Srimathi Karpagammal, Proprietrix vs N. Raghunathan and Another

Natesan, J.—The Appellant is the owner of Karpagam Talkies, a traveling cinema at Tiruvottiyur on the outskirts of the City. The appeal has

been filed from the order of this Court quashing under Article 226 of the Constitution the proceedings of the Collector, Chingleput, holding that the

Appellant is entitled to a renewal of the licence of the touring cinema for a period of one year from 21st November 1968. The jurisdiction of this

Court under Article 226 was invoked by the 1st Respondent herein, lessee of Sri Venkateswara Theatre, a permanent cinema in Tiruvottiyur. Two

questions short in themselves but of considerable interest to the owners of permanent and touring cinemas, arise for consideration in this appeal:

first whether Rule 14(2) of the Madras Cinemas (Regulation) Rules, 1957 (hereinafter referred to as the Rules), prohibiting the location of a touring

cinema within a distance of 1.609 km. of a permanent cinema is constitutionally invalid as an unreasonable restriction of the rights protected under

Article 19(1)(g); and next, granting that, the rule is constitutionally valid, whether the inhibition could be applied when the proprietor of a touring

cinemas applies only for renewal of the licence already granted for a further period of one year.

Sri Venkateswara Theatre, the permanent cinema, was granted ''C'' Form licence for exhibiting films on 28th March 1968 and it was opened for

shows on 31st March 1968. Approval of the site for location of the permanent cinema had been secured in 1962; but there was delay in getting

the theatre ready for shows. Prior to the opening of the permanent cinema, the Appellant herein who had a touring cinema located within two

furlongs of the permanent cinema that is, within the prohibited distance, secured on 18th October, 1967 ''C'' Form licence for exhibiting pictures

for one year. Actually, exhibition of pictures commenced only on 22nd November 1967. In the circumstances, when the permanent cinema

petitioned to the Collector of Chingleput for stoppage of the touring cinema functioning within prohibited distance, the Collector by his order, dated

4th April, 1968, rejected the petition. He held that the touring cinema might function till the expiry of the licensing period. At the time when the ''C''

Form licence was granted to the Appellant, Rule 109 of the Rules relating to travelling or touring cinemas provided that they should not be licensed

to exhibit shows in any place for a period longer than one year. Subsequent to the grant of licence to the Appellant, Rule 109 was amended as per

G.O. Ms. No. 805, dated 21st March 1968 providing for the redevelop a licence for a farther period not exceeding one year under certain

conditions. On the strength of this amended rule, the Appellant applied for renewal of his licence for further period of one year and to this the 1st

Respondent herein, the proprietor of the permanent cinema, filed objections. By his order, dated 14th October 1968, the Collector overruled the

objections and renewing the Appellant''s licence in the first instance for the period from 18th October 1968 to 21st November 1968 held that the

Appellant would be entitled to further renewal of his licence up to 21st November 1969. The proprietor of the permanent cinema challenges the

order of the Collector holding that the touring cinema is entitled to a renewal of the licence for a period of one year from 21st November 1968. In

renewing the licence from 18th October 1968 to 21st November 1968, the Collector has proceeded on the view that the normal period of one

year of the licence would be completed only on 21st November 1968 and the further period of one year would commence thereafter. It is thus that

the two questions posed above arised for determination. Our learned brother Kailasam J., has answered both the questions in favour of the 1st

Respondent.

Now to take up the first question the provisions of the Madras Cinemas (Regulation) Act (Madras Act IX of 1955) are not challenged. It is only

the constitutionality of the rule providing for a minimum distance between a permanent cinema and a touring cinema that is impugned. The Act

which is intended to provide for the regulation of exhibitions by means of cinematographs in the State, by Section 3, provides that no person shall

give an exhibition by means of a cinematograph elsewhere than in a place licenced under the Act, or otherwise than in compliance with any

conditions and restrictions imposed by such licence. The Act and the rules contain elaborate provisions for licensing permanent and touring

cinemas. Section 5 imposing restrictions on powers of the licensing authority, provides that the licensing authority shall, in deciding whether to grant

or refuse a licence, have regard inter alia to the interest of the Public generally, the suitability of the place where the cinematograph exhibition are

