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PETITIONER: DESH BANDHU GUPTA & CO. & ORS.

       Vs.

RESPONDENT: DELHI STOCK EXCHANGE ASSN. LTD.

DATE OF JUDGMENT23/02/1979

BENCH: TULZAPURKAR, V.D. BENCH: TULZAPURKAR, V.D. SARKARIA, RANJIT SINGH SEN, A.P. (J)

CITATION:  1979 AIR 1049            1979 SCR  (3) 373  1979 SCC  (4) 565  CITATOR INFO :  R          1981 SC1922  (11)  R          1984 SC 505  (8)  D          1985 SC1211  (18)  F          1985 SC1698  (43)  E&F        1989 SC1167  (8)  RF         1992 SC 847  (37)

ACT:      Securities Contracts (Regulation) Act, 1956-Ss. 4 & 16- Notification issued thereunder-Scope of.      Interpretation  of   statutes-Press  Note   issued   by Government and letter of Ministr of Finance-If could be used for interpreting the notification.

HEADNOTE:      By a  notification issued on the 27th June, 1969, under s. 16(1)  of the  Securities Contracts (Regulation) Act 1956 the Central  Government banned  with  immediate  effect  all forward trading  in shares  on recognised stock exchanges in the country.  The proviso  to the  notification, which dealt with how  all existing contracts remaining outstanding as on the date of the notification should be closed or liquidated, contained a  direction to  the effect that "a contract other than a  spot delivery  contract or contract for cash or hand delivery or special delivery may be entered into between its members or though or with any such member for the purpose of closing out  or liquidating all existing contracts remaining to be  performed after  that date." It further provided that "such contracts  shall be subject to the rules, bye-laws and regulations of the recognised stock exchange" that come into force when  further new  dealings are prohibited and subject also to  such terms and conditions as the Central Government may impose.      In terms of the notification the respondent called upon all its members to submit a list of outstanding transactions in all  securities on  the cleared list and to deposit along with  it,   interim  margins  in  cash  or  approved  shares calculated on  the basis of differences between the rates of the last  clearing and certain average specified rates fixed by it. Appellant no. 2 who was a partner of appellant no. 1, contended that  the demand for interim margins was by way of

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"carry over"  of the  forward transactions which, in view of the ban  contained in the notification, was illegal. Instead of submitting  a list of his outstanding transactions on the basis of  the rates  fixed by the respondent, he enclosed a, statement of  his outstanding  transactions adjusted  at the last official closing rates which were higher than the rates fixed by  the respondent, suggesting thereby that he was not liable  to   pay  anything.   The  respondent  rejected  the appellant’s contention  and again  called upon him to comply with its  earlier notice. Eventually since the appellant did not comply  with the  notice the  respondent by a resolution declared him  a defaulter  which exposed  him under  the bye laws to  a rigorous enquiry into his financial condition and entailed  other   disabilities  including   termination   of membership. By  another resolution  the appellant was called upon to deposit additional security of Rs. 20,000/-.      In his writ petition before the High Court, challenging the  resolutions,  the  appellant  contended  that  all  his transactions which  remained outstanding  on June  27,  1969 were forward  contracts pertaining to cleared securities and as such  were affected  by the notification which banned all forward contracts, that these had to be adjusted at the last official closing  rates,  and  therefore,  the  respondent’s action in  calling  upon  him  to  deposit  interim  margins calculated 374 on the  basis of certain average specified rates fixed by it was not warranted by the proviso of the notification and was illegal. The High Court dismissed the petition.      Dismissing the appeal, ^      HELD: The  directions issued  by  the  respondent  were proper and legal. [383 H]      The  proviso  clearly  permitted  the  closing  out  or liquidation of  all outstanding  transactions in  the normal manner by  entering into  a forward  contract  (which  would include "carry over") in accordance with the rules, bye-laws and regulations  of the respondent. There was no warrant for the stand  taken by  appellant no.  2 that  all  outstanding transactions had  to be or could be adjusted on the basis of "previous official closing." [381F]      1. For  the purpose  of closing or liquidating existing outstanding transactions a forward contract was permitted to be entered  into. The  expression "such contracts" occurring in the  last part  of the  notification meant  those as were referred to  in the  first part  of  the  notification,  the making  of  which  was  banned  after  June  27,  1969.  The expression  "such   contracts"  was  not  referable  to  the existing outstanding  "contracts nor  to ’a  contract’  that could  be  entered  into  for  closing  or  liquidating  the existing  outstanding   contracts.  The  last  part  of  the notification has nothing to do with the existing outstanding contracts,  the   closing  or   liquidating  of   which  was independently provided for by the proviso. [381 C-D]      2. Moreover  the letter  of the Joint Director Ministry of Finance  addressed to the President of the respondent and the Press  Note issued  by the  Ministry of  Finance clearly brought  out   that  as  per  the  notification  itself  all outstanding contracts  were permitted  to be  liquidated  in accordance with the relevant rules, bye-laws and regulations of a  recognised stock  exchange and  secondly  no  specific period was  mentioned in the notification for liquidation of outstanding business  but that  the members  operating on  a recognised  stock   exchange  were  expected  to  clear  the outstandings  in  a  smooth  and  orderly  manner  within  a

