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isherdas Sahni and Brothers Vs. the District Magistrate, Lucknow and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtAllahabad High Court
Decided On
Case NumberWrit Petn. No. 97 of 1970
Judge
Reported inAIR1972All83
ActsUttar Pradesh Cinemas (Regulation) Act, 1956 - Sections 13; Uttar Pradesh Cinematograph Rules, 1951 - Rule 2; Cinematograph Act, 1918 - Sections 5(3) and 9
Appellantisherdas Sahni and Brothers
RespondentThe District Magistrate, Lucknow and anr.
Appellant AdvocateSudhir Shankar and ;Y.S. Srivastava, Advs.
Respondent AdvocateChief Standing Counsel and ;S.C. Khare, Adv.
DispositionPetition dismissed
Excerpt:
commercial - lease - section 5 and 13 of u.p. cinemas (regulation) act, 1965 and section 5 of cinematograph act, 1918 - lease agreement of cinema building entered - cinematograph license taken - dispute arose - landlord ordered for vacation of building and applied for license - lessee did not vacate, applied for renewal of license - temporary license granted - license is issued keeping in view the place and the person - licensee is liable for any non-compliance - licensee must have a legal right on premises - person must own, hold lease or manage premises for effective possession - premises to be vacated. - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m......gur sharan lal, j.1. in this writ petition the petitioner firm, namely, isherdas sahni and brothers, seeks to get quashed by a writ in the nature of certiorari or like writ, order or direction, three orders contained in annexures 13, 14 and 18 to the writ petition, the first and the third having been passed by the government of uttar pradesh impleaded as opposite party no. 2 and the second one by the district magistrate of lucknow (opposite party no. 1) acting as the licensing authority under section 4 of the u. p. cinemas (regulation) act, 1955. it also seeks the issue of a writ in thenature of mandamus to opposite party no. 1 aforesaid to grant to the petitioner firm cinematograph licence for the basant cinema at lucknow so long as it continues to enjoy the possession of the said cinema.....
Judgment:

Gur Sharan Lal, J.

1. In this writ petition the petitioner firm, namely, Isherdas Sahni and Brothers, seeks to get quashed by a writ in the nature of certiorari or like writ, order or direction, three orders contained in Annexures 13, 14 and 18 to the Writ Petition, the first and the third having been passed by the Government of Uttar Pradesh impleaded as opposite party No. 2 and the second one by the District Magistrate of Lucknow (Opposite party No. 1) acting as the licensing authority under Section 4 of the U. P. Cinemas (Regulation) Act, 1955. It also seeks the issue of a writ in thenature of mandamus to opposite party No. 1 aforesaid to grant to the petitioner firm cinematograph licence for the Basant Cinema at Lucknow so long as it continues to enjoy the possession of the said cinema premises and complies with all the formalities of Cinematograph Act and the rules. An interim relief in the form of grant of cinematograph licence was also prayed for but the same was not allowed and it was decided to hear the writ petition itself at a very early date. The facts and circumstances leading to the making of this writ petition are briefly given hereinafter.

2. The building, a part of which is known as Basant Cinema, was constructed by Sri Moti G. Thadani and Smt. Padma Thadani. A lease for the Basant Cinema was given by the said owners for a period of five years to the petitioner firm and a deed of lease was executed on 29-11-1947. Sri Amrit Lal Sahni, partner of the firm, took cinematograph licence for Basant Cinema and started exhibiting cinematograph films in the Basant Cinema. The lease was renewed from time to time, the last renewal being by means of a deed dated 5-12-1960, which was for a period ending on 31-5-1966. Sri Sahni of course got a renewal of the Cinematograph licence from year to year. Disputes arose between the landlords and the petitioner firm on the expiry of the period of lease on 31-5-1966. The lease covered also fittings and fixtures in the premises of Basant Cinema such as fans, electric boards and the air cooling plant. The landlords wanted the premises to be vacated and in fact Sri Moti G. Thadani made an application to the District Magistrate Lucknow for the issue of a licence to him with effect from 1-6-1966.

The firm on the other hand did not vacate the premises and continued in possession, though without the consent of the landlords, and applied for renewal of the licence. The renewal of the licence in favour of the petitioner firm in March, 1966 was only for two months ending on 31-5-1966. The District Magistrate later granted licence for a further period of three months commencing from 1-6-1966 and required the licensee to obtain a recognition of its rights in the cinema premises from an appropriate court of law if it wanted renewal of licence for a further period. The petitioner firm therefore filed a suit on 3-7-1966 in the Civil Court at Lucknow for the declaration of rights in the premises and also seeking an injunction directing the landlords to restore and continue the supply of electric energy which had been disconnected by the landlords. The firm also obtained an interim injunction in regard to the supply of electric energy which order however led to further litigation at higher level between the parties.

The claim of the petitioner firm in the suit was that by reason of the provisions of the U. P. (Temporary) Control of Rent and Eviction Act, 1947, which was applicable to the cinema premises leased out to it, the firm had a right to continue in possession even after the expiry of the period of lease fixed by the deed of lease. The landlords on the other hand also filed a suit on 27-7-1966 for the ejectment of the tenant firm on the ground that the provisions of the just mentioned Act did not apply to the premises and that, in any case, for eviction no permission of the District Magistrate under Section 3 of the Act was required as the tenant firm had denied the title of the landlords and had caused substantial damage to the building. It may be stated that these two suits came to be decided by means of a common judgment only on 30-11-1970. It was held by the court deciding the suits that the U. P. (Temporary) Control of Rent and Eviction Act was applicable to the Basant Cinema premises and by reason of that Act the tenant firm continued as a tenant on the expiry of the lease period on 31-5-1966 but that because of the denial of the title of the landlords by the tenant the landlords could sue to evict the tenant firm. The suit filed by the landlords for ejectment was accordingly decreed and the suit filed by the tenant firm was dismissed. The impugned orders had however been passed before the decision of the two suits in circumstances presently to be mentioned.

