Primary gold under prohibited possession rules upheld, but inherited gold coins escaped confiscation and penalty was reduced.

Primary gold remains prohibited in ownership, custody, or control under section 8(1), and succession does not by itself create a lawful right to retain it; confiscation for that contravention was upheld. Gold coins that devolve on an heir by succession are not liable to confiscation merely because the deceased failed to make a declaration, as the successor is protected by the proviso to section 71; confiscation of the coins was therefore set aside. In the circumstances, the contravention concerning primary gold was maintained but the penalty was reduced because the possession arose in unusual family circumstances.

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Issues: (i) whether the primary gold found in the appellant's control after succession on the death of his sister was in prohibited possession under section 8(1) and liable to confiscation; (ii) whether the gold coins were liable to confiscation for the deceased sister's failure to make a declaration; and (iii) whether the penalty imposed required reduction in the circumstances.

Issue (i): whether the primary gold found in the appellant's control after succession on the death of his sister was in prohibited possession under section 8(1) and liable to confiscation.

Analysis: The appellant came into possession of the primary gold by succession long before the search, and the surrounding circumstances showed that the gold remained under his control. Section 8(1) prohibited ownership, custody, or control of primary gold except as otherwise provided in the Act. The reliance placed on section 16 was rejected because that provision governed declarations in respect of articles and ornaments, not a general right to possess primary gold. The exceptions permitting possession of primary gold were confined to the specific categories recognised by sections 32 and 42, which did not apply to an ordinary family member.

Conclusion: The primary gold was lawfully held to be in the appellant's control and its confiscation for breach of section 8(1) was upheld.

Issue (ii): whether the gold coins were liable to confiscation for the deceased sister's failure to make a declaration.

Analysis: The coins were seized from the appellant after they had devolved on him by succession. The liability alleged against the deceased sister for not declaring them could not be enforced against the appellant in the same manner. The proviso to section 71 protected the appellant in respect of property coming to him by succession, and the omission of the deceased to make a declaration did not render the coins liable to confiscation in the appellant's hands.

Conclusion: The confiscation of the gold coins was set aside.

Issue (iii): whether the penalty imposed required reduction in the circumstances.

Analysis: The appellant's possession arose in unusual family circumstances, and the matter warranted a more lenient view on penalty even though the contravention regarding primary gold was maintained.

Conclusion: The penalty was reduced from Rs. 10,000 to Rs. 5,000.

Final Conclusion: The appeal succeeded only in part: confiscation of the primary gold was sustained, confiscation of the gold coins was annulled, and the penalty was reduced.

Ratio Decidendi: Mere succession or family custody does not authorise possession of primary gold contrary to section 8(1), but property that devolves on an appellant by succession cannot be confiscated solely on the basis of the deceased's failure to declare it.

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