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reasonable period. [382G-H]      3. The  two documents  which came into existence almost simultaneously with  the issue of the notification, could be looked  at  for  finding  out  the  true  intention  of  the Government in  issuing the  notification. The  principle  of contemporanea expositio can be invoked, though the same will not always  be decisive  on the question of construction. In construing a  statute courts  will give  much weight  to the interpretation put  upon it at the time of its enactment and by those  whose duty  it has  been to  construe, execute and apply   it.    Contemporaneous   construction    placed   by administrative or  executive officers charged with executing a  statute,   although  not   controlling,  is  nevertheless entitled to  considerable weight;  it is  highly persuasive. [383A-B]      Baleshwar Bagarti  v. Bhagirathi  Dass, ILR 35 Cal. 701 at 713;  Mathura Mohan  Saha v.  Ram Kumar Saha, ILR 43 Cal. 790; approved.

JUDGMENT:      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2458 of 1969.      From the  Judgment and  Order dated  14-10-1969 of  the Delhi High Court in Civil Writ No. 520/69. 375      Desh Bandhu  Gupta (for Appellant No. 2 for self and on behalf of appellants 1 and 3.)      F. S. Nariman, Bishamber Lal, Manoj Swarup, Miss Lalita Kohli and Miss Manish Gupta for the Respondents.      The Judgment of the Court was delivered by      TULZAPURKAR,J.-This appeal  by certificate  is directed against the judgment and order dated October 14, 1969 of the Delhi High  Court  dismissing  the  appellants’  Civil  Writ Petition (520  of 1969)  whereby the  appellants  sought  to quash certain  directions issued  on June  28, 1969  and two resolutions passed on July 2 and 3, 1969, by the Delhi Stock Exchange, which adversely affected them.      The Delhi  Stock Exchange  Association Ltd.,  New Delhi (the Respondent  herein) is a company incorporated under the Indian Companies Act, 1913. It has received recognition from the  Central   Government  under  s.  4  of  the  Securities Contracts Regulation)  Act (XLII) of 1956 for the purpose of the said  Act. One  Desh  Bandhu  Gupta  (Appellant  No.  2) carried on  business as  a share-broker in the firm name and style of  Desh Bandhu  Gupta &  Co. (Appellant No. 1) and as such was  a member  of the Respondent. By a notification No. S.O. 2561  dated June  27,1969 issued  under s. 16(1) of the Securities Contracts  (Regulation)  Act,  1956  the  Central Government banned  with immediate effect all forward trading in shares  at all  the Stock  Exchanges in  the  country  by declaring that  "no person,  in the  territory to  which the said Act  extends, shall,  save with  the permission  of the Central Government,  enter into any contract for the sale or purchase  of   securities  other  than  such  spot  delivery contract or  contract for  cash or  hand delivery or special delivery in  any securities as is permissible under the said Act and  the rules,  bye-laws and regulations of recongnised Stock Exchange",  but as regards the forward contracts which remained out  standing as on that date it was directed under the proviso  that these could be closed or liquidated in the normal manner.  On June 28, 1969 at an emergent meeting held at 10.30  a.m. the  Board of  Directors  of  the  Respondent considered the  abnormal  situation  arising  from  the  ban

