B. Ramamoorthy vs Union of India (UOI)

T. Meenakumari, J.—The writ petition is for the issue of writ of certiorari to call for the records of the Respondent in his Ref. No. 15027/90-D1 dated 5.12.1990 and set aside the same.

The Petitioner is a licensee of the Central Talkies at Thirubuvani Village, Mannadipattu Communue, Pondicherry. Aggrieved by the issuance of the impunged order dated 5.12.1990, the present writ petition has been filed.

Mr. M. Ravindran, learned Senior Counsel for the Petitioner has contended that the Petitioner is a licensee of the abovesaid Cinema Talkies. On 18.11.1990 the Respondent has issued a show cause notice basing on the inspection made in Central Talkies. The allegations in the inspection report were that there were some malpractices in maintaining the daily collections and also the closing and running Sl. Nos. of the tickets. The show cause notice was issued in Ref. No. 15027/90-D1 dated 21.11.1990 calling upon the Petitioner to show cause as to why the licence of the theatre should not be suspended. The Petitioner sent an explanation on 26.11.1990. The impugned order was passed on 5.12.1990 by the Respondent in exercise of the powers conferred u/s 10 of the Pondicherry Cinemas (Regulation) Act, 1964 read with condition No. 17 of the Licence suspending the Petitioner''s licence with immediate effect until further orders. The above order has been impugned in this writ petition. During the course of hearing, the Petitioner has filed an additional affidavit on 4.1.1999 raising additional grounds questioning the power of the authorities to suspend the licence Learned Senior Counsel for the Petitioner has argued that there is no provision or power vested with the Respondent under the Pondicherry Cinemas (Regulation) Act to pass any interim orders suspending the licence. The Respondent can pass the final orders alone specifying the period of suspension. Learned Sennior Counsel has brought to the notice of this Court Section 10 of the Pondicherry Cinemas (Regulation) Act, 1964 which reads as follows:

If the owner or person incharge of a cinematograph uses the same or allows to be used or if the owner or occupier of any place permits the place to be used in contravention of the provisions of this Act or of the Rules made thereunder or of the conditions and restrictions upon or subject to which any licence has been granted under this Act, he shall be punishable with fine which may extend to Rs. 1000/- and in the case of continuing offences with a further fine which may extend to Rs. 100/- for each day during which the offence continues.

Learned Senior Counsel for the Petitioner has further argued that the authorities have got power to grant licence as per Sub-section (3) of Section 5. Sub-section (3) of Section 5 of the Act reads as follows:

Restrictions on powers of licensing authority:

(1)....

(2)....

(3). Subject to the foregoing provisions of this section, the licensing authority may grant licences under this Act to such persons and on such terms and conditions and subject to such restrictions as it may determine. When the licensing authority refuses to grant any licence, it shall do so by an order communicated to the applicant giving the reasons in writing for such refusal.

Basing on the above, learned Senior Counsel for the Petitioner has argued that Section 10 of the Act also does not authorise the Respondent to suspend the licence. The Section confers the power of imposing penalty of fine on the licencee. Learned Senior Counsel for the Petitioner has also argued that the Pondicherry Cinemas (Regulation) Rules, 1966 also do not empower the suspension of licence as there are no provisions under the Rules. Learned Senior Counsel has brought to the notice of this Court condition No. 17 of the Licence which reads as follows:

This licence shall be subject to cancellation or suspension for breach of any of these conditions or of the subject conditions specified on reverse.

Basing on the above, learned Senior Counsel has emphasised that neither the Pondicherry Cinemas (Regulation) Act, 1964 nor the Pondicherry Cinemas (Regulation) Rules, 1966 authorise the licensing authority to suspend the licence. The licensing authority has no power to incorporate a condition in the licence empowering himself to suspend the licence. The power to suspend the licence must be giver, by the Legislature to the licensing authority and the licensing authority cannot assume the power by himself by incorporating a condition in the licence. Learned Senior Counsel has argued that as per Section 11 of the Act, there is a power to revoke the licence. Section 11 of the Act reads as follows:

Power to revoke the licence given--where the holder of a licence has been convicted of an offence u/s 7 of the Cinamatograph Act, 1952 or Section 10 of this Act, the licence may be revoked by the Licensing Authority by an order in writing.

