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Judgment
Gokulakrishnan, J.—This revision is against the judgment rendered in C.A. No. 266 of 1976 on the file of the Principal Sessions Judge,
Madras Division, dated 19th November, 1975.
The prosecution case is that P.W. 1 who is the Inspector of Central Excise, Madras, checked the accounts and inspected the gold items in the
shop of the petitioner herein on 26th June, 1973 at about 5-30 p.m. that the petitioner was found in possession of primary gold weighing 2.200
grams. (M.O. 1 series), 3 gold soverign coins weighing 20 grams, (M.O.2 series) and brand new gold ornaments such as 52 gold nose screws, 10
studs, thali and thali gundus made of gold 8 in number (M.O. 3 series) all weighing 308.700 grams and that all the above said items are in excess of
the account shown by him. They were seized under the mahazar (Ex. P-1) duly attested by independent witnesses. The Central Excise authorities
took action under the Gold Control Act and passed an order (Ex. P-5) confiscating the gold items and ornaments stated above and imposed a
penalty of Rs. 250/-. After taking action under the Gold Control Act, the authorities also laid a complaint for violation of certain sections of the
Gold Control Act by the petitioner herein after granting an authorisation as per Ex. P-6. The alleged offences committed by the petitioner are under
Ss.6(2) 8(1) and 27(1) of the Gold Control Act, 1968, punishable under S.85(ii) (viii) and (ix) of the Gold Control Act.
When questioned by the Trial Court, the petitioner stated that the gold ornaments seized by P.W.1 were his family properties and that some of
them were pledged with him by one Raghavachari and Sadasiva Achari and that he showed the vouchers to the officers. The petitioner also
examined D.Ws. 1 and 2 in defence.
The trial Court held that D.W.1 had no explanation for non-production of the pawn tickets in respect of the jewels said to have been pledged by
him. It accepted the evidence adduced on the side of the prosecution and held that the petitioner had contravened the provisions of Ss. 8(1), 27(1)
and 6(2) of the Act punishable under Ss.85(ii), (viii) and (ix) of the Gold Control Act. Accordingly, the Magistrate convicted the petitioner under
the aforesaid sections observing that he did not impose separate sentence under each head. Finally, the trial Court sentenced the petitioner to
imprisonment till the rising of the Court and pay a fine of Rs. 1,000/- in default to rigorous imprisonment for three months. The learned Principal
Sessions Judge, Madras Division,, who heard the appeal preferred by the petitioner herein, confirmed the conviction and the sentence of the trial
Court. Aggrieved by the conviction and sentence, the petitioner has preferred the above criminal revision petition.
Mr. S. Prathapchand Chopda, learned counsel appearing for the petitioner took me through the judgments of the Courts below and also the
evidence on record. He (sic) that a declaration under S.16(1) of the Gold Control Act ought to have been taken before the petitioner was
prosecuted under S.6(2) of the Gold Control Act. For this proposition, learned counsel for the petitioner cited the decision reported in Badri
Prasad and Others, etc. Vs. Collector of Central Excise and Others, etc., . The Supreme Court, dealing with section 16(1) of the Gold Control
Act in relation to Ss. 6(1) and 6(2) of the said Act, has observed:-
On the first point learned counsel drew our attention to S.6(1) of the Act which has been already referred to and contended that inasmuch as S.
