Holding

A licence under the Jammu and Kashmir Cinematograph Act is a personal right of the individual licensee and does not constitute an interest in the premises that passes to a partnership; therefore, the partnership had no claim to the licence and the licensing authority validly suspended unauthorised exhibition.

Summary

Ved Gupta obtained a licence to exhibit films at Apsara Theatre in his personal capacity, while the cinema was operated by a partnership that included him and two others. The partners claimed that the licence was the property of the partnership and that they were entitled to notice and a hearing before the licensing authority could suspend the exhibition of films. The Supreme Court held that the licence under the Jammu and Kashmir Cinematograph Act is granted to an individual licensee and does not create an interest in the premises that passes to the partnership. Consequently, the partnership had no legal right to the licence, and the licensing authority was empowered to suspend the exhibition of unauthorised films without violating natural‑justice principles. The Court also rejected the view that Section 6F supported the partnership’s claim and affirmed that the licence could not be transferred or sub‑let without authority. The appeal was allowed, setting aside the High Court division‑bench decision and upholding the district magistrate’s order.

Issues considered

The nature of a licence under the Jammu and Kashmir Cinematograph Act – whether it is an interest attached to the premises or a personal right of the licensee.
Whether a partnership acquires any interest in a licence held by one of its partners in his individual capacity.
The interpretation of Section 6F of the Act and whether it supports the partnership’s claim to the licence.
Whether the licensing authority had jurisdiction to suspend the exhibition of films without notice and hearing, invoking principles of natural justice.
The procedural correctness of the High Court’s handling of the Letters Patent Appeal under Rule 23 of the Jammu and Kashmir High Court Rules.

Legislation cited

Jammu and Kashmir Cinematograph Act, 1933s. 15, s. 3, s. 6, s. 6E, s. 6F
Jammu and Kashmir (Cinematograph) Rules, 1975s. 23, s. 88(v)
Jammu and Kashmir Entertainment Duty Act, 1959s. 15

Subjects

licencepartnershipJammu and Kashmir Cinematograph ActSection 6Fnatural justicesuspension of exhibitionlicensing authorityproperty interesthigh court procedural rules

Judgment

575

VED GUPTA
A
;
v.
APSARA THEATRES

August 11, 1983
B
[D.A. DESAI AND V. BALAKRISIINA BRAD!, JJ.J,

Jammu and Kashmir (Cinematograph) Act, 1989 (1933 A.D.}-Licence for
exhibition of cinematograph films in a theatre-Whether it constitutes an interest
attached to the pren1ises in which cinematogra"ph is installed ?-When premises
and cinematograph are owned by a partnership and the licence is held by a partner
in his individual capacity, whetherthe partnership firm acquires any interest in the c
licence.?- Whether s.6F lends support to such a view?

The appellant, purporting to Act On behalf of a partnership consisting
of himself, Todar Mal and Krishan Kumar, applied for and obtained permission
in his individual capacity to construct a cinema theatre on a plot of land which
was taken on lease jointly by all the three of them after the application for ·the D
permission was made but before the same was granted. They entered into a
partnership along with 11 others for carrying on the business of constructing
and running a cine1na the~tre and the deed of partnership contained a clause
that the pJot of land -~s well as the permission obtained for constructing the
theatre shall be the property of the firm. On completion of the constructio.D. the
appelJant applied for, in his own name, and obtained in his personal capacity,
a licence to exhibit cinematograph films at the Theatre. The partnership was E
re.constituted on retirement of two partners and the new deed executed by the
remaining partners also contained a clause that the firm shall have the right to
operate the licence. An application for inclusion of the names of Todar Mal
. and Krishan Kumar in the licence was rejected by an order of the Licensing
• > Authority who held that the appellant was the sole licensee and the said order
became final. Another application for renewal of the. licence in the name of
the Theatre on the ground that the appellant had been expelled from the
F
partnership was also rejected by an order of the Licensing Authority _which was
not challeni:;ed. Thereafter when, in a suit instituted for a declaration that the
licence was the property of the firm, the trial court issued an injunction restrain·
ing the appellant from interfering· with the possession and running of the
Theatre by some of the partners of the firm, the appellant wrote to the
Licensing Authority disclaiming responsibility for any acts of commission or G
omi6sion committed by others in the~premises of the Theatre. The Licensing
Authority, acting on a report from the police that films were being exhibited in
the Theatre by persons other than the licensee, ordered suspension of exhibition
of films at the Theatre. A writ petition chaUenging the validity of this order
filed in the name of the Theatre was dismissed by a Single Judge of the High
Court. In the Letters Patent Appeal heard by a Division Bench consisting of H
the Acting Chief Justice anoth,er Judge of the High Court the Acting Chief
Justice held that the impugned order was void but the other Judge agreed with
the vie~ of the Single Jud$e who had d,ismlssed the petition earlier. In view ef
'176 SUPREME COURT REPORTS t1983} 3 s.c.R.
the divergence of opinion, the maiter was referred to the only other Judge avail-
A able in the High Court, but he having declined to hear the same for good
reason, the Division Bench decided under sub-r. (3) of r. 23 of the Jammu and
Kashmir High Court Rules, 1975 that the view of the Senior Judge should pre
vail and accordingly the Letters Patent Appeal was allowed in conformity with
·the view taken by the Acting Chief Justice. This resulted in the anomalous
situation that as against the view concurrently taken by two Judges of the High
Court, the opinion of the Acting Chief Justice which was really the minority
.B view was allowed to prevail.

