Narthaki Theatre and etc. vs The Joint Commissioner, Land Administration Department and Others

Y. Venkatachalam, J.—In all these writ petitions, the subject-matter involved and also the respondents are similar. Therefore, all these writ

petitions were taken up together and are disposed of by this common order with the consent of all the parties concerned.

W.P. No. 2293/92 has been filed seeking for a writ of certiorari, to call for the records of the 2nd respondent made in D. Dis. (L) C.A. 178/88,

dated 19-12-1991 and of the 3rd respondent made in R.C. No. E4. 73086/88, dated 13-11-88 and to quash the said proceedings of the 2nd and

3rd respondents dated 19-12-91 and 13-11-88. W.P. No. 2186/92 has been filed seeking for a writ of certiorari to call for the records relating to

the order of the first respondent herein in D. Dis (L) C.A. 218/89, dated 20-12-1991 relating to the petitioner''s theatre and to quash the order of

the first respondent dated 20-12-1991 dismissing the appeal C.A. No. 218/89 preferred by the petitioner and W.P. No. 3477 of 1992 has been

filed seeking for a writ of certiorari calling for the records of the second respondent made in D. Dis. (L) C.A. 204/89, dated 20-12-91 and the

third respondent made in R.C. No. 70353/ 89 M.5 and to quash the said proceedings of the second and third respondents, dated 20-12-91 and

25-6-89 respectively.

In support of the writ petitions, the petitioners herein have filed separate affidavits wherein they have narrated all the facts and circumstances that

forced them to file the present writ petitions and requested this Court to allow the writ petitions as prayed for. Per contra on behalf of the

respondents separate counter-affidavits have been filed rebutting all the material allegations levelled against them one after the other and ultimately

they have requested this Court to dismiss the writ petitions for want of merits.

Heard the arguments advanced by the learned counsel appearing for the respective parties during the course of their arguments. I have perused

the contents of the affidavits and the counter-affidavits together with all other relevant material documents available on record in the form of typed

set of papers. I have also taken into consideration the various points raised by the learned counsel appearing for the parties during the course of

their arguments.

The brief case of the petitioners as seen from the affidavits are as follows : In W.P. No. 2293/92 the petitioner is the Srinivasa Theatre of

Sathuvacheri Village of North Arcot District. The 3rd respondent issued notice calling upon them to show cause as to why the ''C'' Form licence of

the petitioner-theatre should not be suspended on the ground that the petitioner had committed certain alleged irregularities mentioned in the said

notice, and the said notice further state that the petitioner had paid compounding fines in respect of the said incidents and, therefore, no action had

been taken to suspend the ''C'' Form licence. The petitioner submitted an explanation denying the charges and pleaded that the proposed action

may be dropped. The petitioner also pointed out that the payment of the compounding fine was only to purchase peace and submitted that no

action was warranted under the Cinema Regulation Act. Notwithstanding the said explanation, the 3rd respondent passed an order dated 13-11-

88 suspending the ''C'' Form licence for a period of 7 days. The said order further provided that an appeal would lie against the same before the

2nd respondent. The petitioner accordingly filed an appeal before the 2nd respondent on 28-11-88 and ultimately the appeal was dismissed as not

maintainable. Hence this writ petition.

W.P. No. 2186/92 has been filed by the theatre Marthaki. On 13-5-89 and inspection was made by the Entertainment Tax Authorities and a

report was made that three persons were found in the theatre without valid tickets issued to them for the show. Including the said three persons,

the total number of persons seated in the theatre was 464 as against it full seating capacity of 533 persons. On a report made to the 2nd

respondent herein a notice to show cause why action should not be taken for the said irregularity was issued by the second respondent under T.N.

Cinema Regulation Art for which the petitioner submitted an explanation on 18-7-89 stating that the three persons found without tickets were only

the wife and two children of the Cinema Projector Operator. At that time, the manager had gone to the bank and free passes could not be issued

to them in his absence and the free passes were under the custody of the manager. The petitioner is entitled to issue up to 10 passes for every

show. The petitioner therefore requested the licensing authority to drop the proceedings, as there was no wilful violation of the Entertainment Tax

Act and the Rules framed thereunder, particularly in view of the fact that there was no loss of revenue to the Government on this account, as the