3. After the expiry of the renewal period of three months the petitioner firm applied for further renewal, giving put that it had instituted a suit to get its rights in respect of the cinema premises adjudged and declared. The prayer was contested by the landlords. The licence was renewed for short periods to enable the State Government to take a decision in the matter. The State Government decided that the licence be renewed no further after 30-11-1966. A writ petition was filed by the petitioner firm against the order refusing to renew the licence but it was dismissed since it became infructuous on account of the expiry of the renewal year 1966-67 on 31-3-1967. A fresh application for grant of cinematograph licence for 1967-68 was made by the petitioner firm and as per order dated 26-5-1967 (Annexure 3to the writ petition) a licence was granted for the period ending on March 31, 1968. Before this order was passed the State Government had issued ft general letter dated 25-5-1967 (of which copy is Annexure 2 to the writ petition) laying down certain guiding principles for the District Magistrate as licencing authority in granting or refusing licences in cases where there was dispute between the persons applying for licences or renewal thereof and their landlords.

The licence to the petitioner firm was granted on the basis of the guidance or directions of the State Government contained in the said letter. The licence was renewed again for the year 1968-69. When however the petitioner firm applied for renewal of the licence for the year 1969-70 the renewal was made only for one month ending on 30-4-1969 (Vide Annexure 4 to the writ petition). This was because the landlords had again objected to renewal and pointed out that there was no extension of lease in favour of the firm. The petitioner firm sent a reply (Annexure 5 to the writ petition) and prayed therein for renewal upto 31-3-1970. The request was however turned down. An appeal filed by the firm before the State Government against the order of the District Magistrate was however allowed by order dated 3-6-1969 (Annexure 8 to the writ petition) to this extent that the licence was ordered to be renewed for a period of three months. The renewal appears to have been made for three months only because the litigation pending in the Civil Courts between the parties was yet undecided. It does not appear from the writ petition whether there was a further renewal of the licence upto 31-3-1970 or not. The landlords filed a writ petition against the appellate order of the State Government but the same was pending till the writ petition under judgment was filed.

4. The petitioner firm applied again for the renewal of licence for the year 1970-71 but was informed by the District Magistrate by means of an order dated 4-4-1970 (Annexure 9) that the licence had been renewed for one month ending on 30-4-1970. The firm wrote back to the District Magistrate giving facts and praying for renewal upto 31-3-1971. The District Magistrate sent some queries for being answered by the petitioner firm in view of another circular letter issued by the State Government on 4-4-1970, being the impugned Annexure 13 to the writ petition, which letter was issuedin supersession of the earlier letter dated 25-5-1967 (Annexure 2 already mentioned) and avowedly upon a fresh consideration of the matter. On receipt of the reply of the petitioner firm (copy is Annexure 12) the District Magistrate passed the impugned order dated 27-4-1970 (Annexure 14) refusing to renew the licence after the expiry of its period on 30-4-1970. The petitioner firm thereupon filed a writ petition (No. 478 of 1970) in this court on 29-4-1970 to get quashed the said order of the District Magistrate.

The writ petition was admitted but the request for interim relief in the form of directing the District Magistrate to renew the licence was rejected. Thereupon, on the plea that a technical objection might be raised that the petitioner firm had filed the writ petition without taking recourse to the remedy of appeal to the State Government against the order of the District Magistrate, the firm successfully applied for being permitted to withdraw the writ petition with right to bring a fresh one if necessary. The petitioner firm then filed an appeal before the State Government but the same was rejected by order dated 16-10-1970. The order communicated to the petitioner firm is Annexure 18 to the writ petition. It will thus appear that Annexures 13, 14 and 18 which are sought to be quashed are respectively the revised circular letter of the State Government dated 4-4-1970, the order of the District Magistrate refusing to renew the licence for the period commencing on 1-5-1970 and the appellate order of the State Government confirming the order of the District Magistrate.

5. Counter affidavits of two persons were filed on behalf of opposite party No. 1, the District Magistrate of Lucknow. Another counter affidavit was filed on behalf of opposite party No. 2, the State of Uttar Pradesh. The petitioner firm has filed one rejoinder affidavit covering the said three counter affidavits. An application was made by the landlords. M.G. Thadani and Smt. Padma Thadani praying for their being impleaded as opposite parties in the writ petition. An application was also made by them for the dismissal of the writ petition on the ground that the said landlords had not been impleaded as parties in the writ petition. The second application was rejected by us and on the first application it was ordered that the said landlords could file a reply to the writ petition and would be heard in opposition to the writ, petition. A rejoinder affidavit was filed by the petitioner firm in respectof the counter affidavit of the landlords as well.

6. For a proper appreciation of the grounds on which the quashing of the impugned orders has been claimed it is necessary to mention some facts about the law governing the subject under consideration. Originally the Cinematograph Act, 1918 which applied to the whole of India, regulated exhibitions by means of cinematographs. It provided that no person would give an exhibition by means of a cinematograph elsewhere than in a place licenced under that Act or otherwise in compliance with any conditions and restrictions imposed by such licence. The District Magistrate was made the licencing authority except that, in a presidency Town, the Commissioner of Police was to be such authority and the local Government could constitute any other authority for the purpose by notification in the gazette. Section 5 of the Act laid down certain restrictions on the powers of the licencing authority in the matter of grant of cinematograph licence. No licence was to be granted unless the licencing authority was satisfied that the rules made under the Act had been substantially complied with and adequate precautions had been taken in the place in respect of which the licence was to be given to provide for the safety of persons attending exhibitions therein.

A certain condition (which need not be detailed) was also required to be inserted in every licence. Subject to the above and to the control of the local Government, the licensing authority was permitted to grant licence to such persons as it thought fit and on such terms and conditions and subject to such restrictions as it might determine. By Section 8 (1) power was given to the Governor General in Council to make rules for the purpose of carrying into effect the provisions of the Act. Section 8 (2) laid down that in particular, the rules could provide for the regulation of cinematograph exhibitions for securing the public safety; the procedure of the authorities to constitute for examining and certifying as fit for public exhibition, etc., and any other matter which by the Act was to be prescribed. The section however permitted the Governor General in Council to delegate to a Local Government the power to make rules on the subject given in Clause (a) of its Sub-section (2), that is to say, in regard to the regulation of cinematograph exhibition for securing the public safety, so far as regards the territories subject to that Government. By amendment of the section by ActNo. 23 of 1919, the scope of delegation of rule making power to the Local Government was extended to all matters given in the several clauses of Sub-section (2) of Section 8. The Local Government in the United Provinces made rules in 1921 and then in 1930 on those subjects.