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imposed under  the notification  and decided to issue notice to all  its members  directing them to submit their lists of outstanding  transactions  in  all  the  securities  on  the cleared list and to deposit along with it interim margins in cash  or   approved  shares   calculated  on  the  basis  of differences between  the rates  of  the  last  clearing  and certain average specified rates fixed by it. Upon receipt of such notice  dated June  28, 1969  from the  Respondent  the appellant No. 2 addressed a letter of 376 even date  to the  Board of  Directors contending  that  the demand for interim margins was by way of "carry over" of the forward transactions  which in  view of the ban contained in the notification  was illegal  and instead  of submitting  a list of  his outstanding  transactions on  the basis  of the rates which  had been  fixed by the Respondent he enclosed a statement of  his outstanding  transactions adjusted  at the last official closing rates which were higher than the rates fixed by  the Respondent,  thus suggesting  that he  was not liable to  pay any  thing but  was entitled  to receive some amount at  the  foot  of  closing  out  or  liquidating  his outstanding transactions.  By a  rejoinder of  the same date the Board of Directors of the Respondent reiterated that its action in fixing the interim clearing rates in the concerned securities and  demanding interim  margins was  in order and that the  adjustment  of  outstanding  business  claimed  by appellant No.  2 was utterly wrong and as such appellant No. 2 was called upon to comply with its notice by submitting an amended list in accordance with the directions together with the differences,  if any,  immediately. By  a telegram dated June 30,  1969, which was confirmed by a letter of even date the appellant No. 2 was again called upon to submit his list alongwith the amount of differences, if any, by July 1, 1969 failing which he was informed that necessary action would be taken against  him. As  the appellant  No. 2  stuck  to  his stand, the  Respondent by its letter dated July 1, 1969 once again stressed  that the  action of the Board in calling for the list  and margin  money was  in order  and in accordance with the  rules, byelaws,  regulations, practices usages and previous  resolutions   of  the   Board  and   gave  further opportunity to  him to comply with the directions by July 2, 1969 upto  11.00  a.m.  failing  which  further  action  was threatened. At  the meeting of the Board of Directors of the Respondent held  on July  2, 1969  at 4.00  P.M.  the  Board noticed that  all  members,  except  appellant  No.  2,  had complied with  its directions  and on a consideration of the entire matter  came to  the conclusion  that appellant No. 2 was intentionally  evading to  comply with its direction and to pay  the  required  amount  of  margins  and,  therefore, resolved that  appellant No. 2 trading in the name and style of Desh  Bandhu Gupta & Co. be declared a defaulter for such failure and  a notice in that behalf be pasted on the Notice Board and  appellant No.  2  was  informed  about  it  by  a telegram and a letter. The resolution passed on July 2, 1969 declaring appellant  No. 2  as a defaulter exposed him under the bye-laws  to a  rigorous inquiry  by the Respondent into his financial  condition  and  entailed  other  disabilities including termination  of his  membership of  the Respondent under Bye-law  308 read  with Article 43(iv) of the Articles of Association.  Appellant No.  2  thereupon  filed  a  writ petition (Civil Writ No. 520 of 1969) in Delhi High 377 Court challenging the directions of the Respondent demanding payment of  interim margins as also its resolution declaring him to  be a  defaulter. It appears that after the filing of

