# STATE OF PUNJAB AND ANOIBER v. HARi KRISHAN SHARMA

- **Citation:** [1966] 2 S.C.R. 982
- **Court:** Supreme Court of India
- **Decided:** 1965-12-09
- **Case number:** Civil Appeal Writ No. 1100 of 1959
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-punjab-and-anoiber-v-hari-krishan-sharma-3670
- **Pages:** 9

## Headnote

982
STATE OF PUNJAB AND ANOIBER
v.
HARi KRISHAN SHARMA
December 9, 1965
[P.
B.
GAJENDRAGADKAR,
C.J.,
K. N.
WANCHOO,
M.
HIDAYATULLAH, v.
R.AMASWAMI
AND
P.
SATYANARAYANA
RAJU, JI.]
Punjab Cinemas (Regulation) Act (11 of
1952) s. 5(2)---Scope of
Govern1nent's Control.
A
B
The second appellant-the Sub-divisional
Officer-had been . consti· c
luted as the licensing autltority, under s. 4 of the Punjab Cinemas (Re·
gulation) Act, 1952, for the area concerned in the present case.
The ·
respondent made an application to him for a licence to construct a per.
manent cinema hall.
Pending the application, instructions
were issued
by the first appellant-the State Government-that all such applications
for licence shall be forwarded to the State Government for orders accompanied with certain particulars regarding the
applicant. The
second
appellant forwarded the respondent's application with the relevant facts
D
to the first appellant and the first appellant rejected the application. The
respondent's appeal to the first appellant under s. 5 (3) of the Act was
also rejected. The respondent then moved the High Court under Art.
226 and the High Court held that the first appellant had no authority or
power to require all applications for
licences under the Act to be for·
warded to it and to deal with them itself.
In appeal to this Court, the firsc appellant contended that it had
jurisdiction to deal with the application because s. 5(2) of the Act conferred very wide powers of control on it and that the power took within
its sweep the directions issued by it.
HELD : The scheme of the Act indicates that there are two authorities which are expected to function under the Act-the licensing authority as welt as the Stat~ Government. The basic fact in the scheme is
that ft is the licensing authority which is solely given the power to deal
with the applications for licence in the first instance, and th.is basic posi·
tion cannot be changed by the State Government by issuing any execu·
tive orders or by making rules under s. 9 of the Act. (989 G; 990 B-C]
The control of the State Government under s. 5(2) snbject to which
the licensing authority has to function is very wide;
but however wide
E
F
this control may be, it cannot justify the State Government to completely
oust the licensing authority and itself usnrp its function~. The licensing
authority has to act under the control of the State Government, but it is
G
the licensing authority which has to act and not the Government itself.
The said -control can be exercised generally before applications .are granted by issuing general instructions which are legitimate and reasonable for
the purpose of the Act, or particularly by correcting
individual orders
granting licences if they are found to be erroneous, but in any case the
State Government has to function either as an appellate authority under
s. 5 ( 3) or as a revisional authority under s. 5 ( 2), but it cannot assume
for itself the powers of the licensing authority. [988 H-989 E]
ff
Karnatl Rangaiah v. A. Sultan Mohiddin, A.I.R. 1957 A.P. 513, M/s.
Vishnu Talkies v. The State, [1962) I.L.R. 12 Raj. 14 and Bharat Bhushan.
v. Cinema and City Magistrate, A.LR. 1956 All. 99, overruled.
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PUNJAB v. H. K. SHARMA (Gajendragadkar, C.J.)
983
A

## Text

982
STATE OF PUNJAB AND ANOIBER
v.
HARi KRISHAN SHARMA
December 9, 1965
[P.
B.
GAJENDRAGADKAR,
C.J.,
K. N.
WANCHOO,
M.
HIDAYATULLAH, v.
R.AMASWAMI
AND
P.
SATYANARAYANA
RAJU, JI.]
Punjab Cinemas (Regulation) Act (11 of
1952) s. 5(2)---Scope of
Govern1nent's Control.
