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PETITIONER: DR. INDRAMANI PYARELAL GUPTA

       Vs.

RESPONDENT: W.   R. NATHU AND OTHERS.

DATE OF JUDGMENT: 11/04/1962

BENCH: AYYANGAR, N. RAJAGOPALA BENCH: AYYANGAR, N. RAJAGOPALA AIYYAR, T.L. VENKATARAMA SINHA, BHUVNESHWAR P.(CJ) SUBBARAO, K. MUDHOLKAR, J.R.

CITATION:  1963 AIR  274            1963 SCR  (1) 721  CITATOR INFO :  R          1970 SC 385  (5)  RF         1970 SC1597  (20)  RF         1971 SC1828  (12)  R          1975 SC1218  (10)  C          1984 SC  87  (21)  R          1987 SC2239  (8)  D          1988 SC1263  (13)

ACT: Forward Contracts-Regulation of-Bye-laws empowering  closing out   of   hedge  contracts--Validity  of-If   can   operate retrospectively-East  India Cotton Association Bye-laws  cl. 52A-Forward  Contracts  (Regulation)  Act,  1952  (LXXIV  of 1952), ss. 4, 11 and 12.

HEADNOTE: The  appellants  were  members  of  the  East  India  Cotton Association which was an association recognised by the  Cen- tral  Government under the Forward Markets  Regulation  Act, 1952.  Prioi to December 1955, they had entered into  "hedge contracts" in respect of cotton for settlements in  February and May 1956 in accordance with the bye-laws of the Associa- tion.   Towards the end of 1955 it was apprehended that  the forward  market in cotton was heading for a crisis  and  the Central Government issued notifications directing the  Asso- ciation to suspend business in hedge contracts for  February and  May  1955  deliveries for short periods  this  did  not improve  the  situation.  On January 21, 1956,  the  Central Government,  acting under s. 12 of the Act, made a new  bye- law in substitution of bye-law 52AA of the Association which empowered the Forward Markets Commission, constituted under, the  Act,  to  issue a notification closing  out  all  hedge contracts at rates fixed by the Commission.  On January  24, 1956,  the Commission issued a notification closing out  all hedge contracts including those subsisting on that date, and fixed  the rates for the settlement of such contracts.   The appellants  contended  that  the amended  bye.law  52AA  was invalid as the power to close out hedge contracts could  not be conferred upon the Commission and as the Association  was

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in  law  incapable  of  conferring  such  a  power  on   the Commission  or on any other body and that in any  cases  the bye-law  could not operate retrospectively so as  to  affect existing contracts. Held, (per Sinha, C. J., Ayyangar, Mudholkar and Aiyar,  JJ. Subba Rao, J. contra), that the amended bye-law 52AA was not ultra vires the Central Government and validly empowered the Commission to close all hedge contracts in cotton  including existing contracts.  Clause (f) of s. 4 of the Act  provided that one of the functions of the Commission 722 shall  be  to perform such other duties  and  exercise  such other  powers  as may be assigned to the Commission  "by  or under  the  Act,  as  may  be  prescribed".   There  was  no limitation  upon  the  nature  of  the  power  that  may  be conferred  under cl. (f) except that it must be in  relation to  the regulation of forward trading in goods.  It was  not possible  to place any limitation on this power by  invoking the rule of ejusdem genesis as there was no common  positive thread  running  through cls. (a) to (e) of s. 4.  To  judge whether legally a power could be rested in a statutory  body the proper rule of interpretation was that unless the nature of the power was such as to be inconsistent with the purpose for  which  the body was created or  unless  the  particular power was contra-indicated by any specific provisions of the Act,  any  power which furthered the provisions of  the  Act could  be  legally conferred. judge by this test  the  power conferred  by  the bye-law could be validly  vested  in  the Commission.   The power was one conferred "under  the  Act". The  words  "under the Act" signified a power  conferred  by laws  made by a subordinate law-making authority  which  was empowered  to  do so by the Act.  The impugned  bye-law  was clearly  well within the bye-law making power under ss.   II and  12.  The bye-law did not contravene articles 64 of  the Articles  of Association of the Association as  articles  64 applied only to the Board and placed no restrictions on  the power of the Association, Western  India  Theaters Ltd. v.  Municipal  Corporation  of Poona, [1959] Supp. 2 S.C.R. 71, Hubli Electricity Co.  Ltd. v. Province of Bombay, 76 I.A. 57 and Narayanaswamy Naidu v. Krishnamurthi, I.L.R. 1958 Mad. 513, referred to, Further,  upon a proper construction of the amended  bye-law it  applied  not  only to contracts to be  entered  into  in future  but also to subsisting contracts.  A  statute  which could validly enact a law with retrospective effect could in express terms validly confer upon a rule making authority  a power to make a rule or frame a bye-law having retrospective operation.   In the present case the power to make  bye-laws so  as  to  operate on subsisting contracts  followed  as  a necessary implication from the terms of s. 11. There was  no contra indication in the other provisions of the Act. Per  Subba  Rao, J.-Under s. 12 (1) of the Act  the  Central Government had no power to make a bye-law with retrospective effect.  The provision conferring rule making power must  be strictly construed and unless it expressly conferred a power to make a bye-law with retrospective effect, it must be held that  it was not conferred any such power.  Evey if  it  was permissible to inter such a power by necessary 723 implication,  it could not be inferred in the present  case. It could not be said that unless retrospective operation was given  to the provisions of s. 12, the object of the  legis- lature would be defeated or the purposes for which the power was conferred could not be fulfilled. Further,  the powers conferred on the Commission  under  the

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impugned  bye-law could not be performed by  the  Commission under  c1.  (f) of s. 4. Clauses (a) to (e) of s.  4  showed that the functions of the Commission were wholly supervisory and  advisory in nature; the functions described in cl.  (f) were  analogous  to these and could only be  supervisory  or advisory.  The Commission had no administrative functions or powers  of  management  or powers  of  interference  in  the internal  management  of registered association  which  were vested  in  the Association.  The power conferred  upon  the Commission was not conferred "under the Act".  The words did not  include  a rule or a bye-law, and applied  only  to  an assignment  made  in  the  exercise  of  an  express   power conferred  under  the Act.  The Central  Government  had  no power tinder s. 12 to make a bye,law assigning any  function to the Commission. Union of India v. Madan Gopal Kabra (1954) S.C.R. 541,  Modi Food  Products Ltd. v. Commissioner of Sale’s Tax, U.P.,  A. I.R.  1956  All. 35, Strawboard Manufacturing  Co.  Ltd.  v. Gupta Hill Workers’ Union, (1953) S.C.R. 439, India Sugar  & Belineries  Ltd. v. State of Mysore, A.I.R. 1960  Mys.  326, C.W. Motor Service (P) Ltd. v. State of Kerala, A.I.R.  1959 Kerala  347, Howell v. Falmouth Boat Construction  Co.  Ltd. (1951)  A.  C.  837;  The Western  India  Theatres  Ltd.  v. Municipal  Crporation of the City of Poona, (1959)  Supp.  2 S.C.R.  71  and Hubli Electricity Co. Ltd.  v.  Province  of Bombay ( 1948) 76 I.A. 57, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 109 of 1957. Appeal  by special leave from the judgment and  order  dated March 1, 1956, of the Bombay High Court in Appeal No. 20  of 1956. G.   S. Pathak, K. H. Bhabha, H. M. Vakeel and I. N. Shroff, for the appellants. C.   K.  Daphtary, Solicitor General of India, B. K.  Khanna and P. D. Menon, for the respondents. 724 C.   K. Daphtary Solicitor General of India S.    N. Andley, Rameshwar Nath and P. L. Vohra, for the Interveners. 1962.  April 11.  The Judgment of Sinha C.   J.,   Ayyangar, Madholkar  and  Aiyar, JJ., was delivered by  Ayyangar,  J., Subha Rao, J. delivered a separate judgment. AYYANGAR,  J.-This  is an appeal by special leave  from  the judgment  of  a  Division Bench of  the  Bombay  High  Court affirming  the judgment of a learned Single Judge whereby  a petition filed under Article 226 of the constitution by  the appellants was dismissed.  By their petition, the appellants challenged the validity of a notification issued by  Forward Markets  Commission a statutory body created by the  Forward Markets  Regulation  Act 1952 (LXXIV of  1952)  (hereinafter referred to as the Act) to the authorities of the East India Cotton Association, Bombay (which will be referred to as the Association)  intimating  to them that the  continuation  of trading  in  certain types of forward  contracts  in  cotton including  that known as "hedge contracts" was  "detrimental to the interest of the trade and the public interest and  to the  larger interests of the economy of India" and  directed these  contracts to be closed out, to be settled  at  prices fixed in the notification. It is necessary to set out briefly certain facts in order to appreciate the points raised by the appeal.  The fast  India Cotton  Association  is  an  "association"  which  has  been recognised by the Central Government under a. 6 of the  Act.

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The three appellants are members of the Association carrying on  business in partnership.  The appellants had,  prior  to December  1955, entered into "hedges contracts"  in  respect with  other  members of the Association for  settlements  in February and May 1956.  There was no dispute that these 725 contracts  were  in  accordance with  the  bye-laws  of  the Association  as  they stood at the date when  the  contracts were  entered  into.  The terms and  conditions  of  forward contracts  in  cotton including "hedge contracts",  and  the manner  of  their  implementation,  were  governed  by   the provisions contained in certain bye-laws of the  Association and  of  these  that relevant to the  consideration  of  the matters  in this appeal was bye-law 52AA which on  the  date when  the  appellants entered into their  contracts  ran  as follows:-               "52-A.A.  (1)  whether or not  the  prices  at               which the cotton may be bought or sold are  at               any  time controlled under the  provisions  of               the  Essential Commodities Act, 1055,  if  the               Textile  Commissioner with the concurrence  of               the  Forward  Markets  Commission  and   after               consultation with the Chairman (of the Board),               be  of opinion that the continuation of  hedge               trading  is  likely to result in  a  situation               detrimental  to  the larger interests  of  the               economy of India and so informs the Board, the               Board  shall  forthwith cause a notice  to  be               posted on the Notice Board to that effect  and               on   the   posting   of   such   notice    and               notwithstanding   anything  to   be   contrary               contained in these bye-laws or in any hedge or               on  call contract made subject to  these  Bye-               laws,  the  following  provisions  shall  take               effect.               (2)Every  hedge  contract and  every  on  call               contract  in so far as the cotton is  uncalled               thereunder or "in so far as the price has  not               been  fixed thereunder entered into between  a               member and a member or between a member and  a               non-member  then outstanding shall  be  deemed               closed  out at such rate, appropriate to  such               contract  as  shall be fixed  by  the  Textile               Commissioner and the provisions               726               of Clauses (3), (4) and (6) of Bye-laws 52A in               so  far  as they apply to hedge  and  on  call               contracts, shall apply as if they formed  part               of this Bye-law.  After the affixation of  the               said  Notice  on the Notice Board  trading  in               hedge and on call contracts shall be prohibit-               ed  until  the Textile Commissioner  with  the               concurrence of the Forward Markets  Commission               and  after  consultation  with  the  Chairman,               permits resumption". Towards  the  end of 1955 the Chairman  of  the  Association appears  to  have  apprehended that the  forward  Market  in cotton was heading for a crisis which was in part due to the transacting  of  unbridled  option  business,  which  though prohibited  by  the  Act and also by  the  bye-laws  of  the Association was ever the less indulged in on a large  scale. The  hairman  brought this situation to the  notice  of  the members of the Board of the Association at a meeting held on December  16,  1955,  and suggested that  they  should  give serious thought to this vital problem.  It may be  mentioned

