Cotton Act, 1957

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THE COTTON ACT, 1957 
 
 
 
CONTENTS 
1.  Short title, extent and commencement 
2.  Definitions 
3.  Constitution of the Cotton Board 
4.  Functions of the Board 
5.  Control of the Board 
6.  Requisition of factories etc. 
7.  Power to secure fulfillment of contracts 
8.  Power to call for information 
9.  Registration of contracts 
10.  Control of contracts through recognised associations 
11.  Delegation of powers 
12.  Penalty, etc. 
13.  False statements 
14.  Power to make rules 
15.  Cognizance of offences 
16.  Special provision regarding fines 
17.  Presumption as to orders 
18.  Repealed 
 
 
 

 
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THE COTTON ACT, 1957 
ACT No. XXXVIII OF 1957 
[10th September, 1957] 
An Act to provide for measures for the promotion of international trade in cotton. 
 WHEREAS it is expedient to provide for measures for the promotion o f international trade in 
cotton; 
 It is hereby enacted as follows:___ 
 1. Short title extent and commencement.___(1) This Act may be called the Cotton Act, 1957. 
 (2) It extends to the 1[Karachi Division], and with the exception of section 6, to the rest of 
Pakistan.  
 (3) It shall come into force at once. 
 2. Definitions. In this Act, unless there is anything repugnant in the subject or context,___ 
(a)  “contract” means a contract for the purchase or sale of cotton, and includ es a 
factory selection contract;  
(b)  “cotton” means unginned cotton (kapas) or ginned cotton ( rui) or pressed and 
baled cotton but does not include wool cotton or silk cotton;  
(c)  “factory selection contract” means a contract for the sale of cotton entered into 
in Pakistan and providing for selection by the buyer at the factory and for 
delivery of the cotton selected in full pressed bales at Karachi within the period 
and at the price specified in the contract;  
(d) “notified order” means an order published in the official Gazette;  
(e)  “pressing factory” means a place wherein steam, water or other mechanical 
power or electric power is used and where cotton is pressed into bales. 
 3. Constitution of the Cotton Board. The 2[Federal Government] may, for the promotion of 
international trade in cotton, constitute, by notification in the official Gazette, a Cotton Board with a 
Chairman and su ch other members, of whom one 3[each may be nominated by the Governments of 
Baluchistan, the North -West Frontier Province, the Punjab and Sind], as may be specified in the 
notification. 
 
1Subs. by the Central Adaptation of Laws Order, 1964 (P. O. No. 1 of 1964), Art. 2 and Sch. 
2Subs. by the Federal Adaption of Laws Order, 1975 (P. O. No. 4 of 1975), Art. 2 and Table. 
3Subs. by Ordinance No. XXIV of 1970, s. 4. 
 
 
 
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 4. Functions of the Board. The Board shall have power to supervise and regulate all dealings 
in cotton, in so far as they are connected with the promotion of international trade therein, and shall 
perform such functions as the 1[Federal Government] may, from time to time, direct for the purposes 
of this Act. 
 5. Control of the Board. The Board shall be subject to the superintendence and control of the 
1[Federal Government], and in the discharge of its functions shall be guided by such general or special 
instructions as may, from time to time, be given to it by the 1[Federal Government]. 
 6. Requisition of factories  etc.___(1) The 1[Federal Government] may, by general or special 
order, requisition any pressing factory or any place, whether open or enclosed, and use the same f or 
pressing or storing cotton belonging to Government, and for purposes incidental thereto. 
 (2) If any such factory or place is requisitioned under this section, there shall be paid 
compensation which shall be determined either with the agreement of the p arties concerned, or by an 
arbitrator chosen with their consent, and in the absence of such consent, by an arbitrator to be appointed 
in accordance with the provisions of section 8 of the Arbitration Act, 1940 (X of 1940). 
 (3) The arbitrator in determinin g the compensation under sub -section (2) shall have regard to 
the provisions of sub-section (1) of section 23 of the Land Acquisition Act, 1894 (I of 1894), so far as 
the same can be made applicable to acquisition of a temporary nature. 
 7. Power to secure fulfillment of contracts. If in the opinion of the 1[Federal Government] it 
is expedient or necessary so to do for the purpose of securing the fulfilment of any contract relating to 
export of cotton on which the exporter has defaulted, it may buy co tton elsewhere and appropriate it 
to the contract, and the defaulter shall be liable for any loss which the 1[Federal Government] may 
sustain on that account, but the defaulter shall not be entitled to any gain on the purchase made against 
default. 
 Explanation.___ In this section “exporter” means a seller of cotton to a foreign buyer or to his 
agent in Pakistan. 
 8. Power to call for information .___(1) The 1[Federal Government] may, at any time, by an 
order in writing, direct such person or class of persons as may be specified in the order to furnish such 
particulars relating to the fulfillment of any contract relating to export of cotton, in such manner and 
to such person, as may be specified in the order. 
 (2) The 1[Federal Government] may, by order in writing, require any person to furnish to it, or 
to such person as may be specified in this order, any information in his possession, being information 
which the 1[Federal Government] may require for the purposes of this Act. 
 9. Registration of contracts. The 1[Federal Government] may, by general or special order in 
writing, require any contract relating to export of cotton to be registered with such organisation and in 
such manner as may be specified in the order. 
 
