Does 5 year lock in period imposed by IOF have legal force?

[goodboy_mentor]

Can a seller of goods sell with condition that they will not be sold further for 5 years? Indian Ordnance Factories sells its pistols to arms license holders as regulated under Arms Act 1959. At the time of sale of pistols to arms license holders, IOF puts a stamp on arms license that the pistol sold by them cannot be re-sold by arms license holder for 5 years commencing from the date of sale.

Questions:

1) Since sale/resale/transfer etc. of firearms is regulated under the provisions of Arms Act 1959, does this act of stamping a condition for resale on license by manufacturer have any legal force? Does IOF have any right to override the provisions for resale of arms as provisioned under Section 5(2) of Arms Act 1959?

2) Regardless of this IOF stamp on license, is it legal to sell such firearm after giving 45 day notice as per Section 5(2) of Arms Act 1959? As per Section 5(2) of Arms Act 1959, arms license holder can sell his arms after completion of 45 days notice period given to the District Magistrate or Officer Incharge Police Station. The 45 day notice period form can be read at http://www.abhijeetsingh.com/arms/india ... notice.pdf

[nagarifle]

i suppose if one takes un undertaking then that would be a contract.

-- 29 Aug 2011, 07:25 --

on second thoughts, IOF is a governmental body with out the power to make or enforce lays. what if one sell it? would the IOF take you to court? do not thinks so as this would open up the can of worms which they would not want under any cost.

[Katana]

I suppose this condition has been kept by IOF to prevent trading in these weapons by the license holders. However, if an article is sold by IOF and monies paid to them, then it is an outright commercial transaction. On the other hand, had the system been that the license holder pays the money to the Govt. Treasury and releases the weapon thereafter, the matter would different.

I feel this form of restriction contravenes ethical sales and is a fit case for fighting it out under the Monopolies and Restrictive Trade Practices Act.

Now for the big question..........who will bell the cat? NAGRI?

[nagarifle]

I suppose this condition has been kept by IOF to prevent trading in these weapons by the license holders.

apart from the above

if one looks at the sale condition of the IOF they sell hand guns to licence holders but not the 3006 rifle. there whole policy of sale is twisted. why should the IOF prevent a licence holder form making a sale? what benefit does the IOF get? none. it actually is unfair to the buyer.

let me put it this way. you buy a car and dealer makes you take un undertaking that you can not sale it for 5 years. is that fair?

as the saying goes, they got you buy the short and the curly or as we say on the forum its the sellers market.

[goodboy_mentor]

i suppose if one takes un undertaking then that would be a contract.

I do not think it would be a contract under Indian Contract Act 1872 in the monopolistic situation enjoyed by IOF. If we refer the Indian Contract Act 1872, the contract appears void:

10- What agreements are contracts –
All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.

Is the buyer making a free consent to agree to the lock in period of 5 years? No, buyer has no other option since IOF is the only manufacturer(monopolistic and dominant position) of handguns and rifles in the country. In other words buyer is being coerced by undue influence into accepting to get his license stamped stating about a lock in period. Also "lawful consideration and with a lawful object" is getting violated as it tries to override and violate Section 5(2) of Arms Act 1959, Competition Act 2002, Indian Contract Act 1872.

16- "Undue influence" defined. defined -
(1) A contract is said to be induced by "undue influence” where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.

Due to its monopoly in the market, IOF is clearly in a position to dominate the will of the buyer and cause "undue influence"

on second thoughts, IOF is a governmental body with out the power to make or enforce lays. what if one sell it?

Exactly, IOF is not competent to make laws. Parliament has clearly formulated the law that regulates the sale/resale of such goods. Section 5(2) of Arms Act 1959 is already very clear on this matter. Nobody including IOF can override or contravene the laws of the land.

I suppose this condition has been kept by IOF to prevent trading in these weapons by the license holders.

IOF has no authourity to regulate the trading of weapons. If someone is doing a sale as prescribed under Section 5(2) of Arms Act 1959, who is IOF to prevent that sale? Is IOF not just a manufacturer selling goods for profit?

However, if an article is sold by IOF and monies paid to them, then it is an outright commercial transaction.

Exactly. IOF is not doing any philanthropy by selling arms to license holders.

I feel this form of restriction contravenes ethical sales and is a fit case for fighting it out under the Monopolies and Restrictive Trade Practices Act.

