TMI Blog1981 (11) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts themselves need some considerable exposition. 3. Some thirty years ago there lived a gentleman by the name of Keshrimal Porwal at Kamptee. He had two flourishing businesses : a bidi factory at Kamptee, and a gold and silver shop in Mandsaur. He had residences at both those places. On 7th October, 1952, he died of tuberculosis at the age of 65. He left behind a widow named Ratanbai, a daughter named Shantabai, and a son named Nemkumar. Both the daughter and son were married, and each had a son whilst Keshrimal was alive. The son of Shantabai seems to have suffered from some congenital abnormality and was almost an invalid from birth. It is said that he is also insane. Shantabai had no more children. However, Nemkumar had four more sons after Keshrimal died, making five in all. 4. After Keshrimal s death, his son Nemkumar carried on the bidi factory at Kamptee, but wound up the gold and silver business at Mandsaur. In consequence, the permanent abode of the family was at Kamptee, though the house at Mandsaur was retained. 5. Nearly sixteen years after the death of Keshrimal, the family house at Kamptee was searched on 9th July, 1968 by the officer of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, the allegation of having owned it in violation of the Ordinance was made only against Ratanbai. That indicates that the Collector was treating Ratanbai as the owner of the gold, presumably because of the statement she had made on 10th July,1968. 10. On 3rd September, 1968, both Ratanbai and Nemkumar wrote to the Collector praying that time for answering the notice be extended by a fortnight. Ratanbai said he was bedridden due to a severe attack of high blood pressure, diabeties and heart trouble; and had been adviced to take complete rest. Nemkumar said he was unwell and felt giddy, and was having a nervous breakdown . On 19th September, 1968, further requests were made to extend time by another fortnight. Ratanbai said she was still not quite well . Nemkumar said he had not been able to prepare his reply due to some urgent work connected with income tax . 11. But, in the meanwhile, on 16th September, 1968, Ratanbai addressed a letter to the Superintendent, Central Excise, Nagpur. She said that in her statement recorded on 10th July, 1968, a mistake had crept in, probably due to the fact that she and the Excise Officers did not speak the same language. She asserted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n finished. Nemkumar would give her no substantial sum, and hence she was unable to make gifts to charities or to her daughter and her daughter s son as she desired. In consequence, the relations between Nemkumar and Ratanbai deteriorated further. 15. Sometime in June 1968, the family decided to go on pilgrimage to Keshariyaji. Enroute, they stopped at Mandsaur. There, a quarrel occurred between Ratanbai and Nemkumar, and she decided to stay back in Mandsaur whilst Nemkumar and his family proceeded to the place of pilgrimage. Ratanbai stayed in Mandsaur for the next five or six days. 16. Learning that Ratanbai was in Mandsaur, the dismissed munim, Motilal, came to meet her. In the court of conversation she narrated her woes, and told him how miserably her son Nemkumar was treating her. At one point she expressed her grave anxiety about future provision for her daughter s invalid son. It was then that Motilal inquired what had become of the gold and silver which Keshrimal had left for his invalid grandson in his will. Ratanbai said she knew nothing about any will. Motilal then told her about it, and said Keshrimal had kept in the safe in the house. The safe, embedded in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n grandsons. But except for this gold and silver, he says, my son will be the owner of all the movable and immovable properties . He adds : I have already made provisions for my wife by giving her money. These are the salient features of the will. The order of the Collector 20. Evidence was recorded in the proceedings before the Collector. Ratanbai and Nemkumar produced a number of witnesses including Motilal, Seth Kajodimal and Mr. A.A. Patil. Some of the officers of the department who had participated in the seizure of the gold were allowed to be cross-examined. The Collector made his order on 15th May 1970. He ordered the gold to be confiscated and imposed a penalty of ₹ 38,000.00 on Ratanbai. 