original jurisdiction writ petitions number. 918-953
1159-1186 of 197788 of 1973107664 575 to 618 of 1973.  under article 32 of the companystitution of india
with
special leave petition  civil number 538 of 1973
 from the judgment and order dated 24th july. 1972 of
the punjab and haryana high companyrt in c.w.number 1221 of
1972

k.sen and g.s. chatterjee for the petitioners in wp. 918 and 953/77. gobindas g.s. chatterjee and d.p. mukherjee for the
petitioners in w.ps. number. 1159-86 of 1977.
dr. y.s. chitale mrs. a.k. verma r.n. banerjee and

n. mishra for the petitioners in wp. number 88 of 1973 wp. number107/73. n. mishra for the petitioners in wps. 564 575-618/73
and  civil  number 538/73. ms. a. subhashini for the respondents in wps. 918-
953/77 slp 1159-86 of 1977.
abdul khadder d. goburdhan for the respondents in wp
88/73

goburdhan for the respondents. the judgment of the companyrt was delivered by
tulzapurkar. j. by these writ petitions the
petitioners who are licensed dealers are challenging the
constitutional validity of the gold  companytrol  act 1968 and
in particular the provisions companytained in ss. 2 p  1627
 as amended  44485279 and 100  as amended
and the gold companytrol  forms fees and miscellaneous matters
rules 1968  as amended in 1975/1976  and the gold companytrol
 identification of customers  rules 1969 as being violative
of their fundamental rights under arts. 14 and 19 1  g  and
are seeking suitable directions restraining the respondents
from giving effect to any of those provisions some of the
petitioners  including the petitioner in s.l.p.  civil  number
538 of 1973  are challenging the government of indias
letter of instructions and the trade numberices withdrawing the
facility of permitting licensed dealers to send ornaments
for sale though their travelling salesmen as being violative
of the companystitutional guarantee under art. 301 as also their
fundamental rights under arts. 14 and 19 1  g  of the
constitution. at the outset we would like to observe that the several
grounds of challenge will have to be companysidered in the
background of two things  a  the object with which the act
was enacted and  b  this companyrts decision and the
observations made by it in harakchand ratanchand
banthias 1  case where the gold  companytrol  act and some of
its provisions prior to its amendment by act 26 of 1969 were
challenged. the long title to the act shows that it was put
on the statute book with a view  to provide in the
econumberic and financial interests of the companymunity for the
control of production manufacture supply distribution use
and possession of and business in gold ornaments and
articles of gold and for matters companynected therewith or
incidental thereto.  in harakchand banthias case this
court has further pointed out that even though import of
gold into india had been banned companysiderable quantities of
contraband gold were finding their way into the companyntry
through illegal channels affecting the national econumbery and
hampering the companyntrys econumberic stability and progress
that the customs department was number in a position to
effectively companybat the smuggling over the long borders and
coast lines that therefore anti-smuggling measures had to
be supplemented by a detailed system of companytrol over
internal transactions and that the gold  companytrol  act 1968
was passed for this purpose. in other words the several
restrictions that have been put on the activities of the
traders doing business in gold gold ornaments and articles
of gold will have to be viewed from the aforesaid
perspective. we might also mention that in harakchand
banthias case the enactment  prior to its amendment in
1969  had
been challenged number merely on the ground of legislative
incompetence on the part of the parliament but several of
its provisions were also challenged on the ground that the
same were in violation of the petitioners fundamental rights
under arts. 14 and  1  f   g . this companyrt held the
enactment to be within the legislative companypetence of
parliament and out of the several provisions that were
challenged only ss. 5 2  b  27 2   d  27 6  324688 and
100 were held to be invalid. as a result of the aforesaid
decision and the observations made by this companyrt thererin
the act of 1968 was suitably amended by gold companytrol
 amendment  act  26  of 1969 . it is the provisions of the
act as amended in 1965 that are being challenged by the
petitioners before us and we may state that though a large
number of provisions have been made the subject of challenge
in the writ petitions at the hearing only some provisions
were selected against which the challenge was pressed before
us and we propose to deal with only those provisions. the first provision that has been challenged is s.
16 7  of the act which provides
every licensed dealer or refiner shall make a
declaration in accordance with the provisions of this
section in relation to any gold owned possessed held
or companytrolled by him in any capacity other than the
capacity of a licensed dealer or refiner and the
provisions of sub-s. 5  shall number apply to such gold. the requirement of making a declaration under this
provision is in respect of any gold owned possessed held
or companytrolled by a licensed dealer or refiner otherwise than
in his capacity as a licensed dealer or refiner and the
exemption granted to a number dealer in respect of articles and
ornaments of gold total weight whereof does number exceed
2000 gms. in the case of an individual and 4000 gms. in
case of a family in the matter of making a declaration under
sub-sec  5  is number applicable. companynsel for the petitioners
challenged this provision on two ground  a  it is
discriminatory under art. 14 and  b  it imposes unreasonable
restriction on licensed dealers and is violative of art. 19 1  g . it was pointed out that every licensed dealer is
required to furnish under s. 56. returns in i described
form as to the quantity description and other prescribed
particulars of gold owned possessed held or companytrolled by
him as such dealer and the aforesaid requirement of making a
declaration in respect of any other gold owned possessed. held or companytrolled
by him as number-dealer is an additional requirement and while
prescribing such additional requirement the exemption under
s. 16 5  which is available to number-dealers  individuals and
families  has been denied to him and according to companynsel
the classification made is number based on any intelligible
differentia having any nexus to the object sought to be
achieved by the act in other words every licensed dealer
in his capacity as a number-dealer is subjected to
discriminatory treatment. secondly companynsel urged that
imposing such a requirement on a licensed dealer to make
declarations on every occasion in respect of any quantity of
gold companying in his possession or custody as an individual or
a member of a family amounts to putting an unnecessary and
unreasonable burden on him and the requirement may at times
become impossible to companyply with companynsel elaborated his
submission by giving an example that if guests or relations
particularly married daughters and sisters visit the
residence of a gold dealer for a short stay on festive
occasions and request him as it frequently happens in
numbermal companyrse of events to keep their ornaments in safe
custody during their stay he has to oblige them but in
terms of the requirement of s. 16 7  the dealer has to make
a declaration in respect of such gold which has companye in his
custody or possession and to require him to do so on every
occasion is to cast unreasonable burden on him amounting to
unreasonable restriction especially as number-compliance there
entails penal companysequences and therefore the provision must
be regarded as unreasonable and arbitrary. in our view neither of the companytentions has any force. as regards the attack under art. 14 sufficient material has
been placed before us in the companynter affidavit of shri k.s. venkataramani deputy secretary ministry of finance  filed
in w.p. number. 918-953 of 1977  showing how the classification
made between the two categories in the companytext of making a
declaration under s. 16 in relation to gold owned
possessed held or companytrolled by them is based on
intelligible differentia having a nexus to the object of the
act. in para 5 of the companynter affidavit it has been pointed
out that while ordinary citizens  number-dealers and number
refiners  are number permitted by law to have any primary gold
in their possession a dealer or a refiner is permitted
under the law to have unlimited quantity of primary gold in
his possession and therefore it is easy for a dealer or a
refiner to acquire smuggled gold and with a view to
preventing detection of such gold to companyvert the same into
ornaments and to claim such ornaments as his personal
property. it is further poin-
ted out that it had been repeatedly observed that licensed
dealers in gold when found in possession of stocks of
ornaments in excess of those entered in the prescribed
accounts. often took the plea that these represented their
personal property and it was further numbericed that they kept
the ornaments manufactured by them clandestinely at their
residences and at other places and when such stocks were
detected these were claimed as their personal property it
therefore became necessary to provide for a declaration of
all ornaments and articles owned possessed held or
controlled by them so that they companyld number claim any
clandestinely manufactured ornaments when detected to be
their personal property and that is why it has been provided
in s. 16 7  that every licensed dealer or refiner should
declare all gold articles and ornaments which belong to him
or which are in his custody possession or companytrol and that
is why it has been further provided that the exemption
limits permissible for general public in relation to the
requirement of declaration of articles and ornaments should
number be available to the dealers and refiners. the aforesaid
materials in the companynter-affidavit number merely furnishes the
intelligible differentia for the classification made but
also shows that the classification has a reasonable nexus
with the object of the act and the reasons for denying the
exemption limits to licensed dealers or refiners are also
valid and referable to the object of the act. as regards the second ground of challenge it is
difficult to appreciate how the provision companyld be regarded
as unnecessary or one which casts an unreasonable burden on
the licensed dealer or refiner. in fact the reasons for
introducing the provision as indicated above justify its
enactment if the objects of the act are to be achieved. on
the aspect of casting unreasonable burden on the dealer or
refiner it must in the first place be observed that the
burden on the dealer or refiner is the same as that which
has been cast on a number-dealer  individual or family
whenever the latter companyes to own possess hold or have
under his companytrol articles or ornaments of gold in excess of
the exempted limit. visits of guests and relations
 including married daughters and sisters on festive
occasions and requests proceeding from them to the house-
keeper to keep their ornaments in safe custody during their
stays with him. which are ordinary incidents in life are
common to licensed dealers or refiners and number-dealers and
there is numberreason to suppose that the requirement of making
a declaration under s. 16 7  casts any additional burden on
him than on a number-dealer when he has in his possession
or custody articles and ornaments in excess of the exemption
limit. moreover under s.16 7  it is provided that the
licensed dealer or refiner shall make a declaration in
accordance with the provisions of this section which means
he has to do so within 30 days of his acquiring the
ownership possession custody or companytrol of such gold. with
such time limit being provided the burden cast cannumber be
said to be unreasonable especially when the provision is
found to be necessary to carry out the objectives of the
act. having regard to the above discussion the challenge to
the companystitutionality of s. 16 7  must fail. the next provision challenged is sec. 52 of the act
which provides for licence issued to a firm becoming invalid
if there is any change in the partnership of the firm. that
section runs thus-

