(1) Does Delhi Administration lack competency in law to fix rates for admission to Cinematograph exhibition in Cinema houses notwithstanding the extension of the Punjab Cinemas Regulations Act, 1952 (hereinafter to be called the Punjab Act 1952), as at present in force in State of Haryana to Delhi by means of notification dated 21-11-1980 iss,ued by the Central Government under Section 2 of the Union Territories (Laws Act), 1950 (hereinafter to be called the 1950 Act) is the main question that calls for determination in this batch of writ petitions.
(2) The points in all these writ petitions are similar and broadly we shall be taking the fact from the representative petition to which the counsel for the petitioners referred namely Cw 959182. It is a common case that the decision in the present writ petition will also govern the decisions in the other writ petitions.
(3) Article 245 of the Constitution empowers the Parliament to make laws for the whole or any part of the territory of India and the legislature of a State for the whole or any part of the State. Article 246 gives exclusive powers to the Parliament to frame laws with respect to any matter enumerated in list I and in Seventh Schedule to the Constitution while Article 246(2) similarly empowers the State legislature to make laws with respect to matters enumerated in list II. Article 246(4) however empowers the Parliament to make laws with respect to any matters for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumearted in the State list. Article 239 lays down that every Union Territory shall be administered by the President acting. . . . through an administrator.
(4) Item 60 of the List I of 7th Schedule deals with sanctioning of Cinematograph films for exhibition, while item 33 in List deals with theatres and dramatic performance of cinemas subject to the provisions of entry 60 of List 1. Cinematographic Act, 1918 dealt with these two separate matters namely sanctioning of the cinematograph films for exhibition and the regulation of cinemas including their licensing with the subject in the Union List as well as that in the State lists. As there was no clear demarcation of the respective provisions of the Act with which Central and the State Government were concerned various difficulties were arising. In order to resolve the confusion 1918 Act as amended from time to time was re-enacted by separating the provisions, by passing the Cinematograph Act, 1952. Part I, Ii and Iv of the Central Act, 1952 extended to the whole of India while Part Iii extended to the Union Territories only. The reason why Part Iii was made to extend only to the Union Territories was because the said part deals with the regulation of exhibition by means of Cinematograph which is covered by entry 33 of List Ii and for which the State Legislatures alone are competent to make the necessary laws and the Parliament thereforee could not make law dealing with the said entry which was to be applicable in the States. But so far as the Union Territories are concerned by virtue of Article 246(4) of the Constitution Parliament could make laws with respect to Entry 33 of List Ii for Union Territory of Delhi. Indeed the Constitional validity of Cinematograph Act, 1952 is not challenged by the petitioners; what is however challenged strongly is the validity of the extension to Delhi of Punjab Act, 1952. Before however, we examine this and.other questions in detail a little background to the controversy will be helpful.
(5) Prior to 1965 there was no provision in the Delhi Cinematograph Rules, 1953 requiring the cinema owners to take permission from the authorities regarding the rates to be charged in the theatres for admission. However by notification dated 6-5-1965 Delhi Cinematograph Rules were amended to introduce sub-rule (13) of Rule 45 which provided that the rates of admission to the auditorium shall be fixed or revised only with the prior approval of the licensing authority which was later substituted by the word 'Lt. Governor of Delhi'. At the same time condition No. 8(A) was also added in Schedule 2 of the Rules providing that the licensee shall not fix or revise the rates of admission to the auditorium except with the prior approval of the licensing authority or the Lt. Governor. After the coming into force of Delhi Police Act, 1978 jurisdiction in respect of cinema houses has been vested with the Commissioner of the Police with effect from 1-7-1978. In the year 1975 there were some presentations for revision of the rates for admission and after discussion between the cinema owners and the administration notification was issued by which the rates of admission were reduced by 10 per cent. However with a view to compensate the cinema owners they were permitted to increase the seating capacity by relaxing the rules and they were allowed the installation of additional seats in various cinemas. For about three years the cinema owners apparently accepted the situation. But the matter was again taken up in February, 1978 for increase in the rates for ad- mission to the auditorium. The Administration in May, 1978 sought information from the cinema owners about the various matters including the profits earned by the cinemas on the basis of the return submitted to the income tax authorities, weekly rental charges taken by each cinemas from the distributors. Apparently the information was not fully supplied because the cinema owners took the position that many exhibitors were running allied business and it was not possible to give separate details if the earning. Before any agreement on rates could be reached the cinema owners filed writ petitions in this court challenging the power of the Lt. Governor to fix the rates of admission to cinemas under the provisions of the Central Act, 1952, or the rules. This petition was allowed by the Division Bench of this court : AIR1979Delhi249 . The court held that condition No. 8A and Rule 45 (13) of 1953 Rules were beyond the rule making powers conferred by Section 16 of the Central Act, 1952 and were ultra vires. As a result this the notifications of 30 October, 1975 and 15th November, 1975 fixing the rates for admission were quashed.
(6) Evidently as a result of above decision given on 15-5-1979 the consequence was that the Delhi Administration was left with no power to fix the rates of admission for auditorium in the Union Territory of Delhi. Evidently as there was no restriction on the cinema owners to increase the rates of admission the owners have been exercising their liberty to increase the rates of admission in 1979, December, 80 and even subsequently. The Administration has given details in the counter affidavit dated 22-7-1982 filed by Mr. P.B. Jaykrishan, Secretary Home, Delhi Administration. Thus whereas the average rate of admission per seat as approved by the Delhi Administration in September, 1975 was as follows: (a) Aircondition Rs. 1.76 to Rs. 1.90 (b) Air Cool Rs 1.51 to Rs. 1.75 (c) Others Rs. 1.50 aid below. The corresponding average rate of admission for sub- sequent period is stated to be the followed: Category Date Avarage rate of admission per seat : varied from Aircoidition 1-5-1979 1.58 to 1.76 15-12-1980 2,16 to 3.63 Present 2.66 to 3.95 Air cool 1-5-1979 0.92 to 1.69 15-12-1980 1.50 to 3.53 Present 1.50 to 3.84 Other 1-5-1979 0.76 to 3.84 15-12-1980 1.15 to 1.27 Presesent 1.15 to 1.27 The point is made that the variation of rates in the Air conditioned cinema thus ranges from 2.60 to 7.75 which comes to double the rates as compared to the rates in 1975. The said rates also compare unfavorably with the rates said to be prevaling in Bombay, Calcutta and Madras. In Bombay the rate of entertainment tax varies from 60 per cent to 180 per cent while the rate of entertainment tax in Delhi varies from 40 to 60 per cent. In Madras the entertainment tax is 100 per cent; while the rate after adding the tax comes to Rs. 5.90; but if 60 per cent tax was added the rate would come to Rs. 4.80 in Madras. In Calcutta the average rate in 1978 was said to vary from 1.01 to 1.62; entertainment tax in Calcutta varying from 50 per cent to 100 per cent. The maximum rate charged is stated to be the maximum of Rs. 4.50. The maximum rate in Delhi is said to be Rs. 7.60. The claim of the cinema owners in Delhi is for Rs. 3.75 for air conditioned hall without entertainment tax. Of course these figures given in the counter affidavit are not accepted in the petitioners' rejoinder, where the stand taken is that in Bombay the air conditioned cinema admission rates ranges from 6.60 lowest to Rs. 8.80 highest. With regard to Calcutta and Madras the rates are said to be low on account of peculiar 'features of the regional film market and also some of the regional films being subsidised by the States. Even in Calcutta the rates of admission are said to vary from 2.45 to 7.70. The other in puts and costs of land are also said 'to vary in Madras and Calcutta as compared to in Union Territory of Delhi. Hence the comparison with Delhi is said to be unjustified. It is also tauntingly pointed out that the government itself in Shakunlam hall which is run by it at Pragati Maidan charges rate of Rs. 4.00 to 5.00 exclusive of tax which would come to Rs. 6.40 and Rs. 81- after the tax was added. Apparently the report is that the rates which the petitioners are asking are nothing Unusual and are in consonance with high costs and other necessary expenses. But it is not necessary to analyze these details and attempt to find the justness between the claim of the cinema owners to increase the rates & that of complaint of Delhi Administration that the rates charged are grossly excessive for the reason that in these petitions we are not to decide whether the rates fixed are reasonable or not because that stage has not yet arrived. It appears that a public notice dated 11-2-1981 was issued by the Administrator, Delhi staring that he proposed in exercise of the powers conferred on him by the Punjab Act, 1952 as extended to Union Territory of Delhi, to fix the number of seats in different enclosures and also the rates of admission to various cinema houses and inviting objections and suggestions in this regard before he finally fixes the rates. This power he invoke by virtue of notification of 21-11-1980 issued in exercise of powers of Section 2 of the Union Territories Act, 1950 by which the Central Govt. has extended to Delhi the Punjab Cinemas Regulation Act, 1952 as is in force in the State of Haryana and the further notification of 11-12-1980 issued by the Administrator by which he appointed 15-12-1980 as the date from which Punjab Act,, 1952 shall come into force in Delhi. Mainly the provisions of Section 7A, 7B and 7C of the Punjab Act, 1952 have been extended. Section 7A provides that the licensee shall not amend or alter the rates without the written approval of the licensing authorities. Section 7B empowers the Administrator to amend or alter the rates for admission to Cinematograph Exhibition. It is this power that is being sought to be exercised by the administrator by the issue of the public notice dated 11-2-1981 and which is mainly under challenge. The apparent justification for extending the Punjab Act. 1952 is not difficult to divine. The same is recited in the counter affidavit wherein it is pointed out that the cinemas is one of the cheap mode of entertainment to the common man but that it was noticed that the cinema owners without any regard to the interest of common man went on increasing the rates. It is said the matter was examined and the government was requested to empower the Adminis' rator to control the rates of admission to various cinemas in Delhi and that the Government of India after considering the matter extended to the Union Territory of Delhi the Punjab Act as at present in force, in the State of Haryana by notification of 21-11-1980 which has also been brought into force in Delhi by notification of 15-12-1980.
(7) Section 2 of the Union Territory (Laws) Act, 1950 says that the Central Government may by notification in the official gazttte extend to the Union Territory of Delhi.. or to any part of such territory with such restrictions and modification as it thinks fit any enactment which is in force in a (J State on the date of notification . There is no doubt that Section 2 in terms empowers the Central Government to extend any enactment to the Union Territory of Delhi. Mr. Venugopal rightly did not raise any objection to the competency of the Central Government to extend any State Act to the Union Territory of Delhi. Indeed this objection would have been in vain because since of decision in Air 1951 Sc 332, where the law relating to delegated legislation was exhaustively review- ed, it is beyond dispute that 'when an appropriate legislature enacts a law and authorises an outside authority to bring it into force in such area or at such time as it may decided that is conditional and not delegated legislation and that such legislation is valid.' (See Sardar Inder Singh V. The State of Rajasthan : 1SCR605 ) . Thus Section 2 of the 1950 Act is an exercise of conditional legislation and would be valid. But Mr. Venugopal objects that this power under the 1950 Act can be exercised only to extend a State Act which was inforce at he time when 1950 Act was passed and not any enactment subsequent to that year. We cannot agree. Section. 2 in its terms clearly says that any enactment can be extended which is in force in a State on the date of notification. The period relevant! thereforee is when notification is issued and admittedly in November, 1980 Punjab Act was in force. This argument can hardly have any vadility in view of the decision in Delhi Laws (Supra) wherein the authorisation given to the Executive at its discretion to select future Central or Provincial Act was upheld by a majority of Five to Two (See: Rajnarain Singh V. Chairman Patna Administration Committee : 1SCR290 ) Even otherwise this argument if accepted would defeat the very purpose of the Act, and would virtually reduce the provisions of the 1950 Act to a useless ritual because the whole purpose of Section 2 is to so empower the Central Government that it can extend at any time any of the statute of State which it considers best suited to the need of the Union Territory as and when the circumstances demand or the necessity arises. But if the limitation in Section 2 of 1950. Act is to be construed as permitting the extension of State Act as in force in 1950, it would mean that Parliament would itself have to pass a legislation any time it wants a particular type of legislation to be applicable in Delhi a frustrating prospect. To prohibit the exercise of conditional legislation to future laws is to use the phraseology of an American Case; 'To deny this would be to stop the wheels of Government. There are many things upon which wise and useful legislation must depend, which cannot be known to the law making power and must there fore, be a subject of inquiry and determination outside the halls of legislation, 'Pennsylvania Case' Lockes Appeal 72 ' Pa 491 as mentioned in Air 1951 S.C. 332 para 237). The argument thereforee that the Punjab Act could not have been extended because it was post 1950 Act has no validity and must be rejected.