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that  the  government also were  anxiously  considering  the steps to the taken to solve or avert the crisis.  The action which  the government took in this matter is reflected in  a notification  issued by them on December 23, 1955, by  which in exercise of the powers conferred in them by s. 14 of  the Act they directed the Association to suspend its business in Indian  cotton edge contracts for delivery in February  1956 and  May  1956 for a period of 7 days with effect  from  the date of the notification.  The situation did not  apparently improve  as  a result of this temporary suspension  so  that before  the expiry of the work fortnight, action  under  the same  provision  was gain taken under a  notification  dated December 10, 1955, by which the period of 7 days was  exten- ded  by  a  further period of 7 days i. e. till  6,  1.  56A meeting of the Board of Association was held on 727 January-6,  1956, i. e., the day on which the suspension  of forward business expired when the following-, resolution was unanimously passed: -               "’In view of the suspension of forward trading               by government the Board hereby resolves  under               bye-law  52  that an emergency has  arisen  or               exists  and  prohibits until  further  notice,               subject  to  the concurrence  of  the  Forward               Markets  Commission as from Saturday, the  7th               January, 1956, trading in hedge contracts  for               February  and  May 1956,  deliveries  above  a               maximum rate of Rs. 700/- per candy Thereupon  a suit (numbered as suit 2/1956) was filed  by  a member  of the Association as representing himself  and  all other  members,  on  the original side of  the  High  Court, Bombay  against the Association and its  Board,  challenging the  validity of the notification of  Government  suspending forward  trading, as also of the resolution of  the  ’Board, just now extracted.  An application for the grant of interim stay  was made for restraining the Board from giving  effect to its resolution but this was refused by the learned  trial Judge and an appeal was filed against the refusal. While  things were in this state the Central Government,  in exercise  of  the powers conferred on them by s. 12  of  the Act,  made anew bye-law which was published in a Gazette  of India   Extra.   ordinary  dated  January   21,   1956,   in substitution of bye law 52 AA set out earlier.  The new bye- law ran.               "152  AA  (1) Whether or not prices  at  which               cotton  may be bought or sold are at any  time               controlled   under  the  provisions   of   the               Essential   Commodities  Act,  1955,  if   the               Forward Markets Commission is of the opinion               728               that continuation of trading in hedge contrac-               ts   for   any  delivery  or   deliveries   is               detrimental to the. interest of the trading or               the public interest or to the larger interests               of  the economy of India and so  notifies  the               Chairman, then notwithstanding anything to the               contrary contained in these bye-laws or in any               hedge  or  on call contract  made  subject  to               these  bylaws the following  provisions  shall               take effect.               (2)Every  hedge  contract and  every  on  call                             contract  in so far as the cotton  is  uncalle d               thereunder  or in so far as the price has  not               been  fixed  thereunder and  relating  to  the

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             delivery  or deliveries notified under  clause               (1) entered into between a member and a member               or  between  a member and  a  non-member  then               outstanding shall be deemed closed out at such               rate  appropriate  to such contract  and  with               effect from such date as shall be fixed by the               Forward Markets Commission and the  provisions               of clauses (3), (4) and (0) of Byelaws 52-A in               so  far  as they apply to hedge  and  on  call               contracts  shall apply as if they formed  part               of this Bye-law". This   bye  law  was  communicated  to  the  Board  of   the Association on January 23, 1956.  We  might here state that the validity of this new  bye-law has  been  impugned  on  various  grounds  and  the  alleged invalidity of this We-law serves as the main foundation  for challenging the validity of the notification of the  Forward Markets Commission issued under the powers conferred by it. On January 24, 1956, the appeal from the order refusing  the interim injunction in Suit No. 2 of 1956 was settled between the parties on , theme terms : "(1) The impugned resolution dated January 6, 1956, declared to be valid, 729 (2)The Board of Directors to meet on January 25, 1958, and consider  under bye-laws 52 (2) whether the rate of Rs.  700 fixed  under the said resolution should continue or  whether it  should  be waived.  ’In considering the same  the  Board will apply its own mind and exercise its own judgment". On the same day, i.e. January 24, 1956, the Forward  Markets Commission took action under-the powers vested in them under the  new  bye-law 52 AA which had been  made  by  government three  days  earlier.  By a communication addressed  to  the Chairman of the Association, the Commission stated :               "’In pursuance of cl. (1) of the bye-law  52AA               of the Bye-laws of the E.I.C.A. Ltd., Bombay I               hereby  notify  to  you  that  the  For.  ward               Markets  Commission  is of  the  opinion  that               continuation of trading in the hedge contracts               for   February  and  May  1956   delivery   is               detrimental to the interests of the trade  and               the public interest and the larger interest of               the  economy of India and fixed under cl.  (2)               of the said bye-law; that the rates prevailing               at  the time at which the trading in the  said               contracts  closed On January 24,  1956,  viz.,               Rs. 700/- for February and Rs. 686/8/- for May               delivery as the rates at which and January 25,               1956  as the date with effect from  which  the               hedge  contracts and on call contracts  in  so               far as the cotton is uncalled thereunder or in               so  far  as  the  price  has  not  been  fixed                             thereunder relating to the said delivery  shal l               be deemed to be closed out". Thereupon the three appellants who are partners carrying  on business  in  cotton under the name and style  of  Indramani Pyarelal  Co. moved the High Court of Bombay by  a  petition under Art. 226 of the Constitution on January 27, 1956,  for a writ of mandamus or a direction in the nature of 730 mandamus   against  the  members  of  the  Forward   Markets Commission who were individually impleaded as respondents to the  petition,  ordering  them to  cancel  or  withdraw  the notification  dated  January 24, 1956,  whose  validity  was

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impugned  on various grounds.  The petition was heard  by  a learned  single  Judge who dismissed it by his  order  dated February  23,  1956.  An appeal was filed  therefrom  to  a, Bench of the High Court and when this was also dismissed the petitioners moved for a certificate of fitness to appeal  to this  Court but the same having been rejected, they  applied for. and obtained special leave from this Court, and that is bow the matter is now before us. The  submissions  of  Mr. Pathak  learned  Counsel  for  the appellant  in support of the appeal may be classified  under three main heads : (1) The notification dated 24th  January, 1956, served on the Board of the Association by the  Forward Markets Commission was ultra vires for the reason that  bye- law  52AA, as amended by the Central Government  on  January 21,  1956, was invalid. (2) Assuming the byelaw to be  valid it  could  not  operate retrospectively  or  be  availed  of retrospectively  so  as  to  affect  rights  under  existing contracts  subsisting  on the day the  amended  bye-law  was notified  in  the Gazette but that it could if  at  all,  be validly applied only to Forward hedge contracts entered into thereafter.  (3)  The notification by  the  Forward  Markets Commission  was  improper  and malafide  and  was  therefore invalid. It  would  be convenient to deal with these points  in  that order  :  (1)  The first of the  points  raised  raises  the question of the validity of bye-law 52 AA as amended by  the Central  Government  on January 21, 1956.   Learned  Counsel divided  his submission on this matter into  two  sub-heads- (a)  that  the Forward Markets Commission could  not,  on  a proper construction of the Act, be validly vested 731 with the power with which it was clothed by the amended bye- law, and (b) that it was beyond the power of the Association to  have conferred the power which it purported to do  under the   amended  bye-law  52AA.   Put  in  other  words,   the objections  were that the Forward Markets  Commission  could not,  having regard to the terms of the statute under  which it  was  created, be a proper recipient of the  power  ’with which  it  was vested by the bye-law and secondly  that  the Association was in law incapable of conferring that power on the Forward Markets Commission or on any other body. We  shall first take up for consideration the argument  that the Forward Markets Commission was in law incapable of being the  recipient of the power conferred by the  bye-law  under which  it was empowered to issue the impugned  notification. For  this purpose it is necessary to examine in  detail  the relevant  provisions  of  the Act.  Section  2  (b)  defines ’Commission’  as  meaning "The Forward  Markets  Commission" established under s. 3. Section 3 (1) enacts :               "3.    The   Central   Government   may,    by               notification in the Official Gazette establish               a Commission to be called the Forward  Markets               Commission for the purpose of exercising  such               functions  and discharging such duties as  may               be assigned to the Commission by or under this               Act." The point urged by learned Counsel was that the function  or the  duty cast upon it by the amended bye-law 52 AA was  not such  as  could be assigned to the Commission "by  or  under this  Act."  The meaning of the words by or under’  and  the extent  and nature of the duties assigned to the  Commission by  the  Act  will therefore  require  careful  examination. Section 4 relates to the functions of the Commission and  it is the proper construction of this 732

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section  that  has  loomed large in the  arguments  on  this point.  It is, therefore, necessary to set this out in  full :               "4. The functions of the Commission shall be-               (a)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 ;               (b)to  keep forward markets under  observation               and  to  draw  the attention  of  the  Central               Government  or of any other prescribed  autho-               rity to any development taking place, in or in               relation  to,  such  markets  which,  in   the               opinion  of  the commission is  of  sufficient               importance  to  deserve the attention  of  the               Central Government and to make recommendations               thereon ;               (e)to  collect  and  whenever  the  Commission               thinks it necessary publish information regar-               ding  the  trading conditions  in  respect  of               goods  to which any of the provisions of  this               Act is made applicable, including  information               regarding  supply, demand and prices,  and  to               submit  to the Central  Government  periodical               reports  on the operation of this Act  and  on               the  working  of forward markets  relating  to               such goods ;               (d)to  make recommendations generally  with  a               view to improving the Organisation and working               of forward markets ;               (e)to undertake the inspection of the accounts               and   other  documents  of   any   recognished               association whenever it considers it necessary               ; and               733               (f)to   perform  such  other   duties   and               exercise such other powers as may be  assigned               to the Commission by or under this Act, or  as               may be prescribed". Pausing  here  it is necessary to add  that  the  expression prescribed" found at the end of cl. (f) has been defined  by s.  2(h) of the Act to mean "Prescribed by rules made  under the Act". Before   considering  the  points  urged  as   regards   the construction  of this section taken in conduction  with  the terms  of  s.3(1) we shall refer to a few  other  provisions which are of some relevance in the present context.  Section 3(2)  which confers power on the Central Government to  call for  periodical returns from Recognised Associations and  to direct such enquiries as they consider necessary to be made, empowers the government to direct the Commission to  inspect the   accounts  and  other  documents  of   any   recognised Association  or of any of its members and submit its  report thereon to the Central Government [vide s. 3(2) (c)].   Sub- s. (4) of this section enacts :               "8(4).  Every recognised association and every               member  thereof shall maintain such  books  of               account and other documents as the  Commission               may specify and the books of account and other               documents so specified shall be preserved  for               such  period not exceeding three years as  the               Commission may specify and shall be subject to               inspection  at  all reasonable  times  by  the               Commission".

