Judgment

AYYANGAR, J. : These six petitions filed under Art. 32. of the Constitution raise for consideration three points: (1) the constitutional validity of the operative provisions of the Forward Contracts (Regulation) Act (Central Act LXXIV of 1952) (to be referred to hereafter as the Act), (2) the validity of a notification dated February 11, 1959 issued under S. 15 of the Act by which gur was brought within the purview of the enactment with immediate effect, and (3) the validity of another notification of the Central Government issued simultaneously fixing the price at which Forward Contracts subsisting on February 11, 1959 was directed to be settled. For the purpose of understanding the points raised and the effect of the impugned notifications on the rights of the petitioners it is sufficient to refer to the facts of Petition No. 23 of 1959 which is typical of the cases before us.

2. The petitioner-Raghubar Dayal Jai Prakash is a firm carrying on the business of purchase and sale of gur and other commodities inter alia at Meerut. Traders like the petitioner had combined together to form a company registered under the Indian Companies Act under the name Kaisergunj Beopar Co. (P) Ltd., Meerut. The function of this incorporated body was, inter alia to regulate forward transactions in the sale and purchase of gur and other commodities entered into between the members of the Society, as also to declare the rates at which the contracts were to be settled on the dates fixed for delivery. This incorporated company has been impleaded as a second respondent to the petition. This association or company, however, was not, on the date of the impugned notification, "recognized" by the Central Government under the provisions of the Act to which we shall presently advert, in respect of dealings in gur with which alone these petitions are concerned. The petitioner had entered into forward contracts of purchase of gur at certain rates and he had also deposited as the buyer the amount as well as the special margin required to be deposited under the bye-laws of this association. Contracts entered into by him which were outstanding on February 11, 1959 were in relation to 29,600 maenads, While so, Government published a notification under S. 15 of the Act on February 11, 1959, applying the provisions of that section to gur as a result of which the forward contracts entered into in gur by the petitioner become illegal and void. The further legal consequence of the notification was that the transactions entered into by the petitioner and others situated similarly like him were to be deemed to be closed out on February 11, 1959 - the date of the notification and the differences arising out of the contract were to be payable not at the rate originally stipulated by the contracting parties but at the rates specified in the notification. If the petitioner had to settle his outstanding contracts at the rate determined by the Central Government he would suffer a loss of Rs. 48,000. He therefore challenges in this petition the validity of the provisions of the Act which enabled the notifications to be issued as also the notifications themselves on grounds to the details of which we shall advert later.

3. Before setting out these details, it would be convenient and tend to the proper appreciation of the problems involved, if we briefly indicate the economic implications of forward trading in commodities, the need for the regulation of such trading; as well as the history of the measures taken from time to time to exercise control on forward trading in gur prior to the issue of the impugned notifications in February 1959.

4. The expert committee to which the Bill which became the Act (Central Act 74 of 1952) was referred, explained in their report the function of forward trading in these terms :

"Forward trading involves speculation about the future, but not all forms of forward trading could be considered as either unnecessary or undesirable for the effi