Hari Kishan Sharma vs The Punjab State and Another

A.N. Grover, J.—In order to appreciate the points requiring determination in this petition under Article 226 of the Constitution, it is necessary to state the facts at some length.

The Petitioner claimed to be an owner of a certain site in the town of Jhajjar. He wanted to construct a cinema hall there for the purpose of exhibiting cinematographs. Under the Punjab Cinema (Regulation) Act, 1952 (hereinafter called the Act), the authority having power to grant licences in a place where cinematograph exhibition can be given is the District Magistrate but the Government by notification can constitute such other authority as it may specify to be the licensing authority for the purposes of the Act (Vide Section 4). It is common ground that the Sub-Divisional Officer of Jhajjar had been constituted the licensing authority in terms of the proviso to Section 4. According to Rule 5 of the rules framed under the Act, the applications for the grant of the licence have to be accompanied, apart from the building plans, etc., and the site plan, by full particulars regarding the ownership of and all rights in the premises and in the cinematograph apparatus to be used therein and the specifications of the various materials proposed to be used in the construction of the building. Before granting the licence, the licensing authority has to call upon the Executive Engineer to examine the structural features of the building and report whether the rules relating thereto have been duly complied with and to do the other things set out in Rule 9.

On 16th October, 1956, the Petitioner submitted an application to the Sub-Divisional Officer, Jhajjar, for the grant of the licence to construct and run a permanent cinema hall on his site. On 22nd February, 1957, the Sub-Divisional Officer, Jhajjar, marked the application to the Tehsildar for inspection of the site. The State Government had sent instructions on 24th April, 1957, that in future all requests for the grant of permission for opening all new permanent cinemas should be referred to it for orders (Annexure R/1). The Tehsildar made a report on 26th September, 1957, that the site was in accordance with the provisions of the Act and that the Petitioner was its owner. On 30th September, 1957, another memorandum was issued by the Government addressed to all the District Magistrates and the Sub-Divisional Officers conveying the decision that when an application for grant of permission to construct a permanent cinema was referred to Government, it should be accompanied by the following particulars:

(1) The population of the town where the permanent cinema is proposed to be constructed;

(2) Whether there are any permanent cinemas already in existence in the town, and if so, how many;

(3) Whether the applicant/applicants has/have been taking any part in any activity undermining the security of the State;

(4) Whether the financial position of the applicant(s) is sound;

(5) * * *; and

(6) * * *.

The Sub-Divisional Officer on 24th April, 1958, wrote to the Petitioner saying that the site proposed for the construction of the cinema hall "is hereby approved." The Petitioner was required to submit a plan of the building within a month and he was not to transfer the ownership of the site without the previous sanction of the licensing authority (Annexure ''A''). On 23rd May, 1958, the Petitioner duly submitted the building plans which were sent by the Sub-Divisional Officer on 24th June, 1958, to the Executive Engineer, Provincial Division, Rohtak, for scrutiny. In that letter (Annexure ''B''), it was stated that the Petitioner had been allowed to construct a permanent cinema hall at Jhajjar and the site plans were being submitted for proper scrutiny and approval at an early date.

It appears that one Mohan Lal had also applied for grant of a licence for construction of a cinema hall in June, 1958, but he was informed that permission had already been given and there was no scope for a second cinema hall. Consequently his application could not be considered. Another person, Sultan Singh by name, appeared on the scene a little later and applied for grant of a similar permission and licence on 26th August, 1958. On 7th October, 1958, the Provincial Town Planner, Punjab, wrote to the Executive Engineer that the plans of the cinema building which had been submitted by the Petitioner had been checked and they satisfied the rules framed under the Act so far as the structural features of the building were concerned. On 6th October, 1958, the Sub-Divisional Officer, addressed a memorandum to the Petitioner informing him that the site plan prepared by him for the construction of a permanent cinema hall would be referred to the Government for approval "according to the latest instruction". On 31st October, 1958, the Sub-Divisional Officer, Jhajjar, made a report (Annexure R/6(B)) with regard to the Petitioner''s case which may be set out in its entirety--