I doubt if this has any legal force of a "restriction". Yes this practice also contravenes the Section 5(2) of Arms Act 1959, Competition Act 2002, Indian Contract Act 1872.

Now for the big question..........who will bell the cat? NAGRI?

Who else except us or NAGRI with our support?

what benefit does the IOF get? none.

It is not merely a question of benefit of IOF. Even if IOF is getting a benefit, it cannot override the laws of the land i.e. Section 5(2) of Arms Act 1959, Competition Act 2002, Indian Contract Act 1872

or as we say on the forum its the sellers market.

Sellers market has been largely created by the ignorance of buyers. What to say when buyers yield up the privilege of thinking, are willing to throw around lakhs of rupees without applying their mind and buying junk in the market?

“When men yield up the privilege of thinking, the last shadow of liberty quits the horizon.” - Thomas Paine

[grewal]

It's an offer with a certain clause. And when someone accepts it as it is then that forms a contract. This is a legal contract. And in case anyone does not feels comfortable with this clause then he is free to renounce that offer. But once you abide by the clause and accept the offer by purchasing the revolver then you have to live with it for next five years. As per Indian Contract Act , it is a valid contract.

We enter into contracts so many times in a day that ‘contract’ has become an indispensable part of our life. When you purchase milk or newspaper in the morning or go to movie in the evening, you are entering into a contract. Indian Contract Act really codifies the way we enter into a contract, execute a contract, implement provisions of a contract and effects of breach of a contract. Basically, a person is free to contract on any terms he chooses. The Contract Act consists of limiting factors subject to which contract may be entered into, executed and breach enforced. It only provides a framework of rules and regulations which govern formation and performance of contract. The rights and duties of parties and terms of agreement are decided by the contracting parties themselves. The court of law acts to enforce agreement, in case of non-performance.

When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal. [section 2(a)].- - Thus, a ‘proposal’ can be to do a positive act or abstinence from act (i.e. negative act). [English Act uses the word ‘offer’, while Indian Contract Act uses the word ‘proposal’. Generally, both words are used inter-changeably. This is not technically correct, as the word ‘offer’ is not used in Contract Act].

-- Mon Aug 29, 2011 15:13 --

Is the buyer making a free consent to agree to the lock in period of 5 years? No, buyer has no other option

Yes he has the option of not entering into a contract. But incase he still buys it then he cannot show his dissent later on as he himself has ratified it .

Exactly, IOF is not competent to make laws. Parliament has clearly formulated the law that regulates the sale/resale of such goods. Section 5(2) of Arms Act 1959 is already very clear on this matter. Nobody including IOF can override or contravene the laws of the land.

I dont think IOF is making any kind of law . This is just a clause/condition laid down by the seller which is totally within the legal framework . After saying all this I still feel this clause should not be there .

[goodboy_mentor]

It's an offer with a certain clause. And when someone accepts it as it is then that forms a contract.

1)Is the IOF not inducing the buyer by undue influence due to its dominant position as defined under Section 16 of Indian Contract Act 1872? How is the buyer making a free consent under Section 10 of Indian Contract Act 1872, to agree to the lock in period of 5 years, when the buyer is already under the undue influence of IOF due to its dominant position?

2)What is the ""lawful consideration and with a lawful object" of IOF under Section 10 of Indian Contract Act 1872?

3)Can a contract override the laws of the land like the Section 10, 16 of Indian Contract Act 1872, Section 5(2) of Arms Act 1959, Competition Act 2002?

I dont think IOF is making any kind of law.

Of course IOF is not "making" any kind of law, but is it not overriding or violating the laws? The Section 5(2) of Arms Act 1959, Competition Act 2002, Indian Contract Act 1872.

[nagarifle]

simply;" a contract is a mutual agreement between two parties."

one may not sale but one can gift

IOF needs to be challenged on this issue to see the reaction.

[goodboy_mentor]

I like analogies,

Analogies do not prove the legality of the matter. If you compare one wrong thing with another wrong thing, will it prove the first wrong to be correct? IOF is selling the firearms to arms license holders, whereas examples given by you have no legal relationship or similarity with it.

You can not sell empty gas cylinder and regulators which you get on your gas connection card (=license?).Not even after 5 years.

The LPG gas cylinder or the regulator is not sold by the LPG gas company. That is why they take a security deposit for them. Instead only the gas within the cylinder is sold to the customer.

We can change operator but cannot sell the number to a third party , ever. That applies to mobile no. purchased in auction also which goes up to lakhs.

