1. The petitioner had applied to the District Magistrate, for grant of a 'No objection' certificate to construct a permanent cinema theatre on a site owned by him in Davangere City. By his order embodied in the Endorsement dated 29-10-1966 (Exhibit B). the District Magistrate rejected his application. In this petition under Article 226 of the Constitution the petitioner has prayed for quashing the said order of the District Magistrate. He has also prayed for quashing the order of the Government dated 26-10-1966 (Exhibit H) directing that his application for grant of a 'No Objection' certificate should be rejected, He has further prayed for a mandamus directing the District Magistrate (respondent 1) to issue him a 'No Objection' certificate.
2. The principal contention of Mr. S. K. Venkataranga Iyengar, learned counsel for the petitioner, was that the order of the District Magistrate declining to grant a 'No Objection' certificate to the petitioner, is unsustainable, as the District Magistrate did not himself exercise the discretion vested in him, but was guided by an outside authority. namely, the Government, which had no power to interfere with the exercise of his discretion.
3. In order to appreciate this contention, it is necessary to set out the relevant statutory provisions.
4. The regulation of cinematographs exhibition in the old Mysore area. Is governed by the Mysore Cinemas (Regulation) Act, 1952 (hereinafter referred to as the Act). Though the State Legislature has enacted the Mysore Cinemas (Regulation) Act, 1964 for the entire new State of Mysore, that Act has not yet come into force.
5. Section 3 of the Act provides, Inter alia, that save as otherwise provided in the Act, no person shall give exhibit by means of a cinematograph elsewhere than in a place licensed under the Act.
6. Section 4 of the Act provides that the District Magistrate shall be the authority having power to grant licenses under the Act and he is designated as the Licensing Authority.
7. Sub-section (1) of Section 5 reads:--
5. (1) The Licensing Authority shall not grant a licence under this Act, unless it is satisfied that :
(a) the rules made under this Act have been substantially complied with, and
(b) adequate precautions have been taken in the place, in respect of which the licence is to be given to provide for the safety of persons attending exhibitions therein.
8. Sub-section (2) of Section 5 provides that subject to the provisions of this Section and to the control of the Government, the Licensing Authority may grant licenses under the Act to such persons as that authority thinks fit and on such terms and conditions and subject to such restrictions as it may determine.
9. Sub-section (3) of Section 5 provides for an appeal from the decision of the Licensing Authority to the Government or such officer as may be specified in this behalf by the Government.
10. Sub-section (1) of Section 9 empowers the Government to make rules to carry out the purpose of the Act.
11. Sub-section (2) of Section 9 provides that without prejudice to the generality of the foregoing power, such rules, may, inter alia, prescribe the terms and conditions and restrictions, if any, subject to which licenses may be granted under the Act.
12. Section 11 repeals the Cinematograph Act. 1923, (hereinafter referred to as the old Act).
13. Though the Act has repealed the old Act. the Government has not framed rules under the Act. In exercise of the powers conferred by Section 8 of the old Act, the Government of Mysore has made the Mysore Cinematograph Rules. 1946. (hereinafter referred to as the Rules). Under Section 24 of the General Clauses Act. these Rules continue to be in force as if they were made under the Act, except to the extent to which they (these rules) are inconsistent with the provisions of the Act.
14. Sub-rule (1) of Rule 7-A provides, inter alia, that any person desirous of erecting a cinema theatre or converting existing premises into a Cinema, shall first make public his intention to do so by exhibiting a notice on a board on the proposed site.
15. Sub-rule (2) of Rule 7-A provides, inter alia, that such person shall also give a similar notice in writing to the Licensing Authority and make an application to him for grant of a 'No Objection' certificate.
16. Rule 7-B provides that on receipt of such notice the Licensing Authority shall notify the public of such application and invite objections within the period specified by him.
17. Sub-rule (1) of Rule 7-C provides that on the expiry of the period for receipt of such objections, the Licensing Authority shall submit a report to the Government along with his recommendation whether or not a 'No Objection' certificate should be granted.
18. Sub-rule (2) of Rule 7-C provides that on consideration of such report the Government may, in its absolute discretion, grant or refuse permission to issue of a 'No Objection' certificate to applicant.
