GUNWANTLAL GODAWAT vs. UNION OF INDIA CUSTOM AND CENTRAL EXCISE THROUGH COMMISSIONER

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURI ICTION CIVIL APPEAL NOS. 4711­4712 OF 2011 Gunwantlal Godawat … Appellant Versus Union of India & Another … Respondents J U D G M E N T Chelameswar, J.

etc.) buried in the house and seized it.  Proceedings for confiscation were initiated.   Eventually on 24.9.1966, the Collector of Central Excise and Customs passed an order2 confiscating the seized gold in exercise of the power under Rule 126M of the RULES on the ground   that   the   seized   gold   was   held   by   the   appellant   in contravention of Rule 126­I.  A penalty of Rs.25 lakhs under Rule 126L(16) of the RULES was also imposed.

accordingly order absolute confiscation of 240.040 kgs. of gold, under Rule 126M of said Rules. The iron safe in which gold was secreted is also confiscated under Rule 126M. I hold that Shri Chhagan Lal Godavat is guilty of contravention of the provisions of the Rule 126-I of the Defence of India Rules, 1962. He is liable to a penalty under Rule 126-L (16) of the said Rules. Taking into consideration the gravity of the offence committed by him and in view of the fact that he hoarded a very huge quantity of undeclared gold I impose upon him a personal penalty of Rs.25,00,000/- (Twenty five lacs).” 2

confiscation   was   passed   though   a   show   cause   notice   dated 3.2.1966   was   issued   proposing   confiscation   and   penalty   under Section 126M and 126L(16) of the RULES respectively, and (ii) An opportunity to redeem the seized gold was not given.

an option to the legal heirs of the appellant’s father to redeem the gold by paying a fine of Rs. 2.5 crores. “(i) I order confiscation of the 240.040 Kgs. of gold (1) Sovereigns of gold 80.776 Kgs. (2) Passas of gold 242 Nos. 75.298.300 Kgs. (3) Pieces of gold bars 5 Nos. 10.975.845 Kgs. (4) Gold bars of 19127 and 1992 9 nos. 72.990 Kgss.) valued at Rs. 12,50,070.41 at the time of seizure (present approximate value Rs. 11.04 crores at the rate of Rs. 4,600 per 10 gms. as on 07.12.1994) along with Iron Safe used to conceal the gold seized from the house of Late Shri Chhaganlal   Godawat,   under   the   Rule   126­M   of   the   erstwhile Defence of India Rules, 1962. The impugned gold along with the Iron Safe will, however, be released and handed over to the legal heirs of Late Shri Chhaganlal Godawat on payment of redemption fine of Rs. 2.50 crores (Rupees Two crores fifty lacs only) in lieu of confiscation under Rule 126­M (8) (a) of the erstwhile Defence of India   Rules,   1962. The   option   to   redeem   the   same   should   be exercised   within   three   months   from   the   date  of   receipt   of   this order.” The Collector further held that in view of the fact that the person from whom the gold was seized (Chhaganlal Godawat) expired, the levy of penalty contemplated under Rule 126L(16) of the RULES is not called for.

quantum   of   the   redemption   fine.     In   view   of   the   difference   of opinion, the matter was referred to the third Member.  The outcome of the entire process is that the Tribunal by its order dated 30th October 1995 finally opined that the redemption fine should be reduced to Rs.12.5 lacs which represented the value of the gold as on the date of the seizure.   Accordingly, the appeal was allowed.

the interim stay was vacated.   The operative portion of the Order reads as follows:­ “8. We, therefore, vacate the stay Order passed on December 20, 1996 staying that operation of the Order dated October 30, 1995 passed by the CEGAT and instead direct that the petitioner shall retain only that much quantity of the seized gold which will fetch a sum of Rs. 2,50,00,000/­ (Rupees Two Crores Fifty Lakhs ) @ Rs. 4600/­ (Rupees Four thousand six hundred) per 10 (ten) gms of gold   and   release   and   hand   over   possession   of   the   rest   of   the quantity of gold to the respondent No. 1 within one month from today.   In case the petitioner succeeds and there is any shortfall in the recovery because of fall in price of gold, the respondent No. 1 shall make that good and if the petition is dismissed and the order of the CEGAT is maintained the respondent No. 1 shall be entitled to return of the gold permitted to be retained under this Order as per the directions of this Court while finally disposing of the matter or thereafter.”

