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PETITIONER: BADRI PRASAD AND ORS.  ETC.

       Vs.

RESPONDENT: COLLECTOR OF CENTRAL EXCISE & ORS.  ETC.

DATE OF JUDGMENT30/03/1971

BENCH: MITTER, G.K. BENCH: MITTER, G.K. SIKRI, S.M. (CJ) HEGDE, K.S. GROVER, A.N. REDDY, P. JAGANMOHAN

CITATION:  1971 AIR 1170            1971 SCR  254  1971 SCC  (1)   1  CITATOR INFO :  E          1987 SC2167  (15,22)

ACT: Gold Control Act, 1969, ss. 4, 6, 8(1) and 16, 58,  71-Vires of-Provisions of ss. 4, 6, 8 and 16 of Act do not constitute unreasonable restrictions on right to carry on business  and are not violative of Arts. 19 (f) and (g)Section 71 is ultra vires-Sections 6 and 16(1) do not encroach on field  covered by Andhra Pradesh (Andhra Area) Pawn Brokers Act 23 of  1948 and  Andhra Pradesh (Telangana Area) Money Lenders Act 5  of 1349F.

HEADNOTE: The  petitioners and appellants carried on the  business  of Pawn broking and money lending inter alia on the security of gold articles and ornaments.  They  challenged the  validity of different provisions of the Gold Control  Act, 1969.  The contentions  that fell for consideration were:  (i)  whether there was anything in the Act or the rules which constituted an unreasonable restriction on the part of a pawn broker  to hold,  acquire  or  dispose  of property  or  carry  on  his business  of money lending within the meaning of Art.  19(1) (f) and (g) of the Constitution not saved by sub-cls.(5)  and (6) thereof; (ii) whether in the absence of a provision  for notice to be   given  to him in case of any  proceeding  for confiscation the pawnee may be     prejudicially    affected without a hearing being given to him; (iii) whether s. 71 of the Act was ultra vires; (iv) whether the failure to make  a distinction   between  ’article’  and  ’ornament’   in   the definition section was prejudicial to a dealer; (v)  whether compliance with all the conditions laid down in form GS  III under  r.  4  of the Act may be impossible in  a  number  of cases; (vi) whether it was difficult to comply with s. 16 of the  Act as regards acquisition or transfer of gold  as  and when  made, (vii) whether a pawn-broker or money lender  was entitled  to  hold  primary  gold;  (viii)  whether  certain government  circulars had the effect of extending  time  for filing  of declaration under s. 16(1) beyond  28th  February 1969 ; (ix) whether s. 58(1) of the Act was violative of the

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Constitution and liable to be struck down; (x) whether s. 16 (1) of the Act being a general provision could not apply  to pawn-brokers  and money lenders who were governed by ss.  6, 10,  28; (xi) whether s. 16(1) was unreasonable  as  regards pawn brokers; (xii) whether the impugned Act encroached upon the  field exclusively occupied by Andhra Pradesh Act  XXIII of 1943 and Andhra Pradesh Act V of 1349F. HELD:     (i) If smuggling of gold into the country is to be checked by the prevention of the conversion of smuggled gold into    gold   articles   or   ornaments,   there   is    no unreasonableness in the State calling upon all pawn  brokers and  persons who take pledges or hypothecation of  ornaments to  furnish declarations so that the Administrator  and  the Gold  Control Officer may keep an eye on the  activities  of such persons and if necessary at any point of time, ask  for a  return  in terms of s. 6 and satisfy  himself  about  the legality  of his acts by inspecting his accounts.  It  would not be difficult for anybody carrying on or wanting to carry on  business lawfully to insist on the pawnor producing  the copy of the declaration in his possession given to him after authentication by the Gold Control Officer in terms of 255 sub-s.  (8) of s. 16 in order to satisfy himself that  there was no contravention of the Act.  The requirement of  making a -declaration as often as a pwan broker acquires  ownership possession, custody or control- of gold under sub-s. (4)  is to  be  read with sub-s. (10) and it is enough  for  a  pawn broker ’to approach the Gold Control Officer’ with the  full and detailed statements of his holding once, a month. [269D- E, G] As  such  it cannot be said that there is  any  unreasonable restriction  in .the said provisions on holding property  or pursuing one’s business in terms of Art. 19(1) (f) or (g) of the Constitution. [269H] (ii) The contention that there being no provision for notice to   be  given  to  him  in  case  of  any  proceeding   for confiscation  the  pawnee  may  be  prejudicially   affected without  a  hearing  being given to  him  had  no  substance inasmuch  as he will be the person presumed to be the  owner in  terms of s. 99 and the gold can only be seized from  his possession or custody.  He can appear before the authorities and  make his submissions so that no penal action should  be taken against him. [270A-B] (iii)     There   is  no  justification  for  an  order   of confiscation of gold under s. 71  of the Act merely  because of  a failure to comply with s. 16 relating to  declaration. It is no doubt true that the owner is to be given a hearing in   terms of s. 79 and he has a right of appeal under s. 80 but the provision of     s.  73 which allows the levy  of  a fine  in lieu of confiscation not exceeding twice the  value of the thing in respect of which confiscation is  authorised appears  to be unduly harsh and unconscionable.   Under  the Wealth  tax Act the penalty for failure to file a return  is much  lighter.   Section 71 therefore appears  to  place  an unreasonable restriction on the right of a person to acquire hold  and dispose of gold, articles or gold  ornaments.   It may  be  applied indiscriminately and  cannot  therefore  be upheld  as  saved  by  cls.  (5)  and  (6)  of  Art.  19  of Constitution. [270C-F] (iv) It cannot be said that the definition section does  not make  a  clear  distinction  between  an  ’article’  and  an ’ornament’.   The explanation to S. 2(p) shows that  nothing made  of gold which resembles an ornament will be deemed  to be  an  ornament  unless the thing  (having  regard  to  its purity, size, weight, description or workmanship) is such as