19. The explanation to Rule 7-C provides that previous sanction of the Government shall not be necessary for grant of a 'No objection' certificate to a touring cinema and that the Licensing Authority may, himself in his discretion, dispose of the application for grant of such 'No objection' certificate.
20. Rule 7-D provides that without prejudice to his right to grant or refuse a cinema license under Rule 14, the Licensing Authority may, with the previous permission of the Government obtained under Rule 7-C, grant a certificate to an applicant that there is no objection to the location of the cinema at the site notified by the applicant under Rule 7-A.
21. Rule 11 provides that no licence shall be granted in respect of any cinema theatre unless that theatre fulfils conditions set out in Clauses (i) to (vii) therein.
22. Rule 14 provides, inter alia, that if the Licensing Authority is satisfied that the requirements of these Rules are fulfilled, he may issue to the applicant a licence for a cinema theatre.
23. Mr. Venkataranga Iyengar urged that Rule 7-C and Rule 7-D are inconsistent with the provisions of the Act and hence, cannot regulate grant of licences. Elaborating this contention Mr. Venkataranga lyengar submitted that under Sub-sections (1) and (2) of Section 5 of the Act, the Licensing Authority, namely, the District Magistrate, is vested with the power to grant or refuse license for a cinema, that that power should be exercised by him alone uninfluenced by any external authority, and that it is not permissible for him to refer to the Government any application for a 'No objection' certificate, nor is it permissible for the Government to give any direction to him as to whether a licence should or should not be granted.
24. In support of his contention. Mr. Venkataranga Iyengar relied on two decisions of the Supreme Court. In State of Punjab v. Hari Kishan Sharma, : 2SCR982 , a similar question arose under the Punjab Cinemas (Regulation) Act. 1952. Section 5 of that Act is in pari materia with Section 5 of the Act (the Mysore Act). Gajendragadkar, C. J., who spoke for the Court, said thus at p. 1084 :
'It is true that Section 5 (2) provides that the Licensing authority may grant licenses subject to the provisions of Sec tion 5 (1) and subject to the control of the Government, and it may be conceded that the control of the Government subject to which the licensing authority has to function while exercising its power under Section 5 (1) and (2) is very wide; but however wide this control may be, it cannot justify applicant No. 1 (the Government) to completely oust the licensing authority and itself usurp his functions. The Legislature contemplates a licensing authority as distinct from the Government. It no doubt recognises that the licensing authority has to act under the control of the Government, but it is the licensing authority which has to act not the Government itself. The result of the instructions issued by appellant No. 1 (the Government) is to change the statutory provision of Section 5 (2) and obliterate the licensing authority from the Statute book altogether. That, in our opinion, is not justified by the provision as to the Control of Government prescribed by Section 5 (2).
The control of Government contemplated by Section 5 (2) may justify the issue of general instructions or directions which may be legitimate for the purpose of the Act and these instructions and directions may necessarily guide the Licensing authority in dealing with applications for licences.....The said control may also involve the exercise of revisional power after an order has been passed by the licensing authority.'
25. His Lordship added that the Government has to function either as an appellate authority or a revisional authority and that the Government cannot assume for itself the powers of the Licensing Authority which have been specifically provided for by Section 5 (1) and (2).
26. A similar question arose before the Supreme Court under the Bombay Cinemas (Regulation) Act, 1953, in C. A. No. 1435 of 1970 = (AIR 1971 NSC 44), State of Gujarat v. Messrs. Krishna Cinema. Section 5 of the Bombay Act is in pari materia with Section 5 of the Punjab Act and Section 5 of the Act (the Mysore Act). Rule 5 (2) of the Bombay Cinema Rules, 1954, which is in pari materia with Rule 7-C of the Mysore Rules authorises the Government, on consideration of the report of the licensing authority, to grant, in its absolute discretion, permission to issue a 'No objection' Certificate. On behalf of the Government of Gujarat it was contended before the Supreme Court that under Rule 5 (2) of the Bombay Rules, the Government had absolute discretion to grant or refuse permission to issue a 'No Objection' certificate to an applicant. Repelling that contention. Shah J., who spoke for the Court, said that the authority to license a cinema theatre is vested in the Licensing Authority subject to the overriding control of the State Government, and that the State Government cannot, relying on the rules, assume to itself jurisdiction of the Licensing Authority to issue licence. His Lordship added that it is difficult to appreciate what purpose would be served by giving a right of appeal to the State Government, to a person aggrieved by the Order of the Licensing Authority if the original order is made under the direction and subject to the control of the State Government itself.27. In view of the aforesaid pronouncements of the Supreme Court, it is clear that the Licensing Authority should himself decide whether or not to grant licence and that the Government cannot, relying on Rule 7-C assume to itself the jurisdiction of the Licensing Authority under the Act and give any direction to him in regard to grant or refusal of licences.