The Cinematograph Act, 1918 was amended by Act No. 62 of 1949. Sub-sections (2) and (2a) of Section 5 of the Act were substituted by the Amending Act but Sub-section (3) remained intact, retaining as before the control of the State Government over the licensing authority in the matter of grant of licences. Section 8 of the Act which provided for the making of rules was substituted by another section providing for another matter and making of rules was provided for in the newly substituted Section 9. Under the said Section 9, the power to make rules to provide for the regulation of Cinematograph exhibition for securing the public safety was conferred on the Provincial Government directly; in other words, the Provincial Government remained no longer dependent upon any delegation of powers from the Central Government to make such rules. Otherwise however the rule making power was given exclusively to the Central Government. Superseding the Rules framed in 1930, the Government of United Provinces made the Uttar Pradesh Cinematograph Rules, 1951 by notification No. 197/III-7(5)-48, dated 22-1-1951. As we find from the notification, the State Government, oblivious of the change effected by the amending Act of 1949, still referred to Section 8 as the section giving power for making rules instead of Section 9, and the rules made were as comprehensive as before.

7. In the Rules aforesaid, Rule 2 which contains definitions defines 'licence' to mean 'a written authorisation by the licensing authority to give cinematograph exhibitions and granted in the form set out in Appendix I to these rules and shall be subject to necessary modifications or amplifications in accordance with any term or conditions imposed under Sub-section (3) of Section 5 of the Act'. Rule 7 laid down conditions for granting and renewing a licence. These conditions did not provide for the person asking for a licence for cinematograph exhibition being the owner or the lessee of the place to be licenced though Rule 4 dealing with the requirement of an application for a licence did provide that an application for the grant of a new licence for cinematograph exhibition should contain full particulars of the ownershipof the premises and the cinematograph machine besides other information. However the form given in Appendix I to the rules contains as second paragraph thereof the following :--

'This licence had been granted to (c) ............... and shall be terminated forthwith if the said (c) ............ ceases to own, to hold on lease or to manage the said (a) ............'

According to the foot notes, at the place indicated by '(c)' the name of the person to whom licence is granted is to be filled and at the place indicated by '(a)' the place licensed is to be indicated. The above quoted provision obviously implies that the licence is to be granted only to a person who owns or holds on lease or manages the place to be licensed for cinematograph exhibition. In 1952 Parliament passed the Cinematograph Act, 1952. By Section 18 thereof it repealed the Cinematograph Act, 1918 with the proviso however that in relation to part A States and part B states the repeal was to have effect only in so far as the said Act (Act of 1918) related to the sanctioning of cinematograph films for exhibition. In other words, the Act of 1918 was kept intact for part A States and Part B States except in so far as it related to the sanctioning of cinematograph films for exhibition. Several States thereafter enacted their own legislation.

For the regulation of cinematograph exhibitions in Uttar Pradesh, the U. P. Cinemas (Regulation) Act, 1955 was passed and came into effect from January 23, 1956. The Cinematograph Act of 1918 was repealed by Section 12 of the U. P. Act in so far as it was still in force in Uttar Pradesh. Under the U. P. Act the State Government was given the power to make rules for the purpose of carrying the provisions of the Act into effect and certain subjects were particularly specified in Sub-section (2) of the section on which the State Government could make rules. One such subject was 'the terms, conditions and restrictions subject to which licence may be granted.'

The U. P. Government did not however make any rules under Section 13 of the said Act. It no doubt made some amendments, in the rules made by it in 1951 as aforesaid under the Cinematograph Act, 1918, presumably on the supposition that those rules were continuing in force even after the passing of the Uttar Pradesh Cinemas (Regulation) Act, 1955.

8. In the writ petition the order of the District Magistrate refusing to renew the licence in favour of the petitioner has been questioned as invalid on a numberof grounds. It has been asserted that the petitioner firm is continuing to be the tenant by reason of the provisions of the U. P. (Temporary) Control of Rent and Eviction Act and, further, the petitioner is in any case in effective possession and management of the cinema premises and it is therefore a wrong exercise of jurisdiction by the District Magistrate to refuse to renew the licence on the ground of the period of lease under the deed of 5-12-1960 having expired. The provision in the Form of the licence which had been prescribed in Appendix I of the U. P. Cinematograph Rules was borrowed from an earlier Form prescribed under the Cinematograph Act, 1918 at a time when no such Act as the U. P. (Temporary) Control of Rent and Eviction Act was in existence and so it is urged that it cannot govern the case of the petitioner firm. Another ground is that under the U. P. Cinemas (Regulation) Act, 1955 effective possession of the premises coupled with the ability to manage the cinematograph shows is the criterion for the grant of a cinematograph licence and all other restrictions provided in the rules are beyond the rule making powers under the said Act. It is said that the rules of 1951 narrowing the qualifications for grant of licence are illegal, ineffective and void and also stand repealed whereas no new rules have yet been framed under the U. P. Act.

By amendment of the petition two new grounds have been introduced. One is that the power of the State Government of Uttar Pradesh to make rules under Section 9(2) of the Cinematograph Act, 1918 was confined to rules for the purpose of public safety and the rules of 1951 actually framed by the U. P. Government were ultra vires being unrelated to requirements of public safety. Another ground is that the form of licence requiring the licensee to be owner, lessee or manager of the place to be licensed was also beyond the rule making power of the State Government as the restriction imposed was unrelated to the object and purpose of the Act. Certain other grounds of attack against the discretion of the District Magistrate in refusing the renewal of the licence will be referred to later on, the same being mostly obviously irrelevant or untenable. The impugned appellate order confirming the District Magistrate's order refusing to renew the licence is said to suffer from the same defects. As to the remaining impugned document Annexure 13, which is the revised circular letter from the State Government to all District Magistrates laying down asto when licence should be renewed and when renewal refused, the contention of the petitioner is that the State Government cannot by an administrative circular interfere with the statutory functions vested in the District Magistrate and the said circular unduly fetters the discretion of the licencing authority.