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is commonly used as ornament in any State.  Clearly it is  a question  of  proof  as to whether the thing  passes  as  an article or an ornament in a particular state. [270G] (v)  It  cannot  be  said  that  compliance  with  all   the conditions laid down in form G. S. III under r. 4 of the Act is  impossible.   No doubt there may be difficulty  in  some cases  where an article contains metals other than  gold  or precious  stones, but a pawn broker who is asked to  advance money  on the security of such an article can make a  fairly accurate  estimate  of  the weight and  value  of  the  gold therein  so as to be able to judge for himself how  much  he can  safely advance on the security of that article.  He  is not called upon to give the exact purity of the gold content of the article.  He can only give an estimate of its purity. [271A-C] (vi) There  was no difficulty in regard to the primary  gold found  in possession of the petitioner in writ petition  No. 24.   Under  s.  2(1)  no person can  own  or  have  in  his possession, custody or control, acquire or agree to  acquire ownership, buy, accept or otherwise receive any primary gold except  as provided in the Act and the pawn broker or  money lender is not such a person. [271F] 256 (vii)     The printed circulars to which attention was drawn did  not  show  that there was any extension  of  time  with regard  to declarations under s. 16(1) beyond 28th  February 1969.  Reference to certain circulars addressed only to Gold Control  officers  to the effect that no steps  were  to  be taken until after 30th April 1969 could not be availed of by the petitioner who was not in a position to assert that  the circular had been publicly advertised or that he himself had received any copy of such circular. [272B]. (viii)  Section  58(1)  of the Act  which  allows  any  Gold Control Officer authorised by the Administrator to enter and search  any  business premises if he has reason  to  suspect that  any provision of the Act was being or was about to  be contravened could not be struck down on the ground that  the power to search was given without the same safeguards as  in the Sea Customs Act, 1882 the Customs Act, 1962 or the  Code of  Criminal  Procedure.   There may be cases  where  it  is necessary   for  the  Gold  Control  Officer  to  act   with expedition  in the matter of search so that the  information that  he is going to search a premises may not leak out  and the  only  safety in this regard is that  the  Gold  Control Officer  must  be authorised by the  Administrator  in  this behalf and he in his turn if he is empowered by the  Central Government may authorise other Government Officers to  enter and  search the premises.  In the present case the  counter- affidavit showed that the officer searching had  information regarding the contravention of the provisions of the Act and the  result of the search showed that huge quantity of  gold was  lying  with  the  petitioner in  respect  of  which  no declaration had been made.  The Gold Control Act is not  the only  Provisions of law where power to search  on  suspicion has  been  conferred  on an  officer.   In  this  connection reference  may be made to s. 41 of the Madras General  Sales Tax  Act  1 of 1959 which came up for  consideration  before this  Court in the Commissioner Commercial Taxes,  Board  of Revenue, Madras v. Ramkishan Srikishan Iyer etc., C.A.  Nos. 150/68 dt. 9-8-1967. [272D-H] (xi) Section 16 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-s. (5)  which

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permits  of  exemptions in respect of persons  holding  gold articles  or  ornaments  up  to  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  his obligation to file a declaration under  s.  16(1). There  is no question of duplication of  declarations  here. 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. 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  cl.  (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. [274A-F] (x)  There  was  no substance in the argument  that  a  pawn broker only kept things in his safe custody and it would  be very  oppresive  on him if he had the obligation to  make  a declaration  as  often as he got in a gold article  under  a pledge  or  parted with it on redemption.  A  money  lender. specially  a  pawn  broker  who  enters  into  a  number  of transactions of pledge every day has to maintain his account books  and he has to record faithfully therein the  articles he  receives  by way of pledge including  their  weight  and general  description  when  he takes them in  and  making  a declaration  for  the purpose of the Act cannot  entail  any hardship on such a person. [274G-275C] 257 Mohd.  Hanif Quareshi v. State of Bihar, [1959] S.C.R.. 629, 671, distinguished. (xi) By  the  Gold  Control Act Parliament  only  sought  to control  and regulate the production, manufacture  etc.  use and  possession of and the business in gold, gold  ornaments etc.  It did not seek to disturb or annul the provisions  of the Andhra Pradesh Acts dealing with pawn brokers and  money lenders.  The provisions of the State Acts are to have  full play  and  effect  so long as the Gold Control  Act  is  not violated. [275E] Accordingly, save that s. 71 of the Act is unconstitutional, the writ petition and appeals must be dismissed. [275G]:,

JUDGMENT: ORIGINAL  JURISDICTION  : Writ Petition Nos. 24 and  587  of 1970. Petitions under Art 32 of the Constitution of India for  the enforcement fundamental rights and Civil’ Appeal No; 1613 of 1970. Appeal  by, special leave from the judgment and order  dated December 26, 1969, of the Andhra Pradesh High Court in  Writ Petition  No.  3047 of 1969 and Civil, Appeal  No.  1659  of 1970. Appeal  by special 1eave from the judgment and  order  dated the  December 26 1969 of the Andhra  Pradesh High  Court  in Writ Petition No.    3008  of  1969. Writ Petition   No.  24/70. C.   K. Daphtary, J. B. Bajpai, P. C. Bhartari, T. B.  Dada- chanji,   O.  C.  Mathur  and  Ravinder  Narain,   for   the petitioner. Jagdish Swarup Solicitor General, M.      C. Setalvad and B. D. Sharma, for    the respondents. Writ Petition No. 587 of 1970. C.   K. Daphtary, P.: C. Bhartari, Ravinder Narain and J. B. Dadachanji, for the petitioners. M. C.’.  Setalvad, and R.  N. Sachthey for the respondents.

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Civil Appeal No. 1613 of 1970. B.   A.  L.  Iyengar  and  P.  Parameshwara  Rao,  for   the appellants. Jagdish  Swarup, Solicitor General, J. M.  Mukhi and  B.  D. Sharma, for the respondents. Civil Appeal No. 1659 of 1970. S.   V.  Gupte,  P. Parameswara Rao and K. C. Dua,  for  the appellants. 17-1 S.C. India/71 258 Jagadish  Swarup, Solicitor-General, and B. D.  Sharma,  for the respondents. M. Natesan and R. Gopalakrishnan, for the interveners. The Judgment of this Court was delivered by Mitter, J.--The petitioner in Writ Petition No. 24 of  1970, a  citizen of India who has been carrying on business  inter alia  of  money lending against pledge  of  gold  ornaments, challenges the vires of the Gold Control Act, 1969 read with the  rules made thereunder and in particular sections  6.  8 and 16(1) of the Act. The  facts  on which the petition is based are  as  follows. The  petitioner  has a fairly extensive  business  of  money lending  in  Etawah in U.P. In pursuit of  his  business  he advances  moneys  to a large number of  persons  who  pledge ornaments made of gold or containing gold and other precious stones,  or  silver.  It includes a seasonal    business  of agriculturists  taking loans from him in the  sowing  season and repaying the same with interest by redeeming the pledged ornaments.   According  to the petition such loans  are  not always redeemed quickly and there are instances of ornaments lying  with  him under pledge for 10 to 15 years.   He  also owns  along  with other members of  his  family  substantial quantities  of gold ornaments.  As he has a strong room  for keeping  these valuables his friends and relations also  are in  the habit of keeping their gold ornaments  and  articles with  him for safe custody.  The purity of the gold  content of  the ornaments varies from 10-12 carats to 22-24  carats. The  content  of the gold is difficult to estimate  in  some cases  where they are pieces containing more than one  metal and  set with stones.  In all such cases a rough  and  ready estimate  of  their value is made whenever possible  by  the indigenous method of determining the purity on a touch stone and loans are advanced to the extent of 50 to 75 per cent of the value of the pledged goods.  Over the last 8 to 10 years the  petitioner claims to have come into possession of  such pledged ornaments and articles which have not been  redeemed since  their  first  pledge  weighing  approximately  42,989 grams.   On an average he ’entertains about 25  transactions of  pledge  or redemption in a day and the total  number  of ornaments  and articles pledged with him over a year  varies from 15,000 to 20,000 pieces.  His entire belongings of gold including  those of the members of his family are kept in  a strong room along with the pledged goods. The  petitioner’s  grievance is based on a raid  which  took place  at  his place of business on March 26,  1969  by  the Inspectors of Excise under the authority of the Collector of Central  Excise.  The raid was completed on 9th April,  1969 and a large 259 number  of ornaments and articles of gold were  seized  from his premises.  According      to the petition the  condition precedent  to  the  exercise of such  power  i.e.  that  the officer  concerned should have a reasonable belief that  the provisions  of the, Act have been violated was  non-existant and  in  any  event the Act did  not  permit  Inspectors  of