Entertainment Tax was paid for the full seating capacity under the compounded rate. However, on 13-5-89 as the Inspecting Officer who

inspected the theatre hustled the petitioner''s representative to pay a compounding fee of Rs. 500/- to compound the offence, the petitioner''s

representative paid the compounding fee hoping that no further action would be taken and the matter would be dropped. The Collector of Nilgiris,

the 2nd respondent herein by order dated 2-8-89 in proceedings No. C3/48695/89 suspended the petitioner''s licence for a period of 10 days

holding that the compounding fee having been paid the petitioner is held to have admitted the offence and, therefore, the explanation offered was

not acceptable. The petitioner, therefore, filed an appeal to the first respondent as indicated in the direction contained in the order dated 2-8-89 of

the 2nd respondent and the petitioner obtained an order of stay of the order of suspension of the ''C'' Form licence which was granted by the first

respondent on 6-9-89. The Joint Commissioner, the first respondent herein, without hearing the petitioner either personally or by his counsel

passed an order dated 20-12-91, communicated to the petitioner''s counsel by the end of December, 1991, dismissing the appeal in limine as not

maintainable, holding that no appeal is provided against an order u/s 9(1) of the T. N. Cinemas (Regulations) Act as the order suspending the ""C

from Licence was passed u/s 9(1) and not u/s 9(2) of the T. N. Cinema Regulations Act. Hence the writ petition.

In W. P. No. 3477 of 1992. Sivasakthi Theatre of Padi Village. Chengalpattu MGR District is the petitioner. The third respondent initiated

action against the petitioner and called upon the petitioner to show cause as to why the ''C'' Form licence of the petitioner theatre should not be

suspended for certain alleged irregularities. The petitioner submitted an explanation denying the charges and prayed for dropping of the action. The

petitioner pointed out that he had paid the compounding fine in order to purchase peace and thereafter requested the third respondent to drop

further proceedings. But notwithstanding the said representation the third respondent therein passed an order dated 25-6-89 suspending the ''C''

form licence of the petitioner theatre for a period of 10 days. Aggrieved by the said order, the petitioner preferred an appeal before the second

respondent and the 2nd respondent entertained the said appeal and granted stay of the operation of the order passed by the third respondent. The

second respondent has now passed an order dated 20-12-91 dismissing the appeal as not maintainable. The 2nd respondent has not considered

the matter on merits and has dismissed the appeal on the ground of maintainability alone. Hence this writ petition.

In all these writ petitions, the impugned orders are challenged by the petitioners on the grounds that the power to suspend or revoke the licence

under the Act is always referable to Section 9(2) of the Act, that Section 9(1) of the Act is only an enabling power, and once the licensing authority

decides to take action to suspend or revoke a licence, the ultimate order is referable to Section 9(2) of the Act alone and that therefore the order

passed by the District Collector is one referable to Section 9(2) of the Act and therefore, the appeal filed before the second respondent is

competent and maintainable. Therefore the order of the Appellate Authority holding that the appeal is not maintainable is therefore unsustainable in

law. According to them Section 9(1) cannot be construed as independent of Section 9(2) of the Act. It is also contended by them that there are

many cases where offences under the Entertainment Tax Act are sought to be compounded and it is only in a few cases that action is sought to be

taken to revoke or suspend the licence and once such action is decided to be taken, then the consequential proceedings of the Licensing authority

would be referable to Section 9(2) read with Section 9(1) of the Act and that therefore, the said order would be amenable to an appeal u/s 9 of

the Act and that therefore the impugned orders are unsustainable in law. They also contend that if Section 9(1) is construed as an independent

power to suspend or revoke a licence in the circumstances mentioned in the said provision, then the said provision itself would be liable to be

struck down as arbitrary and discriminatory violative of Article 14 of the Constitution. There are no guidelines u/s 9(1) to indicate as to cases in

which the licensing authority could initiate action to suspend or revoke the licence. Further they contend that composition of a proceeding alleging

offences under the Entertainment Tax Act would not tantamount to a conviction, that the licensees of theatres often seek to compound proceedings

taken by the authorities for alleged offences under the Entertainment Tax Act in order to purchase peace and in order to avoid wasteful

expenditure and time. It is their categorical case that compounding of offences have never been treated as tantamount to a conviction or finding of

guilt and that therefore once the licensing authority decides to take action to suspend or revoke a licence it should be referable to Section 9(2) of

the Act whether the circumstances mentioned in Section 9(1) of the Act exists or not. Therefore the impugned orders holding that the appeal is not

maintainable is not sustainable in law.

