State of Punjab & ANR Vs. Hari
Krishan Sharma  INSC 285 (9 December 1965)
09/12/1965 GAJENDRAGADKAR, P.B.
(CJ) GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N.
CITATION: 1966 AIR 1081 1966 SCR (2) 982
F 1970 SC1896 (15) D 1980 SC1008 (30) RF 1982
Punjab Cinemas (Regulation) Act (11 of 1952)
s. 5(2)-Scope of Government's Control.
The second appellant-the Sub-divisional
Officer-had been constituted as the licensing authority, under s. 4 of the
Punjab Cinemas (Regulation) Act, 1952, for the area concerned in the present
case. The respondent made an application to him for a licence to construct a
permanent cinema hall. Pending the application, instructions were issued by the
first appellant-the State Government-that all such applications for licence
shall be forwarded to the State Government for orders accompanied with certain
particulars regarding the applicant. The second appellant forwarded the
respondent's application with the relevant facts to the first appellant and the
first appellant rejected the application. The respondent's appeal to the first
appellant under s. 5(3) of the Act was also rejected.
The respondent then moved the High Court
under Art. 226 and the High Court held that the first appellant had no
authority or power to require all applications for licences under the Act to be
forwarded to it and to deal with them itself.
In appeal to this Court, the first appellant
contended that it had jurisdiction to deal with the application because s.
5(2) of the Act conferred very wide powers of
control on it and that the power took within its sweep the directions issued by
HELD : The scheme of the Act indicates that
there are two authorities which are expected to function under the Act-the
licensing authority as well as the State Government. The basic fact in the
scheme is that it is the licensing authority which is solely given the power to
deal with the applications for licence in the first instance, and this basic
position cannot be changed by the State Government by issuing any executive
orders or by making rules under s. 9 of the Act. [989 G; 990 B-C] The control
of the State Government under s. 5(2) subject to which the licensing authority
has to function is very wide;
but however wide this control may be, it
cannot justify the State Government to completely oust the licensing authority
and itself usurp its functions. The licensing authority has to act under the
control of the State Government, but it is the licensing authority which has to
act and not the Government itself. The said control can be exercised generally
before applications are granted by issuing general instructions which are
legitimate and reasonable for the purpose of the Act, or particularly by
correcting individual orders granting licences if they are found to be
erroneous, but in any case the State Government has to function either as an
appellate authority under s. 5(3) or as a revisional authority under s. 5(2),
but it cannot assume for itself the powers of the licensing authority. [988
H-989 E] Karnati Rangaiah v. A. Sultan Mohiddin, A.I.R. 1957 A.P. 513,
M/s.Vishnu Talkies v. The State,  I.L.R. 12 Rai.
14 and Bharat Bhushan v. Cinema and City
1956 All. 99, overruled.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 763 of 963.
Appeal by special leave from the judgment and
order dated March 30, 1961 of the Punjab High Court in Civil Appeal Writ No.
1100 of 1959.
Bishan Narain and R. N. Sachthey, for the
S. N. Andley, for the respondent.
The Judgment of the Court was delivered by
Gajendragadkar, C.J. The short question of law which arises in this appeal
relates to the construction of section 5(2) of the Punjab Cinemas (Regulation)
Act, 1952 (No. 11 of 1952) (hereinafter called 'the Act'). The respondent, Hari
Krishan Sharma, who claims to be the owner of a certain site in the town of
Jhajjar, desired to construct a cinema hall at the said place for the purpose
of exhibiting cinematography. On December 16, 1956, he submitted an application
to appellant No. 2, the Subdivisions Officer, Jhajjar, for the grant of the
licence to construct and run a permanent cinema hall on his site. On February
22, 1957, appellant No. 2 forwarded the said application to the Tehsildar for
inspection of the site. It appears that on April 24, 1957, the Government of
appellant No. 1, the State of Punjab, had issued instructions in regard to the
grant of licences under the relevant provisions of the Act. These instructions
required that all requests for the grant of permission for opening all new
permanent cinemas should be referred to appellant No. 1 for orders. On
September 26, 1957, the Tehsildar made a report that the site was in accordance
with the provisions of the Act and that the respondent was its owner. On
September 30, 1957, another memorandum was issued by appellant No. 1 addressed
to all the District Magistrates and the Sub-Divisional Officers conveying the
decision of appellant No. 1 that when an application for grant of permission to
construct a permanent cinema was referred to the Government, it should be
accompanied by the particulars enumerated in the memorandum.