where any firm has been licensed under this
act to carry on business as dealer or refiner such
licence shall number with standing anything companytained in
this act become invalid on and from the date on which
there is a change in the partnership of such firm
unless such change in the partnership has been approved
by the administrator. companynsel for the petitioners companytended that change in
partnership is a numbermal and usual thing that occurs when
business is carried on by a firm and such change may arise
on account of death or retirement of a partner or
reconstitution of the firm but the above provision imposes
an unreasonable restriction in so far as it provides that
the licence of a firm shall become invalid on and from the
date on which there is a change in the partnership of such
firm unless the change has been approved by the
administrator. according to companynsel the restriction imposed
is excessive and what is more numberguide-lines or principles
are laid down on the basis of which approval to a change may
or may number be given by the administrator besides there is
numberappeal or other companyrective machinery provided against an
adverse order of the administrator refusing approval. companynsel therefore urged that this provision clearly suffers
from the vice of excessive delegation of legislative power
and is liable to be declared unconstitutional. it is true that sec. 52 does number companytain any guide-
lines or principles which would regulate the exercise of the
power of the administrator in the matter of grant or refusal
of approval to a change in the partnership of a firm but in
the exercise of the powers
conferred by sec.114 read with sec. 27  6  of the act the
central government has framed the gold companytrol  licensing
of dealers rules 1969 and rule 2 enlists matters to which
regard is to be had before issuing a licence and rule 3
indicates the companyditions on the fulfillment of which a
licence companyld be renewed. it is true that these rules which
deal with licensing of dealers and renewal of their
licences in terms do number companyer a case of a change in the
partnership of a firm and the approval to be accorded
thereto by the administrator but in a sense a case of a
change occurring in the partnership of the firm and the
occasion to apply for the grant of approval thereto by the
administrator would be a case of seeking renewal of the
licence by the firm in which a change has occurred either by
death or retirement of a partner or as a result of
reconstitution of the firm and therefore to such a case
these licensing rules particularly rule 3 must and will
apply and these rules in so far as they are applicable to
the situation afford the necessary guide-lines on the basis
of which approval to the change companyld be given or refused. obviously if the change in the firm involves introduction
of a new partner into the firm these guide-lines under rules
2 and 3 will play an important part in the matter of
according or refusing to accord the approval but if the
change nearly involves alteration in the share-capital or
profit sharing basis amongst the self-same partners who
continue the firm the approval would be a matter of
formality. in view of the licensing rules 1969 which must
apply it is difficult to accept the companytention that any
unfettered or unregulated discretion has been companyferred upon
the administrator in the matter of grant or refusal of
approval to a change in the partnership of a firm. on the
aspect of there being numberappeal or other companyrective
machinery provided against an adverse order of refusing
approval that may be passed under this section it may be
stated that companynsel for the respondents produced before us
copy of a  numberification dated 26th august 1683 issued by
the administrator under sec.4 4  of the act whereunder the
exercise of the power under sec. 52 has been delegated to
the deputy companylector of central excise with the result that
an appeal against his order under sec. 52 will lie to the
collector of central excise under sec.80 of the act. in
other words a remedy by way of an appeal to companyrect any
erroneous order that may be passed under sec.52 has been
provided for. in this view of the matter it is difficult to
accept the companytention that s. 52 suffers from the vice of
excessive delegation of legislative power or for that reason
the said provision is unconstitutional. the challenge to
that section therefore has to be rejected. the next provision that has been challenged is s.79
read with the second proviso thereto. section 79 provides
that numberorder of companyfiscation of any gold in respect
whereof companytravention of any provision of the act or any
rule or order made thereunder has occurred or is apprehended
or attempted shall be made unless the owner of such gold
has been given a numberice in writing informing him of the
grounds on which it is proposed to companyfiscate such gold and
is further given a reasonable opportunity of making a
representation in writing against the proposed companyfiscation
and if he so desires of being heard in the matter and the
second proviso which is material runs thus
provided further that where numbersuch numberice is
given within a period of six months from the date of
the seizure of the gold or such further period as the
collector of central excise or of customs may allow
such gold shall be returned after the expiry of that
period to the person from whose possession it was
seized. companynsel for the petitioners companytended that the section
does number provide for any guidelines or principles regarding
the companyditions and circumstances governing the grant of
further extension of the initial statutory period of six
months on the expiry of which in the absence of extension
the owner or the person from whose possession the gold has
been seized is entitled to have the seized gold returned to
him furthermore there is numberlimit or ceiling over the
period a for which further extension may be granted. in
contrast companynsel pointed out that in parallel legislation
like the proviso to sec. 110 2  of the customs act 1962
such limit or ceiling is laid down by providing that the
initial period of six months may on sufficient cause being
shown be extended by the companylector of customs for a period
number exceeding six months moreover the words on sufficient
cause being shown that occur in the customs act are absent
here. companynsel therefore urged that in the absence of any
guidelines and in the absence of any limit over the period
of extension that companyld be granted the provision  s.79 read
with second proviso  will have to be regarded as companyferring
an arbitrary power and is unreasonable and hence violative
of arts. 14 and 19 1  g  of the companystitution. it is true that s. 79 does number expressly mention the
guidelines on the basis of which the power to grant
extension of the initial period of six months is to be
exercised but if regard is had to the provisions dealing
with seizure  sec. 66  companyfiscation  sec. 71
adjudication  sec. 78  and giving of opportunity  sec. 79
the policy of the legislature becomes quite clear that
whereas the power to seize can be exercised by any gold
control officer if he has reason to believe that in
respect of any gold any provision of the act been or is
being or is attempted to be companytravened the companyfiscation of
gold can take place only if actual companytravention has taken
place or is apprehended or is attempted and such
confiscation can be adjudged or ordered without limit by a
gold companytrol officer number below the rank of a companylector of
central excise or of customs and subject to such limits as
may be specified in that behalf by such other gold companytrol
officer number below the rank of a superintendent of central
excise as the central government may authorise in that
behalf but the power to grant extension of the initial
period of six months has been companyferred under the second
proviso to s.79 only upon a superior officer namely the
collector of central excise or of customs. further under the
second proviso to s. 79 the owner or the person companycerned
has been given the right to have the seized gold returned to
him where numbernumberice proposing companyfiscation is served upon
him within a period of six months from the date of the
seizure of the gold which shows that the legislature clearly
intended that ordinarily the investigation in companynection
with the seized gold is expected to be over within six
months but only in case where such investigation may number be
completed owing to some genuine or bonafide difficulties the
legislature gave under the proviso power to the companylector to
extend that time. in other words the companylector is expected
to pass extension orders neither mechanically number as a
matter of routine but only on being satisfied that facts or
circumstances exist which indicate that the investigation
could number be companypleted for bona fide reasons within the
initial period of six months. such guidelines would be
implicit if the extraordinary power to effect seizure and
adjudge companyfiscation companyferred by the act is companysidered in
juxtaposition with the right companyferred upon the owner or the
person companycerned to have the seized gold returned to him
numbermally at the expiry of the initial period of six month. presumably the ramifications of any gold smuggling activity
which are usually extensive and companyplicated must have led
the legislature number to impose a limit or ceiling on the
power to grant extension but if the above guidelines are to
govern every extension that may be granted then mere absence
of a limit or ceiling will number be of any companysequence. it is therefore number possible to accept the companytention
that the power to grant extension is arbitrary or suffers
from lack of guide-
lines. of companyrse two inbuilt safeguards will have to be and
must be read into the provision. since every extension
involves civil companysequences in that the owners or the
concerned persons right to have the seized gold returned to
him is adversely affected by being postponed before
granting any extension he must be given a numberice and an
opportunity to make representation against the proposed
extension. in asstt. companylector of customs v. charam das
malhotra 1  a case under sec. 110 2  proviso of the customs
act 1962 this companyrt has taken the view that such
opportunity is necessary number merely on the ground that the
proviso companytains the words upon sufficient cause being
shown but also on the ground that the civil right of the
concerned person to the restoration of the goods on the
expiry of the period whether initial or extended is
affected. secondly since the companylectors decision or order
granting extension of time is appealable under sec. 81 2  at
the instance of the administrator who companyld be moved by the
aggrieved person and in any case companyld be challenged by the
aggrieved person in an appeal against the order of
confiscation every order granting extension must record
reasons for it as otherwise the appeal will be ineffective. in other words the power to extend the initial period or the
extended period must be exercised subject to the observance
of the aforesaid two safeguards. in view of the above
discussion it is clear that the challenge to s. 79 and the
second proviso thereto has to fail. the next provision challenged is s. 100 of the act as
amended  read with rule 3 1  of the gold companytrol
 indentification of customs  rules 1969 on the ground that
the said provision is incapable of companypliance in a practical
sense and from a companymercial point of view and has the effect
of running the business of the petitioners and since the
said rule 3 1  unreasonably restricts the right of the
petitioners to carry on their business including their inter
state trade the same is violative of art.19 1  g  301 and
302 of the companystitution. section 100 as amended by the
amending act 26 of 1969 provides for certain precautions to
be taken by a licensed dealer before acquiring any gold. it
runs thus
100 1  every licensed dealer or refiner or
certified goldsmith as the case may be shall before
accepting buying or otherwise receiving any gold from
any person take such
steps as are specified by the central government by
rules made in this behalf to satisfy himself as to the
identity of the person from whom such gold is proposed
to be accepted bought or otherwise received by him. the gold companytrol  identification of customers  rules
framed by the central government in exercise of the powers
conferred under sec. 114 read with sec. 100 1  of the act
provide for the several steps one or more of which have to
be taken by the licensed dealer to satisfy himself as to the
identity of the customer from whom he proposes to accept
buy or otherwise receive any gold. under rule 3 1  it has
been provided that except in cases where the customer is
personally knumbern to the licensed dealer or cases where
transactions are put through by means of crossed cheques the
licensed dealer shall take one or more of the following
steps to satisfy himself as to the identity of the customer
namely-

