Supreme Court of India
STATE OF U.P. AND ANR.versusRAJA RAM JAISWAL AND ANR.
- Citation
- 1985 INSC 108
- Decided
- 29 April 1985
- Disposal
- Dismissed
- Bench
- D A DESAI
Holding
The Supreme Court held that the High Court was in error in issuing a mandamus directing the licensing authority to grant the cinema licence; the licensing authority must independently assess public‑interest considerations at the licence stage and cannot be compelled to grant a licence on irrelevant grounds.
Issues considered
- Whether a writ of mandamus can compel a statutory licensing authority to grant a cinema licence after it has already considered public interest at the certificate‑of‑approval stage.
- Whether public‑interest considerations applicable at the stage of granting a certificate of approval under Rule 3 are the same as those applicable at the stage of granting a licence under Section 3/5 of the U.P. Cinema (Regulation) Act.
- Whether the District Magistrate’s refusal to grant the licence was based on relevant statutory considerations or on extraneous grounds.
- Whether the High Court erred in directing the licensing authority to grant the licence.
Legislation cited
- Cinematograph Act, 1918
- Constitution of Indias. Article 226
- Land Acquisition Act, 1894s. 4(1)
- U.P. Cinema (Regulation) Act, 1955s. 3, s. 5, s. 5(3)
- U.P. Cinematograph Rules, 1951s. Rule 3, s. Rule 4, s. Rule 7(2)(b), s. Rule 7(2)(c)
Subjects
licensing authoritypublic interestcinema licenceadministrative lawwrit of mandamusU.P. Cinema ActU.P. Cinematograph Rulesjudicial reviewland acquisition
Judgment
to2i
A
STATE OF U.P. AND ANR.
v.
B
RAJA RAM JAISWAL AND ANR.
April 29, 1985
[D. A. DBSAI AND V. BALAKRISHNA ERADI, JJ.],
c
"'-
. \.
Constitution of India 1950, Artide 226 Writ of Mondamus-lssuance of-
To statutory "authority under Q licensing statute to grant a licencC-Whether per·
missible.
U.P. Cinema <Regulation) Act, 1955, sections 3 and 5 & U.P. Cinemato-
graph Rules 1951Rules3 and 7.
D
Licence for location and construction of Cinema under Rule 3-Licence for
exhibition of films in cine1na building under section 3-Grant of-Determination
of'public intere.~t'-Stages of consideration-Explained.
Administrative Law Licensing powers-Indisputable adjunct of controlled
econo1ny-Exercise in oppressive or arbitrary manner-Avoidance of-Vigilance E
by courts-Necessity of.
Construction of Cinema theatre-Grant of licence-Objection of Hindi
Sahitya Somme/an-Refusal of Licence-Whether justified.
The respondent desired to construct a cinema theatre on a plot of land. F
He submitted an application under Rate 3 of tho. U.P. Cinematograpb Rules
\ 1951 to the District Magistrate. for obtaining a certificate signifying his appro-
Val of the site selected for constructing a permanent building to be used for
cinematograpb exhibition. The District Magistrate as the licensing Authority
issued a public notice specifying the request of the respondent for grant of a
certificate and calling objections. An organisation called the Hindi Sahitya
Sammelan alone submitted its objection, The District Magistrate referred the G
application of the respondent to the State Government, which directed the Dis-
trict Magistrate to carefully examine the matter. The District Magistrate was
of the opinion that the Sammelan can neither be styled as an edllcational insti-
tution nor a residential institution with~n the contemplation of Rule 7(2)(b) be-
cause it was an institution wedded to and working for the propagation of Hindi
language, and even though it may provide some research facility on its campus,
it has no regular programme of class teaching, and that having regard to all the II
l022 SUPREME CUORT REPORtS (1985] 3 s.c.R..
A relevant circumstances, the construction of a cinema building at the proposed
site was not against public interest. On the contrary, it was held that a modern
beautiful fully air-conditioned cinema building apart from adding to the beauti-
fication of the city would enrich the coffers of the State exchequer in 1he form
of entertainment tax. The District Magistrate granted the certificate informed
the respondent that construction of a cinema hou.se and be completed within
two years from the date of the issuance of the order. Chagrined by the grant of
B the certificate, the Sammelan initiated action for acquisition of the plot over
which the cinema building was being constructed, should uoder the Land Acqui-
sition Act. The respondent successfully assailed the acquisition order in the
High Court.
In the meantime as the period of two years specified in the certificate
c issued under Rule 3 was about to expire, the respondent moved an application
for extension of time for completion of the construction of cinema building, and
during the pendency of this application, the building was completed.
The respondent made an application under section 3 of the U.P. Cinema
(Regulation) Act, 1955 for a licence to exhibit films in the cinema building. The
District Magistrate refused to grant the licence. The respondent preferred an
D appeal under Sec. 5(3) of the 1955 Act to the State GOvernment, which allowed
the appeal and remitted the matter to the District Magistrate with a dire.:tion to
re-examine the grounds on which he had refused to grant licence to run the
cinema in accordance with the rules and pass suitable and legal order after
giving an opportunity of hearing.
E Against the aforesaid order of remand the respondent filed a Writ Peti-
tion in the High Court. A Division Bench held that even thoug_h the order
under challenge was one of remand, as the respondent has journeyed to and fro
on numerous occassions, it was necessary to dispose of the petiiion on merits,
and held that while granting a certificate under Rule 3 of the 1951 Rules, it was
open to the licensing authority to take into consideration whether it would be in
public interest to grant the necessary certificate or to refuse the same, but after
F the grant of certificate when a fulftedged cine!J1a building comes up and is
shown to comply with the relevant rules and regulations, cinematograph licence ·
cannot be refused on the vague consideration that it would not be in public
r
interest to grant the _licence. It was also held that the failure to complete the
construction of the cinema building within the prescribed time, if properly ex-
plained would not be a ground to refuse the cinematog:raph licence, more. so
because the requirement of rule 3(3) is directory and not mandatory. The High
G Court accordingly 1nade the rule absolute and in modification of the order of the
State Government, it directed the District Magistrate-Licensing Aut!1ority to
forthwith grant to the petitioner the requisite licence subject to reasonable con-
dition and restrictions.