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the petition the Board of Directors of the Respondent at its meeting held  on July  3,  1969  passed  another  resolution calling upon  the appellant  No. 2  under Article  29 of the Articles of  Association to  deposit additional  security of Rs. 20,000/-  failing which  further action was thereatened. The writ  petition was amended and a prayer seeking to quash the second  resolution was added. The main contention of the appellant No. 2 was that all his transactions which remained outstanding as  on June  27,  1969  were  forward  contracts pertaining to  cleared securities  and as such were affected by the Notification which banned all forward contracts, that these had to be adjusted at the last official closing rates, that the  action of  the Respondent  in calling  upon him to deposit interim  margins calculated  on the basis of certain average specified rates fixed by it was not warranted by the proviso therein  but in fact amounted to carry over of those transactions  which  had  been  prohibited  and,  therefore, illegal and  that both  the resolutions,  one dated  July 2, 1969 whereby he was declared to be a defaulter and the other dated July 3, 1969 whereby he was called upon to deposit Rs. 20,000/- as  additional security  were contrary  to law  and unjust and,  therefore, the  said  action  as  well  as  the resolutions were  liable to  be quashed. The appellant No. 2 further contended  that  by  passing  the  two  resolutions, particularly  the   first  one   dated  July   2,  1969   in contravention  or   breach   of   statutory   Bye-laws   and Regulations his fundamental right to carry on business under Article 19(1)(f) of the Constitution had been infringed and, therefore,  issuance   of  appropriate   writ  quashing  the directions issued  on June  28, 1969 and the two resolutions dated July 2 and 3, 1969 was sought.      By its  reply filed  on July  15, 1969  the  Respondent raised a preliminary objection to the maintainability of the petition. It  was contended  that the  relationship  between appellant No. 2 and the Respondent was contractual resulting from the Memorandum & Articles of Association and the Rules, Bye-laws and  Regulations made under the powers given by the Articles of Association, and since the grievance made in the writ petition  related to contractual rights and obligations between the  parties and  no question  of enforcement of any statutory right  or obligation  arose the  remedy under writ jurisdiction was  not available.  On merits it was contended that the  construction sought to be placed by the appellants on  the   proviso  contained   in  the   Central  Government Notification, which dealt with closing out or liqui- 378 dating the  transactions outstanding as on June 27, 1969 was not correct,  that under  the said proviso such transactions were permitted to be closed or liquidated in accordance with the rules,  bye-laws and  regulations of the Respondent and, therefore, the  directions issued  by its Board of Directors on June  28, 1969 to all its members including appellant No. 2 to  submit their  lists of outstanding transactions and to pay interim  margins on  the basis  of the average specified rates fixed  by it  were proper  and  lawful  and  both  the resolutions  were   legal  and  justified.  The  respondent, therefore, prayed for dismissal of the writ petition.      On a consideration of the rival submissions made before it by  counsel for  the parties,  the High Court upheld both the contentions of the Respondent and dismissed the petition with costs.  The High  Court’s view  on both  the points  is challenged by the appellant before us in this appeal.      In the  view which  we are  taking on the merits of the case after  giving our  anxious consideration  to the  rival submissions thereon, we feel that it would be unnecessary to

