RAJA VIDEO PARLOUR AND ORS. ETC.versusSTATE OF PUNJAB AND ORS . ETC.

                  RAJA VIDEO PARLOUR AND ORS. ETC.                                 A
                                           v.
                     STATE OF PUNJAB AND ORS. ETC.

                                   JULY 14, 1993

                   [P.B. SAWANT AND S.C. AGRAWAL, JJ.]                             B

           Punjab Exhibition of Films 011 Television Screel! through Video Cas-
    sette Players (Regulatio11) Rules, 1980: Rule 5(3) and proviso to sub rule 3
    of Rule 11}-Applicable to TV projectors with a separate screen larger than
    TV screen-Maximum seating capacity flXed at 50 i"espective of the size of C
    the screen-Whether i1nposes unreasonable restriction.

          Constitutio11 of ll!dia, 1950:

           Article 19( 1)(g)-Rule 5(3) and proviso to Rule 10(3) of Punjab Ex-



,   hibition of Filn1s on Television Screen through Video Cassette Players
    (Regulation) Rules 1989-Whetlzer applies to TV projectors with a separate
    screen larger than TV scree!t--Maximum seating capacity flXed at 50 i"espec-
    tive of the size of the screen-Whether imposes unreasonable restriction and
    hence violative of
                                                                                   D




          The appellants were running video parlours wherein th•Y exhibited
                                                                                   E
    pre-recorded video cassettes of cinematograph films by a VCR/VCP and a
    video projector on a screen of 100 inches to 120 inches, with a seating
    capacity of more than 50 seats. In the Punjab Cinemas (Regulation) Rules,
    1952, there was no special provision for grant or licence for such public
    exhibition of films. On January 10, 1986 the Government or Punjab issued       F
    executive instructions under the Punjab Cinemas (Regulation) Act, 1952
    and Rules made thereunder and advised the District Magistrate concerned
    to issue licences to the applicants for public exhibition of films on video
    under the Cinematograph Act, 1952. Accordingly, Temporary licences were
    granted to the appellants under which the seating capacity for the premises    G
    used for public exhibition of films was in the range of 150-200.

          By notification. dated January 13, 1989, the President of India
    promulgated the Rules providing for regulation of the exibition of films on
    Television screen through VCPs. Suh-rule (3) of Rule 5, provided that the
    licence should be granted for a Video Cassette player in respect of a          H
                                      149
    150                   SUPREME COURT REPORTS [1993} SUPP. i'S.C.R.

A premises having seating capacity upto fifty seats only. Sub-rule (3) of Rule
    10, provided that no licence shall be granted for a bnilding under these
    rules, if snch building is worth accommodating more than fifty spectators
    at a time. The appellants filed writ petitions before the HighCourt chal-
    langing the above said provisions.

B        The High Court held that T.V. screen was an integral part of the
  Television and that it cannot be separated out and that the television
  screen and the projector screen were fundamentally different and that
  while the Television works on the principles of electron scanning, the
  projection system works on projection of lights and that the two were
C totally different systems for display of pictures; that though under the
  Rules, the appellants were entitled to exhibit films on television screen
  from pre-recorded video cassettes with the help of VCPs, they were not
  entitled to exhibit films with the help of projector on a projection screen;
  and that the said restriction on seating capacity is a reasonably restriction
  having regard to the size of the. television screen, health of the persons
D visiting the parlours and public safety.
            Being Aggrieved by the jndgement of the High Court, the appellants
    prefered the present appeal, contending that nnder Section 5 of the Act the
    power of the licensing authority to grant the licence could be restricted by
    1"11les and since the Rules were not applicable in the instant case, there was
E   no restriction on the power of the licensing authority to grant a licence and
    that the grant/renewal of the licence has been wrongly refused by the
    licensing authorities.

