Prakash Narain, J.
(1) The petitioner claims itself to be a registered pertnership carrying on business in the Union Territoly of Delhi In 1965 applied for the issue of a license for manufacture of cartridges used as amunition in shot guns A license bear' Ing No. 2/IX/1965 was issued to the petitioner for the manufacture of 5000 gun cartridges at a time. This license was in Form Ix given in the . Arms Act, 1959 lt was renewed from time to time up to December 31,1971. ltis alleged by the petitioner that acting upon this license granted to it investment was made for purchasing necessary machinery and installing a factory in Bhogal, New Delhi. The production of cartridges was undertaken by the petitioner right up to February, 1972. During all this period the concerned authorities regularly inspected (he (Arrexure) and September 2, 1972 (Annexure and also making a declaration that the license issued to the petitioner originally in 1965 was a valid license to enable them to continue the manufacture by them of the ammunition mentioned in the said license
(2) The petition has been opposed on behalf of respondents 2 and 3,ramely, the Delhi Administra and the District Magistrate, Delhi the issue of the license in 1965 is not disputed but it is contenced that under the Aims Act, 1959 read with the Rules made there under the District Magistrate was not the competent authority to issue the license for the manufacture of ammunition which the petitioner wants to manufacture and the moment this fact was discovered the.petitioner was informed that the license issued to it earlier by the Disrict Magistare, Delhi was not valid in the eye of law. It has also been menuored in the affidavit filed on behalf of respondents 2 and 3 that the Additional District Magistrate ignored a poliey of the Cenlrat Government contained in Actter N0.9/19/55P. Iv dated March 8, 1957 wherein it was laid down that the Government of India has decided that ihc manufacture of arms and ammunition is to be the exclusive monopoly of the Central Government but pending a final decision in the matter the Central Government had no objection to the continuance of manufaelure of arms and ammunftion by private persons and firms who were duly licensed and were already doing lbe work provided that revolvers, pistols and rifle weapons and ammunition were not to be manufactured by private persons at all. It is also stated in the affidavit that the Delhi Admintstration after examining the whole case came to the conclusion, that the petitioner should be prohibited from further manufature not only because the manufacture in the private sector of the type of ammunition that the petitioner was manufacturing was prohibited but also because the liceoce issued by the District Magistrate was in valid in the eye of law.
(3) On tacts there is not much dispute between the patties. The petitioner was originally granted a license by the District Magistrate in 1965 which was renewed from time to time up to December 31, 1971. The petitioner did manufacture shot gun cartridges and there is Do complaint that the petitioner ever violated any terms .of the license or the statute or any statutory rules The short point for coasideration is whether the stand taken by the second and third respoodents Is tenable in law. .
(4) MR.B.R.L Iyangar appearing for the petitioner raised 11 cententions before me and has confined his petition only to the prayer that the communication from the Delhi Admninistration dated Septembcr2, 1972 (Annexure H) be struck do wn. His contentions are as follows:-
1.If a statute governs the question of issue of license executive directions issued particularly of license executive directions issued particularly prier to the commencement of the statute, i.e the Arms Act, 1959, cannot form the basis of refusing a renewal of license. It may be noticed that the executive directions relied upon by the respondents is the policy letter No.9/ 19/55-0 IV-daled March 8, 1957 issued by the Minstry of Home affairs, Government of India (Annexure R 2 to the counter-affidavit).
2.In any case the said administrative instructions cannot govern or override a citizen's rights to carry on trade or business which are governed by the statute. (Arrexure C) and September 2, 1972 (Annexure H) and also making a declaration thet the license issued to the petitioner originally in 1965 was a valid license to enable them to continue the manufacture by them of the ammunition mentioned in the said license.
