Complete Lack Of Clarity In Govt Regulations Concerning Arms And Ammunition Industry: Delhi High Court

The Delhi High Court has recently observed that there is a complete state of confusion and lack of clarity in the Government regulations in relation to the arms and ammunition industry.

A division bench comprising of Justice Rajiv Shakdher and Justice Amit Bansal said there is a complete lack of clarity between different agencies like Directorate General of Foreign Trade (DGFT), Ministry of Home Affairs (MHA) and the Delhi Police regarding the application of the regulatory regime concerning arms and ammunition.

Observing that such state of confusion is detrimental to the interest of the entire arms industry, the bench said:

“Admittedly, the Government of India is seeking to encourage and promote manufacture of arms in India through the 'Make in India' initiative, for which it is imperative that there is complete clarity with regard to the regulatory regime.”

The bench directed the Union Government to complete in an expedient manner the exercise of enhancing efficiency and streamlining the processes for consolidating the licensing process for arms and ammunition.

The court further ordered that publicity be given widely, including by way of trade notices, to all stakeholders in the arms and ammunitions industry.

The bench was dealing with Union Government's appeal against a single judge order allowing the plea moved by Syndicate Innovations International Limited and directing the release of consignments comprising of 'frames' and 'slides' of handguns. The consignment was seized by the Central Government.

In 2020, Syndicate was granted license to import various parts of arms and ammunitions by DGFT. The said license included import of 'Frames' and 'Slides' of a handgun. During inspection of consignments, the Delhi Police found out that the imported 'frames' and 'slides' were pre-fitted with certain operational parts.

Later, the Delhi Police sought clarification from the DGFT whether Syndicate could have imported 'frames' and 'slides' with pre-installed operational. The DGFT issued a communication to the Delhi Polce that 'frames' and 'slides' were not specifically defined in the Foreign Trade (Development and Regulation) Act, 1992 or the Foreign Trade Policy, 2015- 2020 and thus, the imported consignments had to be considered subject to the provisions of the Arms Act, 1959 and the Arms Rules, 2016 and the manufacturing license granted by the MHA.

The MHA in August 2022 issued an advisory that 'Slides' and 'Frames' cannot be pre-fitted with other licensable parts for the purpose of manufacturing as well as import and that Syndicate could not have imported the additional operational parts.

The single judge directed release of the import consignments observing that Central Government failed to substantiate that the parts cannot be manufactured in India.

In appeal, the division bench noted that Syndicate was issued an unqualified and unconditional license to import 'frames' and 'slides', which are parts of handguns, along with other parts and components.

It further noted that Form X (for composite import/ export license for arms and ammunitions) did not mention that there was a further requirement of Syndicate obtaining separate import licenses in respect of the embedded parts.

“The appellants have failed to place any evidence or material on record to demonstrate that 'frames' and 'slides' are not commercially known to exist with pre-fitted sub-components,” the court said.

Accordingly, the court dismissed Centre's appeal and dissolved the limitation imposed on Syndicate in February last year that restrained it from disposing of the goods imported.

“The present case is illustrative of a complete state of confusion and lack of clarity that prevails in the Government regulations in relation to the arms and ammunition industry. The appellants themselves are not clear about the applicability of different rules in different situations, thereby resulting in the regulatory regime being operated in an arbitrary and ad hoc manner,” the court said in the postscript.

Title: THE MINISTRY OF HOME AFFAIRS & ANR. v. SYNDICATE INNOVATIONS INTERNATIONAL LIMITED & ORS.

Citation: 2024 LiveLaw (Del) 955

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