28. However, the learned Government Pleader sought to draw a distinction between a licence and a 'No obiec-tion' certificate. He contended that what the Supreme Court has laid down in the aforesaid two decisions, is applicable only to grant of licences under Rule 14 of the Rules and has no application to grant of a 'No obiection' certificate under Rule 7-D. He maintained that the grant of a 'No objection' certificate under Rule 7-D is wholly outside the scope of licensing under Section 5 read with Rule 14 and that Rule-7-C which provides that the Government may, in its discretion, grant or refuse permission for issue of a 'No objection' certificate, is not inconsistent with Section 5 of the Act-29.
29. The Act does not mention of 'No objection' certificate. But. in out opinion, a 'No objection' certificate is, in substance, merely the first stage in the grant of a licence for the construction of a cinema theatre on a particular site or for conversion of existing premises into a cinema theatre. A 'No objection' certificate must be regarded as a part of a licence. The scheme of the Rules appears to be to determine in two stages, the question whether a licence should be granted to a permanent cinema. At the first stage, namely, the state of granting or refusing a 'No objection certificate, the situation of the site proposed for a permanent cinema theatre, the suitability of such site and the objections of the public for the location of the theatre, are considered.
30. Presumably, these two stages in licensing of cinema, are intended to eliminate expenditure and hardship that may result by allowing a person to construct a permanent theatre at huge expenditure and then refusing licence to run a cinema in that theatre on the ground of unsuitability of the situation of that theatre or on the ground of objections of the public. If a 'No Objection' certificate is granted to a person in respect of the proposed site after considering the objections that may be received, much of the risk and uncertainty is removed. If the grantee of a 'No Objection' certificate constructs the theatre on such site so as to conform to the conditions set out in Rule 11 and if the electrical installations are certified to be satisfactory by the Electrical Inspectorate, the grant of a licence ordinarily follows.
31. We find it difficult to accede to the contention of the learned Government Pleader that issue of 'No Objection' certificate is no part of the process of licensing. Our view that a 'No objection' certificate is a part of a licence for a cinema theatre, receives support from the following observations of Shah J. in Civil Appeal No. 1435 of 1970 = (AIR 1971 NSC 44).
'Somewhat inconsistently Rule 5 (2) (of the Bombay Cinema Rules 1954) states that the Government may grant the 'No objection' certificate which for some unexplained reason is used as a synonym for 'licence' in the Act.' Thus, it is clear that the Government cannot, relying on Rules 7-C and 7-D assume for' itself the jurisdiction to grant or refuse permission for the issue of a 'No Objection' certificate by the District Magistrate to an applicant. Rules 7-C and 7-D in so far as they purport to confer jurisdiction on the Government to direct the District Magistrate to grant or refuse a 'No Obiection' certificate to an applicant, denuding the discretion vested in the District Magistrate under Section 5 (1) and (2), are ultra vires of the Act and hence void.
32. It follows that the order of the Government dated 26-10-1966 (Exhibit H) refusing to grant a 'No objection' certificate to the petitioner and the Endorsement dated 29-10-1966 (Exhibit B) issued by the District Magistrate embodying the decision of the Government, are clearly unsustainable. We hereby quash both these orders. We now direct the District Magistrate to consider afresh the petitioner's application for grant of a 'No Objection' certificate and decide the same according to law and without referring the same to the Government and without being influenced by any order or direction issued by the Government.
33. In the circumstances of the case, we direct the parties to bear their own costs in this petition.