          Allowing the appeal, this Court

F         HELD: 1.1. A TV Projector with a separate screen operates as a TV
    receiver and performs the same functions as a TV and exhibition of
    pre-recorded cassettes through VCR/VCP and a TV Projector would
    amount to exhibition of moving pictures or series of pictures given by
    means of VCR/VCP through the medium ,1f television. (155-H; 156-A]
G
          Mis. Shankar Video & Ors. v. State of Maharashtra & Anr., (1993] 3
    sec 696, relied on.
          1.2. The words 'television screen' in the Punjab Exhibition of Films on
    Television Screen through Video Cassette Player (Regulation) Rules, 1989
H   could not be construed to mean the screen of a television set. There is no
             RATA VIDEO PARLOUR v. STATE OF PUNJAB                         151

warrant for reading the work 'set' after 'television' in the words 'television    A
screen' in the Rules. The words 'television screen' in the Rules are wide
enough to cover a screen of the 1V Projector once the same is held to be a
television receiver. The Rules, in their application, cannot be confined to
exhibition or cinematograph films through a VCR/VCP on the screen or a
television set. They are applicable to exhibition or films on a separate screen
through video cassette players and television projectors. [1S6-D-E]
                                                                                  B

      1.3. The grant/renewal or licences was wrongly rerused by the
authorities on the ground that the Rules do not contemplate grant or a
licence in cases where a TV projector is used. [1S6-F-G; IS7-E]

      2.1. The rerusal to grant/renew the licences on the ground that the
                                                                                  c
licence can be granted only for premises with a seating capacity upto SO
persons was not justilied. [1S6-F-G]

       2.2. The justilication for upholding the maximum limit of SO persons
contained in Rule S(3) proviso of the Rules as a reasonable restriction was       D
based on the view that the Rules are applicable to exhibition of lilms
through a television set only and the size of the screen of the television set
is normally upto 27'. The saidjustilication is no longer available since the
Rules have been found to be applicable to TV projectors with a separate
screen which are much larger in size than the 27' screen in a TV set. The
provisions contained in Rule S(3) and the proviso to Rule 10(3) lixing a          E
maximum seating capacity of SO irrespective of the size of the screen are
therefore, struck down as imposing an unreasonable restriction of the
right of the appellant guaranteed under Article 19(1) (g) of the Constitu-
tion. [1S7-C-E]
                                                                                  F
      3. The licensing authority is directed to reconsider the matter of
grant/renewal of such licences in accordance with law and till then interim
orders passed by this Court permitting the appellants to operate their
Video Parlours or Video halls would continue. [1S7-F]

      CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.3280-82                     G
of 1993.

     From the Judgment and Order dated 5.8.1992 of the Punjab and
Haryana High Court in C.W.P. Nos. 10150, 10654 & 10754 of 1990.

      Gobind Mukhoty, H.N. Salve, Bharat Sangal, V.S. Madan, S.C.                 H
    152                   SUPREME COURT REPORTS (1993) SUPP. 1 S.C.R.

A Gulati and Ms. Manjula Gupta for the Appellanl,.
         S.K. Dholakia, S.M. Jadhav, A.S. Bhasme, Ranbir Singh & G.K.
    Bansal for the Respondents.

          K. Sukumaran, N. Sudhkaran, Ms. Prasanthi Prasad, Ms. Indu Mal-
B hotra and J.M. Khanna for the Intervenor.
          The Judgment of the Court was delivered by

           S.C. AGRAWAL J. Leave granted.

C         Heard learned counsel for the parties.

           These appeals are directed against the judgment of the High Court
    of Punjab & Haryana dated August 5, 1992 dismissing the writ petitions
    filed by the appellants wherein. they had challenged the orders refusing to
    grant or renew the licence for exhibition of video films through video
D   cassette recorder (VCR) video cassette player (VCP) and a video projector
    on a separate screen in the video parlours run by them. The appellants
    have also challenged the validity of the proviso to sub-rule (3) of Rule 10
    and Rule 5(3) of the Punjab Exhibition of Films on Television Screen
    through Video Cassette Players (Regulatimc) Rules, 1989 (hereinafter
E   referred to as 'the Rules') made by the Government of Punjab in exercise
    of the powers conferred on it by Punjab Cinemas (Regulation) Act, 1952
    (hereinafter referred to as 'the J\ct').

