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Derivative trading does not violate Prize Chit & Money Circulation Schemes (Banning) Act, P&H High Court quashes criminal proceedings

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The Punjab and Haryana High Court vide order dated 3 April 2024 had quashed the criminal proceedings on an authorised dealer of commodity trading company which is a member of National Commodity and Derivatives Exchange Limited.

The police department filed a criminal case under the pretext that the accused was involved in gambling on the prices of gold, silver, and bronze, thereby, committing offences under the IPC, Public Gambling Act, 1867 and the Prize Chit and Money Circulation Schemes (Banning) Act, 1978.

Also read: ASP authorised to raid suspected gambling houses under the Gambling Act

The Court held that the accused entity is a dealer of a member of National Commodity and Derivatives Exchange Limited and therefore no offence under the Prize Chit and Money Circulation Schemes (Banning) Act, 1978 is made out.

The Court also noted the sub inspector who had conducted the raid didn’t have required sanction under the Section 5 of the Public Gambling Act, 1867 to conduct the raid. It is worth noting even in July 2023, the Punjab and Haryana High Court had quashed an FIR under the Public Gambling Act and subsequent proceedings on the ground that raid was conducted by an officer below the rank specified under the enactment to conduct raids.

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