# [1974] 3 S.C.R. 133 - **Citation:** [1974] 3 S.C.R. 133 - **Court:** Supreme Court of India - **Decided:** 1974-01-17 - **Bench:** S. N. Dwivedi, Y. V. Chandrachud - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1974-3-s-c-r-133-6231 - **Pages:** 9 ## Headnote Probation of o.f(enders Act, 20of1958-Whetiier applies to offe11ces 1u1der Customs Act, 1962, and offences under Part XII-A. Defence of India Rules, 1962. · Defence of India Rules, 1962, r. 1261 and J26P-'Gold' if Includes smuggled gold. On the question (1) whether the Probation of Offenders Act, 1958, app1ies to offences under Customs Act, 1962, and to those under Part XU-A of the Defence of India Rules, 1962, relating to Gold Control, and (2) \Vhether under the scheme of the Gold Control Rules, smuggled gold is not comprehended under r. 126p. HELD: (1) These a~c n1ostly ·economic offences which in conceivable cases, may pose a grave threat to the economy and the security of the country. They arc fundamentally of a different genre and are calculated to involve consequences of a far reaching character as compared with the offences under the general law of crimes. But every contravention of the Customs Act or the Gold Control Rules cannot, without more, t.e assumed to be fraught with consequences of national dimensions. The words of s. 4(1) of the Probation of Offenders Act are wide and would include even offences under the Custo1ns ACt and the Gold Control Rules. Though r.126p(2) (ii) of the Defence of India Rules prescribes a n1inimum sentence of 6 n1onths, it cannot override the provision"S of the Probation of Offenders A.ct. [136G] (a) The Probation of Offenders Act is a reformative mensure ::?.nd its object is to reclaim ainateur offenders who, if spared the indignity of incarceration, can be usefully rehabilitated in society. A jai1 terin would normally be enough to wipe out the stain of guilt but the sentence which society passes on convkts is rele11tless. ln recalcitrant cases punislunent bas to be deterrent so that others similarly minded l'nay warn thcn1selves of the hazards of taking to a career of crime. But the novice,. ~s in the present case, \vho strays into the path or crin1e ought, in the interest of society, to be treated as being socially sick. The ignon1iny con1monly associated with a jail tcnn and the social stigma which attaches to convicts often render the remedy worse than the disease. Crhnes are not always rooted in criminal tendencies and their origin n1ay lie in psychological factors induced by hunger. \Vant and poverty. The Act recognises the importance of environmental influence in the commission of crimes and prescribes a remedy whereby the offender can be reformed and rehabilitated in society. An attitude of social 1.kfiance and recklessness which comes to a convict who, after a jail ter1n, is apt to think that he has nothing n1ore to lose or fear, may breed a litter of crime. The object of the Act is to nip that attitude io the bud. [137A] Rata11 lal v. State of Punjab, [1964] 7 S.C.R. 676 and l:slter Dat v. Tlze State of Punjab, A.l.R. 1972 S.C. 1295, followed. (b) There is no foundation for the fcilr that offenders released on probation n1ay hold the society to ransom and that society n1ay therefore look upon the release of offenders on probation as the triumph of criminals over the \veaknesses of law. An offender released on probation is convicted but not forthwith. sentenced in the sense of penal laws. Section 4(1) of the Act pro\'ides that instead of sentencing the offender "at once" the court may direct his release· on his entering into a bond to receive a sentence when called upoQ. during the probationary period and in the mean time to keep the-peace and be of good beba\'iour. Thus it is only in a limited sense, though a socially significant. sense. that the Act constitutes an exception to the broaa and general principle of criminal law that a sentence shall follow on conviction. The discretion vested in the trial court in thi~ behalf must of course be e:terciscr.l ~1ccording to rules of reason and justice depending on the circumstances of each case. but the Magistrate had called for the report of the Probation Officer and it was 134 SUPREME COUllT REPORTS [ 19741 3 s.c.~. on the basis of ## Text B c D E G H 133 ARVIND MOHAN SINHA 1'. AMULYA KUMAR BISWAS & ORS. January 17, 1974 [S. N. DWIVEDI AND Y. V. CHANDRACHUD, JJ.] Probation of o.f(enders Act, 20of1958-Whetiier applies to offe11ces 1u1der Customs Act, 1962, and offences under Part XII-A. Defence of India Rules, 1962. · Defence of India Rules, 1962, r. 1261 and J26P-'Gold' if Includes smuggled gold. On the question (1) whether the Probation of Offenders Act, 1958, app1ies to offences under Customs Act, 1962, and to those under Part XU-A of the Defence of India Rules, 1962, relating to Gold Control, and (2) \Vhether under the scheme of the Gold Control Rules, smuggled gold is not comprehended under r. 126p. HELD: (1) These a~c n1ostly ·economic offences which in conceivable cases, may