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Pathak, J. – In these three petitions under Article 32 of the Constitution, the petitioners
separately pray for a restoration of the quota originally granted to them in their respective
licences for the manufacture of fire-arms. Writ Petition No. 833 of 1979 has been filed by
Ranjit Singh who alleges that his father Pritam Singh commenced the business of
manufacturing guns in 1950 under a licence issued by the Government of Jammu and
Kashmir. The licence permitted him to manufacture 30 guns per month. The guns were
manufactured by hand and were not proof-tested. The licence was renewed annually and the
quota was maintained throughout. Later, with the enactment of the Arms Act, 1959, the
licence was issued under that statute. The Government insisted that the guns manufactured by
Pritam Singh should undergo proof-testing, and for that purpose it became necessary for the
manufacturer to purchase and install the necessary machinery and plant. The machinery was
installed shortly after 1960 on a substantial investment of funds raised with great difficulty
and, it is said, in the result the factory is now capable of manufacturing 50 guns per month.
Until the year 1963, the licence in favour of Pritam Singh was renewed by the Government of
Jammu & Kashmir for the full quota of 30 guns. But with effect from the year 1964 the
Government of India began to issue the licences. The quota was reduced from 30 guns to 10
guns per month, and it is alleged that this has resulted in considerable hardship in view of the
financial liability and the establishment expenses suffered pursuant to the installation of the
machinery. On the death of Pritam Singh in 1969, the business was carried on by the
petitioner and his mother, and the licence now stands in their names. Several representations
were made to the authorities for the restoration of the original quota but there was no
satisfactory response. The petitioner claims that his plea for the restoration of his original
quota has been supported by the State Government. The petitioner cites a number of cases
where the quota reduced in the case of other manufacturers has been restored and relies on
other material to show that the determination of his quota has been arbitrary.
Writ Petition No. 834 of 1979 has been filed by Bachan Singh. The facts incorporated in the
petition run a materially similar course, except that the original quota granted to the petitioner
consisted of 50 guns per month and has now been reduced to 5 guns per month.
The petitioner in the third Writ Petition, No. 835 of 1979, is Uttam Singh. In his case, the
original quota of 50 guns a month has been reduced to 15 guns a month. Here again, the
pattern of facts is substantially similar to that traced in the other two writ petitions.
In opposition to the writ petitions, the Union of India which is the sole respondent relies on an
Industrial Policy Resolution of 1956 which envisions an exclusive monopoly in the Central
Government in the matter of manufacturing arms and ammunition while permitting existing
manufacturers in the private sector to continue to carry on their business on a limited scale. It
is asserted that in fixing a quota the manufacturing capacity of a concern is not a determining
factor, and it is denied that the Government has acted arbitrarily. It is also urged that the
petitioners should be denied relief on the ground of laches. The Union of India rests its case
on the Industrial Policy Resolution of 1956. Under that Resolution, however, it was decided
that no objection would be taken to the continuance of the manufacture of arms and
ammunition by existing units in the private sector already licensed for such manufacture
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provided the operation of those units was strictly restricted to the items already manufactured
by them and that no expansion of their production or increasing the capacity of the items
already produced was undertaken without the prior sanction of the Government of India.
Plainly, what was envisaged was a prohibition against an increase in the quota, not its
curtailment. Purporting to implement the Industrial Policy Resolution, the Government issued
instructions that the quota fixed should be such that the market was not flooded with arms and
ammunition. No objection can be raised to that. It is as it should be, but with that primary
consideration defining the outer limits, there are other factors which govern the fixation of the
actual quota. There is the production capacity of the factory, the quality of guns produced and
the economic viability of the unit. The Government is bound to keep these in mind while
deciding on the manufacturing quota. There is need to remember that the manufacture of arms
has been the business of some of these units for several years and the Industrial Policy
Resolution contains a specific commitment to permit the continuance of those factories. On
the other side, the Government is entitled to take into consideration the requirements of
current administrative policy pertinent to the maintenance of law and order and internal
security.
Any curtailment of the quota must necessarily proceed on the basis of reason and relevance. If
all relevant factors are not considered, or irrelevant considerations allowed to find place, the
decision is vitiated by arbitrary judgment. On the material placed before us, we are not
satisfied that the Government of India has taken into careful consideration the several
elements necessary for forming a decision on the quota permissible to each of these
petitioners. We are of opinion that it should do so now. And, for that purpose, the petitioners
should be entitled to place before the Government a fresh and complete statement of their
case, with supporting written material, to enable the Government to reach a just decision in
each case. We need not, in the circumstances, consider the other grounds on which the
petitioners claim relief.
On behalf of the Government it is urged that there is no fundamental right under Article
19(1)(g) of the Constitution to carry on the manufacture of arms. That contention is disposed
of shortly. The Arms Act, 1959, expressly contemplates the grant of licences for
manufacturing arms. An applicant for a licence is entitled to have it considered in accordance
with the terms of the statute and to have for its grant on the basis of the criteria set forth in it.
The other contention on behalf of the Government is that the petitioners are guilty of laches.
We are not impressed by the contention for the reason that the licences are granted for
specific periods with a right to apply for renewal on the expiry of each period. Each renewal
constitutes a further grant of rights and it is open to the applicant to show on each occasion
that the quota governing the preceding period should now be revised in the light of present
circumstances. Besides, the petitioners have been continuously agitating for the restoration of
their quota.
Having regard to the peculiar circumstances of these cases, we are not inclined to deny them
relief.
Accordingly, we allow the writ petitions and direct the respondent Union of India to
reconsider the manufacturing quota fixed in the case of each petitioner after allowing a
reasonable period to the respective petitioners to set forth their case on the merits, with such
supporting written material as they may choose to place before it.
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Petitions allowed.