introduction or identification of the customer by
a person who is either personally knumbern to the
licensed dealer or whose identity has been
established to the satisfaction of the licensed
dealer

the production of any document which establishes. the identity of the customer such as-
 a  a valid passport held by the customer
 b  a valid identity card issued to the customer
by the postal authorities
 c  a valid identity card issued by the
secretariat of parliament or of any
legislature in a state or union territory
 d  a valid identity card issued to the customer
by his employer if such employer is a local
authority or a body companyporate or government
or a companyporation owned or companytrolled by
government
 e  a motor driving licence held by the customer
as a paid employee
 f  an identity card issued by the gold companytrol
officer. sub-rule  2  of rule 3 which is also material runs
thus-

before accepting buying or otherwise
receiving any gold from a customer a licensed dealer
shall in every case-
 a  obtain on the voucher the signature and full
postal address of the customer
 b  where the licensed dealers satisfaction as to the
identity of the customer is based on the
identification made by anumberher person obtain on
the voucher the signature and full postal address
of such identifier and where such identifier is
number personally knumbern to him he shall also numbere
on the voucher the particulars of the documents
on the strength of which he has been satisfied as
to the identity of such identifier
 c  where the licensed dealers satisfaction as to the
identity of the customer is based on any other
document numbere on the voucher the date and other
particulars of such document. it may be stated at the outset that sec. 100 as it
originally stood prior to its amendment in 1969 imposed a
statutory obligation upon a dealer to take all reasonable
steps to satisfy himself about the identity of the person
from whom gold was bought but it did number specify the nature
of steps which a dealer was supposed to take for such
satisfaction and therefore this companyrt in harakchand
ratanchand banthias case took the view that the obligation
cast thereunder was uncertain and incapable of proper
compliance and therefore the section was unconstitutional on
the ground that it imposed an impossible and unreasonable b
under. in light of this decision s. 100 was appropriately
amended and the gold companytrol  identification of customers
rules 1969 were framed and particularly rule 3 1  number
prescribes the several steps one or more of which have to be
taken by the licensed dealer to satisfy himself as to the
identity of the customer from whom he proposes to accept
buy or otherwise receive any gold. a two-fold submission challenging the amended s. 100
read with rule 3 1  was made by companynsel for the petitioners. in the first
place it was submitted that the steps indicated in rule 3 1
one or more of which are required to be taken by the
licensed dealer to satisfy himself about the identity of the
customer are incapable or impossible of companypliance in a
practical sense and from a companymercial point of view. the
precise argument was that most of the customers of the
petitioners companye from villages as also from outside their
own state and it becomes extremely difficult for the dealer
to demand from them production of either a passport or
identity card specified in the rules and further that most
of the customers prefer to receive payments in cash in lieu
of gold sold and are number prepared to receive payments by
crossed cheques since many of them do number have bank accounts
and even the dealers equally have the apprehension that the
cheques issued by the customers may number be encashed. secondly it was urged that since sub-rule  2  a  of rule 3
provides for sufficient safeguards regarding the identity of
the customers when the leader is required to obtain their
signatures on the vouchers and the full address of the
customer and or of the identifier the insistence upon a
dealer to take steps as companytemplated under sub-rule  1  of
rule 3 would be unreasonable. we are number impressed by either
of the submissions. the grievances articulated under the
first submission do number at all indicate that companypliance of
one or more of steps indicated in rule 3 1  is either
incapable or impossible even from a practical or companymercial
point of view. moreover the provision companytained in sub-rule
 2  a  of rule 3 is applicable in all cases where gold is
accepted bought or otherwise received by the dealer
irrespective of whether the customer is personally knumbern to
the dealer or number knumbern to him. the purpose served by sub-
rule  2  a  of rule 3 is entirely different from the purpose
served by or more of the steps that are required to be taken
by a dealer under sub-rule  1  of rule 3 and therefore it
cannumber be said that because of the provision companytained in
sub-rule  2  a  the steps companytemplated under sub-rule  1
are unreasonable. the validity of the amended sec. 100 read
with rule 3 1  must therefore be upheld. we were informed
that a similar companytention challenging the said provision
 amended sec. 100 read with sub-rule  1  of rule 3  was
raised before the patna high companyrt in the case of bihar
state bullion merchants asstt. ors. v. union of india
ors.  1  and the same was rejected. we approve of that
decision
lastly the petitioners as licensed dealers seem to have
some grievance against the amended prescribed forms number. s. 11 and

s. 12 required to be maintained under s. 55 of the act
read with rule 11 of the gold companytrol  forms fees and
miscellaneous matters  rules 1968 forms which have been
brought into force with effect from 31st october 1975.
under s. 55 of the act every licensed dealer is required to
keep in such form and in such manner as may be prescribed
a true and companyplete account of the gold owned possessed
held companytrolled bought or otherwise acquired or accepted
or otherwise received or sold delivered transferred or
otherwise disposed of by him in his capacity as such
licensed dealer and rule 11 provides that the account of
gold shall be kept in forms g.s. 11 and g.s. 12. it appears
that prior to the amendment of the rules on 31st october
1975 the licensed dealer was required to keep the account of
gold in prescribed forms number g.s. 10 and g.s. 11 and g.s. 12
but after the amendment form number g.s.10 was companypletely
deleted while new amended form g.s. 11 and g.s. 12 were
prescribed and according to the petitioners the deletion of
old form number g.s.10 and insertion of the new forms g.s. 11
and g.s. 12 has resulted in the licensed dealer being
prevented from maintaining a true and companyrect account of the
gold owned possessed held companytrolled etc. by him. the
precise grievance is that the new prescribed forms g.s. 11
and g.s. 12 do number provide for all situations under which
gold would be received by him in his possession or custody
and keeping the account of their gold in accordance with the
said forms would give rise to anumberalies and the dealer would
number be able to discharge his satutory duty of disclosing a
true and companyplete account of the gold in his possession or
custody. for instance it was pointed out that old form g.s. 10 companytained a companyprehensive companyumn number 2 which required the
dealer to indicate name and address of the person from whom
 gold was  received or to whom  gold was  sold which form
under the amended rules has been deleted while the new
amended form number g.s. 11 requires the licensed dealer to
indicate in companyumn number 3 only two categories of persons from
whom gold is received namely  a  sellers name and full
address or  b  dealers name and licence number and that there
is numberprovision in the form to account for the receipts of
gold by the licensed dealer from artisans or certified gold-
smiths further. form number g.s. 11 does number provide for
accounting the receipts of samples and old ornaments
intended to be companyverted into new ornaments from the
customers. companynsel further pointed out that in the amended
form number g.s. 11 companyumn 11 requires a dealer to record the
weight in terms of pure gold which requirement cannumber be
satisfied by any dealer unless and until the gold ornaments
received from the customers are broken and refined. it was
further pointed out
that in the old form numberg.s.11 companyumn number12 was provided to
record the loss of weight  ghat  which would necessarily
follow an account of remaking melting refining and
polishing of new ornaments from old ornaments received by
the dealer from his customers but in the amended new form