9. We have heard Shri S.N. Kakkar Advocate (Allahabad) for the petitioner, the Chief Standing Counsel for the opposite parties and Shri S.C. Khare, Advocate (Allahabad) for the landlords Shri M.G. Thadani and Smt. Padma Thadani. We proceed to consider the various pleas raised on behalf of the petitioner in the light of the replies thereto from the opposite parties and the landlords.

10. The validity of the provision in the licence form given in Appendix I to the U. P. Cinematograph Rules, 1951 that the licence shall be terminated forthwith if the licensee ceases to own, to hold on lease or to manage the licensed premises has been challenged in two ways. One contention is that Section 9(2) of the Cinematograph Act 1918 conferred limited power upon the State Government to make rules, that is to say, the power was confined to making rules to secure the public safety, but the rules framed by the State Government in 1951 went beyond the scope of that power. The second contention is that even if the rules as a whole were within the scope of the State Government's rule making power, the particular provision aforesaid in the licence form was ultra vires because while on the one hand there was no express authorisation to make a rule having such a provision, on the other it was also beyond the object and purpose of the Act. The condition about the licensee being an owner, lessee or manager is challenged on this very ground even if it be sought to be justified by the power of control of the State Government in the matter of grant of licences conferred by Section 5(3) of the Cinematograph Act, 1918 and later by Section 5 (2) of the U. P. Cinemas (Regulation) Act, 1955. It may be stated that the opposite parties do contend that the condition would be justified as a condition of licence laid down by the State Government in exercise of the power of control conferred under the just mentioned sections.

11. In regard to the first contention it may again be stated that the effect of the amendment of the Cinematograph Act, 1918 in 1949 was on the one hand, to curtail the power of the State Government so as to confine it again to making of rules only for regulation of cinematograph exhibitions for securing the public safety and on the other hand, to enlarge it in one sense, namely, to frame such rules by its own without depending upon delegation by the Central Government. Under the U. P. Cinemas (Regulation) Act, 1955 the State Government is of course the sole authority to make all rules on matters covered by the Act but because no rules have been framed afresh under the said Act by the State Government of Uttar Pradesh, the contention of the learned counsel for the petitioner is that the validity of the U. P. Cinematograph Rules, 1951 has to be judged with reference to the power possessed by the State Government under the Cinematograph Act, 1918 and if any rule was ultra vires of that power then it was as good as non-existent and it cannot be regarded as having continued in force by reason of the provisions of Section 24 of the U. P. General Clauses Act or Section 12 of the U. P. Cinemas (Regulation) Act.

It may be stated that Sub-section (1) of the said Section 12 repealed the Cinematograph Act, 1918 in so far as it related to matters other than the sanctioning of cinematograph films for exhibition in its application to the State of Uttar Pradesh. Sub-section (2) thereof provided for continuing in force of any order made under the Cinematograph Act, 1918, and all appointments made, licences granted, conditions or restrictions imposed and directions issued under any such order and in force immediately before the commencement of the U. P. Cinemas (Regulation) Act and for the same being deemed to be made, granted, imposed or issued in pursuance of the U. P. Act. The contention of the learned counsel for the petitioner is that the said Sub-section (2) or Section 24 of the U. P. General Clauses Act could continue only what was valid under the Cinematograph Act, 1918 and not anything which was ultra vires and therefore as good as nonexistent. A perusal of the U. P. Cinematograph Rules, 1951 shows that at least most of the rules therein unquestionably relate to matters concerned with securing the public safety at cinematograph exhibitions. In order to be able to enforce the rules the State Government had obviously also the authority to provide for laying down the form of licence containing conditions provided for in the Rules. It is however being contended that the provision that the licensee should be a person who is the owner, lessee or manager of the premises to be licensed for cinematograph exhibition has no relevancy to the question of securing the public safety.

In our view the expression 'the regulation of cinematograph exhibitions for securing the public safety' has a wide connotation and includes regulating cinematograph exhibitions for the protection of the interests of all concerned or the public in general. It is true that the licence is granted with respect to a certain place but it has to be granted to a particular person who would be charged with the duty of observing the conditions and restrictions mentioned in the licence and the provisions of the Act and the rules made thereunder. The public safety cannot be secured unless the licensee is not only a person who is liable to penalty for not making compliance with the requirements of the licence, the Act and the rules, but is also legally in a position to do so; obviously such person must have a legal connection with the premises to be licensed and cannot be a person having in law no legal interest in it or who is merely a trespasser. It will thus appear that one of the requirements of securing the public safety will legitimately be the grant of licence to a person having the necessary legal right in the premises to be licensed. The requirement, according to the licence form, that the person to be granted the licence must own, hold on lease or manage the premises to be licensed is thus a requirement for securing the public safety. Whether, as argued for the petitioner, it is excessive in nature in so far as it does not include a person in 'effective' possession of the premises to be licensed will be considered later.

12. Learned counsel appearing for the landlords has submitted before us that the U. P. Cinematograph Rules, 1951 remained in force by virtue of Section 24 of the U. P. General Clauses Act and that Rule 7 thereof was at first amended by Notification No. XX-L-I 1968-Sa Pr-VI dated February 10, 1969 in exercise of the power conferred by Sub-section (1) of Section 13 of the U. P. Cinemas (Regulation) Act, 1955 read with Section 21 of the U. P. General Clauses Act, 1904 and Sections 21 and 24 of the General Clauses Act, 1897 and again by another Notification No. XX-L-I/1969-GAD dated June 11, 1969 published in the U. P. Gazette Part I-A dated 21-6-1969. In Rule 7 as substituted by the first notification as also in the same rule as again substituted by the second notification, it was provided that one condition for granting and renewing a licence will be that 'the licencing authority is satisfied that the requirements of these rules have been fully complied with'. The contention of the learned counsel for the landlords is thatthe substitution of Rule 7 containing the above requirements implied that the State Government adopted the rules of 1951 and thus even if the licence form containing the questioned provision was not within the rule making power of the State Government in 1951, it became valid and operative upon being adopted by the State Government in exercise of its powers under the U. P. Cinemas (Regulation) Act, 1955. We are unable to accept this contention. If the licence form was invalid to the extent it contained the provision of automatic cancellation of the licence if the licensee ceased to own, to hold on lease or to manage the licensed premises, the rule could not be validated in exercise of the rule making power under the U. P. Cinemas (Regulation) Act in this indirect manner and without either re-enactment or express validation. In this connection learned counsel for the petitioner has relied upon a decision of this Court in Banwari Lal Tandon v. Military Estates Officer, 1969 All LJ 499 and that no doubt lends support to his contention.

