Bholanath Karmakar v. UNION OF INDIA — 1976 DIGILAW 308 (CAL)

Judgment 1. THIS Rule is directed against a Show-cause notice dated 9th December, 1968 issued under Section 79 of the Gold Control Act, 1968 and the order of confiscation and penalty dated 22nd October, 1969 passed by the Collector of Central Excise, Calcutta and Orissa under Sections 71 and 74 of the Gold Control Act, 1968. 2. PETITIONER carries on business as a jeweler in the name and style of "Ms. Gunea House" at Alamganj Ghatal in the district of Midnapore. He holds a licence, the number of which is 672/gold (63. On 6th of May, 1968, some officers of the Central Excise Department visited the shop of the petitioner and seized there from primary gold and gold ornaments as per details mentioned in the Panchnama, Annexure 'a' to the petition. By a letter dated 13th of May, 1968 the petitioner was asked to give oral and writ ten evidence in the enquiry relating to the aforesaid seizure. That notice was given pursuant to Rule 126l of the Defence of India (Amendment) Rules, 1963. There after, on 9th December, 1968, the petitioner was called upon to show-cause why the seized primary gold and the ornaments should not be confiscated under Section 71 of the Gold Control Act, 1968, read with Section 116 of the said Act and why a penalty under Section 74 of the said Act read with Section 116 thereon should not be imposed. In that show-cause notice it was stated that the petitioner contravened the provisions of Sections 29 and 55 read with Sections 32 and 33 of the Gold Control Act, 1968 corresponding in 126b, 126g (i) and 126 (ii) (bb) (i) of the Defence of India Rules, 1982 Part X11a. Thereafter, the petitioner showed cause and the Collector of Control excise, Calcutta and Orissa by his order dated 22nd October, 1969 confiscated primary gold weighing 442. 900 GMS and the remaining quantity of gold ornaments weighing 1370. 260 gms. under Section 71 of the Gold Control Act, 1968. The petitioner was, however, given an option to take release of the confiscated gold and gold ornaments on payment of a fine of Es. 5,000/- in lieu of confiscation. The Collector also imposed a penalty of Rs. 1,000/- upon the petitioner under Section 74 of the said Act. 260 gms. under Section 71 of the Gold Control Act, 1968. The petitioner was, however, given an option to take release of the confiscated gold and gold ornaments on payment of a fine of Es. 5,000/- in lieu of confiscation. The Collector also imposed a penalty of Rs. 1,000/- upon the petitioner under Section 74 of the said Act. The petitioner being aggrieved by the aforesaid show-cause notice, the confiscation of gold and imposition of personal penalty, moved this Court Hinder Art, 226 of the Constitution and obtained the present Rule on 22nd of December, 1969. An interim injunction was also granted by this Court restraining the respondents from giving effect to the impugned order of punishment both of the fine of Rs. 5,000/- and penalty of Rs. 1,000/ -. The operation of the order of confiscation was also stayed pending the hearing of the Rule. The respondents were directed to hold the gold pending the hearing of this Rule. 3. MR. Banerji, appearing on behalf of the petitioner contends that a person cannot be punished for an offence under a law which came into existence subsequent to the commission of the offence. The Defence of India Rules having been repealed on the 10th of July, 1938, the Collector of Central Excise had no jurisdiction to issue a show cause notice under Section 71 of the gold Control Act, 1968 for contravention of certain provisions of the defence of India Rules. The expression "anything done" in Section 116 (2) of the Gold Control Act does not include any act, done by a person in contravention of the provisions of Defence of India Rules. It is further submitted that no proceeding was pending on the date when the Gold Control Act came into force. So, the said sub-section (2) of Section 116 of the Act could not keep alive any action taken in pursuance to the Defence of India Rules. In support of his contentions Mr. It is further submitted that no proceeding was pending on the date when the Gold Control Act came into force. So, the said sub-section (2) of Section 116 of the Act could not keep alive any action taken in pursuance to the Defence of India Rules. In support of his contentions Mr. Banerji relied upon an unreported Bench Decision of this Court in Criminal Revision No. 156 of 1970 Haribhai Vithalji Soni vs. The State decided on 23rd of April, 1970 a Single Bench Decision of this Court in Criminal Revision No. 1355 of 1974 deputy Collector, Central Excise, Gold Control vs. Sankarlal Karmakar decided on May 26, 1975 and another Single Bench Decision of this Court in Civil Rule 4819 (w) of 1972 Haribhai Vithalji Soni vs. Union of India and ors. decided on 19th February, 1976. 