(8) Mr. Venugopal propounded the following propositions : - 1. The power of extending legislation under Section 2 of the Union Territory (Laws) Act 1950 by the Central Government can be exercised only in case where no law on the topic has already been passed by Parliament. 2. The Central Law having provided for licensing of cinemas, exhibition of films therein and all matters pertaining thereto, that law should be treated as exhaustive and a Code in regard to that topic, and hence excluding the right of the Central Government to extend a law in regard to the same topic. 3. In view of the Judgment of this Hon'ble Court in : AIR1979Delhi249 to the effect that the policy of the Central Law did not provide for fixation of rates in Cinemas the extension of a provision of law which provides for fixation of rates in Cinemas would amount to an amendment by the Executive of the Central Law which is impermissible. 4. The power to extend a law under Section 2 is the power to extend the law as a whole and would exclude the power to tear out a part of the law and make it applicable to the Union Territory. 5. Rule 8 is ultra virus Section 15 of the Central Act read with Section 14 there to ; since under the Act power of revocation (which would include the power of suspension under the General Clauses Act) can be exercised .only on conviction for breath and not otherwise. 6. In the absence of express provision in Section 16 of the Act delegation of the power to make Rules providing for suspension of Cinema license Rule 8 is ultra virus the Act since a power of levy of penalty or to cancel or suspend a license is, an essential legislative power which is not delegatable. 7. In any event the power under Rule 8 can be exercised only for violation of the Central Act or rules made there under and cannot be exercised for violation of some other law. 8. In any event the phrase 'any other reason' occurring in Rule 8 rannot be exerrised for violation of a provision relating to fixation of rates, when it has already been held that the Central Act and the rules do not authorise fixation of rates and as such cannot also authorise suspension for violation of any provision fixing rates. 9. Section 7A and 7B of the extended Act are vocative of Art. 14 and 19(1)(g) of the Constitution in so far as they confer an arbitrary power, lacking in necessary guidelines. . 10. Section 7A which is alleged to have been violated has no application since the only rates fixed on 30-10-1975 had been struck down in the : AIR1979Delhi249 and thereforee no rates had been approved by the Licensing authority. 11. In the absence of extension of Section 8 of the Haryana Act, no power of suspension can be exercised for violation of 7A, 7B by invoking Rule 8. Re. Proposition No. 4.
(9) The argument' is that Section 2 of 1950 Act when it permits the extension of an enactment necessarily implies the extension of the whole enactment and not part of it. This argument is raised because as is clear from the notification of 21-11-1980 though the Punjab Act 1952 as in force in Haryana has been extended to the Union Territory of Delhi, yet it is subject to the modification that Section E 3 to 7, 8, 8A have been omitted. In reality basically it is Sections 7A, 7B and 7C of Punjab Act which will be in force in Delhi. The extension of Sections 7A. 7B and 7C is thus, contended to be without authority of law. We cannot agree. That the Government has the power to extend a part of an enactment or even a Section is now no longer rest integra in view of the decision in Rajnarain Singh's case (supra). In that case Section 3(1)(f) of the Act empowered. 'the local government to extend to Patna the provision's of any section of the said Act (Bengal Municipal Act) subject to such restriction or modification as the local Government may think fit'. Challenge to this provision on the ground that it was ultra virus failed. The Supreme Court examined this aspect with reference to the earlier decision in Re : Art. 143, Constitution of India etc. AIR 1951 Sc 332 and it was explained with reference to Delhi Laws case that 'Mukherjee and Bose jj., who swung the balance, held that not only could an entire enactment with modification be extended but also a part of one; and indeed that was the actual decision in-Queen V. Burah, 5 Ind. App. 178 PC 5 on which the majority founded as follows :
'NOW the only difference between that case and this is that whereas in the former case the whole of an enactment, or a part of it, could be extended, here, any section can be picked out. But to pick out a section is to apply a part of an Act, and to pick out a part is to effect a modification, and as the previous decision holds, that a part of an Act can be extended, it follows that a section of sections can be picked out and applied, as in Burah's case (B) where just that was done; also, for the same reason that the whole or a part of an Act can be modified, it follows that a section can also be modified.'
'But even as the modification of the whole cannot be permttted to effect any essential change in the Act or an alteration in its policy, so also a modification of a part cannot be permitted to do that either.' 'We hold that any section or sections of the Bihar and Orissa Municipal Act of 1922 can be picked and applied to 'Patna' provided that does not effect any essential change in the Act or alter its policy'. It is important to note that Section 7 of Delhi Laws Act was worded more or loss in the same manner and permitted the extension of any enactment and yet it was held as explained in Raj Narain (Supra.) case that not only could an entire enactment but a part of it could be extended. On that reasoning extension of Section 7A, 7B & 7C cannot be faulted unless it could be shown that by extension of these sections any essential change in the Act or its policy has 'been effected. Mr. Venugopal however, sought to urge that the force of this observation in Raj Narain Singh's case has been whittled down in a later case in Mithan Lal v. State of Delhi and others, : 1SCR445 . We cannot agree. In Mithan Lal (supra.) case what happened was that the Bengal Finance (Sales Tax) Act had been extended to Delhi by the notification exercising powers under Section 2 of the Part C State Laws 1950. The said Act imposed Sales Tax on the supply of materials in building contract. A similarly worded provision of Madras Act had been struck down in an earlier decision of Supreme Court in The State of Madras V. M/s. Gannon Dunkerley & Co. : 1SCR379 on the ground that the Legislature of the State Legislature cannot impose a tax unless it was a sale covered by entry 54 in List D. i.e. as defined in Sale of Goods Act. Challenge to the virus of the extension of this Act based on the ground that the Bengal Finance (Sales Tax Act) which was passed by a State Legislature imposing such a tax was invalid but it was rejected on the ground that the extension was as if the Act was enacted by Parliament and admittedly Parliament could impose a tax even on the supply of materials in building contract. But when it was argued that the power of extension could be exercised to extend Enactment in force, as provisions of Bengal Act were ultra virus as being beyond the powers of State Legislature they were not in force at the date of notification and this could not be extended to State of Delhi. The contention was 'enactment in force' must be construed as meaning provisions of State Acts which are valid and enforceable. Repelling this contention the Supreme Court explained that it was not intended by Section 2 of Part State Laws Act that the authority concerned should take upon itself to examine the virus of each and every provision in the statute and then extend only such of them as it considered to be valid and that the expression 'enactment which is in force in Part A State' must be construed as meaning a statute which is in operation in Part A State as distinct from a Statute which had been repealed and it cannot be interpreted as having reference to individual sections or provisions of a statute. It was in that context that it was emphasised that it could not have been intended that the authority should take upon itself to examine the virus of each and every one of provisions of the statute and then extend only such of them as it considers to be valid. We cannot read this authority as lying down that a part of an enactment or a section cannot be extended, as was specifically laid down in Raj Narain's case. All that it held was that enactment in force means whether a Statute is in operation. It did not even advert to the aspect whether a Section can be extended as specifically decided in Raj Narain's case (supra.).
(10) The next aspect of this argument was that by extending only Section 7A, 7B and 7C of Punjab Act 1952, the Central Government has effected change of essential legislature policy underlying Punjab Act, 1952. We do not agree. In our opinion essential legislative policy behind Sections 7A, 7B, 7C has been kept in tact and unaltered. There is no modification made in the said sections when extending them to the Delhi. The objection as to why Section 3 to 7 of Punjab Act have been omitted is pointless because the said sections in the Punjab Act deal with the provisions or issuing of a license for cinematograph exhibitions and the restrictions on the powers of licensing authorities. Identical provisions being already to be found in the Central Act Part Ii, it would have been a mere surplusage to extend the same provisions of the Punjab Act. The question whether there has been change in the essential legislative policy of the extended Act must be found out from examining wheher in extending Sections 7A, 7B, 7C and omitting some other sections any change of policy hos been effected. Now the only object of extending Sections 7A, 7B, is to fix rates for admission to cinematograph exhibition and the manner of determining it. All this has been bodily lifted without any change. As to what amounts to effecting a change of policy reference may be made to Lachmi Narain etc. etc. v. Union of India and others, : 2SCR785 . In that case what had happended was that originally Bengal Finance Act had been extended in 1951 to the Union Territory of Delhi. Section 6(2) of the Bengal Finance Act had provided that the State Government after giving by notification in the official gazette not less than 3 months notice of its intention to do so may omit or amend the schedule. On December 7, 1957 the Central Government purported to make an amendment in the notification issued in 1951 by which the Bengal Finance Sales Tax Act had been extended by pureorting to modify sub-section 2 of Section 6 by adding clause (AA) substituting for the words 'not less than 3 months' the words 'such previous notice as it considers reasonable'. The Supreme Court held that the power given by Section 2 exhausts itself on an extension and the power cannot be exercised repeatedly. It also held that when the Section 6(2) provided a requisite notice of not less than 3 months this was the essence of the legislative mandate and this legislative policy could only be amended by the legislature, and the impugned notification was outside the permissible delegation as it purported to change the essential legislative policy which could only be done by the Legislature. No amendment has been made in Sections 7A, 7B. The whole policy of the sections to fix rates for cinemas has been kept intact. We would thereforee hold that it was competent for the Central Government while extending Punjab Act to modify by deletion some sections (like sections 3 to 7) and to extend only 7A, 7 B, 7C and by this it did not make or effect any change of policy of Punjab Act. Propositions 1 3
(11) Proposition I is obviously very widely stated. It is also obviously a little confusing because if on the same subject matter a law. js already there, there would be no point in extending another law. But in argument the effort is to broaden the scope by saying that because Central Act dealt with exhibition of cinematograph no other Act dealing with cinemas can be brought and extended to Delhi. So stated the proposition is unacceptable. But Mr. Venugopal seeks to support the said preposition by urging that this result must follow because it is now well settled that the power of extendnig any enactment given to the Central Government does not authorise it either to amend or repeal an existing law. See Delhi Laws case (supra). He invokes the observations of Mukherjee, J. in para 276 wherein his Lordship held that Section 2 of Part C States (Laws) Act is ultra virus to the extent that it empowers the Central Government to extend to Part C States (Laws) which are in force in Part A States even though such laws might conflict with or affect laws already in existence in the areas to which they are extended. The learned judge while upholding the power of the Central Government to extend an existing Act however cautioned that 'it is quite an intelligible policy that so long as a proper legislative machinery is not set up in a particular area, the Parliament might empower an exeeutive anthority to introduce laws validly passed by a competent leislature, and actually in force in other parts of the country to such area, with such modifications and restrictions as the authority thinks proper, the modifications being limited to local adjustments or changes of a minor character. But this pre- supposes that there is no existing law on that particular subject actually in force in that territory. If any such law exists and power is given to repeal or abrogate such laws, either in whole or in part and substituted in place of some other laws which- are in force in other areas, it would certainly amount to unwarrantable delegation of legislative powers'. We may mention that originally section 2 of the Union Territories Part C State (Laws) Act at the time of reference before the Supreme Court in 1951 reads as follows: The Central Government may, by notification in the official Gazette, extend to any part 'C' State (other than Coorg and the Andaman and Nicobar Islands) or to any part of such State, with such restrictions and modifications as it thinks fit any enactment which is in force in a Part A State at the date of the notification (and provision may be made in any enactment so extended for the repeal or amendment of any corresponding law (other than a Central Act) which is for the time being applicable to that Part 'C' State).