Jn the appeal to this Court it was contended on behalf of the appellant~
ff 5tate that the scheme of the U.P. Cinema (Regolation) Act, 1955 and the U.P.
ti.P. STATE v. RAiA llAM io23
Cinematograph Rules 1951 reveal that the licensing authortiy has to take into A
consideration public interest both at the thne of granting a certificate of appro-
val as contemplated by Rule 3 as also public interest while granting a cinema
licence under Sec. 3 read with Sec. 5, and that the High Court was in error in
holding· that once while granting a certificate of approval under Rule 3, public
interest has been taken into consideration. The question of examining whether
such building should be licenced for. exhibition of cinem8.tograph does not call
for a re-examination· whether the grant is not otherwise contrary to public .B
interest. Public interest cannot be fitted into a stratight jacket formula ·and
what relevant considerations would constitute public interest at the time of
granting. a certificate of approval under Rule 3 may materially very or differ
from the relevant considerations which may constitute public interest while
licensing the cinema theatre for exhibitiOn of a cine1natograph under Sec. 3.
Dismissing the appeal,
c
· HELD : 1 The High Court was, clearly in error in issuing a manda-
mus directing the District Magistrate to grant a licence. The High Court was
hearing a Writ Petition praying for a Writ of Certiorari for quashing the order
of removal. The High Court should have quashed 1he order of re111and if it was
satisfied that the order of suffers from an error apparent on the record. But D
there its jurisdiction would corrie to an end. The High Court cannot then pro-
ceed to take over the functions of the lieensing authority and direct the
licensing authority ~Y .a mandamus to grant a licence, To that extent the
judgment of the High Court is set aside. [10400,FJ
2 Where a statute confers power and casts a duty to perform any function E
before the power is exercised or the function is J)Crformed, to the Court cannot
in exercise of writ jurisdiction supplant the licensing authority and take upon
itself the function of the licensing authority. [1040 E]
3. The High Court was in error in holding that once the public interest
1
has been taken into consideration while granting certificate of approval, consi-
deration of public interest would not arise and cannot be countenanced while F
\ granting a cinenlatograph licence under Sec. 3 read with Sec. 5. [1037H, 1038J
4. Licensing powers, an indisputable adjunct of controlled economy,
take various forms and they are numerous. They are generally couched in a
language giving wide scope for exercise of powers. Therefore the Courts have
been vigilant to see thJt they are not exercised in an oppressive or arbitrary
manner. The Powers being wide, the question of its.exercise on relevant or G
considerations gern1ane to the determination more often arises. If the licence
is refused on grounds which appear to be irrelevant, the court can legitimately
interfere. [1039H ,!040A]
S. The scheme manifested by U.P. Cinema (Regulation) Act, 1955 and
the U.P. Cinematograph Rulos 1951 establish the legislative intention that the H
ioH StiPallr.iB couar aEPORi:s [198$] 3s.c.it.
<A licensing authority bas to keep in view public interest both at the time of grant-
ing the certificate of approval under Rule 3 and granting·a cinematograph
licence under Sec. 5. While granting a certificate of approval under Rule 3, the
licensing authority may take into consideration the various aspects set out- in
Rule 4 as well as the conditions prescribed in Rule 7. But even where all the
conditions prescribed in Rule 4 and Rule 5 as well as various other relevant
rules are satisfied still the licensing authoritr may refuse to grant the·certificate
B of approval, if it is satisfied that the location of cinema at the site in question is
not a public interest. [1034G-, 1035A]
6. Rule 7(2)(c) casts an obligation to record the re3.son in writing which
must necessarily sufficient reasons for refusing to grant the certificate on the
ground that the location of a cinema at the site of the building is not in public
(' interest. The licensing authority has not an absolute discretion but it is hedged
in by relevant considerations as also by the proviso that if the licensing autho-
ri .... is inclined to refuse the licence on the ground that the location of a cinema
at the site of the building is not in public interest, it cannot do so except without
the prior approval of the State Government. [1035C-D]
In the instant case, the District Magistrate white granting the certificate of
D approval on March 24, 1972 had in terms held that Hindi Sahitya San1n1elan is
neither an educational institution nor a residential institution nor it bas a public
hospital and that it cannot be styled as an educational institution for the pur-
pose of Rule 7(2)(b)(i). This determination is final and conclusive. [1035F)
7. While granting the cinema licence under Sec. 3 the licensing authority
E bas to keep in view the provision of Sec. 5. Sec. 5(1)(c) provides that no licence
shall be granted unless the licensing authority iS satisfied that the grant of
licence is not otherwise contrary to public interest. Undoubtedly, the para·
meters of public interest while refusing to grant licence under Sec. 5(l)(c) for
exhibition of cinematograph would be materially different than the one which
would enter the verdict while considering the application forg ranting a certificate
of approval under Rule 7(2)(c). [1035G-1036]
F
CIVIL APPEALLATB JURISDICTION : Civil Appeal No. 2437 of
1981
....
From the Judgment and Order dated 25.8.1981 of the Allaha·
bad High Court in C.M.W.P.No. 324l of 1980.
R.N. Trivedi, Addi. Adv. Genl., Gopal Subramaniam and Ms.
Shobha Dikshit for the Appellants.
