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Union of India (Uoi) and ors. Vs. Gem Palace, Jaipur and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtRajasthan High Court
Decided On
Case NumberCivil Spl. Appeal Nos. 121, 122 and 123 of 1970
Judge
Reported inAIR1973Raj242; 1972()WLN1072
ActsConstitution of India - Articles 14 and 141; Gold Control Act, 1968 - Sections 6(1)
AppellantUnion of India (Uoi) and ors.
RespondentGem Palace, Jaipur and ors.
Appellant Advocate M.M. Vyas, Adv.
Respondent Advocate D.P. Gupta, Adv.
DispositionAppeals allowed
Cases Referred & Ballabhdas Mathuradas Lakhani v. Municipal Committee Malkapur
Excerpt:
.....seeks to do is to ascertain by way of information from persons engaged in the trade of keeping gold or gold ornaments hypothecated with them for advancing loans. this is collecting data in their dealings in gold. the criterion if public interest. this expression as we have already noticed is capable of a definite meaning when used in this context. public interest is not the curiosity of the administrator as an individual but his anxiety to ascertain the extent of transactions by way of hypothecation, mortgage, charge, etc. from people advancing loans on the security of gold or gold ornaments public interest in this context would be regulated by a desire on the part of the administrator to check up inter alia the correctness of the returns submitted under section 16 or section 10 of..........gold into the country is to be checked by the prevention of the conversion of smuggled gold into gold articles or ornaments there is no unreasonableness in the state calling upon all pawn brokers and persons who take pledges or hypothecation of ornaments to furnish declarations so that the administrator and the gold control officer may keep an eye on the activities of such persons and if necessary at any point of time, ask for a . return in terms of section 6 and satisfy himself about the legality of his acts by inspecting his accounts. it would not be difficult for anvbodv carrying on or wanting to carry on business lawfully to insist on the pawner producing the copy of the declaration in his pos-session given to him after authentication by the gold control officer in terms of.....
Judgment:

Beri, J.

1. The validitv of the Gold Control Act. 1968 (Act No. 45 1968) was challenged by means of a group of 150 writ petitions before a learned Single Judge of this Court on diverse grounds. These petitions were resisted by the Union of India and the learned Single Judge by his judgment dated the 4th of December. 1969 in view of the decision of the Supreme Court in Harakchand Ratan-chand Banthia v. Union of India. AIR 1970 SC 1453 rebelled all attacks except one asainst Section 6(1) of the Act and held that this part alone was unconstitutional because no guideline was provided therein. Union of India has preferred three appeals against that judgment which can be disposed of together.

2. Mr. Vvas, learned counsel for the appellants, invited our attention to Badri prasad v. Collector, Central Excise. AIR 1972 SC 1170 a decision which was rendered subseauent to the decision challenged in these appeals and urged that Section 6 was specifically challenged in this case and their Lordships in Para 17 of the iudgment have held it to be valid. On this authority it was contended that Section 6 has been declared not to be unconstitutional by the Supreme Court. What their Lordships of the Supreme Court have laid down is the law for the land under Article 141 of the Constitution of India- added the learned counsel He further urged that even if a particular aspect of attack was not made against the validity of a Provision of law. but the provision was considered and declared by the Supreme Court to be valid it cannot be questioned before the High Court from another angle and he placed reliance on Ram Manohar Lohia v. State of U P. AIR 1968 All 100 at p. 106 & Ballabhdas Mathuradas Lakhani v. Municipal Committee Malkapur, AIR 1970 SC 1002 at p. 1003.

3. Mr. D. P. Gupta, learned counsel for the respondents, urged that Section 6 has been declared to be invalid by the learned Single Judge on the ground that it confers a naked power on the Administrator to call for the return of the books from any pawner without there being any indication in the provision as to who amongst them could be called to furnish accounts. This attack was not considered by their Lordships of the Supreme Court and is still open to challenge in these appeals. His next submission was that out of 150 petitions appeals have been ore-ferred only in three and therefore, the law declared by the learned Single Judge regarding Section 6 will be binding in the State of Raiasthan against the Union of India.

4. It will be appropriate at this stage to recall Section 6. which is tha target of attack. It reads.-

'6. Power of Administrator to call for returns as to receipt of sale of hypo-thecated gold.

(1) The Administrator may, if he is of opinion that it is necessary in the public interest so to do. require any person who lends or advances monev on the hypothecation, pledge, mortgage or charge of any article or ornament to make to him in such form, and within such time as may be specified a return as to the receipt, deliverv or sale of such article or ornament and as to the persons from whom they were received or as the case may be, to whom thev were delivered or sold.

(2) The Administrator may. by order authorise any Gold Control Officer to examine the accounts relating to the receipt, deliverv or sale of any sold, of any person who advances any monev on the hypo-thecation, pledge, mortgage or charge of any article or ornament and if any gold is found in the possession of such person which is not entered in such accounts or which is in excess of the quantity shown in such accounts and which is not otherwise accounted for to the satisfaction of such officer, such gold shall be deemed to be in the possession of such person in contravention of the Provisions of the Act.'