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             Section 28 reads :               "28.  (1)  The  Central  Government  may,   by               Notification  in  the Official  Gazette,  make               rules for the purpose of carrying into  effect               the objects of this Act.                                    734               (2)   In particular, and without prejudice  to               the  generality of the foregoing  power,  such               rules may provide for-                (a)  the terms and conditions of  service  of               members of the Commission;               (b)   the  manner  in which  applications  for                             recognition may be made under section 5 and th e               levy of fees in respect thereof ;                (c)  the manner in which any inquiry for  the               purpose of recognising any association may  be               made  and the form in which recognition  shall               be granted ;               (d)   the  particulars to be contained in  the               annual reports of recognised associations ;               (e)   the  manner in which the bye-laws to  be               made, amended or revised under this Act shall,               before  being so made, amended or  revised  be               published for criticism ;               (f)   the constitution of the advisory commit.               tees  established under section 26, the  terms               of  office  of  and  the  manner  of   filling               vacancies among members of the committee ; the               interval within which meetings of the advisory               committee may be held and the procedure to  be               followed  at such meetings ; and  the  matters               which  may be referred by the Central  Govern-               ment to the advisory committee for advice ;               (g)   any  other matter which is to be or  may               be prescribed." The argument on this part of the case was briefly this : The Forward  Markets  Commission is a statutory  body  specially created  for the purposes of the Act.  The powers which  mat be conferred upon the Commission and the duties which it may be  called  on  to discharge are therefore  subject  to  the provisions of the Act.  No more power can be conferred  upon this body than what the Act allows                          735 and  the  power under the amended bye-law 52AA  is  not  one which  is  contemplated  by the Act  as  conferable  on  it. Section 4 defines the functions of the Commission under five general  heads (a) to (e) with a residuary clause  contained in cl. (f).  The powers or duties dealt with in cls. (a)  to (e) are in their essence either recommendatory or  advisory. In  the context therefore #,,the other" duties or  ’-,other" powers which may be assigned to the Commission under cl. (f) must   be   either  ejuesdem  generis   with   advisory   or recommendatory  powers  or  of a  nature  similar  to  those enumerated in the previous subclauses. In support of these submissions learned Counsel invited  our attention  to  several decisions in which  ancillary  powers which  might  be implied from the grant of  certain  express powers were referred to. In particular it was submitted that the  Court would not imply a power which it was not  absolu- tely necessary to effectuate on express grant or was need to prevent  the  nullification  of an express  power  that  was granted.    In  our  opinion,  these  decisions  afford   no assistance  for resolving the controversy before us.   There is  no question here of deducing an implied power  from  the

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grant of an express one.  What we are concerned with is  the scope of an express power or rather whether the grant of the power conferred upon the Commission by the bye. law could be held to be a power which could be assigned to the Commission under  cl.  (f).   So  far  as the  terms  of  el,  (f)  are concerned,  there  is no limitation upon the nature  of  the power that might be conferred except, of course, that  which might  flow  from its having to be one in  relation  to  the regulation  of  forward-trading in goods which  the  Act  is designed to effectuate.  Any limitation therefore would have to  be deduced from outside cl.(f) of s. 4. Taking  each  of the  clauses  (a)  to (e), it is not possible  to  put  them positively under one genus in order 736 that there might be scope for the application of the ejusdem generis rule of construction.  Negatively, no doubt it might be said that none of these five clauses confer an  executive power such as has been vested in them by the amended bye-law 52AA  but this cannot be the foundation for  attracting  the rule  of construction on which learned Counsel  relies.   On the  other  hand,  if there is  no  common  positive  thread running  through  cls.(a) to (e) such as  would  bring  them under one genus and negatively they do not expressly include any administrative or executive functions, that itself might be a reason why the expression "other" occurring in cl.  (f) should receive the construction that it is intended to  com- prehend such a function.  Learned Counsel further  suggested that even if the rule of ejusdem generis did not apply,  the allied rule referred to at page 76 of the report of  Western India Theatres Ltd. v. Municipal Corporation of Poona,  that the   matters  expressly  referred  to  might  afford   some indication  of  the kind and nature of the power,  might  be invoked,  but we consider that, in the context, there is  no scope  for the application of this variant either.  What  we are  here concerned with is whether it is legally  competent to  vest  a  particular power in a statutory  body,  and  in regard  to this the proper rule of interpretation  would  be that  unless  the  nature  of the power is  such  as  to  be incompatible with the purpose for which the body is created, or  unless the particular power is contra-indicated  by  any specific  provision of the enactment bringing the body  into existence,  any power which would further the provisions  of the  Act could be legally conferred on it.  Judged  by  this test  it  would be obvious that the power conferred  by  the bye-law  is  one  which  could  be  validly  vested  in  the Commission. A  more  serious argument was advanced  by  learned  Counsel based upon the submission that a 737 power  conferred by a bye-law framed under s. 11 or  12  was not  one that was conferred ""by or under the Act or as  may be prescribed".  Learned Counsel is undoubtedly right in his submission  that a power conferred by a bye-law is  not  one conferred  "by the Act", for in the context  the  expression "conferrod by the Act" would mean "conferred expressly or   by necessary implication by the Act itself".  It is  also common ground that a bye-law framed under s. II or 12  would not fall within the phraseology "as may be prescribed",  for the "expression" ’Prescribed’ has been defined to mean  "’by rules under the Act", those framed under s. 28 and a bye-law is  certainly  not within that  description.   The  question therefore  is whether a power conferred by a bye- law  could be  held  to  be a power ",conferred under  the  Act".   The meaning of the word ",under the Act" is well-known.  "By" an Act  would  mean  by a provision  directly  enacted  in  the

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statute in question and which is gatherable from its express language  or by necessary implication therefrom.  The  words under the Act " would, in that context, signify what is  not directly to be found in the statute itself but is  conferred or imposed by virtue of powers enabling this to be done;  in other  words,  by  laws made  by  a  subordinate  law-making authority  which  is empowered to do so by the  parent  Act. This  distinction is thus between what is directly  done  by the  enactment  and what is done indirectly  by  rule-making authorities  which are vested with powers in that behalf  by the Act. (vide Hubli Electricity Company Ltd. vs.   Province of Bombay, and Narayanaswami Naidu vs. Krishna-Murthi.  That in  such a sense bye-laws would  be  subordinate-legislation "’under  the  Act"  is clear from terms of  ss.  11  and  12 themselves.  Section 11 (1) enacts:               "11.  (1)  Any  recognised  association   may,               subject  to  the  previous  approval  of   the               Central               (1)   76 I.A. 57, 66.               (2)   I.L.R. 1958 Mad 513, 547.               738               Government.  make bye-laws for the  regulation               and control of forward contracts", and  sub-s. (2) enumerates the matters in respect  of  which bye-laws  might  make provision.  Sub-s. (3) refers  to  the bye-laws   as  the-se  made  under  this  section  and   the provisions  of sub-s. (4) puts this matter beyond  doubt  by enacting:               "11  (4) Any bye-laws made under this  section               shall be subject to such conditions in  regard               to previous publication as may be  prescribed,               and  when approved by the Central  Government,               shall be published in the Gazette of India and               also in the Official Gazette of State in which               the   principal  office  of   the   recognised               association is situate ;               Section  12 under which the  impugned  bye-law               was made states in sub-s. (2) :               "12  (2) where, in pursuance of this  section,               any  bye-laws have been made or  amended,  the               bye-laws so made or amended shall be published               in  the  Gazette  of India  and  also  in  the               Official  Gazette  of the State in  which  the               principal office of the recognized association               is situate, and on the publication thereof  in               the  Gazette of India the bye-laws so made  or               amended shall have effect as if they had  been               made    or   amended   by    the    recognised                             associations,               and in sub-s. (4):               "12.  (4).   The making or  the  amendment  or               revision  of any bye-laws under  this  section               shall in all cases be subject to the condition               of previous publication", Having regard to these provisions it would not be 739 possible  to contend that notwithstanding that the  bye-laws are rules made by an Association under s. 11 or compulsorily made  by the Central Government for the Association  as  its bye-laws   under  s.  18,  they  are  not  in  either   case Subordinate  legislation under s. 11 or 12 as the  case  may be, of the Act and they would therefore squarely fall within the  words ,-under the Act" in s- 4(f).  Indeed, we did  not understand Mr. Pathak to dispute this proposition. His  contention however was that when cl.  (f)  specifically

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made  provision  for  powers conferred  by  "rules"  by  the employment  of the pbrase "or as may be prescribed" and,  so to  speak,  took the "rules" out of the reach of  the  words "’under the Act" it must necessarily follow that every power confered  by Subordinate law making body must be  deemed  to have  been excepted from the content of that expression  and that  consequently  in the Content the word ,,’by  the  Act" should  be  held  to mean ,,directly by the  Act"  i.e.,  by virtue  of positive enactment, of the words "under the  Act" should  be  held to be a reference to powers  gatherable  by necessary implication from the provisions of the Act.  As an instance  learned  Counsel referred us to the power  of  the Central  Government to direct the Commission to inspect  the accounts  and other documents of any recognised  association or  of any of its members and submit its report  thereon  to the Central Government under s. 8 (2)(c) and suggested  that this  would  be  a case of a power or duty  which  would  be covered  by  the words "under the Act".  We  find  ourselves wholly  unable co accept this.  If without the reference  to the phrase "as may be prescribed" the words "’under the Act" would comprehend powers which might be conferred under "bye- laws"  as  well  as those under "rules"  we  are  unable  to appreciate  the line of reasoning by which powers  conferred by  bye-laws  have to be excluded, because of  the  specific reference to powers conferred by rules". 740 Undoubtedly,  there is some little tautology in the      use of  the expression "as may be prescribed"          after the comprehensive  reference to the powers conferred "under  the Act",  but  in order merely to avoid redundancy  you  cannot adopt  a rule of construction which cuts down the  amplitude of the words used except, of course to avoid the redundancy. Thus  the utmost that could be that though normally  and  in their ordinary signification the words ,under the Act" would include both "rules" framed under s.28 as well as "bye-laws" under  s.  11  or  12, the reference  to  "rules"  might  be eliminated  as tautlogous since they have been  specifically provided by the words that follow.  But beyond that to claim that  for the reason that it is redundant as to a part,  the whole  content  of  the  words "under  the  Act"  should  be discarded,  and the words "by the Act" should be read  in  a very  restricted and, if one may add, in an unnatural  sense as excluding a power confered by necessary implication, when such  a power would squarely fall within the reach of  these words  would  not, in our opinion, be  any  reasonable  con- struction  of  the  provision  We need  only  add  that  the construction we have reached of s.4 (f) is reinforood by the language  of  s.  3 (1) which is  free  from  the  ambiguity created  by  the occurrence of the expression  "’as  may  be prescribed" in the former.  We have therefore no  hesitation in  holding  that there was no incompetency in  the  Forward Markets  Commission being the recipient of the  power  which was conferred upon them by bye-law 52AA as amended. The  next part of the submission in relation to this  matter was  that it was not competent for the Association  to  have framed  this  bye-law  and that the powers  of  the  Central Government under s. 12 and of the Association under s. 11 in regard  to  the framing of bye-law being  co-extensive,  the bye-law framed was not competent to confer any power on  the commission. 741 This   contention   was   urged  with   reference   to   two considerations:               (a)   that  a  bye-law  of  the  type  now  in               controversy  was not within s. II of the  Act,