F.S. Nariman, Raja Ram Agarwal, Yogeshwar Prasad, Rani
:g .'ahhabra and Ms. Suman Bagga for the Respondents.
ti.P. STA.Ta v. RA.IA. RAM ibesal, /.\ i6H
The Judgment of the Court was delivered by
A
DESA.I, J. Respondent Raja Ram ·Jaiswal alongwith the
members of his family ('respondent' for short) purchased premises
No. 26/30, a plot of land with a small structure standing on it
admeasuring 2978 sq. yd5. situated at K.P:Kakkar Road, somewhere
in March 1970. The respondent desired to construct a cinema theatre
on the plot of land after demolishing the existing structure. As a first B
step, he got prepared the plans for a modern air· conditioned, sound
proof cinema building and got the same approved by the Local
Municipal Corporation and the District Magistrate. Subsequently,
on July 6, 1971, the·respondent submitted an application as required
by Rule 3 of the U.P.Cinematograph Rules, 1951 (1951 Rules'
for short) to the District Magistrate for obtaining a certificate
c
signifying his approval of the site selected for constructing a
permanent building to be used for cinematograph exhibition. Before
granting tbe requisite certificate the District Magistrate as the
Licensing Authority has to ·be satisfied that the requirements of the
1951 Rules have been fully complied with. Inter alia it must be D
satisfied that any recognised educational institution (other than
primary school) or any -residential in·stitution attached thereto is
not situated within a radius of 75 metres from the proposed cinema
· building. There were other conditions to be satisfied but this one
is being referred to by us because the allegation is that this condi-
tion has been contravened. It also appears that before granting the E
requisite certificate, with a view to giving au opportunity to the
public in the locality to express thdr opinion for or against the
grant of the certificate, if they so desired; a public notice was issued
-specifying the request by •the respondont for issue of a certificate
of approval of the site for constructing a cinema theatre. An
\ organistion called The Hindi Sahitya Sammelan ('Sammelan' for F
short) alone submitted its objection. The District Magistrate
referred the application of the respondent to the State Government.
The State Government directed the District Magistrate to carefully
examine the matter and determine whether it would or would not be
in public interest to grant the certificate. There. ensued some corres- G
pondence· between the District Magistrate and the State Government,
the query centering round the question whether the Sammelan was
a recognised educational institution as envisaged by Rule 7(2)(b)
of 1951 Rules. The District Magistrate iii his letter dated March
24,1972 inter alia stated that Sammelan can neither be styled as an
io26 StlPREMB OOUllT RBPOJ!.TS [!985j 3 s.c.1t
A educational institution nor a residential institution within the
contemplation of Rule 7(2)(b) because it is an institution wedded to
and working for the propagation of Hindi language and even though
it may provide some research facility on it~ campus, it has no
regular programme of class teaching. The District Magistrate was
also of the opinion that having regard to all the relevant circumsta-
B nces, the construction of cinema building at the proposed site was
not against public interest. On the contrary according to him, a
modern beautiful fully air-conditioned cinema building apart from
adding to the beautification of the city would enrich the coffers of
the State exchequer in the form of entertainment tax. He concluded
by observing that in his opinion public interest will not be adversely
c affected if the per mission is granted for construction of the cinema
house at the proposed site and that he proposed to grant the permis-
sion. Accordingly, on March 28,1972, the District Magistrate
informed the respondent that 'with reference to his application
dated July 6,1971 in connection with the construction of a cinema
h~use over Plot No. 26, Crosthwaite Road, the site plans checked and
D sign,ed by the Executive Engineer, P.W.D. Allahabad have been
approved on certain conditions including that the construction of
the cinema house will be completed within two years from the date
of the issue of the order and the c,inema house wiil be fully air-
conditioned and according to the plans and specifications submitted
E to him.' There was a small building over the plot in respect of
which the certificate signifying the approval of the District
Magistrate was granted. This building was demolished and construc-
tion of the cinema building according to the plan was commenced.
Chagrined by the grant of the certificate, Sammelan initiated action
for acquisition of the plot over which the cinema building was being
F constructed somewhere in August, 1973. As the various steps taken for
acquisition of land form part of a separate controversy to be dealt /
with in Civil Appeal No. 2458/80, the same may be skipped over
here. Suffice it to state that a notification under Sec. 4(1) of the
Land Acquisition Act, 1894 was issued by the Collecfor, Allahabad
on January 31, !974 notifying that Plot No. 26 admeasuring 2865
Sq. Yds. was proposed to be acquired for a public purpose viz.
for extension of Hindi Sangrahalaya of Hindi Sahity a Sammelan
The respondent challen.ged ·this notification in Writ Petition No.
1932/74 in the High Court of Allahabad. In the meantime as the
period of two years specified in the certificate issued under r. 3 was
about to expire, the respondent moved an application, on March
'
U.P. STATE v. RAJA RAM (Desai, J.) 1027
26,1974 before the District Magistrate for extenison of time for A
completion of the construction of cinema building. The State
Government withdrew the notification dated January~'31,1974 with
the result that the writ petition filed by the respondent was dismis-
sed on January 30,1975 as having become infructuous. Within a
period of six days on February 6,1975, the Collector of Allahabad
issued a fresh notification under Sec. 4(1} of the Land Acquisition II
Act for acquiring land described as bearing Plot No. 62 admeasur·
• ing 8265 sq. yds. for the same purpose: The respondent questioned the
'
validity and legality of the second notification in Writ Petition No.
3174/75. During this period, the application for extension of time
for the construction of cinema building was pending with the
District Magistrate. By Letter dated July 25,1975, the District
c
Magistrate informed the respondent that 'with reference to his
application dated March 26,1974 praying for extension of time, it is
not possible to grant the extension as the matter is pending before
the High Court at the instance of the respondent and as they have
obtained stay against the land acquisition proceedings, it would not D
be proper for the District Magistrate to pass any order regarding
this very land so long as the stay order granted by the High Court
is in force. It was also noticed that the period of two years initially
granted had expired in March, 1974 and the same cannot be exten-
ded. It appears, however, that during the time the application for
extension of time for completion of the cinema building was pending
with the District Magistrate, the work of construction was going
a pace and it was completed presumably sometime before the
District Magistrate declined to grant extension of time. As the
cinema building was complete, the respondent made an application
on May 25,1979 under Sec. 3 of the U.P. Cinema (Regulation) Act, F
1955 ('1955 Act' for short) for a licence to exhibit films in the
\ cinema building. Though the District Magistrate is a statutory
authority for grant or refusal of licence under the 1955 Act, surpris-
ingly, he referred the application of the respondent for grant of
• licence to the State Government specically in view of the pendency
of the Writ Petition No. 3174/75 challenging the notification for G.