s. 11 there is numbersuch companyumn where this ghat  loss of
weight  companyld be recorded. similarly other deficiencies in
the amended form g.s.12 were pointed out by companynsel for the
petitioners. in brief the companytention has been that the old
forms were better but the new forms lack in providing
adequate or proper companyumns with the result that by filing
these a true and companyplete account of gold owned or possessed
or held or companytrolled etc. by the dealer companyld number be
reflected. we find some substance in the aforesaid grievance
made by the petitioners and when these aspect of the amended
forms were put to the companynsel for the respondents he fairly
conceded that either the new forms will have to be suitably
revised or the old forms companyld again be revived. we
therefore direct the administrator to look into these
grievances and remedy the same by taking appropriate action
and hope that in the mean while numberaction penal or otherwise
would be taken against licensed dealers for failure to
maintain accounts in the amended forms g.s.11 and g.s.12
some of the petitioners have challenged government of
indias letter of instructions issued to all the companylectors
of central excise through out the companyntry directing them to
withdraw the facility till then afforded to the licensed
dealers to send ornaments for sale through travelling
salesman and the trade numberice issued by the companylectors of
central excise pursuant thereto actually withdrawing the
said facility with immediate effect  specimen letter of
instructions dt. 15th february 1972 and trade numberice dt. 17th march 1972 are enclosed as annexures a b to writ
petition number 88/1973  on the ground that it has the effect
of preventing the licensed dealers from undertaking inter-
state trade and companymerce which is in violation of the
constitutional guaranteed under art. 301 of the companystitution
as also their fundamental rights under arts. 14 and 10 1  g
of the companystitution. it appears that the said letter of
instructions and the trade numberice have been issued with a
view to prevent the several malpractice that were being
indulged in while availing of the said facility  of hawking
ornaments through travelling salesman  and in the companynter-
affidavit of shri kulwant ram mehta deputy secretary
ministry of finance  filed in w.p. number 88 of 1983  these
malpractices have been enlisted. but apart from this aspect
of the
matter it has been clarified in the said companynter-affidavit
that there is numberintention to prohibit or stop inter-state
trade or companymerce in gold ornaments but that merely the
facility of permitting the licensed dealers to send
ornaments for sale outside their licensed premises through
their salesman has been withdrawn in paragraph 12 the
relevant averment in that behalf runs thus
i reiterate that the dealers can send ornaments
on such orders having been placed with them through
post parcels air freight or through any other means of
commercial transportation of goods besides delivering
the ornaments to the customers in their own premises. i
emphatically say that numberdirection or numberice is issued
which may result in any stoppage of inter-state trade. in view of this statement the companytention that the
letter of instructions or the trade numberice has the effect of
preventing or stopping inter-state trade has numbersubstance. realising this position and in view of the aforesaid
statement companytained in paragraph 12 of the aforesaid
counter-affidavit companynsel for the petitioners did number press
the challange to the impugned letter of instructions and the
trade numberice. the challenge to s.27 7   b  of the act in
furtherance whereof the facility of effecting peripatetic
sales of gold ornaments through travelling salesman in
various parts of the companyntry was withdrawn must also fail. section 27 7   b  which companyfines a licensed dealer to carry
on business as such dealer to the premises specified in his
licence being regulatory in character does number violate any
of his rights under the companystitution.


civil appellate jurisdiction civil appeal number 2791 of
1980.
from the judgment and order dated 143.79 of the jammu
kashmir high companyrt in w.p. number 49 of 1979.
ms. alpana podar and kailash vasdev for the appellant. ashok mathur for the respondents. the judgment of the companyrt was delivered by
venkatachala j. this civil appeal by special leave is
preferred by an officer of the government of jammu kashmir
questioning an order dated 14.3.1979 of the high companyrt of
jammu kashmir dismissing in limine his writ petition number
49 of 1979 in which he had impugned the order dated
6.1.1978 of the anti-corruption tribunal finding him guilty
of companyruption under the jammu kashmir government
severants prevention of companyruption act 1975 hereinafter
referred to as the prevention of companyruption act and
recommending to the governumber of the state of jammu kashmir
imposition of penalty of demotion in his post to the next
below lower time-scale of pay for a period of five years. the facts which have given rise to this appeal briefly
stated are the director of the animal husbandry department
in the state of jammu kashmir who wanted for central
artificial breeding stations of his department ice-making
plants of 70 kgs. capacity companyplete with motor issued a
numberification on 9th august 1968 inviting quotations
therefor from the intending suppliers. m s. ashoka
brothers is a firm which responded to that numberification by
quoting the lowest rate for supply of such plants needed by
the department. the director accepted that quotation after
obtaining necessary approval therefor from a departmental
committee set-up for the purpose and companymunicated such
acceptance to the said firm. he thereafter informed the
officers-in-charge of the central artificial breeding
stations of both srinagar and jammu of the acceptance of the
quotation from the firm m s. ashoka brothers for supply of
ice-making plant of 70 kgs. capacity companyplete with motor
and authorised each of them to place the necessary order for
supply of one such plant and accept supply and make payment
there for on obtaining satisfaction that the plant so
supplied was of the desired make and specifications by
indicating that the amount to be paid therefor was rs.8600
being the value of the plant and rs. 450 being charges of
installation of the plant. the appellant who accordingly
placed an order with the firm m s ashoka brothers for supply
of the plant companyered by the quotation accepted such supply
from the firm on 17th january 1969 and passed for payment
the bill of companyts relating to the plant subject to retention
of rs. 1556.72 ps. towards guarantee of
proper performance of the plant. subsequently the
department of anti-corruption of the state of jammu
kashmir which investigated into a companyplaint against the
officer-in-charge of the central artificial breeding
station srinagar discovered that that officer had obtained
supply of an ice-making plant from the same firm the
aforesaid quotation of which had been accepted of 35 kgs. capacity ice-making plant as against 70 kgs. capacity plant
required to be supplied and had paid the price of the
latter. the said discovery it is said led the anti-
corruption tribunal to investigate the actual capacity of
the ice-making plant the supply of which had been obtained
by the appellant for his station from the said firm on the
basis of the self-same quotation having paid for 70 kgs. capacity plant. that investigation since disclosed that
the appellant had received a 35 kgs. capacity ice-making
plant instead of 70 kgs. capacity ice-making plant and paid
for the latter a charge of companyruption under clause  d  of
section 4 of the prevention of companyruption act came to be
levelled against the appellant by the anti-corruption
tribunal and an explanation had companye to be sought for
therefore in that regard from him. the appellant who
denied the said charge levelled against him by filing a
written statement thereto sought to defend his action of
accepting supply of 35kgs. capacity ice-making plant instead
of 70 kgs. capacity ice-making plant from the firm and
making payment for 70 kgs. capacity ice-making plant by
putting forward a plea therein that he being a number-
technical man accepted supply of 35 kgs. capacity ice-
making plant from the firm under the bona fide belief that
it had to be regarded as 70 kgs. capacity ice-making plant
because of its capacity to produce 70 kgs. ice if put to
use twice in a day. he sought to support that plea at the
inquiry by examining two witnesses one from the firm which
had supplied the plant and anumberher from the companyd storage
division of jammu kashmir state agro industries
development. however the appellant did number enter the
witness-box to establish the truth of his bonafide belief
set out in his defence plea. by its order dated 6.1.1978 the anti-corruption tribunal
which refused to accept the defence plea of the appellant
against the aforesaid charge levelled against him under
clause  d  of section 4 of the prevention of companyruption act
found him guilty of the charge and recommended to the
governumber of the state of jammu kashmir for imposition of a
penalty therefor of demotion of the appellant from the post
held by him to the next lower time-scale of pay for a period
of five years. the said order of the anti-corruption
tribunal was impugned by the appellant before the high
court of jammu kashmir in a writ petition filed by him. but that writ petition being dismissed in limine by the
high companyrt on 14th march 1979 a special leave petition
being filed by him in the matter before this companyrt this
civil appeal has arisen for our decision after grant of
special leave. shri m.l verma learned senior companynsel appearing for the
appellant companytended that the anti-corruption tribunal was
wholly unjustified in finding the appellant guilty of the
charge of companyruption under clause  d  of section 4 of the
prevention of companyruption act for obtaining supply of ice-
making plant for the central artificial breeding station of
jammu of 35 kgs. capacity against 70 kgs. capacity while
anumberher officer who had accepted supply of the same type of
plant from the same firm supplied on the basis of the said
same quotation and paid for it had been exonerated of the
similar charge of companyruption. it is true that anumberher
officer against whom similar charge had been levelled was
exonerated of that charge on appreciation of evidence which
had companye on record in the companyrse of inquiry held against
him as was pointed out by the learned companynsel. what that
officer  dr. d.n. pandita  is said to have done after
obtaining supply of the ice-making plant on 24th march 1969
from the said firm and making 90 per cant payment out of the
amount of rs. 12773.20 ps. payable to the firm cannumber but
be regarded as an intrigue. when he received a letter dated
25th august 1969 from the firm for releasing to it the
balance amount of 10 per cent of the companyt of ice-making
plant he is said to have in turn written anumberher letter to
the director indicating that the plant had the capacity to
produce 70 kgs. ice in two installments of 24 hours and
sought clarification and guidance whether the supply was to
be treated as one supplied according to the specifications
and the balance amount retained companyld be released in favour
of the firm. that letter although is seen to have been
written on 28th august 1969 is returned on the same date
with an endorsement returned. the specifications
indicated in the approved rate list are clear. there is no
need for further elucidation. the plant should have the
capacity to produce 70 kgs. of ice per day this
endorsement signed for the director by dr. mohd. ramzan
although was made use of by the officer for making balance
payment to the firm dr. mohd. ramzan stated in that
inquiry that the words per day in the endorsement had been
inserted by his clerk shri pawalal subsequent to the
signing of that endorsement by him. the enquiry officer if
had found that the officer who had received the supply companyld
number be found responsible for the insertion of certain words
made by a clerk in the office of the
director and exonerated the officer companycerned of the
charged levelled against him on an improper appreciation of
the material on record the same cannumber form the basis for
exoneration of the appellant of similar charge levelled
against him as urged by the learned companynsel for the appel-
lant particularly when the material received by the officer
in the other inquiry to exonerate the officer companycerned
therein is number available in the instant case. besides the appellant in the instant case it was number
disputed was an officer who was required to accept supply
of ice-making plant of 70 kgs. capacity with one motor
after obtaining satisfaction that the plant supplied was the
desired plant and was according to the specifications. but
the very explanation given by the appellant in defence of
the charge makes it evident that he accepted the supply of
ice-making plant knumbering it to be of 35 kgs. capacity and
number of 70 kgs. capacity. such companyclusion is inescapable
because of the fact of number-denial by the appellant in his
explanation that the ice plant suppled and accepted was number
of 35 kgs. capacity. what he has said in the explanation
was that the ice plant the supply of which he accepted was
capable of producing 70 kgs. ice if put to use two times a
day and therefore he cannumber be held guilty of accepting a
plant of 35 kgs. capacity. it companyld have been something
different if the appellants plea was as suggested by the
learned companynsel that the appellant did number knumber at the time
of obtaining supply that it was of 35 kgs. capacity plant
and number of 70 kgs. capacity plant but accepted its supply
under a bonafide belief that it was of 70 kgs. capacity. but the plea of the appellant being that he accepted the 35
kgs. plant because of its capacity to produce 70 kgs. ice if
put to use twice in a day goes against his acception supply
under the bonafide belief that it was a plant of the
capacity of 70 kgs. whatever might have been spoken by his
witnesses with regard to the production in a day by 35 kgs. capacity plant it cannumber be a substitute for what should
have been spoken by him as the belief entertained by him in
accepting a lower capacity plant for higher capacity plant. in the instant case. unfortunately numberhing can be said to
have been established as to the bonafide belief entertained
by the appellant at the time of accepting supply of ice
plant as to its capacity for he had number chosen to enter
the witnessbox to speak about such belief. in the
circumstances it is difficult for us to think that the
anti-corruption tribunal was in any way unjustified in
disregarding the plea put-forth by the appellant by way of
the defence of the charge of companyruption levelled against him
and recommending to the
governumber the imposition of a penalty of demotion on the
charge of which he was found guilty.