4. MR. Chakraborty, appearing as an Amicus Curiae in this Rule, contended that when the repeal of an enactment followed by a fresh legislation, Section 6 of the General Clauses Act would be applicable in such cases unless the new legislation manifested an intention incompatible with or contrary to the provisions of the section. Such incompatibility would have to be ascertained from a consideration of all the relevant provisions of the new law. The line of enquiry would be whether the New Act destroyed the old liability, penalty or punishment under the Repealed Act. In support of his contentions, mr. Chakraborty relied upon the decision of the Supreme Court in State of Punjab vs. Mohar Singh A. I. R. 1965 S. C. 85 Mr. Chakraborty further contended that none of the provisions of the Gold Control Act were inconsistent with any of the provisions of the Defence of India Rules. The investigation commenced in pursuance to Rule 126l of the Defence of India Rules should be deemed to be continuing under Section 117 (1) of the Gold (Control) Ordinance, 1968 read with Section 116 of the Gold Control Act. The Bench Decision in Criminal Revision No. 156 of 1970 referred to by Mr. Banerji, in that case, the petitioner was convicted under Section 126p (2) (i) of the Defence of India Rules, 1962, as amended and was sentenced to simple imprisonment for two months. Against the order of conviction, the petitioner moved this Court in Criminal Revision. The Bench Decision in Criminal Revision No. 156 of 1970 referred to by Mr. Banerji, in that case, the petitioner was convicted under Section 126p (2) (i) of the Defence of India Rules, 1962, as amended and was sentenced to simple imprisonment for two months. Against the order of conviction, the petitioner moved this Court in Criminal Revision. The Division Bench set aside the order of conviction on the ground that sub-section (8) of the Rule 126 HH speaks of "primary gold" and therefore, the possession of the melted gold did not amount to infringement of the provisions of Rule 126b and accordingly, the conviction was set aside, That decision, in my opinion, has got no relevancy to the points raised in the present case. 5. IN Sankarlal Karmakar's case (Criminal No. 1355 of 1974), the Collector of Central Excise moved an application under Section 439 of the Criminal Procedure code, 1898 against the order of discharge of the opposite party under Section 253 (1) of the Criminal Procedure Code, 1898. The opposite party was prosecuted under Section 85 (ii), Sections 85 (VI) and 85 (IX) of the Gold Control Act, 1968 for having in possession of 42 Gms. of primary gold and 491. 13 Gms. of gold ornaments, without any licence. A search was conducted in the shop of the accused opposite party and the aforesaid quantity of unlicensed gold was seized. Thereafter, an adjudication proceeding under the Defence of India Rules was held. On the 6th of January, 1971 a complaint was filled after the Gold Control act came into force. 6. IT was contended before the learned Judicial Magistrate that since the alleged offence was not committed under the Gold Control Act, 1968, but if any, under the Defence of India Rules which had since been repealed, no prosecution lay against the accused opposite party. The learned Magistrate came to conclusion that the opposite party could not be prosecuted under the Gold Control Act, 1968 and as such he discharged the accused under Section 253 (1) of the Criminal Procedure Code. The learned Magistrate came to conclusion that the opposite party could not be prosecuted under the Gold Control Act, 1968 and as such he discharged the accused under Section 253 (1) of the Criminal Procedure Code. It was urged on behalf of the Collector of Central Excise that since the accused opposite party had committed an offence under the Defence of India Rules and since the Gold Control Act contained similar provisions regarding such offence, the accused could be prosecuted, under the Gold Control, 1968 and in any event Section 116 (2) of the Gold Control Act, 1968 authorized such prosecution of the accused opposite party even after the repealed of the Defence of India Rules, 1962. The learned Judge observed that no man could be prosecuted or punished under the law which came into existence subsequent to the commission of the offence. I respectfully agree with the view of the learned Judge that "anything done" occurring in sub-section (2) of Section 116 of the Gold Control Act does not mean that an offence which has been done by a person shall be kept alive under the sub-section. 