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go into  and decide  the preliminary objection raised by the respondent to  the maintainability of the writ petition. We, therefore, propose to dispose of the appeal on merits.      On  merits   the   question   that   arises   for   our determination is  what on  proper construction  is the scope and ambit  of the  proviso contained  in the  notification ? Whether, after  the imposition  of the  ban on  all  forward trading in  shares with  effect from  the close  of June 27, 1969, the  outstanding contracts  that had  remained  to  be performed as  on that  date were  permitted to  be closed or liquidated under  the proviso  in accordance with the rules, bye-laws and  regulations of  the Respondent or not ? On the one hand counsel for the appellants contended that by reason of the  ban imposed  on all  forward trading  in shares with effect from  the close  of June  27, 1969  the action of the respondent  in   making  the   demand  for  interim  margins calculated on  the basis of the difference between the rates of the  last clearing  and certain average rates fixed by it in respect  of their forward outstanding transactions, which amounted to "carry over" of those transactions, was illegal; in other words the proviso did not permit the closing out or liquidation of  the existing outstanding transactions by way of  "carry  over".  On  the  other  hand,  counsel  for  the respondent contended  that notwithstanding  the ban imposed, which prohibited  all future  forward trading in shares, the existing forward  transactions that  remained outstanding on that date were permitted to be closed or liquidated in the 379 normal manner under its rules, bye-laws and regulations and, therefore, the  directions issued  by the respondent on June 28, 1969  were in  accordance with  the notification. It was pointed out  that  at  the  close  of  June  27,  1969,  the appellant No. 2 had certain outstanding contracts in Cleared Securities for  the then  current clearing  of July  8, 1969 which had  to  be  completed  and  performed  for  the  said clearing in the manner laid down in Regulation 8 and Bye-law 52(e) which  meant that he could either make cross contracts to  close  his  outstanding  purchases  or  sales  for  that clearing or  to make carry over contracts so as to close the contracts of  the current clearing and to make contracts for the ensuing  clearing and  such contracts could be made upto the last  business day  prescribed for  that clearing by the Respondent;  and  so  much  was  permitted  by  the  proviso contained in  the notification.  Moreover, in  view  of  the crisis created by the Notification the Board of Directors of the Respondent issued the directions on June 28, 1969 having regard to  Bye-law 73,  which were  in order and the further action taken  by the  respondent against the appellant No. 2 consequent upon  his failure  to comply  with the directions was proper and justified under Bye-law 308 read with Article 43(iv) of  the Articles  of Association  of the  respondent. Since the  question depends  upon proper construction of the notification dated  June 27,  1969, it  will be desirable to set out the said notification in extenso which ran thus:-               "New Delhi, the 27th June 1969.                         NOTIFICATION           S.O. 2561.  In exercise of the powers conferred by      subsection  (1)   of  section   16  of  the  Securities      Contracts  (Regulation)  Act  1956  (42  of  1956)  the      Central  Government,   being  of  opinion  that  it  is      necessary  to   prevent  undesirable   speculation   in      securities in  the whole of India, hereby declares that      no person,  in the  territory to  which  the  said  Act      extends, shall, save with the permission of the Central      Government, enter  into any  contract for  the sale  or

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    purchase of  securities other  than such  spot delivery      contract or  contracts for  cash or  hand  delivery  or      special delivery  in any  securities as  is permissible      under  the  said  Act,  and  the  rules,  bye-laws  and      regulations of a recognised stock exchange:           Provided  that   a  contract  other  than  a  spot      delivery  contract   or  contracts  for  cash  or  hand      delivery or  special delivery  in any securities on the      Cleared Securities  List of a recognised stock exchange      may be entered into between its members 380      or through  or with  any such member for the purpose of      closing  out  or  liquidating  all  existing  contracts      entered into  upto the  date of  this notification  and      remaining to be performed after the said date, but such      contracts shall  be subject  to the rules, bye-laws and      regulations of  the recognised stock exchange that come      into force  when further new dealings are prohibited in      any securities  on  the  Cleared  Securities  List  and      subject also  to such  terms and conditions, if any, as      the Central Government may from time to time impose."      Counsel for  the appellants  did not  dispute that  the proviso in  the aforesaid  notification dealt with the topic of closing out or liquidating all existing forward contracts entered into  up to  the date  of the notification and which remained to  be performed or outstanding as on that date but contended that  it did not permit the closing or liquidating all such outstanding transactions in the normal manner under the rules,  bye-law or  regulations of  the respondent,  but such outstanding  transactions were  declared to be "subject to the  rules, bye-laws  and regulations  of the  recognised Stock  Exchange  that  come  into  force  when  further  new dealings are  prohibited in  any securities  on the  Cleared Securities  List   and  subject   also  to  such  terms  and conditions, if  any as  the Central Government may from time to time  impose." In  other words, according to counsel, the words "but such contracts" occurring in the last part of the notification referred  to  the  outstanding  contracts  that remained to  be performed  at the close of June 27, 1969 and it is  this last portion of the notification which indicated the manner  in  which  such  outstanding  transactions  were required  to  be  closed  or  liquidated.  The  Respondent’s counsel disputed  this and  urged that  the last portion had nothing  to  do  with  such  outstanding  transactions,  the closing or  liquidating of which was fully dealt with by the proviso. It  cannot be  disputed that  the drafting  of  the notification in question has been far from happy but even so on a  fair reading  of the  notification it  is difficult to accept the  construction sought  to  be  placed  thereon  by counsel for  the appellants.  In our  view, the notification was in three parts. By the first part the Central Government put a ban on all forward trading in shares through the Stock Exchanges in  the country  by declaring  that  "no  person.. shall, save  with the  permission of the Central Government, enter  into  any  contract  for  the  sale  or  purchase  of securities  other   than  such  spot  delivery  contract  or contract for  cash or  hand delivery  or special delivery in any securities as is permissible under the said Act, and the rules,  bye-laws  and  regulations  of  a  recognised  stock exchange." The  second part  consisted of the proviso and it dealt  fully  with  how  all  existing  contracts  remaining outstanding as  on the  date of  the notification  should be closed or liquidated, and the direction 381 contained therein  in that  behalf was to the effect that "a