        The appellanl' are running video parlours wherein they exhibit pre-
  recorded video cassettes of cinematograph films with the aid of a
F VCR/VCP and a video projector on a large screen of the size of 100 inches
  or 120 inches. The premises in which they conduct the said business are
  having a capacity of more than 50 seats. In the Punjab Cinemas (Regula-
  tion) Rules, 1952 that were framed by the Government of Punjab in
  exercise of the powers conferred by the Act, there was no special provision
  for grant of licence for such public exhibition of films. On January 10, 1986,
G the Government of Punjab issued executive instructions for grant of licen-
  ces for public exhibition of films on video under the Act and the Punjab
  Cinemas (Regulation) Rules, 1952 wherein it was stated that the Govern-
  ment have decided to frame acts/rules to regulate the video films through
  VCR's and while this process would take some time, the Government , in
H the meanwhile, have decided to take immediate remedial measure to
                                                                                       •
    RAJAVIDEOPARLOUR v.STATEOFPUNJAB(AGRAWAL,J.]                           153

provide for licensing of commercial exhibition of films through VCR's. By A
the said instructions, the District Magistrates were advised to issue licences
to the applicants for public exhibition of films on video under the
Cinematograph Act, 1952. In accordance with those instructions, tem-
porary licences were granted to the appellants. Under those licences, tiie
seating capacity for th,e premises used for public exhibition of films was in B
the range of the 150 / 200.

      By notification dated January 13, 1989, the President of India
promulgated the Rules providing for regulation of the exhibition of films
on Television screen through VCPs. Rule 2 makes the Rules applicable to
all the existing places where films are exhibited on television screen             C
through video cassette players on payment for admission to such places
and also to the places which shall be used for the said purpose after the
commencement of the Rules. In Rule 4 it is laid down-

         "4. Licensing - No person shall exhibit films on television screen
         through video cassette players on payment for admission basis in          D
         any place unless he has obtained a licence under and in accordance
         with the terms and conditions of a licence to be granted under
         these rules.

            Provided that a person who, immediately before the commen- E
         cement of these rules, holds a licence under any instructions issued
         by the State Government, shall be required to obtain a licence
         within one months from such conmmencement or on the expiry of
         the licence, whichever period is earlier".

       Part II (Rules 5 to 11) prescribes the procedure for granting licences.     F
In sub-rule (3) of Rule 5, it is provided that the licence shall be granted
for a Video Cassette Player in respect of a premises having seating
capacity upto fifty seats only. Similarly in the proviso to sub-rule (3) of Rule
10, it is laid down that no licence shall be granted for a building under
these rules, if such building is worth accommodating more than fifty               G
spectators at a time.

      The High Court construed the Rules to mean that they apply only to
exhibition of films on the screen of television sets seen through VCPs:
According to the High Court, the inbuilt television screen is normally of
21" or 27" size while the size of the separate screen on which cinematograph       H
    154                   SUPREME COURT REPORTS [1993] SUPP. 1 S.C.R.

A films can be exhibited by VCR with the help of video projector is 100" or
   120" or even more. The High Court, therefore, examined whether a
  television set can have a split screen. For that purpose, the High Court
   decided to obtain the opinion of an expert and examined Shri S.B.L.
  Sachan, Assistant Professor, T.V. Engineering, Technical Training ln-
B stitute, Chandigarh who opined that TV screen is an integral part of the
  TV and cannot be separated out and that there is a fundamental difference
  between the TV screen and projection screen and that they are not
  identical. He also stated that the TV projection system is totally different
  from the cinema projection and that TV projection can also pick up TV
  signals but the way of converting the signals into picture form as compared
C to television is different. On the basis of the said statement, the HighCourt
  concluded that TV screen is an integral part of the television and that it
  cannot be separated out and that the television screen and the projector
  screen are fundamentally different and that while the television works on
  the principles of electron scanning, the projection system works on projec-
D tion of lights and that the two are totally different systems for display of
  pictures in asmuch as the television screen is not replaceable by projection
  screen and projection screen is not replaceable by projection screen.
  According to the High Court the Rules specifically provide for exhibition
  of films through pre-recorded cassettes on VCPs on television screen and
E that cloth screen or wall used for the exhibition of film through projection
  system cannot be said to be television screen. The High Court, therefore,
  held that though under the Rules, the appellants were entitled to exhibit
  films on television screen from pre-recorded video cassettes with the help
  of VCPs, they were not entitled to exhibit films with the help of projector
F on a projection screen. The High Court has also examined the question
  regarding the validity of Rule 5(3) and proviso to sub-rule (3) to Rule 10
  imposing a maximum limit of fifty persons in the matter of seating capacity
  of the premises used for public exhibition of films. The High Court has
  held that the said restriction on seating capacity is a reasonable restriction
  having regard to the size of the television screen (at present 27"), health of
G the persons visiting the parlours and public safety. The High Court has,
  further, observed that having regard to the advanced technology for ex-
  hibiting cinematograph films from pre-recorded video cassettes by playing
  on VCP with the help ·of projection system on screens of varying sizes, the
  Government would be y;ell advised to appropriately amend the video rules
H or notify fresh rules for exhibition of cinematograph films with the help of
     RAJA VIDEO PARLOUR v. STATEOFPUNJABIAGRAWAL.J.J                      155