proposed to be given, the adequacy of existing places for the exhibition of cinematograph films in the locality, the benefit to any particular locality

or localities to be afforded by the opening of a new place of cinematograph exhibition and representations made by persons already giving

cinematograph exhibitions in or near the proposed locality or by any local authority or police authority within whose jurisdiction the place proposed

to be licensed is situated. The licensing authority is prohibited from granting licence unless the rules made under the Act have been substantially

complied with. We would like to draw particular attention to the provisions of Section 5(2) that the licensing authority shall not grant a licence

unless it is satisfied that adequate precautions have been taken in the place, in respect of which the licence is to be granted to provide for the

safety, convenience and comfort of the persons attending exhibitions therein. Section 10 provides for rules being made to carry out the purposes of

the Act, and, without prejudice to the generality of the power given, rules may provide for the regulation of cinematograph exhibitions for securing

the public safety, the matters to be taken into consideration by the licensing authority before approving the site for the construction of the building,

or the plans for the construction or reconstruction of the building or the installation of machinery and the terms, conditions and restrictions subject

to which the licensing authority may accord approval in respect of the said matters. Rule 3(h) of the rules defines permanent building as a building

which is constructed for permanent use with stone, mud, brick, mortar, cement or other non-inflammable material. With reference to travelling

cinema, commonly called touring cinema, Rule 99 defines building as including any booth, tent or similar structure. A reference to Part IV and Part

V relating to building and maintenance of premises in respect of permanent cinema shows that, before a permanent cinema could be licensed, it

would have to comply with a variety of rules and regulations, stringent and complex, requiring the proprietor of the permanent cinema to sink a

considerable fortune. Rule 14(2), the impugned rule, is in Part I-A of the rules. The relevant part of the rules reads:

14(1) There shall be no restriction to the grant of licences to permanent and touring cinemas on the basis of population in any place, except towns

with a population of 50,000 and above in which no touring cinemas will be allowed, if there are three or more permanent cinemas.

(2) The restrictions in respect of distance between cinemas shall be as specified below:

A touring cinema in any place shall not be allowed within a distance of 1-608 km. of the nearest permanent cinema located in the same local area

or in the adjacent village, panchayat or town or in the City of Madras. ""Local Area"" for this purpose means the area within the jurisdiction of a

municipal council or a panchayat board or a revenue village.

It is not argued before us, and n our view it cannot be argued, that permanent cinema owners and touring cinema owners do not form two

distinct classes. The Act quite properly provides for separate sets of rules and considerations. But it is urged for the Appellant that the restriction

regarding distance has no reasonable relation to the object of the Act, the regulation of exhibitions by means of cinematographs. It is said that, so

far as the general public are concerned, no purpose would be served by the introduction of the rule as to distance. Cinemas may provide

recreation and information. There may be advertisements, propaganda and publicity. The public may choose, according to their fancy or purse or

requirement, touring cinema or permanent cinema. So far as the persons engaged in exhibition of films are concerned, whether it be through touring

cinema or permanent cinema, their main aim is to make profits and it is their trade or occupation. The effect of the rule as to distance, it is said, may

be to send a touring cinema owner to some far off place and deprive him of patrons he would otherwise command.

The tests as to the reasonableness of restrictions on the rights guaranteed under Article 19(1) are now well established. The nature of the right

alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent of the evil sought to be remedied thereby and the

disproportion of the imposition should all enter into the judicial verdict on reasonableness of restrictions. The phrase reasonable restrictions in

Article 19(6) connote that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of excessive nature, beyond what

are required in the interests of the public. It was faintly argued by Mr. Vedanthachariar that the instances particularized in Article 19(6) give the

extent and nature of the restrictions that may be imposed on the freedom guaranteed in Article 19(1)(g). Counsel would, in effect, confine the

permissible restrictions under Article 19(1)(g) to the two instances given. Reliance for this extreme contention was placed on the observations of

the Supreme Court in Chintaman Rao Vs. The State of Madhya Pradesh, that Clause (6) of Article 19 in the concluding part particularised certain

instances of the nature of the restrictions that were in the mind of the Constitution-makers which had the quality of reasonableness, and that they

afforded a guide to the interpretation of the clause and illustrated the extent and nature of the restrictions which could be imposed on the freedom

guaranteed in Sub-Clause (g) of Article 19. Clearly the two instances do not limit the restrictions that could be imposed under Article 19(6). As