 
1Subs. by the Federal Adaptation of Laws Order, 1975 (P. O. No. 4 of 1975), Art. 2 and Table. 
 
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 10. Control of contracts through recognised associations.___ (1) The 1[Federal Government] 
if satisfied that it could be in the interests of the trade and also of the public to do so, may, by a notified 
order and subject to such conditions, if any, as may be specified in the order, prohibit any specified 
kind or class of contracts, such as forward contracts or hedge contracts, unless such contracts are made 
through and under the control of, and in the manner prescribed by, an association recognised by the 
1[Federal Government] under sub-section (2). 
 (2) For the purposes of t his section, the 1[Federal Government] may, by a notified order, 
recognize any association, constituted for the purpose of regulating and controlling contracts, which 
applies for such recognition.  
 (3) A recognition under sub -section (2) may be granted su bject to the condition that the 
association shall by such amendments of its articles of association, rules or bye -laws as may be 
necessary provide for the appointment by the 1[Federal Government] of not more than four persons, 
representing interests not directly represented through membership of the association, as members of 
the governing body of the association. 
 (4) Every association, which is recognised under sub-section (2), shall furnish to the 1[Federal 
Government] such information and such periodical returns relating to the affairs of the association as 
the 1[Federal Government] may by order in writing require.  
 (5) The 1[Federal Government] may, by order in writing, give such directions, as it  considers 
necessary in the interests of the trade and the public, to an association recognised under sub -section 
(2) in respect of contracts to which this section applies.  
 (6) No articles, rules or bye -laws of an association recognised under sub -section (2) shall be 
altered save with the previous approval of the 1[Federal Government]. 
 (7) Whenever the 1[Federal Government] considers it expedient to do so, it may by order in  
writing direct any association recognised under sub-section (2) to make, repeal or amend any articles, 
rules or bye-laws of the assoc iation in the manner and within  a period specified in the order ; and if 
the recognised association refuses, fails or negl ects to comply with the direction wit hin the specified 
period, the 1[Federal Government] may, by a notified order, make, repeal or amend the articles, rules 
or bye-laws in the manner specified in the order giving the direction or with such modifications as the 
1[Federal Government] may think fit, and the making, repeal or amendment of the articles, rules or 
bye-laws shall be deemed to have been duly effected by the association. 
 (8) If the 1[Federal Government] is of the opinion that the interests of the trade and the public 
require that the recognition accorded to an association under sub-section (2) should be terminated, the 
1[Federal Government] may, after giving the association a reasonab le opportunity of being heard in 
the matter, by a notified order, terminate the recognition on and from the date of such order or any 
specified date subsequent thereto, and the association shall cease to be an association recognised under 
sub-section (2) from the date of such termination: 
 Provided that such termination shall not affect the validity of any contract entered into or made 
before the date of such termination. 
_________________________________________________________________________________ 
1Subs. by the Federal Adaptation of Laws Order, 1975 (P. O. No. 4 of 1975), Art. 2 and Table. 
 