3. the petition has been opposed on behalf of respondents 2 and 3,namely the Delhi Administration and the Disrict Magistrate, Delhi. the issue of the liccnce in l965 is not disputed but it is contened that under the Arms Act, 1959 read with the Rules made there under the District Magistrate was not the competent authority to issue the license for the manufacture of ammuntion which the petitioner wants to manufacture the moment this fact was discovered the petitioner was irformed that the license issued to it earlier by the District Magistrare, Delhi was not valid in the eye of law. It has also been menuored in the affidavit filed on behalf of respondents' and that the Additional District Magistrate ignored a policy of the Central Government contained in letter No. 9/19/55 P. Iv dated March 8, 1957 where in it was laid down that the Government of India has decided that the manufacture of arms and ammuinition is to be the exclusive monopoly of the Central Government but pending a final decision in the matter the Central Government had no objection to the continuance of manufaelure of arms and ammuntion by private persons and firms who were duly licensed and were already doing the work provided that revolvers, pistols and rifle weapons and ammunition were not to be manufactured by private persons at all. It is also stated in the affidavit that the Delhi Administration after examining the whole case came to the conclusion that the petitioner should be prohibited from further manufaclure not only because the manufacture in the private sector of the type of ammunition that the petitioner was manufacturing was prohibited but also because the license issued by the District Magistrate'was invalid in the eye of law.
4. On tacts there is not much dispute between the parties. The petitioner was originally granted & license by the District Magistrate in 1965 which was renewed from time to time up to December 31, 1971. The petitioner did manufacture shot gun cartridges and there is no complaint that the petitioner ever violated any.terms .of the license or the statute or any statutory rules The short point for consideration is whether the stand taken by the second and third respondents is tenable in law.
5. Mr.B. R. L lyangar appearting for the petitioner has raised 11 cententions before me and has confined his petition only.to the Prayer that the communicatin from the Delhi Administraton-dated September 2, l972(Annexure H) be struck down .His contentions are as follows:-
1.If a statute governs the question of issue of license executive directions issued particularly of license executive directions issued particularly prior to the commencement of the statute, i.e the Arms Act, 1959, cannot form the ebasus of refusing renewal of llcence It may be noticted that the executive directions relied upon by the respondents is the policy letter No 9/19/55-0. Iv dated March 8, 1957 issued by the Ministry of Home affairs, Government of lndia (Annexure R.2 to-the counter affidavit)
2. In any case the said administrative instructions cannot govern or override a citizen's rights to carry on trade or business which are governed by the statute.
3. Claiming grant of license may not be a right which can be enforced in courts but once a license has been granted a right is created io claim renewal
4. The Central Government cannot order revocation of a license by correspondeiice, even if it be assumed that any such order has been made by the Centrall Government for that can be done only by means of a gazette notification as provided by sob-section (9)of Section 17 of the Arms Act.
5. Even if subsection (6) of Section 17 of the Armas Act was 'attracted somebody has to determine the grouads for suspending or revoking a license and that determination can only be after giving the petitioner a bearing in consonance with the principles of natural justice.
6. The stand taken by respondents 2 and 3 is not bona tide as will be apparent from the change in the grounds advanced, by them from time to time.
7. The Delhi Administration has obviously acted on a letter or communication of the Central Government without affording any opportunity to the petitioner to put forth its case.
8. Whether the ammunition being manufactured by the petitioner falls in the prohibited category is a question of fact which requires determination and that determination has to be made by the appropriate authority keeping in view the principles of natural justice.
9. Annexure R. 3 with the counter-affidavit which is a communication dated July 8, 1970 from a under Secretary to the Government of India to an Under Secretary of the Delhi Administration is obviously issued without application of mind for it speaks of a license issued to the petitioner in 1968 whereas the license was issued to the petitioner in 1965,
10. Since the Union of India has not filed any counter affidavit the allegations of the petitioner in paragraph 28 of the petition stand unretuted. Paragraph 28 of the petition avers that even if it be assumed that the District Magistrate had no authority to lssue the lictnce he had issued it in good faith with the complete knowledge of Union of India and Delhi Administration and that the license has now been cancelled without any reason and with mala fide intent.