A
B
The second appellant-the Sub-divisional
Officer-had been . consti· c
luted as the licensing autltority, under s. 4 of the Punjab Cinemas (Re·
gulation) Act, 1952, for the area concerned in the present case.
The ·
respondent made an application to him for a licence to construct a per.
manent cinema hall.
Pending the application, instructions
were issued
by the first appellant-the State Government-that all such applications
for licence shall be forwarded to the State Government for orders accompanied with certain particulars regarding the
applicant. The
second
appellant forwarded the respondent's application with the relevant facts
D
to the first appellant and the first appellant rejected the application. The
respondent's appeal to the first appellant under s. 5 (3) of the Act was
also rejected. The respondent then moved the High Court under Art.
226 and the High Court held that the first appellant had no authority or
power to require all applications for
licences under the Act to be for·
warded to it and to deal with them itself.
In appeal to this Court, the firsc appellant contended that it had
jurisdiction to deal with the application because s. 5(2) of the Act conferred very wide powers of control on it and that the power took within
its sweep the directions issued by it.
HELD : The scheme of the Act indicates that there are two authorities which are expected to function under the Act-the licensing authority as welt as the Stat~ Government. The basic fact in the scheme is
that ft is the licensing authority which is solely given the power to deal
with the applications for licence in the first instance, and th.is basic posi·
tion cannot be changed by the State Government by issuing any execu·
tive orders or by making rules under s. 9 of the Act. (989 G; 990 B-C]
The control of the State Government under s. 5(2) snbject to which
the licensing authority has to function is very wide;
but however wide
E
F
this control may be, it cannot justify the State Government to completely
oust the licensing authority and itself usnrp its function~. The licensing
authority has to act under the control of the State Government, but it is
G
the licensing authority which has to act and not the Government itself.
The said -control can be exercised generally before applications .are granted by issuing general instructions which are legitimate and reasonable for
the purpose of the Act, or particularly by correcting
individual orders
granting licences if they are found to be erroneous, but in any case the
State Government has to function either as an appellate authority under
s. 5 ( 3) or as a revisional authority under s. 5 ( 2), but it cannot assume
for itself the powers of the licensing authority. [988 H-989 E]
ff
Karnatl Rangaiah v. A. Sultan Mohiddin, A.I.R. 1957 A.P. 513, M/s.
Vishnu Talkies v. The State, [1962) I.L.R. 12 Raj. 14 and Bharat Bhushan.
v. Cinema and City Magistrate, A.LR. 1956 All. 99, overruled.
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PUNJAB v. H. K. SHARMA (Gajendragadkar, C.J.)
983
A
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 763 of
B
1963.
Appeal b): special leave from the judgment and order dated
March 30, l 9l\l of the Punjab High Court in Civil Appeal Writ
No. 1100 of 1959.
Bishan Narain and R. N. Sachthey, for the appellant.
S. N. A ndley, for the respondent.
The Judgment of the Court was delivered by
c
Gajendragadkar, C.J. The short question of law which arises
in this appeal relates to the construction of section 5 (2) of the
Punjab Cinemas (Regulation) Act, 1952 (No. 11of1952) (hereinafter called 'the Act') . The respondent, Hari Krishan Sharma,
who claims to be the owner of a certain site in the town of
Jhajjar, desired to construct a cinema hall at the said place for
D
the purpose of exhibiting cinematographs.
On December 16,
1956, he submitted an application to appellant No. 2, the SubDivisional Officer, Jhajjar, for the grant of the licence to construct
and run a permanent cinema hall on his site. On February 22,
1957, appellant No. 2 forwarded the said application to the
Tehsildar for inspection of the site. It appears that on April 24,
E
1957, the Government of appellant No. 1, the State of Punjab,
had issued instructions in regard to the grant of licences under
the relevant provisions of the Act. These instructions required
that all requests for the grant of permission for opening all new
permanent cinemas should be referred to appellant No. 1 for
orders. On September 26, 1957, the Tehsildar made a report
F that the site was in accordance with the provisions of the Act and
that the respondent was its owner.