21. The findings of the Collector are important. He held that the will was proved to be genuine. This is what he said: The condition of the will, the statements of independent and respectable witnesses like Shri Patil and Shri Kajodimal and also that of dismissed Motilal cannot be disbelieved. It has been corroborated by the report of the Superintendent (Legal) that Shri Patil was the Collector, Mandsaur at the relevant period. Shri Patil had admitted the signature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in possession of the gold as opposed to Nemkumar. The Order of the Administrator 24. Against the order of the Collector, Ratanbai appealed to the Administrator. Whilst the appeal was pending, she was asked by the letter dated 30th July, 1971 - ..... .whether you intend to apply to the adjudicating authority in accordance with section 4 of the Gold (Control) Amendment Act, 1971 for reopening of your case for fresh adjudication according to the amended provisions of Sections 71 and 73 of the Gold (Control) Act, 1968 or whether you would like your appeal to be disposed of in conformity with the above amended sections. 25. To this she replied by a letter dated 12th August 1971, that she did not intend to apply to the adjudicating authority for reopening the case for fresh adjudication, and wanted her appeal to be disposed of in conformity with the said amended sections. However, she submitted that in deciding the appeal it should be taken into consideration that the gold did not belong to her but to her grandsons, and it was sought to be confiscated, not for any fault of theirs, but the alleged act or omission of another without their knowledge or connivance. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old and, thus, the principles of natural justice had been violated. For these reasons he prayed that the order of the Administrator be set aside. 30. By a letter dated 31st July, 1971, the Central Government summarily rejected Sushil Kumar s application. He was told that under section 82(1) of the Gold Control Act, the revision application has to be against the order from which no appeal lies , and since he had not come up in appeal he was ineligible to take recourse to revision remedy . This reasoning is incomprehensible. There is no doubt that the order made by the Administrator was not appealable, so the condition in section 82(1) was fufilled. That Sushil Kumar had not, or would not, file an appeal against the order of the Collector had nothing to do with the point. Although in a subsequent letter Sushil Kumar made manifest this fallacy, the Central Government answered that the decision already conveyed to him was final . So, this present petition under Article 226 of the Constitution has been filed by him along with his four brothers and the son of Shantabai, i.e. all the grandsons of Keshrimal. 31. The application for revision filed by Ratanbai was dismissed by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stirred up the question of the indentity of the gold for the first time in revision, and decided it in the way in which he did, because he did not wish to face those questions. The Facts 35. What then are the facts as found by the gold control authorities ? They have all found the will to be genuine. The finding is either express or implied. For my part, I entertained substantial doubts. There was practically no cross-examination of the witnesses produced by Ratanbai and Nem kumar before the Collector. Numerous questions which ought to have been asked were never put to them. To get at the truth, I was minded to call Motilal and Mr A.A. Patil for cross-examination. But, after making inquiries, counsel for the petitioners informed me that both those gentlemen were now dead. Therefore, there is no option but to proceed on the footing that the will is genuine. 36. As regards the alleged discovery of the will and the gold in Mandsaur on 30th June, 1968, all the authorities have disbelieved the story. They have held, on the basis of Ratanbai s statement of 10th July, 1968, that she was in possession of the gold for at least 8 or 9 years before it was seized on 9th July, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce is already on record, and the matter has been under litigation for over a decade. I think the only fair course is to proceed on the basis that the gold seized is the same as that mentioned in the will, as did the Collector and the Administrator. 41. So, the facts to which I must now apply the law are: (i) that the will is genuine (ii) that the gold seized is that mentioned in the will and (iii) that Ratanbai had been in possession of the gold at least for 8 or 9 years before it was seized on 9th July, 1968, if not from some earlier point of time. Further, from the fact that the will is genuine, it inevitably follows that Keshrimal s grandsons became the owners of the gold from the moment of his death. I pass on to the law. The Defence of India (Amendment) Rules, 1963 42. It will be remembered that in 1962 there was an outbreak of hostilities with the Chinese on the North-Eastern border. On 26th October, 1962, the President of India issued a Proclamation declaring that a grave emergency exists whereby the security of India is threatened by external aggression . The Defence of India Ordinance 1962 was issued on the same day. It was replaced on 12th December 1962 by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s possession of gold other than ornament . It consisted of eleven unwieldy sub-rules of which the drafting was cumbrous and repetitive, probably because they were done in a hurry. I will summarise their material aspects. But, sub-rule (i) needs to be quoted in full. It said : Every person, not being a dealer or refiner required to apply for a licence, or licensed under this Part, shall within thirty days from the commencement of this Part make a declaration to the Board in the prescribed form as to the quantity, description and other prescribed particulars of gold (other than ornament) owned by him. To remove doubts, sub-rule (2) specified who was to make the declaration in certain cases. With respect to minors, clause (a) of this sub-rule said the declaration had to be made by the guardian . But, if the quantity of gold was less than the limits specified in relation to various classes of persons by sub-rule 7 no declaration was necessary. This was, so to speak, the free limit. 45. The acquisition of gold, other than ornament, was again prohibited by sub-rule (3), except by succession, intestate or testamentary or in accordance with a permit granted by the Board. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 9 and 10 of the Fourth Amendment Rules did not come into force immediately. By rule 1(2), it was left to the Central Government to appoint a date for their enforcement. They were brought into force on 1st March, 1967 by a notification issued on 25th February, 1967. Rule 9 amended rule 126H. It inserted sub-rules (1 A) to (1G) after sub-rule (1) of that rule. The ban on the possession of primary gold was stated in sub-rule (1A) as follows.- No person (other than a dealer or refiner licensed under this Part) shall, after the expiry of a period of six months from the commencement of the Defence of India (Fourth Amendment) Rules 1966, either own or have in his possession, custody or control any primary gold. During the grace period of six months allowed by this sub-rule, all primary gold was required to be disposed of by sale to a refiner or a dealer or by conversion into ornaments. Details of the procedure to be followed for this purpose were set out in sub-rule (1b). The other newly added sub-rules ensured that the primary gold was either converted into ornaments or standard gold bars. The period of six months, reckoned from 1st March 1967, expired on 1st September 1967. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. However, as it happens, the provisions of the Ordinance and the act are verbatim the same (except, that the Act has one section less), so the question loses all importance. For convenience, I will refer to the provisions of the Act, treating it as having come into force on 29th June 1968. It is understood, that where necessary, the equivalent provision of the Ordinance is meant. The ban with regard to primary gold was embodied in section 8(1). It reads 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 received or agree to buy, accept or otherwise receive, any primary gold. Comparing this with sub-rule (1A) of the amended rule 126H of the Defence of India Rules, it can be seen that the ban now was less absolute. The opening words : Save as otherwise provided in this Act had no equivalent in the rule. They indicate that the section has exceptions, the rule envisaged none. To expound his argument, counsel for the petitioners identified the various sections in which the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les and ornaments . The definitions in section 2 do not apply if the context otherwise requires . The side-note of section 16 also indicates that the section is concerned with only articles and ornaments . 51. However, counsel for the petitioners cited Ganpatrai Dhanuka v. A.K. Bandopadhyay, Collector, Customs and Central Excise, Shillong and another, AIR 1973 Gauhati 8, in which it has been held that gold in sub-section (3) includes primary gold because there is no reason why the definition in section 2(j) should not be applied. I am not sure that I agree with that Judgment ; nevertheless, in the present case, I will assume that it is right. 