Amongst the items thus enumerated were the
population-of the town where the permanent cinema is proposed to be
constructed; whether there are any permanent cinemas already in existence in
the town, and if so, how many; whether the applicant/applicants has/have been
taking any part in any activity undermining the security of the State; and
whether the financial position of the applicant/applicants is/are sound. These
notifications were issued by appellant No.1 8Sup. CI/66-16 984 while the
application made by the respondent was pending co;
On April 24, 1958, appellant No. 2 informed
the respondent that the site proposed by him for the construction of the cinema
hall had been approved. The respondent was required to submit a plan of the
building within a month and he was warned not to transfer the ownership of the
site without the previous sanction of the licensing authority. On May 23, 1958,
the respondent submitted the building plans. These plans were forwarded by
appellant No. 2 to the Executive Engineer, Provincial Division, Rohtak, for
scrutiny. While forwarding the plans to the Executive Engineer, appellant No. 2
had stated that the respondent had been allowed to construct a permanent cinema
hall at Jhajjar and the site plans were being submitted for proper scrutiny and
approval at an early date.
Meanwhile, it appears that one Mohan Lal had
also applied for grant of a licence for construction of a cinema hall in June,
1958, but he was informed that permission had already been granted to one
person, and there was no scope for a second cinema hall. That is why he was
told that his application could not be considered. Yet another person, Sultan
Singh by name, made a similar application on August 26, 1958. On October 7,
1958, the Provincial Town Planner, Punjab, wrote to the Executive Engineer that
the building plans submitted by the respondent had been checked and they
appeared to satisfy the rules framed under the Act so far as the structural
features of the building were concerned. On October 6, 1958, however, appellant
No. 2 addressed a memorandum to the respondent informing him that the site
plans prepared by him for the construction of a permanent cinema hall would be
referred to appellant No. 1 for approval "according to the latest
Then followed a report made by appellant No.
2 to appellant No. 1 on October 31, 1958, mentioning all the relevant facts in
regard to the application of the respondent, and adding that the report was
forwarded to appellant No. I for its consideration. On December 20, 1958,
appellant No. 2 submitted another report to appellant No. 1 saying, inter alia,
that it had been reported by the police that the respondent had been arrested
in connection with "Save Hindi Agitation" and was discharged on
tendering apology and that he did not pay any income-tax. On March 4, 1959,
appellant No. 2 informed the respondent that his application had been rejected
by appellant No. as the same did not fulfill the conditions laid down in the
memorandum, dated 985 September 3-0, 1957. It appears that appellant No. I had
decided of grant the licence to Sultan Singh, and that probably is the reason
why the application of the respondent was rejected.
On receiving this communication from
appellant No. 2, the respondent preferred an appeal to appellant No. 1 under S.
5(3) of the Act, but his appeal was rejected on April 14, 1959; and that drove
the respondent to the High Court of Punjab to seek an appropriate relief under
its jurisdiction under Article 226 of the Constitution.
