JUDGMENT :

SANJAY KISHAN KAUL, J.

1. A lot of noise but no music. The present case is a classic one where multiple proceedings have been initiated but have resulted in no culmination over a period just short of a decade. And this is not so because of any interdicts from the courts in preventing these legal proceedings, yet the proceedings have hardly moved. The result is that the culpability of the first two respondents herein has not been determined - thus, a cloud hangs over their conduct and that is all.

2. We now turn to The Forward Contracts (Regulation) Act, 1952 (hereinafter referred to as the ‘said Act’ since repealed by the Finance Act, 2015), as the proceedings against the first two respondents herein emanated from the powers exercised under the said Act. The said Act aimed to regulate certain matters relating to forward contracts, prohibition of options in goods and for other connected matters. A reading of the statement of objects and reasons shows that the said Act was a sequitur to the initial prohibition of forward trading in certain commodities as a result of the Central Government issuing orders under Rule 81 of the Defence of India Rules during the war period.

3. Chapter II of the said Act provides for the Forward Markets Commission (for short ‘FMC’) an authority to regulate commodities futures market, which was established under Section 3, with its functions being provided under Section 4 of the said Act. The functions, inter-alia, were to advise the Central Government in respect of the recognition of, or the withdrawal of recognition from, any association or in respect of any other matter arising out of the administration of this Act and to keep forward markets under observation. Chapter III deals with the recognition of associations concerned with the regulations and control of forward contracts. An application for such recognition of associations had to be made under Section 5 of the said Act for grant of recognition under Section 6. Section 7 of the said Act dealt with withdrawal of recognition. The Central Government had the power under Section 8 to call for periodical returns or direct inquiries to be made. Suffice to say that it is in exercise of these powers under Section 8(2) of the said Act that the proceedings against Respondent Nos. 1 and 2 herein commenced.

4. In the aforesaid play of the said Act, we now turn to National Multi Commodity Exchange of India Limited (for short ‘NMCE’) which is an association registered under the provisions of the said Act. NMCE is registered with the FMC, under Section 14B of the said Act. The subsequent development has been that in pursuance of a scheme of amalgamation, concluded in 2018, the Indian Commodity Exchange Limited (for short ‘ICEL’) who is the Appellant before us, emerged as the successor of NMCE.

5. Respondent No. 1 herein, Neptune Overseas Limited (for short ‘NOL’) is a company registered under the Companies Act, 1956 dealing with export/import and trading in various commodities including rubber. This company is the core promoter of NMCE, being its largest shareholder with 30.18% shareholding. The role of Mr. Kailash Ramkishan Gupta, Respondent No. 2 herein, was dual in character - he was the founder and CEO of NMCE as well as the Managing Director of NOL. The other related development is that the FMC, in view of the said Act being repealed, itself merged with the Securities and Exchange Board of India (for short ‘SEBI’) with effect from 28.9.2015.

6. The genesis of the dispute is a communication dated 28.11.2010, made by a stated independent journalist to the FMC alleging, inter-alia, trading irregularities within the NMCE along with an allegation of abuse of position by Respondent Nos. 1 and 2 herein. The proceedings that transpired thereafter and the related compliance with principles of natural justice form the subject matter of the present litigation.

7. The FMC, on the basis of the abovementioned complaint, initiated an inquiry into the affairs of NMCE