pose a grave threat to the economy and the security of the country. They arc fundamentally of a different genre and are calculated to involve consequences of a far reaching character as compared with the offences under the general law of crimes. But every contravention of the Customs Act or the Gold Control Rules cannot, without more, t.e assumed to be fraught with consequences of national dimensions. The words of s. 4(1) of the Probation of Offenders Act are wide and would include even offences under the Custo1ns ACt and the Gold Control Rules. Though r.126p(2) (ii) of the Defence of India Rules prescribes a n1inimum sentence of 6 n1onths, it cannot override the provision"S of the Probation of Offenders A.ct. [136G] (a) The Probation of Offenders Act is a reformative mensure ::?.nd its object is to reclaim ainateur offenders who, if spared the indignity of incarceration, can be usefully rehabilitated in society. A jai1 terin would normally be enough to wipe out the stain of guilt but the sentence which society passes on convkts is rele11tless. ln recalcitrant cases punislunent bas to be deterrent so that others similarly minded l'nay warn thcn1selves of the hazards of taking to a career of crime. But the novice,. ~s in the present case, \vho strays into the path or crin1e ought, in the interest of society, to be treated as being socially sick. The ignon1iny con1monly associated with a jail tcnn and the social stigma which attaches to convicts often render the remedy worse than the disease. Crhnes are not always rooted in criminal tendencies and their origin n1ay lie in psychological factors induced by hunger. \Vant and poverty. The Act recognises the importance of environmental influence in the commission of crimes and prescribes a remedy whereby the offender can be reformed and rehabilitated in society. An attitude of social 1.kfiance and recklessness which comes to a convict who, after a jail ter1n, is apt to think that he has nothing n1ore to lose or fear, may breed a litter of crime. The object of the Act is to nip that attitude io the bud. [137A] Rata11 lal v. State of Punjab, [1964] 7 S.C.R. 676 and l:slter Dat v. Tlze State of Punjab, A.l.R. 1972 S.C. 1295, followed. (b) There is no foundation for the fcilr that offenders released on probation n1ay hold the society to ransom and that society n1ay therefore look upon the release of offenders on probation as the triumph of criminals over the \veaknesses of law. An offender released on probation is convicted but not forthwith. sentenced in the sense of penal laws. Section 4(1) of the Act pro\'ides that instead of sentencing the offender "at once" the court may direct his release· on his entering into a bond to receive a sentence when called upoQ. during the probationary period and in the mean time to keep the-peace and be of good beba\'iour. Thus it is only in a limited sense, though a socially significant. sense. that the Act constitutes an exception to the broaa and general principle of criminal law that a sentence shall follow on conviction. The discretion vested in the trial court in thi~ behalf must of course be e:terciscr.l ~1ccording to rules of reason and justice depending on the circumstances of each case. but the Magistrate had called for the report of the Probation Officer and it was 134 SUPREME COUllT REPORTS [ 19741 3 s.c.~. on the basis of that roport that the respondents were released on probation and the Hi,gb Court has upheld the exercise of that discretion. There is no reason to interfere with the concurreni factual evaluation of the ci=mstances of the case. (137GJ Jal Narain\', Tiie Municipal Corporation of Delhi, A.l.R. 1972 S.C. 2607, referred to. (2) The High Court erred in holding that the legislature could not have in I ended that a person in possession of smuggled gold should make a declaration in regard thereto. (140AJ (a) Under r. l26I of the Gold Control Rules (of Defence of India Rules) every person must, within the stipulated period, make a declaration to the administrator as to the guantity, description and other prescribed particulars of gold owned by him. Failure or omission to do so, without reasonable cause, is made punishable by r. 126(1)(i). Possession of gold in contravention of any provision of Part Xll·A is made punishable by Rule l26P(2)(il). The definition of 'Gold' in r. l26A (d) is couched in wide tenns and it does not make any distinction between smuggled gold and gold lawfully possessed. (140Gl (b) The intention of the legislature must be gathered primarily and principally from the words used by it and the definition of •gold' carves out no exception in favour of smuggled gold. It would be surprising that the obligation to declare gold should be imposed on lawful possessors of gold but should leave untouched the possession by smugglers or their agents of gold smuggled into the country. [140BJ (c) Under the definition Gold means gold and it should not be read as 'gold means gold but shall not include smuggled gold". To put such a