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Customs  or  Central  Excise  to carry  out  the  search  or seizure.   The  validity of the search and seizure  is  also challenged  on  the  ground that inasmuch  as  the  time  to furnish declaration under S. 16 of the Act had been extended Since  the Commencement of the Act from time to time  up  to the 30th April 1969 the search which took place on March 26, 1969 was unjustified. The  different  provisions  of the Act and  the  grounds  of attack on them may be, summarised as follows :- (a)  Sections  4. 6, 8(1), 16- read with 71, 74 and  86  are bad in law as outside the competence of Parliament and/or in violation  of  the Constitution.  ’Section 6 and  16(1)  are impugned on the ground that Parliament had no competence  to encroach on the field of lending and. money lenders which is covered  by  a  State item of  legislation  in  the  Seventh Schedule. (b)  Sections  4  and 16 read with the power of  search  and seizure,  impositions  of  fine and  penalty  and  power  of prosecution   etc.   confer  arbitrary  powers   upon    the respondents  capable of indiscriminate use and as  such  are violative of Art. 14. (c)  The expression "possession", custody and control in  s. 16  is  vague  and  uncertain  incapable  of  any  objective assessment. (d)  The provisions of s. 8 (1) of the Act are violative  of the  petitioner’s  fundamental  right to  acquire,  hold  or dispose of property in the form of primary gold as it is not in  the  interest of general public.  The  section  is  also impugned  as affecting the possession by the  petitioner  of primary gold found which he has been holding for many  years past.   It  is  also attacked on the ground  that  the  Gold Control  Officer  can  always treat a  particular  piece  of ornament  as primary gold, the acquisition and  disposal  of which was prohibited under the Act.  (e) It is impossible for anyone to comply strictly with the form GS III prescribed under the rules.  In order to  comply with  the strict statutory obligations the petitioner  would have  to incur huge expenses for maintaining  the  necessary staff and undertaking scientific assessment to ascertain the purity,  weight and value of gold content in each and  every ornament. 260 (f)  The  obligation to furnish declarations in  respect  of every  pledge  and/or redemption of the  ornament  would  be incapable  of  compliance as on an average  he  enters  into about  100 transactions of this character in a day.  It  was also quite impracticable to comply with the provisions of s. 16(4)  and (10) to furnish repeated declarations  for  every acquisition   and/or  redemption  of  the  pledge   of   the ornaments. The  petition was affirmed on January 13,     1970   and  on the 19th January this Court granted interim stay of  further proceedings in pursuance of search and seizure. In  the   counter affidavit of the  Assistant  Collector  of Central Excise reliance is placed on, the following facts 1.  The total quantity of gold seized in the course  of  the search  of  the petitioner’s,premises which started  on  the 26th March, 1969 and ended on 9th April 1969 was  95,793.995 gms.  of  the approximate value of  Rs.  14,47,300/-.   This included gold with foreign. marking,weighing 3,539,842 gins. other,  primary gold without marks  212.865 gms gold  coins weighing 85.53 gms. and ornaments weighing 91,9555,753  gms. Two show cause notices were issued one for contravention  of the provisions of the Act and the other for contravention of the  provisions  of the Foreign Exchange    Regulations  Act

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read   with  the     provisions of the Customs Act  and  the Imports and Exports Control Act. 2.   The petitioner took an ’inordinately long time to  seek legal  redress : he waited from April 1969 to  January  1970 before   complaining  of  the  search  and   seizure.    The petitioner   never  attempted  to  avail  himself   of   the opportunity   of  having  a  personal  hearing  before   the competent  authority i.e. the Collector of  Central  Excise, Kanpur. 3. On or about March 25, 1969 on receipt of information  and being satisfied that the provisions of the Act as also those of  the Customs Act and the provisions Exchange  Regulations Act   and  Imports  and  Exports  Control  Act  were   being contravened, the Superintendent, Central Exercise,  Manipuri authorised  the Inspectors of Central Excise  Department  to enter  and  search the premises of the petitioner  and.,  to seize  any offending gold, gold articles or gold  ornaments. The  authorisation  of  the  Inspectors  was  under   powers conferred  by s. 58(2) of the Act and s. 105 of the  Customs Act, 1962. 4.   The Income-tax Officer Etawah issued an order under  s. 132(3)   of  the  Income-tax  Act,  1961   restraining   the Superintendent, Central Excise, from removing, parting  with or otherwise dealing 261 with the gold and gold ornaments seized by the Inspectors of Central   Excise. 5.   Among  the  things  seized were  30  biscuits  of  gold including one  of foreign marking which was primary gold the possession of which by itself was a : contravention of s.  8 (1)  of the Act Neither at the time. of the seizure  of  the gold  nor  during  the  course  of  the  investigation   the petitioner  indicated  as  to  how many  and  which  of  the ornaments were his own and how many of them belonged to  the various  members of his family : no such details  have  been given in the petition. 6.   All  the allegation regarding the vires of the  Act  or the  Rules were disputed.  The difficulty if complying  with the   provisions  of  the  Act  was  also  denied  and   the justification  for the retention of the seized articles  was based on the powers conferred under the different Acts. In  the counter affidavit affirmed by the Secretary  to  the Government in the Ministry of Finance, Department of Revenue and  Insurance. a claim is made that the subject  matter  of the  Act  does  not  encroach on  the  power  of  the  State Legislature  to legislate with respect to money  lending  or money  lenders.  It however contains provisions  prohibiting persons from obtaining loan on the hypothecation, pledge  or mortgage  of primary gold which is a reasonable  restriction on the fundamental right of a citizen.  It is also  asserted that  no  provision  of the Act is  vague  or  uncertain  or difficult of compliance.  S. 8(1) of the Act is sought to be justified  on  the  ground  that  this  provision  had  been inserted  in  the  statute with a view  to  eliminating  the chances  of false defenses being raised on the detection  of smuggled gold and a period of six months from 1st March 1967 had been allowed under the Defence of India Rules to  enable persons  who might have gold in their possession to  dispose of  it  either  by  sale or  delivery  for  conversion  into ornaments  to  licensed dealer or by  certified  goldsmiths. Stress  was also laid on the legislation on the  subject  by which control of gold was first made law as Part XII(A)  (of the Defence. of India, Rules) promulgated under the  Defence of  India  Act followed by the Gold Control Act,  1967,  the Gold  Control Ordinance, 1968 arid the Gold Control  Act  of