projection system from pre-recorded cassettes and lill such lime, the video      A
rules are amended or new rules notified, the Government may consider
granting permission to the appellants for exibition of cinematograph films
by using projection system on such terms or conditions, as it may deem fit,
including charging of taxes, entertainment duty elc. and keeping in view,
of course, public health and ensuring public safely.
                                                                                 B
       We have heard Shri Harish N. Salve and Shri Govind Mukhoty in
support of these appeals. On behalf of the appellants, it has been urged
that since the High Court was of the view that the Rules were not ap-
plicable to exhibition of cinematograph films on pre-recorded cassettes
through VCPs and projection system on a separate screen, the High Court          C
was in error in dismissing the writ petitions filed by the appellants and that
the High Court should have set aside the orders passed by the authorities
rejecting the applications for grant/renewal of licences submitted by the
appellants inasmuch as in absence of the Rules, there was no restriction
on the power of the licensing authority to grant/renew a licence under           D
Section 4 of the Act. The submission was further that under Section 5 of
the Act the power of the licensing authority to grant the licence can he
restricted by rules framed under the Act and since the Rules are not
applicable in the present case, there was no restriction on the power of the
licensing authority to grant a licence and that the grant/renewal of the
licences has been wrongly refused by the licensing authorities on the basis      E
of the Rules which have been found to be not applicable .

      . In Mis. Shankar Video & Ors. v. State of Maharashtra & Anr., C.As,
arising out of SLP(C) Nos.13015/9~and 15302/92 in which judgment has
been pronounced today, we have considered the question whether exhibi- F
tion of pre-recorded cassettes of films through VCRNCP and a television
projector on a separate large screen can be regarded as exhibition of
moving pictures given by means of VCR/VCP through the medium of
television so that the place where such exhibition is given may constitute a
video cinema under relevant provisions of the Maharashtra Cinemas
(Regulations) Rules, 1966. In that case, we have considered the salient G
features of the television technology with special reference to a television
receiver and in that context we have examined the mode of functioning of_
the television projector with a separate screen and have come· to conclusion
that a TV projector with a separate screen operates as a TV receiver and
performs the same functions as a TV and on that view we have held that H
    156                   SUPREME COURT REPORTS (1993) SUPP. 1 S.C.R.

A exhibition of pre-recorded <:asscttes through VCR/VCP and a TV projec-
    tor \vould amount to exhibition of moving pictures or series of pictures
    given by means of VCR/VCP through the medium of tebision. In that
    case, we have also noticed.the points of difference between a television set
    having an inbuilt screen and a TV projector with a separate screen to which
B   reference has been made in the judgment of the High Court and we have
    found that the said differences are not such as to alter the nature of the
    system on which the TV projector works and it does not cease to be a
    television receiver. Once a TV projector is held to be a TV receiver, the
    separate screen of the TV projector has to be regarded as a television
    screen.
c
           The ·High Court has construed the words 'television screen' in the
    Rules to mean the screen of a television set and on that basis, the High
    Court has held that television screen only means the inbuilt television
    screen and does not include a separate screen. We do not find any warrant
D   for reading the word 'set' after 'television' in the words 'television screen'
    in the Rules. The words 'television screen' in the Rules are wide enough
    to cover a screen of the TV projector once the same is held to be a
    television receiver. We are, therefore, unable to agree with the view of the
    High Court that the Rules apply only to exhibition of cinematograph films
    through a VCP on the screen of a tele\ision set and they do not apply to
E   such exhibition through a TV projector on a separate large screen. We are
    of the opinion that the Rules are applicable to exhibition of films on a
    separate screen through video cassette players and television projectors.