(12) Subsequent to the decision in Delhi Laws case the portion in the brick above has been deleted and no longer exists. In our view Mr. Venugopal is reading in this part of finding a conclusion which does not follow inso far as he seeks to urge that simply because there is a Central Act 1952 dealing with some aspect of cinematographic exhibition, the Central Government is prohibited from extending an Act which is dealing with different aspects of Cinematographic exhibition. The counsel is conscious that Punjab Act, 1952 is in no way seeking to amend, alter or abrogate Central Act. But he maintains that as Durga Chand V. Union of India : AIR1979Delhi249 has held that the regulation and Control of rate of cinema tickets is not permissible under Cinematographic Act, 1952 an existing law in Union Territory of Delhi any exercise of power extending a law like Punjab Act, 1952 permitting the fixation of Cinema rates is in conflict and amounts to amending existing law i.e. the Central Act, 1952, and this is incompetent. This argument naturally assumes that there is irreconcilable conflict between She provisions of the Central Act and Punjab Act. We cannot accept this argument because it assumes wrongly as if the Central Act specifically contained a prohibition against the fixation of cinema rates. It is no doubt true that a division bench of this court held that no such power to fix rates for cinema exhibition could be spelt out from the provisions of the Central Act but this does not amount to a prohibition. Rather there was a gap or a void in the Central Act regarding the power of the fixation of rates for admission for cinematographic exhibition. The significance of distinction between absence of a certain power in an Act and a positive or negative mandate e.g. prohibition cannot be ignored. In that context we cannot accept that Punjab Act, 1952 because it permits the fixation of cinema rates would amount to repealing or amending any provision of the Central Act. Extending Punjab Act, 1952 only supplies the gaps in Central Act (though in passing we may note that has held contrary to our court that Punjab Act (even without Sections 7A and 7B) empowered the licensing authority to fix rates for admission to the cinematograph exhibition of course we shall proceed on the view of law taken by this court earlier though Punjab view has much to commend it). The extended Punjab Act is only supplemental and in addition to the Central Act, 1952. There is no conflict as such between the two Acts. All that is being done is to fill a void or a partial vacuum and we have it on the authority of Bose, J. who constituted the majority in Delhi Laws case (supra) that such a provision does not amount to unconstitutional delegation of legislative power for as he observed: 'It is one thing to fill avoid or partial vacuum. Quite another to throw out existing laws enacted by a competent authority. It is bad enough to my mind to hold that the first is not a delegation of legislative power. But as that has been held by an authority which it is impossible now to question so far as the past is concerned I bow to its wisdom.' Now the extension of the Punjab Act does not say anywhere that any provision of the Central Act is being repealed or amended. All that is being done is to give additional powers to the Administrator to fix rates for the admission to cinemas which it did not possess earlier. That such a power to fix rates for admission to cinemas would be justified in the interest of public can not be doubted. Mr. Venugopal contends that as Part Iii of Central Act (which applies to Delhi) dealing with regulation of exhibition by means of Cinematographs did not provide for fixation of rates for admission to cinemas : AIR1979Delhi249 it must be taken that the Parliament applied its mind and came to the conclusion that no law was required empowering the licensing authorities to fix rates for admission to cinemas, and there was thus implicit prohibition against extending any law which would permit the fixation of cinema rates. Counsel says that just as the Central Government could not frame a rule under the Central Act to fix rates for admission to cinemas, similarly Central Government cannot, exercising its power under Section 2 of Union Laws Act, 1950 extend, Punjab Act containing Section 7A & 7B which permits the fixation of cinema rates. This argument really amounts to saying that, by the mere fact of Extended Act providing something extra than what is provided in the Central Act an inconsistency arises, or at least this amounts to amendment or repeal of Centre Act, which is obviously not permissible. In our view this argument is based on the fallacy of assuming that Punjab Act in any way is repealing or amending Central Act. In this connection reference may also be made to Harishamkar Bagla V. M.P. State : 1954CriLJ1322 . Section 3 of the Essential Supplies (Temporary Powers) Act 1946 empowered the Central Government to issue an order as it appears to be necessary for maintaining or increasing the supplies of any essential commodity. Section 6 of the Act further laid down that any order made under Section 3 shall have effect notwithstanding anything contained in any enactment other than this Act or any instrument having eKect by virtue of any enactment other than this Act. Under powers conferred by Section 3 of the Act Cotton Textiles (Control of Movements) Order 1948 was issued. The High Court had held Section 6 to be unconstitutional because it took the view that if there is any repugnancy in an order made under Section 3 with the provisions of any other enactment than the provisions of the order will prevail with reference to the other provisions of the law and that this would amount to doing something which may have the effect of repealing by implication an existing law, which power could not be delegated in view of the Delhi Laws case where it was held that to repeal or abrogate an existing law is the exercise of an essential legislative power. The Supreme Court held this construction by the High Court to be erroneous in these words 'Section 6 does not either expressly or by implication repeal any of the provisions of pre-existing laws neither does it abrogate them. Those laws remain untouched and unaffected so far as the statute book is concerned. The repeal of a statute means as if the repealed statute was never on the statute book. It is wiped out from the statute book. The effect of Section 6 certainly is not to repeal any one of those laws or abrogate them. Its object is simply to by-pass them where they are inconsistent with the provisions of the Essential Supplies (Temporary Powers) Act. 1946 or the orders made there under. In other words the orders made under Section 3 owuld be operative in regard to the essential commodity covered by the Textile Control Order wherever there is repugnancy in this Order with the existing laws and to that extent the existing laws with regard to those commodities will not operate. By-passing a certain law does not necessarily amount to repeal or abrogation of that law. That law remains unrepealed but during the continuance of the Order made under section 3 it does not operate in that field for the time. The ambit of its operation is thus limited without there being any repeal of any one of its provisions. In the present case Punjab Act is dealing with a subject matter of fixing rate for admission to cinemas, which was not provided in the Central Act and even the question of temporary non-operation of any provisions of Central Act does not arise. The Supreme Court up-held the validity of Section 6 even while holding that some provisions of the Act will not operate in the field covered by the Textile control order. Here the Central Act remains in full bloom and can operate in all fields covered by it. The argument based on the ground of repeal being effected must fail.
(13) Mr. Venugopal in the alternative contended that the power of extending an enactment given to the Central Government is akin to Section in an Act which provides that the regulations or rules on publication shall have effect as if enacted in the Act. He relies on the observation in Chief Inspector of Mines v. K.C. Thapar : (1961)IILLJ146SC where it was said that 'the true position appears to be that the Rules and Regulations do not lose their character as rules and regulations, even though they are to be of the same effect as if contained in the Act. They continue to be rules subordinate to the Act, and though for certain purposes, including the purpose of construction, they are to be treated as if contained in the Act, their true nature as subordinate rule is not lost', and also referred us to K.S.B. Board v. Indian Aluminium Co. : 1SCR552 wherein it was observed :
'WE are, thereforee, of opinion that the correct view is that notwithstanding the subordinate legislation being laid on the table of the House of Parliament or the State Legislature and being subject to such modification, annulment or amendment as they may make, the subordinate legislation cannot be said to be valid unless it is within the scope of the rule making power provided in the statute.'
He also referred us to State of Kerala v. M.G.Abdullah & Co. : 1SCR601 wherein it was held that 'the statutory Rules made in exercise of the delegated authority are valid and binding only if made within the limits of authority conferred'. We do not think that it is correct to equate the nature of power exercised by Central Government when making a rule under an ordinary Act and the power which is exercised by the Central Government by virue of Section 2 of the Union Laws Act, 1950; to extend an Act to Delhi. We may, in passing note that in England, these words, 'as if enacted in this Act' are merely a survival, a common form, which may originally have served a useful purpose, but which, in view of the decision of the courts, has long ceased to serve any purpose at all'. (See Craies on Statute Law, 7th edn. page 313) .
(14) As to what is the source of power when an Act is extended by Central Government exercising powers under Union Laws Act, 1950, a reference may with advantage bs made to Mithan Lal (Supra). In that case, Administration of Delhi extended to Delhi the Bengal Finance Sales Tax: Act passed by the Legislature of Province of Bengal. It would appear that in an earlier case, from Madras, the Supreme Court had held that provision which imposed sales- tax on supply of materials in building contract was ultra vires. In answer to the argument that extended Act was ultra virus as State Legislature was not competent to enact sales-tax on supply of material, it was pleaded that the extended Act was enacted by Parliament by virtue of authority given by Article 246(4) of the Constitution, and as the Parliament was under no inhibition not to impose a sales-tax on supply of materials, it was valid legislation. But then an alternative argument was raised, namely Article 248 provided that Parliament has exclusive power of making any law imposing a tax; such a power could proparly be exercised only by Parliament itself imposing a tax and not by extending the operation of taxation law passed by the legislature of a State, and' that Section 2 of the Part C State laws must be held to be lead as being repugnant to Article 243(2) insofar as it conferred on the Government authority to extend a taxation law to Part C States. This argument was rejected with the observation that 'when a notification is issued by the appropriate Government exteding the law of a Part A State to a part C State, the law so extended derives its force in the State to which it is extended from Section 2 of the Part C States (Laws) Act enacted by Parliament The result of a notification issued under that Section is that the provisions of the law which is extended become incorporated by reference in the Act itself, and, thereforee, a tax imposed there under is a tax imposed by Parliament'. This case is a clear authority for the proposition that the source of an extended Act like Punjab Act is the Parliament itself and not a subordinate authority like I he Central Government. Similar was the vew which was accepted in State of A.P. v. New Delhi Municipality : AIR1975Delhi223 wherein after referring to Mithan Lal's case (supra) and discussing the nature of the legislation like Punjab Municipal Act as applicable to Delhi, it was observed that 'it is thus clear that on the extension of the Act to the Union Territory of Delhi by the various Central Legislative enactments referred to above, it became a Central Act or an Act of Parliament as if made by virtue of power of Parliament to legislate for the Union Territory of Delhi by virtue of clause (4) of Article 246 of the Constitution of India'. Similarly in Mithan Lal (supra) while upholding the validity of Section 6 of the Essential Supplies Act which provided that any order issued under the Act will have effect not- withstanding anything contained in any other enactment, even on the assumption that to the extent of repugnancy between an order issued under Section 3 of the said Act and an existing law, the latter will stand repealed by implication. Supreme Court observed, 'Conceding, however, for the sake of argument that to the extent of a repugnancy between an order made under Section 3 and the provisions of an existing law, to the eexfent of the repugancy, the existing law stands repealed by implication, it seems to us that the repeal is not by any act of the delegate, but the repeal is by the legislative act of the Parliament itself. By enacting Section 6, Parliament itself has declared that an order made under Section 3 shall have effect notwithstanding any inconsistency in this order with any enactment other than this Act. This is not a declaration made by the delegate, but the legislature itself has declared its will that way in Section 6. The abrogation or the implied repeal is by force of the legislative declaration contained in Section 6 and is not by fores of the order made by the delegate under Section 3. The power of the delegate is only to make an order under Section 3. Once the delegate has made that order, its power is exhausted. Section 6 then steps in wherein the Parliament has declared. that as soon as such an order comes into being, that will have effect notwithstanding any inconsistency therewith contained in any enactment other than this Act. Parliament being supreme, it certainly could make a law abrogating or repealing by implication provisions of any pre-existing law and no exception could be taken on the ground of excessive delegation to the act of the Parliament itself. There is no delegation involved in the provisions of Sec ion 6 at all and that Section could not be held to be unconstitutional on that ground.'