Their Lordships of the Supreme Court examined whether the demand of a return under Section 6 (1) was a reasonable restriction under Article 19. They held that asking for the return in terms of Section 6 was not unreasonable by wav of a restriction in carrying on the trade of money lending or hypothecation. Mr. Gupta's grievance is that their Lordships of the Supreme Court did not consider the precise attack which he ia leveling against the validity of Section 6 (1), namely, that there is no guideline and np criterion provided in the statute to distinguish between persons from whom such return shall be called. The Dower thus conferred on the Administrator, he stressed, is naked arbitrary and unbridled. Let us recall the observations of their Lordships in Badri Prasad's case. AIR 1971 SC 1170 :--

'Mr. Daphtary. learned counsel appearing in support of Writ Petitions 24 and 287 of 1970 limited his challenge mainly to Sections 6, 8 and 16 of the Act and attempted to show that compliance with all the conditions in form GS III prescribed under Rule 4 of the Act was almost an impossibility. The first question to be considered is, whether there is any thing in the Act or the rules regarding the filling up of the form GS III which constituted an unreasonable restriction on the part of a Pawn-broker to hold, acquire or dispose of property or carrying on his business of monev lending unreasonable within the meaning of Article 19(1)(f) and (g) of the Constitution not saved by Sub-clauses (5) and (6) thereof. In our view no exception can be taken to the provisions of the Act to which our attention was drawn by learned counsel for the purpose on this score. If smuggling of gold into the country is to be checked by the prevention of the conversion of smuggled gold into gold articles or ornaments there is no unreasonableness in the State calling upon all pawn brokers and persons who take pledges or hypothecation of ornaments to furnish declarations so that the Administrator and the Gold Control Officer may keep an eye on the activities of such persons and if necessary at any point of time, ask for a . return in terms of Section 6 and satisfy himself about the legality of his acts by inspecting his accounts. It would not be difficult for anvbodv carrying on or wanting to carry on business lawfully to insist on the pawner producing the copy of the declaration in his pos-session given to him after authentication by the Gold Control Officer in terms of Sub-section (8) of Section 16 in order to satisfy himself that there is no contravention of the Act.'

5. There is considerable force in the contention of Mr. Was that if Section 6 has been held to be valid on the touchstone of Article 19 and declared by the Supreme Court to bp valid now it is not open to this Court to re-examine the validity of the question. This is the: view that their Lordshins of the Supreme Court themselves took in Ballabhdas's case AIR 1970 SC 1002. The Allahabad High Court in Ram Manohar Lohia's case AIR 1968 SC 100 has cited numerous decisions in its iudgment showing that it did not matter if some facets of the attack were not even examined by the Supreme Court. We see no reason or justification for taking a different view. Once the validity of Section 6 which was challenged and upheld by the Supreme Court it is not open to us to re-examine the matter from another angle.

6. However we would like to add a few reasons for upholding the validity of Section 6 (1) of the Act precisely in the light of the arguments urged before us. The power under Section 6 is conferred on the Administrator the highest iunctionary created Under the Act in question to call for the return of the receipt, delivery or sale of hypothecated. pledged or mortgaged or charged articles made of gold. But he can do so only if the public interest so reauires him to do. Thp learned Single Judge was persuaded to hold Section 6 (1) ultra vires because in Harakchand's case AIR 1970 SC 1453 their Lordships of the Supreme Court had declared Section 27 (6) (g) to be ultra vires because the words employed therein were that a licence could be refused to an applicant on the ground of 'public interest.' Their Lordships held that there being no guideline provided or objective standards afforded this provision was ultra vires. The expression 'public interest' is a well known term in the field of law and has been employed in a number of statutes. It derives its colour from the obiects of the statute wherein it is employed and in the context where it occurs. The preamble of a statute can be pressed into service to ascertain the obiects of a statute. Laws are enacted to attain certain ends. In the case before us while recognising the undisputed love for gold in India both as an article of adornment and investment and after taking into account our meagre production thereof and with the knowledge of a widespread smuggling from varying channels corrupting the economy of the country and thereby denuding our precious foreign exchange, the Gold Control Act was brought on the statute book. The malleability of the yellow metal helps in changing its shape fast. Its accepted value facilitates easv change of hands. In order therefore, to ascertain who holds gold and how much at a given point of time Section 16 reauires certain declarations to be made to the authority created under the Act. Section 10 provides a restriction that loans shall not be obtained on hypothecation of primary gold or undeclared gold, A machinery has been provided to make an assessment as far as possible at a given point of time of the existence of gold so that additions thereto by the process of smuggling may be capable of being detected and penalised. What Section 6 (1) seeks to do is to ascertain by way of information from persons engaged in the trade of keeping gold or gold ornaments hypothecated with them for advancing loans. This is collecting data in their dealings in gold. The criterion is public interest. This expression as we have already noticed is capable of a definite meaning when used in this context, Public interest is not the curiosity of the Administrator as an individual but his anxietv to ascertain the extent of transactions by way of hypothecation mortgage, charge, etc. from people advancing loans on the security of gold or gold ornaments. Public interest in this context would be regulated by a desire on the part of the Administrator to check up inter alia the correctness of the returns submitted under Section 16 or Section 10 of the Act. This is indeed a perfectly legitimate guideline which is implied in the very language of the provisions of the Act and we are unable to characterise it as a naked power. We are. therefore unable to agree with the learned Single Judge that Section 6 (1) suffers from the vice of discrimination under Article 14 of the Constitution because it provides no guideline and we set aside this judgment and accept these appeals.

7. One more argument might be noticed before we part with the case. Mr. Gupta savs that in 147 writ petitions the judgments of which have not been appealed against, the law was declared by, the Single Judge that Section 6 (1) is void. On the principle of res judicata this argument fails on the ground because parties are different. So far as the declaration of law is concerned the law declared by a Division Bench will prevail Over the one declared by a Single Judge.

8. The result is that these appeals succeed and the iudgment of the learned Single Judge is set aside. There will be no order as to costs.


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