The reasons given by the Acting Chief Justice for the view he took
were : (i) that a licence under the provisions of the Jammu and Kashmir
(Cinematograpb) Act is granted for premises permanently equipped for cinem-
tograph exhibition in the name of the owner/manager of the cinem_atographs
c used in the premises and hence, where the licer,sed premises including the
cinematograph used therein belongs to a partnership and one of the partnerS.
obtains a licence in bis separate name, the other partners automatically acquire
an interest in the licence and that the privilege granted by the liceiising authority
''must necessarily follow the title in sqch building and the cinematograph11
and that the provision contained in s. 6F lends support to this conclusion; (ii)
that the partnership firm had a legal right in the licence which entitled it to
D notice and hea'ring under the Act before the licence was suspended; (iii) that
inasmuch as the said procedure was not followed by the Licensing_ Authority,
the impugned order was void and in violation of principles of natural justice;
and (iv) that except for the power of revocation of licence embodied' in
s. 6F and an implied power to suspend a licence pending proceedings for
revocation, the Licensing Authority had no power to suspend the licence of
E . the Theatre under any other circumstances.

Allowing the appeal,

HELD : The provisions of the Act and the Rules conte1nplatc the grant
of a licence to a person in respect of a 'place' where cinematogr_aphic apparatus
, .
F have been installed. Under the Rules and the terms. and conditions of the
licence, the grantee thereof is the person answerable to the Licensing Authority
for breach Or the obligations and conditions. A licence granted under the Act
is not analogous to a licence in the realm of real property law. It is, therefore,
not possible to accept the view that the licence is a grant for the premises and
constitutes an interest attached to the premises. The provision contained in
s. 6F, far from supporting such a view, goes to show that the holder of a licence
G may be a person different from the owner or partner of a cinematograph. The
object of that section is to empower the Licensing Authority to revoke the
licence in the event of commission of an offence under s: 6 or 6E not merely by
the licensee but also by .any person who inay be in actual charge· of the
cinematograph. [588 H, 589 A-B, G-H,"590 A]
H
2. (a) In proceedings to which the Licensing Authority was a patty, the
High Court as well this Court h<1:d upheld the order of the Licensing Authority
holding the appellant to be the sole licensee and r~jecting the case put forwar<I
VED GUPTA J>.·APSARA THEATR£S 577

J on behalf of the firm. The firm and its partners are bound by the said decision.
It is, therefore, unnecessary to deal with the reasons statrd ·by the Acting
Chief Justice of the High Court in support of his concusion that the licence
was granted to the 3.ppellant in his individ~al capacity as representing the
-A

partnership. [588 D-E]

(b) The appellant was the sole licence in respect of the Theatre. By
virtue ofr. 88 {v) as well as cl.11 of the licence issued, there was a clear
prohibition against the licensee frow transferring, assigning, sub-letting or B
otherwise transferring · the licence without the permission of the Licensing
Authority and also against his allowing aDy other person to exhibit films at the
licensed place without obtaining such permission. The firm.of partners had no
right whatever to exhibit cinematograph films at the theatre without a licence. It
was the plain duty of the Licensing Authority to Cnsure that exhibition of films
was not conducted in the Theatre by unauthorised persons and the impugned
order ·is obviously one passed by him in the discharge of the said function. The
principles of natural justice are not attracted to such a situation. The rosition
would have been different if it was a case of even temporary suspension.of the
licence without notice to the licensee. [590 D, F, 591 A, 592 A, C-F]

(c) The Licensing Authority had the power to make the impugned order
suspending the exhibition of films in the Theatre by persons other than the D
licensee. The power to control the exhibition of cinematography by grant of
. licence and the power to administer and enforce the provisions of the Act and
the rules included the implied power to take all steps necessary to ensure the
due obserVance of the terms of the statute. the rules and the· conditions of
licence. The view expressed in the impugned judgmeilt of the Hi8h Court that
the Licensing Authority had no pOwer to make the impugned order was based
on the fallacious·'ass.umption that what was done under the 'impugned order
E
was to suspend the licence while, in fact, what was done was only to suspend
the exhibition. of .filin~ in the Theatre by perSons other than the licensee.
[593 D-F, BJ

· 3. Although there are Very serious doubts about ihe corre~tne.ss of the
view taken by the Division Bench of the High Court regarding the applicability F
of r. 23 (3) of the Jammu and Kashmir High Court Rules, 1975 to the instant
case, it is not necessary to consider that question in view of the conclusion
arrived at on the merits of the case. [586 F-G]

CIVIL APPELLATE JUR!SDJCT!ON: Civil Appeals No. 2611 and
2.611-A of 1981. G

From the Judgment and Order dated the ist July, 1981 of the
High Court of Jammu and Kashmir in L.P.A. No. I of 1981 and
.. C.M.P. No. 454 of 1981.
H
A. K. Sen and G. L. Sanghi, Vineet Ku'mar and Devinder Gupta
for the Appellant ..
S78 SUPREME COURT )UlPORTS 11983) 3 s.c.R.

D. D. Thakur, S. N. Kacker and R. P. Bhatt, for respondent in
A 2611/81.

. Soli. J. Sorabjee, K. K. Venug9pa/ and R. P. Bhatt, for respon-
dent in 2611-A/81.
•
B E. C. Agarwa/a, S. P. Gupta; R. Salish, V. K. Pandita and R.P.
Sethi for respondent in 2611-2611-A.

L. N. Sinha, Attn. Genl.· A/tof Ahmad and Irfan Ahmad for
respondent no. 2. ,
c S. Ghosh and A. K. Nag for the intervener.

The Judgment of the Court was delivered by

BALAKRJSHNA ERAD1, J. ,When the hearing of these appeals was.
concluded on November 11, 1982, after elaborate arguments hiid
D been addressed by learned counsel appearing on both sides, we
announced our decision aliowing the appeal (C.A.No. 2611 of 198i)
by passing the following order :

"The appeal is allowed.
E
The Judgment and order of the Division Bench of the
High Court presided over by learned Acting Chief Justice
is set aside and one by learned Single Judge, Dr. A. S.
Anand, is restored and consequently the Writ Petition No.
F 436 of' 1980 filed by Respondents in the High Court of
Jammu and Kashmir stands dismissed. No order as to
costs of hearing in this Court.

The legal consequence of this order will take effect
from November 16, 1982. All interim orders passed by
G this Court shall stand vacated from the midnight between
15th and 16th November, 1982.