construction on the definition is to coin a ~ew definition and therefore to legislate. [140C] (d) The word 'gold' is used at several plaoes in the Gold Control Rules and it is a well recognised rule of construction that the same word should receive the same meaning in collocation. It is manifest from the language, intendment and scheme of these Rules that the word •gold' covers not only gold which is lawfully possessed but gold in any form or- shape and whether· possessed lawfully or otherwise. ['40D) .K. Yisluum1oorthi v. State of Mysore & Anr., 1971 (2) Mys. L. J. 261, approved. CruMiNAL APPELLATE JURISDICTION : Criminal Appeals Nos. 114 & 115of1970 From the Judgment and Order ·dated the 28th November, 1969 of the Calcutta High Court in Criminal Revision Case Nos. 635 and 636 of 1969. S. N. Prasad and S. P. Nayar, for the appellant. The respondents did not appear {in Cr. A. 114 & 115/701. The Judgment of the Court was delivered bv. CHANDRACHUD, J.-These appeals are brought by leave granted by the High Court of calcutta under Article 134(1)(c) of the Constitution. A B c .D E F Cr. A. No. 114o/1970:'0n May 29, 1968 gold bars and sovereigns G bearing foreign markings were seized from the respondents by customs officers, Calcutta. Respondents were charged under section 135, Customs Act, 1962 for being in possession of goods which they had reason to believe to be liable to confiscation under section 111 of that Act. It was alleged that the goods were imported into India without the requisite permit and without payment of duty and were therefore liable to confiscation under section l ll(d) of the Customs Act. The H respondents were illso charged under Rules 126P(l)(i) and 126P(2){ii) of the Defence of India Rules, 1962, for failure to make a declaration in respect of the gold found in their possession. A B c I r F G H A. M,' SINHA v. A, K. BISWAS (C/randrachud, /,) 13S The respondents pleaded guilty to the charges . but -cited facts in extenuation of the oft'cnccs. The learned Presidency Magistrate, 8th Court, Calcutta, convicted them of the offences of which they were charged but he directed, on the faith of a report made by the Probation otlicer, that they should be relcascd under section 4(1) of the Probation of Offenders Act, 1958 on their executing a bond of Rs. 1000/- each with one surety in like amount, undertaking to appear and receive the sentence whenever called upon and to keep peace and be of good behaviour for a period of two years. Respondents ate young boys nonnally engaged in agriculture. To us they seem to be carriers who were carrying the gold for a small tip but the learned Magistrate believed their defence that they had purchased the gold for the marriage of the sister of one of them. The gold which was of the value of about Rs. 7800/- was already confiscated in the proceedings under the Customs Act. The appellant, an Assistant Collector of Customs, filed. on behalf of the Department a revision application (No. 635 of 1969) in the High CoUrt of Calcutta against the judgment of the learned Magistrate. · Liller, it was converted into an appeal under section 11(2) of the Probation of Offenders Act. The High Court disposed of three matters by a common judgment which -is reported in Aravlnda Mohan Sinha v. Prohlad Chandra Samanta(I) Two out of these are before us; the third, Criminal Appeal No. 113 of 1970 is reported to be unready. The High Court held in the matter under consideration that though Rule 126PP(2)(ii) of the Defence of India Rules prescribes a minimum sentence of imprisonment for a term of not less than 6 months", it cannot override the provisions of the Probation of Offenders Act and therefore it was competent to the learned Magistrate to release the respondents under that Act. The only question in this appeal is whether the Probation of Offenders Act,20 of 1958, can apply to offences under the Customs Act, 1962 and to those under· Part-XII-A of the Defence of India Rules, 1962, intituled "Gold Control". Section 135(bXii) of the Customs Act, 1962, under which the respondents have been convicted prescribes a punishment of 2 years imprisonment or fine or both for acquiring possession of or for being in any way concerned in carrying, keeping etc. any goods which a perron knows or has reason to believe to be liable. to confiscation under section 111. Under section 11 l(d), goods imported contrary to any prohibition imposed by or under the Customs Act or by any other law arc liable to confiscation. The offence comitted by the respondents consists in their being in possession of or in purchasing the gold bearing foreign markings which was evidently imported into India without a valid permit issued by the Reserve Bank of India, an act prohibited by section 8(1) of the Foreign Exchange Regulation Act, 1947. On the prosecution leading evidence to establish the ingredients of this offence, respondents pleaded guilty to the chor~e. 111 4. I. R. 1970 Cal. 437. 