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Issues: Whether Rule 7A of the Forward Contracts (Regulation) Rules, 1954 and condition No. (ii) in the certificate of registration granted under Section 14A of the Forward Contracts (Regulation) Act, 1952 were valid, and whether the Commission could impose a condition restricting the commodities in which a registered association could carry on forward trading.
Analysis: The statutory scheme showed that recognition under Section 6 and registration under Section 14A operated in different fields. Recognition by the Central Government did not itself permit forward trading, and registration under Section 14A was a separate and necessary requirement for carrying on such business. The language of Section 14A authorised registration only in accordance with the conditions of the certificate, and the Court held that no restriction confined those conditions merely to the manner of carrying on business. The Commission's powers under Section 4(f), read with the rule-making power under Section 26, and the prescription in Rule 7A and Form F, supported the inclusion of conditions relating to the commodities in which trading could be undertaken. Sections 15 to 18 were held to deal with general prohibitions and restrictions by the Central Government and not to curtail the Commission's power to regulate a particular association by attaching registration conditions. The Court applied harmonious construction and held that the two sets of powers could coexist without conflict.
Conclusion: Rule 7A was held to be intra vires, the Commission was competent to impose condition No. (ii), and the impugned condition and direction were valid.
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