' Reasons will follow."
H
We now proceed to state in this judgment the· reaso.us in support of
our !lfor~said conc!u~iqn,
'.:;
VED il~P'l'A v. APSARA THEATRES (Ba/akrishna Eratii, J.) 579

In July, 1966, the appellant Ved Gupta decided to embark upon
a venture to construct and operate an air-conditioned Cinema in a· A
plot of land which he proposed to take on lease in Gandhi Nagar,
Jammu, in Collaboration with two osher persons, namely, Todar Mal
and Kishan Kumar. Accordingly, on July22, 1966, Ved Gupta
purporting to act -011 behalf of a partnership consisting of himself and
the two persons aforementioned (as a matter of fact, no partnership
B
had been constituted at all by that date), applied to the District
Magistrate, Jammu, under .soction 3 of the Jammu and Kashmir
(Cinematograph) Act_, 1989 (1933 A.D.) (herein-after referred to as
the Act) for permission· to construct a modern Cinema Hall at the
proposed site, a detailed description of which was furnished in the
plan annexed to the application. Shri Ved Gupta was informed by the c
District Magistrate, Jammu by his Memo (Annexure·B) that the
Government bad approved the construction of a Cinema Hall at the
proposed site and had granted the requisite permission in his favour
as per 'letter dated· September 11, 1967, issued by the Secretary to
Government, General Department. . From Annexure-B, it would
;ippear that the permission so granted was in favour of Ved Ved Gupta
D
in his individual capacity and not as the representative of any firm.
. ' In the meantime, by a deed dated December 7, 1966, which· was
' registered on December 24, 1966; the plot in question was taken on
lease jointly by Ved Gupta, Todar Mal and Krisban Kumar for a
period of 40 years on the terms and conditions set out therein. There· E
after, under a deed dated July 15, 1969, the aforesaid three persons
entered into a partnership.along with 11 others under the name and
· style "Metro Theatres" for c;urying on the business of constructing
and running a· modern air-conditioned Cinema in the site covered by
'
the permission granted by the Government. Clause 15 of the said
deed provided that the site for construction of a Cinema which had F
been obtained on lease by Ved Gupta, Todar Mal and Krishan
Kumar in their own names shall not be their personal property, but
shall be the property of the partnership, and that the permission
which Ved Gupta _had obtained from ihe Government for construe•
tion. of the Theatre in the said plot shall be treated as the property of G
the partnership. By a subsequent· agreement executed by the 14
partners <in February 22, 1969, the name of the Cinema business was
changed from 'Metro Theatre' to 'Apsara Theatre."

The construction of the Cinema Theatre appears to have been H
• completed by the middle of June 1969. On June 17, 1969, Ved Gupta
submitted an application to the District Magistrate, Jaminu, reporting
that the construction of the theatre and the installation of the cinem~-.
.
sso SUPREME COuRT REPORTS [19831 3 s.c.ll
tograph machinery and equipment . had all been completed pursuant
A . to the permission granted by the Government and requesting that
the requisite licence for running the Cinema Theatre may be issued
to him under the Act and the Rules. Annexure-C is a copy of the
said application and it shows that it was filed by Veil Gupta in his
personal capacity without any mention whatever therein of the
B partnership. On July 22, 1969, a licence was issued by the District
Magistrate to.Ved Gupta under Section 3 of the· Act to give public
exhibition of cinematopraph films at .the Apsara Theatre situated at
Gandhi Nagar, Jammu.

Annexure-D is a copy of the said licence and it is expressly
c stated therein that the said licence has been granted to Shri Ved
Gupta and that it shall remain in force until March 31, 1970, pro-
vided that Shri. Ved Gupta or any person to whom, with the consent
of the licensing authority, the licence is transferred, continues to· own
or manage· the qinen!atographs used in the said Apsara Theatre. A
D Schedule of conditions imposing v~rious duties and obligations on
the licensee is also appended to the said licence.

On March 31, 1970, two partners-Todar Mal and Sham
Kumar·- retired from the partnership. Consequent thereon, the firm
was reconstituted and a new partnership deed was executed by the
E remaining partners on April 11, 1970, Clause 18 of the said document
contained the following recital. :

"The licence for running the Cinema, by which Apsara
Theatre is being run stands in the name of Shri Ved Gupta
s/o Shakur-Dass, the 9th party. The right to operate the
F Cinema licence shall be . the property of this partnership
and changes in the constitution shall .make no difference
in thi.s respect."

Soon.thereafter, on December 3, 197.5, Todar Mall who had
G '"retired from the firm and Krishan'.Kumar who continued to be a part-
ner jointly issued a notice to the District Magistrate, Jammu, claiming
· that their names should also be included in the licence issued to Ved
:Gupta in respect of the Apsara Theatre. Subseq11ently, on January
26, 1976, Krishan Kumar addressed 'a communication to the District ·
H .Magistrate stating that he had not actually signed the notice-sent on
December 3, 1975, that Tcidar Mal had unauthorisedly purported to ---
send the notice on his behalf also without his knowledge or consent •
:and the said notice may,. therefore, be treated as fictitious. A copy
VED GUPTA v. APSARA THEATRES (Balakrishna Eradi, J.) 581
r
I
of the said letter was sent by Krishan Kumar to Ved Gupta also,
Strangely, after the expiry of nearly two years thereafter, Krishan A
Kumar submitted an application to the District Magistrate requesting
that the names of himself and of Todar Mal should also be included
as licensees in the licence for Apsara Theatre, issued to Ved Gupta.-
Notice of the said application was issued by the District Magistrate
to Shri Ved Gupta and the District Magistrate conducted an enquiry at
which both sides were heard through their a<jvocates. After consider-
8
ing the arguments advanced before him by the counsel appearing for
the contending parties, the District Magistrate passed a detailed order
· dated December 29, 1977, rejecting the request of Todar Mal and
Krishan Kumar and declaring Shri Ved Gupta to be the sole licensee
authorised to run the Apsara · Theatre. Thereupon, Todar Mal pre-
. ferred an appeal against the said order passed by the District
c
Magistrate. Krishan Kumar was impleaded as a second respondent
in that appeal. The Minister of State for Revenue and Law, Govern-
ment of Jammu and Kashmir, heard counsel on both sides and
ultimately dismissed Todar Mal's appeal by a detailed order, of which
Annexure-G is a copy. Todar Mal did not leave the matter there. D
He filed~ writ petition in the High Court of J_ammu and Kashmir,
challenging the legality and validity of the orders passed by ·the
District Magistrate and the appellate authority, namely, the State
Government. Krishan Kumar was made a party-respondent in the
said petition. That writ petition was dismissed in //mine by the High
E
Court by an order dated April 29, 1978. Thereafter, Todar Mal came
up to this Court, praying for the grant of special leave to appeal
(S.L,P. Civil No. 3490 of 1978) against the said decision of the High
Court. This Court rejected that ·Special Leave Petition by order
dated November 13, 1978. Krishan Kumar was a party-respondent
in the Special Leave Petition also. F