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             and  (b) that having regard to  the  provision               contained  in the Articles of  Association  of               the  Association  the bye-law was  beyond  the               powers of the Association to frame.  These  we               should deal in that order.               The first objection naturally turns upon  whe-               ther  the  bye-law  is  one  which  could   be               comprehended with s. 11 of the Act.  Its first               sub-section enacts;                "  11  (1) any  recognised  association  may,               subject  to  the  previous  approval  of   the               Central  Government,  make  bye-laws  for  the               regulation and control of forward contract." That  the  impugned bye-law is one for  the  regulation  and control  of  forward contracts cannot be disputed,  and  the terms being very general would include a bye-law of the type now  impugned.  In this connection reference may be made  to byelaw 52AA which the impugned bye-law amended, under  which power  was  vested  in the  Textile  Commissioner  with  the concurrence of the Forward Markets Commission, (though after consultation  with the Chairman of the Board) to direct  the enclosure of hedge contracts and fix the rates at which such contracts might be closed out a provision whose validity was not  impugned  in the present proceedings.   Mr.  Pathak  no doubt  submitted that he was not precluded from  challenging before  us even the earlier bye-law for the purpose of  sus- taining  his  argument that the amended  bye-law  was  ultra vires.  Nevertheless it must be apparent that it was  always assumed that bye-laws which vest in authorities external  to the Association the 742 power to interfere with forward dealing was within the scope of the bye-law making powers under This general provision apart, sub-s. (2) of s. 11 enact:               "11(2).  In particular, and without  prejudice               to the generality of the foregoing power, such               bye-laws may provide for-               (a)...............................               (b)...............................               (c)...............................               (d)fixing,  altering  or postponing  days  for               settlement;               (e)determining  and  declaring  market  rates,               including opening, closing, highest and lowest               rates for goods;               (f)..............................               (g)......................................               (h)........................................               (i)...........................................               (j)..........................................               (k).........................................               (1)...........................................               (m).........................................               (n)   the regulation of fluctuations in  rates               and prices;               (o)   the emergencies in trade which may arise               and  the  exercise  of  powers  in  such   eme               regencies  including the power to fix  maximum               prices;               743 As  the  power of the Central Government  to  make  bye-laws under s. 12 is admittedly co-extensive with the power of the Associations to frame byelaws, it is not necessary to  refer to the terms of the latter sections Before  considering in detail the argument on this  part  of

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the case we consider it useful to set out a few of the  bye- laws  of  the  Association  whose  validity  has  not   been challenged  and  which would show the manner  in  which  the Association has been functioning in emergencies such as that for  which the impugned bye-law provides, Bye-law  52  which still exists:               "52.(1)  If  in the opinion of  the  Board  an               emergency has arised or exists, the Board may,               by a resolution,               (i)   passed  by a majority of not  less  than               --and               (ii)  confirmed prohibit, as from the date  of               such  confirmation or from such later date  as               maybe  fixed  by the Board in  the  resolution               referred to in sub-clause (1),               (a)trading  in  the  Hedge  Contract  for  any               delivery  or  deliveries -- ------or  (b)  all               trading  in such contracts as are referred  to               in clause (a) for a specified period----               --------------------               "52A.-If  the  Board, at a  meeting  specially               convened in this behalf, resolve that a  state               of emergency exists or is likely to occur such               as shall in the opinion of the Board make free               trading   in   forward   contracts   extremely               difficult,  the  Board  shall  so  inform  the               Forward Markets Commission and upon the               744               Forward  Markets Commission intimating to  the               Board its agreement with such resolution, then               notwithstanding   anything  to  the   contrary               contained in these bye-laws or in any  forward               contract  made subject to these  Byelaws,  the               following provisions shall take effect-               (1)The  Board  shall at  a  meeting  specially               convened in this behalf,               (a)fix  a date for the purpose  hereinafter               contained,               (b)fix settlement process for forward  con-               tracts,               (c)fix a special Settlement Day.               (2)...............   Every   hedge    contract               entered into between a member and a member  or               between a member and a non-member  outstanding               on  the date fixed under clause (1)(a)  hereof               shall  be  demand  closed  out  at  the   rate               appropriate  to  such  contracts  fixed  under               clause (1)(b) hereof."               3 -6  - - - - - - -               and then follows Bye-law 52AAA. Apart  for  the amended bye-law occurring in  the  group  of existing bye-laws making provision for emergencies to  which sub-clause  (o)of s.11(2) refers, there is no  dispute  that there  was an emergency in the forward market and  that  the impugned bye-law was framed to meet such a contingency.   It was  not  contended before us that the method by  which  the emergency  was resolved by the impugned bye-law -  viz.,  by closing  out  subsisting contract was not the  usual  method employed  for  the purpose.  If therefore  the  bye-law  was provision for an emergency within s.11 (2)(o) then it  would seem to follow that for the resolution of that emergency, 745 every  one  of the matters which could be included  in  such bye-laws  would  be  attracted  to it, and  so  we  find  it impossible  to accept Mr. Pathaks submission  regarding  the

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invalidity of the bye-Law. An  analysis of the impugned bye-law 52AA and comparison  of it  with  that which it replaced would show  that  the  main point of difference is that whereas formerly action to  stop forward trading and for closing out contracts and to fix the rate at which contracts were to be closed out was vested  in the Textile Commissioner, acting with the concurrence of the Forward  Markets Commission, under the amended  bye-law  the power  is directly vested in the Forward Markets  Commission itself.   The  arguments addressed to us on this  point  are concerned  not so much with the propriety as with the  vires of a provisions by which the power to close out contracts by the  issue  of a notification is vested in  the  Commission. Apart from an argument immediately to be noticed, we do  not see  how, if such a power could validly be conferred upon  a Textile  Commissioner or even exercised by the Board of  the Association  under  a bye-law framed under s. 11,  the  same would  be beyond the power to make bye-laws under s.  11  by the  mere fact that the authority vested with the  power  is the  Forward  Markets  Commission.  We are  clearly  of  the opinion that bye-law 52AA is well within the bye-law  making power under s. 11 of the Act and therefore within 12. It  was then said that the amended bye-law 52AA wag  invalid as  in  violation  of the Articles  of  Association  of  the Association being an impermissible delegation of the  powers vested in the board of the Association by its Memorandum  of Articles.  In this context Mr. Pathak placed reliance on cl. 64 of the Articles as laying down the limits within which 746 the  Board might delegate their powers.  He  contended  that the  conferment of the power to take action on  the  Forward Markets  Commission  was thus contrary to  and  inconsistent with  the powers of the Association under this Article.   It would  be seen that if learned Counsel is right, this  would render  invalid not merely bye-law 52AA as now  amended  but even  the  bye-law as it originally stood,  but  as  already stated learned Counsel urged that he was not precluded  from raising  this contention.  This point was not raised in  the Court  below  but  having beard arguments  on  it  we  shall pronounce  upon it.  We consider that there is no  substance in this objection.  Article 64 on which reliance was  placed runs in these terms:               "The  Board may delegate any of their  powers,               authorities    and   duties   to    committees               consisting of such members or member, of their               body  or consisting of such other  members  or               members  Associate Members, Special  Associate               Members or Temporary Special Associate Members               of  the  Association not being  Directors,  or               partly  of Directors and partly of such  other               members  and/or  Associate  Members,   Special               Associate  Members or Temporary Special  Asso-               ciate Members as the Directors may think  fit.               Any Committee so formed shall in the  exercise               of  the  powers so delegated conforms  to  any               regulation  that  may  from time  to  time  be               imposed on it by the Directors". In so far as the Memorandum is concerned, its paragraph  III states   the   objects  for  which   the   Association   was established, as being, inter alia "  - - - - - - - - - -"               (e)   To  make  from  time  to  time  bye-laws               for---  opening  and  closing  of  markets  in               cotton and the               747

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             times during which they shall open or  closed;               the  making performance and determination  the               prohibition  of specified classes of  dealings               and  the  time during which  such  prohibition               shall  operate;  the provision of  an  dealing               with  ’Croners’  or ,Bear Raids’  in  any  and               every  kind of cotton and cotton  transactions               so  as  to prevent or stop or  mitigate  undue               speculation inimical to the trade as a  whole;               the   course  of  business  between   Original               Members inter be or between any of them on the               one hand, and their constituents on the  other               hand, the forms of contracts between them  and               their rights and liabilities to each other  in               respect of dealings in The Articles dealing with bye-laws, the manner in which they are  to be made as well as the subject to which  they  might relate  is to be found in Articles 73 and 74.  The  relevant portion of Article 73 runs:               ""Under  and in conformity with any  Statutory               provisions  for the time being in  force,  the               Board may pass and bring into effect such bye-               laws  as may be considered in the interest  of               or conducive to the objects of the               and Article 74 runs:               "Without  prejudice to the generality  of  the               powers  to  make  bye-laws  conferred  by  the               Memorandum   of  Association  and   by   these               Articles  and under or in the absence  or  any               statute  or statutes in force in that  behalf,               it is hereby expressly declared that the  said                             powers to make, alter, add to, or rescined Bye -               laws including power to do so in regard to all               or any of the following matters--" Sub-para (7) repeats inter alia the contents of        748 Paragraph III (e) of the Memorandum of Association which  we have extracted, The entire argument of Mr. Pathak on Article 64 was based on the footing that the power to make a bye-law was  vested  solely  in the Board, because it  is  only  the powers  of  the  Board that are subject  to  the  limitation imposed by Article 64.  If however the power to make a  bye- law  was  not confined to the Board but  bye-laws  might  be framed  by  the Association itself, the  argument  based  on Article  64  would be seen to have no  validity.   That  the later  is the true position is clear from Article  73  which reads: "The  Board’s  powers as aforesaid in relation  to  bye-laws shall not derogate from the powers hereby conferred upon the Association  who may also in the same way and for  the  same purpose  from  time to time pass and bring into  effect  new bye-laws and rescind or alter or add to any existing bye-law by  resolution  passed by a majority of  two-thirds  at  the least  of  the  Members present and voting  at  the  General Meeting previous to which at least fourteen day’s notice has been given that a Member intends at such meeting to  propose the making of such bye-law or the decision, alteration of or addition to a bye law or bye-laws". If therefore a bye-law could be made, by the Association  it is manifest that there is no limitation upon its powers such as  is to be found in Article 64 which applies only  to  the Board.   The  validity of the bye-law  therefore  cannot  be challenge  by reference merely to the powers of  the  Board, because  what is contemplated by s. I I is the power of  the