In his petition, the respondent alleged that
the order passed by appellant No. I rejecting his application for a licence
under S. 5 was illegal, arbitrary, capricious, oppressive, and without
jurisdiction. In support of his plea, the respondent had also alleged that in
rejecting his application, appellant No. 1 had been influenced by extraneous
considerations which had no relevance to the decision of the question as to
whether a licence should be granted to him or not. The suggestion made by the
respondent was that appellant No. 1 wanted to prefer Sultan Singh to him for
extraneous considerations, and that rendered the impugned order invalid. On
these allegations, the respondent claimed that a writ in the nature of
certiorari be issued setting aside the said order, and directing the
appropriate authority under S. 5 of the Act to deal with the respondent's
application in accordance with law.
The appellants disputed the allegations made
by the respondent in his writ petition. It was urged that appellant No. I had
taken into account the relevant considerations prescribed by the instructions
issued by it by virtue of its authority under S. 5(2) of the Act, and had come
to the conclusion that the respondent's application could not be granted. The
plea made by the respondent that appellant No. I had been influenced by
extraneous considerations, was denied.
On these pleas, the High Court was called
upon to consider five issues. The important ones amongst these issues were
about the jurisdiction of appellant No. 1 to pass the order rejecting the
respondent's application for a licence, and about the invalidity of the order
resulting from the fact that it was based on extraneous considerations. The
High Court has upheld the respondent's contention on the first point, and has
held that appellant No. I had no jurisdiction to deal with the matter as it has
purported to do. On that view, the High Court did not think it necessary to
consider the other issues, particularly because "they involved questions
of fact which are more or less disputed and on which 986 it will not be
possible to come to any clear conclusion on the factual side". In the
result, the High Court has allowed the writ petition filed by the respondent
and has directed the appellants to treat the order made by appellant No. as
void, ineffective, invalid and of no binding effect.
In consequence, a writ of mandamus has also
been issued requiring the licensing authority to deal with the respondent's
application in accordance with law. It is against this order that the
appellants have come to this Court by special leave and the only question which
they have raised before us for our decision is whether the High Court was right
in holding that appellant No. I had no jurisdiction to deal with the
respondents application in the manner it has done under s. 5(2) of the Act.
That is how the question about the construction of s. 5(2) falls to be decided
in the present appeal.
Before dealing with this question, we may
very briefly indicate the effect of the broad provisions of the Act. The Act
was passed in 1952 in order to make provisions for regulating exhibitions by
means of cinematography in the Punjab. Section 3 of the Act provides that no
person shall give an exhibition, by means of a cinematography, elsewhere than
in a place licensed under this Act or otherwise than in compliance with any
condition and restriction imposed by such licence. Section 4 provides that the
licensing authority under the Act shall be the District Magistrate.
The proviso to this section authorises the
Government, by notification, to constitute for the whole or any part of the State,
such other authority as it may specify therein, to be the licensing authority
for the purposes of the Act. It is common ground that appellant No. 2 has been
constituted a licensing authority for the area with which we are concerned in
the present appeal.
That takes us to s. 5 which must be read
"5. (1) The licensing authority shall not grant a licence under this Act
unless it is satisfied that(a) the rules made under this Act have been complied
with; and (b) adequate precautions have been taken in the place, in respect of
which the licence is to be given, to provide for the safety of the persons
attending exhibitions therein.
(2) Subject to the foregoing provisions of
this section and to the control of the Government, the licensing authority may
grant licences under this Act to such 987 persons as it thinks fit, on such
terms and conditions as it may determine.
(3) Any person aggrieved by the decision of
the licensing authority refusing to grant a licence under this Act may, within
such time as may be prescribed, appeal to the Government or to such officer as
the Government may specify in this behalf and the Government or the officer, as
the case may be, may make such order in the case as it or he thinks fit".
