Decided on August 14,1963

Collector Of Central Excise, Hyderabad And Others Appellant
Phool Chand Mohanlal And Another Respondents


JAGANMOHAN REDDY,J.:- - (1.) Our learned brother, Gopalakrishnan Nair, J., had issued a writ of mandamus directing the appellants Government not to enforce the notices issued by them on 14-6-63 purporting to be under the Gold Control Rules, to the respondents in respect of their business as pawn-brokers, against which this writ appeal has been filed.
(2.) The respondents are dealers in gold within the meaning of the Defence of India (Amendment) Rules 1963 (hereinafter referred to a 'the Gold Control Rules') made under the powers conferred under Section 3 of the Defence of India Act (LI of 1962). These Rules, which are contained in Part XII-A of the Defence of India Rules, 1962, were inserted by an amendment in 1963. The respondents are also doing business as pawn-brokers. It was their contention in the writ petition filed on 18-6-1963 that while pawn-brokers are exempt from filing any statement as to the jewellery pledged with them, they were asked by a notice issued to them on 14-8-1963 to give a declaration of gold articles pledged with them and also to furnish details of the date of pledge, the description of the ornaments pledged, the weight of the ornaments so pledged, their net gold content and the amount of loans advanced. After an examination of the relevant gold control rules, our learned brother held that an ordinary person is not bound to make a return or declaration of the gold ornaments in his possession or under his control and that a person who does the business of a pawn-broker by advancing loans on the pledge of gold ornaments need not also make a return or declaration in respect of the ornaments pledged with them, and that a dealer as well as an adult who owns or has in his possession or under his control gold, other than ornaments over and above 50 grams in weight have to make declarations of the gold with them, that the business of the writ petitioners was only a subsidiary one, their main business and by far the larger one, is that of pawn-brokers and as such merely because they are licensed dealers also, they cannot be asked to make a return of the jewels or ornament pledged with them inasmuch as their being in possession or control of gold ornaments is in an entirely different capacity from that of a dealer. It was observed that a person may as an individual own and possess gold ornaments of his own. He may as a managing trustee of a rich temple have possession and control of gold ornaments of the deity. He may as an executor under a will of his deceased friend be in custody of valuable ornaments, and merely because he also happens to be a dealer under the gold control rules, he cannot be held to be liable to make a return or a declaration in respect of the gold ornaments which are in his possession in quite different capacities, and if it were so, one would expect very clear words to that effect in the Gold Control Rules, which clear provisions are not discernible from the rules. In this view, a writ of mandamus was issued.
(3.) Mr. K. Ramachandrarao on behalf of the appellants contends what is to be seen is the intendment behind the rules which if ascertained, would show that a licensed dealer in gold who is also dealing in pawn or pledge of gold has to make a declaration of the gold held by him in his capacity as a pawn-broker so as to enable the Gold Control authorities to keep a check on the dealer. A pawn broker simpliciter not being a dealer as he does not deal in gold either specific or in making jewels or ornaments the control that is envisaged on a 'dealer' as defined in Rule 126-A(c) will be more effective by requiring him (pawn-broker) to furnish statements of all the gold ornaments in his possession lest at any particular time he may not say that they are ornaments pledged with him, though they may be ornaments made by him as a dealer. Further, Mr. K. Ramachandra Rao submits that the prescribed form in which a dealer has to make his return namely G. Section 3, being a statutory form, has legislative sanction and a dealer who has ornaments in his possession, whether pledged or otherwise, must make a return in that form.;

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