# Vaishnav Talkies, Budhanpur, Azamgarh v. State of U.P. and others

- **Citation:** (2001) 1 ILRA 214
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2001
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/vaishnav-talkies-budhanpur-azamgarh-v-state-of-u-p-and-others-39702
- **Pages:** 5

## Text

INDIAN LAW REPORTS ALLAHABAD SERIES [2001
214
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By the Court

1. The petitioner Vaishnav Talkies,
Budhnapur Azamgarh, through its partner
Shri Subedar Singh has filed the present
petition seeking a writ of certiorari
quashing the order dated 6th July, 1992
passed by the District Entertainment Tax
Officer respondent no.3 on behalf of the
District Magistrate, Azamgarh filed as
Annexure 22 to the writ petition and also
a writ of mandamus commanding the
respondents to grant the licence to the
petitioner under the grant-inaid scheme
dated 18th July, 1989 and to grant the
facilities under the said grant in aid
scheme.

The petitioner claims itself to be a
newly constructed cinema hall. According
to the petitioner, on 20th July, 1991 the
petitioner
submitted
an
application
seeking permission for the construction of
a permanent cinema building under Rule
3 of U.P. Cinematograph Rules 1951,
hereinafter referred to as the Rules, before
the
District
Magistrate,
Azamgarh
respondent no. 2. The Respondent no. 2
asked for reports from the various
authorities
i.e.
S.D.O.
Budhnapur,
Tehsildar Budnapur, Superintendent of
Police, Azamgarh, Executive Engineer
P.W.D. Temporary Division, Azamgarh,
and Entertainment Tax Officer, Azamgarh
all of whom submitted their reports. The
petitioner has set up a case that the
A.D.M. (Administration) who was at the
relevant
time
Officer
Incharge
of
Entertainment Tax himself made a spot
inspection and after being duty satisfied
vide order dated 24th September, 1991 had
asked the respondent no. 2 for the counter
signing on the site plan and also strongly
recommended for grant of permission for
raising the construction of the new cinema
1All] Vaishnav Talkies, Budhanpur, Azamgarh V. State of U.P. and others 215
hall on the proposed land of the petitioner.
According to the grounds taken by the
petitioner in this petition it was under a
bonafide impression that the permission
for raising the construction has been
granted by the A.D.M. (Admn.) who was
the Officer Incharge on behalf of the
Licensing
authority
and
started
construction of the permanent cinema
hall. The petitioner vide letter dated 30th
September, 1991 informed the respondent
no.2 about the start of construction of the
cinema building. After having constructed
the cinema building, the petitioner made
an application for grant of licence on
6.4.1992 before respondent no.2 i.e. the
licensing
authority
on
which
the
respondent no. 2 called for reports from
the concerned authorities.

2. It appears that since no formal
permission under Rule 3(3) of the Rules
had been granted to the petitioner by the
District Magistrate/Licensing Authority,
the District Entertainment Tax Officer on
behalf
of
the
District
Magistrate/
Licensing Authority Azamgarh informed
the petitioner vide letter/ order dated
6.4.1992 that the petitioner would not be
entitled for the benefit of grant in aid
scheme under the G.O. dated 18th July,
1989. The petitioner was further informed
that further action on the application for
grant of licence can be taken if the
petitioner is prepared to take a licence
without grant in aid. The letter/order
dated 6th July, 1992 is under challenge in
the present petition.

We have heard Shri Govind Krishna,
learned counsel for the petitioner and Shri
C.S. Singh, learned standing counsel who
represented all the respondents.