On April 19, 1979. Krishan Kumar addressed a letter to the
District Magistrate, Jammu, requesting that the renewal of the licence
may be granted ,"in the name of the "premises of Apsani Theatre"
The District Magistrate rejected the said request by a detailed order G
datad April 21, 1979. (Annexure-1) Before tbe said order was passed
· by the District Magistrate, an elaborate hearing appears to ·have been
given by him to Krishan Kumar and Ved Gupta represented by their
Advocates. It is seen from Annexure-1 that the contentions advanced
•before the District Magistrate on behalf of Krishan Kumar were that ll
even though the licence had originaliy been issued in the name of
•
...Ved Gupta, the right of operation of the licence had . become. the
I
stli>REME cotiRt REPORTS il983J 3 s.c.tt.
property of the firm by virtue of clauses 13 and 18 of the partnership
A deed and since Ved Gupta had been expelled from the partnership
and had thereby ceased to be connected with the firm, he did not have
(
the possession of the premises and he was not entitled to claim a ·
renewal of the licence. These ~ontentions · were ·repelled by the
District Magistrate who held that the renewal of the licence could
not be made in the name of any party other than th; original licensee,
B
namely, Shri Ved Gupta, who had been declared to be the sole licen·
see in respect of the Apsara Theatre by the proceedings of his
predecessor dated December 29, 1977, which was confirmed in appeal
by the State G9vernment and which had acquired finality between
the parties by reason of the dismissal of the writ petition and the
c Special Leave Petition by the High Court and Supreme Court,
respectively. In March, 1980 the licence for the Theatre was renewed
by the District Magistrate in the name of Ved Gupta. ·

On April 27, 1979, a suit was instituted against Ved Gupta and
seven others by seven of the partners including Krishan Kumar-for
D, a declaration that the Cinema licence dated July 22, 1969, issued by.
the District Magistrate, Jammu (8th defendent) for exhibition of
cinematographs in the building known as Apsara Theatre, Gandhi
Nagar, Jammu, is the property of the firm Apsara Theatre and for a
prohibitory injunction restraining ·defendants l to 7, nameiy, Shri
E Ved Gupta and six of the partners who were residing with him from
interfering with the running of the Cinema by the plaintiffs and also
for a prohibitory injunction against the District Magistrate (defen·
dant 8) restraining him from interfering in any manner with the
exhibition by the plaintiffs of cinematographs in the premises of
Apsara Theatre. On the date of the institution itself, the District
F Judge, Jammu, issued an order of temporary injunction restraining
defendants 1 to 7 from interfering with the possession and the running
of the Theatre Apsara by .the plaintiffs. On being .served with the
order of injunction, Ved Gupta wrote to the District Magistrate on
September 24, 1980 that it had b~come impossible for him to operate
the Cinema li'cence "in view of the temporary injunction issued by the
G
District Col!rt and since it is only the licensee who is held responsible
under the. Act and the Rules for due compliance with all the terms
and conditions of the· licence and answerab_le to the licensing authority
for all commissions and omissions in the Cinema premises, he may
H be saved from any prosecution or other action· under law in the.
capacity of licensee of the Apsara Theatre. in respect of any illegal
acts or offences committed by others in the. said premises. On
VED GUPTA v. APSARA THEATRES (Balakrisima EraJi, J.) 583
September 26, 1980, the Superintendent of Police, Jammu City,
reported to District Magistrate that on verification by the Sub· A
Inspector deputed for the purpose, it had been found that the
cinematographs were being conducted in the Apsara Theatre by
persons other than the licensee and the· Police had challaned the
licensee under Section 6 of the Act. The Distrfot Magistrate ivas
requested by the said letter that exhibition of cinematographs in the B
Theatre·may be suspended till the final· decision was rendered by the
Court in favour of either of the parties. Acting"'on the aforesaid
material brought to his notice, the District Magistrate passed the
order (Annexure-J) dated September 26, 1980, directing that exhibi·
tion of cinematographic films in Apsara Theatre will remain suspended
until further orders. The sole question arising· for determination in c
j· these appeals concerns the validity of the said order passed by the
District Magistrate and hence, it will be convenient at this stage to
reproduce the full text of the o_rder. It reads : ·

"Whereas it has been brought to my notice by Shri
D
Ved Gupta, sole licensee, Apsara Theatre that the District
and Sessions Judge, Jammu, has issued a . temporary
injunction-against the exhibition of films by him iu the
above-said theatre;

And whereas the S.P. City by his letter No. liConf. E
dt. 16.9.80 has intimated that there was exhibition of films
on 25th September, 1980, in Apsara Theatre by persons
other than the licensee;

And ·whereas under the provisions of the Cinemato~
graph Act, read with rules, none other than licensee is F
permitted to exhibit films during the currency of the
licence ";'ithout permission of the licensing authority;

Now, therefqre, I, A. Sahasranaman, District
Magistrate, Jammu, hereby order that exhibition of films G
in Apsara Theatre will remain suspended till further
orders. ·