“19. Undeniably and undisputedly, it is the date of giving option which is relevant for adjudging the fine and not the date of seizure.

xx xxx xxx xxx The   language   of   sub­rule   8   of   Rule   126­M   of   ‘Rules,   1962’ categorically envisages that the officer adjudging may give to the owner of the Gold an option to pay in lieu of confiscation such fine as the said officer thinks fit.  According to Wiktionary, a wiki based open content dictionary, the meaning of term in lieu of is ‘Instead, in place of , as a substitute for’.   This meaning suggests that the redemption fine is the substitute for the market value of the Gold.

xxx xxx xxx xxx ………., the market value of the seized Gold has to be taken on that date when the option is given by the officer adjudging it.

10 gms as on December 7, 1994, the date of adjudicating when the option was given by him to the respondent and on this basis, the price of total seized and confiscated Gold 240.040 kgs came to be 11.04 crores and the redemption fine cannot be in any way less than this.

“4. Under the circumstances, we dispose of the appeal by way of remand to the Adjudicating Commissioner (authorized officer) to determine appropriate redemption fine and allow the order of the gold to redeem the gold on payment of such redemption fine.   It goes without saying that while determining the redemption fine, he shall   follow   the   cited   order   of   the   Hon’ble   High   Court   dated 29.6.2009.” xxx xxx xxx xxx 8

(i) An option is given to Shri Gunwant Lal Godawat and legal heir  of late Shri Chhagan Lal Godawat  to pay Rs.11.04 crores (Rupees Eleven crores and four lakhs only) in lieu of confiscation of the gold weighing 240.040.145 kgs under the erstwhile Defence of India Rules, 1962 within three months of receipt of this order. (ii) In case Shri Gunwant Lal Godawat and the legal heir of late Shri   Chhagan   Lal   Godawat   does   not   exercise   the   option   of depositing the amount of Rs.11.04 crores in the stipulated time limit, as given above, Shri Gunwant Lal Godawat and legal heir of late Shri Chhagan Lal Godawat shall be liable to return to the Department immediately the gold weighing 185.145 kgs which was returned   to   them   on   2.7.94   in  compliance   of   directions   of   the Hon’ble Rajasthan High Court given in the order dated 28.05.97.” THE HISTORY OF THE GOLD CONTROL REGIME:

(2)   Notwithstanding such repeal, any rules made, anything done or any action taken under the Defence of India Ordinance, 1962(4 of   1962)   ,   as   amended   by   the   Defence   of   India   (Amendment) Ordinance, 1962 (6 of 1962) shall be deemed to have been made, done or taken under this Act as if this Act had commenced on the 26the October, 1962.”

repealed   and  upon   such   repeal,   Section   6   of   the   General Clauses   Act,   1897,   shall   apply   as   if   the   said   Part   were   a Central Act; (2)     Notwithstanding   the   repeal   made   by   sub­section   (1)   but without prejudice to the application of Section 6 of the General Clauses Act, 1897, any notification, order, direction, appointment or declaration made or any notice, licence or certificate issued or permission, authorization or exemption granted or any confiscation adjudged or penalty or fine imposed or any forfeiture ordered or any   other   thing   done   or   any   other   action   taken   under   or   in pursuance of the provisions of Part XII­A of the Defence of India Rules, 1962, so far as it is not inconsistent with the provisions of this Ordinance be deemed to have been made, issued, granted, adjudged,   imposed,   ordered,   done   or   taken   under   the corresponding provisions of this Ordinance.”

inconsistent with the provisions of this Act, be deemed to have been done, taken, made, given, issued, granted, adjudged, imposed or ordered, as the case may be, under the corresponding provision of this Act as if this Act had commenced on the 29th day of June, 1968.” It can  be   seen  from   the   sub­section  (2)  extracted   above   that  it creates 2 fictions.  The 1st fiction provides that various things done or actions taken under the ORDINANCE or the RULES are deemed to   be   things   done   or   actions   taken   under   the   corresponding provisions of the GOLD ACT.  The 2nd fiction is that the GOLD ACT “had commenced as on 29th  June 1968”.  But the GOLD ACT does not contain a provision corresponding to that part of Section 117(1) of the ORDINANCE dealing with the repeal of the  RULES and the consequences of such repeal. EFFECT OF THE REPEAL OF THE RULES BY THE ORDINANCE:

answer   the   above   question.     Certain   posts   of   part­time   Village Officers were abolished by Section 3 of an Ordinance of the then State   of   Andhra   Pradesh.     The   Legislature   never   replaced   the ordinance by an enactment.  In the litigation that ensued therefrom, one of the questions before this Court was whether those abolished part­time   Village   Officer   posts   would   revive   on   the   lapse   of  the ordinance.  A Constitution bench of this Court held that “the effect of Section 3 of the Ordinance was irreversible except by express legislation”.