'acquisition of the land on which the cinema building was construc-
ted. A communication from the .Joint Secretary of the State
Government to the District Magistrate concerning the question of
grant of cinema licence has a material bearing on the issue involved
in the writ petition. Therefore the relevant portion. of the
~o~munication may be extracted, It reads as under:
"
1028 SUPREME COURT RBPORTS (1985] 3 S.C.R·
A "With reference to your letter No. 23/MAOKA./79-80
dated June 27, 1979, I have been directed to say that you
may grant licence to Chandralok Cinema constructed by
Sri Raja Ram Jaiswal on the Hindi Sahitya Sammelan
Marg, for one year if you are satisfied that this cinema
complies with the requirements of the Uttar Pradesh
B
Chalchitra Niyamawali, 195! with the condition that if in
the mean time the case pending before the Hon'ble High
Court is decided in favour of the Government, the licence
•
would automatically stand cancelled."
c
It would thus appear that the District Ma istrate had to
consider the application for licence uninfluenced by another litiga-
tion pending between the respond~nt and the State Government.
On receipt of this letter the Di!trict Magistrate after obtaining
reports from various authorities vis-a-vis the building reiterated his
D view to the State Government on October 19, 1979 that as the writ
petition of the respondent challenging the notification for acquisition
of land is pending, it would not be proper to grant cinema licence
to the respondent. On December 7,1979, writ petition filed by the
respondent challenging the notification for acquisition of land on
which the cinema building was constructed was allowed by a Divi-
E sion Bench of the High Court and the notification dated February.
6,1975 was quashed. On December 9,1975, the respondent made a
representation to the State Government for issuance of a cinema
licence. By the notification dated December 13,1979, the State
Government directed the first respondent to contact the Distirct
F Magistrate in this behalf. Accordingly, on December 18, 1979, the
respondent wrote to the District Magistrate that all the concerned
authorities had inspected the building and reported that the building
complies with all the rules and regulations and recommended grant '
of licence. By its communication dated December 24, 1979, the
Additional District Magistrate informed the respondent that •
'with reference to his application for cinema licence dated May
G
4, 1979 to run Chandralok Cinema he has to inform him that the
District Magistrate' by his order dated December 24, 1979 has
refused to grant the licence.' The respondent preferred an appeal
under Sec. 5(3) of the 1955 Act to the State Government against
the order of the District Magistrate refusing to grant the licence.
The reasons which weighed with the District Magistrate in rejectiQi
tt the application will he de11lt witli a little while after. The Stl\t~·
UcP, STATE v, RAJA RAM (Desai, J) 1029
Government called for the comments of the District Magistrate A
with regard to the contentions raised by the respondent in his appeal
and after· taking into consideration the comments, the State
Government as per its order dated February 15, 1980 allowed the
appeal and remitted the matter to the District Magistrate with a
direction, to re-examine the grounds on which he had refused to
grant licence to run the Chandralok cinema in accordance with the
• rules and pass suitable and legal order after giving them an opportu-
nity of hearing. If the District Magistrate feels necessary to seek
prior approval, of the Government to refuse to grant licence in
public interest, he may express his opinion and send full facts
through the Commissioner for prior approval.' This order of remand
wa~ questioned by the respondent in Writ Petition No. 3241/80 in
the,Allahabad High Court. ·
A. Division Bench of the High Court held that even though
the, order under challenge was one of remand, as the respondent has
journeyed to and fro on numerous occasions, it is necessary to
dispose· of the petition on merits. It was further held that while
granting a certificate under Rule 3 of the 1951 Rules, it was open
to. the licensing authority to take into consideration whether it
would be in public interest to grant the necessary certificate or to
refuse the same, but after the grant. of the certificate when a full
lleqged cinema building comes up and is shown to comply with the
relevant rules and regulations, cinematograph licence cannot be
refused on the vague consideration that it would not be in public
interest to grant the licence. It was also held that the failure to
complete the construction of cinema building within the prescribed
time, if properly explained would not be a ground to refuse cinemato-
graph licence, more so because the requirement of rule 3(3) is F
\ •
directory and not mandatory. The High Court accordingly made the
rule absolute and in modification of the order of the State Govern-
ment dated February 15,1980 it directed the District Magistrate-
• Licencing Authority-to forthwith grant to the petitioner the requisite
licence·subject to reasonable conditions. and restrictions. An order
in the nature of mandamus was issued accordingly. Bence this
appeal by the State of Uttar Pradesh and the District Magistrate
by special leave. · · ·
Before we advert to the contentions canvassed before us on
\>eba\f, of the appellants, a brief resume of the stages through which H
1030 SU~REME COURT REPORTS [19 SS] 3 S.C.R;
•
A the proceedings journeyed in this Court may be mentioned. The
petition for special leave came up for admission on September 17,
1981 when special leave to appeal was granted and the operation of
the judgment of the High Court was stayed. Consequently, the
mandamus directing the District Magistrate to grant licence stood ·
suspended. CMP 26710/81 was moved on behalf of the present
B respondent for vacating the stay granted by this Court. The proce-
edings dated December 15, 1981 as recorded show that after the
arguments were heard at some length, the Court in the interest of
,•
justice thought it expedient to modify . the stay order dated
'
September
17,1981 to the effect that the stay order granted by the Court will
c be in operation for a further period of two months only and that
the hearing of the appeal may be expedited. The present. appeal
and the cognate Appeal No. 2458/81 came up together for hearing
and the cognate appeal was first taken up for hearing for the
obvious renson that if the challenge to the notification for acquisi-
tion of the plot on which the cinema building is con~tructed failed
D in the appeal on behalf of the State of U.P., it would have an impact
on the present appeal because if the land was to be acquired, the
question of granting licence for running a cinema on the land under
acquisition could hardly be envisaged. The hearing as usual in this
Court went on merrily. Therefore, after bearing the parties, we
made the order on January 20, 1983 directing the District Magistrate
E to comply with the remand order. It may be recalled that the order
under challenge in this appeal was the order of remand made by
. the State Government to the District Magistrate for considering
and diposing of the application for a cinema licence on merits. We
had some h4'Sitation whether the court can grant a mandamus
directing a statutory authority to grant a licence at a stage when the
F District Magistrate was yet to apply his mind and examine the
application on merits because doing so would tantamount to the
(
t
court substituting itself as a licensing authority without the licensing
authority performing its duty, which would be impermissible. We
were conscious of the fact that the District Magistrate was bound •
to take some time in processing and disposing of the application for
a cinema licence pending with him. Accordingly, we directed the
G District Magistrate to proceed to consider the application of the
respondent for grant of a cinema licence and dispose of it in the
light of the observations made in the order. Pursuant to this order,
the District Magistrate, Allahabad proceeded to examine the
application of the respondent for cinema licence on merits and
having given him an opportunity of being heard, by his onler dated
ff
U.P. STATE v. RAJA RAM (Desai, J.) 1031
" February 20, !983 rejected the application for licence observing A
that it would not be in public interest io grant the cinem•tograph
licence applied (or by the respondent. The appeal was again placed
on board for further directions on March JO, 1983. After giving
anxious consideration to the order of t.he District Magistrate, the
Court made an order vacating interim stay granted by this Court
B
staying the operation of the judgment of the High Court. The effect.