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"recognised  Association"  to frame the  bye-law.   We  have therefore no hesitation in rejecting the contention that the bye-law as framed contravenes the rules of the Association. 749  Mr.  Pathak  next contended that the impugned  bye-law  was invalid because it operated retrospectively.  This  argument he  presented under two heads His first submission was  that consistently with the rule that an, enactment ’would not  be construed  as.  retrospective unless the same were  to  have that effect by express language or by necessary  intendment, the impugned bye-law should, be held to affect and close out only those contracts which were entered into after the  date on  which the byelaw came into operation and that if he  was right  in  this construction the impugned  notification  had gone  beyond the powers conferred on the Commission  by  the new bye-law.  We are wholly unable to accept this submission as to the construction of the bye law.  The first  paragraph of   the  ])ye-.law  by  its  list  words  points  out   the consequence  of  a  notification  by  the  Forward   Markets Commision.  It provides that if the Chairman were  notiified that the continuation of trading in hedge contracts for  any delivery  etc.   "was detrimental to the  interests  of  the general  public  or the larger interests of the  economy  of rndia,"  then,  notwithstanding, anything  to  the  contrary contained   the bye-laws of the Association or in any  hedge etc.  contract  the  provisions  contained  in  the   second paragraph  should have effect. , If one had regard  only  to paragraph  and nothing more there might be’ some room for  a plausible argument that subsisting contracts were not to  be affected, though the expression "notwithstanding anything to the  contrary  contained in any bedge etc.  contract"  would undoubtedly militate against any such contention.  But  such ambiguity if any is cleared by the provision in paragraph  2 which has effect on the notification under paragraph 1,  for by  express  terms it refers to "every hedde  contract"  and "every  on call contract" "in so far as cotton  is  uncalled thereunder  or  in so far as the pride has  not  been  fixed thereunder".   This  therefore places it beyond  doubt  that executory contracts 750 which  were subsisting on the date of the notification  were within  its  scope and were intended to be affected  by  it. And  this, if anything more needed, is made more certain  by the I reference in parts (2) to the provisions of old.  (3), (4)  and (6) of bye-law 52A.  Bye-law 62A deals  with  cases where the Board of the Association resolves repeat its terms "that  a  state of emergency exists or is  likely  to  occur which  makes free trading in forward con.  tracts  difficult and  on  obtaining the concurrence of  the  Forward  Markets Commission,  then notwithstanding anything to  the  contrary contained in these Bye-laws subject to these Bye-laws.   The following provision %hall have effect               "(1)  The Board shall at a  meeting  specially               convened in this behalf,               (a)fixa  date for the purposes  herein.  after               contained,               (b)fix    settlement   prices   for    forward               contracts,               (c) fix a special Settlement Day."               Clause (3) of bye-law 52A runs :-               "52A (3) All differences arising out of  every               such  contract between members shall  be  paid               through  the Clearing House on the  Settlement               Day fixed under clause (1) (c) her               Clause (4)

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             "52A (4) All differences arising out of  every               such  contract  between a member  and  a  non-               member   shall  become  immediately  due   and               payable."               and Clause (6)               "52A (6 In hedge and on call contracts entered               into between a member and a non. member and in               contracts to which clause (5)               751               applies, any margin received shall be adjusted               and  the whole or the balance thereof, as  the               case may be, shall be immediately refundable. It  is  thus clear that the entire machinery  for  resolving emergencies  such as is contemplated by byelaw 52A  includes the suspension of forward businow together with the  closing out  of forward contracts of hedge and on call  types  whose volume  or nature had led to the emergency.  It proceeds  on the basis that the crisis could not be met unless subsisting contracts  were  closed out and, so to speak a  new  chapter begun.  That is the ratio underlying the combined effect  of bye-laws 52AA and 52 A and in view of this circumstance  the argument  that on a reasonable construction of  the  amended bye-law  it would apply to contracts to be entered  into  in future and not to subsisting contracts must be rejected. If  he  was  wrong in his argument that the  byelaw  on  its proper construction did not affect subsisting contracts such as these of the Appellants, Mr. Pathak’s further  submission was that the impugned bye-law was invalid and ultra vires of the  Act  because it purported  to  operate  retrospectively affecting   vested   rights  under  contracts   which   were subsisting on the day on which the bye-law came into force. Mr.  Pathak  invited our attention to a passage  in  Craies’ Statute Law, 5th Ed. p. 366 reading:               "Sometimes a statute, although not intended to               he   retrospective,  will  in  fact   have   a               retrospective operation.  For instance if  two               persons enter into a contract, and  afterwards               a statute is passed which, as Cockburn, C. J.,               said  in Duke of Devonshire v.  Barrow,  etc.,               Co.  (1877) 2 Q. B. D. 286, 289) "engrafts  an               enactment upon existing contracts’ and 752 thus  operates so as to produce a result which is  something quite   different  from  the  original  intention   of   the contracting  parties,  such  a  statute  has,  in  effect  a retrospective operation." The  bye-law  in so far as it  affects  executors  contracts requiring  such  contracts to be closed out on  a  (lay  not originally: - contracted for and at a price fixed by law  is in   the   above  sense  undoubtedly   retrospective.    The submission of learned ’Counsel was that though a legislature which bad plenary power in this regard could enact a, havind a retrospective operation, Subordinate legislation, be it  a rule,  a bye-law or a notification, could not be made so  as to have retrospective operation and that to that extent  the rule, bye-law or notification would be ultra vires and would have  to be struck down, relying for this position  on  -the decision of the Mysore High Court reported in AIR 1960  Mys, 326.   ’We do not however consider it necessary  to  canvass the  correctness of this decision or the broad  propositions laid down in it.  It is clear law that a Statute which could validly  enact  a  law with retrospective  effect  could  in express terms validly confer upon a rule-making, authority a power   to   make  a  rule  or  frame  a:   bye-law   having retrospective  operation  and we would add that we  did  not

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understand  Mr.  Pathak to dispute this position.   If  this were  so  the same result, would follow where the  power  to enact  a rule or,a byelaw with "retrospective effect" so  as to Affect PendinG transactions, is conferred not by  express words  but  where  the necessary intendment  of  I  the  Act confers  such A power.  If in the present case the power  to make  a byelaw so as to operate on contracts  subsisting  on the  day the same was framed, would follow as;  a  necessary implication  from  the  term  of S. 1 1,  it  would  not  be necessary  to discuss the larger question as to whether  and the 753                circumstances   -   in   which    Subordinate               legislation with retrospective effect could be               validly made.                Before proceeding further it is necessary  to               notice  a submission that under the  Act,  far               from there being a conferment of power to make               a  bye-law,  so  as to  -affect  rights  under               subsisting  contracts,  there  was  a   contra               indication  of such a power  being  conferred.               In,  this connection Mr. Pathak  invited,  our               attention  to the: terms of ss. 16 and 17  and               19  of the Act under which the Act has  itself               made  special provision for  affecting  rights               such  as  those,  if  the  appellants  in  the               present case.  Detailing the conseqences of  a               notification under s. 15, s.16 (a:) enacts "16 (a,,) Every forward contract for the sale or purchase of any goods specified in the notification, entered into before the  date of the notification and remaining to be  performed after the said, date and which is not in conformity with the provision of section 15, shall be deemed to be closed out at such rate as the Central Government may fix in this behalf. S.17 (3) enacts "17.  (3)  Where a notification has been issued  under  sub- section  (1),  the provisions of section 16  shall,  in  the absence  of  anything to the contrary in  the  notification, apple  to all forward contracts for the sale or purchase  of any goods specified in the notification entered into  before the  date of the notification and remaining to be  performed after  the said date as they apply to all forward  contracts for  the  sale or purchase, of any goods  specified  in  the notification under section 15." and f 19 (2) runs:- "19  (2).  Any option in good which has been  entered  into’ before the date on which 754               this  section comes into force and  which  re-               mains  to be performed, whether wholly  or  in               part,  after  the  said date  shall,  to  that               extent, becomes void." Based  on these provisions the submission was that  Act  had made  special  provisions  for  retrospective  operation  of certain   notifications  so  as  to  affect   rights   under subsisting  contracts and that in cases where there  was  no such  specific provision it was not intended that a  bye-law or a notification could have that effect. We  see  no force in this argument.  The fact that  the  Act itself  makes  provision  for  subsisting  contracts   being affected,  would  in  our opinion far  from  supporting  the appellants  indicate  that  in the context of  a  crisis  in forward trading the closing out of contracts was a necessary method of exercising control and was the mechanism by  which the  enactment contemplated that normalcy could be  restored

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and healthy trading resumed. If  therefore we eliminate the provisions in as. 16, 17  and 19 as not containing any indication that a power to frame  a bye-law  with  retrospective effect was  withheld  from  the Association, the question whether such bye-law-making  power was  conferred  has to be gathered from the terms of  s.  II itself.  Thus considered we are clearly of the opinion  that a power to frame a bye-law for emergencies such as those for which  a bye-law like 52 AA is intended includes a power  to frame one so as to affect subsisting contracts for resolving crisis in Forward Markets.  We have already referred to  the terms  of bye-law 52A which shows that when an emergency  of the  type  referred  to  a. It (2)  (a)  arises  it  is  not practicable to rescue a forward market from a crisis without (1)  putting an end to forward trading, and (2) closing  out subsisting  contracts so as to start with a clean slate  for the 755 future.   When therefore under s. 11 (2) power is  conferred to frame a bye-law to provide for:               " (O) the emergencies in trade which may &rise               and the exercise of power in such  emergencies               including the power to fix maximum and minimum               prices;"               &-ad  this is read in conunction  with  clause               (g) reading:               "regulating  the entering into,  making,  per-               formance, rescission and termination of contra               eta...............    If It is manifest that the section contemplates the making of a bye-law   regulating  the  performance  of  contracts,   the rescission  and  termination  of contracts  and  this  could obviously  refer only to the bye-law affeding  rights  under contracts  which  are subsisting on the day  the  action  is taken.   It is therefore manifest that s. 11 authorises  the framing  of a byelaw which would operate retrospectively  in the sense that it affects rights of parties under subsisting contracts.   Finally  it  should be borne in  mind  is  that ultimately what we are concerned in a. 1 1 of the Act is the power  of the Association to frame the bye-law’ for  if  the Association  could validly frame such a bye-law the  Central Government  could under s. 12 have a similar power.  We  did not hear any argument to establish that the Association  had no such power. There is one other aspect in which the same problem might be viewed  and  it is this : The contract entered into  by  the respondents  purported to be one under the bye-laws for  the time being in force and any change in the bye-laws therefore would in to be contemplated and provided for by the contract itself, so that it might not be correct to speak of the  new bye-law as affecting any accrued 756 rights  under  a  contract.   For  when  those-by-laws  were altered   the  changes  would  get  incorporated  into   the contracts  themselves,  so  as to afford no  scope  for  the argument  that  there has been an infringement of  a  vested right.   In the view however which we have taken  about  the validity  of  the  bye-law on the ground that  it  was  well within  the terms of as.’ ’II and 12 we do not  consider  it necessary  to  pursue  this aspect further or  to  rest  our decision on it. What   remains   to  consider  is  the  challenge   to   the notification  based  on the ground that it was  vitiated  by having  been  issued  malafide.   The  ground  of  malafides alleged  was  that the impugned notification was  issued  in

