Skip to content


Agma Nachiar (Died) and ors. Vs. Union of India (Uoi) - Court Judgment

LegalCrystal Citation
SubjectExcise;Constitution
CourtChennai High Court
Decided On
Case NumberWrit Petition Nos. 5146 of 1979 and 863 of 1980
Judge
Reported in1987(13)LC295(Madras); 1986(26)ELT925(Mad)
ActsGold (Control) Act, 1968 - Sections 2, 3(1), 8, 8(1), 8(6), 12, 16, 16(1), 16(3), 16(5), 16(11), 71 and 71(1)
AppellantAgma Nachiar (Died) and ors.
RespondentUnion of India (Uoi)
Appellant AdvocateM.R. Narayanaswami, Adv.
Respondent AdvocateT. Somasundaram, Addl. Central Govt. Standing Counsel
DispositionPetition dismissed
Cases ReferredVipin Maneklal v. Sushil Kumar
Excerpt:
gold control - primary gold--possession of declared primary gold after commencement of act is illegal--gold (control) act, 1968 : sections 8(1)(i), 12, 16(11), 71(1). - - for all these reasons, the writ petitions fail and the same are dismissed with costs......premises of both the petitioners and the bars of gold were seized and proceedings under the gold (control) act, 45 of 1968, hereinafter referred to as the act, were initiated. there were issuances of show-cause notices and replies. the first authority, namely, the third respondent passed orders on 26-7-1976, holding that the possession of the bars of gold would come within the mischief of section 8(1) of the act and ordered confiscation of the bars of gold under section 71(1) of the act. the third respondent exonerated the petitioners from the ambit of section 16(ii) of the act. there were appeals and the appellate authority, the second respondent herein, by a common order dated 14-10-1977, confirmed the order of the original authority. there were further revisions before the.....
Judgment:

Nainar Sundaram, J.

1. There are two writ petitions. The first petitioner in W.P. No. 5146 of 1979 is the daughter of one Md.Yousuf Maracair and the petitioner in W.P. No. 863 of 1980 is the son of the very same Md. Yusuff Maracair. According to them, on 4-2-1959 the petitioner in W.P. No. 863 of 1980 was gifted with thirty bars of gold and the petitioner in W.P.No. 51 46 of 1979 was gifted with ten bars of gold by their father and this is evidenced by a document of even date. Md. Yusuff Maracair died on 2-6-1965. On 17-8-1974 there was a raid by the Central Excise Officers attached to Thiruvarur Range, of the residential premises of both the petitioners and the bars of gold were seized and proceedings under the Gold (Control) Act, 45 of 1968, hereinafter referred to as the Act, were initiated. There were issuances of show-cause notices and replies. The first authority, namely, the third respondent passed orders on 26-7-1976, holding that the possession of the bars of gold would come within the mischief of Section 8(1) of the Act and ordered confiscation of the bars of gold under Section 71(1) of the Act. The third respondent exonerated the petitioners from the ambit of Section 16(ii) of the Act. There were appeals and the appellate authority, the second respondent herein, by a common order dated 14-10-1977, confirmed the order of the original authority. There were further revisions before the first respondent and they were not successful and the revisions were dismissed on 12-7-1979 by the first respondent. The orders of the respondents are being impugned in these two writ petitions.

2. Mr. M.R. Narayanaswami, learned counsel appearing for the petitioners, took me through the various provisions of the Act and also referred to the preamble to state that no prohibition against holding or possessing gold as such could be spelt out from the scheme of the Act and its provisions; and the Act was intended only to provide for the control of the production, manufacture, supply, distribution, use and possession of, and business in, gold, ornaments and articles of gold and the petitioners having had been exonerated of any culpability under Section 16 (ii) of the Act, which generally deals with gold, cannot be lugged in under Section 8(1) of the Act. Certain provisions of the Act, including those dealing with definitions will have to be adverted to for the purpose of deciding the question raised by the learned counsel for the petitioners. Section 2(b) defines 'article' as follows :

''article' means any thing (other than ornament), in a finished form, made of, manufactured from or containing, gold, and-includes ~

(i) any gold coin,

(ii) broken pieces of an article, but does not include primary gold;'

Section 2(j) defines 'gold' as. follows :

''gold' means gold, including its alloy (whether virgin, melted or re-melted, wrought or unwrought), in any shape or form, a purity of not less than nine carats and includes primary gold, articles and ornament'.