• of this order was that the mandamus· granted by the State became
operative. Accordingly, on March 19, 1983, the. District Magistrate
granted the licence to run Chandralok cineina. Two CMPs Nos.
12718-19/83 were moved in this Court, one of them being for .taking
action for contempt and another for certain directions. They were c
~ a sequel to the granting of a 1'.c.e11ce and public annoyance demons-
. '·trably exhibited by the authonhes of the Sammelan. While dispos·
ing of ·these ·petitions, we directed that the City Magistrate .would
withdraw the impugned order under Sec. 144, Cr.P.C. within a
fortnight- from the date of the order and the District Magistrate
shall renew the licence of Chandralok cinema to be operative and D
in force till the decision of appeal by this Court and the City.
Magistrate shall make necessary arrangements tci. maintain public ·
order near and around Chandralok cinema if necessary by posting
additional police force and grant necessary protection to the licensee
enabling him to run the cinema house peacefully. Regretably, it
E
must be concluded from this resume that the dispute is hardly
between the State Government and the respondent, but it is a
proxy fight consequent upon the clash of ego between the Sammelan
and Jaiswal. Unintluenced by this irrelevant aspect, the apoeal may
be disposed of on merits.
F
It may be mentioned that even though the Sammelan had
moved an application for being joined as a party to the writ petition·
in the High Court which was rejected, we, without the slightest
hesitation, granted the request for intervention made by Shri S.N .
• Kacker, learned coun.sel for 'the Sammelan to intervene and SUS·
pending the normal procedure that the interventionist is not entitled G
to address oral arguments, we heard Mr. Kacker on all points he
wanted to canvass and at some length and permitted him to put I
his written submissions on record.
While the introduction has become somewhat long, the
contentions canvassed in the dispute are relatively of an insignificant u
1032 SUPREME COUltT REPORTS (1985) 3 S.C.R.
A nature save and except" the one whe_ther the statutory· Iicencing
authority _acting within the parameters of the statute under which it
is set up can be sui>planted in exercise of the writ jurisdiction before
the statutory authority has yet to discharge its functions under the
statute. Ihcidently, whether public interest has a relevance at the
time of issuance of a certificate of approval under Rule 3 or at the.
.B time· of grant of licence under Sec. 3 is another important question 7
Other contentions are minor and of incidental nature.
The peresent situation viewing the background of public
interest have a direct bearing on the rival contentions in this appeal.
c A cinema building in which for the purposes of the record, we may
note that Rs. 60 lakhs have been .sunk stares into our face.
Admittedly, it is a modern air-conditioned sound-proof cinema
building. It abuts on a road named K.K.Marg, a very prominent
locality in Allahabad town. It is equally true that Hindi Sahitya
Sammelan. has its campus at a distance of roughly 95 feet from the
D outer boundary of the cinema building. Hindi Sahitya Samme-
lan was founded for the development and propagation of Hindi, and
a
certainly it "is prestigious institution . devoted to making Hiridi the
Lingua Pranca of India. Though Hindi Films have contributed
immeasurably to the propagation of Hindi yet the Sammelan
E championing Hindi appears not to have taken kindly to the modern
·m.·ss media communication and detested the existence of a theatre
somewhere near its campus. That is the genesis of the present litiga-
tion. Sincere efforts were made to assuage all the authorities in charge
of the Sammelan, but they proved of no avail.° May be an institu-
tion devoted to research may consider cinema theatre a nuisance but
F in an urban area like Allahabad, the Sammelan cannot hope to live
in isolation of the existence of theatre as also the noise of transport
vehicles.
Let us have a glance at the relevant prov1s10ns of the 1955
.,
Act and the 1951 Rules which should be our starting point., 1955
G Act. was enacted as its long title shows for making provisions and
regulating exhibitions by means of cinematographs in the State of
' U. P. Sec. 3 provides that 'save as otherwise provided in the Act, no
person shall give an exhibition by means of a cinematograph
elsewhere than in a place licensed under this Act or otherwise than
in compliance with conditions and restrictions imposed by such
H licence.' Sec. 4 constitutes District Magistrate to be the Licensing
U.P. STATE v. RAJA RAM (Desai, J.) 1033
Authority. There are two provisos conferring power on the State A
Governm~nt to constitute other licensing authority._ They are hardly
material for the peresent purpose. Sec. 5 prescribes restrictions on
the power of the licensing ·authority and inter alia provides that 'the
licensing authority has to· be satisfied that the building or other
place in which cinematograph exhibition proposed to be given
-(i) ......... (ii) is situated at such minimum distance as may be B
prescribed from other public buildings and from recognised educa-
tional and other public institutions and public hospitals ..... .' Sec. 5
(1 )"( c) provides that the licensing authority must be satisfied that the
-...,.. ·grant of licence otherwise is not contrary to public interest. Sub-sec.