7. IN that case on the 16th of January, 1971 when the complaint was filed, no proceeding was pending under the Defence of India Rules. That being so, when the Gold Control Act came into force, obviously no complaint could have been filed under that Act. But in the instant case, a proceeding had already been started by issuing a direction under Rule 126l of the Defence of India Rules on 13th of May, 1968. So, that "official act" done in the exercise of the powers conferred under the Defence of India Rules was kept alive. In my opinion, that decision has got no application to the facts and circumstances of the present case. 8. IN C. R. No. 4819 (w) of 1972, it appears that as the Division Bench of this Court set aside the order of conviction of the petitioner in C. R. 156 of 1970, the Gold Control Administrator started an adjudication proceeding and in that proceeding confiscated the gold and imposed a personal penalty upon the petitioner. The petitioner being aggrieved moved this Court under Art. 226 of the Constitution. The petitioner being aggrieved moved this Court under Art. 226 of the Constitution. The learned Judge observed "in view of the findings of the fact arrived at by this Court it is very difficult to uphold the finding of fact held to the contrary, by the Quasi-Judicial Tribunal on the same set of evidence before the Tribunal. Moreover, it is also clear that the authority concerned was of opinion that the petitioner was guilty under Section 71 (1) of the Gold Control Act on the basis thereof the confiscation was made. "The learned Judge further observed "the Gold Control Act of 1962 cannot be availed of at all as the period between 25th of June, 1988 and 1st of September, 1968 or 29th of June, 1969 was not covered either by the gold ordinance or gold control Act and therefore, the show cause notice under the Gold control Act cannot be initiated, more so, when subsequent to that, this Court set aside the conviction against the petitioner under the Defence of India Rules." It is rather unfortunate that attention of the learned Judge was not drawn to Section 1 (3) of the Defence of India Act, 1962 wherein it is provided that the Defence of India Rules shall remain in force during the period of the operation of the Emergency issued on the 26th March, 1962 and for a period of six months thereafter. On the 10th of January, 1968 the Emergency was withdrawn. So, the Defence of India Rules was in force till 10th of July, 1962. Before 1st of September, 1968, on 29th June, 1968, the Gold (Control) Ordinance came into force. 9. IN my opinion, that decision would be of no assistance to the petitioner. The learned Judge made the Rule absolute on the ground that the conviction of the petitioner was set aside by a Division Bench of this Court and on the same set of evidence a quasi-judicial authority could not confiscate the gold. 10. THE question which arose in Mohar Singh's case was whether a person could be convicted under the Act for an offence committed against the Ordinance before the Act came into force. The prosecution was started long after the Ordinance had come to an end. The Ordinance was repealed and substituted by the Act which incorporated all the provisions of the Ordinance. The prosecution was started long after the Ordinance had come to an end. The Ordinance was repealed and substituted by the Act which incorporated all the provisions of the Ordinance. The Repealing Act reproduced the provisions of the Ordinance in their entirety, but it nowhere provided that the offence committed, when the Ordinance was in force, could be punished after the repeal. The High Court came to conclusion that Mohar Singh could next be convicted of an offence under a law which was not in force at the time of the commission of the offence. The Supreme Court observed that whenever there was a repeal of an enactment the consequences laid down in Section 6 of the General Clauses Act would follow unless, as the Section it-self showed a different intention. In the case of a simple repeal there was scarcely any room for expression to Contrary opinion. But when the repeal was followed by a fresh legislation on the same subject, the Courts have to lock to the provisions of the New Act. but only for the purpose of determining whether a different intention indicated. The line of enquiry would be not whether the