16(1) was a general provision while S.6(1) was specially directed towards pawn brokers, the former provision i.e.. S.16(1) was inapplicable to
pawn brokers. Our attention was also drawn to S. 28 of the Act under which a licensed dealer could unless authorised by the Administrator so to
do carry on business as a money lender or banker on the security of any article or ornament or both in the same premises in which he carried on
business as a dealer. In our view S.l6 is not excluded in the case of money lenders or pawn brokers Any person who comes under the purview of
S.16(1) has to make a declaration unless there is any provision to the contrary in that Chapter. The only provision to the contrary is contained in
Sub-sec. (5) which permits of exemptions in respect of persons holding gold articles or ornaments upto a specified limit. The provision in S.6(1)
empowering the Administrator to call upon any pawn broker to furnish a return does not do away with hit obligation to file a declaration under
S.16(1). S. 6(1) empowers the Administrator to take action in special cases where; he thinks it necessary to call upon a money lender to make a
return and under S.6(2) he is empowered to authorise any Gold Control Officer to examine the accounts of such Pawn broker. This cannot
obviate the requirements of S.16(1). Counsel argued that there would be duplication of declaration in respect of pawn brokers if both are
complied with. No such duplication or difficulty will arise. Every pawn broker will have to file his declaration under S.16(1) and he would be
obliged to make a return only when he is called upon to do so in terms of S. 6. It was argued further that although under S.16(2) the Legislature
had expressly Provided for returns being submitted with regard to various kinds of persons, pawn brokers were not included therein and so long as
no order prescribing for declarations being filed by them under Clause (m) was made they were under no obligation to file declarations. There is no
substance in the contention because Sub-sec. (2) is directed only towards removal of doubts which might be felt in the cases of persons specified
in Clauses (a) to (l). In the case of pawn brokers no such difficulty or doubt arises. If a number of pawn brokers carry on business in partnership
the declaration can be made by any partner of the firm in terms of Clause (f) and if a company, carries on business of pawn broking any person in
charge of the management of the affairs of the company can make the declaration.
From the above said observations of the Supreme Court, it is clear that the case cited was in respect of exemptions claimed by pawn brokers for
giving a declaration under S. 16(1) of the Act. In dealing with such a case, the Supreme Court has made it specific that every one including pawn
brokers is expected to make a declaration under S. 16(1) of the Act. The observation of the Supreme Court further makes it clear that the powers
conferred upon the Administrator concerned under Ss. 6(1) and 6(2) of the Gold Control Act is independent to that of S. 16(1) and as such there
is no necessity to infer that a declaration under S. 16(1) must precede before the Administrator takes action under Ss. 6(1) and 6(2). On a reading
of the Act as a whole and also specifically Ss.6 (1) and 6(2) of the Gold Control Act. I am of the view that Ss. 6(1) and 6(2) of the Act are
independent and the Administrator has ample power to invoke the said section for the purpose of calling for returns as to the receipt or sale of
hypothecated gold. Hence the argument of the learned counsel appearing for the petitioner as stated above has no force.
Learned counsel for the petitioner also argued that before taking action under S.6(2) the Administrator ought to have called for returns as
provided under S. 6(1). The word ""such person"" according to the earned counsel occurring in S. 6(2) refers to persons mentioned in S. 6(1) of the
Act and as such the action taken under S 6(2) before adverting to S. 6(1) is not valid A reading of S. 6(1) and 6(2) of the Act in my view, is
independent and ""such person"" occurring in S. 6(2) itself and it will not relate to the person mentioned in S. 6(1). S 6(2) is a compact section which
enables the Administrator to authorise any Gold Control Officer to examine the accounts relating to the receipt, delivery or sale of any gold, of any
person who advances any money on the hypothecation, 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 this Act. It has been found by the two Courts below that the petitioner had in excess than what he has stated in his accounts, 308.700
grams of gold ornaments which are M.O. 3 series and 20 grams of two full sovereign and one half sovereign which is M.O. 2 series in this case
and that is clear violation of S. 6(2) of the Gold Control Act. Hence both the Courts below have correctly found that the petitioner has violated
S.6(2) of the Act and is liable to be punished under S. 85(viii) of the said Act.
Further, P.W. 1 has also found 2.200 grams of primary gold in the possession of the petitioner. As per S. 8(1)(i) of the Gold Control Act, it is
stated ""Save as otherwise provided in this Act, no person shall own or have in his possession, custody or control any primary gold"". Hence both
the Courts below as a matter of fact found that the petitioner had in his custody 2.200 grams of primary gold and thus he has violated S. 8(1)(i) of
the Act. I am in complete agreement with the said finding arrived at by both the Courts below.
The Courts below have also found that the petitioner has violated S. 27(1) of the Gold Control Act. S. 27(1) states-
Save as otherwise provided in this Act, no person shall commence, or carry on business"" ""as a dealer unless he holds a valid licence issued in this
behalf by the Administrator"".
