SUSHIL KUMAR PORWAL AND ORS. versus VIPIN MANEKLAL AND ORS.

Citation: [1987] 3 S.C.R. 1116 · Decided: 27-08-1987 · Supreme Court of India · Bench: RANGANATH MISRA · Disposal: Appeal(s) allowed

Judgment (excerpt)

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SUSHIL KUMAR PORWAL AND ORS. 
v. 
VIPIN MANEKLAL AND ORS. 
AUGUST 27, 1987 
[RANGANATH MISRA AND MURARI MOHON DUTf, JJ.] 
Gold Control Act, 1968-proviso to section 71-interpretation 
of-Whether it covers primary gold. 
One Kesharimal Porwal, who had one of his businesses as gold 
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and silver shop, died on October 7, 1952 leaving behind surviving 
a widow Ratanbai, a daughter Shantabai and a son Nern Kumar. Y 
Kesharimal left a will whereby he bequeathed gold and silver _to his 
grandsons--sons of Shantabai and Nern Kumar-providing that each 
grandson would receive 500 tolas of gold at the time of marriage and the 
remaining gold would be equally divided among them. The genuineness 
and validity of the will were not challenged at any stage. 
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On July 9, 1968, the officers of the Central Excise, Nagpur, 
searched the residential premises of Nern Kumar and seized 10 slabs 
and 9 pieces of ,gold and 230 gold coins having at that time a market 
value of Rs. 7 ,63,000. The gold seized was primary gold. The off'cials of 
the Central Excise separately recorded the statements of Ratanbai and \, 
Nern Kumar. Ratanbai stated that the seized gold was the 'self-earned 
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property' of her late husband, and had been kept in the iron-safe about 
8/9 years ago, and that keys of the shelf had all along remained in her 
possession. Nern Kumar in his statement denied any knowledge of the 
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gold and said that he had come to know of the existence of the gold for 
the first time during the search. A declaration in respect of the seized 
gold was filed by Ratanbai with the Central Excise. 
The Collector of Central Excise served separate notices on 
Ratanbai and Nern Kumar, calling upon them to show cause why the 
seized gold should not be confiscated and a penalty imposed for violation "f 
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of the provision of paragraph 9(1)(i) of the Gold Control Ordinance, 
1968. The notices were replied by both. The Collector came to the 
finding that Ratanbai had full knowledge of the gold and was in con-
scious possession of it for at least 8/9 years. As for Nern Kumar, the 
Collector held that it was difficult to sustain the charge of possession 
and custody of the gold against him. Accordingly, the Collector, held 
H that only Ratanbai had violated the provision of paragraph 9(I)(i) of the 
1116 
S.K. PORWAL v. V. MANEKLAL 
1117 
Gold Control Ordinance, 1968, and directed the confiscation of the gold 
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and imposition of a penalty of Rs.38,000 on Ratanbai under paragraph 
75 of the Gold Control Ordinance, 1968, which was replaced by the 
Gold Control Act, 1968. Nern Kumar was acquitted. 
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An appeal preferred by Ratanbai against the order of the Col· 
lector was dismissed by the Administrator under the Gold Control Act, 
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Ratanbai then filed an application for revision before the Central 
~· Government, challenging the order of the Administrator. The appellant 
No. 1, Sushi! Kumar son of Nern Kumar, who had by then attained 
majority, also filed a revisional application before the Central Govern-
.,_ 
ment. Both the revisional applications were dismissed. Thereupon, the 
appellants Nos. 1 to 5 and Surendra Kumar since deceased, son of C 
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Shantabai, filed a writ petition in the High Court. The High Court 
(Single Judge) quashed the order of confiscation and penalty and 
directed the return of the gold to the petitioners. 
The respondents preferred an appeal to the Division Bench of the 
High Court. The Division Bench did not agree with the interpretation of D 
the learned Single Judge on section 71(1) of the Gold Control Act, 
including the proviso thereto, and set aside the judgment of the Single 
Judge. Aggrieved by the decision of the High Court, the appellants 
moved this court for relief by special leave. 
Allowing the appeal, the Court, 
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HELD: The ground that weighed with the Central Excise 
Authorities in confiscating the gold was that the acquisition, possession, 
custody or control of primary gold in question by Ratanbai became 
illegal and liable to confiscation, as she had not filed any declaration 
required under rule 126·1 of the Defence of India Rules, 1962, nor had F 
she disposed of the gold by sale or converted the gold into ornaments in 
contravention of clause (i) of sub-rule (1-B), but had possessed the same 
in violation of sub-rule (I-A) of Rule 126-H of the Defence of India 
(Fourth Amendment) Rules, 1966. But, after the amendment of section 
~ 71(1) of the Gold Control Act, 1968, by additio

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