Sub-s. (4) of s. 5 authorises the Government
to issue directions to licensees generally or to any licensee in particular for
the purpose specified by it. Section 6 confers powers on Government or local
authority to suspend exhibition of films in certain cases; and s. 7 prescribes
penalties. Section 8 empowers the State Government or the licensing authority
to suspend, cancel or revoke a licence granted under s. 5, on one or more of
the grounds indicated by clauses (a) to (g) of sub-s. (1). The other
sub-sections of s. 8 prescribe the procedure which has to be followed in
exercising the powers conferred by sub-s. (1). Section 9 confers on the
Government the power to make rules by a notification; this power can be
exercised for any of the purposes mentioned in clauses (a), (b) & (c) of
the said section. Section 10 gives power to the State Government to exempt any
cinematograph exhibition or class of cinematograph exhibitions from the
operation of any of the provisions of the Act; and s. 1 1 provides that the Cinematograph
Act, 1918 (No. 11 of 1918) in so far as it relates to matters other than the
sanctioning of cinematograph films for exhibition, is hereby repealed.
There is a proviso to this section with which
we are not concerned in the present appeal. That, broadly stated, is the scheme
of the Act.
There are two Central Acts dealing with the
The first one is Act II of 1918 which, as we
have seen, is repealed in the manner prescribed by s. 1 1 of the Act so far as
the Punjab is concerned. Section 5 of this Act corresponds generally to s. 5 of
the Act. The Central Act II of 1918 has been subsequently repealed by Central
Act 37 of 1952. Section 12 of this latter Act corresponds generally to S. 5 of
The question which we have to decide in the
present appeal lies within a very narrow compass. What appellant No. 1 has done
is to require the licensing authority to forward to it all applications
received for grant of licences, and it has assumed power and authority to deal
with the said applications on the merits for itself in the, first instance, Is
appellant No. 1 justified in 988 assuming jurisdiction which has been conferred
on the licensing authority by s. 5(1) and (2) of the Act ? It is plain that s.
5(1) and (2) have conferred jurisdiction on the licensing authority to deal
with applications for licences, and either grant them or reject them. In other
words, the scheme of the statute is that when an application for licence is
made, it has to be considered by the licensing authority and dealt with under
s. 5(1) and (2) of the Act. Section 5(3) provides for an appeal to appellant
No. 1 where the licensing authority has refused to grant a licence; and this
provision clearly shows that appellant No. 1 is constituted into an appellate
authority in cases where an application for licence is rejected by the
licensing authority. The course adopted by appellant No. 1 in requiring all
applications for licences to be forwarded to it for disposal, has really
converted the appellate authority into the original authority itself, because
5(3) clearly allows an appeal to be preferred
by a person who is aggrieved by the rejection of his application for a licence
by the licensing authority.
It is, however, urged by Mr. Bishan Narain
for the appellants that s. 5(2) confers very wide powers of control on
appellant No. 1 and this power can take within its sweep the direction issued
by appellant No. I that all applications for licences should be forwarded to it
for disposal. It is true that s. 5(2) provides that the licensing authority may
grant licences subject to the provisions of s. 5(1) and subject to the control
of the Government; and it may be conceded that the control of the Government
subject to which the licensing authority has to function while exercising its
power under s. 5(1) and (2), is very wide; but however wide this control may
be, it cannot justify appellant No. 1 to completely oust the licensing
authority and itself usurp his functions. The Legislature contemplates a
licensing authority as distinct from the Government. It no doubt recognises
that the licensing authority has to act under the control of the Government;
but it is the licensing authority which has to act and not the Government
itself. The result of the instructions issued by appellant No. 1 is to change
the statutory provision of s. 5(2) and obliterate the licensing authority from
the Statute-book altogether. That, in our opinion, is not justified by the
provision as to the control of Government prescribed by s. 5(2).
The control of Government contemplated by s.