136. ·suPREME COURT REPORTS [ 19741 3 's.C.R. Rule 126P(l){i) of the Defence of India Rules, 1962 provides to A the extent material that whoever omits or fails to make a declaration as required by Rule 126 I without a reasonable cause shall be punishable with imprisorunent for a term which may extend to one year or a fine or with both. The relevant part of Rule 126 I provides that every person shall within the specified period make a declaration to the Administrator in the prescribed form as to the quantity of gold, other than ornaments owned by him. Rule 126P (2)(ii) provides that whoever B has in his possession or under his control any quantity of gold in contravention of the provisions of Part XII-A ("Gold Control"), shall be punishable with imprisonment for a term of not less than 6 months and not more than 2 years and also with fine. Respondents had made no declaration of the gold in their pos•ession and pleaded no reasonable ;oause for omitting to do so. They pleaded guilty to these charges as ~· c The Probation of Offenders Act, 1958, received the assent of the President on May 16, 1958 and was published in the Gazette of India on May 19, 1958. Section 3 of the Act confers power on the court to release certain offenders after admonition. Under section 4(1): "When any person is found guilty of having committed an D offence not punishable with death or imprisonment for life and the Court by which the person is found guilty is of opinion that, having regard to the circumstances of the case including the nature of the offence and the character of the offender, it is expedient to release him on probation of good conduct, then, notwithstanding anything contained in any other law for the time being in force, the Court may, instead of sentencing him at once E to any punishment, direct that he be released on his entering into a bond, with or without sureties, to appear and receive sentence when called upon during such period, not exceeding three years, as the Court may direct, and in the meantime to keep the peace and be of good behaviour." We are unable to accept the appellant's contention that the probaF tion of Offenders Act can have no application to offences consisting of the contravantion of the Cuitoms Act or the "Gold Control" Rules contained in Part XII-A of the Defence of India Rules, 1962. True, that these offences are fundamentally of a different genre and are calculated to involve consequences of a far-reaching character as compared with offences under the general law of Crimes. These are mostly economic offences which in conceivable cases may pose a grave threat G to the economy and the security of the country. But every contravention of the Customs Aci or the "Gold Control" Rnles cannot, without more, be assnmed to be fraught with consequences of national dimensions. The broad principle that punishment must be proportioned to· the offence is or ought to be of universal application save where the statute bars the exercise of judicial discretion either in awarding punishment or in releasing an offender on probation in lieu of sentencing H him forthwith. The words of section 4(1) of the Probation of offender• Act are wide and would evidently include offences under the customs Act and the Gold Control Rules. A B c 0 E F G H A. M. S!Nllh v. A.•: BlSWAS (Chamlrachud, J.) 137 The Probation of Offenders Act is a reformative measure and its object is to reclaim amateur offenders who, if spared the indignity of incarcaration, can be usefully rehabilitated in society. A jail term should. normally be enough to wipe out the stain of guilt but the sentence which the society passes on convicts i' relentles.<. The ignominy commonly associated w_ith a jail term and the social stigma which attaches to convicts often render the remedy worse than the disease and the very purpose of punishment stands in the danger of being frustrated. In recalcitrant cases, punishment has to be deterrent so that others similarly minded may warn themselves of the hazards of taking to a career of crime. But the novice who strays into the path of crime ought, in .the interest of society, be treated as being socially sick. Crimes are not always rooted in criminal tendencies and their origin may lie in psychological factors induced by hunger, want and poverty. The Probation of Offenders act recognises the importance of environmental influence in the commission of crime' and prescribes a remedy whereby . the offender can be reformed and rehabilitated in society. An attitude of social defiance and recklessness which comes to a convict who, after a jail term, is apt to think that lie has no more to lose or fear may breed a litter of crime. The object of the Probation of Offenders Act is to nip that attitude in the bud. Winifred A. Elkin describes probation as a system which provides a means of re-education without the necessity of breaking up the offender's normal life and removing him from the natural surroundings of his home.! Edwin E. Sutherland raises it to a status of a convicted offender.2 . The probationary system in our country