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contract other than a spot delivery contract or contract for cash or hand delivery or special delivery (meaning thereby a forward contract).......may  be  entered  into  between  its members or  through or  with any such member for the purpose of closing  out or  liquidating all  existing  contracts.... remaining to  be performed after that date." In other words, for  the   purpose  of   closing  or   liquidating  existing outstanding transactions  a forward  contract  (which  would include a carry over) was permitted to be entered into. Then follows the third or the last part of the notification which commences with  the  words  "but  such  contracts  shall  be subject  to   .......  "  The  expression  "such  contracts" occurring in  this last part of the notification meant those as were  referred to  in the  first part of the notification the making  of which  was banned after June 27, 1969 and the last portion  provided that  such forward contracts that had been banned  "shall be  subject to  the rules,  bye-laws  or regulations of  the recognised Stock Exchange that come into force (i.e. become applicable) when further new dealings are prohibited ........  and subject  also  to  such  terms  and conditions as  the Central  Government may from time to time impose."  In   our  view  the  expression  "such  contracts" occurring in  the last  part of  the notification  were  not referable to  the existing  outstanding contracts  nor to ’a contract’  that   could  be  entered  into  for  closing  or liquidating the  existing outstanding  contracts.  In  other words, the  third part of the notification on which reliance has been  placed by  the counsel  for the appellants, in our view, has  nothing  to  do  with  the  existing  outstanding contracts,  the   closing  or   liquidating  of   which  was independently provided  for by  the proviso.  It  will  thus appear  clear   that  on   a  proper   construction  of  the notification in  question the  proviso clearly permitted the closing  or   liquidating  of   the   existing   outstanding transactions in the normal manner by entering into a forward contract (which  would include a "carry over") in accordance with the  rules, bye-laws and regulations of the Respondent. There was  no warrant  for the  stand taken by the appellant No. 2  that all  outstanding transactions had to be or could be adjusted on the basis of "previous official closing".      On the  construction of  the proviso  counsel  for  the Respondent rightly invited our attention to two documents on record which  had come  into existence almost simultaneously with the  issuance of the notification explaining the manner in which outstanding transactions were intended to be closed or liquidated.  In a Press Statement or Press Note issued by the Finance  Ministry immediately  upon the  issuance of the notification it was stated thus:           "The existing contracts entered into upto the date      of the  notification and remaining to be performed are,      however, per- 382      mitted by  the same  notification to  be liquidated  in      accordance with  the rules, bye-laws and regulations of      the Stock Exchange concerned." Further it  appears that  in response to a query made by the President of  the respondent,  Shri Maitra,  Joint  Director (S.E.) Ministry  of Finance, Department of Economic Affairs, addressed  a  communication  dated  June  28,  1969  to  the President in which he stated thus:           "As  stated   in  the   notification  itself,  all      outstanding contracts  which were  not liquidated  till      the date of notification, will have to be liquidated in      accordance  with   the  relevant  rules,  bye-laws  and      regulations of  your exchange  in that regard. No fresh

