Notice to the firm alone cannot sustain partner penalties or third-party confiscation without specific statutory findings.

Personal penalties on partners could not be sustained where the show-cause notice was issued to the firm alone and no individual notice or separate allegation was made against them. Gold ornaments received from customers for repairs could not be confiscated as third-party property without notice to the owners and a finding of their contravention, knowledge, or connivance. By contrast, ornaments seized from the residential premises were treated as unaccounted stock-in-trade on the basis of the partner's admission, and confiscation of unaccounted primary gold and a half sovereign was upheld where the record showed contravention and non-accounted possession. The alleged inadequacy of prescribed register forms did not displace the duty to maintain true and complete accounts.

---

---

Issues: (i) Whether personal penalties could be imposed on the partners when the show cause notice was addressed to the firm alone. (ii) Whether gold ornaments received for repairs could be confiscated without notice to their owners or a finding of knowledge or connivance. (iii) Whether the ornaments forming part of the seized residential stock could be treated as stock-in-trade and confiscated, including the portion attributed to non-declaration by a partner. (iv) Whether confiscation of 207.100 gms of primary gold and 4 gms of half sovereign was sustainable. (v) Whether the finding of contravention of Section 55 based on the prescribed registers was vitiated by the alleged inadequacy of the forms.

Issue (i): Whether personal penalties could be imposed on the partners when the show cause notice was addressed to the firm alone.

Analysis: The notice set out the contraventions against the licensed dealer-firm and called upon the firm to show cause to confiscation and penalty. No independent allegation was made against the partners in their personal capacity, and Section 79 required written notice before any penalty could be imposed. The mere appearance of the partners' names in the notice header did not amount to a notice to them individually.

Conclusion: The penalties imposed on the partners were unsustainable and were set aside.

Issue (ii): Whether gold ornaments received for repairs could be confiscated without notice to their owners or a finding of knowledge or connivance.

Analysis: The ornaments were admittedly received by the dealer for repairs and belonged to persons other than the dealer. Under Section 71, confiscation of third-party gold could not follow unless the adjudicating authority found that the owners had themselves contravened the Act or had knowledge of, or connived in, the dealer's contravention. No notice was issued to the owners, and no such finding was recorded.

Conclusion: Confiscation of 619.250 gms of ornaments received for repairs was illegal and was set aside.

Issue (iii): Whether the ornaments forming part of the seized residential stock could be treated as stock-in-trade and confiscated, including the portion attributed to non-declaration by a partner.

Analysis: The seized ornaments from the residence were treated as stock-in-trade on the strength of the partner's statement admitting that they were unaccounted commercial stock. The challenge based on family ownership and an earlier declaration was not supported by any produced declaration, and the record did not establish coercion or unreliability sufficient to displace the admission. The portion separately referred to as 629 gms was in fact part of the larger seizure and did not stand on a different footing.

Conclusion: Confiscation of the residential gold ornaments was upheld, and the separate confiscation of 629.000 gms was set aside as consequential to the larger seizure.

Issue (iv): Whether confiscation of 207.100 gms of primary gold and 4 gms of half sovereign was sustainable.

Analysis: The primary gold was found unaccounted in the licensed premises, and the dealer's own statement indicated that it had been obtained by melting purchased ornaments without vouchers. That justified the finding of contravention of Section 32. As to the half sovereign, the record showed it had been received from a customer for manufacture and not accounted, and the appellants did not establish that it belonged to a third party or that the confiscation was otherwise illegal on the pleaded case.

Conclusion: Confiscation of 207.100 gms of primary gold and 4 gms of half sovereign was upheld.

Issue (v): Whether the finding of contravention of Section 55 based on the prescribed registers was vitiated by the alleged inadequacy of the forms.

Analysis: The grievance regarding the adequacy of the G.S. 11 and G.S. 12 forms had earlier received attention from the Supreme Court, but the defect noted there did not dispense with the obligation to maintain accounts. On the facts, the partners admitted that the excess ornaments were purchased and kept for sale without being entered in the registers, so the finding of non-maintenance of true and complete accounts remained supported.

Conclusion: The finding of contravention of Section 55 was upheld.

Final Conclusion: The appeal succeeded only to the extent of deleting the partners' personal penalties, setting aside confiscation of the repair goods, and granting consequential reduction of the redemption fine and related reliefs, while the remaining confiscation and findings of contravention were maintained.

Ratio Decidendi: A personal penalty or confiscation affecting property of a third party cannot be sustained unless the person concerned is specifically noticed and the statutory conditions of liability, including knowledge or connivance where required, are found on record.

---