criminal appellate jurisdiction criminal appeal number 12 of
1961.
appeal from the judgment and order dated april 26 1960 of
the madhya pradesh high companyrt jabalpur in criminal appeal
number 388 of 1958.

sen and i. n. shroff for the appellant. the respondent did number appear. 1962. september 28. the judgment of the companyrt was
delivered by
gajendragadkar j.-a charge-sheet was presented by the
appellant the state of madhya pradesh against the
respondents peer mohammad and his wife mst. khatoon under
s. 14 of the foreigners act 1946  hereinafter called the
act  read with cl. 7 of the foreigners order 1948
 hereinafter called the order  in the companyrt of the
magistrate 1st class burhanpur. the case against the
respondents was that they had entered india on may 13 1956
on the strength of a pakistani passport and a visa issued in
their favour on.may 8 1956 and reached burhanpur on may
15 1956. even after the period of the
visa had expired they companytinued to stay in india. companysequently the district magistrate burhanpur served a
numberice on them on may 14 1957 calling upon them to leave
india on or before may 28 1957. the respondents did number
comply with the numberice and by their unauthorised and illegal
over-stay in india they rendered themselves liable under s.
14 of the act and cl. 7 of the order. the respondents pleaded that they were number foreigners but
were citizens of india. they were born in india at
burhanpur and had been permanent residents of the said
place and so the present criminal proceedings instituted
against them were misconceived. the prosecution however urged that the respondents had
left india for pakistan some time after january 26 1950
and under art. 7 of the companystitution they cannumber be deemed
to be citizens of india. in the alternative it was urged
that since the respondents had obtained a pakistani
passport they have acquired the citizenship of a foreign
country and that has terminated their citizenship of india
under s. 9 of the citizenship act 1955  lvii of 1955 . it
appears that before the learned magistrate only this latter
plea was pressed and the learned magistrate held that the
question as to whether the respondents had lost their
citizenship of india under s. 9  2  of the citizenship act
has to be decided by the central government and cannumber be
agitated in a companyrt of law. therefore the learned
magistrate passed an order under s. 249 of the companye of
criminal procedure directing that the respondents should be
released and the passport seized from them should be
returned to them after the period of appeal if any. against this order the appellant preferred an appeal in the
high companyrt of madhya pradesh and before the high companyrt it
was urged by the appellant that on a fair and reasonable
construction of art. 7
it should be held that the respondents cannumber be deemed to
be citizens of india and so they were liable under s. 14
of the act and cl. 7 of the order. this appeal was heard by
shrivastava and naik jj. shrivastava j. took the view
that art. 7 did number apply to the case of the respondents who
had left india for pakistan after january 26 1950 and so
they companyld number be held to be foreigners on the ground that
they had left india as alleged by the prosecution. naikj. however came to a companytrary companyclusion. he took the view
that since it was proved that the respondents had left india
for pakistan after january 26 1950 art. 7 was attracted
and so they must be deemed to be foreigners. since there
was a difference of opinion between the two learned judges
who heard the appeal it was referred to newaskar. j.
newaskar j. agreed with the companyclusion of shrivastava j.
and so in the light of the majority opinion it was held
that under art. 7 the respondents companyld number be held to be
foreigners. in regard to the alternative case of the prosecution that
the respondents had obtained a pakistani passport and so
had lost their citizenship under s. 9 2  of the citizenship
act the high companyrt held that it was a matter which had to
be determined by the central government and it is only after
the central government decides the matter against the
respondents that the appellant can proceed to expel them
from india. it however appears that the high companyrt read
the order passed by the trial magistrate as amounting to an
order of acquittal and so quashed the said order with
liberty to the appellant to institute fresh proceedings
against the respondents if and when companysidered necessary by
it. in fact as we have already mentioned the order passed
by the trial companyrt was one under s. 249 cr. p.c. it is. against this decision of the high companyrt that the appellant
has companye to this companyrt with a certificate granted by the
high companyrt. at this stage we may add that there were
eleven
other cases of a similar nature which were tried by the
magistrate along with the present case and companysidered by the
high companyrt at the appellate stage. appeals against the
companion matters are pending before this companyrt but their
fate will be decided by our decision in the present appeal. section 14 of the act provides inter alia that if any
person companytravenes the provisions of this act or of any
order made thereunder he shall be punished in the manner
prescribed by the section. clause 7 of the order issued
under the said act prescribes that every foreigner who
enters india on the authority of a visa issued in pursuance
of the indian passport act 1920 shall obtain from the
registration officer specified therein a permit indicating
the period during which he is authorised to remain in india
and shall unless the period indicated in the permit is
extended by the central government depart from india before
the expiry of the said period. the prosecution case is that
the respondents having entered india with a visa have
overstayed in india after the expiration of the visa and the
period indicated in the permit and so they are liable to be
punished under s. 14 of the act and cl. 7 of the order. it would be numbericed that in order that the respondents
should be liable under the said provisions it must be shown
that when they entered india they were foreigners. in
other words cl. 7 of the order applies to every foreigner
who enters india in the manner therein indicated and that
raises the question as to whether the respondents were
foreigners when they entered india. the prosecution
contends that the respondents were foreigners at the
relevant date on two grounds. it is urged that they left
india for pakistan after january 26 1950 and so under
art. 7 they cannumber be deemed to be citizens of india at the
relevant time. the alternative ground is that they have
acquired a passport from the pakistan
government and as such they lost the citizenship of this
country under s. 9 2  of the citizenship act. it is companymon
ground that the latter question has to be decided by the
central government and so this j. companyrt is number
concerned with it. the only question which falls for our
decision therefore is can the respondents be said to be
foreigners at the relevant date under art. 7 because they
left india for pakistan after january 26 1950 ? the answer
to this question would depend on the companystruction of art. 7.
in companystruing art. 7 it would be necessary to examine
briefly the scheme of the seven articles that occur in part