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1969.   It was- submitted that the object of this series  of legislation  was  with a view to prevent smuggling  of  gold into India and of the dissemination thereof which results in the  loss  of Rs 100 crores of foreign exchange  per  annum. This   object  could  not  be  achieved  unless  there   was restriction  on the manufacture and sale of  new  ornaments, declaration  of  holdings  of  gold  other  than  ornaments, regulation of the business of gold including the  activities of  gold refiners and goldsmiths.  The  impracticability  of estimating the purity of gold  ornaments was also disputed on the assertion that  any experienced  goldsmith can easily assess the purity of  gold in an ornament by rubbing it on a touch stone.  A time limit of  30  days  had been given from the  commencement  of  the Defence of India (4th Amendment) Rules 1966 to persons owing ornaments  in  excess  of the specified  limits  for  making declarations.   The petitioner should therefore have made  a declaration  of  ornaments in his  possession,  custody,  or control.   In writ petition filed before the present  series of petition,% an undertaking had been given to this Court in those petitions that no action would be taken under S. 16(7) and  16(1)  and  100  of the Act and  the  time  for  making declarations  under  S. 16 was extended till  28th  February 1969 and suitable instructions had been issued to the  field staff  to comply with the above.  The time limit  for  fling the declaration under S. 16(7) had been extended up to  30th June  but  it  was  denied  that  the  period  of  making  a declaration  under  S. 16(1) had been extended  up  to  30th April, 1969. Before  examining in detail the relevant provisions  of  the Act  and  the contentions founded thereon, it may  be  noted that this Act had been challenged by several writ  petitions to  this Court immediately after it was put on  the  statute book  in  September  1968.  The  questions  which  fell  for consideration in that series of petitions included : (a)  Whether  the Act was within the legislative  competence of Parliament under Entry 52 of List I and Entry 33 of  List III of the Seventh Schedule, or (b)  Whether it fell within the exclusive competence of  the State Legislatures under Entry 27 of List II. A  large  variety  of propositions  was  there  advanced  to declare the Act as beyond the competence of Parliament.   It had  been argued inter alia that section 4(4),  4(5),  5(1), 5(2)  27(2) (d), 27(6), 16(7), 32 read with 46, 88  and  100 were  unreasonable  and not in public interest and  so  were violative  of  Art.  19(1)(f) and (g)  of  the  constitution violation art 14 was also urged .    Being  of  the  view  that  the  attack  on  some  of  the provisions was justified but the provisions which were found to be invalid not being so inextricably bound up with  other parts  as  to render the whole  Act  unconstitutional,  this Court   held  that  several  provisions,  namely,   sections 5(2)(b),  27(2)(d) 27(6), 32, 46, 88 and 100  were  invalid. It  is worthy of note that although challenge  was  directly made  to the validity of S. 16(7) the Court did not  express any opinion thereon.  The said provision cannot therefore be assumed to have been Struck down. 263 The matters with which we are not concerned not only include (1)  Writ  Petition No. 24/1970 of which details  have  been given  above,  but  (2)  Writ  Petition  No.  587/1970   the petitioners  in this petition having come before this  Court on  an  earlier  occasion and (3) two  Appeals  1613/70  and 1659/70.  The petitioners in the two petitions mentioned  as well  as the appellants in the appeals are all  persons  who

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carry  on  the business of pawn broking  and  money  lending inter  alia, on the security of gold articles and  ornaments and  the  common grievance of all these persons  is  against some  of the provisions of the Act, the appeals involving  a further  question  as to the impact of the  Act  on  several State Acts dealing with money lending and money lenders  and pawn broking and pawn brokers. The impugned Act, as is shown by its preamble, is to provide for  the economic and financial interests of the  community, for  the production, manufacture, supply, distribution,  use and  possession,  of and business in,  gold,  ornaments  and articles  of  gold and for matters  connected  therewith  or incidental thereto.  As is well known the object of the  Act is  to make it difficult, if not impossible, for gold  which is smuggled into the country from being circulated evidently with  the object of checking smuggling of gold or  rendering the  same  unprofitable and so avoiding a  loss  of  foreign exchange to the country. Although  there is no definition of pawn broker in s.  2  of the Act there can be no doubt that some of the provisions of the  Act are designed to restrict the use of gold by way  of pledge  or hypothecation for securing loan.  S. 2(b) of  the Act defines an "    article"   as   anything   (other   than ornament) in a finished form, made of, manufactured from  or containing,  gold  and  includes any gold  coin  and  broken pieces  of  an article, but does not include  primary  gold. Under s. 2(j) ’gold’ means gold including its alloy (whether virgin,  melted  or remelted, wrought or unwrought)  in  any shape  or form, of purity of not less than nine  carats  and includes primary gold, article and ornament.  ’Ornament’  is defined  as  a thing in a finished form meant  for  personal adornment  or  for the adornment of any idol, deity  or  any other object of religious worship, made of, or  manufactured from gold, whether or not get with stones or gems etc.   The definition  contains an Explanation whereby a thing made  of gold though resembling an ornament is not to be deemed to be an  ornament  unless it is used as such in any pact  of  the country.  Primary gold is defined in s. 2(4) as meaning gold in  any unfinished or semi-finished form  including  ingots, bars,  billets etc.  S. 2(i) defines a ’declaration’ as  one which  is required by the Act or was required by rule  126-1 of  the Defence of India Rules, 1962 or the  Gold  (Control) Ordinance,  1968  to be made with regard to  the  ownership, possession, custody 264 or  control of gold.  Under s. 4(1) the  Central  Government has  to  appoint  an  Administrator  for  carrying  out  the purposes   of  the  Act.   Sub-s.  (2)  gives  the   Central Government  power  to  appoint  Gold  Control  Officers  for enforcing the provisions of the Act. Section  6(1)  empowers  the Administrator  to  require  any person who lends money on pledge, hypothecation etc. of  any article  or  ornament  to  furnish  a  return,  giving  full particulars  of the things given by way of security and  the Persons  who gave the security.  Sub-s. (2) of-this  section authorises  the examination of accounts of  persons  lending money  on  the security of gold articles  or  ornaments  and declares that any gold which is not entered in the  accounts or:  found  to  be in excess of the quantity  shown  in  the accounts  and  it  is not otherwise  accounted  for  to  the satisfaction of the examining officer is to be, deemed to be in  possession  of  such  person  in  contravention  of  the provisions  of the Act.  Chapter III of the  Act  containing sections  8  to 11 deals with restrictions relating  to  the manufacture,  acquisition,  possession,  sale,  transfer  or