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 11. Delegation of powers.___1[(1)] The 2[Federal Government] may, by a notified order, direct 
that any power conferred upon it by or under this Act shall, in relation to such matters and subject to 
such conditions, if any, as may be specified in the order, be exercisable by the Cotton Board. 
 2[(2) The Cotton Board may, by general or special order in writing, direct that such of its 
powers, including powers which have been directed under sub-section (1) to be exercised by the Cotton 
Board, shall, in relation to such matters and subject to such conditions, if any, as may be specified in 
the order, be exercisable also by the Chairman of the Board or such member th ereof as may be so 
specified: 
 Provided that orders passed under the powers thus delegated shall be laid before the Board at 
its next meeting.] 
 12. Penalty, etc.___ (1) Any person who contravenes or fails to comply with an order made or 
direction given under this Act shall be punishable as if he had contravened a provision of this Act. 
 (2) Any person who contravenes any provision of this Act shall be punishable with 
imprisonment for a term which may extend to three years or with fine or with both. 
 (3) Where any person as aforesaid is a company or a body corporate, every director, manager, 
secretary or other officer, and every agent and servant thereof, and in the case of an unlimited company 
or a company limited by guarantee, also any of its members, shall, subject to the provisions of the next 
succeeding sub-section, be punishable as if he had contravened the provisions of this Act. 
 (4) No such director, manager, secretary or other officer and no such agent, servant or member 
as is referred to in sub -section (3) shall be prosecuted under this Act unless he has bee n given an 
opportunity by the 2[Federal Government] to show c ause, within such time as the 2[Federal 
Government] may specify, why he should not be prosecuted, and if it is made to appe ar to th e 
satisfaction of the 2[Federal Government] at any time before the institution of the prosecution that he 
has used due diligence to enforce the observance of the provisions of this Act and the orders and 
directions issued thereunder and that the offence has been committed without his knowledge or against 
his consent, the 2[Federal Government] may forbear further proceedings against him: 
 
 Provided that nothing in this sub-section shall prevent the 2[Federal Government] from 
proceeding against him further if it sees reason to do so. 
 
 13. False statements. If any person___ 
 
(i)  when required by an order under this Act to make any statement or furnish any 
information, makes any statement or furnishes any information which is false 
in any material particular and which he knows or has reasonable cause to believe 
to be false, or does not believe to be true, or  
 
(ii)  makes any such statement as aforesaid in any book, account, record, declaration, 
return or other documents which he is required by any such order to maintain or 
furnish,  
he shall be punishable with imprisonment for a term which may extend to three years or with fine or 
with both. 
 
1Re-numbered and added by Act No. V of 1973, s. 2. 
2Subs. by the Federal Adaptation of Laws Order, 1975 (P. O. No. 4 of 1975), Art. 2 and Table. 
 
 
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 14. Power to make rules.___(1) The 1[Federal Government] may, by notification in the official 
Gazette, makes rules for carrying out the purposes of this Act. 
 (2) Without prejudice to the generality of the foregoing power, such rules may prescribe the 
procedure for determining, whether by means of arbitration or otherwise, the loss that may be sustained 
by Government in securing the fulfilment of any contract on which an exporter has defaulted, and the 
manner in which the liability of the defaulter for such loss may be discharged by him. 
 (3) Rules made under this section shall be laid before the National Assembly at its meeting 
held next after the publication of the notification under sub-section (1). 
 15. Cognizance of offences. No court shall take cognizance of any offence punishable under 
this Act except on a report in writing of the facts constituting such offence made by a person who is a 
public servant as defined in section 21 of the Pakistan Penal Code (Act XLV of 1860). 
 16. Special provision regarding fines . Notwithstanding anything contained in section 32 of 
the Code of Criminal Procedure, 1898 (Act V of 1898), it shall be lawful for any Magistrate of the 
First Class specially empowered by the Provincial Government in this behalf to pass a sentence of fine 
exceeding one thousand rupees on any person convicted under this Act. 
 17. Presumption as to orders. Where an order purports to have been made and signed by an 
authority in exercise of any power conferred by or under this Act, a court shall, within the meaning of 
the Evidence Act, 1872 (I of 1872), presume that such order was so made by that authority. 
 18.  2[*  * * * * * *] 
 
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62403           Date: 13-01-2025 
1Subs. by the Federal Adaptation of Laws Order, 1975 (P. O. No. 4 of 1975), Art. 2 and Table, for “Central Government”. 
2Rep By the Repealing and Amending Ordinance 1965 (10 of 1965), s.2 and 1st Sch.