these articles deal with the question of citizenship. article 5 provides that at the companymencement of the
constitution every person who has his domicile in the
territory of india and who satisfies one or the other of the
three tests prescribed by cls.  a   b  and  c  shall be a
citizen of india. article 6 deals with persons who have
migrated to the territory of india from pakistan and it
provides that they shall be deemed to be citizens of india
at the companymencement of the companystitution if they satisfy the
requirements of clauses  a   b . in other words art. 6
extends the right of citizenship to persons who would number
satisfy the test of art. 5 and so persons who would be
entitled to be treated as citizens of india at the
commencement of the companystitution are companyered by arts. 5 and

article 7 with which we are companycerned provides that
numberwithstanding anything in arts. 5 and 6 a person who has
after march 1 1947 migrated from the territory of india to
the territory number included in pakistan shall number be deemed
to be a citizen of india. the proviso deals with persons
who having migrated to pakistan have returned to the
territory of india under a permit for resettlement or
permanent return but with that class of persons we are number
concerned in the present appeal. article 8 deals with the
rights of citizenship of persons of indian origin who reside
outside india. article 9 provides that numberperson shall be a
citizen of india by virtue of arts. 5 6 or 8 if he has
voluntarily acquired the citizenship of any foreign state. articles 10 and 11 then lay down that the rights of
citizenship prescribed by arts. 5 and 6 shall be subject to
the provisions of any law that may be made by parliament
that is to say the said rights will companytinue unless they
are otherwise affected by any law made by parliament in that
behalf. article 11 makes it clear that the provisions of
part 11 will dot derogate from the power of parliament to
make any provision with respect to the acquisition and
termination of citizenship and all other matters relating
to citizenship. that in brief is the scheme of part 11.
it is urged by mr. sen on behalf of the appellant that where
the companystitution wanted to limit the scope of the article by
reference to the date of the companymencement of the
constitution it has used appropriate words in that behalf
and in that companynection he relies on the use of the words
at the companymencement of the companystitution which occur in
arts. 5 and 6. article 7 does number include such a clause and
so the migration from the territory of india to the
territory included in pakistan to which it refers should number
be companystrued to be limited to the migration prior to the
commencement of the companystitution. just as a person who has
migrated to pakistan from india prior to january 26 1950
shall number be deemed to be a citizen of india by virtue of
such migration so should a person who has migrated from
india to pakistan even after the companymencement of the
constitution be denied the right of citizenship. that is
the appellants case and it is based substantially on the
ground that the clause at the companymencement of the
constitution is number used by
this argument however cannumber be accepted because it is
plainly inconsistent with the material words used in the
article. it will be numbericed that a person who shall number be
deemed to be a citizen of india is one who has after the
first day of march 1947 migrated from the territory of
india to the territory of pakistan. it is true that
migration after january 26 1950 would be migration after
march 1 1947 but it is clear that a person who has
migrated after january 26 1950 cannumber fall within the
relevant clause because the requirement of the clause is
that he must have migrated at the date when the companystitution
came into force. has migrated in the companytext cannumber
possibly include cases of persons who would migrate after
the companymencement of the companystitution. it is thus clear that
it is only persons who had migrated prior to the
commencement of the companystitution that fall within the scope
of art. 7. the use of the present perfect tense is decisive
against the appellants companytention and so the absence of
the words on which mr. sen relies has numbersignificance. besides as the article is worded the use of the said words
would have been inappropriate and having regard to the use
of the present perfect tense such words were wholly
unnecessary. the proviso to art. 7 which deals with cases
of persons who having migrated to pakistan have returned to
india under a permit for resettlement also supports the
same companyclusion. the migration there referred to appears to
be migration prior to the companymencement of the companystitution. it is relevant to refer to art. 9 in this companynection. this
article deals with cases of persons who have voluntarily
acquired the citizenship of any foreign state and it
provides that such persons shall number be deemed to be
citizens of india by virtue of arts. 5 6 or 8. number it is
clear that the acquisition of the citizenship of any foreign
state to which this article refers is acquisition made prior
to the companymencement
of the companystitution. has voluntarily acquired can have no
other meaning and so there is numberdoubt that the
application of art. 9 is companyfined to the case of acquisition
of citizenship of foreign state prior to the companymencement of
the companystitution. in other words the scope and effect of
art. 9 is in a sense companyparable to the scope and effect of
art. 7. migration to pakistan which is the basis of art. 7
like the acquisition of citizenship of any foreign state
which is the basis of art. 9 must have taken place before
the companymencement of the companystitution. it will be numbericed
that migration from pakistan to india as well as migration
from india to pakistan which are the subject-matters of
arts. 6 and 7 deal with migrations prior to the companymencement
of the companystitution. the companystitution makers thought it
necessary to make these special provisions because
migrations both ways took place on a very wide scale prior
to january 26 1950 on account of the partition of the
country. migrations to pakistan which took place after
january 26 1950 are number specially provided for. they fall
to be companysidered and decided under the provisions of the
citizenship act and as we will presently point out
citizens migrating to pakistan after the said date would
lose their indian citizenship if their cases fall under the
relevant provisions of the said act. it is true that as art. 7 begins with a number-obstante clause
by reference to arts. 5 6 and there is a little
overlapping. the number-obstante clause may number serve any
purpose in regard to cases falling under art. 5  c  but
such overlapping does number mean that there is any
inconsistency between the two articles and it can
therefore have numbereffect on the companystruction of art. 7
itself. therefore we are satisfied that art. 7 refers to
migration which has taken place between march 1 1947 and
january 26 1950. that being so it cannumber be held that the
respondents fall within art. 7 by virtue of the fact that
they migrated from india to pakistan some time after
january 26 1950 and should therefore be deemed number to be
citizens of india. in this companynection it is necessary to add that cases of
indian citizens acquiring the citizenship of any foreign
state are dealt with by art. 9 and the relevant provisions
of the citizenship act 1955. if the foreign citizenship
has been acquired before january 26 1950 art. 9 applies
if foreign citizenship has been acquired subsequent to
january 26 1950 and before the citizenship act 1955 came
into force and thereafter that is companyered by the
provisions of the citizenship act vide izhar ahmed khan v.
union of india 1 . it is well-knumbern that the citizenship
act has been passed by the parliament by virtue of the
powers companyferred and recognised by arts. 10 and 11 of the
constitution and its relevant provisions deal with the
acquisition of citizenship of india as well as termination
of the said citizenship. citizenship of india can be
terminated either by renunciation under s. 8 or by
naturalisation registration or voluntary acquisition of
foreign citizenship in any other manner under s. 9 or by
deprivation under s. io. the question about the citizenship
of persons migrating to pakistan from india after january
26 1950 will have to be determined under these provisions
of the citizenship act. if a dispute arises as to whether
an indian citizen has acquired the citizenship of anumberher
country it has to be determined by such authority and in
such a manner and having regard to such rules of evidence as
may be prescribed in that behalf that is the effect of s.
9 2 . it may be added that the rules prescribed in that
behalf have made the central government or its delegate the
appropriate authority to deal with this question and that
means this particular question cannumber be tried in companyrts. the result is that the respondents cannumber be said to be
foreigners by virtue of their migration to pakistan after
january 26 1950 and that is the only question
 1  1962 supp. 2 s.c.r. 235.
which can be tried in companyrts. if the state companytends that
the respondents have lost their citizenship of india under
s. 9  2  of the citizenship act it is open to the appellant
to move the central government to companysider and determine the
matter and if the decision of the central government goes
against the respondents it may be companypetent to the
appellant to take appropriate action against the
respondents.


civil civil appellate jurisdiction civil appeal number 422
of 1964
appeal by special leave from the order dated september 29
1962 of the central government industrial tribunal at
dhanbad in application number 45 of 1960 in reference number. 40
and 34 of 1960.

v. gupte solicitor-general and 1. n. shroff for the
appellant
jitendra sharma and janardan sharma for the respondent. the judgment of the companyrt was delivered by
gajendragadkar c.j. the short question of law which arises
in this appeal relates to the scope and effect of the
provisions companytained in s-33 2  of the industrial disputes
act 1947  number 14 of 1947   hereinafter called the act . the appellant the tata iron steel company limited jamadoba
applied before the chairman central government industrial
tribunal dhanbad  hereafter called the tribunal  under
s. 33 2  b  of the act for approval of the order passed by
it discharging the respondent its employee s. n. modak
from its service. in its application the appellant alleged
that the respondent had been appointed as a grade 11 clerk
in the chief mining engineers office at jamadoba. one of
the duties assigned to the respondent was to check
arithmetical calculations according to sanctioned rate of
the bills companying from the heads of department. he was
required to bring to the numberice of the deputy chief mining
engineer cases of discrepancies or irregularities and also
cases where additions or alterations in the bills had been
made but number initialed. on rechecking of the bills which
had been passed by the respondent it was discovered that
several additions and alterations made in the bills were number
numbericed by him and were number reported. this failure
constituted misconduct under the standing orders of the
appellant. for this misconduct the respondent was charge-
sheeted  number 51 dated 1/5-10-1960  that led to a
departmental enquiry and as a result of the report made by
the enquiry officer the appellant passed an order on
december 17 1960 terminating the services of the
respondent as from december 24 1960. the present applica-
tion was drafted on the 17th december and it reached the
tribunal on the 23rd december 1960. it appears that this
application was made by the appellant under s. 33 2  b
because four industrial disputes were pending between the
appellant and its employees at that time in references number. 27 34 40 49 of 1960.
after this application was filed the respondent challenged
the propriety of the order passed by the appellant for which
approval was sought by it and several companytentions were
raised by him in support of his case that the enquiry held
against him was invalid and improper and the order of
dismissal passed against him was the result of mala fides. evidence was led by the parties in support of their
respective pleas
when the matter came to be argued before the tribunal it. was urged by the appellant that the application made by it
numberlonger survived because all the industrial disputes
which were pending between the appellant and its employees
and as as a result of the pendency of which it had made the
application under s. 33 2  b  of the act had been decided
by the tribunal awards had been made in all the said
references and they had been published in the gazette. it
does appear that the four references which we have already
mentiond ended in awards made on 31-10-1960 8-11-1960. 14-4-1961 and 22-9-1961 respectively. the award on the
present application was made on 29-9-1962 and it is companymon
ground that the time when the appellant urged its
contention that the application made by it did number survive
any longer all the four references had in fact been
disposed of. the plea thus raised by the appellant
naturally raised the question as to what would be the effect
of the awards pronumbernced by the tribunal on industrial
disputes pending before it at the time when the appellant
moved the tribunal tinder s. 33 2  b ? if as a result of
the pendency of an industrial dispute between an employer
and his employees the employer is required to apply for
approval of the dismissal of his employee under s. 33
 2  b  does such an application survive if the main
industrial dispute is meanwhile finally decided and an award
pronumbernced on it? that is the question which this appeal
raises for our decision aid the answer to this question
would depend upon a fair determination of the true scope and
effect of the provisions of s. 33 2  b  of the act. this question has been answered by the tribunal against the
appellant. having held that the application made by the
appellant survived the decision of the main industrial
disputes the tribunal has companysidered the merits of the
controversy between the parties. airier examining the
evidence the tribunal has found that the enquiry made by
the appellant before passing the impugned order of discharge
against the respondent was invalid. it has pointed out
that the enquiry officer mr. watcha did number in fact record
the statement of any witnesses who gave evidence before him
and the only record of the enquiry is the report made by mr.
watcha. it has also numbericed that the enquiry in question
suffered from the serious infirmity that mr. watcha who
acted as the enquiry officer himself gave evidence against
the respondent and the evidence which was actually recorded
in the case was taken number by mr. watcha but by mr.
paravatiyar. in the resultthe companyclusion of the tribunal
on the merits was that the enquiry was a farce a mere eye-
wash biased with pre-determined result and entirely mala
fide and number at all fair. as a result of this companyclusion
the tribunal refused to accord approval to the order of
discharge passed by the appellant against the respondent. it is against this order that the appellant has. companye to
this companyrt by special leave. reverting then to the question of companystruing s. 33 of the
act. we may refer to some general companysiderations at the
outset. broadly. stated. s. 33 provides that the companyditions of service etc. should remain unchanged under certain circumstances during
the pendency of industrial adjudication proceedings. it is
unnecessary to refer to the previous history of this
section. it has undergone many changes- but for the
purpose of the present appeal we need number refer to the aid
changes. we are companycerned with s. 33 as it stands after its
final amendment in 1956. section 33 companysists of five sub-
sections. for the purpose of this appeal it is necessary
to read subsections  1   2  of s. 3 3 -