Mahajan J., (as he then was) pointed out in the case a above cited, they were only certain instances of the nature of the restrictions that the

Constitution makers had in mind. The argument of earned Counsel ignores the words in particular in Clause (6) of Article 19. The instances are

illustrations of constitutionally recognised reasonable restrictions imposed in the interests of the general public. They do not exhaust the sphere or

area in which restrictions could be imposed. There are any number of restrictions wholly unrelated to the instances given in Article 19(6) whose

validity have been upheld, to mention a few; restrictions on the fundamental right to apply motor vehicles on public pathways, licensing eating

houses subject to restrictions to provide against drunkenness, disorder, etc., regulations restricting the working hours and opening and closing

hours of establishments, restriction in the location of bus stands and restrictions on exports and imports. No general pattern of reasonableness

applicable to all cases can be formulated, and each cases of restriction has to be examined individually.

Considerable reliance was placed by earned Counsel for the Appellant on the decision in Rashid Ahmed Vs. The Municipal Board, Kairana, .

But that was a case where the Petitioner who was carrying on wholesale business in vegetables and fruits in the municipal limits of the town, was

effectually prohibited from doing so by the impugned bye-law, of the Municipality. The bye-law provided for the granting of a monopoly to a

contractor to deal in wholesale transactions at the place fixed as a market. A particular contractor acquired the right to carry on the wholesale

business at the place fixed as market. There was no provision authorizing the issue of licence to anyone else, with the result that the Petitioner could

not carry on the wholesale business either at the place fixed as a market or in the place where he had been carrying on the whole sale business. In

the circumstances, the Supreme Court held that there was an unreasonable restriction on the right of the Petitioner. The case has no application

here, where the touring cinema owner can carry on his business any where the outside the prescribed zone. Nor is the decision Abdul Hakim

Quraishi and Others Vs. The State of Bihar, where the impugned law in effect placed a total ban on the slaughter of bulls and bullocks and so

virtually deprived Kassais who earned their living by slaughtering bulls and bullocks of any help to the Appellant. Earned Counsel for the Appellant

submits that the word reasonable implies intelligent care and deliberation, that is, the choice of a course which reason dictates, while the distance

rule here arbitrarily invades the touring cinema owner''s rights. But as the Supreme Court observed in Abdul Hakim Quraishi and Others Vs. The

State of Bihar, :

the Legislature is the best judge of what is good for the community, by whose suffrage it came into existence though the ultimate responsibility or

deterring the validity of the law must rest with the Court and the court must not shirk that solemn duty cast on it by the Constitution.

The Writ Petition was disposed of by our learned brother Kailasam J. at the request of the parties expeditiously without waiting for a counter

affidavit from the Government setting out their stand. Before us a counter affidavit has been filed by the Collector of Change up to meet the

challenge to the constitutionality of Rule 14(2). It is submitted for the State that the restrictions imposed by the rule are reasonable and in the

interests of the general public. Rule 14(2), it is said, is intended to encourage permanent cinemas as they promote the interests of the general public

from the point of view of public health, etc. and also to protect the permanent cinemas from the possible disturbance and nuisance that may be

caused by the location of touring cinemas near them. True, the counter affidavit is rather laconic. What is intended to be taken in by the word ''etc''

is left to imagination. May be it is taken as obvious. But what is lacking in the counter affidavit can be gathered from the provisions of the Act and

the rules and are matters of common knowledge. First and foremost there is the greater fire hazard in respect of touring cinemas. A reference to

the various rules will show the extreme anxiety felt by the Legislature in this regard. The touring cinema auditorium is not expected to be

constructed of non-inflammable materials. Instances in this regard is only in respect of permanent cinemas. A permanent cinema may be expected

to provide convenience and comfort to the persons attending exhibitions in a measure that a touring cinema cannot do. The Legislature may

properly consider that a permanent cinema, from the point of view of public health, sanitation, welfare, comfort and convenience, must be

encouraged. If the travelling cinema which does not require much outlay may be located to function in the immediate neighborhood of a permanent

cinema which demands heavy outlay on buildings, lay out, furniture, machinery, etc. there would be hesitancy on the part of persons to embark

upon the construction of permanent theatres. The rates of admission to a touring cinema is comparatively low and it is reasonable for the

Legislature to provide against unfair economic oppression of desirable trades and ventures in the public interest. This is not a case of creating

monopoly for a permanent cinema owner or giving him a preference in his interest, but is one of the Legislature seeing to it that public welfare is not

thwarted or impeded by unfair private competition. We cannot say that Rule 14(2) on the face of it, is violative of any fundamental right guaranteed

under Article 19(1)(g), to require the Respondents here to place more materials to establish that the legislation, comes within the permissible limits

of Clause (6).