Shri Hari Kishan Sharma, Managing Director, Manoranjan Touring Takies of Jhajjar has applied for permission to construct a cinema hall in Jhajjar town which has population of about 12,000. A reference was made to the Tehsildar, Jhajjar, for verification of the site proposed for the construction of the hall. He has reported that the same is exclusively owned by the applicant. He was also asked to verify that the proposed site also fulfilled other conditions required by the Cinematograph Act, 1952, and rules made thereunder. After necessary verification from the revenue records, Tehsildar, Jhajjar (Revenue Authority), intimated that the site is exclusively owned by Shri Hari Kishan and fulfilled other conditions. On receipt of this report, the applicant was asked to submit plans of the building for scrutiny by the P.W.D. authorities. On receipt of such plans, the Xen, P.W.D., Rohtak, was requested to check the same as required by the Punjab Cinema Rules, 1952. He returned the plans after due scrutiny and signed the same in token thereof. The Executive Engineer has further stated that these satisfy the Punjab Cinema Rules, 1952, so far as the structural features of the building were concerned. It may be added here that it has been brought to my notice that the proposed site is an evacuee property and not exclusively owned by the applicant as reported by the Tehsil-dar and a case in regard thereto is pending with the Regional Settlement Commissioner, Patiala. A demi-official letter has been issued to him for intimating the present position of the case. The proposed site is, therefore, the subject of a dispute and the report of the Tehsildar, Jhajjar, in this regard cannot be considered to represent the actual state of affairs.

The case is forwarded for consideration.

On 20th December, 1958, the Sub-Divisional Officer, Jhajjar, submitted another report to the Government saying inter alia that it had been reported by the police that the Petitioner had been arrested in connection with "Save Hindi Agitation" and was discharged on tendering apology and that he did not pay any income tax. He had landed property comprising a few plots recently purchased by him. He had stated before the Tehsildar, Jhajjar, that he had hard cash amounting to Rs. 22,000 and 125 tolas of jewellery, but he had neither given any concrete proof in respect of that nor shown balance-sheet of any bank or post-office. The plans submitted by him, however, were stated to be in accordance with the rules. On 4th March, 1959, the Sub-Divisional Officer, informed the Petitioner that his application had been rejected by the State Government as the same did not fulfil the conditions laid down in the memorandum, dated 30th September, 1957. It is clear from Annexure R/5, dated 18th February, 1959, that the Government had no objection to the grant of permission to Sultan Singh and from the written statement filed by the State, it is clear that the Government had decided to grant the licence to him. The Petitioner filed an appeal to the Government u/s 5(3) of the Act, but the appeal was rejected on 14th April, 1959, (Annexure ''H''). The Petitioner then moved this Court under Article 226 of the Constitution and on 21st September, 1960, when the matter was argued before me, I expressed the view that it should be decided by a Division Bench and that is how it has now been placed before us for disposal.

The learned Counsel for the Petitioner has raised the following points:

(1) Under the Act, it was the Sub-Divisional Officer who was competent to grant or refuse to grant the licence and the State Government could not exercise that power which had been granted to him.

(2) The Petitioner fulfilled all the conditions which had been laid down for the grant of the licence and it was not open to the authorities concerned to decline to grant the licence.

(3) The refusal of the State Government to grant the licence was actuated by extraneous considerations inasmuch as--

(a) the Petitioner was alleged to have taken part in the Hindi Agitation; and

(b) Sultan Singh was more influential and was able to pull the political strings more effectively.

(4) The exercise of power by the State Government in the matter of refusing to grant the licence was arbitrary and discriminatory.

(5) The act of granting the licence is not purely of an administrative nature, but it involves proceedings which are quasi-judicial and a hearing must be afforded before the request for the grant of a licence can be refused which was not done in the present case.