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delivery  of  gold.  Sub-s. (1) of S. 8 forbids  any  person from owning or having in his possession, custody or  control or  acquiring or agreeing to acquire the ownership,  posses- sion,  custody or control or buying, accepting or  otherwise receiving or agreeing to buy accept or otherwise receive any primary  gold  save as otherwise provided in this  Act.   In other  words,  there  is a complete bar  to  anybody  having possession of primary gold. In  this  connection  it  may be  noted  that  there  was  a notification under the Defence of India Rules requiring  the conversion  of  primary  gold  either  into  cash  or   into ornaments  within  the  time  specified  therein  which  had expired  long  before the Gold Control Act was  put  on  the statute book.  Sub-s. (4) of s. 8 is aimed at preventing any person from delivering, selling or disposing of etc. of  any article to a person who is not a licensed dealer or  refiner except  as provided in the Act.  Sub-ss. (3) and (4) have  a qualification in sub-s. (5) as regards the person  accepting or  transferring by way of gift or exchange gold  coins  not exceeding   five  in  number.   Sub-s.  (6)   empowers   the Administrator to make exemption from the above provisions in special circumstances.  Section 10 provides as follows :                   "No  person  shall obtain from  any  other               person   any   loan   or   advance   on    the               hypothecation, pledge, mortgage or charge of-               (a)   any primary gold, or               (b)   any   article  or  ornament   which   is               required  to  be  included  in  a  declaration               unless  such article or ornament has  been  so               included :               Provided that, in the case of an article which               is   not   required  to  be  included   in   a               declaration, no transfer or                                    265               delivery  thereof  shall be made  unless  such               transfer  or  delivery has been  intimated  in               writing to the Administrator." s.  11 contains prohibitions regarding making  manufacturing etc. of primary gold articles except under authorisation  by the Administrator. Chapter IV deals with possession of gold by public religious institutions, disposal of gold received by way of offerings, sub  mission of monthly accounts and responsibility  of  the person  in charge of the management of any public  religious institution in regard to such gold or gold ornaments.  S. 16 which  has  no less than 13 sub-sections provides  for  the making  of declarations for all practical purposes by  every person  who owns or possesses or deals with or  disposes  of gold subject to the exemption created in sub-s. (5).   Under sub-s.  (1)  every  person who owns  or  is  in  possession, custody  or  control  of  any article  or  ornament  at  the comme ncement  of  the,  Act,  or  acquires  the   ownership possession  ,etc. thereafter must make within 30  days  from such  commencement or from the acquisition, as the case  may be  or  within such further time as the  Administrator  may allow  a  declaration  in  the prescribed  form  as  to  the quantity,  description and other prescribed  particulars  of any  article or ornament or both, owned, possessed, held  or control by him.  Such declaration however is not required to be made by any person who has before the commencement of the Act already made a declaration in relation to the article or ornament  or  both.  Sub-s.(2) specifies a number  of  cases from  clauses  (a) to (1) of persons who have  to  make  the declarations  in  such cases and its opening  words  are  as follows

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             "For  the  removal  of doubts,  it  is  hereby               declared  that the declaration referred to  in               this section shall be made, in relation to any               article, or ornament, or both. Clause  (a) deals with minors and lunatics, the  declaration having to be made by the guardian or manager.  Cl. (b) deals with  owners  of  idols  or  deities;  cl.  (c)  deals  with properties of a person which are under the management of  an administrator  or receiver; clause (d) with a  person  whose properties  ate under the management of the Court of  Wards; cl. (e) relates to articles or things vested in an  executor or  an  administrator  of  a  will  or  other   testamentary disposition;  cl. (f) deals with the case of firms; cl. (g) with the case of a Hindu undivided family; cl. (h) with the case ,of a private or a public trust; cl. (i) with the  case of  a  company whether incorporated in or  outside  India-. clause (j) with a 266 temple,  church,  mosque, gurdwara or  any  other  religious institution;  cl. (k) deals with wakf property and  cl.  (1) deals with societies, clubs or other associations.  Cl.  (m) deals  with other persons owning, possessing or  holding  of gold as may be prescribed for them.  Sub-ss. (1) and (2)  of section 16 make it quite clear that every person who owns or is  in  possession,  custody or control of  any  article  or ornament,  no  matter  whether he is or  is  not  the  owner thereof, is under a duty to make a declaration with  respect to  all his holdings of gold articles or ornaments.   Clause (5) exempts persons holding or owning gold only within up to certain limits from making such declarations.  Under cl. (3) any  person  who did not own, possess, hold or  control  any quantity of’gold in excess of the quantity specified in sub- s. (5) before the commencement of the Act but acquires after such   commencement   the  ownership  thereof   whether   by succession,  intestate  or testamentary or  otherwise,  must make  a declaration if as a result of such  acquisition  the total quantity of gold which comes to be. held or  possessed or  controlled by him exceeds the limits specified.   Sub-s. (4)  of the section makes it incumbent on all  persons.  who have  made  declarations either under the Defence  of  India Rules  or the Gold Control Ordinance or under sub-s. (1)  to make a further declaration as often as he acquires or  parts with  the  ownership, possession etc. of  such  gold  giving prescribed   particulars  thereof.   Sub-s.  (7)  makes   it obligatory  on  every licensed dealer or refiner to  make  a declaration  as therein specified.  Under sub-s.  (8)  every declaration  required  under this Section is to be  made  in triplicate  of  which one copy is to be  authenticated  and’ signed by the Gold Control Officer and to be returned to the person making the declaration and the copy so returned is to be  retained by such person as evidence of  the  declaration made by him under this section.  Under sub-s. (10) a  person who acquire or parts with ownership, possession, custody  or control of gold’ after he has made a declaration to  endorse within 30 days from the date of such acquisition or  parting with of gold in such manner as may be prescribed on the copy of the declaration retained by him and to produce such  copy within  7 days from the date of such endorsement before  the Gold  Control Officer who has to make necessary  changes  in the register referred to in sub-s. (9) and also in the  copy of  the declaration kept in his safe custody.  Under  sub-s. (11) no person shall own or have in his possession,  custody or  control  any quantity of gold which is  required  to  be included in a declaration unless such gold has been included in a declaration or further declaration as the case may  be.