Earned Counsel for the Respondents drew our attention to the decision of the Supreme Court in M.C.V.S. Arunachala Nadar etc. Vs. The

State of Madras and Others, where the validity of certain provisions of the Madras Commercial Crops Markets Act which were impugned under

Article 19(1)(g) was upheld by the Supreme Court as constituting reasonable restrictions on a citizen''s right to do business. Under the Act a

person was restricted from selling specified produce by insisting that he should trade only with a licensed trader in the licensed premises. There was

also provision in the Act that, once a market was established, no licence to purchase or sell commercial crops would be granted or renewed in

respect of any place situated within such distance of the market as may from time to time be fixed by the State Government. The Supreme Court,

after referring to the provisions of the Act and the circumstances under which the Act came to be passed, observed that such a statute could not be

said to create unreasonable restrictions on the citizen''s right to do business, unless it was clearly established that the provisions were too drastic,

harsh and overreached the scope of the object to achieve which it was enacted. Our attention was also drawn to the decision of the Supreme

Court in Ajmer Singh Vs. The State of Punjab, where, by shifting of a bus stand, the Appellant who had been running a bus stand for several years

was deprived of the income he used to enjoy. Upholding the validity of the rule shifting the bus stand, the Supreme Court said that the Appellant

was not prohibited from carrying the business of running a bus stand, but that what was prohibited was that the bus stand existing on the particular

site being unsuitable from the point of view of public convenience it could not be used for picking up or setting down passengers from that stand. It

was observed by Supreme Court that there was no fundamental right in a citizen to carry on business wherever he chose, that his right must be

subject to any reasonable restriction imposed by the executive authority in the interest of public convenience, and that the restriction may have the

effect of eliminating the use to which the stand had been put till then. We may, in this connection, refer to zoning regulations in the United States

restricting the use to which property within a designated district may be put. Regulations prohibiting erection of apartment houses in residential

districts have been held valid on the ground that the development of detached house sections would be greatly retarded by coming of apartment

houses which have sometimes resulted in destroying the entire section for private house purposes--see Euclid v. Ambler Reality Co. 71 Led. 303.

To be valid, the restrictions must bear a substantial relation to public health, safety, morals, or general welfare and should not be arbitrary or

unreasonable, for instance like regulations excluding or restricting construction of gasoline filling stations from residential or other designated

districts--vide Corpus Juris Secundem Vol. 19-A, at page 1179. The principle is that a right thing in the wrong place may be a nuisance. It must be

noted that there is no prohibition against a permanent cinema coming up by the side of another permanent cinema. But as between two touring

cinemas a minimum distance is prescribed. The object of the restriction is manifest and is clearly regulatory of the business in the interest of the

public from the point of view of public health, safety, convenience, comfort and welfare which the licensing authority must have regard to u/s 5 of

the Act. Unless the zonal restriction is obviously drastic, harsh and has overreached the scope of the object to achieve which the rule was framed,

it is not for this Court to judge the reasonableness of the restriction imposed by the rule and envisaged under the Act. When we find that as

between two touring cinemas a distance of 0-805 km. is prescribed a distance of 1-609 km. as between a touring cinema and a permanent cinema

cannot be said to be unreasonable. In our opinion, Rule 14(2) prescribing the distance as between a touring cinema and a permanent cinema is

constitutionally valid.