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order to prevent the Board of Directors of the  Association. from  applying  their minds and  exercising  their  judgment which  they were directed to do by the terms of the  Consent Memo  filed on which the appeal from the judgment in C.S.  2 of  1956  was  disposed  of on January  24,  195  .  To  the allegation  made  in  this form in the  petition  the  first respondent,   the,   Chairman:  of   the   Forward   Markets Commission,  filed  an affidavit in the course of  which  he pointed  out that the continuance of trading in futures  was in   the  circumstances  then  prevailing  in   the   market detrimental  to  the  interests  of the  trade  and  that  a conclusion on this matter had,been reached by the Commission even  before by-law 52 AA was amended, that the question  of closing out existing contracts was engaging the attention of even  the  Board  of the Association from as  early  as  the beginning  -of  January 1956 and it was for the  purpose  of enabling the Commission to take action to set right  matters that  bye-law  52AA  was amended and  that  immediately  the amended  bye-law came into force the Commission took  action and issued: the notification now manugned.  He also  pointed out  that the liberty given to the Association  to  consider the matter                             757 under’  the terms of the Compromise Memo was a factor  which had also boon taken into account before the notification had been issued.  The learned Judges of the High Court  accepted this   explanation  of  the  circumstances  in   which   the notification  came to be issued and considered that  on  the allegation in the petition no mala fides could be  inferred. We  are in entire agreement with the learned Judges  of  the High Court on this point.  No personal motive or mala  fided in  that  sense has been attributed to the  members  of  the Commission and in these circumstances we consider that there is  no  basis for impugning the notification on  the  ground that it was not issued bonafide. This  completes all the points urged by the learned  Counsel for  the appellants.  We consider that there is no merit  in the appeal which fails and is dismissed with costs. SUBBA  RAO,  J.-I  regret my inability to  agree  with  the judgment  prepared  by my learned brother Rajagopala Ayyangar, J. As the  fact,-;  have been fully stated in the judgment of my learned brother, I need not  repeat them except to the extent necessary to appreciate the two  points  on which I propose to express my opinion. The appellants carry on business in cotton under, the name and style  of  Indramani  Pyarelal  Gupta & Co. The said firm is a member of  the  East  India  Cotton  Association Limited, which is  a  recognized  Association  within  the  meaning of the Forward Contracts  (Regulation)  Act,  1952, hereinafter called "the Act".  The Association has been formed for  the purpose  of,  inter alia, promoting and regulating trade in cotton  and  providing  a  cotton  Exchange and a Clearing House.  Under  the  Act  a formed by the  Central  Government  and  respondent is its man and respondents 2 and 3 are its Members. 758 Prior to January 21, 1956, on behalf of themselves and their constituents, the appellants entered into hedge contracts in cotton  for  February 1956 and May,  1956  Settlements  with other members of the Association in accordance with its bye- laws.  When the said contracts were effected, bye-law 52  AA ran as follows : "(I) Whether or not the prices at which cotton may be bought or  sold are at any time controlled under the provisions  of the   Essential  Commodities  Act,  1955,  if  the   Textile

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Commissioner  with  the concurrence of the  Forward  Markets Commission  and after consultation with the Chairman, be  of opinion that the continuation of hedge trading is likely  to result in a situation detrimental to the larger interests of the  economy  of India and so informs the Board,  the  Board shall  forthwith cause a notice to be posted on  the  Notice Board  to that effect and on the posting of such notice  and notwithstanding anything to the contrary contained in  these Bye-laws or in any hedge or on call contract made subject to these Bye-law, the following provision shall take effect. (2)Every hedge contract and every on call contract in so far as  the cotton is uncalled thereunder, or in so far  as  the price has not been fixed thereunder, entered into between  a member  and  a member or between a member and  a  non-member then  outstanding shall be deemed closed out at  such  rate, appropriate  to  such  contract, as shall be  fixed  by  the Textile Commissioner and the provisions of clauses (3),  (4) and  (6) of Bye-law 52-A, in so far as they apply  to  hedge and on call contracts shallapply as if the formed part of this Bye-law. After the affixation of the said notice onthe Notice Board, trading in hedge               759               and  on  call contracts  shall  be  prohibited               until   the  Textile  Commissioner  with   the               concurrence of the Forward Markets  Commission               and  after  consultation  with  the  Chairman,               permits resumption". On January 21, 1956, the Central Government, in exercise  of power  conferred upon it by sub-s. (1) of s. 12 of the  Act, notified  a new bye-law 52-AA to be substituted in place  of the earlier bye-law 52-AA. The new bye-law reads as  follows :               "(1) Whether or not prices at which cotton may               be  bought or sold are at any time  controlled               under   the   provisions  of   the   Essential               Commodities Act, 1955, if the Forward  Markets               Commission is of the opinion that continuation               of trading in hedge contract for any  delivery               or  deliveries is detrimental to the  interest               of  the trading or the public interest or  the               larger  interests of the economy of India  and               so notified the Chairman, then notwithstanding               anything  to the contrary contained  in  these               Bye-laws  or in any hedge or on call  contract               made  subject to these Bye-laws the  following               provisions shall take effect.               (2)   Every  hedge contract and every on  call               contract  in  so  far as  cotton  is  uncalled               thereunder  and  relating to the  delivery  or               deliveries  notified under clause (1)  entered               into between a member and a member or between a               member  and non-member then outstanding  shall               be deemed closed out at such rate  appropriate               to  such  contract and with effect  from  such               date as shall be fixed by the Forward  Markets               Commission and the provisions of Clauses  (3),               (4)  and (6) of Bye-law 52A in so far as  they               apply  to  hedge and on call  contract"  shall               apply as if they formed part of this Bye-law."               760       On January 24, 1956, the Forward Markets Commission, in       exercise  of  the power conferred on it under  the  new       bye-law,   issued  a  notification  closing   out   all       contracts of February 1956 and May 1956 Settlements  at       the  rates  mentioned in the said  notification.   The,

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     petition for a writ of mandamus filed by the appellants       in  the  High  Court  of Judi-  cature  at  Bombay  for       ordering the respondents to cancel or withdraw the said       notification  dated January 24, 1956, was dismissed  in       the  first  instance by Coyajee, J.,  and,  the  appeal       preferred against the judgment of Coyajee, J., was also       dismissed  by  a division Bench consisting  of  Chagla,       C.J., and Tendolkar, T. Hence the appeal.            I  purpose,  as  I  have  already  indicated,   to       consider the following two questions, as in the view  I       will be taking on those questions, the appeal will have       to  be allowed, and no other question, therefore,  will       arise for consideration.  The said questions are :  (1)       Whether  under  s.  12  (i)  of  the  Act  the  Central       Government.   has   power  to  make  a   bye-law   with       retropective effect; and (21 whether under s. 4 (f)  of       the Act, the Forward Markets Commission can exercise a,       power  assigned  to  it under a  bye-law  made  by  the       Government under s. 12 of the Act.               Before  considering the scope of the  power  of       the  Central Government under s. 12 (1) of the Act,  it       is  necessary  to  consider  whether  the  new   byelaw       notified  on January 21, 1956, has retrospective  There       are material differences between the old bye-law  52-AA       and the new one substituted in its place Under the  now       bye-law  the  important  provision is  that  all  hedge       Contracts  outstainding at the time it came into  force       shall be deemed to be closed out at such rates as shall       be  fixed by the Textile Commissioner.   Whereas  under       the  old by law the, Textile Commissioner had  to  form       his opinion with the concurrence of the Forward Markets       Commission and after consultation with       761       the  Chairman, under the new bye-law the said power  of       forming an opinion is conferred solely on the  For-ward       Markets Commission where as under the old, bye-law  the       opinion and was in regard to the question whether hedge       trading was likely to result in a situation detrimental       ’to the larger interests of the economy of; India under       the  new  bye-law  the opinion is  in  respect  of  the       question  whether the continuation of trading in  hedge       contracts  will  be  detrimental to  the  interests  of       trading  or the public interest or the larger interests       of  the economy of India.  While under the  old  byelaw       the  question to he considered was in regard  to  hedge       trading as such, under the new bye-law it is in respect       of  the continuation of trading in hedge contracts  for       any delivery or deliveries.  While under the old  bye,-       law the, said opinion was Communicated to the Board for       action,  under  the new bye-law it is notified  to  the       Chairman.   While  under the old bye -law  trading,  in       hedge  and  on call contracts could be resumed  if  the       Textile  Commissioner,  with  the  concurrence  of  the       Forward Markets Commission and after consultation  with       the  Chairman, permitted the resumption, under the  now       bye-law  the said provision for resumption is  omitted.       It  is, therefore, manifest that the power  of  closing       out a contract under the new bye-law differs from  that       Under  the  old bye law in respect of  the  purpose  of       closing out, the authority empowered to order the close       out  and the consequences of such closing out.   It  is       idle  to  contend  that  the  new  bye-law  makes  only       inconsequential  changes in the old bye-law.   The  new       bye-law  operates  upon an important  term  of  a               contract  entered  into before  it  came  into

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             force,  namely,  the mode of  performance:  it               carries    oil   its   face   the   vice    of               retroactivity.   In  Craies on  Statutes,  5th               Edn’.   p,   366,   the   following    passage               appropriate  to  the question  now  raised  is               found. 762               renders  the performance of a  contract  impo-               ssible,  the rule of law is that the  contract               to  frustrated by  supervening  impossibility,               consequently  in  this case also  the  statute           operates retrospectively."                  The  learned  author proceeds to state  at  p.               367:               "The  principle of this case has been  applied               in later cases to contracts the performance of               which  in manner contemplated by  the  parties               has been rendered impossible by reason of some               change in the law." It is, therefore, clear that the said bye-law, in so far  as it  purports  to  effect  the mode  of  performance  of  the preexisting   contracts,  is  certainly   retrospective   in operation.   I  am assuming for the purpose of  the  present question that the bye- law cannot be construed in such a way as  to  confine  its operation only to  contracts  that  are entered into after it came into force.  If so, the  question arises  whether the Central Government had power to  make  a bye  law  under  s. 12 (1) of  the  Act  with  retrospective effect-Section 12 (1) of the Act reads               "The  Central  Government  may,  either  on  a               request  in  writing received by  it  in  this               behalf from the governing body of a recognized               association,  or  if  in  its  opinion  it  is               expedient  so to do, make bye-laws for all  or               any of the matters specified in section II  or               amend  any bye laws made by  such  association               under that section.’ Section  11 enumerates the matters in respect of  which  the recognized   associations  can  make  bye.  laws   for   the regulation and control of forward contracts.  Neither s.  12 nor a. 11 expressly states that a bye-law with retrospective operation  can be made under either of those  two  sections. Full effect 763 can  be  given to both the sections by recognizing  a  power only  to  make bye-laws prospective in operation,  that  is, bye-laws  that would not affect any vested rights.   In  the circumstances, can it be held that the Central Government to which  the  power  to  make bye-laws  is  delegated  by  the Legislature  without expressly conferring on it a  power  to give  them  retrospective  operation can  exercise  a  power thereunder  to make such bye-laws.  Learned counsel for  the respondents contends that, as the Legislature can make a law with  retrospective operation, so too a delegated  authority can  make  a bye-law with the same  effect.   This  argument ignores  the  essential distinction  between  a  Legislature functioning in exercise of the powers conferred on it  under the   Constitution  and  a  body  entrusted  by   the   said Legislature with power to make subordinate Legislation.   In the  case of the Legislature, Art. 246 of  the  Constitution confers  a  plenary  power of  Legislation  subject  to  the limitations mentioned therein and in other provisions of the Constitution  in  respect  of  appropriate  entries  in  the Seventh  Schedule.  This Court, in Union of India  v.  Madan Gopal  Kabra  (1),  held that  the  Legislature  can  always