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    forward transactions  in any cleared security, however,      is permissible.           A statement of outstanding position in each of the      cleared securities  on your Exchange, as on the date of      the notification may please be forwarded to us as early      as possible  and thereafter at each settlement so as to      enable  Government   to  know   the  reduction  in  the      outstanding business  effected from  time to  time.  As      will be  seen, no specific period has been mentioned in      the notification  for liquidation  of the outstandings.      It is,  however, hoped  that you  will  issue  suitable      instruction  to   your  members   to  ensure  that  the      outstandings are cleared in a smooth and orderly manner      within a reasonable period."                                          (Emphasis supplied) It may  be stated  that in one of his earlier communications appellant No. 2 himself had requested the respondent to seek clarification from  the Government  on the  points raised by him in  regard to  the outstanding  transactions. The letter dated June  28, 1969  addressed by the Joint Director to the President of  the Respondent clearly brings out two aspects: first, that  as per  the notification itself all outstanding contracts were permitted to be liquidated in accordance with the  relevant   rules,  bye-laws   and  regulations  of  the respondent and secondly, no specific period was mentioned in the notification for liquidation of the outstanding business but the  members operating  on a  recognised Stock  Exchange were expected  to clear  the outstandings  in a  smooth  and orderly manner  within a reasonable period and, in fact, the Government  desired  the  respondent  to  forward  to  it  a statement at  each settlement  indicating the  reduction  in outstanding  business   effected  from  time  to  time.  The exposition in  these two  documents, therefore,  conforms to our interpretation of the proviso. 383      It may  be stated  that it  was not  disputed before us that these  two documents  which came  into existence almost simultaneously with  the issuance  of the notification could be looked  at for  finding out  the true  intention  of  the Government  in   issuing  the   notification  in   question, particularly in  regard to  the manner  in which outstanding transactions were  to be closed or liquidated. The principle of contemporanea  expositio (interpreting  a statute  or any other  document  by  reference  to  the  exposition  it  has received from  contemporary authority) can be invoked though the same  will not  always be  decisive of  the question  of construction. (Maxwell  12th Edn.  p. 268).  In Crawford  on Statutory Construction  (1940 Edn.) in para 219 (at pp. 393- 395) it  has been  stated that  administrative  construction (i.e. contemporaneous  construction placed by administrative or executive  officers charged  with  executing  a  statute) generally should  be clearly  wrong before it is overturned; such a  construction,  commonly  referred  to  as  practical construction,  although  not  controlling,  is  nevertheless entitled to considerable weight; it is highly persuasive. In Baleshwar Bagarti v. Bhagirathi Dass(1) the principle, which was reiterated  in Mathura  Mohan Saha  v. Ram Kumar Saha(2) has been stated by Mukerjee J. thus:           "It is  a well-settled  principle of  construction      that courts  in construing  a statute  will  give  much      weight to  the interpretation  put upon it, at the time      of its  enactment and since, by those whose duty it has      been to  construe, execute  and  apply  it.  I  do  not      suggest for  a moment  that such  interpretation has by      any means  a controlling  effect upon  the Courts; such

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    interpretation may,  if occasion  arises,  have  to  be      disregarded for cogent and persuasive reasons, and in a      clear case  of error,  a Court would without hesitation      refuse to follow such construction." Of course, even without the aid of these two documents which contain a  contemporaneous exposition  of  the  Government’s intention, we  have come  to the  conclusion that on a plain construction of  the Notification  the proviso permitted the closing out  or liquidation  of all outstanding transactions by entering  into a  forward contract in accordance with the rules, bye-laws and regulations of the respondent.      Having regard  to the  above construction which appears to us  to  be  the  true  and  proper  construction  of  the notification  in   question  it   will  be  clear  that  the directions issued  by the  respondent  to  all  its  members including appellant  No. 2  on June  28, 1969  in regard  to their outstanding  transactions as  at the close of June 27, 1969 were proper and 384 legal and  the appellants’  stand was  clearly erroneous. It cannot be  disputed that  ample  opportunity  was  given  to appellant No.  2 to  comply  with  the  directions  but  the appellant persisted  in his erroneous contention, and failed to comply  with those  directions with  the result  that the respondent  had   no  alternative   but  to  declare  him  a defaulter. In  our view,  the directions dated June 28, 1969 as well  as the  two resolutions passed by the respondent on July 2  and July  3, 1969  were proper and justified and the appellants’ case  on merits was rightly rejected by the High Court.  This   conclusion  of   ours,  as   stated  at   the commencement  of   the  judgment,  renders  unnecessary  the determination of the preliminary objection.      In the  result the  appeal fails  and is dismissed with costs. P.B.R.                                     Appeal dismissed. 385