          On that view of the matter, the contention urged on behalf of the
F appellants that since the Rules were not applicable, there was no restriction
    on the power of the licensing authority to grant/renew the licences of the
    appellant cannot be upheld and orders refusing to grant/renew the licences
    are not liable to be quashed on that basis. From the said orders, it appears
    that the grant/renewal of licences was refused by the authorities on two
    grounds, (i) the Rules do not contemplate grant of a licence in cases where
G   a TV projector is used; and (ii) the licence can be granted only for
    premises with a seating capacity upto 50 persons. The first ground given
    for rejection of the licence cannot be upheld since we have found that the
    Rules cover TV projectors. As regards the second ground based on the
    limitation with regard to seating capacity, the submission of the learned
H   counsel for the appellants iS that the said condition imposed in sub-rule
    RAJAVIDEOPARLOllR 1·.STATEOFPUNJAB{AGRAWAL,J.]                     157

(3) of Rule 5 and the proviso to sub-rule (3) of Ruic 10 is unconstitutional A
in asmuchas it in1poscs an unreasonable restriction on the right to carry on
trade and business granted under Article J9( I )(g) and is not saved by
Article 19(6) of the Constitution. It has been submitted that _the limit about
the maximum seating capacity cannot be arbitrarily fixed at the figure of
fifty and that such limit, in order to be reasonable. must be dependant on
the size of the screen. Jn this regard, reference has been made to cor-
                                                                               B
responding provisions contained in Rule 5 of the Delhi Cinematograph
(Exhibition of films by Video Cassette Recorders) Rules, 1986 and Rule
5(a) of the U.P. Cinemas (Regulation of Exhibition by means of Video)
Rules, 1988 wherein the maximum seating capacity has been fixed depend-
ing on the size of the television or a video screen. The High Court has      c
upheld the maximum limit of fifty persons in Rule 5(3) and Ruic 10(3)
proviso of the Rules as a reasonable restriction on the view that the Rules
as a• reasonable restriction on the view that the Rules are applicable to
exhibition of films through a television set only and the size of the screen
of the television set is normally upto 27". The said justification for uphold- D
ing the validity of these provisions is no longer available since the Rules
have been found to be applicable to TV Projectors with a separate screen
which are much larger in size than the 27" screen in a TV set. The
provisions contained in Rule 5(3) and the proviso to Rule 10(3) fixing a
maximum seating capacity of fifty irrespective of the size of the screen have,
therefore, to be struck down as imposing an unreasonable restriction on E
the right of the ar:iellant guaranteed under Article 19(1)(g) of the Con-
stitution. Since both the grounds on which the grant/renewal of licences
was refused cannot be sustained the said orders refusing to grant/renew
the licences to the appellants are set aside. The matter of grant/renewal of
 the licences to the appellants shall be reconsidered by the licensing
                                                                               F
authority in accordance with law and till then the interim orders passed by
this Court permitting the appellants to operate their video parlours or
video halls would continue.

      The appeals are accordingly allowed and the judgment of the High
Court dated August 5, 1992 holding that the Punjab Exhibition of Films on G
Tele,ision Screen through Video Cassette Players (Regulation) Rules, 1989
are not applicable to exhibition of films ·on a separate screen through a TV
projector and that the appellants are not entitled to exhibit cinematograph
films with the help of VCP and the T.V. projector is set aside and it is
declared that the said Rules are applicable to such exhibition of films on H
    158                  SUPREME COURT REPORTS [1993) SUPP. I S.C.R.

A separate screen through the TV projector. The orders refusing to
    grant/renew the licences to the appellants are set aside and the licensing
    authority is directed to reconsider the matter of grant/renewal of such
    licences in acc0rdance with law and till then interim orders passed by this
    Court permitting the appellants to operate their video parlours or video
    halls would continue. No orders as to costs.
B
    V.M.                                                     Appeals allowed.