13. Learned counsel for the landlords has however contended that even if the provision in the form of licence, Appendix I (which is to be treated as part of the definition of licence in Clause (v) of Rule 2 of the U. P. Cinematograph Rules, 1951) is regarded as not being within the competence of the rule making power of the State Government conferred by Section 9 of the Cinematograph Act 1918, it will be valid as general direction imposing a condition of licence given in exercise of the power of control conferred by Section 5(3) of the Cinematograph Act, 1918 and maintained intact under Section 5 (2) of the U. P. Cinemas (Regulation) Act, 1595. As pointed out earlier, the licensing authority cannot grant a licence unless it is satisfied that the rules made under Act have been substantially complied with and 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. Identical provisions exist in both the Acts in this respect: Section 5(1). But, in addition, Section 5(3) of the Cinematograph Act, 1918 and Section 5 (3) of the U. P. Act which has been in force from early 1955 further provide that the power of the licencing authority to grant licences shall be subject to the control of the State Government. In The State of Punjab v. Hari Kisham Sharma, AIR 1966 SC 1081 it was recognised that the control of the State Government under Section 5(3) of the Cinematograph Act, 1918 is very wide.In Ankam Madhava Rao v. Andhra State Government, Kurnool, AIR 1955 Andhra 123 also it was held that the State Government's control is wide and would embrace the power to issue appropriate instructions to the licencing authority.

The reply to this argument on the petitioner's behalf is that the alternative power under Section 5(3) of the Cinematograph Act, 1918 could justify the condition in the licence form about the relationship of the licensee to the licenced premises only if it had been claimed by the Govt. that it had exercised the power under Section 5(3) of the said Act. Further as laid down in the just cited Andhra Pradesh case, any direction or instruction given in exercise of that power should be with the intendment and object of the Act and must be correlated to the purpose of the Act. The second point will be dealt with later. As to the first, it is obvious that it is only when there is a wrong reference to a power that the question can arise whether it can be justified by a different power possessed under the same enactment. In the instant case the notification showed that the State Government purported to exercise their power under Section 8, the Cinematograph Act, 1918 Actually, when the rules were made, Section 8 did not deal with the subject of rules at all and it was Section 9 which conferred power to make rules. If the State Government had not been in error and had realised that by the amendment its power to make rules had been curtailed in the matter of subjects, it might have thought of combining the power under Section 5(3) of that Act along with the power under Section 9 to make the provisions which it thought as necessary by way of conditions of licence to be imposed in general.

Where it did not cite correctly even the provision relating to rule making power there is no reason why it should not be possible to justify the provisions under the correct powers actually possessed under the Act. Learned Counsel for the petitioner has however pointed out that the State Government has not taken the plea that the disputed condition in the licence form may be taken to have been provided for in exercise of the power of control under Section 5(3) of the Cinematograph Act, 1918. The amendment in the Writ Petition came after the filing of the counter-affidavit on behalf of the State Government. Apart from that, the counter-affidavit is to contain assertions of facts and it is not like a written statement which sets out evenlegal pleas in defence. It was open to the State Government to contend in the course of arguments that the power under Section 5(3) would cover the provision of the disputed condition of the licence form. Shri Kakkar cited the case of Dr. Bhagawan Saran Saxena v. State of Uttar Pradesh, Civil Misc. Writ No. 5517 of 1970, D/-22-1-1971 (reported in 1971 Lab IC 1002 (All)) decided by G.C. Mathur, J. That case is distinguishable. There the petitioner was retired under Article 465-A of the Civil Service Regulations where the power existed for the retirement of the petitioner only under Article 465 of those Regulations and the State did not (sic) the case that the retirement was alternatively under Section 465. It was held that the retirement was invalid because different considerations governed the order to be passed under the two Articles and unless action had been wittingly taken under Article 465 on considerations relevant to that Article, retirement under the Article would not be justified.

14. One more case has been cited in this connection and that is P. Balakotaiah v. Union of India, AIR 1958 SC 232. That case is also distinguishable. In that case action against railway servants had been taken under the Railway Security Rules. The persons punished filed writ petition on the ground that the said rules were ultra vires. The High Court of Nagpur dismissed the writ petition on the ground that the order could be sustained under Rule 148 of the Railway Establishment Code. That ground was not merely not in the contemplation of the authorities who took action when they passed the impugned orders but was not even raised in the pleadings before the High Court. The Supreme Court held that though no exception could be taken to the proposition that when an authority passes an order which is within its competence, it cannot fail merely because it purports to be made under a wrong provision if it can be shown to be within its powers under any other rule, and that the validity of an order should be judged on a consideration of its substance and not its form. The Supreme Court, however, thought that the proposition was not applicable to the case before it because it had not been the contention of the authorities at any stage that the orders in question were really made under Rule 148 (3) of the Railway Establishment Code and that a reference to Rule 3 of the Security Rules in the procecdings might be disregarded as due to a mistake.

There were two entirely separate sets of rules which contained in Rule 3under which the action was taken and Rule 148 (3) by which the action was held justified by the High Court at its own instance. In the instant case the State Government repeated the old provisions in the rule of 1951 regarding conditions of licence which it had power to frame under Section 8 of the Cinematograph Act, 1918 before its amendment in 1949 it purported to wholly (sic) this taken by under Section 8. It should have invoked section though in case the condition about the applicant for licence being owner or lessee or manager could not be laid down under the restricted rule making power under Section 9 of the amended Act, it would have been necessary to invoke the powers under Section 5(3) of that Act. We are accordingly of the opinion that the questioned provision can be and should be upheld by the power to give directions under Section 5(3) of the Cinematograph Act, 1918. The exercise of that power docs not require any formality with which the rules have to be made and it cannot be said that if that power has been exercised then some more procedure not undergone would have had to be undertaken.

