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1969 (4) TMI 107 - SC - CustomsWhether the Gold (Control) Act, 1968 (Act No. 45 of 1968) is constitutionally valid? Held that - the provisions held to be invalid are not inextricably bound up with the remaining provisions of the Act. It is difficult to hold that Parliament would not have enacted the impugned Act at all without including that part which is found to be ultra vires. The Act still remains substantially the Act as it was passed, that is, an Act to provide for the control, production, manufacture, supply, distribution, use and possession of gold and gold ornaments and articles of gold. In the result we hold that the following provisions of the impugned Act are invalid. Sections 5(2)(b), 27(2)(d), 27(6), 32, 46, 88 and 1 00. The petitioners are, therefore, entitled to a writ in the nature of mandamus under Art. 32 of -the Constitution commanding the respondents not to take any steps to implement any of the invalid provisions of the Act. Writ Petitions 282, 407 and 408 of 1968 are allowed to this extent.
Issues Involved:
1. Legislative Competence of Parliament under Entry 52 of List I and Entry 33 of List III of the Seventh Schedule. 2. Validity of Specific Sections of the Gold (Control) Act, 1968 concerning restrictions and administrative powers. 3. Reasonableness of Restrictions imposed by the Act under Article 19(1)(f) and (g) of the Constitution. 4. Violation of Article 14 of the Constitution concerning equal protection and discrimination. 5. Severability of Invalid Provisions and the survival of the remaining Act. Issue-wise Detailed Analysis: 1. Legislative Competence of Parliament: The primary question was whether the Gold (Control) Act, 1968, fell within the legislative competence of Parliament under Entry 52 of List I and Entry 33 of List III of the Seventh Schedule. The petitioners argued that the Act pertained to handicrafts, which fell under the exclusive competence of State Legislatures under Entry 27 of List II. The Court held that the manufacture of gold ornaments by goldsmiths constituted an "industry" within the meaning of Entry 52 of List I and Entry 33 of List III. The Court emphasized that legislative entries should be given a large and liberal interpretation and concluded that Parliament had validly exercised its legislative power in enacting the Gold (Control) Act, 1968. 2. Validity of Specific Sections: Several sections of the Act were challenged for being unreasonable and violative of constitutional rights. The Court examined the following sections: - Section 4(4) and 4(5): The delegation of powers by the Administrator was found to be within permissible limits, necessary for administrative efficiency. - Section 5(1) and 5(2)(a): The power to make orders was deemed to be within the framework of the Act and not inconsistent with its provisions. - Section 5(2)(b): The power to regulate by licenses, permits, or otherwise was found to suffer from excessive delegation of legislative power and was held to be constitutionally invalid. 3. Reasonableness of Restrictions: The Court evaluated the restrictions imposed by the Act under Article 19(1)(f) and (g) of the Constitution. It was argued that sections like 27(2)(d), 27(6), 32, 46, 88, and 100 imposed unreasonable restrictions on the fundamental rights of the petitioners. The Court held: - Section 27(6): The conditions for the grant or renewal of licenses were vague and imposed unreasonable restrictions. Clauses (a), (d), (e), and (g) were particularly highlighted. - Sections 32 and 46: The limits on the possession of primary gold were found to be unreasonable due to the statutory definition of "standard gold bar." - Section 88: The imposition of vicarious liability on dealers for the acts of their employees was deemed to extend beyond reasonable limits. - Section 100: The obligation on dealers to verify the identity of persons from whom they bought gold was found to be uncertain and incapable of proper compliance. 4. Violation of Article 14: The petitioners argued that the provisions regarding licensing of dealers were more stringent than those for certified goldsmiths, violating the guarantee of equal protection under Article 14. The Court held that licensed dealers and certified goldsmiths formed separate classes and the classification made by the Act was reasonable. The Court found no violation of Article 14 in the provisions of the Act. 5. Severability of Invalid Provisions: The Court addressed whether the invalid provisions affected the validity of the entire Act. It concluded that the invalid provisions were not inextricably bound up with the remaining provisions, and the Act could still function without them. The Court held that the remaining provisions of the Act were capable of being executed independently and thus survived. Conclusion: The Supreme Court held that the Gold (Control) Act, 1968, was within the legislative competence of Parliament. However, specific sections of the Act were found to impose unreasonable restrictions and were declared invalid. The invalid sections included: - Sections 5(2)(b): Excessive delegation of legislative power. - Sections 27(2)(d) and 27(6): Vague and unreasonable conditions for licensing. - Sections 32 and 46: Unreasonable limits on the possession of primary gold. - Section 88: Unreasonable vicarious liability. - Section 100: Uncertain and unreasonable statutory obligation. The remaining provisions of the Act were upheld, and the petitioners were granted a writ of mandamus to prevent the implementation of the invalid provisions. The petitions were allowed to the extent of the invalid sections, with no order regarding costs.
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