# STATE OF GUJARAT AND ANR v. M/S. KRISHNA CINEMA AND ORS

- **Citation:** [1971] 2 S.C.R. 110
- **Court:** Supreme Court of India
- **Decided:** 1970-09-10
- **Case number:** Civil Appeal No. 1435 of 1970
- **Bench:** J. C. Shah, K. S. Hegde, A. N. Grover
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-gujarat-and-anr-v-m-s-krishna-cinema-and-ors-5302
- **Pages:** 8

## Headnote

Bombay Cinemas (Regulation) Act 11 of 1953 and Rules-Rule 89
tloes not pl'ohibit construction of cinema building before grant of no objection certificate by Licensing
Autho1·ity-Directioti given
by . State
Government to Licensing Authority. vitiated if there is no application of
mind to facts-Appellate order under s. 8A must give 1-easo11,~Use of
words 'absolute discretion' in s. 5(2) of Chapter II does not invest State
Government with arbitrary power.
The Bombay Cinemas (Regulation) Act 11 of 1953 and the rules made
thereunder were made applicable to the territory of the State of Gujarat by
the Bombay Reorganisation Act, 1960. Under s. 3 of Act 11 of 1953 films
can be exhibited only in licensed premises. Bys. 4(3) the District Magistrate is, where there is no Commissioner df Police, the Licensing Authority,
By s. 5 the Licensing Authority is subject to the control d the State
Government .. A person aggrieyed by the order of the Licensing Authority
has under s. SA a right of appeal to the State Government Rule 5(2)
authorises the Government on consideration of the report of the Licensing
Authority, in its absolute discretion to grant permission for the issue of a
no objection certificate to the applicant or to refuse to grant the same.
By r. 89 it is enacted that no person shall put up any building or structure
or convert existing premises for being used as a cinema except with the
permission in writing of the Licensing Authority.
The respondents carried on the business of exhibiting dnematograph
films in a theatre named Krishna Cinema at Rajkot.
On· May 14, 1963
they applied to the District Magistrate for a 'no objection certificate' to the
user of a building to construction, as an 'annexe.' to the Krishna Cinema.
The Magistrate sanctioned the construction of the building and the plans
submitted by the respondents were approved by the Executive Engineer.
On completion of the bujlding the . Executive Engineer recommended the
grant of a 'no objection certificate'.. Thereafter the District Magistrate
in his report of the State Government suggesting that a no objection certificate be granted even though the construction of the building before the
~rant of the certificate was against the rules. The Government of Gujarat
intimated by a letter dated July 9, 1964 written by the Addi. Distiict
Magistrate, Rajkot that the application filed by the respondents could not
be granted. An appea1 filed against the order communicated by the Addi.
District Magistrate to the State Government was rejected. The respondent
filed a writ petition in the High Court which succeeded. The 'State of
Gujarat appealed to this Court relying on r. 89 for their contention that
the building was constructed in violation of the rules and, therefore, the
refusal of a 'no objection certificate' was justified. Dismissing the appeal,
HELD : (I) Rule 89 authorises the Licensing Authority to allow conversion of an existing building into a cinernatograph theatre. Therefore
the completion of the building before the Government considered the tequest to a 'no objection certific~te' did not cons.titute a .bar to the e:'erci~e
of Jurisdiction to grant the certificate and District Magistrate was nght m
his view that the certificate applied for must be granted. [115 B-Cl.
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GUJARAT v. KRISHNA CINEMA (Shah, /.)
111
The 'annexe' complied with all the requirements of the rules, but by
letter dated July 9, 1964 the Licensing Authority under instructions of the
State Government informed the respondent that application for ~onstruct·
in& a permanent annexe near the present Krisha Cinema and. for obtaining a 'no objection certificate' was not admissible.
The building had
been constructed several months before the date on which the letter was
written. -The contents of the letter created an impreosion that in the
view of the authorities the building had still to be constructed, It was
clear .that the authority did not apply its mind to the application. I

## Text

110
STATE OF GUJARAT AND ANR.
v.
M/S. KRISHNA CINEMA AND ORS.
September 10, 1970
[J. C. SHAH, K. S. HEGDE AND A. N. GROVER, JJ.]
Bombay Cinemas (Regulation) Act 11 of 1953 and Rules-Rule 89
tloes not pl'ohibit construction of cinema building before grant of no objection certificate by Licensing
Autho1·ity-Directioti given
by . State
Government to Licensing Authority. vitiated if there is no application of
mind to facts-Appellate order under s. 8A must give 1-easo11,~Use of
words 'absolute discretion' in s. 5(2) of Chapter II does not invest State
Government with arbitrary power.
