Licensing authorities cannot reject arms dealer licence renewals on non-statutory, extraneous, or unreasoned grounds.

The petitioner, a licensed arms dealer since 2008, applied for a renewal of its arms dealer licenses (Forms 11, 12, and 14) prior to their expiry in 2019

An initial rejection in 2020 on grounds of delay was set aside by the High Court in 2023, remanding the matter for fresh consideration

Despite favorable report submissions from the Superintendent of Police and the Sub-Divisional Magistrate recommending renewal for the periods 2020–2024 and 2025–2029, the competent authority issued an order dated 07.07.2025 rejecting the application

The petitioner challenged this order on the grounds that it was non-speaking, inconsistent in its dates, and ignored material evidence

1. Whether the impugned order dated 07.07.2025 was arbitrary and violative of the principles of natural justice due to lack of reasoning and non-application of mind

2. Whether the licensing authority can reject a renewal application based on non-statutory grounds or requirements not prescribed under the Arms Act and Rules

The court primarily applied the Arms Act, 1959, and the Arms Rules, 2016, specifically Rule 10, which governs safety training and storage obligations

It relied on the precedent established in M/s Shanti Gun House v. State of M.P. (W.P. No. 35051 of 2025), which held that renewal applications cannot be rejected on vague, non-statutory, or extraneous grounds in the absence of a threat to public safety or statutory violations

The Court found that the impugned order was "ex-facie illegal" as it failed to disclose any reasons for rejection, rendering it a non-speaking order

It noted a significant clerical inconsistency where the authority rejected the license for the period 2022–2026 despite the application being for 2025–2029, indicating a mechanical process without application of mind

Furthermore, the Court observed that the authority completely ignored the favorable recommendations and verification reports from subordinate officials

Regarding Rule 10 of the Arms Rules, 2016, the Court clarified that it does not mandate specific conditions like private security guards or fire extinguishers as conditions precedent for renewal unless explicitly stated in the license

Since there was no evidence of illegal activity or threat to public safety, the rejection was deemed to be rooted in the same impermissible reasoning previously quashed in the Shanti Gun House case

The High Court quashed the impugned order dated 07.07.2025 and allowed the writ petition

The respondents were directed to reconsider the renewal application strictly in accordance with the Arms Act and Rules and the principles laid down in M/s Shanti Gun House, with a further direction to renew the license forthwith if no legal impediment exists