52. The contention of counsel for the petitioner was that since the will and the gold had been discovered in Mandsaur on 30th June 1968, the grandsons of Keshrimal must be deemed to have acquired the ownership of the gold by testamentary succession on that date. Likewise, Ratanbai acquired the actual possession, custody or control of the gold on the same date. Therefore, he said, by filing a declaration with the Gold Controller, Nagpur, on 29th July, 1968, i.e., within 30 days, Ratanbai had complied with sub-section (3) and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law had stood there, nothing more could have been said, and this petition would have to be dismissed. But in Badri Prasad v. Collector of Central Excise, Sarvodayanagar, Kanpur and others, AIR 1971 S.C. 1170, the Supreme Court held that section 71 of the Gold (Control) Act 1968 was unconstitutional. To rectify the position, the Gold (Control) Amendment Act 1971 was passed. It substituted a new section 71. The new sub-section (1) is as follows : (1) 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 together with any package, covering or receptacle in which such gold is found, shall be liable to confiscation: Provided that where it is established to the satisfaction of the officer adjudging the confiscation that such gold or other thing belongs to a person other than the person who has, by any act or omission, rendered it liable to confiscation, and such act or omission was without the knowledge or connivance of the person to whom it belongs it shall not be ordered to be confiscated but such other action, as is authorised by this Act, may be taken against the person who has, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal or revision : sub-section (2). But, the aggrieved person must move an application within 90 days from the commencement of the Act, or such further time, not exceeding 90 days as on showing sufficient cause might be allowed : sub section (3). 60. This section is concerned with the reopening of cases which already stood finally concluded before the Amending Act came into force. Hence the phrase past confiscations is the title. It is not concerned with cases which were still pending, whether at the stage of adjudication or appeal or revision. In those pending cases, the adjudicating officer or the appellate or revisional authority were naturally bound to give effect to the new sub-section (1) of section 71 as it had been made retrospective. There was no need to make any provision for reopening in relation to such cases. 61. Thus, Ratanbai, or the petitioners, did not have to move under section 4 of the amending Act for setting aside the order of confiscation, as Ratanbai s appeal was pending. The letter dated 30th July 1971, written by the Administrator to Ratanbai, asking whether she intended to apply for reopening, was misconceived. Yet, the fact that such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond proviso of section 79, where no such notice is given within a period of six months from the date of seizure of the gold, it shall be returned after the expiry of that period to the person from whose possession it was seized . The period of six months from the date of seizure, 9th July, 1968, had expired much before the Collector made his order on 15th May, 1970. Hence, on this ground he should have ordered the gold to be returned to Ratanbai, from whose possession it was taken. 63. Although the point is clear enough, there is direct authority in support of what I have just said. In Ambalal Morarji Soni v. Union of India and others, AIR 1972 Gujarat 126, the notice enjoined by section 79 was served two days after the six months had expired. It was held that a civil right to get back the seized goods had become vested in the person concerned and a writ of mandamus was issued. The judgment of the Supreme Court in the Assistant Collector of Customs and Superintendent, Preventive Service Customs, Calcutta and others v. Charan Das Malhotra, AIR 1972 S.C. 689, which dealt with almost identical provisions in the Customs Act 1962, was followed. The Supreme Court had affirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illong and another, AIR 1973 Gauhati 8. 67. A small dilemma remains. If the matter is viewed under the proviso of the amended sub-section (1) of section 71, the gold ought to be returned to the owners, that is, the petitioners. But if the obligation under the second proviso of section 79 is to be enforced, it has to be returned to Ratanbai. She died on 16th April, 1973. However, the problem is obviated by an application moved, just before the hearing commenced, by Nemkumar and Shantabai, to be impleaded as co-petitioners in their capacity as the heirs of Ratanbai. The application has been opposed on the ground of delay, but, I think, having regard to the extreme intricacy of the law and the possibility of misunderstanding, that in the interests of justice the application ought to be allowed. Accordingly, Nemkumar and Shantabai will be deemed to have been added as petitioners. I was explicitly told that there is no conflict of interest between them and the original petitioners and order may be made in favour of any or all of them. 68. For these reasons, this petition is allowed. The order by the Collector confiscating the gold seized on 9th July 1968 and levying a penalty on ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