new Act expressly kept alive old rights and liabilities but whether an intention was manifested in it to destroy them. The Supreme Court allowed the appeal of the State of Punjab and set aside the order of the High Court. On October 26, 1962 the President promulgated Proclamation of Emergency under clause- (1) of Art. 352 of the Constitution. On the same day the President promulgated the Defence of India Ordinance (Ordinance No. IV) of 1962. In pursuance of the powers given by the said Ordinance Defence of India Rules, 1962 were framed. The Defence of India ordinance was replaced by the Defence of India Act, 1962 (Act I) of 1962. That act came into force on December 12, 1962. The Defence of India Rules however, framed earlier were continued under that Act. On 9th of January, 1963 Defence of India Rules were amended by incorporating chapter XIIA (Gold Control) Rules, 1983. On 10th of January, 1968 President withdrew proclamation of Emergency. On 29th of June, 1968 Gold Control Ordinance came into force. Section 117 of the Ordinance repealed Part XIIA of the Defence of India Rules. On 9th of January, 1963 Defence of India Rules were amended by incorporating chapter XIIA (Gold Control) Rules, 1983. On 10th of January, 1968 President withdrew proclamation of Emergency. On 29th of June, 1968 Gold Control Ordinance came into force. Section 117 of the Ordinance repealed Part XIIA of the Defence of India Rules. Sub-section (1)of Section 117 of the Ordinance reads as follows : - "as from commencement of this Ordinance, the provisions of Part XII-A of the Defence of India Rules, 1962 shall stand repealed and upon such repeal, Section 6 of the General Clauses Act, 1891, shall apply as if the said Part was a Central. Act." 11. ON 10th of July, 1968, Defend of India Rules came to an end, in view of Section 1 (3) of the Defence of India act, 1962. On 5th of May, 1968 the search and seizure of the petitioner's shops were made. At that time the defence of India Rules were in force on 1st of September, 1968 Gold Control act, 1968 come into force. On 9th of December, 1963 the show cause notice under Section 71 of the gold Control Act was issued upon the petitioner. 12. IT appears that the search and seizure were made on the 5th of May, 1968 when Part XII-A of the Defence of India Rules were in force. On 13th of May, 1968 a proceeding was started under Rule 126l of the Defence of India Rules. On the 10th of July, 1963 defence of India Rules came to end. Before that, on the 29th of June 1968 Gold Control Ordinance came into force. By virtue of Section 117 of the Ordinance the said proceeding under the Defence of India Rules was kept alive. On 9th of December, 1968, the show-cause notice was issued under the Gold Control Act, 1988. The principle of Section 6 of the General Clauses Act is that, unless a different intention appears in the repealing Act, any legal proceeding can be instituted and continued in respect of any matter pending under the repealed Act as if that Act was in force at the time of the repeal. In other words whenever there is a repeal of an enactment the consequences laid down in Section 6 of the General Clauses Act will follow unless, as the Section itself says a different intention appears in the repealing Statute. In other words whenever there is a repeal of an enactment the consequences laid down in Section 6 of the General Clauses Act will follow unless, as the Section itself says a different intention appears in the repealing Statute. In view of Section 116 (2) of the Gold Control Act, 1968, read with Section 6 of the General Clauses Act, any action taken under the Defence of India Rules must be deemed to be continuing as none of the provisions of the Gold Control Act are inconsistent with any of the provisions of the Defence of India Rules. Mr. Sanyal, appearing on behalf of the respondents drew my attention to the decision of the Supreme Court in Jayantual Amartlal vs. Union of India, A. I. R. 1971 S. C. 1103, and contended that the principle as laid down in Mohar Singh's case has been followed in that case. 13. IN Jayantilal's case a proceeding was instituted against the appellant under Rule 126m of the Defence of India Rules. The Supreme Court held that said proceeding could be continued against him despite the subsequent repeal of those rules by Section 117 (1) of the Gold Control Ordinance, 1968 and the latter repeal of the Ordinance itself by Section 116 of the Gold control Act, 1968. The Supreme Court said that there was nothing in the Gold Control Act which would indicate a different intention that the rights and liabilities accrued or incurred under the Ordinance would be extinguished on the passing of the Act. So, the proceedings initiated under the repealed law must be held to continue and section 6 of the General Clauses Act would be applicable in determining the effect of the repeal of the Ordinance. 