The first contention is based on the provisions contained in Sections 4 and 5 of the Act and it will be useful to set them out:

[His Lordship read Sections 4 and 5 and continued--]

Admittedly, it was the Sub-Divisional Officer, Jhajjar, who had been conferred the power under the proviso to Section 4 to grant the licence. It is also undisputed that it was the State Government in the present case that had declined to grant the licence to the Petitioner and the Sub-Divisional Officer never exercised his discretion u/s 5. Indeed, it was not open to him to exercise any discretion whatsoever owing to the instructions sent on 24th April, 1957, by the State Government, to which reference has been made before, directing that all requests for grant of permission for opening all permanent cinemas should be referred to the Government for orders. A question immediately arises whether the State Government could assume to itself the power which the Act confers expressly on the authority subordinate to it, namely, the Sub-Divisional Officer in the present case. The learned Counsel for the State has based and justified the exercise of that power on the language of Sub-section (2) of Section 5. According to him, the licensing authority can grant the licences subject to the "control of the Government." This could entitle the Government to send the instructions of the nature mentioned before and to decide itself whether the licence should be granted or not. In Seth Thakar Das v. The Punjab State and Anr. 1960 P.L.R. 520, Mahajan, J., had occasion to consider this matter and he was of the view that the power to grant a licence only vested in the District Magistrate though the exercise of that power was subject to the control of the Government, but it was the District Magistrate alone who had to apply his mind in a given case whether the conditions of the Act and the rules had been satisfied. The District Magistrate had to exercise his discretion under the Act and it was only after he had exercised his discretion that the question of the control of the Government'' over that exercise could arise. On behalf of the State, the correctness of this view is assailed on the ground that the world "control" according to dictionary meaning implies command or a checking or directing action, and, therefore, it is always open to the State Government to make an order itself with regard to the grant or refusal of the licence. In Shorter Oxford English Dictionary the following are the meanings of the word "control"--

(1) The fact of controlling, or of checking and directing action; domination, command, sway.

(2) Restraint, check.

(3) A method or means of restraint; a check.

In Bank of New South Wales v. Commonwealth 76 C.L.R. 1, Dixon, J., pertinently observed that the word "control" was an unfortunate word of such wide and ambiguous import that it has been taken to mean something weaker than ''restraint'', something equivalent to regulation''". Merely because the word "control" has been used which is capable of being taken in the wider sense of command or direction, I cannot accede to the contention that its true meaning and import should be confined to that sense alone. It is necessary always to keep in mind the scheme and the entire provisions of the Act and to give the word or words used, when capable of being used in more than one sense that meaning which would be consistent and in consenance with the purpose and the object for which the statute was enacted. As is clear from the preamble, the Act is meant for making provision for regulation exhibitions by means of cinematographs in the Punjab. No cinematograph exhibition can be given except in a place licensed under the Act and in compliance with any condition and restriction imposed by such licence. The District Magistrate or the person constituted as the licensing authority by notification is the authority having power to grant licences under the Act. Sub-section (1) of Section 5 employs a negative language saying that the licensing authority shall not grant a licence unless it is satisfied about the matters mentioned in Sub-clauses (a) and (b). In Sub-clause (b) the emphasis is laid on the consideration of safety of the persons attending exhibitions in the licensed building and adequate precautions having been taken in that behalf. Sub-section (2) confers the power on the licensing authority to grant the licence to such persons as it thinks fit, but that is subject to the control of the Government. Sub-section (3) of Section 5 confers a right on the person aggrieved by the decision of the licensing authority refusing to grant a licence to appeal to the Government or to such officer as the Government may specify. What is envisaged essentially is the exercise of power by the licensing authority in the first instance and certain fetters have been placed on the exercise of that power so that it may not be capable of being exercised arbitrarily or capriciously. Apart from the checks imposed in the statute itself, a further check has been placed on the exercise of power by the licensing authority and that is where the question of control of the Government comes in. The word "control" in this context has reference to restraint or check. In other words, what is clearly intended by the legislature is that the licensing authority may not grant a licence even if the conditions laid in Sub-clauses (a) and (b) of Sub-section (1) of Section 5 have been satisfied without further check or restraint on the part of the Government. This, however, cannot possibly lead to a situation where the Government can completely withdraw the power which the statute has in express terms conferred on the licensing authority so as to render the provisions contained in Sections 4 and 5 altogether nugatory. Not only that this result will flow if such a contention, as has been canvassed on behalf of the State, is to be accepted but also Sub-section (3) of Section 5 will become wholly redundant as no question of appeal can arise if the Government itself decides to grant or refuse to grant the licence.

