Kishori Lal Kanoo vs Union Of India And Ors.
1994 Latest Caselaw 816 Del

JUDGMENT

D.P. Wadhwa, J.

(1) The petitioner, claiming to be the sole proprietor of East End Arms Company, has filed this petition under Article 226 of the Constitution seeking a writ of certiorari for issuing a direction of the respondents to transfer 240 proof tested pieces of single barrel guns of which 198 pieces were proof tested and passed by the Inspectorate of Small Arms, Ichapur, in favor of the petitioner. Petitioner says as per provisions of the Arms Act and the Rules it was he who in 1981 deposited these 240 guns with the Ordnance Factory, Ichapur, for inspection but respondents were not passing orders for transferring these guns to him.

(2) Petitioner contends that he was the sole proprietor of East End Arms Company, Manipur, and that his younger brother Bishon Lal Kanoo, who migrated from Pakistan, was inducted by the petitioner as Manager of the firm. Some how, the petitioner says Bishon Lal Kanoo styled himself as partner of the firm and so also Parimal Kanoo, another brother of the petitioner, staked claims to the firm and the license which he had for manufacture and storing of the guns. Under the provisions of the Arms Act, the District Magistrate, Manipur Central, Imphal, by his order dated 22 April, 1976 held the petitioner to be licensee and entitled to take possession of the shop premises and the factory from Mr. Bishon Lal Kanoo and Parimal Kanoo with the police help. Both Bishon Lal Kanoo and Parimal Kanoo filed a writ petition in the Gauhati High Court which was dismissed on 29 June, 1976. Further appeal by Bishon Lal Kanoo and Parimal Kanoo was filed in the Supreme Court which on 7 November, 1978 passed the following order:- "BY consent of the parties, the dispute between them regarding the dissolution of the partnership and its accounts is referred to the sole arbitration of the District & Sessions Judge, Imphal. The item of licenses both for manufacturing and selling of arms and the produce brought into existence under those licenses for manufacturing and selling of arms and the produce brought into existence under those licenses shall not, however, be the subject matter of arbitration for division in species. The Arbitrator will value the produce and a portion such valuation between the parties along with other assets of the partnership. Each party will be at liberty to apply for either a fresh license or renewal of the license under the Arms Act, 1959 and the rules there under to proper authorities and the authority will dispose of their applications in accordance with law. In view of the above order that is being passed in this appeal the application under Section 20 of the Indian Arbitration Act, 1940 made before the Subordinate Court of Second Sub-Judge at Imphal will be treated as withdrawn by the appellants herein. Status quo as on 6th October, 1976 to be maintained without prejudice to the proceedings that might have been initiated by respondent No. 3. The appeal is disposed of in terms of the above order with on order as to costs."

It is stated that arbitration proceedings are still on, Mr. Ashri, learned Counsel for the petitioner, said that arbitration proceedings have no bearing on the relief claimed by him in the present petition. Respondents, however, contend to the contrary. On 23 Setpember, 1992 a wireless message was sent by the Central Government to the Home Secretary, Imphal, with a copy to M/s. East End Arms Company. This wireless message is as under :- "REFERENCETHIS MINISTRY'S Message Of Even Number Dated 1.6.90 Regarding Storage Of 240 Pieces Of Proof Tested Gun Barrels Belonging To M/S. East End Arms Company Imphal At Their Licensed Premises M/S. Indian National Arms Company Gauhati (.) M/S East End Arms Company Imphal Have Now Represented For Grant Of Permission For Taking Delivery Of 198 Pieces Of Proof Tested Guns Stored At The Licensed Premises Of M/S Indian National Arms Company Gauhati For Taking Them Into Stock Of M/S East End Arms Company Gauhati (.) Request Intimate Present Status Of The Case Regarding ownership Of Said 240 Guns Pending In Supreme Court Of INDIA(.)"

Objection of the respondents are two folds: (1) it could not be said that the petitioner is the sole licensee as arbitration proceedings have not yet become final; and (2) as on date petitioner is not having license to manufacture and store the guns. Mr. Ashri said that he has made specific averment in the petition that the petitioner was in possession of a valid license and that this objection could be made if the Court passed a conditional order that the guns be released to the petitioner on the production of a valid license for the purpose. We do not think there can be any objection to this course if we so adopt. As regards the order of the Supreme Court, which we have reproduced above, we do not think that the order comes in the way of taking, decision in the present petition. The Supreme Court had referred the dispute to arbitration regarding the dissolution of the partnership and its accounts. It has specifically kept outside the arbitration the question of licenses "both for manufacturing and selling of arms and the produce brought into existence under those licenses", and rightly so as that matter was governed by the provisions of the Arms Act and the Rules.

(3) Accordingly, we allow the petition and direct that the guns in question be transferred to the petitioner, on the petitioner producing valid arms license for the purpose. We are not quite sure if all or only the proof tested pieces of guns are to be transferred to the petitioner. That should be as per law. The petition is, therefore, allowed in the above terms.