14. IN my view the same principle would be applied in case of repeal of the Defence of India Rules. In the show-cause notice corresponding provisions of the Rules incorporated in the Gold Control Act, have been referred to. That show-cause notice could not be construed that the petitioner contravened the provisions of the Gold Control Act, which was not in force when the petitioner contravened against the Defence of India Rules. The corresponding provisions have been mentioned in the show-cause notice for the purpose of showing that the provisions of the New Act are not inconsistent with or contrary to the provisions of the repealed Rules. It is urged by Mr. The corresponding provisions have been mentioned in the show-cause notice for the purpose of showing that the provisions of the New Act are not inconsistent with or contrary to the provisions of the repealed Rules. It is urged by Mr. Banerji that the Ordinance was followed by the Act incorporating the entire provisions of the Ordinance but repeal of the "rules" were not replaced by the Gold Control act. So, the principle as laid down by the Supreme Court in Jayantilal's case could not be applicable. Certain provisions of these two enactments are inconsistent. Under Rule 126m gold seized under Rule 126l shall be confiscated. There was no time limit. Under Section 78 read with Section 79 of the Gold Control Act, 1968 Parliament fixed the time limit viz. six months, by which time the notice to show-cause must have to be issued and failures so to do entails the consequences, viz. that the seized gold shall have to be returned to the person from whose possession the offending article was seized. These two provisions in the two enactments relating to issuance of the show-cause notice are not mutually consistent. In fact there is no provision under Rule 126m to issue any show-cause notice at all prior to confiscation under Sections 78 and 79 of the Gold Control Act, 1968. Gold under Defence of India Rules does not include "primary gold," though under the Gold Control Act, 1968 gold includes primary gold. 15. IT is true that primary gold was not included in the definition of: gold under the Defence of India Rules. Every person who was in possession of primary gold exceeding the prescribed weight was required to cover the same into ornaments or sell the same to the licensed dealers within the time prescribed under the Defence of India Rules. Possession of primary gold thereafter, exceeding the prescribed limit was an offence. That period had expired long before Gold Control Act, 1968 came into force. Accordingly, the Gold Control Act naturally did not make any provision for a declaration of the possession of the primary gold. The provisions which have been referred to by Mr. Banerji are not incompatible with or contrary to the provisions of the Defence of India Rules. That period had expired long before Gold Control Act, 1968 came into force. Accordingly, the Gold Control Act naturally did not make any provision for a declaration of the possession of the primary gold. The provisions which have been referred to by Mr. Banerji are not incompatible with or contrary to the provisions of the Defence of India Rules. The provisions of the Gold control Act nowhere manifest an intention to destroy any liability acquired "or incurred under the Defence of India Rules, so, in my view, the Collector of Central Excise has got jurisdiction to issue a show-cause notice under Section 79 of the Gold Control Act, 1968 read with Section 116 (1) of the said Act and Section 6 of the General Clauses Act, 1897, for contravention of offences under the Defence of India Rules since repealed. 