Licensing authorities must provide a hearing before refusing licence renewal, aligning with principles of natural justice and constitutional guarantees.

1. This Special Appeal has been preferred against the judgement of a learned Single Judge allowing a petition under Art.226 of the Constitution

2. The respondent carries on business as an arms dealer at Gorakhpur under the name Gorakhpur Arms Corporation and at Lucknow under the name Indian Arms Corporation. The licences held by the respondent in the name of the Gorakhpur Arms Corporation in Forms Nos. IX, X, XII and XIII and in the name of the Indian Arms Corporation in Forms Nos. IX, X and XII expired and the respondent applied for their renewal. The State Government by two separate orders dated August 17, 1964 refused to renew the licences. The orders purported to be under S.14(1)(b)(i)(3) of the Arms Act . 1959 read with S.15(3) of that Act. The orders declared that the State Government had reason to believe that the respondent was not fit to hold the licences. It came to that belief on information which appeared to show that the respondent had contravened the conditions of the licences The orders alleged a number of transactions in breach of the licences and falsification of the stock registers maintained by the respondent.

3. The respondent filed a petition for certiorari against the orders of August 17, 1964. The writ petition has been allowed by Broome, J. He has held that the State Government was bound to afford a hearing to the respondent before renewal was refused, and as that opportunity was not extended he has quashed the impugned orders and directed the State Government to consider the respondents renewal application afresh and, if grounds for refusal were found to exist to inform the respondent of them and give him an adequate opportunity of being heard before final orders were made.

4. The State of Uttar Pradesh now appeals.

5. The question before us is whether the respondent was entitled to a hearing before renewal of his licences was refused ft n urged by the appellants that the law casts no duty upon the licensing authority to hear a person before refusing to renew his licence. The powers exercised by the licensing authority in the matter, it is said, are not quasi - judicial but fall entirely within its administrative discretion.

6. The impugned orders have been made under the Arms Act , 1959 but before that Act was brought on the statute book the law governing such matters was set out in the Indian Arms Act , 1878. To appreciate the scope and limitations of the powers conferred by the Arms Act , 1959, it will be pertinent to briefly refer to some provisions of the enactment which preceded it. S.5 of the Indian Arms Act , 1878 required that a person intending to manufacture, convert or sell arms and ammunition must take out a licence. S.14 similarly required a licence if a person intended to keep fire arms or ammunition in his possession of under his control. The Act did not specify the grounds upon which a licence could be granted of refused under S.5 and S.14 nor the conditions subject to which such licence could be granted. The power conferred upon the licensing authority was not circumscribed by any express limitations S.18 provided for the cancellation of suspension of a licence. Here again apart from the case where the licence - holder is convicted of an offence under the Act or the rules made thereunder, the section did not expressly specify the grounds upon which the licence could be cancelled or suspended. The only requirement mentioned was the recording of reasons in writing for such order. It must be remembered that the Indian Arms Act , 1878 was enacted in an age when the British Government had, only some years before, quelled a massive uprising which had threatened to remove British power from the country altogether and when considerations of military ascendancy and law and order were paramount in the cons