Case: Ranjit Singh Etc Vs. Union of India

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.3. 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.4. The petitioner in the third Writ Petition, No. 835 of 1979, is Uttam Singh. In his case, th e 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.5. In opposition to the writ petitions, the Union of India which is t he 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.6. 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, n ot 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 i s 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.7. We need not, in the circumstances, consider the other grounds on which the petitioners claim relief.8. 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.9. 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.10.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]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, n ot 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 i s 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 eachneed not, in the circumstances, consider the other grounds on which the petitioners claimare 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.