15. The next point calling for consideration is whether the requirement about the claimant to a licence or a licensee being owner, lessee or manager of the licensed premises is, firstly, in excess of the requirement for securing the public safety, in which case it will, according to the learned counsel for the petitioner, be excessive exercise of the rule making power granted by Section 9(3) of the Cinematograph Act, 1918 and, secondly, whether it is relevant to the objects and purposes of the Act or not, for in the latter case, even the power of control under Section 5(3) of the said Act would not justify it. It is not in controversy that the licence, even though it is in respect of the premises to be used for cinematograph exhibitions, must be in the name of a person and it has also been ultimately accepted that the person to be granted the licence must have some connection with the premises to be licenced. The point of controversy is whether this connection should extend to being the legal right of ownership, lessee or manager or it should suffice if the person is in actual possession of the premises. In other words, the contention on the petitioner's behalf is that actual possession should be sufficient for the grant or renewal of a licence and refusal to renew, or cancellation of, a licence should take place only when the licensee ceases to be in actual possession.

16. Now actual possession of a person may be unlawful in certain circumstances. There may be a case when a person is in actual possession under colour of legal right, such as when he says that his tenancy continues on account of the provisions of the U. P. (Temporary) Control of Rent & Eviction Act or when he says that a notice given to terminate the tenancy has been waived or tenancy has not been terminated or when he says that the lease has been extended. These will be cases where there is a controversy as to whether the licensee has ceased to be a licensee or manager. The question whether the licence be renewed or refused would depend upon what the authority thinks in regard to the existence or non-existence of the right of lessee or manager. The case which really falls to be considered is that of a person whose tenancy has either unquestionably come to an end or has been adjudged by a court of law to have come to an end as with case of the petitioner. So the question really arising for consideration is whether there can be a rule or direction that licence be not granted or renewed in favour of a person whose tenancy has come to an end but who has not yet been dispossessed.

17. The learned counsel for the landlords has referred to us two English and one Indian decision. One is All England Report Reprint 1926 K. B. D. 279 R.A. Holbourn Licensing Justices. Among the conditions under which the Licensing Justices were required to permit a transfer of a licence was a condition that the proposed transferee was a fit and proper person to hold the licence. Lease holders of a public house applied to the Licensing Justices for a transfer of the licence from their secretary and resident manager to the secretary and a proposed new resident manager. The service agreement between the applicant and the proposed manager manner (sic) provided for its termination by 4 weeks' notice on either side. At a recent general meeting of the Justices they had decided that as a general rule agreement under which proposed transferees of licence were employed should be liable to be terminated by not less than three months' notice. But apart from that the application before the justices was the third application for transfer in respect of the house made by the leaseholders within just 18 months and the proposed transferee has been fixed in different number of employments in the last seven years the house required special care by the resident manager who could be trusted to look after it.

The Justices, therefore refused the application. On the lease-holder's approaching the Kings' Bench Division it was held that in every case of a transfer the Justices had to consider whether the proposed transferee had such a real and effective interest in the licenced premises as to be a fit and proper person to hold the licence and in regard to that matter nothing was more germane than a question of reasonable security of tenure. The decision was upheld. In Kishan Chand Arora v. Commr. of Police, AIR 1959 Cal 123 it was held that in order to be recognised as a 'keeper' of an eating-house to whom a licence may be issued under the Calcutta Police Act, a person must be a keeper not only 'de facto' but also 'de jure'. Learned Counsel for the landlords has contended that in the case of a licence for cinematograph exhibitions also the question of reasonable security of tenure which can exist under a legal right only in the premises to be licensed, is a very relevant question to be considered by the licensing authority or the State Government which controls the licensing authority since in the absence of reasonable security of tenure, no proper exhibition can be expected and exhibitions are allowed not merely for profit making by the exhibitiors but also for providing proper entertainment to the public. In our opinion the contention has substance.

18. The requirement that the licensee should be the legal owner, lessee or manager of the licenced premises is in our opinion relevant to the need of securing the public safety also. A person in legal possession of the premises to be licenced or already licenced will have the legal right to carry out all works necessary including alterations in the building to keep or to bring the premises in a condition required under the rules relating to securing the public safety. A trespasser will not be in that position unless it is presumed that he will act without right and unlawfully make changes in the building of a third person, which presumption will only amount to aiding an illegality. Similar views were expressed by Bishambhar Dayal, J. in the unreported case Shri Ram Agyan Singh v. The State of Uttar Pradesh, Writ Petition No. 1198 of 1966 decided in March 1967 (All). A legal title is therefore necessary from the point of view of securing the public safety as well. Reliance in this connection is placed on the third case King v. The Hyde Justices, (1912) 1 K. B. 645. Init the question of the proposed transferee of an old bear house licence being a fit and proper person had been considered and the licence refused.

It was found that the Justice could properly come to the conclusion that the applicant was a fit and proper person to hold a licence if the terms upon which he intended to carry on his business were such that the only ultimate inference from the consideration of those terms could be that the applicant could not carry on his business without infringing the law. It is argued before us that if a trespasser is granted the licence for a cinematograph exhibition it would also be only helping and perpetuating the trespass which will be against public policy. The decision in the unreported case Sheo Lal Sahu v. State of U. P., Writ Petition No. 2060 of 1967 D/- 26-10-1967 (All) has correctly been relied upon in this connection. So lawful interest in the premises will be a relevant consideration in connection with securing the public safety as also from the point of view of general object and purposes of the Act. The provision, cannot, therefore, be regarded as ultra vires of the rule making power of the State Government under Section 9(3) of the Cinematograph Act, 1918 or an excessive exercise of the power of control under Section 5(3) of that Act as being unrelated to the object and purposes of the Act.

19. Learned counsel for the petitioner has, in the alternative, made strenuous effort to show that the possession of the petitioner is a legal possession even after his tenancy has been held to have come to an end and there is even a decree for his ejectment in favour of the landlords. He has invited our attention to Section 9 of the Specific Relief Act, 1877 and the corresponding Section 6 of the Specific Relief Act, 1963. If a person in peaceful possession is ousted from possession otherwise than in due course of law, then he has been given the right to regain possession through court by merely proving his possession. According to the learned counsel the possession of an ex-tenant is thus juridical possession. He has cited certain decisions in this connection. One is Lallu Yeshwant Singh v. Rao Jagdish Singh, AIR 1968 SC 620. That case, however, relates to the special provisions of the Qanoon Ryotwari Gwalior State Samvat 1974 and has no bearing on the contention before us. However, in Yar-Muhammad v. Lakshmi Das, AIR 1959 All 1 (FB) it was observed that a person though in possession had some right andcan sue under Section 9 of the Specific Relief Act for possession if he is illegally ousted therefrom without his consent.