'Ornament' has been defined under Section 2(p) as follows :

''Ornament' means a thing, in a finished form, meant for personal adornment or for the adornment of any idol, deity or any other object of religious worship, made of, if manufactured from, gold, whether or not set with stones or gems (real or artificial), or with pearls (real, cultured or imitation) or with all or any of them, and includes parts, pendants or broken pieces of ornament.'

'Explanation - For the purposes of this Act, nothing. made of gold, which resembles an ornament, shall be deemed to be an ornament unless the thing (having regard to its purity, size, weight, description or workmanship) is such as is commonly used as ornament in any State or Union territory;'

Section 2(r) defines 'primary gold' as follows :

''primary gold' means gold in any unfinished or semi-finished form and includes ingots, bars, blocks, slabs, billets, shots, pellets, rods, sheets, foils and wires;'

3. Coming to Section 8 which is found in' Chapter III under the caption 'Restrictions relating to the manufacture, acquisition, possession, sale, transfer or delivery of gold, we can confine our concentration mainly on Section 8(1) which deals with primary gold. There is no dispute before me that the bars of gold seized from the petitioners are primary gold. Section 8(1) stands extracted as follows :

'Save as otherwise provided in this Act, no person shall -

(i) own or have in his possession, custody or control, or

(ii). acquire or agree to acquire the ownership, possession, custody or control of, or

(iii) buy, accept or otherwise receive, any primary gold.'

Chapter IV deals with possession of gold by public religious institutions and Section 12 speaks about non-application of the ban on possession of primary gold which forms part of a structure, etc., of public religious institutions and the said section reads as follows ;

'Nothing in clause (i) of sub-section (i) of Section 8 shall apply to any primary gold which forms part of any structure of any other construction, or appendage within the precincts of a temple, church, mosque, gurdwara or any other place of public religious worship if such primary gold has been included in a declaration.'

In Chapter V relating to declarations, we find only one provision enacted therein and that is Section 16. Section 16(1) (provisos omitted), reads as follows :

'Save as otherwise provided in this Chapter, every person who owns, or is in possession, custody or control of, any article or ornament at the commencement of this Act, or acquires the ownership, possession, custody or control of any article or ornament thereafter, shall make, within thirty days from such commencement or from such acquisition, as the case may be, or within Such further period as the Administrator may, oh sufficient cause being shown, allow, a declaration in the prescribed form as to the quantity, description and other prescribed particulars of any article, or ornament, or both, owned, possessed, held or controlled by him.'

Section 16 (3) may have relevance and it reads as follows :

'If any person who did not own, possess, hold or control, before the commencement of this Act, any quantity of gold in excess of the quantities specified in Sub-section (5),. acquires, after such commencement, the ownership (whether by succession, intestate or testamentary, or otherwise), possession, custody or control of any gold and if, as a result of such acquisition, the total quantity of gold owned, possessed, held or controlled by such person exceeds the quantities specified in Sub-section (5), such person-shall, within thirty days from the date of Such acquisition or within such further period as the Administrator may, on sufficient cause being shown, allow, make a declaration in the prescribed form stating the total quantity, description and other prescribed particulars of -

(a) the gold owned, possessed, held or controlled by him immediately after such acquisition, and

(b) the person from whom the ownership, possession, custody or control of such gold was acquired.'

To appreciate the place of Section 16(3), Section 16 (5) also needs extraction as follows : 'No declaration referred to in Sub-section (1) of Sub-section (3) shall be required to be made, -

(a) in relation to articles, unless the total weight of articles owned, possessed, held or controlled by. -

(i) a minor, who is not a member of a family, exceeds twenty grammes.

(ii) an individual (other than a minor), who is not a member of a family, exceeds fifty grammes.

