1. This appeal has been filed by the Collector of Central Excise, Madras, and is directed against the Order of the Collector of Central Excise (Appeals), Madras dated 24-3-1986 setting aside the Order of the original authority, namely, the Deputy Collector of Central Excise, Madras, dated 27-9-1985. The respondent herein applied for inclusion of Shri Imtiaz Ahamed as a partner in their gold dealers firm having a licence No. 68/83. Shri Imtiaz Ahamed is a minor. The inclusion of the minor in the said partnership firm was not approved by the original authority on the ground that in terms of Section 27 of the Gold (Control) Act, 1968, the 'Act' for short, the applicant is required to agree to abide by the provisions of the Act and the Rules made thereunder and since the minor is only represented by a guardian and since the guardian has signed the Partnership Deed taking all the responsibilities on behalf of the minorson, the minor cannot give an undertaking to abide by the provisions of the Act. His prayer for inclusion of the minor was rejected. The appeal preferred by the respondent as against the same was allowed under the impugned order by the Collector of Central Excise (Appeals), Madras, as against which the Collector of Central Excise, Madras has come by way of appeal before the Tribunal.
2. Shri K.K. Bhatia, the learned Senior Departmental Representative, appearing on behalf of the appellant, contended that a person who intends, to commence business as a dealer should make an application as prescribed in terms of Section 27(5) of the Act and as per Form No.GS-6 prescribed in terms of Rule 5(2) of the Gold Control (Forms etc.) Rules, 1968, a declaration must be signed by the applicant for the licence, agreeing to abide by the provisions of the Act, Rules, Orders and Directions issued under the Act. Since a minor does not have the capacity to enter into a contract, the minor being one of the partners proposed in the firm, he cannot be called upon to execute a declaration, as prescribed in the Form GS-6 and therefore, the provisions of the Act and Rules would become un-workable. The learned SDR urged that even under Section 30(3) of the Indian Partnership Act, 1932, a minor is not personally liable for the act of the firm. The learned SDR urged that though under the Partnership Act, the minor can be admitted to the benefits of the partnership, that perhaps cannot be extended to the extent of abrogating the rights of the Department in enforcing certain statutory obligations in terms of the Act in granting a Gold Dealers licence. The learned SDR further urged that a minor can only be admitted to the benefits of the partnership under the Partnership Act, 1932 and so a minor cannot befastened with any liability and proceeded against under the Act and if proceedings instituted under the Act against a minor are likely to be detrimental to the minor's interests, then such proceedings would be in conflict with the provisions of other enactments safeguarding the welfare of the minor. The learned SDR further submitted that the observations of the lower appellate authority under the impugned order that "he (reference to minor) will be precluded from doing any commercial activity of the firm till he attains the age of majority" are wholly without jurisdiction.
3. Shri Ramachandran, the learned Counsel for the respondent submitted that under Section 2(h), "dealer" has been defined as "any person who carries on directly or otherwise the business of making manufacturing, preparing, repairing, polishing, buying, selling, supplying, distributing etc., of gold and the definition of dealer includes a firm and other bodies such as a local authority, company, society registered under the Societies Registration Act etc. It was urged that a firm being included in the definition of a dealer can as well apply for a licence in terms of Section 27(5) of the Act and such application by the firm w411 have to be in conformity with Form GS-6 prescribed under Rule 5(2) of the Gold Control (Forms etc.), Rules, 1968. The learned Counsel contended that in subscribing to a declaration under Form GS-6, it is not necessary that all partners should subscribe to the same and it is only the firm which is the applicant is the signatory and whoever is the Managing Partner of the firm will be competent to act on behalf of the firm depending upon the terms of the Partnership Deed. The learned Counsel therefore, urged that a firm being a competent person to apply for a licence, the application of the firm will have to be considered as such and no provisions under; the Act disqualifies the inclusion of the minor either expressly or by necessary implication for being included in such a partnership 'firm seeking a dealer's licence.
The learned Counsel also submitted that inclusion of a minor in a firm is not excluded in the Income-tax Act, 1961. Finally, the learned Counsel placed reliance on an un-reported Division Bench judgement of the Delhi High Court in the case of Talwar Diamonds v. Union of India in C.W.P. No. 1551 of 1986 to contend that a firm under the provisions of the Act is a legal entity though not in general law.