Per contra, it is contended on behalf of the respondents that since the explanation offered by the licensee was not convincing as he has already

admitted to compound the offence under Tamil Nadu Entertainment Tax Act 1939, the licence issued to the theatre was suspended for the

irregularities found. In as such as the petitioners herein were permitted to compound the offence punishable under Tamil Nadu Entertainment Tax

Act, the Licensing Authority suspended the C. Form licence of the petitioner''s theatre for a particular period of exercise of the powers conferred

by Section 9(1) of the Tamil Nadu Cinema (Regulation) Act. Therefore the order''s of the Collectors in these cases are legal and proper. Further it

is contended by the respondents that u/s 9(1) of the Tamil Nadu Cinema (Regulation) Act, C. Form licence of a cinema theatre can be suspended

if the licensee of theatre is found to be violating the rules without any reasonable cause eventhough he was permitted to compound the offence

under the Tamil Nadu Entertainment Tax Act. According to the respondents, as long as the licensees are running their business strictly in

accordance with the rules and regulations, the powers u/s 9, would not be invoked. Since in these cases, the petitioners herein violated the

conditions of the C. Form licence, the C. Form licence of the petitioners'' theatre were ordered to be suspended. They contend that the erring

licensees can be corrected by invoking penal provisions in the Act and that therefore the orders of the Appellate Authority in these cases are

reasonable and correct.

Having seen the entire material available on record and in the facts and circumstances of the cases and from the claims and counter claims

made by the parties herein, it is clear that in the case of W. P. No. 2293/ 92 on 23-5-88 night show the theatre had allowed totally 27 persons

above the admitted capacity. They admitted the offence and compounded the same by paying a fine of Rs. 1000/-. Previously also on 31-5-87

evening show it was found that they have admitted 199 persons in addition and at that time the ''C'' form licence was suspended for 7 days.

Considering all these the licensing authority suspended the ''C'' form licence for 7 days. In the case of W.P. No. 2186/92, it is seen that three

persons were found in the theatre without valid tickets issued to them for the show. They also paid a compounding fee of Rs. 500/- to compound

the offence. Thereafter as the explanation was not acceptable the licensing authority suspended the ''C'' Form licence for 10 days. In the case of

W. P. No. 3477 of 1992, apart from other irregularities pointed out by the respondents on 13-6-88, 362 persons were allowed into the theatre

without ticket. Previously also for several irregularities on the part of the petitioner theatre the ''C'' form licence was suspended for particular

periods in the years 79 and 81. In such circumstances, this time for the Irregularities committed the licensing authority suspended the ''C'' form

licence for 10 days.

In all these cases, the petitioners have admitted the irregularities committed and they have also compounded the same by paying compounding

fee by way of fine. Therefore the petitioners herein having been permitted to compound the offence cannot be considered as aggrieved persons

within the meaning of Section 9A of the Act with consequent right of appeal to the Appellate Authority. It is clear that in all these cases the

Licensing Authority suspended the C. Form license u/s 9(1) of the Tamil Nadu Cinema (Regulation) Act 1955 and in view of the specific

provisions made u/s 9-A(1) of the Act, no appeal can be filed to the Appellate Authority against the order made by the Licensing Authority u/s

9(1) of the Act, it is significant to note that Section 9(1) and 9(2) of the Act deal with two distinct and separate clauses and categories of cases and

circumstances under which there could be revocation or suspension of a licence. Section 9(1) of the Act empowers the Licensing Authority when

there has been a conviction under the relevant provisions of the Tamil Nadu Entertainment Tax Act 1939 or when the licensee has been permitted

to compound the offence under Tamil Nadu Entertainment Tax Act to revoke or suspend the licence. The Provision of Section 9(2) provides for

revocation and suspension in cases where licence has been obtained on misrepresentation or playing fraud as to essential fact or when the licensee

has without reasonable cause failed to comply with any condition or restrictions subject to which the license has been granted. It is significant to

note that in cases wherein the provisions of Section 9(1) of the Act were involved, there is already a pre-existing conviction or order of

composition. These are the clear cases wherein the petitioners indulged in serious irregularities and violations of the terms of grant of ''C'' form

licence. As long as the licensees are running their business strictly in accordance with the rules and regulations, the powers u/s 9 would not be

invoked. But ''C'' form license of a cinema theatre can be suspended if the licensee of the theatre is found to be violating the rules without any

reasonable cause even though he was permitted to compound the offence under the Tamil Nadu Entertainment Tax Act. Therefore I see no

illegality or irregularity in the orders impugned in these writ petitions and that therefore the order of the Appellate Authority in all these cases is

reasonable and correct.

Therefore for all the aforesaid reasons and in the facts and circumstances of the cases and also in view of the above discussions with regard to

the various aspects of these cases. I am of the clear view that the petitioners herein have failed to make out any cases in their favour and that

therefore all these writ petitions fail and there is no need for any interference with the orders impugned in these writ petitions. Thus all the writ

petitions are liable to be dismissed for want to merits.

In the result, all the writ petitions are dismissed. No costs, consequently all the connected WMPs are also dismissed.