Learned Senior Counsel for the Petitioner, relying upon Section 11 of the Act, has argued that the licensing authority has got a power to revoke the licence and they have no power to suspend the licence. He has further argued that when the power is not conferred to suspend the licence, the action taken by the licensing authority in suspending the licence of the Cinema Theatre is not valid as per law.

Learned Senior Counsel tried to correlate the provisions of the Pondicherry Cinemas (Regulation) Act, 1964 with the Madras Act. Learned Senior Counsel has stressed that under the Madras Act, specific powers have been conferred on the Authorities either to suspend or cancel the licence Learned Senior Counsel has argued that even assuming that there is a power on the licensing authority to suspend licence as per the condition of the licence, the same is not prescribed by the Act or the Rules. In the absence of any specific power conferred by the statute, the authorities cannot assume power by themselves. In support of his contention, learned Senior Counsel for the Petitioner has relied upon the following decisions:

Mohammad Yasin Vs. The Town Area Committee, Jalalabad and Another, .

R.M. Seshadri Vs. The District Magistrate, Tanjore and Another, .

Gnanaprakasam v. The Revenue Divisional Officer, Chidambaram 1986 Writ L.R. 33.

Durga Chand Kaushish and Another Vs. Union of India and Others, .

Punjab State Electricity Board Vs. Bassi Cold Storage, Khara and another, .

Sri Ganganagar Urban Co-opertive Bank Ltd. Vs. Prescribed Authority and others, .

The Respondent has filed a counter affidavit and also the reply affidavit stating that the licensing authority has got the authority u/s 5(3) of the Act read with Section 10 of the Act to suspend the licence. Learned Counsel for the Respondent has mainly relied upon condition Nos. 16 and 17 which provides either cancelling or suspending the licence as specififed in Form C. He has argued that having accepted the conditions, the Petitioner cannot turn round and question the power of the Respondent for suspending the licence. The suspension was necessitated as the Petitioner has violated the condition No. 12 of Form C licence. Learned Counsel for the Respondent has further argued that by operation of the General Clauses Act, when the licensing authority has got the power to grant licence, the same authority has got power to suspend or cancel the licence. He has argued that it is deemed to have been clothed with the power of either suspending or cancelling the licence. Basing on the reply affidavit, learned Counsel for the Respondent has argued that the authorities have got jurisdiction under Sub-section (3) of Section 5 of the Pondicherry Cinema (Regulation) Act to incorporate the conditions while granting the licence. He has further argued that the conditions attached to the licence presumes the character of statutory rule made under the Act and the condition attached to C form licence gets merged with the power of the licensing authority u/s 5(3). He has further argued that the conditions attached to the ''C'' Form licence cannot be questioned. He has further argued that the condition has become the part of the licence. Learned Counsel for the Respondent has argued that there is an amendment to Section 10 i.e. Section 10A by Act 7 of 1981 which reads as follows;

10A. Any offence punishable u/s 10 or any breach of the conditions of the licence or any contravention of the provisions of this Act and rules made thereunder may, either before or after the institution of prosecution, or cancellation or suspension of the licence issued under the provisions of this Act, be compounded by the District Magistrate on payment of such sum, as the District Magistrate thinks fit.

Basing on the above he has argued that the authorities have power to cancel or suspend the licence. In support of his contention, learned Counsel for the Respondent has relied on the following decisions:

Kasinka Trading and another, etc. etc. Vs. Union of India and another,

Dalbir Singh v. Union of India 1995 Cr.L.J. 2390.

In this case it is not in dispute that as per Section 5(3) of the Act, the authorities may grant licences under the Act to such persons and on such terms and conditions and subject to such restrictions as it may determine. u/s 10 of the Act, the authorities can impose penalty for contravention of the provisions of the Act or the Rules or of the conditions and restrictions upon or subject to which any licence has been granted under the Act. Learned Senior Counsel for the Petitioner has emphasised that granting of licence is subject to the foregoing provisions of the relevant section. As the authorities are not clothed with the power of suspension, with reference to the provisions of the Sections, learned Senior Counsel for the Petitioner has argued that the order of the Respondent cannot be sustained and it has to be held that the order was passed without jurisdiction. Learned Senior Counsel has argued that the conditions are not supported by the Act or the Rules. In this regard, learned Senior Counsel has relied upon the decision of the Supreme Court in Punjab State Electricity Board v. Bassi Cold Storage, Kharar and Anr. 1994 (2) SCC Supp. 124. In the above decision, the Supreme Court has held as follows:

...We would have had no hesitation in accepting this contention of Shri Sibal but for the fact that what has been provided in Condition 29 has to be read along with provisions of the Act and, in case provisions of the Act would not permit reference of the dispute at hand to arbitration, what has been laid down in the Act has to prevail over the remedy provided by condition 29. Having found that the dispute of the present nature cannot be subject matter of arbitration being not covered by any of the sections of the Act dealing with arbitration; and having held that the provisions of the Act have to override what has been mentioned in the condition, and having further held that the Act would prevail over the general law of arbitration now contained in the Arbitration Act of 1940, we would hold that though the present dispute would have been referable to arbitration because of what has been provided in Condition 29, it cannot be done, in view of the provisions in the Act which would override the stipulation contained in the aforesaid condition.

Basing on the above, learned Senior Counsel for the Petitioner has argued that Condition No. 17 has to be held as unconstitutional as it gives unbriddled and unchannelised power to a licensing authority. He has also argued that the absence of appeal provision in the Act or Rules enables the Licensing Authority to exercise his power of suspending the licence in an arbitrary manner as there is no check to his power. A reading of the Act also shows that there is no power of suspension vested with the authorities. As per Section 10 of the Act, the authorities are clothed with the power of imposing penalties for violation of the conditions of the licence. The suspension of the licence is not the purpose of the particular Act. Section 10 which deals with the power of penalties, does not confer any power on the Respondent to frame rules providing for the suspension of the licence. The Respondent cannot assume the power. A reading of Section 10 shows that condition No. 17 of C Form Licence suffers from the vice of excessive delegation so far as it confers power on the rule making authorities to frame the rules behind the purpose of the Act. The main Act does not confer any power to incorporate such condition in the licence. In the absence of any regulation or control in the Principal Act, the action of the authorities in laving down such condition has to be held as transgressing the limits of the power granted to it. The High Court of Delhi in Durga Chand Kaushish and Another Vs. Union of India and Others, has observed that a lacuna or absence of policy and purpose relatable to regulation or control in the Principal Act cannot be removed or cured by the same being set out in the rules or regulations framed by an authority delegated by the Legislature to do so as a rule-making authority has no plenary powers and in so doing it would have transgressed the limits of power granted to it. The above observation was made by the Delhi High Court following the judgments in Delhi Laws Act''s case AIR 1951 SC 332. State Vs. Haidarali, and Bimal Chandra Banerjee v. State of Madhya Pradesh (1990) 2 SCC 467.

In this case, the Pondicherry Cinemas (Regulation) Act does not authorise the suspension of the licence. In the absence of such power, it has to be held that the basis of the statutory power conferred by the statute cannot be transgressed by the rule making authority. The rule making authority has no'' power to suspend the licence and it has to act within the limits of the power granted to it. It has also to be held that the condition is bad as it does not spell out a guideline for its operation and implementation, a criterion for action under it, an index at which the reasonableness of an order issued under it can be tested. I see some force in the contention of the learned Senior Counsel for the Petitioner that the licence and Form C is granted subject to the foregoing provisions of the Act and the provisions do not contain the power of the licensing authority to cancel or suspend the licence. In view of the above, it has to be clearly held that Condition No. 17 as incorporated in the licence, without jurisdiction. Under the circumstances, Condition No. 17 which is not supported by any statute and which gives an unbriddled and unchannelised power to a licensing authority has to be held as unconstitutional and Condition No. 17 is struck down for the foregoing reasons. As I am of the view that the Act itself does not confer any power for cancellation of the licence the arguments of the learned Counsel for the Respondent have no substance and the case laws cited by the learned Counsel for the Respondents have no application to the particular circumstances of the case. For the reasons stated above, the impugned order is quashed. The writ petition is allowed. No costs. Consequently W.M.P. No. 29692 of 1990 is closed.