To my mind Sections 4 and 5 provide for two distinct authorities in the matter of granting a licence when applied for. It is the licensing authority that has to examine in the first instance and has to be satisfied whether the provisions contained in Sub-section (1) of Section 5 have been fulfilled. The rules contain definite provisions, to which reference has been made before, when a new building has to be constructed and at that stage if is the licensing authority alone who must be satisfied that the applicant has done all that was necessary under the rules and that the various officers, namely, the Executive Engineer, the Electrical Inspector, etc., have carried out the necessary inspections and have made a report to the effect that everything was in order. As there may be more than one application and the power given in Sub-section (2) of Section 5 is somewhat wide in that respect as the licence can be granted to such persons as the licensing authority may think fit, the licensing authority may have to abide by some general policy or conditions which may be laid in that behalf and that is where the control of the Government becomes material. It may be open to it to frame certain conditions and requirements with regard to the financial condition of the applicant and his suitability in the matter of running a cinema, etc. Even that may be a moot point and I am expressing no final opinion on it but one thing is abundantly clear that initially it is the licensing authority alone that has to exercise power in the matter of granting the licence. If any party is aggrieved by its decision, then he can appeal to the Government and seek his redress there. That will be the stage when the Government can examine whether the licensing authority has acted properly in refusing to grant a licence if the application has been turned down by that authority. The Allahabad decision in Bharat Bhushan Vs. Cinema and City Magistrate and Another, cannot be of much help to the State. It is true that there the word "control" was held as not being confined to to mere regulation. It was considered to be more comprehensive and was said to include domination or command over an inferior. The learned Allahabad Judges were of the view that the State Government could lay down general rules or instructions for the guidance of the District Magistrate in the exercise of his discretion and that the "control" envisaged was not confined to the issuing of mere general directions. It included an interference on the part of the State Government with the individual decision of a particular case by the District Magistrate, but as was pointed out in that very case, the State Government had interfered only when the District Magistrate refused to grant the licence to any one of the parties. No opinion was expressed on the point which arises here as the following observations at page 100, would clearly show:

We are not here considering a case in which before the District Magistrate could exercise his discretion under the section, the State Government arbitrarily directed the District Magistrate to grant the licence to a particular individual.

We express no opinion whether in such a case the State Government''s action will be justified under the section. We are here concerned with the exercise of a power by the State Government after the District Magistrate had himself exercised his discretion.

Even if it be assumed that the word "control" is used in the sense in which the learned Allahabad Court held it had been employed and that the Government would be justified in interfering with an individual order that the licensing authority may be disposed to make in complete disregard of the Act or the rules or justice or fair play, ''the Government cannot deprive that authority altogether of the power to grant the licence as was done in the present case. In The State v. Mehar Singh 1959 P.L.R. 68, a Division Bench of this Court had to consider the scope of the words "general superintendence and control" employed in Sub-section (3) of Section 6 of the Administration of Evacuee Property Act. The question there was whether in exercise of that power the Custodian could issue executive instructions as to the manner in which the Assistant Custodian should exercise the discretion which had been conferred upon him by Section 40, which related to grant or rejection of an application for confirmation of transactions in respect of property declared to be evacuee property. The following observations are noteworthy:

* * *the power of superintendence conferred by this section cannot be exercised to control the discretion of a subordinate tribunal. The power vested in the Custodian to grant or reject an application for confirmation is derived from the legislature and the extent of any discretion in the exercise of such power must depend upon the language which the legislature has chosen to employ.

These observations can be applied appositely to the present case and it must be held that the State Government could not withdraw and assume to itself the power which the licensing authority had under the statute of granting or refusing to grant a licence.

Although argument has been addressed with regard to the other points which have been agitated by the learned Counsel for the Petitioner, it is unnecessary to decide them in view of the decision which is being given on point No. 1. Moreover, most of the other points, apart from point No. 5 involve questions of fact which are more or less disputed and on which it will not be possible to come to any clear conclusion on the factual side.

In the result, this petition is allowed and the Respondents are directed to treat the order made by the State Government refusing to grant a licence to the Petitioner as void, ineffective and invalid and of no binding effect. A mandamus shall also issue requiring the licensing authority to dispose of the request or application of the Petitioner for grant of a licence under the Act in accordance with law. The Petitioner shall be entitled to his costs which are assessed at Rs. 100.

S.B. Capoor, J.

I agree.