11. Originally the only contention raised at the time of renewal was with regard to the quantity which the petitioner may be allowed to manufacture on the basis of its 1969 production but when the petitioner represented against the arbitrary Older made in the quantity it could manufacture the stand was changed by respondents 2 and 3 claiming total lack of jurisdiction on the. part of the District Magistrate to issue a license. -
(5) As against the contentions raised by the learned counsel for the petitioner, Mr. M. C. Bhandare, the learned counsel for respondents 2 and 3 has urged that the only point requiring determination and which is the crux of the matter is as to what is the purport of the impugned communication dated September 2, 1972 (Annexure H to the petition). If Delhi Administration has been taking different stands in the past it still would not affect the main question to be decided and that is whether the District Magistrate is the appropriate licencing authority for the type of ammunition which the petitioner wishes to manufacture. Mr. Bhandare urged that merely because the petitioner had been manufacturing shot gun cartridges in the past under an invalid license cannot entitle it to claim that the mistake made originally by the District Magistrate should be perpetuated even if the District Magistrate is not the appropriate licencing authority contemplated by the Arms Act. On the question of giving the petitioner a bearing it was urged that the order dated December 6/7, 1972 filed along with the counter-afidavit and which is in the form of a communication addressed to a partner of the petitioner by an under Secretary of the Delhi Administration shows that the petitioner was heard as directed by this and it was explained to it that the District Magistrate was not the appropriate licencing authority for that type of ammunition The reference in this communication to the policy of the Government of India is not very relevant for, it is conceded, that policy cannot overide statute.
(6) In order to appreciate the contentions of the parties it will be advantageous to keep in mind the relevant provisions of the statute and the rules framed there under. The relevant provisions of the statute arc Sections 2(b), 2(h). Sections 3, 4, 5, 13, 14, 15, 17 and 44. The relevant rules in the case are Rules 3 and 4 and Schedules land 2.
(7) Section 2(b) defines the word 'Ammunition'; Section 2(h) defines what is 'prohibited ammunition. Section 3 days down that no person shall acquire, have in his possession, or carry any firearm or Ammunition unless he holds in this behalf a license issued in accordance with the provisions of the Act and the Rules framed there under. Section 4 gives the power to the Central Government to provide for acquisition possession or carrying of arms other than fire arms In any particular area. Section 5 deals with manufacture of arms and ammuaition and prohibits any person to manufacture, sale, transfer etc. any fire arms or any ammunition unless he holds in this behaifa license issued in accordance with the provisions of the Act and the Rules. Section 13 lays down that an application for the grant of a license under Chapter Ii, which deals with manufacture and sale of fire arms and ammunition, shall be made to the licencing authority and shall be in su:b form, contain such particulars and be accompanied by such fee, if any, as may be prescribed. It then goes on to lay down the procedure for the grant of license. Section 14 lays .down when licenses shall be refused by the licenciag authority. Section 15 provides for the period of the validity of a license and also lays down that every license shall, unless a licencing authority for reasons to be recorded in writing otherwise decides in any case, be renewable for the same period for which the license was originally granted and shall be so roaewable from time to time and the provisions of Sections 13 and 14 shall apply to the renewal of a license as they applied to the grant thereof. Section. 17 lays down the criteria for variation, suspension and revocation of liceneces which have been granted. Section 44 gives to the Ceatral Government powers to make rules for carrying oat the purport of the Act generally and in particular with respect to the-matters specified in subsection (2).--
(8) In exercise of the powers conferred by the various provisions of the Arms Act, the Central Government made the Arms Rules, 1962. Rule 2 gives all the definitions. Rule 3 sets out that for the purposes of the Act and the Rules 'arms' or ammunition' shall be of the categories specified in columns 2 and 3 respectively of Schedule I and references to any category of arms or ammunition in these rules shall be construed accordingly. Rule 4 lays down that licenses under Chapter Ii of the Act may be granted or renewed for such purposes, by such authorities, in such Forms and to be valid for such period and in such arrears as are specified in Schedule II.