4. We have considered the submissions of the parties herein. The short question that arises for our consideration in the appeal is whether a minor by reason of admitted incapacity under general law to enter into a contract is precluded by the provisions of the Act from being included as a partner in a firm seeking licence under the Act in terms of Section 27(5) of the Act. It is no doubt true that a minor in law can be admitted only to the benefits of the partnership and a minor under the general law has no capacity to enter into any contract. In the present case, the definition of the word 'dealer' under Section 2(h) is an inclusive definition which as extracted above includes a firm. Therefore, a firm is competent as a person to make an application for the issuance of a Gold dealers licence in terms of Section 27(5) of the Act. In making such an application in accordance with Form GS-6, declaration has to be given or signed only by the firm and whoever is the Managing Partner or the Partner authorised to be in-charge and responsible for the conduct of the business of the firm would have the power to sign on behalf of the firm. Merely because one of the family members who happens to be a minor is sought to be included in the partnership of the firm, in our view, that would not ipso facto dis-entitle a firm already having a dealer's licence from seeking the permissions of the Department to have the name of such minor member of the family included in the firm with requisite grant of licence. The contention of the learned SDR that the minor would not be competent to sign the kind of declaration contemplated in Form GS-6, is not legally tenable. In the matter of grant of a licence, any obligations of contractual nature do not arise. The plea of the learned SDR as a minor cannot be proceeded against personally in case of any violation or contravention of the provisions of the Act by a firm of which the minor is the partner is not acceptable in law. If a minor commits an offence, he can be proceeded against even for heinous offence like murder though law has incorporated certain safeguards with reference to punishment under the provisions of the Children: Act, Probation of Offenders Act etc. If a firm consisting of a minor as one of the partners commits any irregularity or offence under the Act, it is the firm that will have to be proceeded against and also the persons who are otherwise personally liable for individual acts and the presence of a minor, as one of the partners, would not in any way disable the authorities at all to institute such proceedings or action as are open to them under the Act in a situation where a contravention is established. The plea of the learned SDR that under the Indian Partnership Act, a minor can be admitted only to the benefits of the partnership and therefore, any proceedings which would be detrimental to the interests of a minor under the Act would conflict with such salutary provisions under the Partnership Act is not tenable in the context of the case because under the Act, the Department is merely concerned with the grant of a licence in terms of statutory provisions and regulations. The Division Bench of the Delhi High Court in the ruling referred to supra has clearly held that in the context of the Gold (Control) Act, if a licence is granted to a firm, it is the firm which holds the licence and as under the Income-tax Act and under the provisions of the Gold (Control) Act also, a firm is a person capable of holding a licence. The Division Bench of the Delhi High Court has gone to the extent of holding that the statutory embargo incorporated under Rule 2(d) of Gold (Control) (Licensing of Dealers) Rules, 1969, would come into operation only when a firm holding a dealer's licence seeks to apply for another licence.
It has been made clear that the terms of Rule 2(d) aforesaid do not apply where the applicant firm is not the holder of another Gold dealer licence as perhaps in arcase where all the partners of the applicant firm are partners in another firm holding a valid licence. The Delhi High Court has also particularly adverted to the application for licence under the Gold Control (Forms, Fees and Miscellaneous Rules), 1968 where one of the columns requires an applicant to name the partners of the firm. The discussion in the Delhi High Court's case clearly points to the fact that a firm has been construed and understood differently from the individual partners comprising the firm under the provisions of the Gold (Control) Act, 1968. Therefore, in the facts and circumstances of this case, the modification in the dealer's licence by inclusion of a minor would not be a circumstance on the basis of which the firm could be denied a dealer's licence if it is otherwise entitled to in terms of the Act. We agree with the submissions of the learned SDR that the observations under the impugned order that the minor will be precluded from doing any commercial activity of the firm till he attains the age of majority is without jurisdiction. We would like to note in this context that the learned Counsel for the respondent also agree with this submission of the learned SDR. For the reasons indicated above, we hold that the application of the respondent under Section 52 of the Act to carry on the business of a dealer with the inclusion of the minor as one of the partners in the firm and seeking the approval of the Administrator or the delegated competent authority for such a change in the partnership is in order. In this view of the matter, we affirm the finding of the Collector of Central Excise (Appeals), Madras though for different reasons and dismiss the appeal.