16. THE next question required for determination is, whether the seized gold can be confiscated under Section 79 of the Gold Control Act when notice under Section 71 of the Act was not given within a period of six months from the date of the seizure of the gold in view of second proviso to Section 79 of the Act. 16. THE next question required for determination is, whether the seized gold can be confiscated under Section 79 of the Gold Control Act when notice under Section 71 of the Act was not given within a period of six months from the date of the seizure of the gold in view of second proviso to Section 79 of the Act. Section 79 of the Gold Control reads as follows: - "no order of adjudication or confiscation or penalty shall be made unless the owner of the gold conveyance, or animal or other person concerned is given a notice in writing- (i) informing him of the grounds on which it is proposed to confiscate such gold, conveyance or animal or to impose a penalty and (ii) giving him a reasonable opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the confiscation or imposition of penalty mentioned therein and if he so desires, of being heard in the matter : provided that the notice and the representation referred to in this section may, at the request of the owner or other person concerned, be oral : provided further that where no such notice is given within a period of six months from the date of the seizure of the gold convey once or animal or such further period as the Collector of Central Excise or of Customs may allow, such gold, conveyance or animal shall be returned after the expiry of that period to the person from whose possession it was seized." Section 79 of the Gold Control Act is in terms identical with the provisions of Section 110 read with Section 124 of the Customs Act. In Assistant Collector of Customs vs. Charandas Malhatra A. I. R. 1972 S. C. 689 the Supreme Court in construing section 110 (2) of the Customs Act observed: "the section does not lay down any period within the notice required by it has to be given. The period laid down in Section 110 (2) affects only the seizure of the goods and not the validity of the notice." It is abundantly clear from the above decision of the Supreme Court that issue of a notice under Section 79 of the Gold Control Act beyond the period of six months from the date of the seizure by itself would not invalidate the notice. In Malhotra's case the Supreme Court further observed that the right to restoration of the seized goods is a civil right which accrues on the expiry of the initial six months and which is defeated on an extension being granted, even though such extension is possible within a year from the date of the seizure. Consequently such a vested civil right in the respondent cannot be defeated by an ex-parte order of extension of time by the Collector. 17. IN A. M. Soni vs. Union of India A. I. R. 1972 Gujarat 126, a Division bench of the Gujrat High Court held, following the decision of the Supreme court in Malhotra's case that, the right to restoration of the seized goods is a civil right which vests in the person concerned if notice is not given to him within the period of six months from the date of the seizure and as such the petitioner was entitled to return all the seized goods. Accordingly, the confiscation and imposition of penalty under the Gold Control Act as well as the Customs Act were set aside. 18. THE provision in the second proviso to Section 79 of the Gold Control act is mandatory. If within six months from the date of the seizure the notice is not given in. that case, the gold "shell" be returned to the person from whose possession it was seized. In the instant case the gold was seized on the 6th of May, 1968 and the notice was issued on 9th December, 1968. So the period of six months expired on 6th November, 1968. No material was placed before me by the respondents to show that any order extending the period was passed by the Collector of Central Excise. Where under the Stature the seized gold shall have to be returned to the petitioner on or before 6th November, 1968 an order of confiscation of the said seized gold could not be made by the Collector of Central excise on the 22nd October, 1969. Sc. that part of the order by which the Collector of Central Excise confiscated the seized gold in lieu of penalty must be quashed. Let a Writ of Mandamus be issued directing the respondents to hand over possession and custody of the seized gold to the petitioner. Sc. that part of the order by which the Collector of Central Excise confiscated the seized gold in lieu of penalty must be quashed. Let a Writ of Mandamus be issued directing the respondents to hand over possession and custody of the seized gold to the petitioner. The personal penalty imposed upon the petitioner by the order dated 22nd October, 1969, however, shall stand. I am grateful to Mr. Chakraborty for rendering valuable assistance to the Court. In the result, this Rule is made absolute in part. I, however, make it clear that if under the provisions of any other law, these goods are required by the authorities concerned, this order shall not operate. There will be no order for costs. Rule made absolute in part.