1985 (2) TMI 285 - SC - Customs

Validity of Section 28 of the Gold Control Act, 1968 questioned - Held that - Parliament has carried out the necessary amendment in the Act. No such vague or indefinite expressions or concepts are to be found in section 28 by reference to which the Administrator is required to exercise his power. In the absence of parity of situation or circumstances the doctrine of parity of reasoning cannot be invoked. In the result we set aside the impugned judgment of the High Court and declare section 28 of the Act valid.

Summary

Issues:
1. Validity of Section 28 of the Gold Control Act, 1968 challenged by the Union of India.
2. Excessive delegation of legislative power in Section 28.
3. Lack of criteria or guidelines for the Administrator in granting or refusing permission under Section 28.
4. Comparison with previous judgments on similar provisions.

Analysis:
The Supreme Court heard 11 appeals challenging the Andhra Pradesh High Court's judgment on the validity of Section 28 of the Gold Control Act, 1968. The High Court had struck down Section 28 due to excessive delegation of legislative power, citing the lack of criteria or guidelines for the Administrator to grant or refuse permission for money-lending or banking activities. The High Court found the provision conferred arbitrary and unfettered power on the Administrator, leaving licensed dealers vulnerable to his discretion without proper guidelines or a hearing process. The Court also drew an analogy from a previous case regarding a similar provision in the Act.

The Supreme Court disagreed with the High Court's reasoning, stating that the objective, policy, and scheme of the Act provide sufficient guidance for the Administrator to exercise discretion under Section 28. The Court highlighted the Act's purpose of controlling gold trade for economic interests and preventing circumvention of its provisions. It emphasized that Section 28 does not impose an absolute prohibition but regulates activities to align with the Act's objectives. The Court noted that a revision process to the Central Government exists, ensuring oversight of the Administrator's decisions, thus preventing arbitrary use of power.

Furthermore, the Court distinguished the present case from previous judgments where provisions were declared invalid due to vague and indefinite concepts. Unlike the earlier provisions, Section 28 does not contain such ambiguous terms, providing a clear framework for the Administrator to consider when granting permissions. The absence of vague expressions in Section 28 led the Court to uphold its validity, rejecting the analogy drawn by the High Court.

The Court cited decisions from other High Courts that upheld the validity of Section 28, reinforcing its stance on the matter. Ultimately, the Supreme Court set aside the High Court's judgment and declared Section 28 of the Gold Control Act, 1968, as valid. As the respondents did not appear, no costs were awarded in the appeal.