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Legislate  retrospectively; unless there is any  prohibition under  the Constitution which has created it.  But the  same rule  cannot obviously be applied to the Central  Government exercising  delegated  Legislative power for  the  scope  of their  power  is not co-extensive with that  of  Parliament. This  distinction  is  clearly brought out  by  the  learned Judges  of  the Allahabad High Court in Modi  Food  Products Ltd. v. Commission of sales-Tax, U.     P. (2), wherein  the learned Judges observed:               "A  Legislature  can certainly  give  retrosp-               ective effect to pieces of Legislation  passed               by  it but an executive Government  exercising               subordinate and delegated legislative               (1) [1954] S.C. R. 541.               (2) A. T. R. 1956 All. 35.               764               powers, cannot make legislation  retrospective               in  effect  unless  that  power  is  expressly               conferred." In  Strawboard Manufacturing Co. Ltd. v. Gutta Mill  Workers Union  (1) a question arose whether the Governor of  U.  P., who referred an industrial dispute to a person nominated  by him  with  a direction that he should submit the  award  not later  than  a particular date could extend the date  for  a making  of the award so as to validate the award made  after the prescribed date.  Reliance was placed upon s. 21 of  the U.  P.  General  Clauses  Act,  1904,  in  support  of   the contention  that  the power of  amendment  and  modification conferred  on the State Government under that section  might be  so  exercised as to have  retrospective  operation.   In rejecting that contention, Das, J., as he then was, observed :               "It is true that the order of April 26,  1950,               does not ex facie purport to modify the  order               of  February  18, 1950, but, in  view  of  the               absence  of any distinct provision in  section               21   that   the   power   of   amendment   and               modification conferred on the State Government               may  be so exercised as to  have  retrospective               operation the order of April 26, 1950,  viewed               merely   as   an   order   of   amendment   or               modification cannot, by virtue of section  21,               have that effect." This  decision is, therefore, an authority for the  position that  unless a statute confers on the Government an  express power to make an order with retrospective effect, it  cannot exercise  such  a  power.   The  Mysore  High  Court  in   a considered  judgment  in India Sugar &  Refineries  Ltd.  v. State of Mysore (2) dealt with the question that now  arises for consideration.  There, the Government issued (1) [1953] S.C.R. 439. 447-448. (2) A. 1. R. 1960 Mys. 3 765 there notifications dated 9-4-1956, 15-10-1957 and 13-2-1958 purporting  to  act  under s. 14 (1)  of  the  Madras  Sugar Factories  Control  Act, 1949, whereby cess was  imposed  on sugarcane  brought and crushed in Petitioner’s  factory  for the   crushing   season  1955.  56,  1956-57   and   1957-58 respectively.  One of the question raised was whether  under the  said  section  the Government had power  to  issue  the notifications  imposing  a  cess on  sugarcane  brought  and crushed  in petitioner’s factory for a period prior  to  the date of the said notifications.  Das Gupta, C. J.,  deliver- ing  the judgment of the division Bench, held that it  could not.   The  learned Advocate General, who appeared  for  the

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State, argued, as it is now argued before us, that in a case where power to make rules is conferred on the Government and if the provision conferring such a power does not  expressly prohibit  the making of rules with retrospective  operation, the Government in exercise of that power can make rules with retrospective  operation.  In rejecting that  argument,  the learned  Chief  Justice,  delivering the  judgement  of  the division Bench, observed at p. 332:               "In  my  opinion a different  principle  would               apply  to the case of an executive  Government               exercising    subordinate    and     delegated               legislative powers.  In such oases, unless the               power  to  act  retrospectively  is  expressly               conferred   by   the   Legislature   on    the               Government,   the   Government   cannot    act               retrospectively." With  respect, I entirely agree with the said  observations. The  same  question was again raised and the same  view  was expressed  by the Kerala High Court in C. W.  Motor  Service (P)  Ltd.  v.  State  of  Kerala  (1).  There  the  Regional Transport  Authority,  Kozhikode, granted a  stage  carriage permit  to  the  third respondent therein in  respect  of  a proposed (1)  A. 1. R. (195) Ker. 347, 348. 766 Ghat  route.  The grant of the permit was challenged on  the ground  that  when  that  order  was  passed  there  was  no constituted  Regional Transport Authority for the  district. It was contended on behalf of the contesting respondent that the  said  defect  was cured by  a  subsequent  notification issued  by  the Government whereby  Government  ordered  the continuance of the Road Transport Authority from the date of the  expiry  of  the term of the said  ’Authority  till  its successor  was  appointed.   The High Court  held  that  the notification with retrospective operation was bad.  In  that context, Varadaraja lyengar, J., observed :               "The rule is well-settled that even in a  case               where  the  executive  Government  acts  as  a               delegate of a legislative authority, it has no               plenary  power  to provide  for  retrospective               operation  unless  and  until  that  power  is               expressly conferred by the parent enactment." The  House of Lords in Howell v. Folmouth Boat  Construction Co. Ltd. (1) expressed the same opinion and also pointed cut the  danger  of  conceding  such  a  power  to  a  delegated authority.    There,  a  licence  was  issued   to   operate retrospectively  and to cover works already done  under  the oral sanction of the authority.  Their Lordships observed:               "It would be a dangerous power to place in the               hands  of  Ministers;  and  their  subordinate               officials  to allow them, when. ever they  had               power to license, to grant the licence ex post               facto; and a statutory power to license should               not  be construed as a power to  authorise  or               ratify  what has been done unless the  special               terms  of  the  statutory  provisions  clearly               warrant the construction." It is true that this is a case of a licence issued by an (1)  (1951) A. C. 837. 767 authority in exercise of a statutory power conferred on  it, but  the  same principle must apply to a byelaw made  by  an authority in exercise of a power conferred under a  statute. Our  Constitution promises to usher in a welfare State.   It involves conferment of powers of subordinate legislation  on

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government and governmental agencies affecting every  aspect of human activity.  The regulatory process      is      fast becoming an ubiquitouselement in our life.  In a  welfare State, perhaps,it is inevitable, for the simple  reason that Parliament or Legislature cannot be expected to provide for  all possible contingencies.  But there is no  effective machinery  to control the rule-making powers, or to  prevent its  diversion  through  authoritarian  channels.   If   the conferment of power to make delegated Legislation proportion vigor  carried  with  it  to make a  rule  or  bye-law  with retrospective  operation,  it may become  an  instrument  of oppression.   In  these circumstances, it has  been  rightly held  that  the provision conferring such a  power  must  be strictly construed and unless a statute expressly confers  a powers to make a rule or bye-law retrospectively, it must be held  that it has not conferred any such power.  It is  said that  such a strict construction may prevent a  rule  making authority  from  making a rule in an emergency,  though  the occasion  demands  or justifies a  rule  with  retrospective effect.   The  simple answer to this alleged  difficulty  is that  if  the Legislature contemplates  or  visualizes  such emergencies, calling for the making of such rules or  bylaws with  retrospective effect, it should expressly confer  such power.   It is also said that the Government can  be  relied upon to make such rules only on appropriate occasions.  This Court   cannot  recognize  implied  powers   pregnant   with potentialities  for  mischief  on  such  assumptions.   That apart, the scope or ambit of a rule cannot be made to depend upon the status of a functionary entrusted with a 768 rule  making power.  In public interest the least the  court can  do  is to construe provisions conferring such  a  power strictly and to confine its scope to that clearly  expressed therein. Applying that rule of strict construction, I would hold that s. 12 (1) does not confer a power on the Central  Government to make a bye-law with retrospective effect and,  therefore, the  new bye-law made on January 21, 1956, in so far  as  it purports to operate retrospectively is invalid. Assuming  that  it is permissible to infer such a  power  by necessary implication, can it be said that it is possible to so  imply  under s. 12 of the Act ?  The  phrase  "necessary implication",   as   applied  in  the   law   of   statutory construction   means  an  implication  that  is   absolutely necessary and unavoidable; that is to say, a court must come to  the conclusion that unless such an implication is  made, the provisions of the section could not be given full effect on  the  wording as expressed therein.  Under s. 12  of  the Act,  the  Central  Government may either on  a  request  in writing  received  by  it  from  the  governing  body  of  a recognized association, or if in its opinion it is expedient so  to  do,  make  byelaws for all or  any  of  the  matters specified  in  s.  11  or amend any  bye-law  made  by  such association  under  that section.  Now s. 11 says  that  any recognized association may, subject to the previous approval of the Central Government, make bye-laws for the  regulation and control of forward contracts; under sub a. (2)  thereof, the association is authorized to make laws providing for any of the matters mentioned therein.  A glance at those matters shows  that  all the bye-laws providing  for  those  matters could  be  framed  without giving s.  12  any  retrospective effect.  It is said that s. II (o) gives an indication  that a  bye-law contemplated by that sub-clause must  necessarily provide for its retrospective operation.  It reads: 769

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             "the emergencies in trade which may arise  and               the  exercise  of powers in  such  emergencies               including the power to fix maximum and minimum                             prices;" The learned Solicitor General contends that an occasion  may arise  when by a determined action of a "bear" or  a  "bull" the  rates  may about up beyond a reasonable level  or  fall down steeply below a particular point creating an  emergency in  the market and in that emergency it would  be  necessary for  the authorities concerned to step in and close out  the contracts, and unless the bye-law is made retrospective such an emergency cannot be met and, therefore, the power to make a  by-law to meet an emergency contemplated in s.  11(o)  of the  Act  must necessarily imply a power to make  a  bye-law retrospectively.   There  is an underlying fallacy  in  this argument.   The conferment of a power on the  Government  to make  a bye-law with retrospective operation must  be  abso- lutely  necessary and unavoidable to provide for the  matter mentioned  in  sub-cl. (o) of s. 11 or any other  clause  of sub-s.  (2) of s. 11.  A bye-law could certainly be made  to provide for an emergency visualized by the learned Solicitor General  or  for any other emergency  contemplated  by  that clause  with only prospective operation.  It cannot,  there- fore, be said that unless retrospective operation was  given to  the provisions of s. 12, the objects of the  legislation would  be defeated or the purposes for which the  power  was conferred  could not be fulfilled.  1. therefore, hold  that s.  12(1) of the Act does not confer any such power  on  the Central Government by necessary implication. The second question turns upon the interpretation of a. 4 of the Act.  It reads:               "The function of the Commission shall be-               (a)   to advise the Central Government in.                                    770               respect  of the recognition of, or  the  with-               drawal of recognition from, any association or               in respect of any other matter arising out  of               the administration of this Act;               (b)   to  keep forward markets under  observa-               tion  and to take such action in  relation  to               them as it may consider necessary, in exercise               of the powers assigned to it by or under  this               Act;               (c)   to  collect and whenever the  Commission               thinks   it  necessary   publish   information               regarding the trading conditions in respect of               goods  to which any of the provisions of  this               Act is made applicable, including  information               regarding  supply, demand and prices,  and  to               submit  to the Central  Government  periodical               reports  on the operation of this Act  and  on               the  working  of forward markets  relating  to               such goods;               (d)   to make recommendation generally with  a               view to improving the Organisation and working                             of forward markets;               (e)   to undertake the inspection of the acco-               unts  and  other documents of  any  recognized               association  or registered association or  any               member  of  such  association  when.  ever  it               considers it necessary; and               (f)   to   perform  such  other   duties   and               exercise such other powers as may be  assigned               to the Commission by or under this Act, or  as               may be prescribed."