In Sheshrao Parashram v. Yeshwant Ambusa, AIR 1969 Bom 429 a tenant holding or after the expiry of lease and in peaceful possession was similarly held to be in juridical possession protected by law since he could sue. That was it case where the ousting was by a stranger with no better right and it was held that the suit for possession was maintainable. Yet another case cited, namely, K.K. Verma v. Union of India, AIR 1954 Bom 358 helps the argument that under the Indian Law the possession of a tenant who has ceased to be a tenant is a juridical possession even though he has no right to continue in possession because his possession is protected against forcible dispossession by Section 6 of the Specific Relief Act, The relevant question before us, however, is not whether if the petitioner is ousted by force, he would have a right to sue under Section 6 of the Specific Relief Act, 1963 for return of possession but whether he has a legal right to continue in possession with some fixity of tenure and the right to make alterations in the premises if necessary.

The answer to that question is hardly open to controversy. A decree for ejectment stands against the petitioner and he has thus no legal right to continue in possession. The fact that in the appeal filed by him a provisional order staying the execution of the decree has been passed cannot alter that nature of his possession. The effect of stay is only to temporarily prevent the landlords from securing effectuation of their right to get possession secured to them by the decree. A similar view was taken in the unreported cases Writ Petn. No. 2060 of 1967 D/-26-10-1967 by Satish Chandra, J. and Spl. Appeal No. 344 of 1963, Adarsh Films Limited v. District Magistrate, decided on 1-8-1963 (All). With the Government orders as contained in Annexure 13 a licensing authority's discretion will have to be exercised against grant or renewal of a licence in favour of a person in the position of the petitioner. It has been urged on behalf of the opposite parties that the trend of decisions of this Court has been likewise. The decisions cited will be presently mentioned.

20. In the aforesaid case Writ Petn. No. 2060 of 1967 (All) the landlord had filed the Writ Petition for quashing of licence granted to the ex-tenant in possession who had filed a suit for declaration of his right to possession. By the time the petition came to beheard his suit had been dismissed. The writ petition was allowed and the licence quashed. In the instant case the petitioner is in a far weaker position in filing the writ petition when, the licence has been refused to him and there is a positive decree for ejectment against him.

21. In Anand Behari Lal v. District Magistrate Varanasi. Writ Petition No. 739 of 1959 D/- 18-4-1959 (All) a tenant's writ petition against refusal of renewal of licence was dismissed as prima facie his tenancy had come to an end even though there had been no judicial finding against him.

22. In Special Appeal No. 344 of 1963 D/- 1-8-1963 (All) the decision of a Single Judge dismissing the Writ Petition of a mortgagee of lessee rights for quashing of an order refusing the licence was upheld since a decree for ejectment had been passed against the mortgagee. There too an appeal from the ejectment decree (sic) had been passed and an order staying execution of decree for ejectment had been obtained by the mortgagee. But those circumstances were regarded as immaterial. It was also held that in no case a mere trespasser in possession of the cinema could obtain a licence in the capacity of manager of the cinema. This case provides strong support to the opposite parties in the instant case to their plea that the writ petition must be dismissed.

23. Shri Ram Agyan Singh v. State of U. P., Writ Petition No 4580 of 1969 D/- 5-2-1971 (All) by G.C. Mathur. J. is again a case helping the opposite parties1 contention. It was a writ petition by the landlord for getting quashed a licence granted by the District Magistrate in favour of two persons in respect of Regal Talkies Ghazipur. The licence for the cinema had been granted in the name of the owner but he had granted a lease in favour of two persons who were exhibiting films in it. Upon the period of extended lease coming to an end, the lessees filed a suit and obtained an injunction against interference by the landlord in their exhibiting films and also applied for licence in their own names. Licence was granted on the strength of the interim order of injunction and for maintaining the status quo. On the basis of dismissal of the suit and the dismissal decree being upheld in the first and second appeals, the writ petition was allowed and the licence in favour of the ex lessees was quashed, holding that the grant of the licence was illegal. A plea that the court should not exercise its discretionary jurisdiction as the quashing of the licence wouldbenefit no one until the petitioner was able to get possession and the Government would lose revenue was repelled. Shri S.N. Kakkar was the counsel for the ex lessees in that case too.

24. The other cases cited at the Bar perhaps with a view to support the petitioner's claim are either irrelevant or not to the point. In Moona Lal & Sons v. State of U. P., Writ Petition No. 1134 of 1960, D/- 16-12-1960 (All) by D.S. Mathur, J. a landlord's Writ Petn. challenging the renewal of licence to his tenant after the expiry of the lease period was dismissed because the U. P. (Temporary) Control of Rent and Eviction Act was held applicable and to continue the tenancy. In Kailash Chandra v. District Magistrate, Lucknow, Writ Petition No. 390 of 1962 D/-31-3-64 (All) a landlord's Writ Petition for cancellation of licence in favour of his tenant whose tenancy was alleged to have come to an end was dismissed because litigation was pending and rights had not been decided. In J.N. Saklani v. State of U. P., Writ Petition No. 2033 of 1968 D/- 30-9-1959 a landlord held the licence in his own name but he had allowed another person to carry on exhibition of films. The licensing authority directed the landlord to execute a power of attorney in favour of that person to regularise the petition, but the landlord failed to do so. The licensing authority refused renewal of licence in the name of the landlord and granted it to that other person who had been carrying on the business for 20 years. A suit filed by the landlord for the ejectment of that person was still pending. In these circumstances a writ petition filed by the landlord for cancellation of licence in favour of that person was dismissed. The instant case stands on a wholly different footing and has nothing in common with the facts of Saklani's case.