Now, we shall pass on to the next question whether the requirement as to the minimum distance between a permanent cinema and a touring

cinema is applicable at the stage of renewal of a touring cinema licence for a second year. The provision for renewal of licence in respect of a

touring cinema is Rule 109 in Part VI of the Rules. The rule reads:

109(1) No building constructed of inflammable or non-inflammable materials shall be licensed to exhibit shows in any place for a period larger than

one year:

Provided that the licence may be renewed for a further period of not exceeding one year if after inspection as contemplated in Rule 113 the

licensing, authority is satisfied, that the site and the building continue to conform to the relevant rules:

Provided further that if the licence is granted for a period of less than one year or renewed for a period of less than one year or if renewal is

refused, it shall be for reasons to be recorded in writing and communicated to the Applicant.

(2) After the period of two years'' exhibition as contemplated in Sub-rule (1), there shall be a minimum interval of three months before the same

site is again licensed.

(3) Where the licensing authority is satisfied that any break/breaks in the period for which the licence was granted is/are not due to the fault of the

licensee, such break/breaks may be excluded for the purpose of computing the said period of two years.

On a reading of the rule, two features emerge. First licence is granted for a travelling cinema, at the most, for a period of one year. There is a

provision for renewal of the licence for a further period not exceeding one year. But the renewal is subject to the requirement that the site and

building continue to conform to the relevant rules. It is contended for the Appellant that the requirement here contemplated, having regard to the

reference to Rule 113, is the continued compliance with the rules relating to the place on which cinema apparatus and plant are erected electric

installation, fire-fighting and precautionary measures Rule 113 provides for the licensing authority being satisfied, on receipt of the Chief Electrical

Inspector''s certificate duly renewed, that all the rules are observed before the licence is renewed. Though the proviso refers to an inspection

contemplated under Rule 113, the licensing authority has to be satisfied that the site and building continue to conform to the relevant rules. The

proviso would become otiose, if the satisfaction referred to therein is the very same satisfaction that is provided under Rule 113. It must be noted

that, before the amendment of Rule 109, there was no such proviso in the original rule. Before the amendment, there was prohibition against the

grant of licence for a touring cinema for a period longer than one year, and, for a further licence for the same site an interval of three months had to

elapse. Obviously, when the amendment provided for renewal of the licence of a travelling cinema for a further period of one year without break,

the legislative authority envisaged the possibility of the situation altering as regards the suitability of the site. The proviso assumes that, when the

licence was originally granted, the rules relevant to the site and building were complied with and requires that the due compliance should continue A

perusal of the Act and rules shows that considerable importance is given to the location of a cinema. Section 3 refers to the licensing of the place.

Reference has already been made to Section 5 which prescribes matters to be taken into account by the licensing authority, one of such matters

being the suitability of the place. Rule 100 states that a person who intends to build a travelling cinema building should follow the procedure in Rule

35 in Part I(a) relating to permanent cinema. The rule provides that a person who intends to build a cinema building, should apply giving particulars

required in Form-A and the application shall be accompanied by a plan of the proposed site drawn to scale, indicating clearly the surrounding

roads and buildings which exist up to a distance of 200 metres of the proposed site, schools, hospitals, temples or mosques, churches or other

places of public worship. Among the particulars to be given in Form A is the distance by public road of the proposed site to the nearest permanent

cinema, nearest touring cinema, nearest school, nearest hospital and nearest temple or other religious institutions. The requirement as to distance

between a permanent cinema and a touring cinema is clearly with reference to Rule 14(2). Rule 106 provides that, after consideration of the

application made under Rule 100, with reference to the matters specified in Section 5(1) of the Act and the objections of the local authority or the

police, the licensing authority may grant a no-objection certificate in Form B. The effect of the no-objection certificate is to approve the site or

location of the building. After completion of the building, the Applicant submits his application for licence to the licensing authority, accompanied by

a certificate from the Chief Electrical Inspector and certain declarations. Thereafter, the licensing authority, issues what is known as a licence in