It is only the mobile service that is sold to you on a rental or prepaid basis, by the mobile telephony service provider, the telephone number is never sold to the customer, instead it is just a numerical identifier for the service being provided.

simply;" a contract is a mutual agreement between two parties."

Of course but in this case it does not seem to be the case. The buyer is not able to make free consent under Section 10 of Indian Contract Act 1872 since there is no other manufacturer of the same product in the country. If he has to buy a new product at the least price, he has to buy it from IOF only. In other words the buyer is already under the undue influence, duress of IOF due to its dominant and monopolistic position.

one may not sale but one can gift

Why he should not make a sale so long as he is satisfying the Section 5(2) of Arms Act 1959?

IOF needs to be challenged on this issue to see the reaction.

Before challanging in court, at first probably a well written grievance with legal points, lodged to the Ministry of Defense at http://pgportal.gov.in/ or a well crafted RTI application to IOF may make them think.

[nagarifle]

Before challanging in court, at first probably a well written grievance with legal points, lodged to the Ministry of Defense at http://pgportal.gov.in/ or a well crafted RTI application to IOF may make them think.

any good draft for an RTI or a letter which can be sent?

[indiaone]

The IOF is not to be blamed for this condition. It is as per the instruction of the Central Government. The main objective is to prevent black marketing in the sale of firearms.As per the present policy of the Govt, the main purpose of allowing citizens to hold arms is for protection, not for speculation in the money market or as an instrument for investment.So the no resale for 5 years has been imposed. How far it is effective, can be well judged by the prevailing price in the open market of second hand fire arms.

[goodboy_mentor]

any good draft for an RTI or a letter which can be sent?

I don't have it now, but will surely write and share it with you after I am able to get all the facts related to this matter. indiaone has said that IOF is doing it as per the instruction of the Central Government and policy ostensibly to prevent black marketing in the sale of firearms. Let me read what this instruction and "policy" is, if it is violating any law or fundamental rights.

The main objective is to prevent black marketing in the sale of firearms.

I think our babus in the Central Government who issued such instructions, need some basic course in economics If there is a demand and supply gap, prices are bound to escalate and black marketers will step in to make hay while the sun shines. Such is the demand and supply gap that IOF has a waiting list of several months for handguns. Not only black marketers, even IOF also appears to be in the same league, trying its best to make hay while the sun shines. Products of much better quality, of the type sold by IOF are available at the fraction of the cost in international markets.

It is as per the instruction of the Central Government. The main objective is to prevent black marketing in the sale of firearms. As per the present policy of the Govt, the main purpose of allowing citizens to hold arms is for protection, not for speculation in the money market or as an instrument for investment.

If you could please share the copy of the instruction of the Central Government and the "policy". I would like to read and understand them.

[nagarifle]

thinking about the lock in period. leads to the next question, do the customs have the right to impose no sale/transfer/gift etc on a firearm when doing a TR?

[goodboy_mentor]

thinking about the lock in period. leads to the next question, do the customs have the right to impose no sale/transfer/gift etc on a firearm when doing a TR?

First the reading of copy of the instructions of the Central Government to IOF and customs is required. Then we can try to find out the errors and loopholes in those instructions. As per my understanding the entire Arms Act 1959, Arms Rules 1962, Notifications issued under the Arms Act 1959, the instructions of Central Government to IOF, customs etc., placing of firearms under restricted list of EXIM Policy etc. need to be reviewed under the doctrine of strict scrutiny, since arms are a fundamental right under Articles 19 and 21 of Constitution. If any right is guaranteed as a fundamental right, regulations for it should pass the test of strict scrutiny because if the fundamental rights are allowed to be regulated, restricted or subverted under flimsy grounds, the very purpose of guaranteeing fundamental rights gets defeated. The following are the conditions under strict scrutiny to be met by the legislation or policy:

1) The State has the burden of proving that its challenged legislation/policy is Constitutional.

2) The State must show that its legislation/policy is necessary to achieve a compelling state interest.

3) If points 1 and 2 are proved then the State must then demonstrate that the legislation/ policy is narrowly tailored to achieve the intended result.

The details about strict scrutiny can be read at http://lawandotherthings.blogspot.com/2 ... clear.html
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Does anyone have copies of all the notifications(other than those already mentioned at http://indiansforguns.com/viewtopic.php?f=4&t=7707) which impacts gun ownership in any manner, issued under Arms Act 1959 or under any other law? If yes please share.