“105. 12. The   question   as   to   whether   rights,   privileges, obligations and liabilities would survive an Ordinance which has ceased to operate must be determined as a matter of construction. The appropriate test to be applied is the test of public interest and constitutional   necessity.   This   would   include   the   issue   as   to whether   the   consequences   which   have   taken   place   under   the Ordinance have assumed an irreversible character. In a suitable case, it would be open to the court to mould the relief.”

“69. The   issue   before   the   Court   is   of   the   consequence   of   an Ordinance terminating on the expiry of a period of six weeks or, within that period, on a disapproval by the legislature. … Would the legal effects created by the Ordinance stand obliterated as a matter of law upon the lapsing of an Ordinance or passing of a resolution of disapproval?” This Court took note of the fact that  Venkata Reddy’s  case and two earlier cases12 which laid down the law based on the theory 12 Para 76. The “enduring rights” theory which had been applied in English decisions to temporary statutes, was thus brought in while construing the effect of an Ordinance which has ceased to operate. In the view of the Constitution Bench: (Bhupendra Kumar case [State of Orissa v. Bhupendra Kumar Bose, 1962 Supp (2) SCR 380 : 15

of “enduring rights” propounded by English decisions in the cases of temporary statutes13

“92. …   The   enduring   rights   theory   attributes   a   degree   of permanence to the power to promulgate Ordinances in derogation of parliamentary control and supremacy. Any such assumption in regard   to   the   conferment   of   power   would   run   contrary   to   the principles   which   have   been   laid   down   in S.R.   Bommai [S.R. Bommai v. Union of India, (1994) 3 SCC 1] . The judgment in T. Venkata Reddy [T. Venkata Reddy v. State of A.P., (1985) 3 SCC 198 : 1985 SCC (L&S) 632] essentially follows the same logic but goes on to hold that if Parliament intends to reverse matters which have been completed under an Ordinance, it would have to enact a specific law with retrospective effect. This, in our view, reverses the constitutional   ordering   in   regard   to   the   exercise   of   legislative power.” It must be remembered that the abovementioned discussion of law was in the context of an Ordinance which was never tabled before the Legislature and lapsed by virtue of the efflux of time.

S.R. Bommai may not make any difference to the present case. In the   case   on   hand,   the   ORDINANCES   came   to   be   repealed   and replaced by the GOLD ACT with retrospective effect from 29th June 1968, that is, from the date of promulgation of the ORDINANCE. THE EFFECT OF THE REPEAL OF THE ORDINANCE BY THE GOLD ACT:

Though the GOLD ACT expressly repealed the ORDINANCE, it did not make a declaration that the RULES are repealed.  But on that account, the peremptory nature of the repeal of the RULES by the ORDINANCE need not be doubted for the following two reasons: (i) The GOLD ACT while making the declaration that the ORDINANCE is repealed provided that various actions taken both under PART XIIA of the RULES or the ORDINANCE are deemed to be actions taken under   the   corresponding   provisions   of   the   GOLD ACT; and (ii) Unlike  Krishan   Kumar   Singh,  the   ORDINANCE was followed up by a legislative action which did not disapprove the content of the ORDINANCE. SCHEME AND PURPOSE OF THE 1

ST   FICTION UNDER SECTION 116:

the rights flowing from the adjudgment of confiscation of gold is a right of appeal against the adjudgment of confiscation.   Both the RULES [Rule 126M(3) and the GOLD ACT (Sections 80 and 81)] provide  for   appeal.   While   under   the   RULES,   appeals   lay   to  the ‘Administrator’   irrespective   of   the   forum   which   adjudged   the confiscation.   Under the  GOLD ACT, the  appellate forum varies depending on the forum which adjudged the confiscation.

others   who   own   or   possess   gold.     The   expressions   ‘dealer’   and ‘refiner’   are   defined   expressions   under   Rule   126­A(c)   and   (h) respectively.     Chapter V of Part XIIA dealt with the regulation of persons other than dealers and refiners who own gold (hereinafter referred to as PERSONS for the sake of convenience).