This _order shi
a I come i~to force with immediate
effect."
H
On Septembes 29, 1980, a writ petition -Writ Petition No. ".436
of 1980-was filed in the High Court of Jammu and Kashmir by
584 Stii>Rm.iE COURT REPORTS Ii 983) 3 s.c.Ji..
M/s Apsara Theatre, seeking to quash the aforsaid order passed by
A the District Magistrate as being Hlegal, ultra vires and void. It was
contended inter alia by the petitioner that there had been a gross
violation of the principles of natural justice inasmuch as the
petitioner-firm and its partners had not been given any notice or
afforded hearing before the impugned order was passed. ·Another
ground put forward by the petitioner was that the District Magist-
B rate had no power to suspend the licence 'under any of the
provisions of the Act or the Rules and that the only power vested
in the licensing authority was to revoke the licence under Section 6-F
of the Act and that too only if the conditions precedent mentioned
in the said Section were found to exist. The learned Single Judge
c of the High Court Dr. Anand, J), by a well-considered judgment
rejected the contentions of the petitioners and dismissed the writ peti-
tion. M/s Apsara Theatre represented by Krishan Kumar preferred a.
Letters Patent Appeal-L.P.A. No. I of 1981 against the judgment
of the learned Single Judge. That appeal was bear& by a Division
Bench consisting of Mufti Baha·ud-din Farooqi, Acting Chief
Justice and Mir, J. The two learned Judges comprising the Division
Bench, however, . came to divergent conclusions. Mir, l agreed
with the. view expressed by the learned Single Judge that the District
Magistrate· bad acted strictly in accordance with law in passing
the impugned order and that the writ petition was devoid' of merit
E But, the Acting Chief Justice was of the view that where the licensed
premises including the cinematographs used therein belonged to.
a partnership and one of the partners had obtained a licence in his
separate name, the other partners automatically acquired an interest
in the licence. It was further held by the Acting Chief Justice that
the effect of the licence was that "it renders privilege the building· of
F the cinematographs used therein and the privilege must necessarily
follow the title in such building and the cinematograph." On this
reasoning, it was held by him that the plaintiff-firm had a legal right
in the licence which entitled it to notice and hearing under the Act
before the licence was suspended, and inasmuch as the said procedure
has not been followed by the District Magistrate, the impugned order
was void and in violation of the principles ·of natural justice. The
learned Acting Chief Justice has further expressed the view that
except only the power of revocation, embodied in Section 6·F of the
Act and an implied power to suspend a licence pending the procee·
H · dings for such revocation, the District Magistrate bad no jurisdiction
or power to suspend the licence of the Theatre under any other
circumstances. Hence quite apart from the question of natural
VED GUPTA v. APSARA THEATRES (Balakrishna Eradi, J.) 585
justice, the impugned order was also held by the Acting Chief Justice
to be one passed without jurisdiction on this ground also. A
In view of the difference of opinion between the two learned
Judges, the Letters Patent Appeal was referred to Kotwal, J. under
Rule 23 (2) of the Jammu and Kashmir High Court Rules, 1975.
It may be mentioned at this stage that at that' time, the High Court
was functioning with a srength of only four Judges, and excluding·
B
the learned Single' Judge who heard the writ petition and the two
members of the Division Bench the Acting Chief Justice and Justice
who comprised the Division Bench which heard the Letters Patent
Appeal, Kotwal, J. was the only other Judge available in the High
Court. Unfortunately, Kotwal, J expressed his inability to hear the
Appeal on the ground that at one stage,· he had appeared as an
c
Advocate for M/s Apsara Theatres in the course of the· earlier
litigations lietween the parties concerning substantially the same
matter. Consequently, it became impossible for the Letters Patent
Appeal being heard by a third Judge designated by the Chief Justice,
as contemplated by Rule 23 (2). The matter was, therefore, placed D
before the Division Bench consisting of the Acting Chief Jmtice and
Justice Mir as C.M.P. No. 454 of 1981 for consideration of the
question as to what rule of procedure was applicable. The learned
Judges took the view tha.t Rule 23 of the Jammu and Kashmir High
Court Rules, 1975, squarely covered the situation that had arisen E
before them. Rule 23 is in the following terms :
"23 .(!) In the event of a difference of opinion among
the judges composing any bench of the court, the decision
shall be in accordance with the opinion of the majority of
the Judges. ·F
(2) If the judges composing the bench are equally
divided on any point, they shall state the point upon
which they differ and the case shall then be heard upon
that point by one or more of the other Judges designated
for the purpose by the Chief Justice and such point shall G
f be· decided according to the opinion of the majority
(if any) of the judges who have heard the case (including,
those who first heard it). . ·
(3) If there is no such majority, then the decision H
shall be in accordance with the decision of the senior
Judge except in.the case of an appeal from.a decree wher~
such decree shall be confirmed,"
' ...
586 SUPREME COURT REPORTS
'.

[1983) 3 S.C.R.

In the opinion of the Divi.son Bench, the present case was governed
A by sub-rule (3) of Rule 23, and, consequently, the decision in the
case had to be in accordance with the opinion of the senior J udg·~.
Accordingly the Division Bench passed orders in C.M.P. No. 454 of
1981 that the Letters Patent Appeal will stand allowed in conformity
with the view taken by the Acting Chief Justice in his judgment.
)
This has resulted in the highly anomalous . situation that as against
B the view concurrently taken by the two Judges of the High Court,
viz. Anand, J; and Mir, J. the opinion of the Acting Chief Justice
which was.really the minority view has been allowed to prevail 'on the
basis of the reasoning that the case was governed by sub-rule (3) of
Rule 23.
c Aggrieved by the decision of the High Court, Ved Gupta has
filed these appeals after obtaining special leave from this Court.
Civil Appeal No. 2611 of 1981 is directed against the judgment of
the learned Acting Chief Justice which has been treated as the final
judgment in the Letters Patent Appeal and Civil Appeal No. 261 l·A
D of 1981 has been preferred against the ord~r passed by the Division
Bench C.M.P. No. 454 of 1981.