(9) According to the petitioner it 'manufactures cartridges for 12 bore shot guns and this ammunition does not fall either in Category . or Ii or Iv of Schedule lot the said Rules but falls in ihe residuary Category Vl. The liconcing authority for this category as per item No. 9 in Schedule Ii would be the District Magistrate and the license is to be issued in Form Ix, Category I of Schedule I is in respect of (a) Prohibited arms, (b) semiautomatic firearms, and (e) rifles of .303 bore or of any other bore which can fire service ammunition of .303 bore ; muskets of .410 bore ; pistols or revolvers etc and the ammunition for these three types of firearms. The fourth item in Category V refers to accessories for any firearms designed ceradapted to diminsih the noise or flash caused by the firing thereof for which obviously no ammunition is required. Category Ii in Schedule I deals with machinery for manufacturc or proof-testing of a firearm. Category Iii deals with firearms other than those in categories I Ii and Iv, namely, revolvers and pistols, breach-loading rifles other than. 22 bore rifles mentioned in category lll(c) .22 bore (low velocity) rifles using rimfire cartridges, breach loading smooth bore guns and a r rifles, and air-guns and muzzleloading guns. Ammunition for all the firearms in this category also fales in category III. Category Iv deals with curios and historical weap ns other than those excluded under section 45(c). Category V deals with arms other than firearms. Category Vi does not specify any firearms' but refers to amnaunition which is defined as articles containing explosives or fulminating material, fuses and frictioa tubes, and ingredients as defined in Section 2(1)(b) Vil
(10) Schedule Ilsets out, inter alia,the categories of arms and ammunitions and the licencing authorities. For categories l(a) and 11 the licencing authority is the Central Governmeant For categories III(b), lll(c), lll(d), V and Vi it lathe District Magisirate. For category I(b) it is the State Government, For category l(c), I(d) and III(a) it is the District Magstrate and so on. Thus, the crucial question is in which category under Schedule I does the amnunition manufactured by the petitioner fall for that would determine which is the appropriate licencing authority.
(11) I am not Impressed with Mr. Iyanger's argument that the ammunition sought to be manufactured by the petitioner falls in Catgory Vi of Schedule 1. I come to this conclusion for two reasons First, Caiegoiy Vi in Schedule I does not deal with ammunition to be used in a firearm for otherwise the firearms would have been specified. Secondly, the type of ammunition being manufactured or sought to be manufactured by the petitioner clearly falls in Category lll(c). The petitioner as itself stated that it had applied for the issue of a license for manufacturing cartridges used as ammunition in shot guns. the copy of the license placed on the record (Annexure A to the petition) shows that the license was issued, inter alia, for the manufacture of gun cartridges It is not the petitioner's case that it is manufacturing ammunition for firearms covered by Category V of Schedule 1. I have already negatived the petitioner's claim that the ammunition is covered by Category Vi in Schedule 1. A plain reading of item Ix of Schedule Ii shows that the appropriite licencing authority for the manufacture of arms or ammunition of any of the calegorics mentioned in Schecule I except Categories V and Vi, is the Central Government. The District Magistrate is the licencing authority for some types of arms and ammunition only in respect of ammunition in Categories V and Vi of Schedule I and for issuing licenses for acquisition, possession etc.of firearms and ammunition of certain specified categories. thereforee, even if the petitioner was originally issued a license by the District Magistrate in 1965 be cannot say that the license that be held was valialy issued. The renewing authority of the licenses is the State Government in this case but the question of renewal only arises if avalid liceuce was initially issued, thereforee the petitioner,s contention can not be accepted.
(12) Mr. Iyangar urged that the license issued in 1965 has been acted upon right till the end of 1971 and the State authorities cannot now take a different stand. There is no force in this contrntion If the license originally issued was a nullity in the eye of law its issue cannot ensure to the benefit of the petitioner nor can the petitioner plead any kind of estoppel. The license issued to the petitioner in 1965was a nullity in the eye of law and the petitioner cannot claim its renewal by the District Magistrate or the Slate Government. Nor can it complain against the Delhi Administration informing the petitioner of the correct position in law. A bench of the Patna High Court in Ram Saran Sharm v. The State of Bihar and others held that if the license originally granted was a nullity in the eye of law the order revoking the license is not liable to be quashed. In the present case the license issued to the petitioner was a nullity in the eye of law and has even expired by efflux of time. The question of revocation, thereforee, does not arise, I have already negatived the contention that such a license can be renewed. thereforee, I hold the petitioner is not entitled to any relief.
(13) In view of my finding above the other contentions raised by Mr. Iyangar do not survive for a decision.
(14) The petition is, accordingly, dismissed with costs. Counsel's fees Rs.300.00.