is sometimes described as a boon of political freedom but that does less than justice to true history. The Dharmashastras did not ordain similar punishment for similar offences irrespective of the antecedents and the physical and mental condition of the offender.3 Dr, P. K. Sen has pointed out in his Tagore Law Lectures on "Penology Old and New" (1943) (p. JlO) that the directions given by the ancient law-givers in the matter of punishment compare favourably with the advanced modern systems as regards the relevance of the objective circumstances attendant on the commission of the crime and the subjective limitations of offenders. Probationary laws were passed by several erstwhile provinces prior to Independence but their'provisions were seldom enforced in practice. Section 562, Code of Criminal Procedure, also contains a provision enabling the court to release certain offenders on probation of good conduct instead of sentencing them at once. There is no foundation for the fear that offenders released on probation niay hold the society to ransom and the society may therefore look upon the release of offenders on probation as the triumph of criminals over the weaknesses of law. An offender released on probation is convicted bnt not forthwith sentenced in the sense of penal laws. Ui;1der the disposition made by the court the sentence is suspended (I) English Juvenile Courts (1938) page 162. (2) Principles of Criminology, 4th Edn. (1947) page 383. (3) History of Dharmashastra by Dr. P. V. Kane, Vol. Ill p. 392 (1946 Ed.). 138 St'PltEME COURT JtEPOJtTS £ 1974 I 3 s.c.11. during the period of probation. Section 4(1) of the Act provides that instead of sentencing the offender "at once'', the court may direct his release on his entenng into a bond to "receive sentence when called upon" during the probationary period and in the meantime to keep the peace and be of good behaviour. Thus it is only in a limited, though a socially significant, sense that the Act constitutes as exception to the broad and general principle of criminal law embodied, for example, in sections 245(2); 258(2), 306(2) and section 309(2), Code of Criminal Procedure, that a sentence shall follow on a conviction. The provisions of the Act are indeed of such beneficence that in RataJI Lal v. States of Punjab(I) this Court remanded a matter to the High Court with a direction that the High Court or the Sessions Court should consider whether the Act should not be applied to an accu. the Act could be applied to an accused who was convicted before it came into force. · In /sher Das v. The State of Pwijab(2) the trial court released on probation an offender who was convicted under section 7(1) of the Prevention of Food Adulteration Act, 1954. The High Court set aside that order and sentenced the accused to imprisonment for six months and a fine of Rs. 1000/-. In default of the payment of fine the accused was ordered to undergo imprisonment for a further period of a month and a half. Setting aside the order of the High Court this Court restored that of the Magistrate with the observation that though adulteration of food was a menace to public health, the application of the Probation of Offenders act could not be excluded in cases of persons found guilty of food adulteration. In Jai Narai11 v. The Municipal Corporatio11 ~f Delhi,(l) the principle laid down in !sher Das's case was affirmed but on the facts of the case this Court refused to release on probation an offender who was convicted for adulterating 'Patisa' by using a non-permitted coal tar dye. This decision only shows that whether the benefit of the Act should be extended in any praticular case must depend on the circumstance of that case. There can therefore be no legal impediment in· applying the provisions of the Probati.on of offenders Act to the respondents. Whether (l) [1964] 7 S.C.R. 676. (2) A.I.R. 1972 S.C. 1295. (3) A.I.R. 1972 S.C. 2607. A B c D E F G 11 A B c D E G JI A. M. Sf.'IH~ I'. A. x. BISWAS (Clw11drac/111d, /.) 13!> on the facts and ~ircumstances of the case the respondents may be ~eleased <;>n probal!on cannot. be put in issue at this late stage because 1t was neither urged 1n the tnal court nor before the High Court that ~y reason of the. antecedents or the propensities of the respondents it was not expedient to extend to them the benefit of the Act. The discretion vested in the trial court in this behalf must of course be exercised according to rules of reason and justice but the learned Magis" Irate had called for the report of the Probation Officer and it was on the basis of. that report that the respondents were released on probation. The High Court has upheld the exercise of that discretion and we see n? reason to interfere with the concurrent factual evaluation of the c1rcu!"stances of the case. Accordingly we confirm the judgment of the Htgh Court. Criminal Appeal No. 115 of 1970: On June 27 1968 three bars of foreign gold were found on. the person of the r~spondent. He pleaded guilty at the trial