3. The learned counsel for the
petitioner submitted that the petitioner
fulfilled all the requirements for grant of
permission under Rule 3(3) of the Rules
for construction of permanent cinema
building
and
was
under
bonafide
impression
that
the
Addl.
District
Magistrate (Admn.)/Executive who had
recommended for the counter signing of
the site plan and for giving permission for
construction of the Cinema building
according to the site plan had in fact
granted permission to the petitioner to
start construction of the cinema building
and
therefore
the
condition
in
the
impugned letter/order dated 6th July, 1992
that Rule 3(3) of the Rules have been
violated is not correct. He further
submitted that in the present case since all
the formalities have been completed, the
grant
of
permission
for
starting
construction of a permanent cinema
building in terms of Rule 3(3) was only a
mere formality which could not adversely
affect the grant of licence under the grant
in aid scheme to the petitioner Shri
Govind
Krishna
further
invited
the
attention of the Court to the G.O. dated
27th August, 1998, copy of which has
been
filed
as Annexure 1 to the
supplementary affidavit of Shri Subedar
Singh sworn on 14th November, 1999, in
which the State Government has taken a
decision that where the cinema owners
have started construction of the cinema
building after making an application to
the licensing authority and there was a
delay in grant of permission, the benefit
of grant in aid scheme should be given
after imposing the compounding fee and
he therefore submitted that in view of the
G.O. dated 27th August, 1998, at best the
petitioner is liable to pay compounding
fee for the violation of Rule 3(3) of the
INDIAN LAW REPORTS ALLAHABAD SERIES [2001
216
Rules, but the benefit of grant in aid
scheme cannot be denied.

4. Shri C.S. Singh, learned standing
counsel on the other hand submitted that
admittedly in the present case the
licensing authority had not given the
permission as required under Rule 3(3) of
the Rules and therefore the construction
made by the petitioner would be treated as
violative of Rule 3(3) of the Rules. In this
view of the matter the benefit of grant in
aid scheme cannot be given to the
petitioner
as
the
same
has
been
specifically excluded under Clause 4 of
G.O. dated 18th July, 1989. In support of
the aforesaid plea the learned standing
counsel relied upon a decision of this
Court in Civil Misc. Writ Petition No.83
of 1996, Chhanga Prasad Sahu and
another Versus State of U.P. and others
decided on 8th May, 1996 wherein this
Court has held as follows:-

"As far as licence is concerned, no
doubt, licence cannot be refused and that
is
why
the
order
be
passed
for
compounding the same. But for granting
permission in paying entertainment tax,
observance of Rule 3 of the Rules is a
condition precedent as given vide clause 3
in G.O. dated 18.7.1989 (Annexure-2).
Since the petitioner has not complied with
and the authorities have reached to the
conclusion that it has not been complied
with, therefore, the petitioner is not
entitled to seek any concession under the
government
Order
dated
18.7.1989
(Annexure-2)."

5. The learned standing counsel
further relied upon a decision of this
Court in the case of Shitla Prasad Dubey
and another Versus State of U.P. and
others reported in A.I.R. 1999 Allahabad
page 260 and submitted that non payment
of composition charge is a valid ground
for not granting the licence and certificate
under Rule 3(3). He further submitted in
paragraph 31 of the reports, this Court had
held that the benefit of the subsequent
clarification of the grant in aid scheme
can be given even where there is no
violation of Rule 3(3), but this can be
done only if the composition charge was
paid before 31.3.1999 which has not been
done in the present case.

6. Having heard the learned counsel
for the parties we find that it is not in
dispute that the petitioner had made an
application for grant of permission to
construct permanent cinema building as
far back as on 20.7.1991 in accordance
with Rule 3 of the Rules. The licensing
authority had asked for reports from the
various authorities on the said application
which was also submitted. The Additional
District Magistrate had also recommended
for the counter signing of the site plan as
also for permission to start construction of
the permanent cinema building vide
recommendation made on 24.9.91. Only
thereafter
the
petitioner
had started
construction of the permanent cinema
building and had applied for grant of
licence to exhibit the cinematograph films
on
6.4.1992.
No
doubt
a
formal
order/permission under Rule 3(30 of the
Rules has not been passed/granted by the
Licensing authority and the petitioner has
completed the construction of the cinema
building without there being any order
under Rule 3(3) of the Rules. Under
section
10
of
the
U.P.
Cinema
(Regulation) Act 1055 hereinafter referred
to as the Act. The State Government has
been empowered to grant exemption
subject to such condition and restrictions
as it may impose from any of the
1All] Vaishnav Talkies, Budhanpur, Azamgarh V. State of U.P. and others 217
provisions of this Act or any Rules made
thereunder. Under Rule 44 of the Rules
the composition charge prescribed for
granting exemption as per Rule 3(3) is
Rs.50,000/-. The respondent no.3 while
passing the impugned order on 6th July,
1992 had found the violation of Rule 3(3)
of
the
Rules.
This
Court
while
entertaining the writ petition on 29th July,
1992 had issued an interim mandamus in
the following terms :-

