The Bombay Cotton Contracts Act, 1932

1.

Extent and operation 2.

1. (1) This Act shall apply to the City of Bombay and the Island of Salsette.
2. (2) It shall come into operation on such date as the 2[Provincial Government] may, by notification in the 3[Official Gazette], direct. 4* * * * *

3. In this Act, unless there is anything repugnant in the subject or context,

1. (a) "Bombay" means the City of Bombay and the Island of Salsette ; 5* * * * *
2. (c) "Board of Directors" means a board of directors of a recognised cotton association constituted under section 5 and acting through at least a quorum of their members at a meeting of that board duly called and constituted ;
3. (d) "Certified godown" means a godown maintained by a cotton association for storing cotton certified under the by-laws of the association ;
4. (e) "Contract" means a contract made or to be performed in whole or in part in Bombay relating to the sale or purchase of cotton and includes options in cotton, but does not include such contracts as the 2[Provincial Government] may, by notification in the 3[Official Gazette], declare to be excluded from the provisions of this Act ;
5. (f) "Cotton Association" means any association, organisation or a body of individuals, whether incorporated or not, established or formed for the purpose of regulating and controlling business in the sale, purchase or other transactions in cotton ;
6. (g) "Forward contract" means a contract for the delivery of cotton at some future date ;
7. (h) "Option in cotton" means a contract made or to be performed in whole

6.

1. (1) The Board of Directors may, subject to the sanction of the ¹[Provincial Government], make and, from time to time, add to, vary or rescind by-laws for the regulation and control of transactions in cotton.
2. (2) In particular and without prejudice to the generality of the foregoing provision such by-laws may provide for,
   • (a) The admission of various classes of members of a recognised cotton association and the exclusion, suspension, expulsion and re-admission of such members ;
   • (b) the opening and closing of markets in cotton and the times during which such markets shall be opened or closed and regulating the hours of trade ;
   • (c) a clearing house for the periodical settlement of contracts or differences thereunder and for the passing on of delivery orders and for any purpose in connection with options in cotton, and the regulation and maintenance of such clearing house ;
   • (d) the number and classes of contracts in respect of which settlements shall be made or differences paid through the clearing house ;
   • (e) fixing, altering or postponing settling days ;
   • (f) determining and declaring the market rates for cotton of any and every description ;
   • (g) the terms, conditions and incidents of contracts and the forms of such contracts as are in writing ;
   • (h) regulating the making, performance and cancellation of contracts, including contracts between a commission agent and his constituent, or between a broker and his constituent, or between a jethawala or muccadum and his constituent, or between a member and a non-member of a recognised cotton association, and the consequences of insolvency on the part of a seller or buyer or intermediary, or the consequences of a breach or omission by a seller or buyer and the responsibility of commission agents, muccadums and brokers not parties to such contracts ;
     • (i) the prohibition of specified classes or types of dealings in cotton by a member of a recognised cotton association ;
   • (j) the settlement of claims and disputes by arbitration and appeals against awards ;
   • (k) the levy and recovery of subscriptions, fees, fines and penalties ;
   • (l) disciplinary measures against members of a recognised cotton association, including suspension, expulsion, fines and non-monetary penalties, for breach of any by-law made by the Board of Directors ;
   • (m) regulating the course of business between parties to contracts in any capacity ;
   • (n) the institution, maintenance and control of certified godowns ; and
   • (o) regulating the making, performance and cancellation of option in cotton.
3. (3) If any person committing a breach of any by-law of a recognised cotton association is a company, every director and officer of such company shall also be deemed to have committed such breach, unless he proves that the breach was committed without his knowledge and control.

7. By-laws made under section 5 or 6 shall be subject to the condition of previous publication and, when sanctioned by the ¹[Provincial Government], shall be published in the ²[Official Gazette].

8.

1. (1) Save as hereinafter provided in this Act, any contract (whether either party thereto is a member of a recognised cotton association or not) which is entered into after the date on which this Act comes into operation and which is not in accordance with the by-laws of any recognised cotton association shall be void.
2. (2) No claim shall be allowed in any court for the recovery of any commission, brokerage, fee or reward in respect of any such contract.

9. [Supersession of Board of Directors and appointment of Board of Control, its powers and duties]¹ Rep. by Bom. 17 of 1938, s. 2 and First Schedule.

10. [Prohibition of certain contracts after appointment of the Board of Control] Rep. by Bom. 17 of 1938, s. 2 and First Schedule.

No suit, prosecution or other legal proceedings whatsoever shall be entertained in any court against any officer or servant of a recognised cotton association 1* * * for anything in good faith done or intended to be done in pursuance or execution of this Act or by-laws made thereunder.

1. (1) Contracts entered into under the provisions of the Bombay Cotton Contracts Act, 1922, shall, be deemed to be valid, except in so far as they may be inconsistent with any of the provisions of this Act and by-laws made thereunder.
2. (2) Forward contracts entered into before the date when this Act comes into operation and which would not have been void under the provisions of the Bombay Cotton Contracts Act, 1922, shall not be deemed to be void merely because they contravene the provisions of this Act and by-laws made thereunder.