w!1ereup~n the learned Presidency Magistrate, 6th Court, Calcutta convicted him under section 135, Customs Act. 1962 and under Rules 126 P (l)(i} and 126 P (2)(ii) of the Defence of India Rules, 1962. The respondent was sentenced to pay a fine of Rs. 150forthe offence under the Customs Act and a fine of Rs. 100 for the offence under Rule 126 P (l)(i). No· separate sentence was imposed for the offence under Rule 126 P(2)(ii). In appeal the High Court of Calcutta confirmed the conviction and sentence under the Customs Act. Regarding the contravention of the two Rules, the High Court held that 110 declaration need have been made by the respondent to the Administrator, as the gold of which the respondent was in possession was smuggled gold and not "legal" gold. According to the High Court "the legislature never expected that smuggled gold would be declared". The High Court therefore set aside the conviction and sentence in1posed on the respondent for contravention of the "Gold Control" Rules. Part XII-A "Gold Control" (consisting of Rules 126A to 126Z) was inserted in the Defence of India Rules, 1962 by G. S. R. 89 dated January 9, 1963. Rule 126A (d) defines gold for the purposes of Pan XIIA thus: "gold" means gold, including its alloy, whether virgin. melted, remelted, wrought or unwrought, in any shape or form, of a purity of not less than nine carats and includes any gold coin (whether legal tender or not), any ornament and any other article of gold;" Some of the other Rules in Part Xl!A provide as follows to the extent material. Under Rule 126, every person must within the stipulated period make a declaration to the Administrator as to the quantity, description and other prescribed particulars of gold owned by him. Failure or omission, without reasonable cause, to make such a declaration is made punishable by Rule 126 P (l)(i). Possession of gold in contravention of any provision of Part XIIA is made punishable by Rule 126 P(2)(ii). 140 SUPREME COURT REPORTS [ 1974] 3 S.C.R. We see no justification in the scheme of the Rules for the view taken by the High Court that smuggled gold is not comprehended within Rule 126P of the Gold Control Rules. The definition of "gold" in Rule 126A (d) is couched in wide terms and it does not make any distinction between smuggled gold and gold lawfully possessed. The High Court says that the legislature could not have intended that a person in possession of smuggled gold should make a declaration in regard thereto. The intention of the legislature must· be gathered primarily and prin- -cipally from the words used by it ·and the definition of "gold" carves -0ut no exception in favour of smuggled gold. Secondly, if the intention -0f the legislature as reflected in· the scheme of a law is to control the meaning of the words used in a particular Section or Rule, it strikes us .as Sllrprising that the obligation to declare gold should be imposed on lawful possessors of gold but should leave untouched the possession by smugglers or their agents of gold smuggled into the country. Under the definition contained in Rule 126A (d), "gold means gold" and no. rule of statutory construction can permit the definition to be altered materially so as to read: "Gold means gold but shall not include smuggled gold". To ·put such a construction on the definition is to ·coin a new definition and therefore to legislate. The word "gold" is used at several places in Part XIIA and it is a well-recognised rule of construction that the same word should receive the same meaning in a collocation. Rule J26A (c)(ii) defines a dealer .as a person who carries on the .business of buying, selling, supplying ·etc. gold for the purpose of making ornaments. Ruic 126 B(l)(a) provides that a dealer shall not make or manufacture any article of gold other than ornament; sub:cJause (b) prov.ides that a ~efiner shall not make or manufacture any article of gold other than primary gold; sub-clause (c) provides that no other person shall make or manufacture any article of gold, unless the dealer, refiner or such other person is authorised by the Administrator to make or manufacture such an article. Rule 126C provides that no dealer shall .make and no person ·shall place any order for making an ornament containing gold of a purtiy exceeding 14 carats. Rule 126D contains a prohibition on loans being granted on the security of gold unless such gold is included in a declaration made under Rule 1261. Rule J26F requires e,·ery dealer and refiner to submit a return in regard to the gold in his possession of control. Under Rule !26G dealers and refiners must keep an account of the gold bought or sold by them. Rule J26H provides that no dealer ·Or refinery shall have in his possession or under his control any gold which has not been included in the return which he is required to submit under the Rules. Rule 1261, with which we are directly concerned 1n this case, provides that every person other'than a dealer or a refiner, -shall within the stipulated period mal