The illegal gun factory was functioning from Shahpur town, Station House Officer Subhash Chand of Shahpur police station said.
Acting on a tip-off, police raided the house engaged in arms manufacturing and seized 17 pistols, apparently made from the same unit, and manufacturing machines. Upon seeing the police, two persons fled.
A case was registered under relevant provisions and a team launched to get to the bottom of the case.
The unit was engaged in supplying arms during the crucial assembly elections which starts from February 11.
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