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Act74
Enacted 1952

The Forward Contracts (Regulation) Act, 1952

In force 43 sections Finance

An Act to provide for the regulation of certain matters relating to forward contracts, the prohibition of options in goods and for matters connected therewith.

Act 74 of 1952 Enacted 26 Dec 1952 In force 24 Aug 1953 Department Department of Economic Affairs

Administered by. Ministry of Finance, Department of Economic Affairs · Other Acts of 1952

Preamble

THE FORWARD CONTRACTS (REGULATION) ACT, 1952

ACT NO. 74 OF 1952

[26th December, 1952.] An Act to provide for the regulation of certain matters relating to forward contracts, the prohibition of options in goods and for matters connected therewith.

BE it enacted by Parliament as follows:--

What this Act covers

Summary of the Forward Contracts (Regulation) Act, 1952

Key Provisions

1. Regulation of Forward Contracts

• Section 15: Central Government can regulate specific goods or areas.

• Illegality Clause: Non-compliant contracts may be deemed illegal.

2. Prohibition and Exemptions

• Options in Goods (Section 19): Prohibited, with existing unperformed contracts rendered void.

• Exemptions (Section 18 & 27): For non-transferable specific delivery contracts and by Central Government decree.

3. Offences and Penalties

• Section 20 & 21: Penalties include imprisonment (up to 2 years) and fines (not less than ₹1,000 for repeat offences).

• Corporate Liability (Section 22): Companies and their directors/managers liable, with provisions for defence.

4. Administrative Provisions

• Recognised Associations (Sections 5-8): Procedures for recognition, governance, and withdrawal of recognition.

• Forward Markets Commission (FMC): Oversight body (details not provided in context).

• Advisory Committee (Section 25): Advisory role for the Central Government.

• Powers to Delegate and Make Rules (Sections 26 & 28): For regulatory efficiency.

5. Judicial and Procedural Aspects

• Cognizable Offences (Section 23): Specified offences under the Code of Criminal Procedure.

• Jurisdiction (Section 24): Trials only in courts of presidency magistrates or magistrates of the first class.

• Search and Seizure (Section 22A): Authority for searching and seizing documents related to illegal contracts.

• Presumptions in Trials (Section 22B): Seized documents as prima facie evidence.

6. Repeal, Savings, and Amendments

• Repeal Provisions: Impact on existing laws and transfer of undertakings (referenced, details not in context).

• Amendment Act (1957): Context provided but summary focused on the 1952 Act.

Sections

Type to filter. 43 sections.

  1. 1Short title, extent and commencement
  2. 2Definitions
  3. 3Establishment and constitution of the Forward Markets Commission
  4. 4Functions of the Commission
  5. 4APowers of the Commission
  6. 5Application for recognition of associations
  7. 6Grant of recognition to association
  8. 7Withdrawal of recognition
  9. 8Power of Central Government to call for periodical returns or direct inquiries to be made
  10. 9Furnishing of annual reports to the Central Government by recognised associations
  11. 9APower of recognised association to make rules respecting grouping of members, restricting voting rights, etc., in special cases
  12. 10Power of Central Government to direct rules to be made or to make rules
  13. 11Power of recognised association to make bye-laws
  14. 12Power of Central Government to make or amend bye-laws of recognised associations
  15. 12AApplication of amendment of bye-laws to existing forward contracts
  16. 12BPower of Commission to suspend member of recognised association or to prohibit him from trading
  17. 13Power of Central Government to supersede governing body of recognised association
  18. 14Power to suspend business of recognised association
  19. 14ACertificate of registration to be obtained by all associations
  20. 14BGrant or refusal of certificate of registration
  21. 14CApplication of sections 8 and 12B to registered associations
  22. 15Forward contracts in notified goods illegal or void in certain circumstances
  23. 16Consequences of notification under section 15
  24. 17Power to prohibit forward contracts in certain cases
  25. 18Special provisions respecting certain kinds of forward contracts
  26. 19Prohibition of options in goods
  27. 20Penalties
  28. 21Penalty for owning or keeping place used for entering into forward contracts in goods
  29. 21APower of court to order forfeiture of property
  30. 22Offences by companies
  31. 22APower to search and seize books of account or other documents
  32. 22BPresumptions to be drawn in certain cases
  33. 23Certain offences to be cognizable
  34. 24Jurisdiction to try offences under this Act
  35. 25Advisory committee
  36. 26Power to delegate
  37. 27Power to exempt
  38. 27AProtection of action taken in good faith
  39. 28Power to make rules
  40. 28ASavings of recognised associations
  41. 29Repeals and savings
  42. 29ARepeal and savings
  43. 29BTransfer and vesting of undertaking of Commission

Amending Acts

3 Acts amending this enactment, passed by Parliament of India. The text above is the consolidated text as published.

  • The Forward Contract (Regulation) Amendment Act, 197174 of 1971
  • The Forward Contracts (Regulation) Amendment Act, 196074 of 1960
  • The Forward Contracts (Regulation) Amendment Act,195374 of 1953

Rules made under this Act

1 set of Rules. India Code publishes Rules as a record and a document rather than as text, so these are indexed here and not reproduced. All Rules.

  • the Forward Contracts (Regulation) Rules, 1954.1954

Related Acts

Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Every one of the 43 sections of this Act has its own page. This page is not a substitute for legal advice.