Ranjit Singh and Ors. Vs. Union of India (UOI)

Facts

Petitioners in these petitions under Article 32 of the Constitution, separately pray for a restoration of the quota originally granted to them in their respective licences for the manufacture of fire-arms.

Petitioners in all three petitions have alleged that their permission to manufacture the gun have been reduced from the original limit to manufacture the guns. In Writ Petition No. 833 of 1979 it was alleged that the Jammu & Kashmir Government has issued a quota to petitioner 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 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. 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. 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. Other two petitions have similar facts, except that the original quota granted to the petitioner consisted of 50 guns per month and has now been reduced to 5 & 15 guns per month.

Key Takeaways for Students

Legal Issue

1. Whether there is no fundamental right under Article 19(1)(g) of the Constitution to carry on the manufacture of arms?
2. Whether petitioners are guilty of laches and licences are granted for specific periods with a right to apply for renewal on the expiry of each period?

Holding

The Union of India relies on the Industrial Policy Resolution of 1956, which allowed existing private manufacturers of arms and ammunition to continue operations, provided they did not expand production or capacity without government approval. While the resolution prohibited increases in quotas, it did not mandate curtailment. The Government, aiming to prevent market oversaturation, issued guidelines for quota determination, which should also consider production capacity, product quality, and economic viability.

The Industrial Policy Resolution emphasized the commitment to existing manufacturers, balanced against administrative policies for law and order. Any quota reduction must be reasonable, relevant, and based on a thorough evaluation of all factors. However, the Government's decision-making in this case appears insufficiently reasoned. We direct the Government to reevaluate the quotas, allowing petitioners to submit a comprehensive statement with supporting materials to ensure a fair decision.

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. 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 Court also held 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.

The Union of India is directed 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.

Final Decision Petition Allowed

Ratio

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. Any curtailment of the quota must necessarily proceed on the basis of reason and relevance.