'-, (3) of Sec. 5 confers right of appeal to the State Government, on
. any person aggrieved by the decision of ·the licensing authority c
refusing to grant licence. Sec. 13 confers power on the State
Government to make rules fot carrying out the purposes of the
Act. 1951 Rules were framed in exercise of the power conferred by
Sec. 9 of the Cinematograph Act, 1918 and by the deeming fiction
enacted in Sec. 12 of the 1985 Act they remain in force. Rule 3
provides as under : D
"3. Application for constructing a building-
(1) A person desirous of constructing a permanent
building to be used for cinematograph exihibition
shall submit an application specifying the site on
which the proposed ·building is to ,be constructed to- E
gether with a plan and specifications thereof to the
officer authorised in this behalf by Government.
(2) The plan mentioned in the aforesaid sub-rule
shall contain the elevations and sections of the build-
. ings, the f'roposed electrical installations, arrange-
ments for ventilation, sanitation and parking of vehi-
cle and the position of the premises in relation to
"
I adjacent premises and public thoroughfare on which
the building abuts, within a radius of one furlong.
(3) The Licensing Authority may, if it is satisfied
that the site plans and specifications fully conform t\) G
the rules, grant to the applicant a certificate signi-
fying his approval thereto. The period within which
the construction shall be completed shall also be
stated in the certificate."
Rule 4. provides for the contents of an application for a H
10311 SUPREME COURT REPORTS (1985) 3 S.C.R
A licence. Rule. 7 prescribes conditions for granting and renewal
of a licence, the one to be noted for the present purpose is the
one prescribed. in Rule 7(2)(b)(i) which is to the effect that 'no
building shall be so licensed, if it is situated within a radius of 75
metres from any recognised educational institution (other than
primary school) or any residential institution attached thereto.'
B Rule 7(2)(c) provides that 'no building shall be so licensed, if for
any other sufficient reason.to be recorded, the licensing authority is r
•
satisfied that the location of a cinema at the site of that building is·
not in public interest.' .
c Learned Advocate General of Uttar Pradesh who appeared for
the appellant urged that the scheme of the Act and the relevant
rules reveal that the licensing authority has to take into conside-
ration public interest both at the time of granting a certificate of
approval as contemplated by Rule 3 as also public interest while
granting a cinema licence under Sec. 3 read with Sec. 5. It was
D urged tha!the High Court was in error in holding that once while
granting a certificate of approval under Rule 3, public interest has
been taken into consideration and it has been found that the loca-
tion of a cinema at the site of the building is not shown to be not
in public interest, the question of examining whether such build-
ing .should be licenced for exhibition of a cinematograph does not
E call for a re-examination whether the grant is not otherwise cont-
rary to public interest. It was urged that public interest cannot
be fitted into a straight jacket formula and what relevant conside-
rations would constitute public interest at the time of granting
a certificate of approval under Rule 3 may materially vary or
p differ from the relevant considerations which 1iay costitute public
interest while licensing the cinema theatre · for exhibition .of a
cinematograph under Sec. 3. The scheme manifested by the relevant
provisions of the Act and the Rules would demonstrably esta-
blish the legislative intention that the licensing authority has to
keep in view/public interest both at the time of granting the certi-
G ficate of approval under Rule 3 and granting a cinematograph
licence under Sec. 3. While granting a certificate of approval
under Rule 3, the lic.ensing authority may take into consideration
the various aspects set out in Rule 4 as well as the conditions
prescribed in Rule 7. But even where all the conditions pres-
cribed in rule 4 and Rule 5 as well as various other relevant rules
H are satisfied still the licensing authority may refuse to grant the
U.P. STATE v. RAJA RAM (l>esai, J.) 1035
... certificate of approval, if it is satisfied that the location of cinema A
· at the site in question is not in public interest. What constitutes
public .interest at the time of consideration for granting certi·
ficate of approval may be culled out from the various conditions
prescribed in the various statutes as well.as all other considerations
which may enter the verdict. while granting the certificate. But it
will be a paper compliance with the relevant rules if it is merely B
stated that even though all other conditions are satisfied and com-
plied with the licensing authority would refuse to grant the .certi-
ficate as it is not in public interest to do so. Rule 7(2)(c) casts an
obligation to record the reasons in writing which must necessarily
be sufficient reasons for refusing to grant the certificate on the
""""' ground that the location of a cinema at the site of the building c
"-, is not in public interest. The licensing authority has not an abso-
'• lute discretion but it is hedged in by relevant considerations as
also by the proviso that if the licensing authority is nclined to
refuse the licence on the ground that the location of a cinema at
the site of the building is not in public interest, it cannot do so
except without the priOr approval· of the State Government. There D
is an explanation which provides that 'for the purpose of the
sub-rule, the licensing authority shall, subject to the general con-
trol of the State Government, determine what is a public hospital
or a recognized educational institution, and its decision shall be
final and conclusive.' It will be presently pointed out that the
District Magistrate while granting the certificate of approval on E
March 24, 1972 had in terms held that Hindi Sahitya Sammelan is
neither an educational institution nor a residential institution ·nor
it has a public hospital and that it cannot be styled as an edu-
cational institution for the purpose of Rule 7(2)(b)(i). In view of
the explanation herein extracted, this determination is final and
conclusive. F
Now while granting the cinema licence under ·sec. ~.the
licensing authority has to keep in view the provisions of Sec. 5,
Sec. 5(l)(c) provides that no licence shall be granted unless the .
licensing authority is satisfied that the. grant of licence is not G
otherwise contrary to public interest. One has to compare the
language of Rule 7(2)(c) with the language implied in Sec.
