Cotton Act, 1957

The Cotton Act, 1957 was passed to promote and regulate Pakistan's international trade in cotton. Section 3 lets the Federal Government set up a Cotton Board, with a Chairman and members nominated by the governments of Balochistan, the former North-West Frontier Province, Punjab, and Sindh. Section 4 gives the Board power to supervise and regulate cotton dealings connected with international trade, and Section 5 keeps the Board under the Federal Government's overall control and direction.

Section 6 lets the government requisition (temporarily take over) any cotton-pressing factory or storage place for pressing or storing government-owned cotton, with compensation determined by agreement or arbitration under the Arbitration Act, 1940, following valuation principles borrowed from the Land Acquisition Act, 1894. Section 7 allows the government to buy replacement cotton elsewhere if an exporter defaults on an export contract, and to recover the resulting loss from the defaulter, though the defaulter doesn't get to keep any profit from that purchase. Section 8 gives the government power to demand information about contract fulfilment and cotton dealings generally, and Section 9 lets it require export contracts to be registered.

Section 10 is a significant control mechanism: the government can require certain kinds of cotton contracts (such as forward or hedge contracts) to be made only through an association it has formally recognised, and it can direct such an association to appoint outside representatives to its governing body, submit periodic returns, follow government directions, and amend its own rules — with the government able to make those changes itself if the association refuses, and able to terminate an association's recognition if the public interest requires it. Section 11 lets the government delegate its powers to the Cotton Board, which can further delegate to its Chairman or a member.

Section 12 sets penalties: contravening the Act carries imprisonment up to three years, a fine, or both, and company directors, managers, and other officers (and members, for unlimited companies) are personally liable unless first given a chance to show cause and found to have acted with due diligence and without knowledge of the offence. Section 13 similarly penalises making false statements to authorities under the Act. Section 15 requires prosecutions to be initiated by a public servant's written report, and Section 16 lets specially empowered magistrates impose fines above the normal one-thousand-rupee ceiling under the general criminal procedure code. This is an old, narrowly-scoped trade regulation law from 1957, amended over the years (Section 18 shows part of it was itself repealed in 1965), so current applicability should be checked against the latest official text.