5(2) may justify the issue of general instructions or directions which may be
legitimate for the purpose of the Act, and these instructions and directions
may necessarily guide the licensing authority in dealing with applications for
licences. The said control may, therefore, take the form of the issuance of
general directions and instructions 989 which are legitimate and reasonable for
the purpose of the Act. The said control may also involve the exercise of
revisional power after an order has been passed by the licensing authority. It
is true that s. 5(2), in terms, does not refer to the revisional power of the
but having regard to the scheme of the
section, it may not be unreasonable to hold that if the Government is satisfied
that in a given case, licence has been granted unreasonably, or contrary to the
provisions of s. 5(1), or contrary to the general instructions legitimately
issued by it may suo moto exercise its power to correct the said order by
exercising its power of control. In other words, in the context in which the
control of the Government has been provided for by s. 5(2), it would be
permissible to hold that the said control can be exercised generally before
applications for licences are granted, or particularly by correcting individual
orders if they are found to be erroneous; but in any case, Government has to
function either as an appellate authority or as a revisional authority, for
that is the result of s. 5(2) and (3). Government cannot assume for itself the
powers of the licensing authority which have been specifically provided for by
s. 5(1) and (2) of the Act. To hold that the control of the Government
contemplated by s. 5(2) would justify their taking away the entire jurisdiction
and authority from the licensing authority, is to permit the Government by
means of its executive power to change the statutory provision in a substantial
manner; and that position clearly is not sustainable.
Section 5(3) provides for an appeal at the
instance of the party which is aggrieved by the rejection of its application
for the grant of a licence. No appeal is provided for against an order granting
the licence; but as we have just indicated, in case it appears to the Government
that an application has been granted erroneously or unfairly, it can exercise
its power of control specified by s. 5(2) and set aside such an erroneous
order, and that would make the provision as to appeal, or revision
self-contained and satisfactory.
The scheme of the Act clearly indicates that
there are, two authorities which are expected to function under the Act-the
licensing authority, as well as the Government. Section 8 is an illustration in
point. It empowers the State Government or the licensing authority to suspend,
cancel or revoke a licence on the grounds specified by it; and that shows that
if a licence is granted by the licensing authority, it has the power to
suspend, cancel or revoke such a licence just as Government has a similar power
to take action in respect of the licence already granted. We are, therefore,
satisfied that the High Court was right in coming to the conclusion that
appellant No. 1 had no authority-or power to 990 require all applications for
licences made under the provisions of the Act to be forwarded to it, and to
deal with them itself in the first instance. Section 5 clearly requires that
such applications must be dealt with by the licensing authorities in their
respective areas in the first instance, and if they are granted, they may be
revised by Government under S. 5(2); and if they are rejected, parties
aggrieved by the said orders of rejection may prefer appeals under S. 5(3) of
the Act. The basic fact in the scheme of the Act is that it is the licensing
authority which is solely given the power to deal with such applications in the
first instance, and this basic position cannot be changed by Government by
issuing any executive orders or by making rules under S. 9 of the Act.
It appears that this question has been considered
by the Andhra Pradesh, and the Rajasthan High Courts and they have taken the
view that the Government can, by virtue of the power of control, deal with the
applications for licences themselves in the first instance lvide Karnati
Rangaiah v. A. Sultan Mohiddin and Brothers, Tadipatri & Ors.(1) and M/s.
Vishnu Talkies v. The State & Others(1) respectively.] We are satisfied
that this view does not correctly represent the true legal position under the
relevant provisions of the Acts prevailing in the two respective States. In
Bharat Bhushan v. Cinama and City Magistrate & Anr. (3 ) also, the powers
of the State Government under s. 5(3) of the Cinematograph Act, 1918, have been
similarly construed and that again, in our opinion, cannot be said to be right.
In dealing with the question about the scope and effect of the power of control
conferred on the State Government, the Allahabad High Court has taken the view
that the power of control which has been conferred on the State Government by
s. 5 (2) is wide enough to enable the State Government to revise an order
passed by a licensing authority granting a licence. This observation, in our
opinion, correctly represents the true scope and effect of the power of control
conferred on the State Government.
The result is, the appeal fails and is
dismissed with costs.
(1) Al.R. 1957 A.P. 513.
(2) (1962) I.L.R. 12 Raj. 44.
(3) A.I.R. 1956 AU. 99.