Penal proof under Gold (Control) Act cannot rest on mere possession or suspicion; statutory ingredients must be proved.

Section 6(2) of the Gold (Control) Act, 1968 applied only to transactions involving receipt, delivery or sale of gold in the context of hypothecation, pledge, mortgage or charge; as the record did not show that the ornaments were pledged or otherwise brought within that setting, the charge was not established. Section 27(1) also required affirmative proof of sale or intended sale, and mere possession of gold ornaments by a pawn broker was insufficient where no test purchase was made and no sale instance was proved. In penal proceedings, suspicion cannot replace proof, and the benefit of doubt applies when statutory ingredients are not established.

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Issues: (i) Whether the appellant, a pawn broker found in possession of gold ornaments, contravened section 6(2) of the Gold (Control) Act, 1968; and (ii) whether the appellant was guilty of contravention of section 27(1) of the Gold (Control) Act, 1968 on the basis of the evidence of sale or intended sale.

Issue (i): Whether the appellant, a pawn broker found in possession of gold ornaments, contravened section 6(2) of the Gold (Control) Act, 1968.

Analysis: Section 6(2) applies to transactions relating to receipt, delivery or sale of gold by a person advancing money on hypothecation, pledge, mortgage or charge of articles or ornaments. The record did not show that the seized ornaments were pledged or otherwise brought within that statutory setting. The appellant's statement also did not amount to an admission of pledge, and there was no evidence that the ornaments were pledged ornaments.

Conclusion: The charge under section 6(2) was not established and was decided in favour of the appellant.

Issue (ii): Whether the appellant was guilty of contravention of section 27(1) of the Gold (Control) Act, 1968 on the basis of the evidence of sale or intended sale.

Analysis: Mere possession of gold ornaments by a pawn broker does not, by itself, establish the statutory contravention. The departmental witnesses admitted that no test purchase was made and that there was no evidence of even a single instance of sale or purchase by the appellant. In a penal proceeding, suspicion, however grave, cannot substitute proof, and the appellant was entitled to the benefit of doubt.

Conclusion: The charge under section 27(1) was not proved and was decided in favour of the appellant.

Final Conclusion: Both charges failed on the evidence, the impugned penalty order was set aside, and the appeal succeeded.

Ratio Decidendi: In penal proceedings under the Gold (Control) Act, a charge cannot be sustained on mere possession or suspicion; the statutory ingredients must be affirmatively proved, and where the evidence is lacking the accused is entitled to the benefit of doubt.

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