2017 Supreme(SC) 1117

SUPREME COURT OF INDIA
J. CHELAMESWAR, S. ABDUL NAZEER, JJ
Gunwantlal Godawat – Appellant
Versus
Union of India & Another – Respondents
CIVIL APPEAL NOS. 4711-4712 OF 2011
Decided On : 22-11-2017

IMPORTANT POINTS
Repeal of Gold (Control) Ordinance, 1968 repealing Defence of India Rules, 1962 did not revive the Rules.
The Gold Control Act, 1968 applies to proceedings concluded under the Defence of India Rules, 1962.
If a person does not make the declaration as calculated violation of the rules, no discretion can be exercised in favour of such person.
Redemption fine has to be determined not on the date of seizure but on the date of option being exercised.
A person cannot be allowed to take advantage of lingering litigation and must pay interest on the redemption fine as determined.

Headnote:(a) Gold Control Act, 1968 – Section 116 – Effect of repeal of Rules by Ordinance and that of Ordinance by Act – Act while repealing the Ordinance declaring that various actions taken both under the Rules or the Ordinance are deemed to be actions taken under the corresponding provisions of the Act – Nature of repeal of Rules held to be peremptory. (Para 28)

       (1985) 3 SCC 198; (2017) 3 SCC 1; (1994) 3 SCC 1; 1947 AC 362 (HL); 102 ER 576 (KB); 151 ER 1024; AIR 1955 SC 84 – Referred

       (b) Gold Control Act, 1968 – Section 80 and 81 and section 116 r/w Rule 126M(3), Defence of India Rules 1962 – Rules providing for appeal to the ‘Administrator’ irrespective of the forum which adjudged the confiscation – On the other hand under the Act, appellate forum varies depending on the forum which adjudged the confiscation – Section 116 does not apply to pending proceedings. (Para 30)

       © Defence of India Rules, 1962 – Part XIIA – Declaration of holding of gold, search and seizure and confiscation (or forfeiture) after adjudgment of liability – Liability for confiscation of property could be purely civil in nature – Possession of undeclared gold entails two independent consequences - (i) liability for confiscation of such gold or fine in lieu thereof, and (ii) liability for prosecution and punishment. (Para 33, 34, 35, 36, 39, 40)

       AIR 1963 SC 255; (2014) 4 SCC 392 – Relied upon

       1874 12 Bengal LR 167 – Referred

       (d) Defence of India Rules, 1962 – Part XIIA and section 116, Gold Control Act, 1968 – Appellant challenging order of confiscation – Proceedings pending by the date of the repeal of the Rules – High Court not disturbing seizure of the gold but remitting matter for fresh adjudgment of whether gold is required to be confiscated – Rules and the Ordinance repealing the rules also repealed by the time of High Court decision – Section 6, General Clauses Act, 1897 – Rules already repealed by Ordinance will not revive on repeal of the Ordinance. (Para 41, 42)

       (1987) 3 SCC 516 – Relied upon

       (e) Defence of India Rules, 1962 – Part XIIA – Rule 126M(3) – Confiscation proceedings initiated under the Rules – Must be concluded in accordance with the Rules, without any reference to the Act – Fiction under section 116, Gold Control Act, 1968 applied only to concluded proceedings and not pending proceedings. (Para 47, 48, 61)

       (1972) 4 SCC 174 – Relied upon

       (f) Defence of India Rules, 1962 – Rule 126I and 126M – Requiring persons to declare acquisition of Gold initially as well as subsequently – Persons not filing a declaration at all and persons not filing a further declaration – Cannot be treated on the same footing – Similarly persons falling under different categories cannot be treated alike – Instantly, appellant did not make requisite declaration – A calculated violation of law – No discretion should be exercised in favour of appellant. (Para 53, 54, 55)

       (g) Gold Control Act, 1968 – Section 71 – Gold can be confiscated under the Act only for contravention of provisions of the Act – Not for contravention of law existing prior to the Act, i.e., the Defence of India Rules, 1962 – Distinction between acts done pursuant to authorization of a statute and acts done pursuant to the authorization under an earlier statute but deemed to have been done under the subsequent statute – Such a fiction does not retrospectively authorise doing of such acts. (Para 65, 66)

       (h) Gold Control Act, 1968 – Section 73 – Redemption fine – On basis of value of gold – Applicable only to confiscations adjudged under the Act – Not applicable to confiscations adjudged under the Defence of India Rules – Instantly, confiscation having been adjudged under the Rules, redemption fine cannot be determined on basis of value of the gold. (Para 68)

       (i) Defence of India Rules, 1962 – Part XIIA – Redemption fine – Value of the gold – Determination – With reference to date on which the owner exercises the option to pay fine in lieu of confiscation, not the date of seizure – High Court rightly determining value of gold as on 9.12.94, i.e., Rs.11.04 crores – In view of value of gold rising to Rs. 72 crores over 50 years, appellant directed to pay 10% interest on the value determined by High Court. (Para 71, 72)

       Facts of the case:

       The residential premises of the appellant’s father were searched in exercise of the authority under Rule 126L(2) of the Defence of India Rules, 1962. 240 kilograms of gold (bars etc.) was found buried in the house which was seized and ultimately confiscated. A penalty of Rs.25 lakhs was also imposed.

       Appeal by the appellant’s father before the Gold Control Administrator which was dismissed. The revision thereagainst before the Government of India was also dismissed.

       The High Court allowed the writ petition remitting the matter to the Collector (Central Excise and Customs).

       The Collector once again ordered confiscation of the entire quantity of (240 kilograms) gold approximately valued at Rs. 11.04 crores with an option to the legal heirs of the appellant’s father to redeem the gold by paying a fine of Rs. 2.5 crores.

       The Tribunal allowed the appeal reducing the redemption fine to Rs.12.5 lacs which represented the value of the gold as on the date of the seizure.

       Finding of the Court:

       High Court rightly determined the value of the gold as on 9.12.94.

       Result: Appeals disposed of.