XIIA “has been or is being or is about to be contravened” with respect to the gold found.

transfer to treasury, as a punishment or in enforcement of law. Though,   the   expression   is   generally   understood   as   having implications associated with a crime. However, it is now well settled at least by two15 earlier judgments of this Court that the liability for confiscation   of   property   could   be   purely   civil   in   nature   as   a consequence of the violation of some prescription of law commonly described   as   ‘forfeiture’.   The   words   ‘forfeiture’   and   ‘confiscation’ have come to be used interchangeably.

The   General   Clauses   Act,   1972   does   not   employ   the   word ‘confiscation’.  On the other hand, it employs the word ‘forfeiture’ in Section 6(d)

omits to make any return required under Rule 126­I without any reasonable cause or makes a false statement in the return filed either   with   knowledge   or   belief   that   such   statement   is   false   is punishable with imprisonment with a term of one year or fine or both.   Sub­rule(2)(ii) stipulates that any person who “has in his possession   or   under   his   control   any   quantity   of   gold   in contravention of any provision of this part” shall be punishable with imprisonment for a term of not less than six months and not more than two years and also with fine.

‘appellate’ fora and the proceedings were pending even by the date of the repeal of the RULES.

(a) revive anything not in force or existing at the time at which the repeal takes effect; or

(b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or 25

proceeding) in respect of the seized gold made under the RULES is required to be made afresh and appropriate further orders are to be passed   in   accordance   with   the   RULES   as   if   the   repealing ORDINANCE had not been passed21. 43. The legal consequences which follow the repeal of the RULES are specified in Section 117 of the ORDINANCE. “…upon such repeal, Section 6 of the General Clauses Act, 1897, shall apply as if the said Part were a Central Act …” Consequently, the RULES would remain unaffected in respect of the various legal proceedings, referred to in Section 6 (e) of the General Clauses Act, either pending or concluded and other appropriate consequences specified in the RULES would follow.

(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or

(d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or

(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed.” 21 I.T. Commissioner Vs. Shah Sadiq & Sons, (1987) 3 SCC 516, page 524 para 15 26

Such repeal gives rise to two questions – What is the effect of (i)  the repeal of the Ordinance 6 of 1968, and  (ii)  the declaration under Section 116(2) of the GOLD ACT?

came to be repealed subsequently by the GOLD ACT. The repeal of the Ordinance does not revive the RULES.

enforced because it was a notice issued under the RULES which had been repealed.   The said argument was rejected. “Para 7. In view of Section 115(2) of the Gold (Control) Act, 1968, it was urged on behalf of the appellant that the notice issued on June 5, 1965 can no more be operative because under the Gold (Control)   Act,   1968,   there   are   no   provisions   for   making   a declaration relating to the possession of primary gold. At this stage it may be noticed that under the “Rules” every person who was in possession of primary gold, exceeding the prescribed weight was required to convert the same either into ornaments or sell the same to the licensed dealers within the time prescribed by the “Rules”.   Possession   of   primary   gold   thereafter   exceeding   the prescribed   limit   was   an   offence.   That   period   had   expired   long before the Gold (Control) Act, 1968 came into force. Hence the Gold (Control) Act naturally did not make any provision for a declaration of the possession of primary gold. In view of that circumstance it was urged on behalf of the appellant that the provisions in the “Rules”   requiring   a   declaration   to   be   made   in   respect   of   the possession of primary gold are inconsistent with the provisions of the Gold (Control) Act and therefore the notice issued under the “Rules”   cannot   be   considered   as   being   continued   under   the provisions of the Gold (Control) Act, 1968. Para 8. The above contention is untenable. There are no provisions in the Gold (Control) Act, 1968 which are inconsistent with Rule 126(I)(10) of the “Rules”. That being so, action taken under that rule must be deemed to be continuing in view of Section 6 of the General Clauses Act, 1897. It is true that Gold (Control) Act, 1968 does not purport to incorporate into that Act the provisions of Section 6 of the General Clauses Act. But the provisions therein are not inconsistent with the provisions in Section 6 of the General Clauses   Act.  Hence   the   provisions   of   Section   6  of   the   General Clauses Act are attracted in view of the repeal of the Gold (Control) Ordinance,  1968. As  the  Gold (Control)  Act  does  not exhibit  a different   or   contrary   intention,   proceedings   initiated   under   the repealed law must be held to continue. We must also remember that by Gold (Control) Ordinance, the “Rules” were deemed as an act of Parliament. Hence on the repeal of the “Rules” and the Gold (Control) Ordinance, 1968 the consequences mentioned in Section 6   of  the  General  Clauses   Act,   follow.  For   ascertaining   whether there is a contrary intention, one has to look to the provisions of the Gold (Control) Act, 1968. In order to see whether the rights and liabilities under the repealed law have been put an end to by the new enactment, the proper approach is not to enquire if the new enactment has by its new provisions kept alive the 29