The Bombay Cinemas (Regulation) Act 11 of 1953 and the rules made
thereunder were made applicable to the territory of the State of Gujarat by
the Bombay Reorganisation Act, 1960. Under s. 3 of Act 11 of 1953 films
can be exhibited only in licensed premises. Bys. 4(3) the District Magistrate is, where there is no Commissioner df Police, the Licensing Authority,
By s. 5 the Licensing Authority is subject to the control d the State
Government .. A person aggrieyed by the order of the Licensing Authority
has under s. SA a right of appeal to the State Government Rule 5(2)
authorises the Government on consideration of the report of the Licensing
Authority, in its absolute discretion to grant permission for the issue of a
no objection certificate to the applicant or to refuse to grant the same.
By r. 89 it is enacted that no person shall put up any building or structure
or convert existing premises for being used as a cinema except with the
permission in writing of the Licensing Authority.
The respondents carried on the business of exhibiting dnematograph
films in a theatre named Krishna Cinema at Rajkot.
On· May 14, 1963
they applied to the District Magistrate for a 'no objection certificate' to the
user of a building to construction, as an 'annexe.' to the Krishna Cinema.
The Magistrate sanctioned the construction of the building and the plans
submitted by the respondents were approved by the Executive Engineer.
On completion of the bujlding the . Executive Engineer recommended the
grant of a 'no objection certificate'.. Thereafter the District Magistrate
in his report of the State Government suggesting that a no objection certificate be granted even though the construction of the building before the
~rant of the certificate was against the rules. The Government of Gujarat
intimated by a letter dated July 9, 1964 written by the Addi. Distiict
Magistrate, Rajkot that the application filed by the respondents could not
be granted. An appea1 filed against the order communicated by the Addi.
District Magistrate to the State Government was rejected. The respondent
filed a writ petition in the High Court which succeeded. The 'State of
Gujarat appealed to this Court relying on r. 89 for their contention that
the building was constructed in violation of the rules and, therefore, the
refusal of a 'no objection certificate' was justified. Dismissing the appeal,
HELD : (I) Rule 89 authorises the Licensing Authority to allow conversion of an existing building into a cinernatograph theatre. Therefore
the completion of the building before the Government considered the tequest to a 'no objection certific~te' did not cons.titute a .bar to the e:'erci~e
of Jurisdiction to grant the certificate and District Magistrate was nght m
his view that the certificate applied for must be granted. [115 B-Cl.
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GUJARAT v. KRISHNA CINEMA (Shah, /.)
111
The 'annexe' complied with all the requirements of the rules, but by
letter dated July 9, 1964 the Licensing Authority under instructions of the
State Government informed the respondent that application for ~onstruct·
in& a permanent annexe near the present Krisha Cinema and. for obtaining a 'no objection certificate' was not admissible.
The building had
been constructed several months before the date on which the letter was
written. -The contents of the letter created an impreosion that in the
view of the authorities the building had still to be constructed, It was
clear .that the authority did not apply its mind to the application. It did
not consider whether a building which was already in existence should
be allowed to be converted into a cinematograph theatre. [116 A-Cl
Further in djsmissing the appeal preferred to ihe State Government it
was recorded that the Government did 'not see any reasons to change the
decision already taken by the District Magistrate'. The order of the State
Government which was a reaffirmation of its originll decision communicated through the Licensing Authority gave no iadication that the objections raised in the memorandum of appeal were Clll.w.od. No reasons
in support of the order were set out. [116 ·C-D]
Since· the State Government did not correctly apprise imelf'll( the
facts when it gave its directions to the Licensing Authority to dismila the
applicatio11 and later dismissed the appeal without giving any reasoas,
its order giving directions to the District Magistrate and in appeal were
rightly set aside by the High Court. [117 A-Bl
(ii) Power to control the Licensing Authority under s. 5 is not power
to sμpplant the Licensing Authority. The power to grant a licence under
the Act is a quasi-Judicial
power. and by the use of the
Expression
'absolute discretion' in r. 5 it is not intended to invest the Licensing
Authority with arbitrary power so as to destroy the limitations to which
it is subject by its inherent nature. [116 G-H]
['The court found it unnecessary for the purpose of the case to express
any opinion on the propriety or validity of provisions making exercise
of quasi-judicial power subject ,to the control, at the stage when it was
exercised, of the executive. It observed however that a right of appeal
under s. SA the State Government against the order of the Licensiag
Authority issued under the order df the State Government was a futile
formality and served no useful purpose]. [114 F-H]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1435 of
1970.
