Redemption fine for seized gold follows the governing confiscation regime and market value at adjudication, not seizure date.

Seizure and confiscation of gold under the Defence of India Rules, 1962 were held not to attract Section 73 of the Gold (Control) Act, 1968, because the saving clause preserved prior action only to the extent it was consistent with the later Act and the Rule 126-M(8)(a) discretion was inconsistent with the Act's ceiling-based scheme. Redemption fine was therefore governed by the earlier rules. The Court further held that the relevant market value was that prevailing when the redemption option was exercised at adjudication, not the date of seizure, and the reduction of the fine to seizure-date value was unsustainable.

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Issues: (i) whether the redemption fine for gold seized and confiscated under the Defence of India Rules, 1962 was governed by Section 73 of the Gold (Control) Act, 1968; and (ii) whether the redemption fine had to be linked to the market value of gold on the date of seizure or on the date of adjudication when option to redeem was given.

Issue (i): whether the redemption fine for gold seized and confiscated under the Defence of India Rules, 1962 was governed by Section 73 of the Gold (Control) Act, 1968

Analysis: The seizure and confiscation had been made under Rule 126-I and Rule 126-M of the Defence of India Rules, 1962, when the Gold (Control) Act, 1968 was not in force. Section 116 of the Gold (Control) Act, 1968 saved prior actions only to the extent they were not inconsistent with the Act. The Court found that the power under Rule 126-M(8)(a), which leaves the amount of fine to the adjudging officer's discretion, was inconsistent with the ceiling-based scheme of Section 73 of the Gold (Control) Act, 1968 read with Section 2(v).

Conclusion: Section 73 of the Gold (Control) Act, 1968 did not apply to the redemption fine in the present case; the matter was governed by the Defence of India Rules, 1962.

Issue (ii): whether the redemption fine had to be linked to the market value of gold on the date of seizure or on the date of adjudication when option to redeem was given

Analysis: Once the Gold (Control) Act, 1968 was held inapplicable, the valuation rule in Section 2(v) could not be imported. Under Rule 126-M(8)(a) of the Defence of India Rules, 1962, the officer's option to permit redemption had to be exercised on the basis of the situation prevailing when the option was given. The Court held that the relevant date was the date of adjudication, not the date of seizure, and that the fine had to bear relation to the market value on that date.

Conclusion: The redemption fine had to be related to the market value of gold on the date of adjudication, namely 7-12-1994, and the reduction of the fine to the seizure-date value was unsustainable.

Final Conclusion: The reference was answered in favour of the Revenue, and the earlier reduction of the redemption fine was rejected in principle, with directions for fresh exercise of the redemption option in accordance with the Court's findings.

Ratio Decidendi: Where confiscation and seizure arose under a repealed regime, the saving clause applies only so far as the earlier action is consistent with the successor statute, and the redemption fine is to be fixed under the governing confiscatory power applicable to that regime and by reference to the market value at the time the redemption option is exercised.

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