On September 30, 1957,
another memorandum was issued by appellant No. 1 addressed to
all the District Magistrates and the Sub-Divisional Officers conveying the decision of appellant No. 1 that when an application
for grant of permission to construct a permanent cinema was
G referred to the Government, it should be accompanied by the
particulars enumerated in the memorandum. Amongst the items
thus enumerated were the population of the town where the permanent cinema is proposed to be constructed; whether there are
any permanent cinemas already in existence in the town, and
if so, how many; whether the applicant/ applicants has/have been
H
taking any part in any activity undermining the security of the
State; and whether the financial position of the applicant/applicants .
is/ are sound. These notifications were issued by appellant No. 1
LSSup. CJ/66-16
984
SUPREME COURT
REPORTS
[1966] 2 S.CR.
while the application made by the respondent was pending conA
~
sideration.
On April 24, 1958, appellant No. 2 informed the respondent
that the site proposed by him for the construction of the cinema
hall had been approved. The respondent was required to submit
a plan of the building within a month and he was warned not to
B
transfer the ownership of the site without the previous sanction
of the licensing authority. On May 23, 1958, the respondent
submitted the building plans.
These plans were forwarded by
appellant No. 2 to the Executive Engineer, Provincial Division,
Rohtak, for scrutiny. While forwarding the plans to the Executive Engineer, appellant No. 2 had stated that the respondent c
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.
Meanwhile, it appears that one Mohan Lal had also applied
for grant of a licence for construction of a cinema hall in June,
I 958, but he was informed that permission had already been
D
granted to one person, and there was no scope for a second cinema
hall. That is why he was told that his application could not be
considered.
Yet another person, Sultan Singh by name, made
a similar application on August 26, 1958. On October 7, 1958,
the Provincial Town Planner, Punjab, wrote to the Executive E
Engineer that the building plans submitted by the respondent had
been checked and they appeared to satisfy the rules framed under
the Act so far as the structural features of the building were concerned. On October 6, 1958, however, appellant No. 2 addressed
a memorandum to the respondent informing him that the site
plans prepared by him for the construction of a permanent cinema
F
hall would be referred to appellant No. 1 for approval "according
to the latest instructions".
Then followed a report made by appellant No. 2 to appellant
No. 1 on October 31, 1958, mentioning all the relevant facts in
regard to the application of the respondent, and adding that the
report was forwarded to appellant No. 1 for its consideration. On
G
December 20, 1958, appellant No. 2 submitted another report to
appellant No. 1 saying, inter a/ia, that i~ had been reported by
the police that the respondent had been arrested in connection
with "Save Hindi Agitation" and was discharged on tendering
apology an_d that he did not pay any income-tax. On March 4,
1959, appellant No. 2 informed the respondent that his applicaH
tion had been rejected by appellant No. 1 as the same did not
fulfil the conditions laid down in the memorandum, dated
. ..
PUNJAB v. H. K. SHARMA (Gajendragadkar, C.J.)
985
A September 30, 1957. It appears that appellant No. 1 had decided
to grant the licence to Sultan Singh,· and that probably is the
reason why the application of the respond~nt was rejected.
On receiving this communication from appellant No. 2, the
respondent preferred an appeal to appellant No. 1 under s. 5(3)
B of the Act, but his appeal was rejected qn April 14, 1959; and
that drove the respondent to the High Court of Punjab to seek
an appropriate relief under its jurisdiction under Article 226 of
the Constitution.
In his petition, the respondent alleged that the order passed
c by appellant No. 1 rejecting his application for a licence under
s. 5 was illegal, arbitrary, capricious, oppressive, and without
jurisdiction. In support of his plea, the respondent had also alleged
that in rejecting his application, appellant No. 1 had been influenced by extraneous considerations which had no relevance to the
decision of the question as to whether a licence should be granted
D to him or not. The suggestion made by the respondent was that
appellant No. 1 wanted to prefer Sultan Singh to him for extraneous considerations, and that rendered the impugned order
invalid. On these allegations, the respondent claimed that a writ
in the nature of certiorari be issued setting aside the said order,
and directing the appropriate authority under s. 5 of the Act to
E deal with the respondent's application in accordance with law.