25. Lastly, in Prabhakar Shankar v. District Magistrate of Poona Special Civil Appeal No. 645 of 1955, D/-31-3-1955 (All), a tenant's writ petition against cancellation of his licence for violating a term of the lease and for failure to prove continuing valid lease was allowed, but it was a case under the Bombay Cinemas (Regulation) Act, 1913 which entitled an occupier to get a licence and hence it was held that licence should not have been cancelled as long as a decree was not passed against the tenant for ejectment. The case is therefore altogether distinguishable.

26. Learned counsel for the opposite parties have also contended thatthe Licensing Authority possesses the discretion to renew or refuse to renew the licence of the petitioner and this court cannot and should not interfere in exercise of its special and discretionary powers under Article 226 of the Constitution of India. On the other hand it has been argued for the petitioner that the question of infringement of his fundamental right to carry on business is involved and this court should interfere if it finds that the discretion has not been correctly exercised. We do not see how any question of fundamental right of the petitioner is involved, nO one can have a fundamental right to carry on business over the premises of another person without a legal right in respect of those premises. On the authority of a trespass he cannot insist upon the grant of licence to him. The petitioner is in the position of a trespasser in the building for which he claims a licence for cinematograph exhibition. Again, even in respect of carrying on business, reasonable restrictions can be imposed and it has not been contended that the Cinematograph Act. 1918 and the corresponding U. P. Cinemas (Regulation) Act, 1955 imposed unreasonable restrictions in regard to the business of cinematograph exhibition. If a person can be granted a licence to exhibit cinematograph films in certain premises which fulfil certain conditions and over which he has a legal rights of occupation, it would be the business of Licensing Authority to see that the requirements of restrictions and conditions are fulfilled in a particular case before granting him a licence. Section 5(1) of the Cinematograph Act, 1918 is in negative form and bans the issue of a licence unless the Licensing Authority is satisfied in certain respects which include substantial compliance with the rules made under the Act.

Under Sub-section (3) of that section it is further to act under the control of the State Govt. and even over and above that it has been given the right to impose further terms and conditions and restrictions which it may think fit in the interests of the public. It will be primarily for the licensing authority to judge if the rules and other conditions have been complied with before it grants or releases a licence unless the refusal is wholly arbitrary this court should not intervene. The decision of the Madras High Court in Om Prakash Gupta v. Commr. of Police, AIR 1960 Mad 490 (Sic) has rightly been relied upon in this connection. In the instant ease the Licensing Authority considered the matter in the light of the guiding instructions front the State Government contained in Annexure 13 to the writ petition and it came to the conclusion that the licence should not be granted. The validity of the Government orders in Annexure 13 which has been impugned will be presently discussed. But in case the Licensing Authority has acted in accordance with annexure 13 it cannot be said to have exercised its discretion arbitrarily.

27. As stated earlier, the Government order in annexure 13 was issued in supersession of the earlier order contained in G. O. dated May 25, 1967 (annexure 2). It cannot be said that the G. O. annexure 13 is substantially different from the G. O. annexure 2 or lays down wholly different principles according to which the Licensing Authority should act. More or less the same criteria for disputed cases have been laid down in less general form. Having regard to the provisions of Section 5 (2) of the U. P. Cinematograph (Regulation) Act, 1955, which, as earlier pointed out, have been judicially held to give wide powers to the State Government, the issue of these G. Os. for the guidance and observance of the licensing authorities was fully within the powers of the State Government. The impugned G. O. contained in annexure 13 lays down what consideration should be kept in view by a licensing authority in granting a licence in disputed cases of applications for licences being lessees or not of the premises for which licences are sought for. Learned counsel for the petitioner has argued that consideration No. (ii) is illegal. It reads; 'whether there has been an allotment order in favour of lessee under the provisions of the U. P. (Temporary) Control of Rent and Eviction Act, 1947.' 'It is urged that the provisions of the said Act apply even to cases of tenancies which had been created otherwise than by allotment and, therefore, if there is no allotment in the case of a particular tenancy it would be illegal to treat it as a case of 'no tenancy'. Since the licensing authority has in its order refusing to renew the licence in favour of the petitioner also referred to the fact that there is no allotment in favour of the petitioner, the argument aforesaid has considerable significance for the petitioner.

However, the argument would appear to be based on a fallacy. The consideration referred to would not appear to relate to the origin of a tenancy already in existence, for the Government could not be oblivious of the fact that tenancies continuing from before the coming into force of the U. P. Act III of 1947 werealso covered by that Act for the conferment of its benefits on the tenants. The consideration will be relevant only in two classes of cases. An accommodation may be allotted to a person and he may succeed in obtaining possession though the landlord may not have let out the premises to the allottee in pursuance of the allotment order. Such an allottee, if he applies for the grant of a licence for the allotted premises, may be granted the licence in view of the impugned consideration quoted above. Again, the period of a lease may expire and the tenant may have made himself liable to be sued for eviction. He may, however, be able to obtain an allotment order in his favour, in which case a new tenancy will start in his favour though he may not have been expressly admitted to tenancy afresh by the landlord himself. The aforesaid consideration No. (ii) will be relevant for the purpose of the licensing authority in granting or renewing the licence in favour of such allottee. The G. O. in annexure 13 cannot, therefore, be regarded as illegal. When the District Magistrate referred to the fact that there had been no allotment in favour of the petitioner, obviously he had in mind the fact that after the expiry of the lease period the petitioner had not also obtained any allotment order to give him a new right of tenancy. He must have had in mind the fact that at the time the lease was made in favour of the petitioner, no allotment order could have been passed in favour of the petitioner.

28. It has been pointed out that in the same situation the licensing authority had earlier renewed the licence. It was, however, within the competence of the licensing authority to reassess the position in the light of the latest Government order contained in Annexure 13. But apart from that, this court cannot overlook the subsequent developments of which mention has been made in the writ petition itself that after the refusal of the licensing authority to renew the licence there has been a judicial adjudication upon the rival claims in the cross-suits and the petitioner's firm has been adjudged to be a trespasser and a decree for ejectment of the petitioner has been passed by the Court.

29. In the result it will appear that the writ petition has no merit and is therefore dismissed. Since however an event subsequent to the rejection of the petitioner's application for licence, namely, the passing of an ejectment decree against the petitioner has also accounted for the dismissal ofthe writ petition we make no order as to costs.


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