Form C which entitles the Applicant to exhibit films. It is manifest from the above that, before a licence is granted for exhibition of films, compliance

with the rule as to distance is exacted. The distance rule from another cinema, travelling or permanent, is only one of the requirements for proper

location. Hospital or school buildings or residential buildings may have been sanctioned or may be under construction, when a touring cinema was

first granted a no-objection certificate. A permanent cinema may be in the course of construction. There will be no contravention of the Act or the

rules, if pending the construction of such buildings, a touring cinema is permitted to function in the neighborhood. In the first instance a licence is

issued to touring cinema only for a period of one year. The authority may issue the licence for a shorter period. An Applicant for touring cinema

may himself apply for licence for a shorter period. There will be no contravention of the rule, if the licence of a touring cinema is renewed beyond

one year when a permanent cinema owner is not by then entitled to C Form certificate. Clearly, having regard to these features, the proviso to the

amended rule requires for the renewal of a licence, that the site and building of the cinema must conform to the relevant rules. In construing a rule,

we must ascertain the intention as expressed by the words used, and, for that, enquire the subject-matter with respect to which the words have

been used and the object in view. The words in the rule must be understood in the sense in which they harmonies with the rest of the provisions of

the Act and rules. Without violence to the language rules must be construed in accordance with reason, justice and equity. Thus read, clearly, for

renewal of a licence for a further period of one year, the rule as to the location has to be duly complied with. The licensing authority is bound to see

that the rule as to distance is not violated by the renewal of a licence. It is pertinent to note that, with reference to a permanent cinema, we have a

group of sections under the head '' Renewal'' in Part VI of the rules. Only Rules 92 and 97 of these rules are applicable to a touring cinema, Rule

92 requiring an application for renewal to be made within one month after the expiry of the existing licence. Rule 97 is not material for our present

discussion. In respect of the permanent cinema, there is no requirement under any of the rules for an enquiry at the time of the renewal about

compliance with the rule regarding site. Before renewal under Rule 96 corresponding to Rule 113, there is, of course, the requirement as to the

Electric Inspector''s certificate. This is a pointer to the true scope of Rule 109.

Reference was made by earned Counsel to the decision of Veeraswami J., in Munuswamy Mudaliar v. The Board of Revenue Writ Petition

No. 697 of 1962. That was a case where a licence granted to a permanent cinema was cancelled at the instance of a touring cinema owner. In that

case, subsequent to the grant of a no objection certificate to a touring cinema and before the touring cinema could secure C Form certificate, the

permanent cinema had become ready for exhibition of films. The learned Judge pointed out that what is not allowed to be located by Rule 14(2) is

a touring cinema within the distance specified from the location of a permanent cinema, and that there was no justification for the view that the

location of the permanent cinema which had come up in due course was objectionable under the rule. As regards the touring cinema, the learned

Judge held that, once a no objection certificate had been granted, a licence in Form C should necessarily follow provided the requisites therefor

were complied with. That was not a case of renewal of the licence of a touring cinema after a permanent cinema had started functioning and the

rule that came up for interpretation was Rule 109 before its amendment. The other decision relied upon by the learned Counsel is one of a Division

Bench of this Court in D. Ramanujam v. J.M. Janakiraman Writ Appeal Nos. 102 and 136 of 1961. That also relates to a case before Rule 109

came to be amended, when there was no express provision as we now find in the proviso to the amended rule. Then there was no question of

renewal of a licence beyond one year and, once a no objection certificate had been granted, if within the period provided the building was put up

and C Form certificate was obtained by a touring cinema, it could ensure for a period of one year. It is in these circumstances that the Division

Bench observed, after referring to rules 100 and 106:

When once a ""No objection"" certificate has been granted after proper compliance with the rules, and the Applicant has spent considerable

amounts in the construction of the cinema (apparently no objection was taken by the Appellant at this stage of the grant of the ""No objection

certificate to the Respondent), it should no longer be open to the authority to go back upon its decision. The rules provide for any interested

person objecting to the grant of any certificate on the ground that Rule 14(2) has been infringed. In the absence of such objection, the question

does not fall to be agitated at the time of the grant of the ''C'' Form licence.

But now Rule 109 requires due compliance with the rules relating not only to the building but also the site. It may be that, for the normal period of

the licence, that is, for the first year, the validity of the no objection certificate need not be gone into. But an application for renewal of licence is

governed by Rule 109 and the licensing authority has to satisfy itself with the relevant conditions as to the site.

The Collector, the licensing authority in this case, while holding that the Appellant would be entitled to renewal of the licence for a further period of

one year, has ignored a material provision. The order of the licensing authority is indubitably erroneous and manifestly vitiated by an error of law

apparent on the face of the record.

The writ appeal fails and is dismissed with costs of the first Respondent.