It has been stated by the prosecution that the petitioner is not having a valid licence issued by the Administrator to deal in these gold articles. Mr. S
Prathapchand Chopda, the learned counsel for the petitioner brought to my notice the definition of ""dealer"" contained in the Gold Control Act, S.
2(h) of the Act states.
dealer"" means any person who carries on directly or otherwise, the business or making, manufacturing, Preparing, repairing, polishing, buying,
selling, supplying, distributing, melting, processing or converting, gold whether for cash or for deferred payment or for commission, remuneration or
other valuable consideration, and includes........
According to the learned counsel for the petitioner, the petitioner is a mere pawn broker and he has a licence for running the pawn broker''s shop
He will not come under the definition of ""dealer"" contained in S. 2(h) of the Act and as such, there is no necessity for him to obtain a licence from
the Administrator as contemplated in S.27(1) of the Act. For this proposition, learned counsel for the petitioner also cited a decision rendered by a
single Judge of our High Court in W.P. No. 4464 of 1974 wherein this Court had an occasion to deal with the fact as to whether a pawn broker
will come under the definition of ''dealer'' contained in S. 2(h) of the Act. After extracting the definition of ''dealer'' contained in S.2(h) of the Act,
Ramanujam, J., has observed-
In this case, admittedly, there is no material to show that the petitioner has been dealing in gold in any of the modes referred to in the definition of
dealer"" apart from carrying on the pawn brokers business. As already stated, the possession of unaccounted gold jewels by a pawn broker may
amount to an offence under the Act in view of S. 6(2) but that does not automatically follow that such a pawn broker who was in possession of
gold jewels which he could not account, is a dealer in gold or gold jewels. In this case, straightway an inference has been drawn based on mere
possession of unaccounted jewels by a pawn broker. Such an inference is not possible on the facts and circumstances of this case as there is no
other, material indicating that the petitioner has been dealing in gold or gold ornaments. S. 27(1) of the Act says that no person shall commence, or
carry on, business as a dealer unless he holds a valid licence issued in that behalf by the Administrator. Unless the petitioner has acted as a dealer,
it is not required to take out any licence as required under S. 27 of the Act. Therefore, it is not possible to say in this case that the infringement of
S. 27 of the Act has been made out.
Mr. E.S. Govindan, learned counsel appearing on behalf of the Central Government Prosecutor submitted that the possession of M.O. 3 series
which consisted of 52 gold nose screws; 10 studs, thali and thali gundus made of gold 8 in number will definitely indicate that the petitioner was
dealing in there gold ornaments. There is absolutely no. evidence that he was dealing in gold ornaments except stating that an inference should be
drawn from the available materials on record. It is for the prosecution to prove that the petitioner was dealing in these ornaments. There is
absolutely no evidence on record in this case except stating that these ornaments were found in the shop of the petitioner. I do not think, on the
facts and circumstances of the present case, such an inference can be drawn in order to punish the petitioner under S. 27(1) of the Gold Control
Act. Taking into consideration the judgment of our High Court rendered by Ramanujam, J., and also from the facts and circumstances of the case,
I do not think the prosecution has made out an offence under S. 27(1) of the Act against the petitioner herein.
In these circumstances, I confirm the conviction of the petitioner under Ss. 6(2) and 8(1) of the Gold Control Act and set aside the conviction of
the petitioner under S. 27(1) of the Gold Control Act.
The petitioner was sentenced for all these offences to imprisonment till the rising of the Court and a fine of Rs. 1,000/- in default, to rigorous
imprisonment for three months. Inasmuch as the petitioner is absolved from the liability under S. 27(1) of the Gold Control Act, I am of the view
that the ends of justice will be served if the imprisonment till the rising of the Court is confirmed and the sentence of fine is reduced to Rs. 700/-. It
is stated that the fine amount of Rs. 1,000/- has been already paid by the petitioner herein. The excess amount of Rs. 300/- will be refunded to the
petitioner. With this modification in sentence, this revision is partly allowed, and partly dismissed.