The sole question rais.ed 1n C.M.P. No. 454 of 1981 relates to
the legality and correctness of the procedure adopted by the High
Court in allowing the Letter Patent Appeal in the manner indicated
E above.

Although we entertain very serious doubts about the correctness
of the view taken by the Division Bench of the High Court regarding
the applicability of Rule 23 (3) to the instant case, we do not .feel
F called upon to examine the said qnestion in depth or to pronounce
upon it in this case in view of the conclusion arrived at by us on the
merits of the case that the conclusious recorded by the Acting Chief
Justice on the points that arose for decision in the Letters Patent
Appeal cannot be legally sustained and that there was no justification
for interference by the ·Division Bench with the judgment of the
G. learned Single Judge, dismissing the writ petition.

in the judgment of the learned Acting Chief Justice, he has
opened the discussion of the mertis of the case by an elaborate
consideration of the question as to whether the licence in respect of
H 'the Apsara Theatre had been granted to Shri Ved Gupta in his
individual capacity or as representing the partnership. In making
this approach to the case, the learned Acting Chief Justice has
VED GUPTA Y. APSARA THEATRES (Balakrishna Eradi, J.) 587

wrongly Jost sight of certain crucial facts which clinch the issue.
Admittedly, the licence in respect of the Apsara Theatre was granted A
by the District Magistrate in the sole name of Ved Gupta and in all
the relevant columns of the document of licence, Ved Gupta has
been shown as the licensee-and there is no mention at all of the furn
or its partners. An application filed by Shri Krishan Kumar for a
declaration that the licence was the property of the· firm and for
inclusion of his name and that of Todar Mal in the said licence as
B
joint licensees, was rejected by the District Magistrate by his order
dated December 29, 1977. It was expressly declared in the said order
that Ved Gupta was the sole licensee and that the mere fact that a
partnership had been entered into for running the cinema business
did not mean that the firm was the licensee. The Appeal preferred c
-) · by Todar Mal against the order of the District Magistrate was
dismissed by the concerned Minister of the State Government on
April 26, 1978. Krishan Kumar had been joined as a party·
respondent in that appeal. The legality of the aforesaid orders was
challenged before the High Court of Jammu and Kashmir in Writ
Petition No. 74 of 1978 filed by Todar Mal. The District Magistrate
D
and the State Government, whose orders were sought to be quashed,
were the main respondents in this writ petition. That writ petition was
dismissed by the High Court on May 9, 1978, S.L.P. Civil No. 3490
of 1978 filed by Todar Mal against the High'Court's order dismissing
his writ petition was rejected by this Court on November 13, 1978. E
Krishan Kumar was a party to the writ petition in the High Court
as well as to the Special Leave Petition in this Court. The declaration
made by the District Magistrate Iha! Ved Gupta was the sole licensee
and that Krishan Kumar or the Ihm could not be treated as licensees
of the Theatre had thus beeome final.
F
Subsequent to the dismissal of the Special Leave Petition· by
this Court, Krishan Kumar made an application to the District
Magistrate on April 19, 1979 for renewal of the licence in the name
of the firm Apsara Theatre. That application was dismissed by the
District 'Magistrate as per his order dated April 21, 1979 that the G
renewal could not be made in the name of any party other than the
original licensee, so long as there had not been any transfer of the
licnce by the orginal licensee in favour of another with the sanction
of the licensing authority. No steps were u;ken by Krishan Kumar
to challenge the said order passed by the District Magistrate. H
From the facts set out above, it becomes· manifest that rightly
Qr wronj!ly, the licensinll authoritr had !!ranted the licence in respect
588 SUPREME COURT REPORTS (19 83) 3 S.C.R.

of the Apsara Theatre to Ved Gupta treating him as the sole licensee.
A The order of the licensing authority was confirmed on appeal by the
State Government. The challenge raised by Todar Mal against the <
refusal by the District Magistrate to include the names of himself
and Krishan Kumar in the licence was rejected by the High Court as
well as by this Court. The renewal of the licence was subsequently
)
given to Ved Gupta after rejecting the prayer of Krishan Kumar as
B representative of the firm for the grant of the renewal in the name
of the firm. Hence the factual situation was that the licence granted
by the District Magistrate in favour the Apsara Theatre was in favour
of Ved Gupta in his individual capacity and he alone was the licensee.
Such being the case, we arc, unable to appreciate why the learned
Acting Chief Justice has devoted a considerable part of his judgment
.c to a discussion of the aforesaid question as to whether the licence
belonged to Ved Gupta alone or whether it was the property of the
firm; In the view of the preceding factual history of the case, th~re
was no scope in law for countenancing any contention being advanced
on ·behalf of the firm that Ved Gupta had obtained the licence and
D
had been holding the same for and on behalf of the partnership. In
proceedings to which the lii:encing authority was a party the High
Courl as well as this Court had upheld its or.der holding Ved Gupta
to be the sole licensee rejecting the case put forward on behalf of the
firm and the firm and its partners are bound by the said decision.
E In this view, we consider it .wholly unnecessary to deal with the
reasons stated by the learned Acting Chief Justice in support of his
conclusion that the licence was granted to Ved Gupta in his indivi-
dual capacity as representing the partnership. It is sufficient to state
that these reasons do not appeal to us as correct or tenable.
F We are also unable to accept as correct the view expressed by
(he learned Acting Chief Justice that under the Act the licence is
granted for premises permanently equipped for cinemrtograph
exhibition in the name of the owner /Manager of the Cinematographs
used in the premises and hence it necessarily follows that where
the licensed premises including the cinematograph used therein
belongs to a partnership and oue of the . partners obtains a licence
in .his separate name, the other partne~s autom.atically acquire
interests in the licence and that the privilege granted by the
licensing authority "must necessarily follow the title in such
H building and the cinematograph". An examination of the
relevant provisions of the Act and the Rules shows beyond
doubt that they contemplate the grant of a licence to a person in
respect of a "pla~e" where cinematographic apparatus have been
VED .GUPTA v. APSARA THEATRES (Ba/akrishna Eradi, J.) . 589

