The prosecution must prove beyond reasonable doubt that the gold content in an alloy exceeds 9 carats purity to establish an offence under the Gold (Control) Act. Failure to preserve a sample for testing, despite a challenge from the accused, violates the principles of natural justice and affects the prosecution's case.

The Appellant Hemchand Jain is accused - 1. He was tried along with Nanakchand Jain (accused-2) by the Chief Presidency Magistrate Egmore, Madras for having committed an offence under Section 135 (b) (ii) of the Customs Act and also for having contravened Rule 126 H (2) (d) and 126 (I) (10) of the Defence of India (Gold Control) Rules, 1962. The appellant alone was convicted under charges 1 to 3 namely under Section 135 (b) (ii) of the Customs Act, R 126 H (2) (d) read with R 126 P (2) (iv); and R 126 1 (10) read with R 126 P (2) (ii) of the Defence of India (Gold Control) Rules sentenced to pay a fine of Rs. 2, 000/- under charge No. 1. Under Charges 2 and 3 he was further sentenced to undergo simple imprisonment for six months and to pay a find of Rs. 1, 000/- under each charge, the substantive sentence of imprisonment to run concurrently.

2.The prosecution case is this : P.W. 2 Kothandabalan, the Preventive Officer attached to Madras Customs House while he was on duty at about 10 a.m. on 5th August, 1967 on suspicion intercepted a car bearing No. MPG 8131 at the junction of N.S.C. Bose road and Mint Street along with P.W.1. Balasubramaniam who was also an officer attached to the Madras Customs House. The appellant and Accused-2 were travelling in the said car. The Appellant had a brief case (M.O.I.) with him. There was a hold-all in the luggage boot, which belonged to the Appellant.

3.When the Appellant was questioned, he stated that he was coming from Bombay and that he alighted at Meenambakkam Airport and when he was further questioned, he stated that his brief case (M.O.I.) contained silver bars. On a search of the brief case, they found 27 silver looking bars. Then the car was taken along with the appellant and the other accused to the shop of Ameenchand Nagindas. These bars were weighed and they were found to weigh 4415 grams. As there was some slight difference in the colour of the bar, P.W. 2 asked the appellant about it and he stated that the bars contained zari silver. On suspicion that the bars might be gold bars they took the bars to the refinery of Pandurad & Co. The appellant, in the meanwhile, sought the assistance of Advocate P.C. Kothari, and they all proceeded to the refinery. On refining the bars, 1, 755.800 grams of gold was obtained. The silver alone weighed 2, 609.00 grams.

4.The house of the appellant was searched and some documents were seized.

5.The Appellant stated that the gold and silver were lawfully obtained, that the 27 bars of silver looking material were examined and passed by the Customs authorities at the Madras Meenambakkam Airport, that the 27 bars were melted and refined without his approval and consent, that there is no restriction either under the Customs Act, 1962 or under the Gold Control Rules to possess an alloy consisting of gold and silver, that he melted silver and silver vessels, zari gold and Gold ornaments belonging to his family in a refinery prior to the enforcement of Gold Control Rules and made it into 27 bars, zari that the material evidence of 27 bars were destroyed without keeping one bar or a bit in the original form, that the gold contents in the bars were not above 9 carats purity and, therefore, no offence under the Gold Control Rules was committed, that the bills pertaining to purchase of silver recovered from him did not pertain to the siver in dispute, that the letters seized on the search do not reveal any shady transactions, that his brother-in-law Nanakchand Jain (accused 2) had nothing to do with the 27 bars recovered, that the opinion of Ameenchand Nagindas was not binding on him and that neither the gold nor the silver is liable to confiscation under the Customs Act.

6.The appellant repeated the same statement in this case while he was questioned under Section 342 Cr. P.C.

7.The learned Chief Presidency Magistrate convicted the appellant as he was of the view that there was a reasonable inference that the gold contained in the alloy was smuggled from