(15) To the same effect are the observations made in Indian Appeals (vol. 5) page 178, Her Majesty the Queen v. Burah (the basic authority which was relied upon to uphold the conditional legislation in Delhi Laws case.). In that case by an Act 22 of 1869 the 9th Section empowered the Lt. Governor from time to time by notification in the Calcutta Gazette to extend mutates mutants all or any of the provisions contained in the other Sections to Jaintia Hills or the Naga Hills. In repealing the challenge that this Section amounted to delegation of legislative power the Privy Council observed at page 195 that 'Their Lordships think that it is a fallacy to speak of the powers thus conferred upon the Lt. Governor (large as they undoubtedly are) as if, when they were exercised the efficacy of the acts done under them would be due to any other legislative authority than that of the Governor General in Council. Their whole opertion is, directly and immediately, under and by virtue of this Act (XXII of 1869) itself. The proper legislature has exercised its judgment as to place persons, laws, powers and the result of that judgment has been to legislative conditionally as to all these things. The conditions having been fulfillled, the legislation is now absolute.' Legislation, conditional on the use of particular powers, or on the exercise of a limited discretion entrusted by the Legislature to persons in whom its places confidence, is no uncommon thing; and, in many circumstances, it may be highly convenient.' On a parity of reasoning, it must be held that when Punjab Act is extended to Delhi, it is not the exercise of rule making authority. In reality this power of extending an Act owes its legislative authority to Union Laws Act 1950, which in is turn derives its efficacy from the legislation passed by the Parliament. It should be noted that Article 246(4) empowers the Parliament to make laws with respect to Union Territories like Delhi. Laws applicable in Delhi will owe their source to the Parliament. The Administrator as such has admittedly no power to frame legislation, because the executive has no competence to do so it being the province of Legislature. Section 2 of the Union Territories Act, however, empowers the Central Government to extend to the Union Territory of Delhi any enactment which is in force in the State. The power of extension has been upheld by Delhi Laws Case as being within the permissible parameter of conditional legislation. This power to the Administrator is not to enact new laws but merely to extend laws passed by competent legislatures in other parts of the territory of India. The notification extending Punjab Act owes its strength and legitimacy to the Act of Parliament (vide Mithan Lal; supra) and not to the executive agency like the Administrator. The position that emerges in law is that whether the Parliament itself had passed an Act like Punjab Act and made applicable to Union Territory of Delhi or whether the Central Government by virtue of Section 2 of the Union Territories Laws Act has extended an enactment like Punjab Act to the Union Territory of Delhi, both of them would owe their source to the same authority namely the Parliament. There is no supremacy per se of one legislation passed by the Parliament and the other Act which has been extended by virtue of Union Laws Act. The authority and parentage being the same. i.e. Parliament, both stand on the same level. So long as the power of extending an Act has not crossed the limits of permissible delegation, the extended Act i.e. Punjab Act cannot be held to be invalid on the supposed ground that it is dealing with an aspect of the matter like the regulation or cinema rates which was not covered by an earlier Central Act i.e. Cinematograph Act of 1952. None is subordinate to the other because the authority is from the same source. To this situation the principles of repugnancy between a law passed by Parliament and legislation passed by a State legislature mentioned in Article 254 are inapposite because both Punjab Act as extended and Central Act must be treated to be the product of the same legislature, namely, Parliament.
(16) Of course, the provisions of two Central Acts may still have some repugnancy, and in that case it will have to besettled on the well established principles of reconciling the two Acts. In such a case, the rule of interpretation is that of implied repeal. But the Court leans against implying, a repeal, 'unless two Acts are so plainly repugnant to each other that effect cannot be given to both at the same time, a repeal will not be implied'. When both the legislations are to be taken as Acts passed by the Parliament the maxim to be applied is 'Posteriora deroganta priori
'THOUGH there may be no direct conflict, a State law may be inoperative because the Common- wealth law, or the award of the Commonwealth Court, is intended to be a complete exhaustive Code (Clyde Engg. Co. Ltd. v. Cowburn. (1926) 37 Clr 466.'
(17) He also referred to one of the tests of inconsistency laid down by Issacs, J.
'IF, however, a competent legislature expressly or implicitly evinces its intention to cover the whole filed, that is a conclusive test of inconsistency where another Legislature assumes to enter to any extent upon the same field'.
(18) The infirmity in the argument of counsel for the petitioner is that it assumes that the Central Act, 1952 is an exhaustive Code which covered full field and all aspects with regard to the regulation of the exhibition by means of cinematographs and, thereforee. Act of Punjab as extended to Delhi purporting to regulate rates for admission to cinemas cannot operate on the same field. But that is to take a too narrow and untenable view on the question of repugnancy because it is well settled that 'Repugancy falls to be considered when the law made by Parliament and the law made by the Stale Legislature occupy the same field because, if both these pieces of legislation deal with separate and distinct matters though of a cognate and allied character, repugnancy does not arise'. It is not correct that the Central Act of 1952 was an exhaustive Code and covered all the field and all aspects with regard to the exhibition by means of cinematographs. This Court has already held in Durga Chand Case (supra) that Central Act had not provided for fixation of rates for cinema. Thus this field was virgin and unoccupied and there could not, in law, be any obstacle for a law the Punjab Act, to be made applicable to Delhi providing for fixation of rates for admission to cinemas. So the question of repugnancy could not arise. It should be appreciated that inconsistency does not lie in the mere co-existence of two laws which are susceptible to simultaneous obedience. In (1977) 2 S.C. 670 Fatehchand Himmatlal v. State of Maharashtra Debt Relief Act was challenged amongst others on the ground of repugnancy with some provision of Gold Control Act, a Parliament law, but was repelled with the observation; 'We also find, as a fact, that dealings in gold, including pledging, have been covered in part by the Gold Control Act, 1968; even so nothing prevents the State from making the impugned Act'. The observation of Suba Rao, J. referred to therein 'A comparative study of both the Acts makes it clear that the two Acts deal with diffeerent matters and were passed for different purposes, apply here also, Moreover, 'unreal and unimaginable conflicts between the Central and the State Acts cannot be the foundation for invalidation of the later. The Court also referred with approval the way the rule has been applied in interpreting Canadian Constitution. 'In the Canadian Constitution, the question of conflict and coincidence in the domain in which provincial and Dominion legislation overlap has been considered. If both may overlap and co-exist without conflict, neither legislation is ultra vires. It has been held that the rule as to predominance of Dominion legislation can only be invoked in case of absolutely conflicting legislation in para materia when it will be an impossibility to give effect to both the Dominion and provincial enactments. There must be a real conflict between the two Acts i.e. the two enactments must come into collision. The doctrine of Dominion Paramountcy does not operate merely because the Dominion has legislated on the same subject matter. The doctrine of 'occupied field' applies only where there is a clash between Dominion Legislation and Provincial Legislation within an area common to both. Where both can co-exist peacefully, both reap their respective harvests (Vide Canadian Constitutional Law by Laskin pp. 454-455, 1951 Edn ' (Para 62) supra. Here no question of conflict arises. Central Act 1952 made no provision for regulation of cinema rates. This void is filled up by Punjab Act as extended to Delhi by supplying such a power. A sense of a provision in a Central Act does not amount to prohibition not to legislate on the subject of fixation of rates for admission to cinemas. In repelling a challenge to the virus of Kerela Abkari Act and the rules on the ground of it being repugnant to Medicinal and Toilet Preparation (Excise Duties) Act and the rules it was said :
'MERELY because the Central Rules made no provision for realisation of supervisory charges at the stage of manufacture of medicinal and toilet preparations, does not imply that the State has no power to prescribe the mode of supervision in a manufactory where preparations containing intoxicating liquor or intoxicating drugs are manufactured or to ensure proper collection of duties, taxes and other dues payable under the Act, or to the proper utilisation of liquor or intoxicating drug.'
Both the Central Act and the extended Punjab Act can stand together without even a friction. As a matter of fact, it is only to further the objective and bring it in harmony with social interest that the Punjab Act has been extended so as to effectuate the purpose of Central Act. Indeed the great purpose of Punjab Act is to remedy and to fill up the deficiency which was found in the Central Act as interpreted by this Court and to supply the necessary required statute to fit in with the changes of time and circumstances. No new principle in law is being laid down by Punjab Act. It is only seeking to effectuate in real sense the purpose of the Central Act for regulating and licensing the admission to the Cinema Auditorium. Mr. Venugopal referred us to Lachmi Narain V. Union of India : 2SCR785 but that authority has no applicability. In that case while extending Bengal Finance Sales Tax Act whereas Section 6(2) of the Act required the State Government to give notice 'not less than 3 months' of its intention to add to the schedule, the Administrator modified Section 6(2) by substituting by the words 'such previous notice as it considers reasonable'. It was in that context that it was held that this modification introduced change of essential features of the enactment, which was not permissible. It was also held that as the Act had been extended originally in 1951, power given under Section 2 had been exhausted, as it can only be exercised once and the purported exercise of power again after 6 years was invalid. But nothing of the sort has happened in the present case. Here the Central Government is not making a law. It is doing what it has been authorised by the Legislature to do. It is merely an agent of the law-making department i.e. the Parliament and in the conditions mentioned only extending Punjab Act, which is in force in a State as it is authorised to do so by the Parliament. The ancestry of Punjab Act must be traced not to Central Government but to Parliament. Reference may usefully be made to Narinder Chand v. U.T.H.P. : 1SCR940 . In that case a mandamus was sought against the Administration on the ground that at the time of auction it was represented that no Sales Tax would be leviable. Rejecting the plea, the Supreme Court observed that 'the power to impose a tax is undoubtedly a legislative power. That power can be exercised by the legislature directly or subject to certain conditions, the legislature may delegate that power to some other authority. But the exercise of that power, whether by legislature, or by its delegate is an exercise of a legislative power. The fact that the power was delegated to the executive does not convert that power into an executive or administrative power'. This authority is a complete answer to the argument which seeks to dilute the potency of the Punjab Act to a mere rule. It will be seen that there is no change in policy indicated by Sections 7A & 7B. The said sections provide the mechanism and the procedure for fixing the rates of admission in cinemas. The said provisions had been bodily retained without changing even a single comma. The policy indicated by the said section being to fix the rate and also to provide the mechanism and the same having been left untouched, there is no question of any change of policy having been effected by the administrator when extending Punjab Act. The reason for the said deletion is obvious. that Sections 3 to 7 have been deleted while extending the Punjab Act. The reason for the said deletion is obvious These provisions deal with the aspect of the provisions of licensing for the cinematograph exhibition and provides various procedural requirements. These provisions arc already to be found in Central Act which continues to remain in force in Delhi. The policy underlying the Punjab Ace for applying for licenses being the same which is already found in the Central Act, there is no change while extending the Punjab Act. Extending Sections 3 to 7 would have been a mere superfluous exercise because the same provisions are already to be found in the Central Act. We must, thereforee, repel the challenge to the virus or invalidity of the notification dated 21-11-1980 issued by the Central Government in exercise of the powers conferred by Section 2 of Union Territories Laws Act, 1950 extending to the Union Territory of Delhi, the Punjab Cinema Regulations Act, 1952 being Punjab Act Ii of 1952 as at present in force in the State of Haryana. Proposition No Ix :
(19) The argument under this head is that Sections 7A, 7B, do not lay down any criteria indicating what would be the circumstances, the conditions and the guidelines in fixing the rates of admissions to cinemas, auditorium and, thereforee, it gives an uncanalised power to the licensing authority or the Administrator and is thus vocative of Articles 14 and 19(1)(g) of Constitution. To start with, it was suggested as if this aspect had already been decided in Durga Chand (supra). We, however, do not so find. That decision really proceeded on the basis that Rule 45(13) and condition 8A which permitted the fixation of rates were beyond the Rule making power conferred by Section 16 of the Act and hence invalid. There is no discussion on the principles which are to be applied in finding out if any legislation is vocative of Articles 14 & 19 and observations made are, thereforee, mere obiter and it is open to us to decide this point free from any binding precedent. That the purpose of the reduction in the rates of admission to cinema auditoriums may be laudable, was accepted in : AIR1979Delhi249 . It will be readily 'appreciated that the action of the Government in regulating the rates of admission was motivated by concern for the common man who should be able to recreate and educate himself by being made able to see the films exhibited in the cinema theatres'. That if the power to regulate rates is negatived, 'the consequences were such that the rates were enhanced by the licensees to the detriment of the public interest which always exists in the recreation and education of the common man living in a city like Delhi. (See Air 1980 Delhi 147).