installed. Under the· Rules and the terms and conditions of th1
licence, the grantee thereof is the person answerable to the licensing A
authority for breach of the obligations and conditions and he is also
punishable for contravention of the provisions of the Act and the
Rules. We are of the opinion,that on a reading of the provisions
contained in the Act and the Rules and the explicit terms of the
licence itself, it is impossible to sustain the view e~pressed in the
judgment under appeal that the licence is a grant. for the premises
B
and constitutes an interest attached to the premises. The analogy
drawn by the learned Acting Chief Justice with licence in the realm
of real property law is a meaningless exercise for the licence granted
under the Act is almost in all res peels a completely different concept.
It is, therefore, not possible to uphold the view expressed in the c
imilugned judgment that "the effect of the licence is that it renders
privileged the building and the cinematograph used therein" and that
"the privilege must necessarily follow the title in such building and
the cinematograph". Section 6·F has been relied on by the learned
Acting Chief Justice as lending support to the aforesaid view
D
expressed by him. That Section is in the following terms :

"6·F. Power to revoke licence-Where the holder of
a licence or a person in charge of a cinematography,
or management thereof or an owner or partner thereof
or an emp!oyee thereof, has been convicted of an E
offence under Section 6 or Section 6·E of this Act, or
under Section 15 of the Jammu and Kashmir Entertain~
ments Duty Act, 1959, the licence may be revoked by
the licensing authority."
F
On a careful reading 9f this Section, it will be seen that far from
supporting the view taken by the learned Acting Chief Justice, this
provision goes to show that the holder of a licence may be a person
different from the owner of the cinematograph or a partner of the
cinematography. The object and purpose of this Section obviously IJ
is to empower the licensing authority to revoke· the licence in the~ ·
event of the commission of an offence under Section 6 or Section 6-E
of the Act, not merely by the licensee but also by -any person who
may be in actual charge of a cinematography or management of the
cinematograph. In other words, a licence is liable to be revoked G
not merely when the licensee is convicted of an offence under Section
6 or Section 6-E of the Act but also in the event of conviction of
such offence of any person belo.ngin~ to the class of persons other
590 SUPREME COURT REPORTS [1983) 3 S,C.R.
•
tha.n the licensee enumerated therein. The provisions of the Section
A contain a clear indication that the holder of the licence (licensee) may ·
be a person different from the owner or manager or partner of the
cinema tograph.
...
In the light of the foregoing discussion, we 'have no hesitation
to hold that the view expressed by the learned Single Judge that Ved )
B Gupta was a sole licensee. and that the firm had no interest in the
licence was perfectly correct and sound and the contrary view taken
by the learned Chief Justice is erroneous. '

The next ground stated in the impugned judgment for quashing
c the order passed by the District Magistrate is that the said order was
violative of the principles of natural justice in as much as no notice
or hearing had been given to the partnership-firm before the order
was passed. This finding is based largely, if not wholly, on the
premise that the firm of partners had derived a "right and interest in
· the licence" and that "the revocation or suspension of the licence
D h~s the potential of seriou;ly afiecting the proprietory and business
interests of the partnership''. We have already recorded our conclu· :
sion that Ved Gupta was the sole licensee in respect of the Theatre
and that the firm of partnership could not be regarded either as
licensees or persons having an interest in .the licence. Hence, it
becomes obvious that the basic premise on which the learned Acting
E
Chief Justice has founded his reasoning cannot be accepted as correct
or sound. While the firm and the partners may have a right to share
in the profits of the business which may be conducted in the Theatre
on the strength of iicence is;ued to Ved Gupta, they have no right or .
interest in the licence which was granted to Ved Gupta in his personal
F and individual capacity. In this connection, it is relevant to refer to
·Rule 88(v). That Rule reads : · ~

"88(v). The licensee shall not, without the permission
of the licensing'authority, assign, sublet or otherwise trans·
fer the licence or the licensed place or the cinernatograph
G
' nor shall the licensee, without permission as afore.said,
allow any other person during the period of currency of
the licence to exhibit the films in !he licensed place."

Clause 11 of the licence issued to Ved Gupta (in Form A prescribed ...
H
under the Rules) incorporates in identical language the provision
aforementioned contained in Rule 88(v) as one of the conditions
1 s bject to which the licence was granted. There was, thus, a clear
11
VED GUPTA V. APSARA THEATRES (Balakrishna Eradi, J.) 591
,._., prohibition against the' licensee from transferring, assigning, sublett•
ing or otherwise transferring the licence without the permission of A
the licensing authority and also against his allowing any other person'ij
) to exhibit films in the licensed place without obtaining such
permission. Thm, the right to conduct the exhibition of the
cinematograph films in the Theatre was vested solely in Ved Gupta,
Gupta, the licensee. It is now relevant to recall that what has B
happened in this case is that in a suit filed by Ktishan Kumar along
with 11 other partners, an order of temporary injunction was issued
on September 23, 1980, restraining Ved Gupta from interfering in
any manner with the running of the Theatre by the plaintiffs. The
effect of the order was that .Ved Gupta had no longer possession
or control over the Theatre premises or the cinematograph c
apparatus instalied therein despite the faet that the was the
licensee responsible to the authorities under the statute for the due
discharge of the -obligations contained in the Rules and in the
conditions appended to the licence. Quite understandably, Ved
Gupta, on receipt of the order of temporary injunction, informed the
District Magistrate by his letter dated September 24, 1980, that as a D
result of the order of temporary injunction, it had become impossible
' for him, for the time being, to operate the cinema iicence with effect
( from the date of the said letter and that he may be absolved from
any liability for prosecution or any other action in law in the capacity
of the licensee of the Theatre in the ~vent of any illegal act or offence E
_being committed by others in the Cinema premises. On September
26, 1980, the Superintendent of Police, Jammu, reported to the
District District Magistrate that cinema eihibition in Apsara Theatre
.. was being conducted by some persons other than the lice'nsec, and,
hence the licensee had been challanged by him under Section 6 of the
Act. The District Magistrate was requested by the said letter 'that F
orders may be passed suspending the exhibition of films in the Cinema
_till the final decision of the court is made in favour of either of the
parties. It was in the context of these developments: that the District
Magistrate passed the impugned order dated September, 26, 1980.
A mere reading of the District Magistrate's order is sufficient to show G
that what was done thereudder was not to suspend or revoke even
temporarily the licence granted in respect of the Theatre. What
was- done by the District" Magistrate was only to suspend the
exhibition of cinematograph films in Apsara Theatre by persons who
are not _licensees and who had no anthority _in iaw to conduct such H
exhibition of films. There was no suspension of the licence issued to
Ved Gupta in respect of the Theatre. Hence, the assumption made
by the learned Actin(l Chief that this was a case of temporary sus-
S92 SUPREME COURT REPORTS [1983) 3 S.C.R.