rights and liabilities under the repealed law but whether it has taken away those rights and liabilities. The absence of a saving clause in a new enactment preserving the rights and liabilities under the repealed law is neither material nor decisive of the question — see State of Punjab v. Mohar Singh [AIR 1955 SC 84 : (1955) 1 SCR 893 : 1955 SCJ 25] and T.S. Baliah v. Income Tax Officer, Central Circle VI, Madras [AIR 1969 SC 701 : (1969) 3 SCR 65 : (1969) 1 SCJ 890 : 72 ITR 787] .” Therefore, it was held that the confiscation proceedings initiated under   the   RULES   must   be   concluded   in   accordance   with   the RULES without any reference to the provisions of the GOLD ACT.

(ii) Whether the High Court applied the correct law in recording the conclusion that the appellant is liable to pay an amount of Rs.11.04 crores in lieu of the confiscation of the Gold if he so chooses? and issues ancillary thereto.

judiciously in accordance with law or rule as the case may be but not arbitrarily.   The words “an option to pay

in lieu of confiscation such fine” are very significant and the use of the words “in lieu of” connotes that the fine should be equivalent to the thing or Gold confiscated by the authority.” We are in complete agreement with the view of the High Court.

judicial   persons   who   are   necessarily   required   to   act   through   a human agency. Rule 126–I(2)(a) stipulates that the declaration is to be made by the guardian. Similarly with gold belonging to an idol24, the declaration is to be made by the manager. In all these cases, the declaration is to be made by a third person who is not necessarily in possession or the owner of gold. In such circumstances, if the declaration is not filed, the owner could not be held responsible for the non­declaration.  Therefore, the relevant factor for the exercise of the discretion is the culpability of the owner of the gold and factors connected therewith.

further declaration under sub­Rule (3) cannot be treated on the same footing.

of the GOLD ACT.  Two members of the appellate tribunal were not able to agree upon the quantum of the fine.   While the Member (Technical – Brahma Deva) opined that the law applicable is only Rule 126­M(8)(a) of the RULES and the RULES did not make any reference to the value of the gold for the purpose of determining the quantum of fine.  He, therefore, opined that the quantum is entirely the discretion of the adjudicating officer.   He, however, chose to substitute   his   discretion   for   that   of   the   adjudicating   officer   by reducing the fine to Rs.25 lakhs from Rs.2.5 crores. Whereas the Member (Judicial – Sankararaman) opined27  that the quantum of fine   must   be   “in   line   with   Section   73   of   the   Gold   Control   Act”   and, therefore, opined that the fine amount should not exceed Rs.12.5 lakhs (the value of the gold at the time of seizure).  In view of the disagreement, the matter was referred to the third member of the tribunal who agreed with the Member (Technical)’s view. 27 While agreeing with the approach taken by my learned brother Shri Brahma Deva for reduction of the fine amount in lieu of confiscation, I am, however, of the view that the quantum thereof should be in line with Section 73 of Gold Control Act after it was amended whereby redemption fine was not to exceed the value of the gold. The term ‘value’ has also been defined in the Act as the marked price on the date of seizure. Applying the said yardstick the fine in lieu of confiscation should not exceed Rs.12.50 lakhs which was the value of the seized goods at the time of seizure. In the circumstances, I feel that the proposed reduction of fine from Rs.2.50 crores as determined by the Collector in the adjudication order passed de novo to a sum of Rs.25 lakhs is apparently based upon the fact that the law has been changed from the Defence of India Rules to Gold Control Act. In view of the matter, the subsequent development of the maximum amount of fine under Section 73 of the Gold Control Act being reduced to the value of goods from twice that amount should also be taken into account. In that event the fine amount in the present case should not exceed Rs.12.5 lakhs. I am of the view accordingly that the fine should be reduced to Rs.12.5 lakhs. 35