(20) Mr. Venugopal's argument is really a strong plea for Laissez faire to be allowed to operate in its full bloom, so B far as the rates for admission to cinemas are concerned. He says that unfeitered competition will permit a level to be found for the rates of admission for cinemas; so if the rates of admission are on the higher level the cinema owners would be driven out of the market unless it reduces the rates. This argument innocently assumes as if there was a free inter-play of competition in the cinema market and rates will find their own level and average cinema goer will be the beneficiary of absence of control. Similarly, arguments are usually raised by the manufacturers of consumers products. It is often said that the consumers need no protection. All can be safely left to the market. But the perfect market is an economist's dream and consumer's sovereignty, a myth. In real life, products are complex and of E great variety and the consumers and retailers have an imperfect knowledge. Suppliers may have often a dominating buying position. As a consequence, bargaining power is generally weighed against the consumer, who indeed must need protection in this unequal fight. That cinemas are amongst the most common and apparently easily available form of entertainment and relaxation to the vast masses of our population needs no emphasis. Any person familiar with the opening day of a new picture at cinema can testify to the factum of the cinema tickets being sold at a price even 4 to 5 times their listed price. The high price paid is not by the new rich or those with unaccounted funds. It is paid for at great sacrifice by a scooter driver, a small panshop owner and Rehriwala, a small petty clerk. The Explanationn for this apparently expensive venture is not difficult to understand. The life of these people is a hard and a drab one. Practical problems of daily living bear overwhelmingly on them. They need an escape and an illusion to give meaning to their dull life. The cinema transports them to a word may be an illusion or unreality where the grandeur of the screnery and finery of the costumes and irrationality of the plot places these poor men and women into another world lulling them into a believing that sometimes or the other a prince will suddenly appear who will marry a poor working class girl and take her to his palace or the poor shoe shine boy will be picked up by a millionaire heiress and married and taken to live in the house of her father whose only child she is. A make believe, a myth for two hours and yet possibly it brightness their life for at least those hours which otherwise is full of misery and worry. No wonder thereforee that on the opening days of a good picture, tickets sell at fantastic rates. To talk of free competition in such circumstances is to ignore the reality. Scale are too unevenly weighed against a cinema goer and conditions could go worse if there was no regulation of rates for admission to cinema. Shortage of theatres compounds this inequality of bargaining power. Just as shortage of rice or wheat will push up the prices similarly a perpetual shortage of cinemas in our country would make a trend for an upward rate for cinemas unless Government was empowered to regulate the rates keeping in view the public interest.
(21) In the report of the Working Group of National Film Policy appointed by the Government of India, it has been specified that as on 31-1-1980 there were only a total of 10392 theatres for a population of over 60 crores. Out of these only 6368 were permanent and the rest are temporary touring threatres. On an assumed average capacity of 600 for a permanent threatre we have in our country about 5.9 seats per thousand of population. Taking the seating capacity of temporary threatres also, it only works out to 7 seats per thousand population. This is the lowest average even in Asian countries because Lanka has 13 seats, Singapore 37, Japan 10 and Malayasia has 27 seats per thousand, Developed countries have a higher ratio. For example, Canada 40, Australia 24, G.D.R. 20, West Germany 18. Even the distribution of seats is uneven. Andhra and Tamil Nadu have 20 seats per thousand, Bihar, U.P. and Himachal Pradesh, go down to 5 seats. Assam, Haryana and Punjab have less than 7. West Bengal, and Maharashtra less than 10. Karnatka has over 10 seats and Kerala 13. 'About 50 per cent of cinemas are concentrated in 4 southern States and all the Northern States are acutely short of threatres'. It had an interesting comment on the classification of seats :
'7.14 We also recommend that there should be statutory provision that all threatres should provide for at least 20 per cent of the seats in the lowest class of tickets. We have observed that particularly in metropolitan cities there are at present very few theatre seats in lower classes. Similarly, the number of seats in the highest class should not exceed 20 per cent of the total capacity.'
(22) There is no denying that public at large has a vital interest in the rates of admission of cinemas even if owned privately. It has been well established for centuries and never doubted that the State is authorised to establish all laws requiring each citizen to so conduct himself and so use his own property as not unnecessarily to injure another. This is very essence of the Government and has found expression in the maxim, Sic utere tuo ut alienum no laedas. (See Munn v. People of Illinois; 24 Law Ed 77 When property is 'affected with a public interest, it ceased to be Jurisdiction privatea only'. 'When, thereforee one devotes his property to a use in which public has an interest, he, in effect, grants to the public an interest, in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use, but, so long as he maintains the use, he must submit to the control'. Similarly, 'And, according to him, when- ever the accident of time casts upon a party the benefit of having legal monopoly of landing goods in a public port, as where he is the owner of the only wharf authorised to receive goods which happens to be built in a port newly erected, he is confined to take reasonable compensation only for the use of the wharf'. (See Munn's case p. 84 supra).
(23) The argument that as under the Central Act as interpreted by this Court there was no power to fix the rates for admission of cinemas, there is something inherently wrong and impermissible in extending the Punjab Act which now empowers the Administrator to fix rates of admission must be rejected outright if' it is meant to establish that because when the original license was granted, there was no power of regulation to fix rates for admission, in the Central Act, no such provision like Punjab Act can be extended which would give such power for, as said in Munn's case (supra) that 'it matters not in this case that these plaintiffs in error had built their warehouses and established their business before the regulations complained of were adopted. What they did was, from the beginning subject to the power of the body politic to require them to conform to such regulations as might be established by the proper authorities for the common good. They entered upon their business and provided themselves with the means to carry it on subject to the condition. If they did not wish to submit themselves to such interference, they should not have clothed the public with an interest in their concerns'. (P. 87)
(24) That a large deal of delegation to be executive in the matter of implementing the policy laid down by the Act is permissible even in America where the three branches jealously seek to keep their separateness. Thus it was emphasised in Hampton Jr. & Co. v. United States 72 L. Ed. 624 that 'the field of Congress involves all and many varieties of legislative action, and Congress has found it frequently necessary to use officers of the executive branch within defined limit's, to secure the exact effect intended by its acts of legislation, by vesting discretion in such officers to make public regulations interpreting a statute and directing the details of its execution, even to the extent of providing for penalizing a breach of such regulations'.
(25) We would have thought that considering cinemas are admittedly used by public and that public interest is to infuse the decision of the licensing authority Administrator, there was sufficient guidance to make Punjab Act immune from the challenge of illegality. But Mr. Venugopal insists that as no detailed guidelines are mentioned in Section 7A, 7B challenge to their invalidity cannot be resisted. Now it is well to remember 'that a statute has to be read so as to make it valid and, if possible, an interpretation leading to a contrary position should be avoided'. : 2SCR477
(26) It is, true that no details are given in the Punjab Act as to the manner in which the rates for admission to cinemas are to be fixed. But we feel that to ask the legislature to itself lay down various details in the matter of fixation of rates for admission is to ask for the impossible and not to take a common sense view of the matter as stated in the decided cases. It is apparent that in fixing the rates there are various conditions and circumstances which have to be taken into account. The rates to be fixed would be many and also would vary. If legislature was asked to fix the minutest of detail, it would be impossible to exercise that power. Practical necessity alone must compel the legislature to leave these details to be worked out by the executive which, of course, will do its duty, after holding an enquiry and giving an opportunity to the parties affected and also act in a non-discriminatory manner. Legislature can only indicate the broad policy. Now Punjab Act is an Act to make provisions for regulating exhibitions by means of cinematographs. The statute itself also gives sufficient and proper guidance. Section 7A(2) provides for the licensee to apply if he wants to increase the rates for admission. 7A (3) gives the guidance that licensing authority if satisfied that increase will not unreasonably affect the purchaser of cinematograph exhibition tickets, it may for reasons to be recorded in writing, grant the approval. Similarly Section 7B of the extended Punjab Act permits power of alteration or amendment of rates of admission only to Administrator, if he is of the opinion that ft is expedient so to do in public interest. Thus the overwhelming guidance for fixation of rates is given in the statute itself, namely, public interest. Mr. Venugopal, however, characterises this guidance as illusory and of no effect. In support of this he referred us to Harak Chand v. Union of India : 1SCR479 , where the provisions of the Gold Control Act were challenged. Section 27 of the said Act provided that no person shall commence or carry on business unless he held a license. Sub-section (6) of Section 27 provided that the license may be issued or renewed having regard to the various matters mentioned in clauses (a) to (h). Section 27 (6) (a) provided that the Administrator will consider the number of dealers existing in the region. The Court held that the region deal of uncertainty. In that context, it also observed that was not defined and similarly it found the expression 'anticipated demand' in clause (b) to be vague and to lead to great deal of uncertainty. In that context, it also observed that the expression 'suitability of the applicant' in Section 27(6)(e) and 'public interest' in Section 27(6)(g) do not provide for any objective standard or norm or guidance. The court thus held that clauses (a), (b), (e) & (g) are inextricably bound up with the other clauses of Section 27(6) and form part of single scheme and the entire Section 27(6) must be held invalid. Mr. Venugopal relied strongly on the observations & says that public interest in clause (g) of Section 27 (6) was categorised as not to provide any objective standard or norm of guidance, from which, according to him, it must follow that a statute which provides that action may be taken in public interest suffers from the vice of arbitrariness. We however, do not read these observations of the Supreme Court in this manner. It will be found that it was only in the context of various other clauses (a) to (h) of Section 27 of Gold Control Act, which supplied no definition of region, etc. for the purpose of granting a license that these remarks were made in passing. That this is not the understanding of the Supreme Court about the guidance to be spelled out from the expression 'in the public interest' will be clear from a reference to : 2SCR621 , Smt. Maneka Gandhi v. Union of India and another. In that case challenge to Section 10(3) (c) of the Passport Act was made on the ground that the exercise of power to impound a passport can be exercised not only by the one or more stated grounds but on the ground of (interest of general public). This was said to be too vague and indeterminate to afford any real guidance to the Passport Authorities and as such was said to be vocative of Article 14 and 19(1)(a) & (g) of the Constitution. It was pleaded that discretion given to the Passport Authority and Central Government was thus unrestricted. Reselling the challenge that the ground denoted by the words 'in the interest of general public' was vocative of Article 14 of the Constitution, the Court speaking through Bhagwati, J. writing for the majority, observed at pags 631 para 65 that, 'We fail to see how this ground can. by any stretch of argument be characterised as vague or undefined'. The words 'in the interests of the general public' have a clearly well-defined meaning and the courts have often been called upon to decide whether a particular action is 'in the interests of the general public' or in 'public interest' and no difficulty has been experienced by the Courts in carrying out this exercise. These words are in fact borrowed ipsis- sima verba from Article 19(5) and we think it would be nothing short of heresay to accuse the constitution-makers of vague and loose thinking. The legislature performed a scissor and paste operation in lifting these words out of Article 19(5) and introducing them in Section 10 (3) (e) and if these words are not vague and indefinite in Article 19(5), it is difficult to see how they can be condemand to be such when they occur in Section 10 (3) (e). How can Section 10 (3) (e) be said to incur any constitutional infirmity on account of these words when they are no wider than the constitutional provision in Article 19(5) and adhere loyally to the verbal formula adopted in the Constitution We are clearly of the view that sufficient guidelines are provided by the words 'in the interest of the general public' and the power conferred on the Possport Authority to impound a passport cannot be said to be unguided or unfettered'. After such an authoritative pronouncement it is futile to challenge the virus of Section 7B of Punjab Act on the ground that the expression 'public interest' occurring therein offers no guidance in the matter of duties that the Administrator has to perform, which challenge is hereby rejected. Moreover, it should be noted that power under Section 7B of Punjab Act is exercised by the Administrator. It is true that no appeal is provided against his order passed under Section 7B, but then 'if must be remembered that in such a case the power is exercised by the Central Government itself and it can safely be assumed that the Central Government will exercise the power in a reasonable and responsible manner. a When power is vested in a high authority like the Central Government, abuse of power cannot be lightly assumed. And in any event, if there is abuse of power, the arms of the court are long enough to reach it and to strike it down.' Maneke (supra). As for Section 7A, the licensing authority has to record in writing its reasons on an application given for increase of the rates. The Supreme Court has held in Bhagat Raja v. Won of India : 3SCR302 , 'the least a tribunal can do is to disclose its mind. The compulsion of disiclosure guarantees consideration. The condition to give reasons introduces clarity and excludes or at any rate minimises arbitrariness, it gives satisfaction to the party against whom the order is made; and it also enables an appellate or supervisory Court to keep the tribunals within bounds. A reasoned order is a desirable condition of judicial disposal'. Moremore under Section 7A(3) if the licensing authority is satisfied that increase in rates will not unreasonably affect the purchaser of the cinematograph exhibition tickets, he may grant such increase. This means that if the increase is justified by the surrounding circumstances of say increase in the rate of electricity charges or other necessary incidental expenses though it may affect the purchaser of the cinematograph somewhat but not unreasonably the increase may be permitted. Reasons have to be recorded for grant of approval. A clear guidance for approving or not approving increase is mentioned in the statute. As to what if any should be the increase and what other circumstances must be considered will naturally vary and cannot obviously be put in the statute.
