The Central Government has the power to issue notifications under Section 18(3) of the Forward Contracts (Regulation) Act, 1952, to regulate non-transferable specific delivery contracts in any area and in respect of such goods or class of goods as may be specified in the notification.

( 1 ) THE applicants are being prosecuted under Sections 20 (e), 21 (a) and 21 (c) of the Forward Contracts (Regulation) Act, 1952 (hereinafter referred to as the Act ). According to the prosecution case, the applicants entered into two transactions of purchase of Tur (Arhar) and one transaction of sale during the period between January, 1967 and March, 1967 and these transactions were forward contract transactions which were prohibited by virtue of notifications Nos. 1384-B, 1384-C and 1384-D all dated 17th July, 1958, issued by the Central Government prohibiting forward contract transactions in regard to Tur and there-by they committed the offences referred to above. After the evidence of the prosecution was over the applicants submitted before the Sub-Divisional Magistrate before whom the case had been pending that the prosecution was uncalled for inasmuch as the three notifications were ultra vires. The Sub-Divisional Magistrate recorded a finding that prima facie there appeared nothing wrong in the notifications. He, however, held that the matter would finally be decided after the defence evidence had also been recorded and the case was taken up for decision. The applicants preferred a revision against that order which was dismissed by the Sessions Judge who also took the view that it was premature to decide the question raised by the applicants at that stage. Thereafter they filed the present application in this Court under Section 551-A read with Section 430 of the Code of Criminal Procedure with a prayer that the proceedings pending in the Court of the Sub-Divisional Magistrate, Gonda, against the applicants may be quashed. While issuing notice on the application on 29th July, 1971, a learned single Judge of this Court felt that in view of the importance of the points involved in the case it was desirable that the application be decided by a Bench of two Judges. It is thus that the case has come up before us.

( 2 ) IT was urged by learned Counsel for the applicants that the three transactions in respect of which the applicants are being prosecuted were non-transferable specific delivery contracts and they could not be prosecuted in view of Section 18 (1) of the Act which provides that nothing contained in Chapter III or Chapter IV of the Act shall apply to non-transferable specific delivery contracts for sale or purchase of any goods. According to him, the case was not covered by the proviso to Sub-section (1) of Section 18 and consequently there was an absolute bar against prosecution of the applicants under any of the three sections referred to above. According to the prosecution, on the other hand, the provisions of Sub-sections (1) and (2) of Section 17 of the said Act were made applicable even to non-transferable specific delivery contracts for the sale or purchase of Tur in virtue of the three notifications referred to above and consequently even if it is accepted that the three transactions were non-transferable specific delivery contracts, the prosecution was justified. We are not concerned with Sub-section (3) of Section 17 in this case. The relevant sub-sections of Section 17 which have been made applicable to non-transferable specific delivery contracts are Sub-sections (1) and (2) which read:

17. Power to prohibit forward contracts in certain cases- (1) The Central Government may, by notification in the Official Gazette, declare that no person shall, save with the permission of the Central Government, enter into any forward contract for the sale or purchase of any goods or class of goods specified in the notification and to which the provisions of Section 15 have not been made applicable, except to the extent and in the manner, if any, as may be specified in the notification.

(2) All forward contracts in contravention of the provisions of Sub-section (1) entered into after the date of publication of the notification thereunder shall be illegal. It would be useful to give a resume of the three