F
The appellants disputed the allegations made by the respondent in his writ petition. It was urged that appellant No. 1 had
taken into account the relevant considerations prescribed by the
instructions issued by it by virtue of its authority under s. 5(2)
of the Act, and had come to the conclusion that the respondent's
application .could not be granted. The plea made by the respondent that appellant No. 1 had been influenced by extraneous considerations, was denied.
On these pleas, the High Court was called upon to consider
five issues. The important ones amongst these issues were about
G the jurisdiction of appellant No. 1 to pass the order rejecting the
respondent's application for a licence, and about the invalidity of
the order resulting from the fact that it was based on extraneous
considerations.
The High Court has upheld the respondent's
contention on the first point, and has held that appellant No. 1
had no jurisdiction to deal with the matter as it has purported to
H
do. On that view, the High Court did not think it necessary to
consider the other issues, particularly because "they involved
questions of fact which are more or l~s disputed and on which
986
SuPREME COU'RT REPORTS
(1966] 2 S.C.R.
it -will- not be possible to come to any clear conclusion: on the
A
factual side". In the result, the High Court has allowed the writ
petition filed by the respondent and has directed the appellants
to treat the order made by appellant No. 1 as void, ineffective,
invalid and of no binding effect.
In consequence, a writ of
mandamus has also been issued requiring the licensing authority
to deal with the respondent's application in accordance with law.
It is against this order that the appellants have come to this Court
B
by special leave and the only question which they have raised
before us for our decision is whether the High Court was right in
holding that appellant No. 1 had no jurisdiction to deal with the
respondent's application in the manner it has done under s. 5(2)
of the Act. That is how the question about the construction of C
s. 5(2) falls to be decided in the present appeal.
Before dealing with this question, we may very briefly indicate
the effect of the broad provisions of the Act. The Act was passed
in J 952 in order to make provisions for regulating exhibitions by
means of cinematographs in the Punjab.
Section 3 of the Act D
provides that no person shall give an exhibition, by means of a
cinematograph, elsewhere than in a place licensed under this Act
or otherwise than in compliance with any condition and restriction imposed by such licence. Section 4 provides that the licensing authority under the Act shall be the District Magistrate. The
proviso to this section authorises the Government, by notification,
E
to constitute for the whole or any part of the State, such other
authority as it may specify therein, to· be the licensing authority
for the purposes of the Act. It is common ground that appellant
No. 2 has been constituted a licensing authority for the area with
which we are concerned in the present appeal.
That takes us to s. 5 which must be read :-
"5. (1) The licensing authority shall not grant a
licence under this Act unless it is satisfied that-
(a) the rules made under this Act have been comF
plied with; and
G
(b) adequate precautions have been taken in the
place, in respect of which the licence is to be given, to
provide for the safety of the pe_rsons attending exhibitions therein.
(2) Subject to the foregoing provisions of this section and to the control of the Government, the licensing
authority may grant licences under this Act to such
H
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(
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A
B
PUNJAB v. H. K. SHARMA (Gajendragadkar, C.J.)
987
persons as it thinks fit, on such terms and conditions as
it may determine.
(3) Any person aggrieved by the decision of the
licensing authority refusing to grant a licence under this
Act may, within such time as may be prescribed, appeal
to the Government or to such officer as the Government
may specify in this behalf and the Government or the
officer, as the case may be, may make such order in the
case as it or he thinks fit".
Sub-s. ( 4) of s. 5 authorises the Government to issue directions
to licensees generally or to any licensee in particular for the pure pose specified by it.
Section 6 confers powers on Government
or local authority to suspend exhibition of films in certain cases;
and s. 7 prescribes penalties.