(27) Not only that but Section 7A (4) also provides for an appeal to the Administrator. Thus, there is an inbuilt safeguard against arbitrariness. These safeguards of giving reasons by the first authority and a further appeal were held in Maneka Gandhi's case (Para 65) to be a sufficient safeguard and to avoid falling a similar provision foul of Article 14 of the Constitution'.
(28) As such it can be said in the words of Condoze. J. in 1934 (293) U.S. 388 'that the Act had sufficiently declared a policy and the discretion delegated was not unfounded and vagarant but was canalised within the banks that keep it from over-flowing'. The object and the policy of the Act will furnish a sufficient guidance to the executive authorities even in the matter of fixing rates for tax has been accepted in a number of Supreme Court deci- sions. Thus 'It is not unconstitutional for the Legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods, and the like'. In : AIR1959SC586 the authority given to the municipality to impose taxes for purpose of implementing the Municipality Act was held to be a sufficient guidance for the imposition of tax, and not to suffer from excessive delegation. In Union of India v. Bhanamal Guizarimal Ltd. : 2SCR627 power was given to the Government to make necessary order for maintaining or increasing supplies of any essential commodity and equitable distribution and availability at fair prices. An order had been issued under clause 11(b) of the Iron and Steel Control Order decreasing by Rs. 30.00 per tonne the prices already fixed for all categories of steel. High Court had held clause 11(b) ultra virus as being vocative of Article 19(1)(f) & (g) of the Constitution. Rejecting the argument that clause 11(b) should have referred to the prices of some specified period as the basic price of commodities and should have directed the Controller to prescribe the maximum price in respect thereof by a reference to the said basic price, the Supreme Court observed,
'HAVING regard to the nature of the problem which the Legislature wanted to attack it may have come to the conclusion that it would be inexpedient to 'limit the discretion of the delegate in fixing the maximum prices by reference to any basic price. thereforee, we must hold that clause 11B is not unconstitutional on the ground of excessive delegation'.
(29) In Edward Mills Co. v. State of Ajmer : (1954)IILLJ686SC , the validity of a notification issued under the provisions of Minimum Wages Act was impeached on the ground that the Act had nowhere formulated a legislative policy according; to which an employment should be chosen for being included in the Schedule and also no standards had been laid down. Holding that the Minimum Wages Act aimed at a statutory fixation of minimum wages with a view to obviate the chance of exploitation of the labour, the Court pointed out that conditions of labour vary under different circumstances and from State to State and the expediency of including a particular trade or industry within the Schedule depends upon a variety of facts which are by no means uniform and which can best be ascertained by the person who is placed in charge of administration of a particular State and that it was with this view to carry out the purpose of the Act that power is delegated to the Government by Section 27. The challenge to the virus of Section 27 was thus repelled. In Vasanlal Maganbhai v. State of Bombay : 1978CriLJ1281 where power was given under Section 6(2) to the Govt. to fix a lower rate of the maximum rent payable by the tenants of lands situate in any particular area or may fix such rate at any other suitable basis as it may think fit. Section 6(1) provided for the maximum rent payable by a tenant for the lease of any land. The notification issued under Section 6(2) had fixed the rates which were very much lower than the rate which had been fixed by the earlier notification. That is why a challenge was made to Section 6(2) on the ground that this amounted to excessive delegation and the discretion by the Provincial Government was unfettered and uncanalised. On examination of the Act, the Supreme Court held that the Legislature realised that large number of tenants in the State being helpless could not be able to make individual application for fixation of reasonable rent and the legislative policy thus having been expressed for determining reasonable rent, delegation to the Provincial Government to fix the rent did not suffer from the infirmity of excessive delegation. The ratio of the said case clearly applies in the present case. Here are millions of small people who go for recreation to cinemas. They cannot bargain on the basis of equality with cinema business Empire. Their welfare needs to be looked after by public authority within the guidance that there should be no increase of rates as to unreasonably affect the purchaser and the decision should be permeated with public interest. In Harishankar Bagla's case (1954 Sc 465) virus of the Cotton Textiles (Control of Movement') Order 4 was challenged on the ground of violation of Article 14. This challenge was rejected with the words,
'THE policy underlying the Order is to regulate the transport of cotton textiles in a manner that will ensure an even distribution of the commodity in the country and make it available at a fair price to all. The grant or refusal of a permit is thus to be governed by this policy and the discretion given to the Textile Commissioner is to be exercised in such a way as to effectuate the policy. The conferment of such a discretion to the Textile Commissioner under Clause 3 of the Order cannot,, thereforee, be called unregulated or arbitrary and is not invalid on that ground.'
In Corporation of Calcutta v. Liberty Cinema ; : 2SCR477 Section 448 of the Calcutta Municipal Act provided that every license granted under the Act shall specify a tax or fee which may be charged at such rate as may from time to time be fixed by the Corporation. By a resolution the Corporation changed 'the basis of assessment of cinema houses. Under the new method the fee was to be assessed at rates prescribed per show according to the sactioned seating capacity at the cinema house which came to (in the case of the petitioner) a fee of Rs. 6,000 per year whereas on earlier basis which it was Rs. 400 per year. Question was raised that Section 548 did not provide any guidance for fixing a rate of tax and it was claimed that the excessive legislative function had been delegated which was unconstitutional. The Supreme Court negatived this challenge and said 'This case would appear to be express authority for the proposition that fixation of rates of taxes may be legitimately left by a statute to a non-legislative authority, for we see no distinction in principle between delegation of power to fix rates of taxes to be charged on different classes of goods and power to fix rates simpliciter, if power to fix rates in some cases can be delegated then equally the power to fix rates generally can be delegated.' No doubt there must be some guidance by the legislature for fixation of the rates but then as Supreme Court cautioned that, 'we first wish to observe that the validity of the guidance cannot be tested by a rigid uniform rule; that must depend on the object of the Act giving power to fix the rate.' Mr. Venugopal had seriously contended that even if some guidance could be spelled out from Section 7A, 7B, it will be of no avail because of the absence of specification of the maximum or at least minimum rates being put in the statute itself. Negativing this, the Court observed, 'we are unable to see how the specification of the maximum rate supplies any guidance as to how the amount of the tax which no doubt has to be below the maximum, is to be fixed. Provision for such maximum only sets out a limit of the rate to be imposed and a limit is only a limit and not a guidance.' The guidance provided in the Punjab Act is that increase may be allowed if it does not unreasonably affect the purchaser of the ticket clear enough guidance. In Avinder Singh and Ors v. State of Punjab : 1SCR845 , it was held that 'it is too late in the day to contend that the jurisprudence of delegation of legislative power does not sanction parting with the power to fix the rate of taxation given indication of the legislative policy with sufficient clarity.' (Para 23). That fixing the price of tickets for admission to cinema is in public interest and can be legitimately done by the State is recognised even in America which openly propounds the philosophy of Leissez Faire. Thus the legislature in the exercise of its police power may require the sale of tickets for public places of amusement. The Legislature may also properly regulate the price on resale of theatre and amusement tickets. Thus it has been held by Court's that 'the statute regulating activities of brokers of theatre tickets which limits price ticket's can be resold by brokers to a premium of not in excess of a certain amount per ticket, is not unconstitutional as arbitrary and confiscatory; nor does such statute violate the home rule provisions of the State Constitution'. It; has been said that the rule in the case of Tyson & Bro. United Theatre Ticket Offices. Inc v. Banton N. Y., 47 S. Ct. 426, 273 U.S. 418, 71 L. Ed. 718, 58 A.L.R. 1236, holding a prior statute of the same nature invalid is no longer applicable in view of later decisions of the Supreme Court' recognising the validity of price fixing in the public interest'. (Vide 86 Corpus JurisSecundum page 681, Art. 14; Head Notes 41(1) & (2). The challenge to the virus of Section 7A, 7B on the ground of excessive delegation or being vocative of Article 14, 19(l)(g) must', thereforee, fail. Preposition No. 10 :
(30) In C.W. 95911982 and other number of petitions order of suspension has been passed by the Licensing Authority because it has taken the view that petitioners increased the rate of admission without the approval of the licensing authority, and have thus contravened Section 7A of the Act. Counsel for the petitioner however, urges that there can be no violation of Section 7A of the Punjab Act unless there existed prior to the increase of the rates for admission some rates of admission which had been earlier approved by the Licensing Authority. According to this argument unless there has been an approved rate under Section 7A(1), there is no necessity even to apply much less to get approval under Section 7A(2). The argument is that as the earlier fixation of rate done in 1975 was held to be bad in the Durga Chand's case (supra.) the consequence is that there are no rates for admission which stand approved by the licensing Authority and consequently it is open to the petitioners to increase their rates at their own sweet will and unfettered by any constraint. The argument is unacceptable. This submission ignores the mandate of Section 7A(2) which clearly provides that if the licensee intends to increase the rate for admis- sion he shall make an application for the same amd section 7A(3) lays down the circumstances in which the Licensing Authority may approve the increase. Section 7A(4) also provides for appeal against the order of licensing authority to the Administrator. The applicability of Section 7A(2) is not dependent on there existing approved rats. Sub-section (2) of Section 7A is immediately attracted whenever the licensee wishes to increase the rate. Even if there are no existing approved rates because of Durga Chand's case (supra), it will not free the licensee from the applicability of Section 7A(2), which immediately becomes attracted since the time Punjab Act came into force. From that time onwards there is the mandate of Section 7A(2) of Punjab Act that if the licensee intends to increase the rate he must apply to the Licensing Authority, which in turn carries inevitably the necessary consequence that he cannot increase the rate of admission unless he obtains approval of the Licensing Authority. Even thereforee, assuming that no rates were approved prior to the Punjab Act coming into force in Delhi the requirement of Section 7A(2) now has to be complied with. It is thereforee, no defense to the petitioner that he does not have to comply with Section 7A(2). Section 7A(1) is an independent provision which gives a general mandate that the Licensing Authority shall adhere to the classification of seats and the rates for admission as approved by the Licensing Authority. This means that if there has been an approved rate for admission the same must be observed by the licensee. This does not cut into the requirement of 'Section 7A(2) which is attracted the moment licensee wishes to increase the rates for admission to cinemas. After the rates have been approved under Section 7A(2), the adherence to such rates will have to be done in terms of Section 7A (1). To accept the argument of Mr. Venugopal would make the working of Punjab Act impossible and such an interpretation leading to such absurd result cannot be countenanced. On the assumption, thereforee, that if the petitioners or any licensee had increased the rates for admission without first getting the approval under Section 7A(2), action could legitimately be taken, for having violated Section 7A of Punjab Act. The grievance on this score by the petitioners is without merit. Prepositions 5 to 8:
(31) Rule 8 of the Delhi Cinematograph Rules 1981 framed under Section 16 of the Cinematograph Act 1952 provides as follows:
'THE licensing Authority may at any time revoke or suspend a license granted by him if any breach of this Rule or of the Conditions of the license or for any other reasons to be recorded by him in writing'.