(iii) a family, exceeds fifty grammes,

(iv) any person referred to in clauses (b) to,(f) and (h) to (m) of Sub-section (2), exceeds fifty grammes;

(b) in relation to any ornaments, or both articles and ornaments, where both articles and ornaments are owned, possessed, held or controlled, unless the total weight of such ornaments or both articles and ornaments, as the case may be, owned, possessed, held or controlled by.

(i) an individual who is not a member of a family, exceeds two Thousand grammes,

(ii) a family, exceeds four thousand grammes;

(c) in relation to any ornaments, or both articles and ornaments, owned, possessed, held or controlled by any person referred to in clauses (b) to (f) and (h) to (m) of Sub-section (2), unless the total weight of such ornaments, or both articles 'and ornaments, exceeds two thousand grammes;;'

Section 16 (ii) is also relevant and it runs as follows :

'No person shall own or have in his possession, custody or control any quantity of gold which is. required to be included in a declaration unless such gold has been included in a declaration or further declaration, as the case may be :

Provided that nothing in this sub-section shall apply until the expiry of the period within which a person is entitled to make a declaration or further declaration.'

Confiscation is contemplated under Section 71 and the action taken in the present cases is under Section 71 (1), the language of which is as follows

'Any gold in respect of which any provision of this Act or any rule or order made thereunder has been, or is being or is attempted to be, 'contravened,, shall be liable to confiscation.'

4. Section 8(1)(i) adumbrates an embargo with regard to owning or having possession, custody or control of any primary gold, save as otherwise provided in the Act. This provision will be operative after the coming into force of the Act with effect from 1-9-1968. There is no challenge in these writ petitions of the vires of the provisions of the Act. The definition of 'gold in Section 2(j) takes in 'primary gold', 'article' and 'ornament'. We are not concerned with article or ornament and we are concerned only with primary gold, in the present cases. Section 16 speaks about declarations in respect of article of ornament and it does not speak about declarations in respect of primary gold. It is true that in more than one place, the expression 'gold' has been used in Section 16. In Sub-section (3) of Section 16, the expression 'gold' occurs. But, Sub-section (3) refers to Sub-section (5) which lays down the exempted, limit for articles and ornaments and Sub-section (3) calls for declarations in respect of acquisitions after the commencement of the Act, of ownership, possession, custody or control of any gold in excess of the quantities specified in Sub-section (5). Hence, the 'gold' referred to in Sub-section (3) necessarily could have reference to articles and ornaments dealt with under Sub-section (5). Section 16 by itself does not provide for declarations to be made in respect of primary gold. The only provision which lifts the ban on Ownership, possession, custody or control of primary gold adumbrated in Section 8(1)(i) is found in Section 12, extracted above, and it speaks about inclusion of such primary gold as set out therein in a declaration. The other place where the expression 'gold' occurs in Section 16 is in Sub-section (ii). But that again speaks about gold which is required to be included in a declaration. In Section 16 itself primary gold is not required to be declared. Section 16, as already stated, speaks about declarations in respect of ornaments and articles which also fall within the definition of 'gold' in Section 2(j). It is only in Section 12 declaration in respect of primary gold of the categories mentioned therein is contemplated. Hence,. If at all Section 16 (ii) could have reference to primary gold, it could be only with reference to the primary gold set out in Section 12. If no declaration which is required under the provisions of the Act in respect of ownership, possession, custody or control of gold, is obtained, the embargo contemplated therein will be operative. That is how we have to understand Section 16(11). In respect of primary gold other than the one coming under Section 12, ho declaration is required and, of course, it is of no avail at all. In such a case, the ownership, possession, custody or control of primary gold will come within the mischief of Section 8(1)(i) and there is no escape from it. Merely because the petitioners have been exonerated of the charge under Section 16(11), it will not make them escape the mischief of Section 8(1)(i) which squarely applies to the facts of the present cases. 'Gold' in Section 16(ii) has reference only to gold which is required to be included in a declaration or further declaration as the case may be. Though 'gold' may take in primary gold, primary gold as such except under Section 12, cannot have the benefit of a declaration. In the above view, it is futile to bank upon the fact that the petitioners have been exonerated of the charge under Section 16(ii) and then advance a theory that Section 8(1) (i) cannot be invoked. The ban with regard to primary gold is found in Section 8(1)0). The exception to the ban is found in Section 12 and that is permissible by a declaration. It is not the case of the petitioners that the bars of gold held by them will fall under Section 12. Hence, there is no escape for the petitioners from Section 8(1)(i). The extractions of the various provisions, as done above, though may appear to be elaborate, have been done only to understand the scheme of the said provisions. Learned counsel traced the implications of the previous rules. In my view, there is ho need to advert to them, because on and from the date of commencement of the Act, the provisions therein will govern, and no submissions were made before me with regard to the concerned provisions being prospective or retrospective. Mr. T. Somasundaram, learned Additional Central Government Standing Counsel, placed reliance on the pronuncement of a Bench of the High Court of Delhi in Vipin Maneklal v. Sushil Kumar : AIR1983Delhi307 to state that Section 8(1)(i) does not contemplate retention of primary gold by the making of any declaration and Section 16 (ii) cannot be so construed as to permit retention of primary gold, merely on a declaration being made. The Bench of the High Court of Delhi in that case was meeting the contention that under the Act there is ho absolute ban on the possession of primary gold, because Section 8(1) of the Act says that 'save as otherwise provided in this Act'. In this connection, reference was made before the Bench to Section 8(6) and 16(11) of the Act. The Bench repelled the argument that under Section 8(6), the. Administrator has got a power to permit retention of the possession of primary gold. Section 8 (6) reads as follows:

'Notwithstanding anything contained in this section, the Administrator may, if he is of opinion that the special circumstances of any case or class of cases so require, authorise any person or class of persons to buy or otherwise receive, or sell, deliver, transfer or otherwise dispose of, any primary gold or article.'

We are not, in the present cases, concerned with Section 8(6) at all. The petitioners do not claim that they have obtained any such exemption. Hence, there is no need to go near the reasoning expressed by the Bench of the High Court of Delhi in this behalf. But, there is a discussion of the implications of Section 16(11) in the judgment and it indicates that Section 8(1) does not contemplate retention of any primary gold by the making of any declaration and Section 16(11) could not be so construed as to permit retention of primary gold merely on a declaration being made. The Bench opined that Section 16(11), so, far as primary gold is concerned, can have reference only to Section 12 -and to no other section. I have also expressed so by independent reasonings of mine as above, and they enable me to repel the submission; made by the learned counsel for the petitioners that if they escape the scathe of Section 16(11), they cannot come within the mischief of Section 8(1)(i). Section 16(11) operates in a different sphere and though it speaks about gold in general terms, it is specifically qualified when it states 'which is required to be included in a declaration'. The declaration aspect is found in Section 16 itself apart from Section 12. Hence, the exoneration of the petitioners from Section 16(11) cannot lead to their exoneration from Section 8(1)(i) of the Act.

5. Mr. M.R. Narayanaswami, learned counsel for, the petitioners, would advance a submission that the confiscation made in contrary to the Constitutional provisions relating to acquisition and deprivation of property. The cases on hand, of course, have arisen prior to the deletion of the provisions in the Constitution of the Articles relating to right of property and deprivation thereof by the Forty fourth Amendment with effect from 20-6-1979 and the petitioners could not be deprived of the arguments which were available to them prior to the coming into force of the Forty Fourth Amendment. But the argument itself lacks substance. The ownership, possession, custody or control of primary gold after the commencement of the Act, save as otherwise provided in the Act itself, will make such possession illegal and hence -it comes within the action of confiscation contemplated under Section 71(1) of the Act. Primary, Gold in such a contingency ceases to have the qualities and adjuncts of 'property' and it becomes a contraband. Confiscation of contraband will not come within the mischief of the erstwhile constitutional provisions relating to right to property. I find that a similar view has also been expressed by the Bench of the High Court of Delhi in the decision referred to above. For all these reasons, the writ petitions fail and the same are dismissed with costs. Counsel's fee Rs. 1000/-.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //