Civil Appeals Nos
1264 6771 etc
From the Judgment and Order dated 261269 of the High Court of Andhra Pradesh at Hyderabad in WP Nos 3956 3971 3983 3899 4421 4474 4537 4544 4570 4825 and 493368
DK Sen Gopal Subramonium and RN Poddar for the Appellant
Ex parte for the Respondents
The Judgment of the Court was delivered by TULZAPURKAR J
In these 11 appeals only that part of the judgment of the Andhra Pradesh High Court is assailed by the Union of India where the challenge to the validity of section 28 of the Gold Control Act 1968 has succeeded
The challenge to the other provisions of the Act at the instance of persons engaged in gold trade ie manufacturers shroffs and dealers in gold was rejected by the High Court
Section 28 of the Act runs thus 28
Money lending business not to be carried on in licensed premises No licensed dealer shall unless authorised by the Administrator so to do a carry on business as a money lender or banker on the security of any article or ornament or both b permit any other person to carry on money lending banking or any other business in the same premises in which he carried on business as such dealer
 The High Court has struck down the aforesaid provision only on the ground that it suffers from the vice of excessive delegation of legislative power inasmuch as no criteria or guide lines have been 954 provided by reference to which the power conferred on the Administrator to refuse permission or grant permission should be exercised and that the section confers an arbitrary uncanalised power upon the Administrator with the result that the licensed dealer is at his mercy while seeking permission to carry on money lending or banking business on the security of any article ornament or both in the same premises in which he carried on business as such dealer
The High Court s reasoning in this behalf is to be found in its judgment at page 87 of the paper book and it runs thus The Administrator as is evident from this provision is given unlimited authority or power to refuse permission or to grant permission
No rules have been framed prescribing the conditions or circumstances under which the Administrator could refuse permission or grant permission
A dealer is at the mercy of the Administrator and is help less against the arbitrary exercise of the power by the Administrator when he chooses to negative the request
It is clear that Section 28 confers an arbitrary and uncanalised power without any criteria for guiding the discretion of the Administrator
Further the section does not provide nor is any rule brought to our notice which enjoins upon the Administrator to give a hearing to dealer who seeks permission under this Section and give reasons in case he decides to refuse the permission
 Incidentally the High Court also proceeded to draw analogy from the reasoning adopted by this Court in its decision in Harakchand Ratanchand Banthias vs Asst
collector of Central Excise Poona II Division while declaring sec
276 of the Act as it stood prior to its amendment by the Amending Act No 26 of 1969 constitutionally invalid on the ground of conferal of a very wide and vague power upon the Administrator to grant or renew a license to a dealer
For the reasons which we shall indicate presently it is impossible to the reasoning given by the High Court for striking down sec
28 in the manner done and in our view the analogy drawn by the High Court from the reasoning adopted by this Court while dealing with unamended sec
276 of the Act is clearly inapplicable
It is true that no express rule prescribing the conditions or circumstances under which the permission can be granted or refused 1 955 has been framed nor any particular guide line has been expressly indicated in sec
28 by reference to which the power conferred upon him thereunder could be exercised by the Administrator but that is not decisive of the matter
It cannot be disputed that sec
28 is part and parcel of the entire scheme of Gold Control as envisaged by the Act and the object of the enactment and the scheme affords sufficient guidance to the Administrator in the matter of exercising his discretion under that section
The main object in putting the Act on the Statute Book as indicated by its long title is to provide in the economic and financial interests of the community for the control of the production manufacture supply distribution use and possession of and business in gold ornaments and articles of gold and for matters connected therewith or incidental thereto
 In Harakchand Banthria s case supra this Court has further pointed out that even though import of gold into India had been banned considerable quantities of contraband gold were finding their way into the country through illegal channels affecting the national economy and hampering the country s economic stability and progress that the Customs Department was not in a position to effectively combat the smuggling over the long borders and coast line that therefore anti smuggling measures had to be supplemented by a detailed system of control over internal transactions and that the Gold Control 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 will have to be viewed from the aforesaid perspective
It is also clear that the restrictions which have been imposed in sec
28 are meant to prevent the circumvention of other provisions of the Act
Therefore in our view the objective the policy and the Scheme of the Act together with the necessity to ensure prevention of circumvention of the other provisions of the Act afford more than sufficient guidance to the Administrator in the matter of exercising the power of discretion conferred on him under sec
In fact sec
51 of the Act requires that the Administrator should have regard to the policy and purposes of the Act in making his orders
Moreover against his order under that section a revision lies to Central Government which implies that he will have to make judicious use of his power or discretion and any improper exercise is liable to be corrected by a higher authority
If that be so it cannot be said that unfettered or uncanalised or arbitrary power has been conferred upon the Administration under sec
Moreover regard must be had to be the nature of the restrictions imposed by the Section
It does not impose any blanket or 956 absolute prohibition upon a dealer from carrying on money lending banking or any other business in the same premises in which he carries on business as a dealer but he is prevented only from carrying on business as money lender or banker on the security of any article ornament or both unless authorised by the administrator
Even the restriction in the case of a third person in carrying on business as a money lender banker or any other business in the same premises is not absolute in as much as the Administrator can authorise the third person to carry on the business in the licensed premises of the dealer and while implementing such limited restrictions or granting relief against the same he will be guided by the policy and purposes of the Act and by the prime consideration that circumvention of the other provisions of the Act shall not be premitted
Having regard to this position which obtains in the case sec
28 cannot be struck down on the ground of excessive delegation of legislative power and its validity has to be upheld
We may indicate that the same provision section 28 was challenged before the Patna High Court in Bihar State Bullion Merchants  Association vs Union of lndia1 and the Gujarat High Court in Ramanlal Purshottamamdas Chokshi vs Union of India  Others 2 and these High Courts have upheld its validity
We approve the view taken in those cases As regards the analogy drawn by the High Court from the reasoning adopted by this Court in Harakchand Banthia s case supra while declaring unamended sec
276 of the Act invalid we would like to point out that while conferring power on the Administrator in the matter of granting or renewing a license to a dealer the unamended sec
276 in several of its clauses referred to certain concepts which Administrator was required to take into account and these concepts were regarded as indefinite uncertain and vague
For instance under clause a the Administrator was required to have regard to the number of dealers existing in the region  in which the applicant was intending to carry on business as dealer but the word region  was no where defined in the Act similarly clause b required the Administrator to have regard to the anticipated demand  as estimated by him for the ornaments in that region but the expression anticipated demand  was really vague and incapable of assessment leading to a great deal of uncertainty similarly the expression 1AIR 1971 Patna 240
214 Guj
LR 112 957 suitability of the applicant  in cl
e and public interest  in cl
g A did not provide any objective standard or norm and because such indefinite uncertain and vague expressions or concepts had been used in some of the clauses under sec
276 this Court struck down sec
276 on the ground that it conferred a very wide and vague power on the Administrator
It may be mentioned that after this provision was struck down by this Court Parliament has carried out the necessary amendment in the Act
No such vague or indefinite expressions or concepts are to be found in sec
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 sec
28 of the Act valid
The appeal succeeds but since the respondents have not appeared there will be no order as to costs
SR Appeal allowed


Summary:
Section 28 of the Gold Control Act 1968 bars money lending business to be carried on in licensed premises either by the licensed dealer or by any other person unless authorised by the Administrator to do so
Drawing analogy from the reasoning adopted by the Supreme Court in its decision reported in Harakchand Ratanchand Banthia vs Assistant Collector or Central Excise Poona II Division 1970 I SCR 479AIR  the High Court of Andhra Pradesh struck down the said provision on the ground that it suffers from the vice of excessive delegation of legislative power in as much as no criteria or guidelines have been provided by reference to which the power conferred on the Administrator to refuse permission or grant permission should be exercised and that the section confers an arbitrary uncanalised and unfettered power upon the Administrator with the result that the licensed dealer is at his mercy while seeking permission to carry on money lending or banking business on the security of any article ornament or both in the same premises in which he carried on business as such dealer
Hence the appeal by special leave
Allowing the appeal the Court  HELD 11 Section 28 of the Gold Control Act 1968 cannot be struck down on the ground of excessive delegation of legislative power and its validity must be upheld
957C 13 It is true that no express rule prescribing the conditions or circumstances under which the permission can be granted or refused has been framed nor any particular guide line has been expressly indicated in section 28 by reference to which the power conferred upon him thereunder could be exercised by the Administrator but that is not decisive of the matter
954H 955A 952 13 Section 28 of the Gold Control Act 1968 is part and parcel of the entire scheme of the Gold Control Act the objective the policy and the scheme of the Act together with the necessity to ensure prevention of circumvention of the other provisions of the Act afford more than sufficient guidance to the Administrator in the matter of exercising the power or discretion conferred on him under section 28
The several restrictions that have been put on the activities of the traders doing business in gold will have to be viewed in the light of the purpose or which the Gold Control Act was passed viz that even though import of gold into India had been banned considerable quantities of contraband gold were finding their way into the country through illegal channels affecting the national economy and hampering the country s economic stability and progress that the Customs Department was not in a position to effectively combat the smuggling over the long borders and coast line that therefore anti smuggling measures had to be supplemented by a detailed system of control over internal transactions
In fact section 5 1 of the Act requires that the Administrator should have regard to the policy and purposes of the Act in making his orders
Moreover against his order under that section a revision lies to Central Government which implies that be will have to make judicious use of his power or discretion and any improper exercise is liable to be corrected by a higher authority
Therefore it cannot be said that unfettered or uncanalised or arbitrary power has been conferred upon the Administrator under section 28
1955B E G 14 further section 28 does not impose any blanket or absolute prohibition upon a dealer from carrying on money lending banking or any other business in the same promises in which he carries on business as a dealer but he is prevented only from carrying in business as money lender or banker on the security of any article ornament or both unless authorised by the Administrator
Even the restriction in the case of a third person in carrying on business as a money lender banker or any other business in the same premises is not absolute in as much as the Administrator can authorise the third person to carry of the business in the licensed premises of the dealer and while implementing such limited restrictions or granting relief against the same he will be guided by the policy and purposes of the Act and by the prime consideration that circumvention of the other provisions of the Act shall not be permitted
956A C Bihar State Bullion Merchants Association
Union of India AIR 1971 Patna 240 Ramanlal Purshottamdas Chokshi vs Union of India  Others  approved
 Annam Ramalingam etc
vs Union of India Writ Petitions Nos
3956 387368 etc
dated 261269
Andhra Pradesh reversed
15 In Harakchand Banthia s case the Supreme Court found the phrases like in the region  the anticipated demand  suitability  and public interest  as vague uncertain and therefore declared the unamended section 216 of the Gold Control Act as invalid and the Parliament has carried out suitable amendments thereafter
No such vague or indefinite expressions or concepts are to be found in section 28 by reference to which 953 the Administrator is required to exercise his power
In the absence of A parity of situation or circumstances the doctrine of parity of reasoning cannot be invoked
957A C Harakchand Ratanchand Banthia vs Assistant Collector of Central Excise Poona 11 Division 1970 I SCR 479 AIR  explained and held in applicable