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It  is  to  be noted however that no  restriction  has  been placed  on a pawn broker on receiving articles or  ornaments of  gold  by  way of pledge  and  advancing  loans  thereon. Chapter  XII of the Act deals with entries. search.  seizure and  arrest for the purposes of’ the Act.  S. 58(1) and  (2) empower any Gold Control officer 267 authorised by the Administrator to enter and search any pre- mises,  refinery etc. if he has reason to suspect  that  any provision of the Act has been or is being or is about to  be contravened.   S.  59  empowers  any  Gold  Control  Officer authorised  in this behalf by the Administrator  to  detain. and  search any person or thing if he has reason to  suspect that  any  person has secreted about his person  or  in  any other  thing any gold in respect of which  contravention  of the  Act is suspected or any document which in  his  opinion will be useful or relevant to any inquiry or proceedings  in relation  to the contravention of any provision of the  Act. S.  60 deals with the conditions under which a search is  to be  conducted.  S. 66 gives any Gold Control Officer  if  he has  reason  to  believe that in respect  of  any  gold  any provision  of this Act has been or is being or is  attempted to  be contravened, the power to seize such gold along  with the  package, covering or receptacle or any other  goods  in which  any  quantity  of such gold has been  mixed.   S.  68 contains  the  power  of arrest  in  certain  circumstances. Under s. 69 the provisions of ss. 102 and 103 of the Code of Criminal  Procedure relating to search and seizure are  made applicable  as  far as possible.  Chapter  XIII  deals  with confiscation  and  penalties.  S. 71 which  is  the  opening section of the Chapter runs as follows:-               "(1)   Any  gold  in  respect  of  which   any               provision  in  this Act or any rule  or  order               made  thereunder has been, or is being, or  is               attempted to be, contravened, shall be  liable               to confiscation.               (2)   Any  package,  covering  or   receptacle               (including  its other contents) in  which  any               gold liable to confiscation under  sub-section               (1)   is  found  shall  also  be   liable   to               confiscation.               (3)   Where  any gold liable  to  confiscation               under subsection (1) is mixed with other goods               in  such  manner  that  such  gold  cannot  be               separated from those other goods, the whole of               such goods shall be liable to confiscation.               (4)   Any gold which is liable to confiscation               under  sub-section  (1), shall be  so  liable               notwithstanding any change in its form." S.   72 provides for confiscation of conveyances or  animals etc. by means of which any provision of the Act is sought to be  contravened.  Under s. 73 whenever any  confiscation  is authorised by the Act, the officer adjudging it may, subject to  such  conditions  as  may  be  specified  in  the  order adjudging  the  confiscation, give to the owner  thereof  an option  to  pay  in  lieu of  confiscation  such  fine,  not exceeding twice the value of the thing 268 in  respect of which confiscation is authorised as the  said officer  thinks  fit.   Under.   S. 74  any  person  who  in relation  to any gold does or omits to do any act which  act or  omission would render such gold liable  to  confiscation under the Act or abets the doing or omission of such an  act or is in charge of the conveyance or animal which is  liable to  confiscation shall be liable to a penalty not  exceeding

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five  times  the value of the gold or  one  thousand  rupees whichever  is  more,  whether  or not  such  gold  has  been confiscated  or is available for confiscation.  Under S.  77 no confiscation made or penalty imposed under the Act is  to prevent the infliction of any other punishment to which  the person  affected thereby is liable under the  provisions  of this  Act  or under any other law.  Chapter XIV  deals  with adjudication,  appeal  and revision.  S.  78  indicates  the limits  of  authority of  different  adjudicating  officers. Under  S.  79 no order of adjudication  of  confiscation  or penalty  is  to  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. Chapter XV deals with offenses and their trial., S. 85 makes the carrying on of the business of a banker or money  lender in  contravention  of  the Act or any  rule  or  order  made thereunder punishable with imprisonment for a term which  is to be not less than six months but not more than three years and  also with fine.  The court however may,  if  satisfied, that the special circumstances of the case so require impose a sentence of imprisonment for a term which may be less than six  months.   Failure to make a declaration under  the  Act without  any reasonable cause or making a declaration  which is  either false or which the declarant knows or has  reason to believe to be incorrect punishable with imprisonment  for a  term which may extend to two years and. also  with  fine. Under S. 91 whoever contravenes any provisions of the Act or any rule or order made thereunder for which no punishment is separately  provided in this Chapter (Chapter XV)  shall  be punished  with imprisonment for a, term which may extend  to three months or with fine or with both.  There are some mis- cellaneous  provisions  in  Chapter XVI.  Under  S.  99  any person  who  is  in possession, custody or  control  of  any primary gold, 269 article  or ornament is to be presumed, unless the  contrary is proved, to be the owner thereof. Mr. Daphtary, learned counsel appearing in support of  Writ Petitions 24 and 287 of 1970 limited his challenge mainly to sections  6,  8 .and 16 of the Act and attempted  to,  show that  compliance  with  all the conditions in  form  GS  III prescribed   under  rule  4  of  the  Act  was   almost   an impossibility.   The  first question to  be  considered  is, whether there is anything in the Act or the rules  regarding the  filling  up of. the form GS III  which  constituted  an unreasonable  restriction: on the part of a pawn  broker  to hold’  acquire  or dispose of property or  carrying  on  his business of money lending unreasonable within the meaning of Art. 19(1)(f) and (g) of the Constitution not-saved by  sub- cis.  (5) and (6) thereof. In our vie* no exception  can  be taken  to the provisions of the Act to which our.  attention was drawn by learned counsel for the purpose on this score.’ If  smuggling- of gold into the country is to be checked by the  prevention,  of the commission of smuggled  gold,  into gold  articles  or  ornaments,,  there  is  ...no  unreason-