pension of the licence issued for the Theatre is manifestly erroneous.
A The firm of partners had no r,ight whatever to exhibit cinematograph
films in the Theatre without a licence. If Ved Gupta, the licensee,
bad been expelled from the partnersltip, the proper course to be
adopted by the firm and its partners was to move the authorities for
the grant of a licence and to run the Theatre only after obtaining
such licence. So long as they did not have a licence-we have already
B found that the licence had been granted' to Ved Gupta only in his
individual and personal capacity and not as a representative of the
firm-the firm and the partners had no legal right whatever to
operate the cinema._ Any such operation by them would have been
in clear and gross contravention of the law embodied in the relevant
c provisions of the Act and the Rules. It was the plain duty of tlie
· District Magistrate as the statutory authority charged with the
enforcement of the provisions of the Act to ensure that exhibition of
films was not conducted in tbe Theatre by unauthorised persons in
violation of the ·law. The impugned Order is obviously one passed
by him in the discharge of the said function. No legal right or
D legitimate expectation of the firm or its partners can be said to.have
been affected by. the said order passed by the District Magistrate, for
the simple reason that uo person can be recognised as having a right
~
to contravene the provisions of the statute prohibiting exhibition of )
cinematograph films in public by any one other than the licensee or
E bis·authorised representative. The principles of natural justice are
not attracted to such a situation and there was no obligation on the
part of the District Magistrate to· give a notice or hearing to the
firm or its partners before he passed the impugned order. The
position would, of course, have been different if it was a case of even
temporary suspension of the licence without notice to the licensee.
However, as we have explained, this is not a case of suspension of
the licence and the complainant before the cour! is not the licensee.
The writ-petiiiOners before the High Court were some of the partners
of the firm who wanted to run the Theatre without a licence in
contravention of the provisions of the Act and the Rules The
G impugned order passed by the District Magistrate directing the sus-
pension of cinema show·s in the Theatre cannot be said to h,ave visited
the writ-petitioners with any adverse civil consequences. They had
no legal right whatever to conduct the cinema shows in the Theatre
without .a licence in contravention of the law. The writ-petitioners
H could not also have any legitimate expectation that they will be
allowed to run the. Theatre ·without a licence in violation of the law.
ln the abs~nce of any legal right or legitimate expectation being
'< ' . '
VED GUPTA v. APSARA THEATRES (Balakrishna Eradi, J.) S93

available to the petitioners, there was no obligation on the part· of
the District Magistrate to afford them a hearing before passing .the A
impugned order. We are, therefore, unable to uphold the view taken
by· the High Court that the impugned order was violative of principles ·
of natural justice.

The only other reason stated by the High Court for quashing
the District Magistrate's order is that the District Magistrate had B
•
no power under the Act or the Rules to make such an order. This
·conclusion is again based on the fallacious assumption that what was
done by the District Magistrate under the impugned order was .to
suspend the licence. Proceeding on that premise, the learned Act-
ing Chief Justic has said that under the provisions of the Act the ·
power to suspend a licence is eonferred only by Section 6-F of the
c
Act as one implicit in the larger po'>I er of revocation and unless the
conditions precedent mentioned in the said Section are present, the
licensing authority had no jurisdiction to suspend the licence. As
already observed by us, the impugned order is not one suspending the
licence issued in respect of the Theatre. What was done thereunder D
is to suspend the exhibition cinematograph films in the Theatre by
(
persons other than the licensee. The power to control the exhibition
of cinematography by grant of licence and the power to administer
and enforce the provisions of the Act and the Rules clearly. include
the power to take all steps necessary to ensure the due observance of
the terms .of the statute, the rules and the conditions of· the licence E
as otherwise the competent authority under the Act would have to be
a helpless spectator when cinematograph film~ are publicly exhibited
by persons other· than .the licensee. The impugned order is one
obviously passed by the District Magistrate in the exercise of his
function of administering the provision of the Act and the Rules and F
the aforesaid implied power to take all incidental >teps necessary for
effective enforcement of the statute. We fail to see how it can be
said oil the .facts and circumstances of the case that the District
Magistrate had no jurisdiction to pass the impugned order.
It this becomes manifest that all the grounds stated by the G
Division Bench of the High Court for upsetting the judgment of the
learned Single Judge, dismissing the writ petition, are incorrect· and
unsustainable in law. Hence it was that we passed the Order dated
November JI, 1982;allowing Civil Appeal No. 2611 of 1981 and
setting aside the judgment of the Division Bench. B
Civil Appeal No. 261 l·A of 1981, which is directed against the
ord~r passed in C.M.P. No, 454 of 1981, is disposed· of as infructuous
594 SUPREME COURT REPORTS [1983) 3 S.C.R;

in view of our having set aside the judgment of the Division Bench
A on the merits.

We make it clear that the inter se rights and claims of Shri
Ved Gupta on the one band and the firm and its ·partners on· the
other in respect of the Apsara Theatre are left open to be decided in
the civil suit that is said to be pending.
B

H.L.C. Appeal a/lowed.

,>·
)