Appeal by special leave from the judgment and order dated
August 12, 13, 1969 of the Gujarat High Court in Special Civil
application No. 919 of 1969.
S. K. Dho/akia, B. D. Sharma and S, P. Nayar, for the appellants.
A. K. Sen,, H. R. Gokha/e, J. L. Hathi, K. N. Blwt and K. L.
Hathi, for the respondents.
H
The Judgment of the Court was delivered by
Shah, J. The respondents in this appeal carry on the business of exhibiting cinematograph films in a theatre named Krishna
112
SUPREME COURT REPORTS
[1971] 2 S.C.R.
Cinema at Rajkot.
On a plot of land adjacent to the Krishna
Cinema the respondents desired to construct "an annexe" for
exhibiting foreign films with independent screen and auditorium.
On May 14, 1963 the respondents applied to the District Magistrate [who is the Licensing Authority under the Bombay Cinemas
(Regulation) Act 11 of 1953] for a 'no objection certificate' to
the user of the "annexe" to be constructed on the site for exhibiting
cinematograph films.
On the same day they submitted to the
Executive Engineer plans of the proposed building of "annexe"
to be used as a cinematograph theatre. They also applied to the
local Municipality for leave to construct a building to be used for
cinematograph theatre. The Municipality sanctioned construction
of the building. The Executive Engineer also signified his assent
by letter addressed . to the Additional District Magistrate to the
grant of a "no objection certificate"
By an application submitted on May 14, 1963 the respondents prayed that a "no objection certificate" under the Bombay
Cinemas (Regulation) Act be granted in respect of the "annexe"
to be constructed.
As required by the rules framed under the
Act the District Magistrate notified the application and invited
objections to the proposal. The District Magistrate then forwarded
his report to the Government of Gujarat that according to the rules
the respondnts should have commenced constructidn of the
"annexe" only after obtaining the 'no objection certificate' under
the Act, but since the building was constructed with the sanction
of the Municipality and the building was in conformity with the
rules, he recommended that the "no objection certificate" be grant~
ed. The Government of Gujarat intimated by a letter written by
the Additional District Magistrate, Rajkot that the application
filed by the respondents could not be granted.
An appeal filed
against the order communicated through the Additional District
Magistrate to the State Government was rejected and the respondents were asked not to make any further representations in that
behalf.
The respondents then filed a petition in the High Court of
Gujarat for a declaration that r. 5 sub-r. (2) of the Bombay Cinema
Rules, 1954, infringes Art. 19(l)(f) & (g) of the Constitution
and for a direction calling upon the Government of the State of
Gujarat to grant 'no objection certificate' as applied for by them
for setting up a cinematograph theatre in the "annexe" and for ~n
order quashing or setting aside the communications from the District Magistrate and the order in ap!leal passed by. th~ State ?f
Gujarat and to direct th~ St:ite of Gu1arat and the Di;;tnct ~fa'lls
trate to consider the appl1cat10n of the respondents for no ob1e7tton
cer'tificate' in accordance with law. The Hi~h Court of Gu1arat
upheld the contention raised by the respondents and set aside the
orders of the State Government and of the District Magistrate.
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GUJARAT v. KRISHNA CINEMA (Shah, ~.)
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The High Court directed that a writ of mandamus be issued directing the State Government to permit the District Magistrate to
issue a 'no objection certificate' and the District Magistrate to issue
such a certificate to the respondents as prayed in their application. The State of Gujarat has appealed to this Court with special
leave.
