GIRDHARI PRASAD SHARMA Vs. UNION OF INDIA

JUDGEMENT

(1.) WHETHER a licence for manufacture of arms issued {in Form IX) under the provisions of the Arms Act, 1959 can be split up on the request made by its joint holders ? This is the question that arises for consideration in this writ petition. According to the respondent authorities, in the light of the industrial policy resolution 1956 and the policy guidelines issued by the Central Government on 8.3.1957 in pursuance of the industrial policy resolution it is impermissible to split up the licence for manufacture of arms and ammunition as it would in effect lead to new licences coming into existence. Before proceeding to examine the validity of the stand taken by the respondent authorities it would be appropriate to take note of the brief facts of the Case in the context of which the aforesaid question has arisen.

(2.) IN order to avoid any controversy the basic facts of the case are taken from the counter affidavit filed on behalf of the respondents. In the counter affidavit it is stated that a licence bearing no.22, dated 21.2.1940 was issued in Form IX under the provisions of the Arms Act, 1878 (since repealed) by the District Magistrate, Munger in favour of one Horil Mistri (the deceased father of the petitioner) who was the sole proprietor of M/s. M. Horil & Co. Munger. After coming into force of the Arms Act, 1959 , and the rules framed thereunder with effect from 1.10.1962, the power to issue licence for manufacture of arms and ammunition vested in the Central Govt, and that required a review of the licences issued by the State Licensing authorities under the Act of 1878. After reviewing the case of Horil Mistri, his earlier licence was replaced with a new licence bearing no.19/IX/78 (in Form IX) with the quota of 234 guns per annum. During the life time of Horil Mistri, the names of his two sons, namely, Shri Lal Sharma (since deceased) and Girdhari Pd. Sharma (the present petitioner) were also endorsed by the Govt, of India in the licence held by M/s. M. Horil & Company in accordance with the Government policy. As a consequence of addition of names the licence of M/s. M. Horil & Company, Munger, stood in the names of three joint proprietors, (i) Horil Mistri, father, (ii) Shri Lai Sharma, and (iii) Girdhari Pd. Sharma (both sons of Horil Mistri). With the passage of time Horil Mistri and one of the two sons, Shri Lal Sharma died and their names were deleted from the licence. Later, on a request made by the sons and heirs of the deceased Shri Lal Sharma, duly forwarded by the State Government, their names were also incorporated as partners in the licence held by the firm, in accordance with the Government policy. After the aforesaid addition, deletion and further addition of names, the present position is that the licence stands in the joint names of Girdhari Pd. Sharma (son of the deceased Hon) Mistri, the original licencee) and (i) Devendra Pd. Sharma, (ii) Vijay Sharma, (iii) Gopal Pd. Sharma, (iv) Krishna Murari Sharma, (v) Sikindra Pd. Sharma, (vi) Jitendra Pd. Sharma, (vii) Manish Kumar Sharma, (viii) Gyandeo Pd. Sharma and (ix) Chandan Sharma (all sons of Shri Lal Sharma and grand sons of Horil Mistri) as partners of M/s. M, Horil and Company, Munger.

(3.) AT this stage, I am turn to the writ petition for taking note of the circumstances and the reasons that prompted the petitioner to make the request to split up the joint licence. In the writ petition, it is stated that long before licence no. 19/IX/78 was issued in the year, 1978 under the provisions of the Arms Act, 1959 and even while the earlier licence issued under the Act of 1878 was subsisting, a partition took place between the two sons of Horil Mistri in the year, 1971 and since then out of the total annual quota of 234 B.L. Guns, 117 were being manufactured by Shri Lai Sharma and the balance haif by the petitioner. It is further stated that the two brothers jointly informed the Collector, Munger about the partition and the arrangement under which each of the two brothers would manufacture 117 B.L. guns annually out of the total quota of 234 B.L. guns per annum under the licence. It is further stated that since then both the brothers started manufacturing 117 B.L. guns separately and the guns manufactured by each of the two brothers were used to be sent to Ichhapur Ordnance Factory for testing under transport licence and permit licences issued by the Collector, Munger to each of the two brothers separately. It is also stated that the petitioner filed a suit for confirmation of the partition between the two brothers and for a declaration that each of them would separately manufacture 117 B.L.guns; that the suit was decreed and the civil court made the declaration as prayed for. Further, according to the petitioner, the aforesaid arrangement continued for some time but after a while difficulties started cropping up and it was realised that unless the licence was split up, it would be difficult to carry on smoothly the business of manufacture of guns. It is stated that both the brothers faced difficulties in payments of income tax and sales tax and also in the renewal of the licence. Problems arose as nonpayment of sales tax by one brother caused undue harassment to the other brother even though he had cleared all tax liabilities. It is further stated that in the meanwhile both the brothers obtained two separate factory licences being Licence No. 62814/MGR in the name of the petitioner and Licence No. 4525/MGR in favour of Sri Lal Sharma. The two brothers also obtained separate sales tax numbers. Their father, Horil Mistry died on 18.1.1986 and after his death the problems between the two brothers further aggravated. Later, Shri Lal Sharma died in February, 1991 and this led to his nine sons being substituted in his place as joint holders of the licence. This aggravated the problems still further and made it necessary for the petitioner to request for the spliting up of the licence. According to him, unless the licence was split up the whole business may have to be ultimately closed down for no fault on his part. From the writ petition it appears that he did not receive the letter, dated 18.6.1986 by which his request was turned down. According to him he met the concerned authority in the Central Government in connection with his request, he was asked to send the death certificate of Shri Lal Sharma and a no objection certificate from the heirs and sons of Shri Lal Sharma. As advised by the concerned authority, the petitioner sent the desired certificates on 24.6.1993 but he did not hear any thing on this matter despite reminders sent by him and finally he was compelled to come to this court in this writ petition.