Section 15 of the Central Act provides that where the hilder of a license has been convicted of an offence under Section 7 or 14, the license may be revoked by the licensing Authority, and Section 16 empowered the Central Government to make Rules. The first challenge to Rule 8 is that as Section 16 does not provide for the Rule to be made for suspending the license, hence Rule 8 is ultra virus the Act. The argument being that power to suspend a license is in the nature of a penalty and the penal provision can only be provided by legislative enactment and not by a rule making authority. This argument suffers from the erroneous assumption that Section 16 does not authorise the framing of a rule to suspend a license for violation of the conditions of a license. Now Section 16 (a) prescribes the terms; conditions and restritions if any subject to which license may be granted. These words which empower the conditions to be imposed for the issue of a license must necessarily and implicitely encompass the power to frame a rule for suspending the license if conditions of license have not been carried out. When the rule making power extends to prescribing the terms and conditions for the grant of a license it is pointless to urge that the power to suspend a license even when the conditions of license have been violated would be outside the authorisation given by the legislature. The legislature obviously could not have contemplated that the rule making authority though it may impose conditions on which the license will be granted will be powerless to spspend or to cancel a license, even when the conditions are violated. Mr. Venugopal however, says that as Section 15 gives power to revoke only if a person has been convicted, the revocation can only be imposed after conviction. We can not agree. In our view Section 15 no doubt contemplates revoking a license, if convicted. Since it is penalty for conviction of offence, legislature possibly had to provide one, because it may not have been possible to enforce it by a rule making power. But it is a far cry from that to suggest that because a contravention of the conditions of license is punishable with a fine the implicit power in a Licensing Authority to suspend or revoke a license for contravention of the conditions of license is beyond the rule making power. We do not see any conflict between the power given to impose a penalty under Section 15 and the power to revoke or suspend a license for contravention of the condiions of license given by Rule 8. Mr. Venugopal relied for his submission on an unreported single Bench judgment of Andhra Pradesh High Court in G. Kamaraju v. State of Andhra Pradesh (C.W.P. No. 418/1955 decided on 12-7-1957) (28). In that case Sections 9 & 10 of Andhra Cinemas Regulations Act were pari materia the same as Sections 14 and 15 of the Central Act. Condition 11 empowered the Collector to suspend or cancel a license. The learned single Judge however, held that before the Collector could suspend a license the licensee should have been first convicted under Section 9. With very great respect we are unable to agree with this, reasoning, and in this we are supported by a Division Bench judgment of the Madras High Court in Wellington Talkies V. Collector of Trichur. 1963 (1) Mad. LJ.215 which specifically dissented from the said single bench Judgment. In that case also clause 16 provided that the license shall be subject; to cancellation or suspension for the breach of any of the conditions. The argument was that as this clause was made as a result of rule making authority this condition encroached and covered the same area as is covered by Sections 8 & 9 of the Act which were similar to Sections 9 and 10 of Andhra Act. In repelling a similar challenge which was accepted in Kamaraju's case (supra.) and voicing their dissent the Bench pointed out that ''condition No. 16 is not really a penal one but a mere administrative consequence' and that such an action of the Licensing Authority tentamounts to a declaration that the pre-requisite condition as to the subsistance of license having been broken it no longer subsists. The Bench summed up the position which has our respectful concurrence:
'WHILE the provisions of Sections 7&9 relate to a criminal prosecution, the conviction therein entailing a further consequence of termination of the license as well, the sanctions provided by condition 16 of the license, is a nice administrative punishment intended wih a view to enforce a due adherence to the Rules under the Act and also the conditions of the license. It cannot, thereforee, be said that the rule making authority in imposing condition 16 really covered the same field as the penalty imposed under Section 9. The power to inflict an administrative punishment by way of cancellation is always inherent in a revocable license. Indeed, such a provision for the determination of the license itself in case of breach of its conditions is necessary even in the interest of the public'.
To accept the argument of the counel for the petitioner that so long as there is no conviction there is no power to revoke or suspend would mean that there can be a flagrant violation of the conditions of the license and yet the Licensing Authority must helplessly permit he licensee to continue its business, until he is convicted. To take an illustration even if the condition required in the interest of rafety of persons attending the exhibition (which is provided in the Act) is violated the authority could not suspend or revoke the license and must need await the licensee to be convicted. Considering the time usually taken in courts, it must mean that the licensee can continue to play with the life of public with impunity. To accept that the Legislature would have contemplated such absurd and unpardonable helplesness en the part of licensig authority is to attribute lack of sensitivity and irrational conduct to the Legislature, which obviously is impermissible. This would itself show the hollowness of the argument that without a conviction under Section 15 of the Central Act no license can be revoked. We thus must reject the contention that Rule 8 is in any way ultravires Section 15 or any provision of the Central Act.
(32) We are of the view that Rule 8 is permitted by the Central Act for the obvious reason that the power to revoke or suspend a license for contravention of the conidtions of the license always inhere in the authirity who grants the license. Reference in this connection may be made to Girdhari Lal V. State of Punjab & Others 1966 P.L.R. 390 . In that case clause (8) of the Iron and Steel Control Order authorised the revocation by the authority which issued the quota. In that case a complaint having been made of misutilisation of the quota, the quata was cancelled. Section 7 & 8 of the Essential Commodities Act provided for penalties which were imposable for contravention of any order issued under Section 3. Rejecting the contention that for misutilisation of quota, only imprisonment on conviction was the consequence and there was no power to cancel the quota issued under Iron and Steel Control Order, the learned Judge said that, 'the Government or the authority to which this task is delegated would be acting in vacuo if it were to be assumed that though the power to give a license is mentioned the authority to revoke it is not to be inferred there from Regulation. To secure equitable distribution necessary implies that the power of grant carries with it the power to cancel a license or quota. A commodity being in short supply generally requires equitable distribution by the Government and if Mr. Thapar's contention is accepted a guarantee may flout the authority by misusing the quota or license for it his contention that even if such a miscreant is sent to jail under the punitive provisions of the Ess,ential Commodities Act the quota would still be available to the industrial unit to which it was originally allocated. There is neither any rational ground nor authority in support' of the proposition for which Mr. Thapar contends'. Rule 8 only paraphrases a power which vest's in the authority granting a privilege Eke a license to revoke or cancel it if it finds that conditions on which it was issued are being breached. As a matter of fact even if Rule 8 had not been framed, the power to suspend or revoke a lincese for breach of the conditions of licnese could be exercised by the Licensing Authority for it is well accepted and the General Clauses Act also fortifies it by providing that where power to make appointment is conferred then the authority having power to make appointment shall have also the power to suspend in exercise of that power and similarly where the Central Act confers a power to issue any notification or order then that power includes a power to add, amend, vary or rescind any order. These obrervations apply aptly to the present case.