Exhibition of cinematograph films and licensing of places for
such exhibition is governed by the Bombay Cinemas (Regulation)
Act 11 of 1963. By virtue of the provisions contained in the
Bombay State Reorganisation Act, 1960, the Act and the Rules
<)Te applicable to the territory of the Slate of Gujarat. By s .• 3
of the Bombay Cinemas (Regulation) Act, 1953, "save as .otherwise provided in the Act no person shall give an exhibition by
means of a cinematograph elsewhere than in a place licensed
under the Act or otherwise than in complti:mce with any conditions
and restrictions imposed by such licence''. In the town of Rajkot,
b¥ virtue of s. 4(3) of the Act the District Magistrate is the
Licensing Authority. By sub-s. ( 1) of s. 5 the Licensing Autkority is prohibited from granting a licence unless it is satisfied that
the rules made under the Act have been substantially complied
with and adequate precautions have been taken in the place, in
respect of which the licence is to be given, to provide for the
safety of persons attending exhibition therein. By s. 5 (2) subject
to the provisions of sub-s. ( 1) and to the control of the State
Government the Licensing Authority may grant licences under the
Act to such persons as that Authority thinks fit. Section 7 authorises the Licensing Authority with power to revoke 'or suspend a
licence. My person aggrieved by an order of a Licensin11; Authority, inter alia, refusing to grant a licence or revoking or suspending any licence, may under s. SA appeal to the State Government :
~. 9 provides for the making of the rules for the purpose of carrying into effect the provisions of the Act. By r. 3, insofar as it is
relevant it is provided :
"(2l Any person desirous of erecting a cinema or
converting existing premises int1> a cinema shall first
make public his intention to do so by exhibiting a notice
in Form "A" on a boa~d on the proposed site in such a·
position that it can be plainly seen from the public
throughfare upon which the site of such proposed
cinema abuts.
(3) Such person shall also give a similar notice in
writing tc the Licensing Authority and make an· application to the Licensing Authority for the grant of a ''No
objection" Certificate specifying therein whether
the
114
SUPREME COURT REPORTS '
(1971].2 S.C.R.
application is in respect of a permanent cinema or a
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touring cinema."
. By r. 4 provision is made for inviting objections on receipt of a
· notice from the applicant. Rule 5 (2) authorises the Government,
on consideration of the report of the Licensing Authority, in its
absolute . discretfon to grant pern)ission for the issue of a "No
objection certificate" to the applicant or to refuse to grant the
same. Chapter III of the Rules prescribes rules relating to buildings to be used for cinematograph theatres. . Chapter IV prescribes rules relating to electric installation and Chapter V prescribes precautions against fire. By r. 89 which occurs in Chapter
VI it is enacted that "no person shall put up any buildings or struc.-
ture or convert existing premises for. beiatg used as a cinema except
with the previous permission in writing of the Licensing Auihority."
Rules 90 provides for the making of an application for permission. Rule 91 . provides for submission of the plans alon_g with
the application. Rule 92 provides for the approval by the Public
Works Department of the plans and r .. 93 for permission to build.
Rule 94 provides that the applicant shall complete the construction of the cinema within a period of two years fi:om the date of the
permission or within such extended period as may be allowed by
the Licensing Authority.
Under the Act the District Magistrate ·is, in places where there
is no Commissioner of Police,. constituted the Licensing Authority.
By s. 5 the power of the Licensing Authority is subject to the
control of the State Government. Authority to license a cinematograph theatre is therefore vested in the Licensing Authority subject to the overriding control of the State Government. It is difficult to appreciate what purpose may be served by giving a right
to appeal to the State to a person aggrieved by the order of the
Licensing Authority, if the original order is made under the direction. and subject to the control of the State Government. A right
of appeal under s. 8A a_gainst the order of the Licensing Authority issued under the order· of the ·"State Government is a futile
formality and serves no useful purpose.
Power to issue, revoke
or suspell\:I a licence· conferred upon the District Magistrate is
exercisable on satisfaction of that officer of certain objective conditions and is nlainly quasi-judicial. But exercise of power by the
Licensing Authority to grant a J.icence is still made subject to the
control of the State Government. It is unnecessary for the nurpose
of this case to exoress any opinion O'n the propriety or validity of
provisions making exercise of quasi-judicial power subject to the
control, at the stage when it is exercised, of the executive.
From the affidavit filed on behalf of the State Government it
appears that the only grounds of objection to the grant of the 'no
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GUJARAT v. KRISHNA CINEMA (Shah, /.)
115
objection certificate' was that contrary to the terms of r. 89 the
respondents had constructed the "annexe" before the State Government considered their application for a "no objection certificate"
.It appears however from the report of the Licensing Authority that
plans . of the building intended to be constructed C'Jmplied with
the rules framed under the Act and the building constructed dia
not contravene the provisions of the Act and the Rules. Rule 89
authorises the Licensing Authority to allow conversion of an
existing building into a cinematograph theatre. Therefore
the
completion of the building before the Government considered the
request for a "no objection certificate" did not constitute a bar to
the exercise of jurisdiction to grant the certificate and the District
Magistrate was right in his view that the certificate applied for
should be granted.
