Speculative contracts which ostensibly are for delivery of goods are included within the purview of the Forward Contracts (Regulation) Act, 1952.

Judgment

RAMASWAMI, J. : This appeal is brought, by special leave, from the judgment of the Madras High Court, dated July 16, 1863 in Criminal Revision Case No. 1139 1961

2. The appellant was charged for having committed offences under S. 420, Indian Penal Code and S. 21 (d) and (e) of the Forward Contracts (Regulation) Act, 1952 (Act 74 of 1952), hereinafter called the "Act", with regard to certain transaction his between the appellant and P. W. 2, Rajam. The appellant was convicted of all the charges and was sentenced to rigorous imprisonment for one year and a fine of Rs. 1,000 under S. 420, Indian Penal Code and a fine of Rs. 100 under each of Cls. (d) and (e) of S. 21 of the Act by the District Magistrate Kumbakonam. He further directed that a sum of Rs. 1,000 out of the said fine should be paid to P. W. 2. On appeal, the convictions and sentences were affirmed by the Sessions Judge, West Thanjavur. The appellant took the matter in revision to the Madras High Court but the revision application was dismissed

3. The appellant was the proprietor of a firm in Bombay known as "Jawarmal Gulab Chand". He advertised that people could invest capital in cotton, oil seeds and other commodities and that J. G. Market reports issued by him could help them in the matter. P. W. 2, a wholesale merchant dealing in cotton seed, groundnut cakes, etc., at Kumbakonam became a subscriber to the reports. P. W. 2 asked the appellant for his business terms. The appellant sent him Ex. P-30 wherein he stated that he undertook export, import, ready and forward business in various commodities in accordance with Pucca Adatia system and according to the usual practice and usage of the various associations concerned. Neither the appellant nor his firm was a member of any recognised association within the meaning of the Act. P. W. 2 placed orders with the appellant and correspondence and statements of accounts were exchanged between the appellant and P. W. 2 who paid a sum of Rs. 12,000 as margin. Subsequent to the demand of P. W. 2 the appellant sent Rs. 1,000 and also a final statement showing loss in the transaction and claiming that a sum of Rs. 398.52 P. was due to the appellant according to the prosecution case the appellant induced P. W. 2 to send him Rs. 12,000 between May 1, 1958 and June 15, 1958 for forward contract business in cotton, castor-seeds and groundnut by a fraudulent representation that the appellant conducted such business even though he was not actually entitled to do any such business and thereby cheated P. W. 2 The case of the appellant was that he could do business under the Pucca Adatia system in with members of recognised associations like the Bombay Oil-seed and Oil Exchange, and the East India Cotton Association, Bombay though he himself was not if member of either of these associations. The appellant denied that he made any false representation or that he induced P.W. 2 to part with his money. The case of the appellant was rejected by the District Magistrate of Kumbakonam who accepted the prosecution case as true and convicted and sentenced the appellant on all the charges. The decision of the District Magistrate was affirmed by the Sessions Judge. West Thanjavur in appeal.

4. It was argued, in the first place, on behalf of the appellant that on the admitted or proved facts no case of cheating has been made out against the appellant and therefore, his conviction under S. 420, Indian Penal Code was illegal. We are unable to accept this argument as correct. It has been found that the appellant sent a letter, Ex. P-34 along with a copy of the business terms, Ex. 34 (a) "on which we undertake business of our clients". In this document the appellant has made the representation that he could do business in forward contracts in cotton, grains, seeds, bullion, black pepper, etc., in accordance with the pucca adatia system and in accordance with the usual practice and usage of the various associations concerned". In Exhibit P-33 the a