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ableness,  in the State calling upon, all pawn  brokers  and persons  who take pledges or hypothecation of  ornaments  to furnish  declarations  so,that the Administrator.  and  the- Gold-  Control Officer may keep an eye on the activities  of such,,-persons  and, if necessary, at any,point of time  ask for a return in terms of s. 6 and satisfy himself about  the legality of his acts: by inspecting his accounts.  It would not be difficult for anybody carrying on or wanting to carry on business lawfully to insist on the pawnor producing  the, copy  of  the declaration in his possession  given  to  him after  authentication by the- Gold Control Officer in  terms of  sub-s.  (8) of s. 16 in order to  satisfy  himself  that there is no contravention of the Act. S.   16 as is seen is all-embracing and makes it  obligatory on  every  person  unless he is exempted  under  sub-s.  (5) thereof  to make a declaration of all the gold articles  and ornaments  in his possession, custody or control.  In  order that  there  may  not be any uncertainty in  the  matter  of making  declarations in certain cases, the  Legislature  has indicated   the  persons  on  whom  the  burden  lay.    The requirement  of  making  a declaration as often  as  a  pawn broker acquires ownership, possession, custody or control of gold under sub-s. (4) is to be read with sub-s. (10) and  it is  enough for  a pawn broker to approach the  Gold  Control Officer with the full and detailed statements of his holding at  the end of every month.  As such it cannot be said  that there  is  any  unreasonable  restriction  on  his   holding property or pursuing his business in terms of Art. 19(1) (f) or (g) of the Constitution. 670 The  contention that there being no provision for notice  to be given to him in case of any proceedings for  confiscation the  pawnee may be prejudicially affected without a  hearing being  given to him has no substance inasmuch as he will  be the  person presumed to be the owner in terms of s.  99  and the gold can only be seized from his possession or  custody. He   can  appear  before  the  authorities  and   make   his submissions  as  to  why no penal  action  should  be  taken against him.  There does not however seem any  justification for an order of confiscation of gold under s. 71 of the  Act merely because of a failure to comply with s. 16 relating to declaration.   It is no doubt true that the owner is  to  be given  a  hearing in terms of s. 79 and he has a,  right  of appeal  under s. 80 but the provision of s. 73 which  allows the  levy  of a fine in lieu of confiscation  not  exceeding twice   the  value  of  the  thing  in  respect   of   which confiscation  is authorised appears to be unduly harsh.   In this  connection,. a, reference may be made to s. 18 of  the Wealth  Tax Act and the penal provisions contained  therein. Under  the Wealth-tax Act the penalty in case of failure  to furnish  the return without reasonable cause is a sum  equal to two per cent of the tax for every month during which  the default co but not exceeding in the aggregate to 50 per cent of  the  tax.   It will be noticed that the  fine  there  is imposed  only on failure to pay the tax but in case of  gold in of which no declaration has been made under s. 16 or  the factum of pawn of which has not been communicated in to  the Administrator, the owner ipso facto becomes liable to pay an unconscionably  high  penalty.  S. 71 therefore  appears  to place an reasonable restriction on the right of a person  to acquire,   hold  and  dispose  of  gold  articles  or   gold ornaments.   It may be applied  indiscriminately and  cannot therefore be upheld as saved by cls. (5) and (6) of Art.  19 of the Constitution. A  point was also made that the definition section does  not

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make  a  clear  distinction  between  an  ’article’  and  an ’ornament’.   This  seems  to be  without  foundation.   The explanation  to  s. (2)(p) shows that nothing made  of  gold which  resembles  an  ornament  will be  deemed  to  be,  an ornament  unless  the thing (having regard  to  its  purity, size,  weight.  description or workmanship) is  such  as  is commonly  used  as ornament in any State.  Clearly it  is  a question  of  proof  as to whether the thing  passes  as  an article  or  an  ornament  in a  particular  State  and  the difference  in  the  treatment of these  two  substances  in certain provisions of the Act do not fall to be considered. It  was argued that compliance with all the conditions  laid down  in  form  Gs  III  under rule 4  of  the  Act  may  be impossible 271 in  a  number of cases.  The form contains  a  schedule  for ornaments  or  articles under different  columns,  column  5 being  meant for estimated weight and value of gold  content and column 6 ‘purity’.  It was urged that where the ornament is made up not only of gold but of other metals and  stones, precious or otherwise, it will be impossible either to  give a  true  estimate  of  the weight  and  value  of  the  gold contained or the purity of the gold.  No doubt there may  be some difficulty in some cases but it must be realised that a pawn broker who is asked to advance money on the security of such an article will make a fairly accurate estimate of  the weight  and  value of the gold therein so as to be  able  to judge  for  himself how much he can safely  advance  on  the security of that article.  He is not called upon to give the exact  purity  of the gold content in the article.   He  can only give an estimate of its purity. The supposed difficulty in the matter of compliance with  s. 16 of the Act as regards acquisition or transfer of gold  as and  when  made really does not exist.  It  would  certainly have been onerous and an impossible task for any pawn broker to  perform  if  he had to  furnish  daily  declarations  in respect  of his transactions had during the day and  to  get the  Gold  Control  Officer to make an  endorsement  on  his declaration every day.  He is at liberty to get it done only once  a  month and surely it would not be  difficult  for  a person  who  maintains a true and faithful  account  of  his dealings  with  his borrowers to prepare a schedule  of  all these  transactions  up  to a certain date  and  secure  the endorsement  of the Gold Control Officer to the  alterations in the declaration already authenticated by him. There is no difficulty with regard to primary gold found  in the  possession of the petitioner in the Writ  Petition  No. 24.   Under  s.  8(1)  no person can  own  or  have  in  his possession, custody or control, acquire or agree to  acquire ownership, buy, accept or otherwise receive any primary gold except  as provided in the Act and the pawn broker or  money lender is not such a person. The next question to which we have to address ourselves  is, whether the petitioner in W.P. No. 24 of 1970 had any lawful excuse  for not making a declaration before the date of  the raid  on his. According to him he was required to  file  his declaration  by 30th April, 1969 and the seizure of  primary gold and ornaments before that date was not lawful.  In this connection Mr. Daphtary drew our attention to the averments in  paragraphs  12 and 16 of the petition  which  have  been already referred to.  This is however denied in the  counter affidavit.   Reference was made in the counter affidavit  to the  previous petitions and it was said that the time  limit for filing the  declaration of 272