Section 8 empowers the State
Government or the licensing authority to suspend, cancel or
revoke a licence granted under s. 5, on one or more of the grounds
indicated by clauses (a) to (g) of sub-s. (1). The other sub-sections
D of s. 8 prescribe the procedure which has to be followed in exercising the powers conferred by sub-s. (1 ). Section 9 confers on the
Government the power to make rules by a notification; this power
can be exercised for any of the purposes mentioned in clauses (a),
(b) & (c) of the said section. Section 10 gives power to the State
Government to exempt any cinematograph exhibition or class of
E
cinematograph exhibitions from the operation of any of the provisions of the Act; and s. 11 provides that the Cinematograph Act,
1918 (No. 11 of 1918) in so far as it relates to matt~rs other than
the sanctioning of cinematograph films for exhibition, is hereby
repealed.
There is a proviso to this section with which we are
not concerned in the present appeal. That, broadly stated, is the
F scheme of the Act.
There are two Central Acts dealing with the same subject.
The first one is Act II of 1918 which, as we have seen, is repealed
in the manner prescribed by s. 11 of the Act so far as the Punjab
is concerned. Section 5 of this Act corresponds generally to s. 5
G of the Act. The Central Act II of 1918 has been subsequently
repealed by Central Act 37 of 1952. Section 12 of this latter
Act corresponds generally to s. 5 of the Act.
The question which we have to decide in the present appeal
lies within a very narrow compass.
What appellant No. 1 has
done is to require the licensing authority to forward to it all
H
applications received for grant of licences, and it has assumed
power and authority to deal with the said applications on the merits
for itself in the first instance. Is appellant No. 1 justified in
988
SUPREME COURT REPORTS ·
[1966] 2 S.C.R.
assuming jurisdiction which has been conferred on the licensing
A
authority bys. 5(1) and (2) of the Act? It is plain thats. 5(1) and
(2) have conferred jurisdiction on the licensing authority to deal
with applications for licences, and either grant them or reject them.
In other words, the scheme of the statute is that when an application for licence is made, it has to be considered by the licensing
authority and dealt with under s. 5(1) and (2) of the Act. Section
B
5(3) provides for an appeal to appellant No. 1 where the licensing
authority has refused to grant a licence; and this provision clearly
shows that appellant No. 1 is constituted into an appellate authority in cases where an application for licence is rejected by the
licensing authority.
The course adopted by appellant No. 1 in
requiring all applications for licences to be forwarded to it for
C
disposal, has really converted the appellate authority into the
original authority itself, because s. 5(3) clearly allows an appeal
to be preferred by a person who is aggrieved by the rejection of his
application for a licence by the licensing authority.
It is, however, urged by Mr. Bishan Narain for the appellants
D
that s. 5(2) confers very wide powers of control on appellant No. 1
ru1d this power can take within its sweep the direction issued by
appellant No. 1 that all applications for licences should be forwarded to it for disposal. It is true that s. 5(2) provides that the
licensing authority may grant licences subject to the provisions of
s. 5 ( l) and subject to the control of the Government; and it may
E
be conceded tha~ the control of the Government subject to which
the licensing authority has to function while exercising its power
under s. 5(1) and (2), is very wide; but however wide this control
may be, it cannot justify appellant No. l to c·ompletely oust the
licensing authority and itself usurp his functions.
The Legislature contemplates a licensing authority as distinct from the GovF
ernment. It no doubt recognises that the licensing authority has
to act under the control of the Government; but it is the licensing
authority which has to act and not the Government itself. The
result of the instructions issued by appellant No. l is to change
the statutory provision of s. 5(2) and obliterate the licensing authority from the Statute-book altogether. That, in our opinion, is not
G
justified by the provision as to the control of Government prescribed by s. 5(2).
The control of Government contemplated by s. 5(2) may
justify the issue of general instructions or directions which may
be legitimate for the purpose of the Act, and these instructions and
H
directions may necessarily guide the licensing authority in dealing
with applications for licences.
The said control may, therefore,
take the form of the issuance of general directions and instructions
,,.
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...
,
l
PUNJAB v. H. K. SHARMA (Gajendragadkar, C.J.)
989
A which are legitimate and reasonable for the purpose of the Act.
