Gold Control liability fails where ornaments were kept for sale, not pledged or hypothecated under the statutory scheme.

Section 6(2) of the Gold Control Act, 1968 applies only where gold is held in connection with pledged, hypothecated, mortgaged or charged ornaments of a person advancing money on such security, and the relevant accounts do not properly record the gold. Where the admitted facts show that the ornaments were merely kept for sale and not pledged or hypothecated with the appellant, the statutory accounting obligation does not arise. On those facts, liability under Section 6(2) was not sustainable, and the impugned order was set aside.

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Issues: Whether the appellant could be held liable for contravention under Section 6(2) of the Gold Control Act, 1968 in respect of gold ornaments found in his possession, when the case of the department was that the ornaments were kept for sale and not pledged or hypothecated.

Analysis: Section 6(2) applies only where a gold control officer examines accounts relating to receipt, delivery or sale of gold of a person advancing money on hypothecation, pledge, mortgage or charge of articles or ornaments, and gold found in such person's possession is not entered in, or properly accounted for by, those accounts. The facts accepted by the Tribunal showed that the ornaments were not pledged or hypothecated with the appellant, but were alleged to have been kept for sale. On that footing, the statutory accounting obligation under Section 6(2) did not arise. The Tribunal also noted that the department had not challenged the finding exonerating the appellant under Section 27(1), and the two charges could not co-exist on the facts found.

Conclusion: The charge under Section 6(2) was not legally sustainable, and the appellant succeeded.

Final Conclusion: The impugned order was set aside and the appeal was allowed because the statutory ingredients for liability under Section 6(2) were absent on the admitted facts.

Ratio Decidendi: Section 6(2) of the Gold Control Act, 1968 applies only to gold held in connection with pledged, hypothecated, mortgaged or charged ornaments of a person advancing money on such security, and not to gold merely kept for sale.

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