Ranjit Singh Vs. Union of India [1980]
INSC 192 (26 September 1980)
PATHAK, R.S.
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]
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 849 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, 850 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.
851 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.
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