“20. It is revealed from the material on record that the Collector aptly applied the market price of Gold at the rate of Rs.4,600 per 10 gms as on December 7, 1994, the date of adjudicating when the option was given by him to the respondent and on this basis, the price of total seized and confiscated Gold 240.040 kgs came to be 11.04 crores and the redemption fine cannot be in any way less than this.

“4. Under the circumstances, we dispose of the appeal by way of remand to the Adjudicating Commissioner (authorized officer) to determine appropriate redemption fine and allow the order of the gold to redeem the gold on payment of such redemption fine.   It goes without saying that while determining the redemption fine, he shall   follow   the   cited   order   of   the   Hon’ble   High   Court   dated 29.6.2009.” Thereby, the Commissioner passed an order as follows: “(i) An option is given to Shri Gunwant Lal Godawat and legal heir  of late Shri Chhagan Lal Godawat  to pay Rs.11.04 crores (Rupees Eleven crores and four lakhs only) in lieu of confiscation of the gold weighing 240.040.145 kgs under the erstwhile Defence of India Rules, 1962 within three months of receipt of this order. (ii) In case Shri Gunwant Lal Godawat and the legal heir of late Shri   Chhagan   Lal   Godawat   does   not   exercise   the   option   of depositing the amount of Rs.11.04 crores in the stipulated time limit, as given above, Shri Gunwant Lal Godawat and legal heir of late Shri Chhagan Lal Godawat shall be liable to return to the Department immediately the gold weighing 185.145 kgs which was returned   to   them   on   2.7.94   in  compliance   of   directions   of   the Hon’ble Rajasthan High Court given in the order dated 28.05.97.” It must be remembered that the amount of Rs.11.04 crores was the value of the gold as on the date (7.12.94) when the appellant was given the option to pay the fine in lieu of confiscation.

“on the date of remand by the High Court”…  Thus the pending proceedings under Part XII­A of the DoI Rules, will have to be deemed to be continue under the Gold (Control) Act.”28 In other words, the argument advanced is that the law applicable to the adjudgment proceedings is GOLD ACT ­ a submission plainly untenable   in   light   of   the   reasons   given   by   us   in  the   preceding paragraphs and the decision of this Court in Jayantilal.

continues to have the discretion to impose a fine lesser than the market value as on the date of seizure.   There is therefore no inconsistency between the DoI Rules and the Act.”

fine, not exceeding the value29 of the thing in respect of which confiscation is authorized, as the said officer thinks fit.” Section   2(v).  ‘value’,   in   relation   to   primary   gold,   article   or ornaments, means,­ (i) when the gold is seized under this Act, the market price of such gold as on the date of the seizure thereof, (ii) when the gold is not available for seizure, the market price of such gold as on the date on which the notice referred to in section 79 is issued.”

confiscations adjudged under the RULES – pursuant to a seizure that took place before the commencement of the GOLD ACT.

the value of gold to the owner.  Hence, the value of the gold is to be determined with reference to the date on which the owner exercises the option to pay the fine in lieu of the confiscation.

principle of law.     The correctness of the said conclusion was the subject matter of the reference before the High Court.   The High Court was completely justified in examining the correctness of the legal basis on which the figure of Rs.12.5 lakhs was arrived at.  For the reasons already recorded by us earlier, the High Court rightly came to the conclusion that the fine in lieu of confiscation must represent   the   value   of   the   gold   so   confiscated   as   on   the   date (9.12.94) the appellant was given an option to pay the fine in lieu of confiscation.   Even according to the said order of the Collector, the value of the gold as on that date was Rs.11.04 crores.  Therefore, the High Court was right in its direction.

deem it proper to direct that the appellant would be entitled to redeem the gold by paying not only the fine of Rs.11.04 crores but also the interest thereon calculated @ 10% p.a.

(J. CHELAMESWAR) …….………….....................J.

(S. ABDUL NAZEER) New Delhi November 22, 2017 45