"The standing counsel prays for and
is granted six weeks time to file C.A.,
R.A., if any, shall be filed within two
weeks thereafter. List for admission on
30th August, 1992.

Let an interim mandamus go to the
respondent No.2 to grant licence to the
petitioner for exhibiting films under the
Grant-in-aid scheme dated 18.7.1989
during the pendency of the writ petition
within a period of six weeks or show
cause by filing counter affidavit within
one month. List on 30.8.1992.

Sd./- M.L. Bhatt, J.

Sd./- R.B. Mehrotra, J.

 29.7.1992.

The writ petition was admitted on 9th
November, 1992 when the Court had
further passed the following interim order
on 9.11.1992 which is quoted below:-

"Issue notice.
The respondents are directed to issue
provisional licence to the petitioner under
the grant-in-aid scheme dated 18.7.1989.

Sd./- A. Singh, J.

Sd/- D.P.S. Chauhan, J.

 9.11.1992

7. The stay matter came up for
consideration before the Court on 2nd
December, 1996 when the Court had
confirmed
the
interim
order
dated
9.11.1992 alongwith the order dated
12.1.1993. The order dated 2nd December,
1996 is reproduced below:-

"In this writ petition an interim order
was passed on 9.11.1992 after the
counter-affidavit
was
filed
by
the
respondents in September,1992 and after
hearing the learned counsel for both the
sides. At this stage nothing has been
shown on behalf of the respondents as to
why the said interim order is not to
continue. In that view of the matter, the
interim order dated 9.11.92 alongwith the
order dated 12.1.93 is hereby confirmed.

Sd/- A. Chakraborti

 2.12.96"

It appears that the petitioner have
been granted a provisional licence under
the grant in aid scheme dated 18.7.1989
and has been exhibiting cinematograph
films.

8. The learned standing counsel has
not denied the issuance of the G.O. dated
27th August, 1998 in which benefit of
grant in aid scheme has been allowed to
these
cinema
owners
who
have
constructed
the
permanent
cinema
building after making application under
Rule 3 of the Rules but without there
being any order under Rule 3(3) of the
Rules which violation is compoundable.
Thus the petitioner is entitled for the
benefit of grant in aid scheme as he had
already made an application under Rule 3
for permission to construct the cinema
building before starting construction. The
decision of this Court in the case of
Chhanga Sahu (supra) would not be
INDIAN LAW REPORTS ALLAHABAD SERIES [2001
218
applicable to the facts of the present case
in view of the subsequent G.O. dated 27th
August,
1998 which has in effect
modified the rigours of clause 4 of G.O.
dated 18th July, 1989. So far as the
decisions in the case of Shitla Prasad
Dubey (supra) is concerned it will also
not apply to the facts of the present case
in as much as the State Government is yet
to pass an order levying composition fee
for violation of Rule 3(3) of the Rules.

9. In view of the foregoing
discussions we hold that the District
Entertainment Officer, Respondent no.3
was
not
justified
in
imposing
the
condition of not giving the benefit of
grant in aid scheme while issuing the
letter dated 6th July,1992 and the said
condition is hereby quashed. The
violation of Rule 3(3) is compoundable
and the composition fee livable is
Rs.50,000/- under Rule 44 of the Rules.
The petitioner has already been granted a
provisional licenc for exhibiting the
cinematograph film under the grant in aid
scheme on 18th July, 1989. Therefore, It
will be subject to the orders which may be
passed by the State Government for
granting exemption for violation of Rule
3(3) of the Rules.

In the result the writ petition
succeeds and is allowed.

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