The said control may also involve the exercise of revisional power
after an ord:r has been passed by the licensing authority. It is
true that s. 5(2), in terms, does not refer to the revisional power
of the Government; but having regard to the scheme of the section, it may not be unreasonable to hold that if the Government
B
is satisfied that in a given case, licence has been granted unreasonably, or contrary to the provisions of s. 5(1), or contrary to the
general instructions legitimately issued by it, it may suo moto
exercise its power to correct the said order by exercising its power
of control. In other words, in the context in which the control
of the Government has been provided for by s. 5(2), it would
C be permissible to hold that the said control can be exercised
generally before applications for licences are granted, or particularly by correcting individual orders if they are found to be
erroneous; but in any case, Government has to function either as
an appellate authority or as a revisional authority, for that is
D
E
F
the result of s. 5(2) and (3).
Government cannot assume for
itself the powers of the licensing authority which have been specifically provided for by s. 5(1) and (2) of the Act. To hold that
the control of the Government contemplated by s. 5(2) would
justify their taking away the entire jurisdiction and authority from
the licensing authority, is to permit the Government by means of
its executive power to change the statutory provision in a substantial manner; and that position clearly is not sustainable.
Section 5(3) provides for an appeal at the instance of the party
which is aggrieved by the rejection of its application for the grant
of a licence. No appeal is provided for against an order granting
the licence; but as we have just indicated, in case it appears to
the Government that an application has been granted erroneously
or unfairly, it can exercise its power of control specified by s. 5(2)
and set aside su~h an erroneous order, and that would make the
provision as to appeal or revision self-contained and satisfactory.
The scheme of the Act clearly indicates that there are two
authorities which are expected to function under the Act-the
G licensing authority, as well as the Government. Section 8 is an
illustration in point. It empowers the State Government or the
licensing authority to suspend, cancel or revoke a licence on the
grounds specified by it; and that shows that if a licence is granted
by the licensing authority, it has the power to suspend, cancel or
revoke such a licence just as Government has a similar power to
H
take action in respect of the licenc~ already granted. We are,
therefore, satisfied that the High Court was right in coming to the
conclusion that appellant No. 1 had no authority or power to
990
SUPREME COURT REPORTS
[1966] 2 S.C.R.
require all applications for licences made under the provisions of
A
the Act to be forwarded to it, and to deal with them itself in the
first instance.
Section 5 clearly requires that such applications
must be dealt with by the lieensing authorities in their respective
areas in the first instance, and if they are granted, they may be
revised by Government under s. 5(2); and if they are rejected,
parties aggrieved by the said orders of rejection may prefer appeals
under s. 5(3) of the Act. Th basic fact in the scheme of the
Act is that it is the licensing authority which is solely given the
power to deal with such applications in the first instance, and this
basic position cannot be changed by Government by issuing any
executive o~ders, or by making rules under s. 9 of the Act.
B
c
It appears that this question has been considered by the Andhra
Pradesh, and the Rajasthan High Courts and they have taken the
view that the Government can, by virtue of the power of control,
deal with the applications for licences themselves in the first
instance [vide Karnati Rangaiah
v.
A. Sultan Mohiddin and
Brothers, Tadipatri & Ors.(') and Ml s. Vishnu Talkies v. The
D
State & Others( 2 ) respectively.] We are satisfied that this view
does not correctly represent the true legal position under the relevant provisions of the Acts prevailing in the two respective
States. In Bharat Bhushan v. Cinama and City Magistrate &
Anr. (3) also, the powers of the State Government under s. 5 ( 3)
of the Cinematograph Act, 1918, have been similarly construed
and that again, in our opinion, cannot be said to be right.
In
dealing with the question abouc the scope and effect of the power
of control conferred on the State Government,
the Allahabad
High Court has taken the view that the power of control which has
been conferred on the State Government by s. 5 ( 2) is wide enough
E
to enable the State Government to revise an order passed by a
F
licensing authority granting a licence.
This observation, in our
opinion, correctly represents the true scope and effect of the power
of control conferred on the State Government.
The result is, the appeal fails and is dismissed with costs.
(I) A.I.R. 1957 A.P. 513.
(2) (1962) I.L.R. 12 Raj. 44.
(3) A.I.R. 1956 All. 99.
Appeal dismissed.
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