MANICK CHAND PAUL & OTHERS ETC. versus UNION OF INDIA AND OTHERS

Citation: [1984] 3 S.C.R. 461 · Decided: 17-04-1984 · Supreme Court of India · Bench: V.D. TULZAPURKAR · Disposal: Dismissed

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Judgment (excerpt)

461 
• 
MANICK CHAND PAUL & OTHERS ETC .. 
v. 
UNION OF INDIA AND OTHERS 
Aptil 17, 1984 
~\ (V.D .• TULZA¥URKAR, V. BALAl:R!SHNA BRAD! AND D.P. MADON, JJ.] 
Gold Control Act 1968, Sections 16(7), 52, 79, JOO read with rule 3(1) Qf the 
Go:/d Control (lden~ific.ation of· Customers) Rule1, 1960,. whet he~. violatt~e of the 
provisions of Articles U,19(1)(/l), 301anl.302 of the Constitution. 
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. 
Gold Control (Forms, Fees and Misce/lane1us Mattefs)· Rules, 1968-For11t1· 
GS,J J and GS 11 as amended are unworkable anti require modification-,.-Govern·· 
1nel/t of India's Letter of Instructions ani the Trade Notices withdrawint the-· 
faciility of sale by licensed traders throuzh their trflvtlli111 sales1nen whether 1•isla-
tiv~ Articles U, 19(/)(t) and 301 ofrhe &nstituti1n. 
In Harak Chand Rotan ChanJ Bamhia's c.u [1~70] I SCR 479, where tao 
Gold (Control) Act, 1969 and some of its provision; prioi to the amendment by· 
Act 26 of 1969 were challenged, the Supreme Court poiilted out that even tho,P&h.' 
import of Gold into India had been banned, considerable quantities ·Of contra-
b&,nd glod were findinii. their \Vay into the cciuntry through illei!al channels;.. 
affecting the national economy and hamperin: the country's economic- stability 
and progress, th!!:t the Customs . DCpartment was not in ·a position to effectively 
combat the sn1ugglinu over the long borders and coast lines, that, therefore, 
anti-smugglinu measur~ l'iad to be supplemented by a detailed •ystem of control 
over internal transaclions and that the Gold (Contro1) Act, 1968 was passed for 
this purpose. In other words, the several restrictions that have be-en put oll the· 
activities of the trad!rs doing business in e01d, go Id orname'nts and articles of 
gold, will have to be viewed frbm the aforesaid perspective. The Court further 
held the enactment to be within _the Jegl.slative compeie_nce of P.1rliamen.f:and 
out of the several provisions that were challenged only ss. 5(2)(b), 27(2)(d), 27(6), 
32, 46. 8-8 and lOO were invalid. As a result of the aforesaid~decisions and,the 
obServations made by this Couft therein t
0
he Act of 1968 was suitably amended 
by Gold Control (Amendment) Act (i6) of 1969. These amended provisions, the 
Gold Control (Identification of Customers) Rules, 1969, th~ Gold Coritrol 
(Forms, Fees and Miscellaneous Matters) Rules 1968 are chaJ!enged by the Writ 
Petitioners as being: violative of the provisions. of Article 14, 19(r)(g), 301,_ and 
302 of the Constitution. Some of the pet_itioners including the petitioners in 
S.L.P. Civil 5J8 of 1973 have also challenged the Govern1nent of lndia·s Letter 
of Instructions and the Trade Notices withdrawing the facility of permitting 
Jicensed dealers to send ~naments for. sale through their travelling salesmen, 
on t~e same grouds. 
Dismissin&: the petit!ons, the~Court 
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462 
SUPREME COURT REPORTS 
(1984] 3 $.C.R. 
_-\ 
HELD: 1:1, Section 16(7) of the Gold (Cootrol) Act, 1968 as .amended is 
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constitutionally valid. [269E, 47IB] 
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1:2. The counter·affidavit of the Urilon. of India not merCiy furrilshes the 
inteI!igible classification ffiade betw~en the.licensed dealers and non-dealers and 
non·rCfiners~ but .. also shows th.at the 'ctassitic3.tioil has a reaSonable nexus with 
the object of the Act and the reasons for denying e>.emption limil~'tO liceriscd 
deJ.Jers or refiners are also valid and r.eferable to the Object of the ~ct, namely 
"to provlde, in the economic· arid financial intefests of thC co'nimunity, for the 
confroJ of production, m·anufacture, supply· distribution, ~se and poss::ssion of' 
and business in, gold ornaments and articles of goid a·nd for matters connectCd 
t~erewith ~r incid~ntal thereto:; [t69F, 4700-E} 
~ .\Vhile.ordinary citizens (non··dealers and. non.rCfinCrs) are ·pot premitted-by -
Jaw to have any primary gold in their possession• a deah:r or a, refiner 1s permit· 
tej under the law to have unlimited quantity of primary rold in hi..; poss.:ssion 
and therefore, it is tasr ·for a dealer or a refinC:r to acquire !rpugg!ed rold and 
\\-ith a vi~w to preventing" det~1.:tion of such golJ, to convert .1he same into or.na· 
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ments and to claint such ornaments as his personal property. This necessitated 
a provision for a dcdaration cf all ornaments and articles, owned, possessed. 
h~ld or controlled by th!m ~o lha,t they_could not _c~aim any clandestinely manu. 
factured oranaments, when· detected to be their

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