Primary gold confiscation upheld where possession was unlawful and notice to persons concerned satisfied statutory requirements.

Primary gold could not be shielded from confiscation under the proviso to Section 71(1) of the Gold (Control) Act, 1968 where its possession was itself prohibited and it had already become liable to confiscation by statute. The proviso was confined to cases where a third person's act or omission made the gold confiscable, but lawful retention would otherwise have been possible. Notice under Section 79 was also sufficient because it was served on the persons from whose possession the gold was seized and who were concerned with it, even though later ownership was asserted in minors under an alleged will. The confiscation was therefore upheld and the writ challenge failed.

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Issues: (i) whether the proviso to Section 71(1) of the Gold (Control) Act, 1968 protected primary gold from confiscation in the facts of the case; (ii) whether the adjudication and confiscation order was vitiated for want of notice under Section 79 of the Gold (Control) Act, 1968.

Issue (i): whether the proviso to Section 71(1) of the Gold (Control) Act, 1968 protected primary gold from confiscation in the facts of the case.

Analysis: The statutory scheme under the Defence of India Rules, 1962, the Gold (Control) Ordinance, 1968 and the Gold (Control) Act, 1968 prohibited possession of primary gold except within the limited framework then available. The earlier declaration regime did not preserve a right to retain primary gold once the relevant period had expired, and after the 1967 amendment the continued possession of primary gold became unlawful. On the facts, the gold had become contraband long before the confiscation proceedings. The proviso to Section 71(1) applies only where gold is rendered liable to confiscation by an act or omission of a person other than the owner, so that but for that act or omission the gold could otherwise have been lawfully retained. That proviso cannot be extended to primary gold whose possession was itself prohibited by law and which was liable to confiscation by force of the statute.

Conclusion: The proviso to Section 71(1) did not protect the seized primary gold, and confiscation was valid in favour of Revenue.

Issue (ii): whether the adjudication and confiscation order was vitiated for want of notice under Section 79 of the Gold (Control) Act, 1968.

Analysis: Section 79 requires notice to the owner of the gold or any other person concerned. The gold had been seized from the house and safe under the control of the mother and son, and notice had been issued to them in the proceedings. Even though the ownership was later asserted to be in minors under an alleged will, the persons from whose possession the gold was seized were persons concerned with the gold for the purpose of adjudication. On that basis, service of notice on them constituted sufficient compliance with Section 79.

Conclusion: The requirement of notice under Section 79 was satisfied, and the confiscation order was not invalid on that ground.

Final Conclusion: The appeal succeeded, the quashing of confiscation by the single judge was reversed, and the writ petition stood dismissed, leaving the confiscation intact.

Ratio Decidendi: The proviso to Section 71(1) of the Gold (Control) Act, 1968 does not apply to primary gold whose possession is itself prohibited by law and already liable to confiscation, and notice under Section 79 is if served on the persons from whose possession the gold was seized and who are concerned with it.

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