Minor's gifted gold protected from confiscation, while guardian remained liable under the residuary penalty provision.

Gold ornaments gifted to a minor were held not liable to confiscation under the Gold (Control) Act, 1968 because the minor was the real owner and had no knowledge or connivance in the failure to make the required declaration; the proviso to Section 71(1) protected the property from confiscation. On penalty, the fine could not be sustained under Section 74 on the facts found, but liability was treated as falling under the residuary penal provision in Section 75. The penalty was therefore recoverable from the guardian, not the minor.

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Issues: (i) Whether gold ornaments received as gifts and belonging to a minor were liable to confiscation under the Gold (Control) Act, 1968 in view of the proviso to Section 71(1); (ii) Whether the penalty imposed could be sustained under Section 74 or was properly referable to Section 75 of the Gold (Control) Act, 1968.

Issue (i): Whether gold ornaments received as gifts and belonging to a minor were liable to confiscation under the Gold (Control) Act, 1968 in view of the proviso to Section 71(1).

Analysis: Sections 8(3) and 16(3) prohibit acquisition or retention of gold without the prescribed declaration, while Section 16(2) requires the guardian to make the declaration where the gold belongs to a minor. Section 71(1) renders gold liable to confiscation where there is contravention, but its proviso protects gold or other property belonging to a person other than the person whose act or omission rendered it liable, if that person had no knowledge or connivance. The materials showed that the ornaments were gifts made to the minor and that the minor was the real owner. The minor could not be said to have connived in the omission to make a declaration.

Conclusion: The gold ornaments were not liable to confiscation and the confiscation order could not stand.

Issue (ii): Whether the penalty imposed could be sustained under Section 74 or was properly referable to Section 75 of the Gold (Control) Act, 1968.

Analysis: The authorities had imposed a fine under Section 74, but the penalty was not sustainable under that provision on the facts found. The proper provision for a case where contravention or failure is made out and no express penalty is otherwise provided is Section 75, which authorises penalty for such contravention, failure or abetment. The liability, in the circumstances, fell on the guardian and not on the minor.

Conclusion: The penalty was sustained under Section 75 and recoverable from the guardian.

Final Conclusion: The challenge succeeded to the extent that confiscation was set aside, while the monetary liability was upheld only as a penalty against the guardian under the residuary penal provision.

Ratio Decidendi: Gold belonging to a minor is not liable to confiscation where the minor had no knowledge or connivance in the contravention, but the guardian may still be proceeded against under the residuary penalty provision where no express penalty is otherwise provided.

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