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Two questions arise under this section, namely, (i)  whether the   duties  imposed  and  the  powers  conferred  on   the Commission under cl. (f) of s. 4 shall 771 be  read  ejusdem generis with those  imposed  or  conferred under cls. (a) to (e), and (ii) whether the powers  assigned to the Commission by or under a bye-law can be performed  by the  Commission  under  cl. (f).  To  appreciate  the  first question  it would be necessary to know the constitution  of the  Commission and its rule in the scheme of  control  pro- vided  by the Act.  Under a. 2(b), ",Commission’  means  the Forward Markets Commission established under s. 3. Section 3 empowers  the Central Government to "establish a  Commission to be called the Forward Markets Commission for the  purpose of exercising such functions and discharging such duties  as may  be  assigned to the Commission by or under  this  Act". Clauses  (a)  to (e) of s. 4 show that the function  of  the Commission  are wholly supervisory and advisory  in  nature. It keeps the forward markets under observation, collects and publishes  information,  undertakes the  inspection  of  the accounts  and other documents, and makes recommendations  to the  Central Government in respect of matters  mentioned  in that section.  Under s. 8(2)(c), the Central Government  may also direct the Commission to inspect the accounts and other documents  of  any  recognized association  or  any  of  its member,%  and  submit  its report  thereon  to  the  Central Government.  It is, therefore, manifest that the  Commission has  no administrative functions or powers of management  or powers  of  interference in the internal management  of  the registered  associations  on the other hand, s. 11  and  the bye-laws  framed thereunder it is not necessary to  go  into them  in detail show that the regulation and control of  the business  of  forward  contracts  and  other  businesses  is entirely  in the hands of the Association.  The doctrine  of ejusdem  generis  is very well-settled.  The  expression  of ejusdem generis" means of the same kind’, and "it is only an illustration  of specific application of the  broader  maxim noscuntur a sociia i. e., general and specific 772 words  which  are  capable of an  analogous  meaning,  being associated  together, take colour from each other,  so  that the general words are -restricted to a sense, analogous,  to the  less general".  While to invoke the application of  the doctrine  of ejusdem generis there must be a distinct  genus or  category., that is to say, the specific words  preceding the  general word must belong to the same class,  the  maxim noscuntur  a sociis is of wider application.  This Court  in The Western India The acres Ltd. v. Municipal Corporation of the  City of Poona, though did not expressly say so,  in  my view  was  dealing  with  the said  two  doctrines,  and  it observed therein:               "........... although the rule of construction               based  on  the principle  of  ejusdem  generis               cannot be invoked in this case, for items  (i)               to  (x) do not, strictly speaking,  belong  to               the  same genus, but they do indicate, to  our               mind  the  kind and nature of  tax  which  the               municipalties are authorized to impose." So, in the present case, it way be said that cls. (a) to (f) may not belong to the same class, but they indicate that the functions  described in the said clauses, being  supervisory and  advisory in character, are so analogous to  each  other that  they  take colour from each other  and  therefore  the general  words following must be restricted to a sense  ana- logous  to  the  said functions.  It  is  said  that  cl.(f)

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provides for duties and powers, whereas cls. (a) to (e) only deal  with functions and, therefore, cl. (f) must be  deemed to  provide  for altogether a different  subject-matter.   I cannot agree with this contention, for the heading of s.4 is "Function of the Commission", and the action opens out  with the words "The functions of the Commission shall be" and the functions are mentioned in cls.(&) to 773 (f).  It is, therefore, manifest that the duties and  powers mentioned   in  cl.(f)  are  also  functions.   To  put   it differently,  all  the clauses deal with  functions  of  the Commission.   That  apart, a power and a duty are,  the  two facts of the same concept.  Clauses (a) to (e) also,  though ex  facto  they  read as if they impose only  duties,  on  a closer scrutiny indicate that the duties cannot be exercised without the corresponding powers for the discharge of  those duties.  I would, therefore, hold that the duties and powers that may be assigned to the Commission under cl. (f) can  be only  supervisory  or advisory functions  other  than  those mentioned  in  cls.(a) to (e).  The power conferred  on  the Commission under the bye-law made by the Government to close out contracts and thus terminate the contracts is neither an advisory  nor  a  supervisory  power,  and,  therefore,  the Commission cannot legally exercise the same. The  second  question turns upon the interpretation  of  the provisions of cl. (f) of s.4. The said clause reads:               "to  perform  such duties  and  exercise  such               other  powers  as  may  be  assigned  to   the               Commission by or under this Act, or as may  be               prescribed." The  crucial words are ,by or under this Act, or as  may  be prescribed".   Under s. 2(h) of the Act  "Prescribed"  means "prescribed  by  rules made under this Act" ; an( a.  2  (k) defines "rules" thus ;               "rules", with reference to the rules  relating                             in  general to the constitution and  managemen t               of an association, includes in the case of  an               incorporated  association its  memorandum  and               articles of association." If read with the definition of the word "Prescribed" 774 cl.  (f)  indicates  that the  commission  can  perform  the functions  assigned to it by or under the Act, or as may  be prescribed  by the rules made under the Act.   The  specific mention of the rules made under the Act in the clause  makes it  abundantly  clear  that  the  phrase  "’under  the  Act" excludes  a  rule made in exercise of  the  power  conferred under  the Act, for if the said phrase takes in a rule,  the word  "Prescribed" becomes redundant.  Such  ineptitude  and went of precision in drafting shall not be attributed to the Legislature,  except for compelling reasons.  If a rule  was not comprehended by the phrase "Under the Act", it would  be illogical to hold that it would take in a bye-law.  It would mean  that  the Legislature specially provided for  a  rule, which  has  certainly  a higher status  than  a  bye-law  in legislative  practice,  while  it treated  a  bye-law  as  a provision of Act: that cannot be.  The other reason that may be  suggested  is  that the word "Prescribed"  was  used  in superabundant  caution  or  by  mistake.   If  superabundant caution  was  required  to  mention  separately  the  rules, greater  caution  would  have  been  necessary  to   provide separately for a bye-law.  A court ordinarily shall  attempt to  give  meaning  to every word used  by  the  Legislature, unless it is impossible to do so.  Here there is not only no

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such impossibility, but there is also a good reason for  the Legislature in excluding the bye-laws from the operation  of cl.(f) of s. 4 of the Act. Subordinate or delegated legislation takes different  forms. Subordinate  legislation is divided into two  main  classes, namely,   (i)   statutory  rules,  and  (ii)   bye-laws   or regulations  made, (a) by authorities concerned  with  local government, and (b) by persons, societies, or  corporations. The Act itself recognizes this distinction and provides both for making of the rules as well as bye-laws.  A  comparative study of ss. 11 and 12 whereunder 775 power  is  conferred  on  the  Central  Government  and  the recognized  associations to make bye-laws on the  one  hand, and s. 28, whereunder the Central Government is empowered to make  rules  on  the other, indicate  that  the  former  are intended for conducting the business of the association  and the  letter  for  the purpose of carrying  into  effect  the objects  of the Act.  In considering the question raised  in this case in this distinction will have to be borne in mind. It   would  be  unreasonable  to  assume  that   a   private association,  though registered under the Act, could  confer powers on a statutory authority ,under the Act.  That is why under s. 4(f), the Legislature did not think fit to  provide for  the  assignment  of a function  to  the  commission  in exercise of a power under a bye-law.  The nonmention of bye- law in cl. (f) is not because of any accidental omission but a   deliberate  one,  because  of  the  incongruity  of   an assignment of a function to the Commission under a  bye-law. I  would,  therefore, construe the words "by or  under  this Act,  or  as may be prescribed" as follows : (by  this  Act" applies   to  powers  assigned  proportion  vigor   by   the provisions  of  the  Act ; ’under this Act"  applies  to  an assignment  made in exercise of an express  power  conferred under  the  provisions of the Act; and ’may  be  prescribed" takes in an assignment made in exercise of a power conferred under a rule.  This construction gives a natural meaning  to the  plain words used in the section and avoids  stretching, the  language  of a statutory provision to save  an  illegal bye-law.   In  this context two decisions are cited  at  the Bar.   The first is that of the Judicial Committee in  Hubli Electricity Company Ltd. v. Province of Bombay (1).   There, under  s. 3(2)(f) of the Indian Electricity Act (No.  TX  of 1910) "the provisions contained in (1)(1948) 26 I.A. 57. 776 the Schedule shall be deemed to be incorporated with, and to form part of, every licence granted under this Part".  Under s. 4(1)(a) of the said Act, ",The Provincial Government may, if in its opinion the public interest so requires, revoke  a licence", inter alia, if "the licensee in the opinion of the Provincial   Government  makes  wailful   and   unreasonably prolonged  default in doing anything required of him  by  or under  this  Act".   Under sub-cl. (6) of  the  Schedule,  a licensee  had  to  comply  with  certain  conditions.    The Government  revoked  the  licence on  the  ground  that  the licensee  did  not comply with the conditions laid  down  in Schedule  VI,  which were deemed to be incorporated  in  the licence  by virtue of s. 3(2), and therefore he did  not  do the thing required of him within the meaning of s. 4 of that Act.   The  Privy Council held that the performance  by  the licensee  of the conditions of the Schedule to the  Act  was clearly  required to be made under the Act.   This  decision does  not  help  us very much in the present  case,  as  the question  of  bye-law  did  not  arise  therein’.   Nor  the

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decision  of  the  Madras High  Court  in  Narayanaswamy  v. Krishnamurthi (1) is of any assistance.  There the  question was  whether  the regulations framed by the  Life  Insurance Corporation  by virtue of the powers vested in it by Act  31 of 1956 prohibiting the employees from standing for election fell within the meaning of the words ,under any law" in Art. 191  (1) (e) of the Constitution.  The High Court held  that the  regulations were law made under the Act of  Parliament. The conclusion was based on the principle that the rule made in  pursuance of the delegated power has the  same  validity and  has the same characteristic as a law made  directly  by the  Parliament.  Apart from the fact that the words  to  be construed there were different and in a sense wider than the words  to  be construed in the present case,  the  principle accepted in the decision is only (1)  I.L.R. 1958 Mad 513.  777 of  a general application and does not help to construe  the specific  words  of cl. (f) of s. 4 ; their meaning  can  be gathered only by interpreting the said words, having  regard to the setting and the context in which they are used. For the foregoing reasons, I would hold that the  Government had  no  power  under s. 12 of the Act  to  make  a  bye-law assigning  any function to the Commission.  It follows  that notification dated January 24, 1956, by the Forward  Markets Commission was illegal and the appellants would be  entitled to the issue of a writ of mandamus in the terms prayed  for. In the result, the appeal is allowed with costs.                            ORDER In  view of the Judgment of the majority, the appeal  stands dismissed with costs. 778