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all  the ornaments held-by a licensed dealer or refiner  was extended up to 28th February 1969 and an undertaking for the purpose was given to this Court with regard to  declarations under  S.  16(1) and it was. only with regard  to  the  time limit  for  filing of declarations by  licensed  dealers  or refiners under s. 16(7) that there was an extension of  time up  to 30th June, 1969.  The printed circulars to which  our attention was drawn do not show that there was any extension of  time with regard to declarations under S.  16(1)  beyond 28th  February,  1969.   Reference  to  a  certain  circular addressed only. to Gold Control Officers, to the effect that no steps were to be taken until after 30th April 1969 by Mr. Daphtary. cannot be availed of by the petitioner who was not in a position to assert that the circular had been  publicly advertised or that he himself had received any copy of  such circular. Mr. Daphtary also argued that the provision for search  as: contained in S. 58(1) which allowed any Gold Control Officer authorised  by  the Administrator to enter  and  search  any business  premises  merely if he-had any reason  to  suspect that any provision of ’the Act was being or was about to  be contravened,  was. contrary to law and  should  be  struck down.   He  complained that it would be made  an  engine  of oppression  in  the hands of any unscrupulous officer if  he was  minded  to  do  so.   He  argued  that  there-:Was no provision  corresponding  to this in the, Sea  Customs  Act, 1892 under which- an officer could only search a ;person  if he had reason ’to believe and where the person about to  be searched  could  require  the officer to take  him  ’to  the nearest magistrate or a Customs Collector.  He also drew our attention  to the Customs Act, 1962 which  envisages  search only  when  the proper officer has "reason to  believe"  and where searches are further subject to the provisions of  the ’Code of Criminal Procedure with respect thereto’ It is true that  the  usual  safeguards  under  the  Code  of  Criminal Procedure  are  not  to be found in this  Act  except  those contained  in  ss.  102 and 103 of the Code.   But  that  by itself  would not be enough to strike down the provision  in S.  58.   There may be cases where it is necessary  for  the Gold Control Officer to act with expedition in the matter of search so that the information that he is going to search  a premises may not leak out and the only safety in this regard is that the Gold Control Officer’ must be authorised by  the Administrator  in  this behalf and he in his turn if  he  is empowered  by  the Central Government, may  authorise  other Government  officers to enter and search the  premises.   In this  case  the  counter affidavit shows  that  the  officer searching had information regarding the contravention of the provisions  of the Act and the result of the  search  showed that huge quantity of gold was lying with the petitioner  in respect of which no declaration had been made.  It would not be out of  273 place  to mention that the Gold Control Act is not the  only provision of law where power to search on suspicion has been conferred on an officer.  In this connection we may refer to S.  41 of the Madras General Sales Tax Act 1 of  1959  which came   up  for  consideration  before  this  Court  in   The Commissioner  of Commercial Taxes, Board of Revenue,  Madras v. Ramkishan Srikishan Jhaver etc.(1). In Writ Petition No. 587/1970 filed on 4th November 1970 the challenge  is  made only to s. 16 of the  Act  which  though questioned  in Writ Petitions Nos. 282, 407 and 408 of  1969 had not been adjudicated upon by this Court. In  the  result  the contentions raised on  behalf  of  Writ

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Petitioners  except  with  regard to section  71  cannot  be accepted  and the provisions of the Act impugned  before  us except the said section cannot be struck down.  Mr.  Ayyangar appearing for the appellant in  Civil  Appeal No.  1613/1970 formulated his objections to the Act  in  the three, following propositions :- 1.   Section 16(1) of the Act was a general provision  which did not apply to pawn brokers and money lenders as they were governed by Sections 6, 10 and 28. 2.   In   any   view  of  the  matter  Section   16(1)   was unreasonable regarding pawn brokers. 3.   By  reason  of the Andhra Pradesh  (Andhra  Area)  Pawn Brokers Act XXIII of 1943 and the Andhra Pradesh  (Telangana Area)  Money  Lenders  Act  (V of  1949  F.)  the  field  of legislation regarding money lending and pawn brokers so  far as the State of Andhra Pradesh was concerned was  completely and  exclusively occupied by those Acts and inasmuch as  the Gold  Control Act purported to trench upon those State  Acts it was beyond the legislative competence of Parliament.      On  the first point learned counsel drew our  attention to Section 6 (1) of the Act which has been already  referred to  and  contended  that inasmuch as  Section  16(1)  was  a general provision while Section 6(1) was specially  directed towards  pawn  brokers, the former  provision  i.e.  Section 16(1)  was inapplicable to pawn brokers.  Our attention  was also drawn to Section 28 of the Act under which no  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 (1)  Civil  Appeals 150 to 154/1967 decided on  9th  August, 1967. 18-1 S.C. India 71 274 same  premises in which he carried on business as a  dealer. in our view Section 16 is not excluded in the case of  money lenders  or  pawn brokers.  Any person who comes  under  the purview  of Section 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-Section (5)  which  permits  of exemptions  in  respect  of  persons holding gold articles or ornaments up to a specified  limit. The  provision in Section 6(1) empowering the  Administrator to call upon any pawn broker to furnish a return does not do away with his obligation to file a declaration under Section 16(1).   Section  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 Section  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 Section 16(1).  Counsel  argued that  there would, be duplication of declaration in  respect of  pawn brokers if both are complied.  No such  duplication or  difficulty will arise.  Every pawn broker will  have  to file  his  declaration under Section 16(1) and he  would  be obliged  to make a return only when he is called upon to  de so  in  terms  of  Section 6. It  was  argued  further  that although  under Section 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 cl. (m) was made they were under no obligation to  file  declarations.   There  is  no  substance  in  this contention because sub-section (2) is directed only  towards removal  of  doubts  which might be left  in  the  cases  of persons specified in Clauses (a) to (1).In the case  of

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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. There  is no substance in the second point either.   It  was argued  that  a  pawn broker only kept things  in  his  safe custody and it would be very oppressive on him if he had the obligation  to  make a declaration as often as he got  in  a gold article under a pledge or parted with it on redemption. Our attention was drawn to a passage in Mohd Hanif  Quareshi v. The State of Bihar(1) where dealing with the case of  ban on  the slaughter of cows of all ages and her progeny  which included  bulls, bullocks, heifers, buffaloes, male,  female or  calves imposing a great hardship on butchers this  Court remarked that the enactment if (1)  [1959] S.C.R. 629 at 671. 275 valid  would compel the butchers to make fresh  arrangements for  the  supply  of  animals which  were  permitted  to  be slaughtered for food and said :               "Theoretically  it may not be  impossible  for               them to do so, but in practice it is more than               likely to cause considerable inconvenience  to               them  and may even involve extra expenses  for               them...........               The immediate effect of the operation of these               Acts is to cause a serious dislocation to  the               petitioners’ business without any compensatory               benefit." We  do  not think that these observations can apply  to  the facts of this case.  A money lender, specially a pawn broker who enters into a number of transactions of pledge every day has  to  maintain  his account books and he  has  to  record faithfully therein the articles he receives by way of pledge including their weight and general description when he takes them in and making a declaration for the purpose of the  Act cannot entail any hardship on such a person. With  regard to the last point urged by Mr. Ayyangar  it  is enough  to say that by the Gold Control Act Parliament  only sought  to control and regulate the production,  manufacture etc.  use and possession of and the business in  gold,  gold ornaments  etc.   It did not seek to disturb  or  annul  the provisions  of the State Acts mentioned.  The provisions  of the  State Acts are to have full play and effect so long  as the Gold Control Act is not violated. Mr.   Natesan   appearing  for   some   interveners   raised contentions similar to Mr. Ayyangar’s and urged that the Act did  not contemplate multiple declarations and it  purported to affect only owners of gold articles or ornaments and  not pawn brokers.  We see no force in this contention. Save  that  section 71 of the Act  is  unconstitutional  the petitioners  in  Writ Petitions 24 and 587 of 1970  are  not entitled  to  the  reliefs asked for  and  they  will  stand dismissed.    Civil   Appeals  Nos.  1613/70   and   1659/70 challenging  the  vires  of the Gold Control  Act  are  also dismissed.  The parties will pay and bear their own costs. G. C. 276