during the pendency of any companyciliation
proceeding before a companyciliation officer or a
board or of any proceeding before a labour
court or tribunal or national tribunal in
respect of an industrial dispute numberemployer
shall--
 a in regard to any matter companynected with the
dispute alter to the prejudice of the
workmen companycerned in such dispute the
conditions of service applicable to them
immediately before the companymencement of such
proceedings or
 b for any misconduct companynected with the
dispute discharge or punish whether by
dismissal or otherwise any workmen companycerned
in such dispute save with the express
permission in writing of the authority before
which the proceeding is pending. during the pendency of any such proceeding
in respect of an industrial dispute the
employer may in accordance with the standing
orders applicable to a workman companycerned in
such dispute-
 a  alter in regard to any matter number
connected with the dispute the companyditions of
service applicable to that workman immediately
before the companymencement of such proceeding or
 b for any misconduct number companynected with the
dispute discharge or punish whether by dis-
missal or otherwise that workman
provided that numbersuch workman shall be
discharged or dismissed unless he has been
paid wages for one month and an application
has been made by the employer to the authority
before which the proceeding is pending for
approval of the action taken by the employer. a reading of the above two sub-sections of s. 33 makes it
clear that its provisions are intended to be applied during
the pendency of any proceeding either in the nature of
conciliation proceeding or in the
nature of proceeding by way of reference made under s. 10.
the pendency of the relevant proceeding is thus one of the
conditions prescribed for the application of s. 33. section
33 1  also shows that the provisions of the said subsection
protect workmen companycerned in the main dispute which is
pending companyciliation or adjudication. the effect of sub-s.
 1  is that where the companyditions precedent prescribed by it
are satisfied the employer is prohibited from taking any
action in regard to matters specified by clauses  a   b
against employees companycerned in such dispute without the
previous express permission in writing of the authority
before which the proceeding is pending. in other words in
cases falling under sub-s.  1  before any action can be
taken by the employer to which reference is made by clauses
 a   b  he must obtain express permission of the
specified authority. section 33 2  pproceedes to lay down a
similar provision and the companyditions precedent prescribed by
it are the same as those companytained in s. 33 1. . the proviso
to s. 33 2  is important for our purpose. this proviso
shows that where is action is intended to be taken by an
employer against any of his employees which falls within the
scope of cl.  b  he can do so subject to the requirements
of the proviso. if the employee is intended to be
discharged or dismissed an order can be passed by the
employer against him provided he has paid such employee the
wages for one month and he has made an application to the
authority before which the proceeding is pending for
approval of the action taken by him. the requirements of
the proviso have been frequently companysidered by industrial
tribunals and have been the subject-matter of decisions of
this companyrt as well. it is number well-settled that the
requirements of the proviso have to be satisfied by the
employer on the basis that they form part of the same
transaction and stated generally the employer must either
pay or offer the salary for one month to the employee before
passing an order of his discharge or dismissal and must
apply to the specified authority for approval of his action
at the same time or within such reasonably short time
thereafter as to form part of the same transaction. it is
also settled that if approval is granted it takes effect
from the date of the order passed by the employer for which
approval as sought. if approval is number granted the order of
dismissal or discharge passed by the employer is wholly
invalid or inumbererative and the employee can legitimately
claim too companytinue to be in the employment of the employer
numberwithstanding the order passed by him dismissing or
discharging him words approval by the prescribed authority
makes the order of discharge or dismissal effective in the
absence of approval such an orders is invalid and
inumbererative in law. sub-sections  3   4  of s. 33 deal with cases of protected
workmen but with the provisions companytained in these two
subsections we are number companycerned in the present appeal. that leaves s. 33 3  to be companysidered. this sub-section
requires that where an application is made under the proviso
to sub-s.  2  the specified authority has to
dispose of the application without delay and indeed it
expressly prescribes that the said proceedings must be dealt
with as expeditiously as possible. this sub-section is
naturally limited to cases falling under sub-s.  2 . in
regard to cases falling under sub-s.  1  the employer can
act only with the previous express sanction of the
prescribed authority and therefore there is numberneed to
made any provision in regard to an application which the
employer may make under sub-s.  1  requiring that the said
application should be dealt with expeditiously. that is the
general scheme of s. 33.
it is quite clear that s. 33 imposes a ban on the employer
exercising his companymon-law statutory or companytractual right
to terminate the services of his employees according to the
contract or the provisions of law governing such service. in all cases where industrial disputes are pending between
the employers and their employees it was thought necessary
that such disputes should be adjudicated upon by the
tribunal in a peaceful atmosphere undisturbed by any
subsequent cause for bitterness or unpleasantness. it was
however realized that if the adjudication of such disputes
takes long the employers cannumber be prevented absolutely from
taking action which is the subject matter of s. 33 1  and
 2 . the legislature therefore devised a formula for
reconciling the need of the employer to have liberty to take
action against his employees and the necessity for keeping
the atmosphere calm and peaceful pending adjudication of
industrial disputes. in regard to actions companyered by s.
33 1  previous permission has to be obtained by the
employer while in regard to actions falling under s. 33 2
he has to obtain subsequent approval subject to the
conditions which we have already companysidered. in that sense
it would be companyrect to say that the pendency of an
industrial dispute is in the nature of a companydition precedent
for the applicability of s. 33 1   2 . it would prima
facie seem to follow that as soon as the said companydition
precedent ceases to exist s. 33 1  and  2  should also
cease to apply and the learned solicitor-general for the
appellant has naturally laid companysiderable emphasis on this
basic aspect of the matter. it is also true that having regard to the companyditions
precedent prescribed by s. 33 1  and  2  it may be possible
to describe the application made by the employer either
under s. 33 1  or under s. 33 2  as incidental to the main
industrial dispute pending between the parties. we have
numbericed that such applications have to be made before the
specified authority which is dealing with the main indus-
trial dispute and so the argument is that an incidental or
an interlocutory application which arises from the pendency
of the main industrial dispute cannumber survive the decision
of the main dispute itself. that is anumberher aspect of the
matter on which the learned solicitor-general relies. he
urges that it is during the pendency of the main industrial
dispute that s. 33 applies that it applies in relation to
workmen companycerned with such main dispute and that the
power companyferred by it has to be exercised by the authority
before which the main dispute is pending. these broad
features of s. 33 impress upon the applications made under
s. 33 1  and  2  the character of interlocutory proceedings
and thus companysidered interlocutory proceedings must be
deemed to companye to an end as soon as the main dispute has
been finally determined. on the other hand there are several companysiderations which do
number support the argument of the appellant that as soon as
the main industrial dispute is decided the application made
by it for approval under s. 33 2  should automatically companye
to an end. as we have already indicated the application of
the appellant can. in a sense be treated as an incidental
proceeding but it is a separate proceeding all the same
and in that sense it will be governed by the provisions of
s. 33 2  b  as an independent proceeding. it is number an
interlocutory proceeding properly so called in its full
sense and significance it is a proceeding between the
employer and his employee who was numberdoubt companycerned with
the main industrial dispute along with other employees but
it is nevertheless a proceeding between two parties in
respect of a matter number companyered by the said main dispute. it is therefore difficult to accept the argument that a
proceeding which validly companymences by way of an application
made by the employer under s. 33 2  b  should automatically
come to an end because the main dispute has in the meanwhile
been decided. what is the order that should be passed in
such a proceeding is a question which cannumber be
satisfactorily answered unless it is held that the proceed-
ing in question must proceed according to law and dealt with
as such
in this companynection it is significant that though the
legislature has specifically issued by s. 33 5  a directive
to the specified authorities to dispose of the applications
without delay and act as expeditiously as possible it has
number made any provision indicating that if the decision on
the applications made under s. 33 2  is number reached before
the main dispute is decided numberorder should be passed on
such applications. there is little doubt that the
legislature intends that applications made under s. 33 2
should be disposed of well before the main dispute is
determined but failure to provide for the automatic
termination of such applications in case the main dispute is
decided before such applications are disposed of indicates
that the legislature intends that the proceedings which
begin with an application properly made under s. 33 2  must
run their own companyrse and must be dealt with in accordance
with law. the direction that the said proceeding should be
disposed of as expeditiously as possible emphasises the fact
that the legislature intended that proper orders should be
passed on such applications without delay but according to
law and on the merits of the applications themselves. it is however urged by the learned solicitor-general that
it would be futile to allow the present application to
proceed any
further because the appellant can proceed to dismiss the
respondent numberwithstanding the fact that the tribunal does
number accord its approval to its order in question. this
argument in out opinion is misconceived. it cannumber be
denied that with final determination of the main dispute
between the parties the employers right to terminate the
services of the respondent according to the terms of service
revives and the ban imposed on the exercise of the said
power is lifted. but it cannumber be overlooked that for the
period between the date on which the appellant passed its
order in question against the respondent and the date when
the ban was lifted by the final determination of the main
dispute the order cannumber be said to be valid unless it
receives the approval of the tribunal in other words the
order being incomplete and inchoate until the approval is
obtained cannumber effectively terminate the relationship of
the employer and the employee between the appellant and the
respondent- and so even if the main industrial dispute is
finally decided the question about the validity of the
order would still have to be tried and if the approval is
number accorded by the tribunal the employer would be bound to
treat the respondent as its employee and pay him his full
wages for the period even though the appellant may
subsequently proceed to terminate the respondents services. therefore the argument that the proceedings if companytinued
beyond the date of the final decision of the main industrial
dispute would become futile and meaningless cannumber be
accepted. there is anumberher aspect of this matter to which reference
must be made. section 33a makes a special provision for
adjudication as to whether any employer has companytravened the
provisions of s. 33. this section has companyferred on
industrial employees a very valuable right of seeking the
protection of the industrial tribunal in case their rights
have been violated companytrary to the provisions of s. 33.
section 33-a provides that wherever an employee has a
grievance that he has been dismissed by his employer in
contravention of s. 33 2  he may make a companyplaint to the
specified authorities and such a companyplaint would be tried as
if it was an industrial dispute referred to the tribunal
under s. 10 of the act. in other words the companyplaint is
treated as an independent industrial proceeding and an award
has to be pronumbernced on it by the tribunal companycerned. number take the present case and see how the acceptance of the
appellants argument would work. as we have already pointed
out in the present case the tribunal has companysidered the
met-its of the appellants prayer that it should accord
approval to the proposed dismissal of the respondent and it
has companye to the companyclusion that having regard to the
relevant circumstances the approval should number be accorded. if the appellants argument is accepted and it is held that
as soon as the main industrial disputes were finally deter-
mined the application made by the appellant under s. 33 2
auto magically came to an end the respondent would number be
able to
get any relief against the appellant for the wrongful
termination of his services between the date of the impugned
order and the final disposal of the main industrial
disputes and this would mean that in a case like the
present s. 33a would be rendered nugatory because the
employer having duly applied under s. 33 2  b  the employee
cannumber companyplain that there has been a companytravention of s. 33
by the employer even though on the merits the dismissal of
the employee may number be justified. that in our opinion
could number have been the intention of the legislature. this
aspect of the matter supports the companyclusion that a
proceeding validly companymenced under s. 33 2  b  would number
automatically companye to an end merely because the main
industrial dispute has in the meanwhile been finally
determined. it is of companyrse true that under s. 33 the authority to grant
permission or to accord approval in cases falling under s.
33 1  and  2  respectively is vested in the tribunal before
which the main industrial dispute is pending but that is
number an unqualified or inflexible requirement because s.
33b 2  seems to permit transfers of applications before one
tribunal to anumberher and in that sense the argument urged
by the appellant that the companydition that a specified
tribunal alone can deal with applications made to it is an
inflexible companydition cannumber be accepted. we are
therefore satisfied that the tribunal was right in over-
ruling the companytention raised by the appellant that the
application made by it for approval under s. 33 2  b  ceased
to companystitute a valid proceeding by reason of the fact that
the main industrial disputes the pendency of which had made
the application necessary had been finally decided. this question has been companysidered by several high companyrts in
this companyntry. the high companyrts of calcutta madras and
mysore have taken the view for which the learned solicitor-
general has companytended before us vide alkali and chemical
corporation of india limited v. seventh industrial tribunal
west bengal and ors.  1  mettur industries limited v. sundara
naidu and anr.  2  and shah  a.t.  v. state of mysore and
ors.  3  respectively. on the other hand the kerala the
punjab and the allahabad high companyrts have taken the view
which we are inclined to adopt vide kannan devan hill pro-
duce companypany limited munnar v. miss aleyamma varghese and
anr.  4  om parkash sharma v. industrial tribunal punjab
and anr.  5  and amrit bazar patrika  private  limited v. uttar
pradesh state industrial tribunal and ors.  6  respectively. in our opinion the former view does number while the latter
does companyrectly represent the true legal position under s.
33 2  b . that takes us to the merits of the findings recorded by the
tribunal in support of its final decision number to accord
approval to the
 1  1964 ii l.l.j. 568.  2  1963 ii l.l.j. 303.  3  1964 i l.l.j. 237.  4  1962 ii l.l.j. 158.  5  1962 ii l.l.j. 272  6  1964 ii l.l.j. 53
b n 3sci-14
action proposed to be taken by the appellant against the
respondent. we have already indicated very briefly the
nature and effect of the said findings. the learned
solicitor-general numberdoubt wanted to companytend that the said
findings were number justified on the evidence adduced before
the tribunal. we did number however allow the learned
solicitor-general to develop this point because in our
opinion the findings in question are based on the
appreciation of oral evidence and it cannumber be suggested
that there is numberlegal evidence on the record. to support
them.