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Indian CasesSupreme Court of India

Ranjit Singh Etc. Etc vs Union Of India on 26 September, 1980

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Supreme Court of India

Ranjit Singh Etc. Etc vs Union Of India on 26 September, 1980

Equivalent citations: 1981 AIR 461, 1981 SCR (1) 847

Author: R Pathak

Bench: Pathak, R.S.

           PETITIONER:
RANJIT SINGH ETC. ETC.

	Vs.

RESPONDENT:
UNION OF INDIA

DATE OF JUDGMENT26/09/1980

BENCH:
PATHAK, R.S.
BENCH:
PATHAK, R.S.
KRISHNAIYER, V.R.

CITATION:
 1981 AIR  461		  1981 SCR  (1) 847
 1980 SCC  (4) 311


ACT:
     Constitution of  India 1950,  Art. 19(1) (g) and 32 and
Arms Act  1959- Petitioner  granted licence to manufacture a
specified number of guns-curtailment of quota-Whether valid-
Whether laches in invoking the jurisdiction of the Court.



HEADNOTE:
     In 1950,  the State  Government issued  a manufacturing
licence renewable  every year  to the  petitioners  for	 the
manufacture by hand of a specified number of guns per month.
The guns were however not proof-tested.
     After  the	  Arms	Act   1959,  came  into	 force,	 the
government  insisted   that  the  guns	manufactured  should
undergo proof-testing.	Pursuant to  that condition in 1960,
the petitioners	 installed machinery  and plant,  by  making
substantial investment	of funds.  From 1964, the Government
of India, reduced the monthly quota of guns.
     The petitioners  in their	writ petitions under Article
32 alleged  that this reduction had resulted in considerable
hardship to  them because  of the fixed overhead costs which
could not  be avoided.	They also alleged that though in the
case of	 a number  of other  such manufacturers	 quotas were
restored, in  their cases, the Government refused to restore
the quotas.
     The Union	of India,  however, denied the allegation of
arbitrariness, and  stated  that:  (a)	what  was  done	 was
pursuant to  the Industrial  Policy Resolution of 1956 which
envisioned an  exclusive monopoly  in the Central Government
in the	matter of manufacturing arms and ammunition and that
in fixing  the quota the manufacturing capacity of a concern
was not	 a determining	factor; (b)  there is no fundamental
right under Article 19(1)(g) of the Constitution to carry on
the manufacture	 of arms;  and (c)  there was  laches on the
part of the petitioners.
     Allowing the writ petitions,
^
     HELD: (a)(i)  Any curtailment of the quota must proceed
on the	basis of  reason and  relevance. 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. If  all  relevant
factors are  not considered,  or  irrelevant  considerations
allowed to find place, the decision is vitiated by arbitrary
judgment. [850F; E]
     In the  instant case  the Government  of India  had not
taken  into   careful  consideration  the  several  elements
necessary for forming a decision on the
848
quota permissible to each of the petitioners. That should be
done and  for that purpose the petitioners would be entitled
to  place   before  the	 Government  a	fresh  and  complete
statement of their case, with supporting material, to enable
the Government to reach a just decision. [850G-H]
     (ii)  The	Industrial  Policy  Resolution	envisaged  a
prohibition against  an increase  in the  quota of guns, not
its  curtailment.   No	objection  could  be  taken  to	 the
government's instructions  on the subject. The other factors
governing  the	 fixation  of	the  actual  quota  are	 the
production capacity  of the factory, the quality of the guns
produced  and  the  economic  viability	 of  the  unit.	 The
Industrial Policy  Resolution contains a specific commitment
to permit  the	continuance  of	 the  factories	 which	were
functioning for several years earlier. [850C; D-E]
     (b) The Arms Act 1959, expressly contemplates the grant
of licences  for manufacturing	arms and  an applicant for a
licence is entitled to have it considered in accordance with
the terms  of the  statute and to press for its grant on the
basis of the criteria set forth in it. [851A-B]
     (c) 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  be revised in
the light of present circumstances. [851C]
     In	 the   instant	case   the  petitioners	  had	been
continuously agitating	for the	 restoration of their quota.
They are,  therefore, not  guilty of laches and are entitled
to relief. [851D]



JUDGMENT:

ORIGINAL JURISDICTION: Writ Petition Nos. 833-835 of 1979.

(Under article 32 of the Constitution) P. Parmeswara Rao, G. D. Gupta and Ashwani Kumar for the Petitioners.

U. R. Lalit and Miss A. Subshashini for the Respondent. The Judgment of the Court was delivered by 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 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. N.V.K. Petitions allowed.