Let them refuse arms license, nothing to worry. Get the reason for refusal in writing and approach High Court. No amount or type of civil cases have any effect on your right to get arms license. Rights and duties are two sides of the same coin. Since arms are acknowledged as fundamental right of citizens by Article 19(1)b, that is exactly why there is corresponding and equivalent fundamental duty to defend the country(surely defend the country with arms and not with bare hands!) under Article 51A(d). In other words the doctrine about the necessity of arms as fundamental right of free citizens to maintain a free State in the 2nd Amendment of the US Constitution also exists very much in the Indian Constitution.
One needs to understand that wherever in Article 19(1) two rights of citizens are joined, they are joined with conjunction "and". When Article 19(1)(a) says "to freedom of speech and (with) expression", since fundamental rights are negative rights, it also includes another unstated combination "to freedom of speech and without expression".
Similarly when Article 19(1)(b) says "to assemble peaceably and without arms", it also includes another unstated combination "to assemble peaceably and (with) arms". This combination of two fundamental rights(to assemble peaceably and (with) arms) gets reflected in the corresponding fundamental duty of citizens in from of Article 51A(d) and other statutory provisions flowing from Article 51A(d) like The Punjab Village and Small Towns Patrol Act, 1918 or The Himachal Pradesh Village and Small Towns Patrol Act, 1964.
If you further analyze the provisions of Arms Act 1959 and its Objects and Reasons, you will further find details about this fact. One of them is the separate use of words "citizen" and "person" since citizens enjoy enhanced protection of their rights under Article 19.
Anything that is an offense under Part III of the Constitution, even the State is not exempt from that offense because of equality before law as per Article 14. For example murder, kidnapping etc. are offenses under Part III, thus no exemption under law for State for these offenses. Surely arms are not an offense under Part III of the Constitution that is why the State is exempt from the Arms Act 1959. Since arms are not an offense under Part III, then what are arms for Article 19(1)(b) when there exists Article 19(3)? They are nothing but fundamental right under Part III.
Arms Act 1959 is flowing from the Constitution and arms license is not a privilege granted by the Government. It is also a legal fact that Government has no discretion to refuse except only refusal as is allowed in the Arms Act 1959. In other words if the person is not offending Sections 9 and 14 of Arms Act 1959, it is his right to get a license. Since it is a matter of right, that is why Section 14(2) prohibits refusal of license merely on the ground that person does not own or possess sufficient property. Since it is a matter of right, that is why Section 14(3) makes it mandatory for licensing authority to give the refusal of license in writing, so that applicant can approach High Court or Supreme Court to get his right enforced. There are plenty of related High court judgments. Also Supreme Court has held in Ranjit Singh Etc. Etc vs Union Of India on 26 September, 1980 that that “An applicant for a license is entitled to have it considered in accordance with the terms of the statute and to press for its grant on the basis of the criteria set forth in it”. Moreover Supreme Court has held in Poonam Verma & Ors vs Delhi Development Authority on 13 December, 2007 that "Guidelines per se do not partake to the character of statute. Such guidelines in absence of the statutory backdrop are advisory in nature. This is because guidelines, by their very nature, do not fall into the category of legislation, direct, subordinate or ancillary. They have only an advisory role to play and non-adherence to or deviation from them is necessarily and implicitly permissible if the circumstances of any particular fact or law situation warrants the same."
For further details one may read this link also https://www.lawyersclubindia.com/forum/RKBA-guaranteed-under-Articles-19-and-21-of-Constitution-36011.asp
Since Section 3 of Arms Act as it stands today((self incriminating), parallel case law can be read in HAYNES v. UNITED STATES, 390 U.S. 85 (1968). It can be read here https://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=US&vol=390&invol=85), the usual course of action after refusal is to approach High Court to get the right enforced. If anyone has any specific question related with Arms Act 1959, he may feel free to discuss.