(33) The next aspect of this argument' by Mr. Venugopal was that Rule 8, even if valid only permitted revocation for breach of the rules or conditions of license. In view of Durga Chand's case (supra.) there is no rule requiring prior approval of the Licensing Authority, before increasing the rates, so there is no violation of the rules. Next step in argument is that there is no condition in he license requiring prior approval for increasing the rate so no suspension can be directed on this ground also. If Mr. Venugopal is right Rules 8, though valid must, remain suspended in mid air, atleast in respect of the action of the Licensee in increasing the rates, for admission to cinemas, even without approval of the Licensing Authority. We however, do not find that such is the result, for according to us the sharp edge of Rule 8 would, be immediately attracted if the licensee was to increase the fates for admission without first getting written approval from the Licensing Authority. This argument of absence of Rule 45(xiii) and condition 8A may have had validity before the enforcement of extended Punjab Act. But it has no susbstance after 15-12-1980, and especially in view of the modification made in definition clause of Punjab Act defining 'licensee' in Section 2(d) of the Punjab Act to mean a person to whom a license has been granted under the Cinematograph Act 1952. The objection that this modification amounts to legislation is without merit. Modification and restrictions which are permitted by Section 2 of Union Laws Act are no doubt meant to permit modification so as to suit the local conditions considering that the extended Act had been passed for another State. In the present case Punjab Act was being extended to Delhi, that is why in Sections 7A and 7B for the word 'Government' 'Administrator' has been substituted because that is relevant for Union Territory of Delhi, Now Section 7A of the Punjab Act requires the licensee to observe the classification of seats and rates of admission. Both Sections 7A and 7B give certain rights and obligations on licensees'. But there is however, no definition of the word licensee in the Punjab Act. Of course under the Punjab Act the word licensee' would have to be spelt out from Section 5 of the said Act which empowers the Licensing Authority to grant the license. obviously meaning that a person to whom a license has been granted is a licensee. But in Delhi license is granted under a Central Act. A licensee must, thereforee, be one who has been granted a license under Central Act. There is no definition of licensee' under the Punjab Act and Central Act. But as Section 7A, 7B of Punjab Act have been extended to Delhi, definition of licensee' had to be supplied to give life to these provisions i.e. Sections 7A & 7B. Unless the word licensee' as mentioned in Sections 7A & 7B is defined the whole of Section 7A and 7B will have remained inoperative. When extended Punjab Act defined licensee' it was done to effectuate Sections 7A, 7B. Thus this modification was essentially a minor one and to bring the extended Act in harmony with Central Law. which is existing in Delhi. The result' of combined reading of Sections 7A, 7B of extended Act and the Central Act, thereforee, is that a licensee' (like the petitioner who has been granted license under the Central Act) is required, to adhere to the classification of eats and the rates for admission as approved by the Licensing Authority. Sub-section (2) Section 7A requires the licensee that if he intends to increase the rates for admission he has to obtain the approval for such increase. These statutory restrictions and requirements in Sections 7A and 7B have necessarily to be complied with by the licensee on pain of revocation for it is well settled that 'the granting of a license to engage in or operate a theatre, show. or other amusement enterprise, such as horse-racing meet, is the grant of a mere privilge, rather than right which once granted cannot be withdrawn, and such a license is taken subject to the valid conditions and regulations. which must be complied with in order to exercise the privileges conferred by the license' (Vide 86 Cjs page 698 Art. 24). Section 7A provides that there will be no increase of cinema rates unless approved by the Licensing Authority and Section 7B similarly authorises the Administrator to amend and alter the rates for admission for cinema, Sections 7A and 7B thus are deemed to be and in fact and law incorporated in the license, and would thus taken to be the condition of license. Now Rule 8 which authorises the revocation if there is a breach of the conditions of license will include not only the conditions which have been mentioned in the license but requirement' of Sections 7A and 7B which have by force of Statute become conditions of license. If, thereforee, the petitioners increase their rates for admission to the cinematograph exhibition without the approval of the Licensing Authority the result will be that they would have violated and not complied with Section 7A and 7B of the Punjab Act, and would make themselves liable to have their licenses revoked or suspended under Rule 8, which gives power to do so for breach of the conditions of a license. We may also mention that Rule 8 permits order of revocation or cancellation for 'other reasons recorded in writing'. Mr. Venugopal would be right in claiming this part to be arbitrary if it was read as giving uncanalised power to the Licensing Authority to suspend for any fanciful or irrelevant reason. But if this part of rule is read as to mean revocation of license 'for cause' which is usually found in many licenses, the challenge on the ground of arbitrariness would fail, because in such a case it would mean that revocation must be for an occurrence which it is reasonably consistent with sound public policy to find offensive. In reading down the expression 'for any other reason', it would be perfectly legitimate for the Licensing Authority to revoke or suspend the license for non-compliance with the provisions of Sections 7A and 7B of Punjab Act, for action an this account would be to see that the mandate of Sections 7A and 7B which are in public interest are not rendered nugatory. In fact such an action would be in accord with the object of the statute. Proposition NO. 11:
(34) Mr. Venugopal had suggested that as Section 8 of the Punjab Act which permits order of revocation to be passed had not been extended it meant that such power was being specifically excluded. We cannot agree. Section 8 of the Punjab Act is only an amalgam of Sections 12, 14, & 15 of the Central Act. As part of Section 8 it was already covered by Sections 15& 14 of the Cinematograph Act and Rule & of Delhi Cinema Rules it was not really necessary to extend Section 8 of the Punjab Act, for the purpose of giving a power to suspend, because such a power was already to be found in the Rules. Rule 8, thereforee, cannot be avoided by the petitioner if he oversteps the limitations provided in Sections 7A, 7B of the Punjab Act. This is of course apart from the fact' that even if Rule 8 was not there the Licensing Authority in terms of the power that inheres in it, as mentioned already will have the right to revoke or suspend a license if provisions of the Central and Punjab Act were violated or for any non-compliance with their provisions. We must thereforee hold that it is competent in law for the licensing authority to revoke or suspend the license, if any increase in rates for admission to cinematograph exhibition is made by the licensee without obtaining approval in writing from the licensing authority.
(35) We have thus dealt with the points which were common to all the cases. As, mentioned already in number of cases orders of suspension have been passed or show cause issued. When the petitioners filed writ petitions the order of suspension were stayed. Suspension was ordered because the licensing authority took the view that rates have been increased without his approval and there was thus contravention of Section 7A of the Act. But that' order has spent itself having been stayed. It is clear that in view of our judgment of today rates for admission to cinematograph exhibition cannot be increased without the approval of the licensing authority. The result will obviously be that the rates of admission to cinema auditorium will henceforth continue to be the same which existed prior to 15-12-1980, (the date when Punjab Act was made applicable to Delhi). These rates are of course subject to any increase being approved by the Licensing Authority under Section 7A of the Act or any alteration or amendment made by the Administrator in exercise of the powers under Section 7B of Punjab Act. The peti- tioners cannot on their own increase the rates for admission to the cinema auditorium.
(36) We may however, make it clear that in case any license was issued after Punjab Act came into force, in Delhi that licensee will only be entitled to charge rates mentioned in his license, notwithstanding that they are lower than what he was charging prior to 15-12-1980. This is for the reason that license and rates having been fixed after Punjab Act came into force, it was permissible for the Licensing authority to fix the rates. And if the licensee wants on increase of rates for admission he must apply under Section 7A of the Act. We do not wish to go into the merits of the order of suspension because we are malting it clear that the dismissal of the writ petitions will not automatically revive the orders of suspension. Of course if rates of admission are continued to be charged higher than indicated by us, without the approval of the Licensing Authority or the Administrator, it will be open to the Licensing Authority to take any action under law including that for revocation or suspension. But that eventuality, if at all, will arise in future, and we deem it unnecessary either to anticipate or to speculate about it. We can best leave it to the parties concerned to deal with it in the light' of their rights and obligations given in the Statute and under the law. We do not wish to express any opinion about the necessity for increase of rates for admission as claimed by the petitioners or the equally forceful plea of the respondents giving vent to the alleged complaint from large sector of public especially from cinema going audience and other responsible public opinion against the sharp and unjustified rise of rates for admission made by the cinema owners, for the obvious reason that this matter is not before us. We are dealing only with the matter of competency to fix rates and not with the justification or otherwise of any particular rates for admission, which have been fixed. We may mention that it was not disputed by Mr. Sabharwal the learned counsel for the respondents that before passing any order of revocation or suspension or taking action the licensee has to be given reasonable opportunity of showing cause against the action proposed to be taken against him. As to what is proper opportunity will depend on the fact's of each case. In the matter of action on the ground of increase of rates without approval, the matter of enquiry can hardly take much time. Cinema tickets are sold publicly and it is a matter of minutes to check up what rate is being charged on any particular day. The cinema rates having been fixed, any sale of tickets beyond the fixed rate for admission would obviously be an increase and if it is without the approval of the Licensing Authority or the Administrator, it would bs open to them to take any action as under the law. We, thereforee, do not visualise that these matters can be unnecessarily delayed. Fairness of procedure requires an opportunity to be given and we cannot allow this right to be negatived. In fairness to Mr. Sabharwal, he did not claim to decide without first giving opportunity to the licensees. Our conclusions are as follows : (1) That the notification dated 21-11-1980 issued by the Central Government under Section 2 of the Union Territories (Laws) Act, 1950 extending to Union Territory of Delhi the Punjab Cinema Regulations Act, 1952 as at present in force in State of Haryana is valid and Constitational; (II) Section 7A and Section 7B of the Punjab Act do not suffer from the vice of excessive delegation and are not vocative of Article 14 or 19(1)(g) of the Constitution; (III) Rule 8 of Delhi Cinematograph Rules, 1981 is valid and is not beyond the ambit of the Central Act : (IV) That after the coming into force of the Punjab Act, 1952 w.e.f. 15-12-1980 the Licensee cannot increase the rates for admission to the Cinematograph Exhibition without first getting the written approval of the Licensing Authority as required by Section 7A of the Punjab Act; (V) That if the licensee increases the rate of admission without the approval obtained under Section 7A (2) Punjab Act he will be contravening the provisions of Section 7A and action to suspend or revoke the license can be validly taken under Rule 8 of the Delhi Cinematograph Rules; (VI) That before exercising powers under the Act or Rule 8 proper opportunity will have to be given to the licensee before passing the final order; (VII) That similarly if the Administrator wishes to proceed under Section7B of Punjab Act he will have to comply with the principles of natural justice and give an opportunity to the parties affectted before passing the final order ; (VIII) That as mentioned by us the order of suspension which has been passed will not automatically revive by the dismissal of these petitions. Of course if in future there is any contravention the authorities are free to initiate action as permitted by law; (IX) That henceforth the rates for admission to the cinematograph exhibition (unless increased I alteration is made by the Licensing Authority or the Administrator) will be those which were prevailing prior to 15-12-1980. Those rates will now continue unless there is an increase or alteration or amendment in terms of Sections 7A and 7B of the Act. But in those cases where the licenses were issued after the coming into force of the Punjab Act rates for admission for cinematograph exhibition as mentioned in the license will operate, notwithstanding that they may be lower than those charged by these licensees prior to 15-12-1982, unless there is an increase or alteration or amendment in terms of Sections 7A, 7B of the Act.
(37) We have upheld die validity of the Act. The court had also earlier permitted the priceedings to gon on pursuance of notice issued under Section 7B of Punjab Act but had directed that final orders may not be passed. We are now dismissing the petitions and vacating all interim orders and that direction is also vacated. It is apparent that as the matter has been pending for quite some time (notice under Section 7B was issued in February, 1981) the matter should be expedited. Because of the pendency of the litigation it is possible that the petitioners and other parties may not have been able to participate fully in pursuance of the notice and place their point of view before the Administrator. We, thereforee, feel that it would be proper if an opportunity is given to the petitioners to say or put forth any further matter or material before the Administrator. We find that the objections and suggestions were to be filed before the Secretary (Home), Delhi Administration. We are, thereforee, directing the petitioners through their counsel that they or their representatives may appear before the Secretary (Home), Delhi Administration on December 27, 1982 when the said officer will, on instructions from the Administrator, fix further dates for proceedings so that the matters could be finalised possibly within 2 months. During the pendency of the petitions this court had permitted the rates for admission to be increased on certain basis. All those directions are hereby recalled and vacated for the reason that the main writ' petitions are now being dismissed. However, as immediate change over to those rates mentioned in our judgment would require some time and adjustments and also to see that avoidable accusation of charging increased rates may riot be leveled against the petitioners, we would direct that the interim orders given by this, Court would continue to operate up to and including (January 13, 1983) but would stand vacated at the end of that day So from January 14, 1983 the petitioners will have to observe the rates of admission for cinematograph exhibition in the manner as already indicated by us in our judgment. We feel that this interval would be sufficient to enable the petitioners to make the necessary adjustments.
(38) The petitioners had been asked to keep the accounts as per order dated April 12, 1982, April 15, 1982 in C.W. 959182 so that the court could know what extra amounts, in case the writ petitions are dismissed, have been collected by the petitioners. In view of our decision that the rate for admisson to cinemas could not have been increased without the approval of the Licensing Authority it is apparent that the collection made by the petitioners under orders of this Court do not legally and properly belong to them. As such some order by the Court for their proper utilisation for a proper public purpose is necessary. In order to make suitable orders we would direct both the petitioners and the respondents to prepare up-to-date statements of account and also to give suggestions for the utilisation of this extra amount which has been collected by the petitioners. It would be better if the petitioners and the respondents could sit together and try to make effort to arrive at a mutually agreed proposal. To come up for this purpose for further directions on 28-1-1983.
(39) As a result the petitions are dismissed as above. In the circumstances here will be no order as costs.