5(l)(c). Undoubtedly the· parameters of public interest while re-
fusing to grant licence under Sec. 5(l)(c) for exhibition of cinema-
tograph would be materially different than the one which would
H
1036 SUPREME COURT REPORT [!985] 3 s.c.1.t
A enter the verdict while considering the application for granting a
certificate of approval under Rule 7(2)(cJ. It must, however, be
made absolutely clear so as to put it beyond the pale of controversy
fhat the relevant aspects required to be kept in view as prescribed
under Rule 7 while granting or refusing to grant certificate of
approval under Rule 3 cannot be reviewed in the name of public
B interest for rejecting an application for cinematograph licence under
Sec. 3 read with Sec. 5 of the Act. To wit, if while granting the
certificate of approval the question whether a particular institution
is an educational institution and is within or outside the prohibi- •
ted distance, is exami_ned and a decision is reached that the institu-
tion is held not to be an educational institution within the con-
e temptation of the relevant rule nor it is within the prohibited area,
this aspect cannot be reviewed fo refuse to grant a licence under
Sec. 3 read with Sec. 5 in the name of public interest. lf any
other view is taken, it would lead to startling results. Again to wit,
if the Sammelan was held not to be an educational institution with-
D in the contemplation of Rule 7(2)(b)(iJ and the necessary certifi-
cate of approval is granted, the licensing authority cannot turn
round in the name of public interest and hold at the time of consi-
dering. the application · for a cinematograph licence that the Hindi
Sahitya Samnielan is an educational institution. and it is also situ-
ated within the prohibited area because such an approach would do
E irreparable and irreversible harm to the person to whom certifi-
cate of approval is granted because by the time he applies for a
cinematograph licence under Sec. 3, he has sunk a large sum of
money in constructing a cinema building. To refer to the facts
of this case, if now the District Magistrate chooses not to grant
licence on the ground tlj,at it would be contrary to public interest
F to grant licence only because the authorities of the Sammelan may
act in a manner so as to disturb public peace and that it is an
educational institution, Rs. 60 lakhs sunk by the respondent would 'I
go down the drain and would be an irreparable wastage affecting both
the national interest and the public interest. Therefore, while
accepting the submission of the learned Advocate General that the
G concept of public interest statutorily recognised has to be kept in
view both at the time of granting certificate of approval under Rule
3 and licence under Sec. 3 read with Sec. 5 of the 1955 Act, per-
m.itting exhibition of a cinematograph, the relevant parameters of
public interest would differ and they cannot overlap each other
anJ have to be justified on the relevant grounds. A stricter view
H about ·the parameters of public interest has to be taken at the
iJ.P. SrATE v. RAJA RAM (Desai, J.) 1037
"' second stage because by that time the person who has been granted A
certificate of approval has sunk a fortune in the venture.
Before we conclude on this point, we may refer to the two
decisions to which our attention was drawn by. the;learned Advocate
General. In The King v. London Country Council, Exparte London
B
and Provincial Electric Theatres Limited(') it was held that the statu-
•\. tory authority was justified in exercise of their discretion to sefuse to
grant licence to a company, the _majority of whose shareholders
were alien enemies. A submission was made on the basis of the ratio
of this decision that even if a cinema building is construded, licence
. can· be refused on the . ground that it is not in publik interest to c
~ . do so. The decision in R. v.Barnstap/e justices, Exparte Carder.(') is
\. hardly of any assistance because it proceeds on the scheme of the
Cinematograph act, 1909. The Act empowered County Councils or
justices where the power have been delegated to them to grant
licences to persons to use 'premises specified ln the licence' for the
purposes of a cinema, subject to certain conditions, ' terms and rest· D
rictions. The practice was stated to be in existence whereby,)n cases
where it was intended to erect premises for use as a ·cinema, justices
were asked to approve the plans of the building to be erected, arid
thereby honourably to commit themselves or .their successors to
grant!the licence after completion of the premises. Disapproving
this practice, it was held that the practice was beyond the powers E
given by the Act and is unenforceable. It was observed that it· was
improper for justices by a gentleman's agreement to fetter, limit
control, or in any way affect their own future decisions, or those
of their successors or of other justices. The scheme of the Act and
the rules at pre sent under examination envisages two stages when
F
the licensing authority has to examine the application : (i) at the
\ stige of grant of certificate of approval of the site and (ii) at the
stage of grant of cinema licence. In view of this difference in the
scheme, the decision is hardly of any assistance. We have reached
I
the conclusion purely on the examination and interpretation of the
schemee merging from the Act and the Rules.
G
The High .Cour.t was therefore, in our opinion, in error in
holding that once the public interest has b.een taken into cosidera-
(I) [1915] 2 K.B. 266
(2) [1937] 4 All E.R. 263 H
103S SUPRBMB COURT RBPORT (1985] 3 s.c.R.
· tion while granting certificate of approval, consideration of public
interest would not arise and cannot be countenanced while granting
A a cinematograph licence under Sec.· 3 read with Sec. 5.
The next question is whether the District Magistrate in this
case was justified in refusing to grant the licence in public interest
B on relevant consideration.
••
The District Magistrate initially refused to grant licence
against which in the appeal preferred by \he respondent, the order
impugned in the writ petition was made by the State Government.
