. 4. Having heard learned Counsel for the parties and perused the pleadings, we are satisfied that the 5th respondent, which is a statutory body has a complete control on 10th respondent as such the grievance of the petitioners with respect to functioning of the 10th respondent can be appropriately looked into and redressed, if there is any truth therein. 4. Having heard learned Counsel for the parties and perused the pleadings, we are satisfied that the 5th respondent, which is a statutory body has a complete control on 10th respondent as such the grievance of the petitioners with respect to functioning of the 10th respondent can be appropriately looked into and redressed, if there is any truth therein. We hope and trust that 5th respondent will ensure the faithful observance of the statutory provisions by 10th respondent. The petition, accordingly, stands disposed of .