A proposal for setting up a clnematograph theatre in a Municipal area has to be cJeared by three authorities. First is the Municipal Authority which must sanction the proposed construction.
For that purpose building plans have to be submitted and constr11ction has to be rOmpleted within one year from the date of
sanction. Again thtj applicatidl). for putting up a .building to .be
used as a cinematogr;iph theatr~ must be accompanied by plans to
be approved by the Public Works Department, and the building
may be constructed only after permission is granted by the Public
Works Department. The building so permitted must be completed
within two years friJin the date of permission or such extende,d
period as may be allowed. by the Licensing Authaority. The third
IS the Licensing Authority who under s. 4 read with ss. 3 and 5 ( 1)
has the powet to issue a licence under the Act. Somewhat inconsistently r. 5 (2) states that the Government may grant the "No
Objection Certificate" which for some unexplained reason is used
as a synonym for "Licence" in the Act.
In the first instance the Rajkot Municipality sanctioned construction of the "annexe" by the respondents by letter. dated May
2$, t 963 and the Executive Engineer by letter dated September
1)3, 1963 informed the Licensing Authority--cop'y of which information was sent to the respondents--that the former had "no
objection to issue sanction for the construction of "annexe" to the
existing Krishna Cinema". It was also recorded in the letter that
the respondents had agreed to carry out modifications in the plan
•s may be ~ggested by the Executive Engineer. · At the foot of
the letter was a note that "the suggestions in accordance with the
Bombay Cinema Rules, 1954" were being forwarded to the respondents separately.
The respondents then applied by letter dated January 2, 1964
to the Licensing. Authority that the "annexe" had already been
constructed and the sanction to ure it as a cinematograph theatre
..
116
SUPREME COURT REPORTS
[1971] 2 s.c.R.
may be granted. The "annexe" complied with all requirements of
the rules, but by Jetter dated July 9, 1964 the Licensing Authority
under the instructions of the State Government informed the
respondents that "application for constructing a permanent annexe
near the present Krishna Cinema and for obtaining a 'no objection
certificate' is not admissible". The building had been constructed
severa! months before the date on which that letter was written.
The contents of the letter create an impression that in the view
of the authorities the building had still to be constructed. It is
clear that the authority did not apply its mind to the application.
It did not consider whether a building which was already in existence should be allowed to be converted into a cinematograph
theatre.
In dismissing the appeal preferred to the State Government it
was recorded that the Government did "not see any reasons to
change the decision already taken by the District Magistrate" and
that decision was communicated to the respondents by letter dated
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July 9, 1964. The order of the State Government which is a reaffirmation of its original decision communicated through the
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Licensing Authority gives no indication that the objections raised
in the memorandum of appeal were considered.
It sets out no
reasons in support of the order. The authority which made the
order on behalf of the State Government appears to hP,ve been
oblivious of the circumstances in which the building was constructell, The Government did not consider whether a building already
in existence which complied with all the requirements of the Rules• E
should be allowed to be converted into a cinematograph theatre.
It was urged on behalf of the State Government that under
r. 5 (2) in Chapter II the State Government has absolute discretion
to grant permission for the issue of a "no objection certificate" to
the applicant. Under the Act the District Magistrate and not the
State Government is the Licensing Authority. Granting that the
State Government may validly control the exercise of power by
the Licensing Authority, on that question we express no opinionthe State Government cannot relying upon the Rules assume to itself the jurisdiction of the Licensing Authority to issue the licence.
Power to control the Licensing Authority under s. 5 is not the
power to supplant the Licensing Authority.
Again the power
to grant a licence under the Act is quasi-judicial, and by the use
of the expression "absolute discretion" it is not intended to invest
the Licensing Authority with arbitrary power so as to destroy the
limitations to which it is subject by its inherent nature. The Act
does not purport io confer arbitrary authority upon the Licensing
Authority or the State Government, and oy the use in the rnle'
of the exrression absolute discretion the legislative intent disclosed
by the Act cannot be superseded .
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GUJARAT V. KRISHNA CINEMA (Shah, J.)
11 7
It is clear on a perusal of the record that the State Government
did not correctly apprise itself of the facts when it gave its directions to the Licensing Authority to dismiss the application, and the
State Government also acted in violation of the rules which inhere
the exercise of judicial power when it dismissed the appeal without
giving reasons. The orders dated July 9, 1964 and f.ugust 21,
1964 were rightly set aside by the High Court.
The appeal therefore fails and is dismissed with costs.
G.C.
Appeal dismissed.