The State Government called for the comments of the District
c Magistrate qua the contentions raised by the respondent in his
appeal. Briefly summarised the veiw expressed by the District
Magistrate in his comments, which was the veiw that prevailed with·
him while rejecting the application for license, was that the relevant
mies having not been complied with : (i) inasmuch as the cinema
haU has been constructed in the restricted area ar d educational
D
institutions are situated within 100 yards of cinema house; (ii)
there is no provision to give conditional licence under the cinema
rules; (iii) the allegation that the District Magistrate has some
bias against the respondent \Yas not correct; (iv) the licence has
been refused in public interest on consideration of public peace and
E order; (v) the construction of cinema building was not completed
within the prescribed period of two years; (vi) if the licence is gran-
ted, there is apprehension of breach of peace. These comments
provide a peep into the mind of the District Magisirate while reject-
ing the application for licence. The State Government while
quashing the order of the District Magistrate refusing to grant
I"
F 'licence held that the reasons on the basis on which the licence to
run cinema was rejected do not faU within the cinematograph Rules '•
and violation of no specific rule iS shown. That sets at naught
ground Nos. (i), (v) and (vi). The charge of bias was shown to 'l
be.not merited and failure to C<!mplete the construction within the •
specified time did not merit rejection of the application for
G licence. Location of eductional institutions within the prohibited
area would not enter the verdict at the stage granting cinemato-
graph licence because the same was taken care of and rejected while
granting the certificate of approval. It is even factually not·correct.
Accordingly, the State Government remitted the matter to the
incensing authority to consider whether licence could be refused
in public interest and if it is to be so refused, the prior appro-
U.P. STATB v. P.ATA RAM (Desai, J.)
val of'the State Government may be obtained. Therefore the remand
order limited the enquiry by the District Magistrate to question
of grant or refusal of licence in. public interest. Other aspects are
concluded by the remand order.
Therefore, the only question that survives for consideration is
whether the District Magistrate is now justified in refusing to grant B
licence on the ground that it is not in public interest to do so. Read-
•\
ing the order dated February 20, 1983, as a whole the influence of
the Sammelan permeates through the order .. Curiously, after the
direction given by the Court that the District Magistrate shall pro-
cess and dispose of the application for licence, the .Dist.rict Magistrate
giv~ a publ!c notice inviting objections to the grant of cinemato- c
grapn licence. The only objector again appears to have been the
Sammelan and it has repeated all those objections which it had
preferred at the time of granting of certificate of approval. The
objections of the Sammelan ~ere founded on two environmental
aspects: (i) tha~ the surroundings of the campus of Sammelan are
calm and quiet and there is such an atmosphere as would be con- D
ducive to the-research work conducted on the campus of the Sam-
melan; (ii) granting of a cineinatograh licence woul4 disturb the
cultural and· educational environment of the . locality and would
be a traffic nuisance. In our opinion, both are irrelevant
considerations for the obvious reasons, that they are deemed to
ha;e been disposed of while granting certificate of approval and E
affirmed by the ,State Government' in appeal. They ought to be
reje,cted for the additional reason that the cinema building is an
air-conditioned sound-proof building. It is noi possible to believe
that conducting cinematograph exhibition in a sound-proof build-
ing will add to the noise. The grievance was that once a cinema
F
theatre comes up, tea stalls will spring up, hawers would crowd
the locality and traffic would increase. is hardly relevant. There is.
nothing special about it. Anyone living in a developing urban
v area has obviously to put up with this situation. Noise can
be mitigated not wholly obliterated. Therefore, the District
Mag'istrate rejected the application on extraneous and irrelevant
considerations not.germane to the issue at the stage of granting the G
licence.
Licensing powers, an indisputable adjunct of controlled eco-
nomy., take various forms and they are numerous. They are gene-
rally couched in a language giving wipe scope for exercise of powers H,...
1040 SUPREl!E COURT REPORT [1985] 3S.C.R.
Therefore the courts have been vigilant to see that they are not
A
exercised in an oppressive or arbitrary manner. The powers being
wide, the question· of its exercise on relevant or considerations
germane to the deter min ation more often arises. If the licence is
refused on grouuds which appear to be irrelevant, the court can
legitimately interfere. In this case the sole ground of refusal of
.B licence is that it is not in pubilc interest to grant it. Lifting the veil
of public interest what transpires is that the license ·should not be
granted because the Sammelan is not reconciled to the existence of
a cinemHhreatre)n its vicinity. In other words, pubilc interest is
shown to be co-extensive with the likes and dislikes of the authori-
ties in charge of the Sammelan. This cannot be countenanced.
c Dislike of a body howsoever prestigious it may be, is not an
adequate substit'ute for public interest. The licensinga uthority has ,
cfoarly acted on irrelevant consideration in refusing the licence.
The High Court was, of course, clearly in error in issuing a
D
mandamus directing the District Magistrate to grant a licence.
Where a statute confers power and casts a duty to perform any
function before the power is exercised or the function is performed,
the Court cannot in exercise of writ jurisdiction;supplant the licens-
ing authority. The High Court was hearing a writ petition praying
for a wit of certiorari for quashing the order of remand. The High
E
Court could have quashed th~ order of remand if it was satisfied
that the order suffers from .an error apparent on the recor.d.
But there its jurisdiction would come to an end. The High Court
cannot then proceed to take over the functions of the licensing
authority and direct the Iicens;ng authority by a mandamus to grant
F license. To that extent the judgment of the High Court is set ·
aside. However, as pointed earlier, while narrating the chronology / ··-
of events through which the appeal proceeded in this Court, the
present situation is that the District Magistrate by its order dated
February 20, 1983 refused to grant licence on extraneous and
irrelevant considerations, and it has failed to exercise jurisdiction
G
1vested iu it. This Court, therefore, on March JO, 1983 vacated the
jnterim stay of the operation of the iudgment of the High
Court. Within a week thereafter the District Magistrate granted
!icense and it was renwed for a further period of one year in April,
1984. That licence is valid and in force and holds·good, subject to the
application for its renewal at prescribed intervals •. The order dated
H
ti.P. STATE v. WA RAM (Desai, J.). 1041
February 20, 1983 refusing to grant license· in public interest is A
quashed and set aside. The District Magistrate as licensing authority
shall examine the application for renewal of licence whenever
made, on retevant and legally valid considerations germane to the
determination and in the light of the observations made in this judg·
ment.
B
Subject to the modifications set out in this judgment, the
• appeal fails and is dismissed but with no order as to costs .
'
c
~ N.V.K. Appeal dismissed.
'
\
;
"
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