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PETITIONER: THE SOUTH INDIAN FILM CHAMBER OF COMMERCE, MADRAS ETC.

       Vs.

RESPONDENT: ENTERTAINING ENTERPRISES, MADRAS AND ORS. ETC.

DATE OF JUDGMENT16/12/1994

BENCH: VENKATACHALA N. (J) BENCH: VENKATACHALA N. (J) PARIPOORNAN, K.S.(J)

CITATION:  1995 SCC  (2) 462        JT 1995 (1)    63  1994 SCALE  (5)314

ACT:

HEADNOTE:

JUDGMENT: VENKATACHALA, J. 1.      On  a  certificate  granted by  the  High  Court  of Judicature at Madras in respect 65 of  its  common Judgment dated 21st June, 1984  rendered  in Writ  Petition No. 1587 of 1984 and connected  matters,  the present  appeals arc filed assailing the  sustainability  of that judgment insofar as it relates to the striking down  of Section  9(2)  of  the Tamil Nadu  Exhibition  of  Films  on Television   Screen   through   Video   Cassette   Recorders (Regulation)  Act, 1984 - "the Act" requiring  every  person keeping  a Video Library licensed under the Act,  possessing cinematograph  films,  to produce in respect  of  each  film whenever  demanded by the concerned officer of government  a letter of consent got from the first owner of the  copyright of such film under the Copyright Act, 1957  or its  assignee thereunder,  as  that  enacted  by  the  Tamil  Nadu   State Legislature   -  "the  State  Legislature",  without   being possessed  of  the required legislative competence   and  of Section  10(2)  of the Act requiring  every  person  keeping Video  Library  licensed under the Act not to sell,  let  to hire,  distribute, exchange  or  put  into   circulation   a cinematograph  film which is not certified by the  authority under  Cinematograph  Act,  1952  as  suitable  for   public exhibition  and does not contain the prescribed mark  or  if contains  a mark, the film is not altered or  tampered  with after  affixure of such mark, as that enacted by  the  State Legislature, is invalid and unworkable. 2.     Before  taking up for consideration  the  contentions urged in these appeals against the striking down by the High Court  sections  9(2)  and 10(2) of the  Act,  it  would  be advantageous to advert to the scheme of the Act, as could be found from the Preamble and the provisions of the Act. 3.     Object sought to be achieved by the State Legislature by  enacting  the Act, as  declared in    its  Preamble,  is

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the regulation in the State of Tamil Nadu of the  exhibition of  films  on  Television  screen  through  Video   Cassette Recorders. 4.     ’Video Cassette Recorder’ is defined in clause (6) of section  2  as meaning a cinematograph for  the  purpose  of giving  cinematograph exhibition of film, recorded on  Video cassette  tape.  ’Video Library’ is defined  in  clause  (7) thereof as meaning a place by whatever name called where the business of selling, letting to hire, distribution, exchange or  putting into circulation in any manner,  whatsoever,  of film for purposes of exhibition is carried 5.      Coming to regulatory  provisions in the  Act,  while sub-section (1) of section 3  requires that no person  shall give  an  exhibition of film on  Television  screen  through Video Cassette Recorder except under a licence granted under section  6  read with section 5 of the Act, and in  a  place other than one  for which permission has been granted  under section  7 read with section 5 of the Act - such  place  not being  allowed to carry on any other business at  any  time, sub-section (2) thereof lifts the restriction imposed as  to exhibition of films  under sub-section (1)  to exhibition of film on Television screen through Video Cassette Recorder to the  family  members of the household only.  Further,  while section  4  thereof requires that no person shall  keep  any Video Library except under and in accordance with, a licence granted  under  the Act and under the  stated  circumstances obtains  separate licences and renewals of the  licences  so obtained, section 6 thereof requires licensing authority not to  grant   a  licence for exhibition of  film  if  it  goes against pub- 66 lie  interest  and  if it is  not  satisfied  that  adequate precautions  have been taken in place for which licence  has to  be  granted to provide for the safety,  convenience  and comfort  of the persons attending exhibitions therein or  as the  ease  may be visiting the  Video  Library.  Thereafter, while  section  7  thereof  refers  to  the  powers  of  the licensing    authority    to   permit    construction    and reconstruction of buildings, installation of machinery, etc. for  exhibition of film,  section 8 thereof reserves to  the Government power to issue orders or directions of a  general nature  as they consider necessary in respect of any  matter relating   to  licences  for  the  exhibition  of  film   on Television  screen  through Video Cassette Recorder  or  the keeping  of Video Library, to licensing authorities.  Coming to  section  9(1), it  enjoins every person  licensed  under section  6 read with section 5 of the Act giving  exhibition of  films  on  Television  screen  through  Video   Cassette Recorder  to produce when demanded by an officer  authorised by  the Government in this behalf, a letter of  consent  for such  exhibition from the person who is the first owner   of the  copyright  of  the cinematograph film under section  17 ’of the Copyright Act, 1957 (Central Act XIV of 1957) and in ease  such copyright has been assigned under section  18  of the  said  Act, from the assignee of  such  copyright.  But, section 9(2), which is struck down by the High Court in  the judgment under appeals reads:               "Every person keeping a Video Library licensed               under this Act, shall in respect of each  film               in his possession, produce when demanded by an               officer  authorised by the Government in  this               behalf,  a letter of consent from  the  person               who is the first owner of the copyright of the               cinematograph  film  under section 17  of  the               Copyright Act, 1957 (Central Act XIV of  1957)

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             and  in case such copyright has been  assigned               under  section  18 of the said Act,  from  the               assignee of such copyright." 6.  Then,  coming  to  section  10(1)  it  enjoins  that  no person licensed under this Act to give an exhibition of film on  Television screen through Video Cassette Recorder  shall exhibit or permit to be exhibited any film other than a film which  has been certified as suitable for public  exhibition by  the  authority  constituted  under  section  3  of   the Cinematograph  Act, 1952 (Central Act XXXVII of  1952),  and which, when exhibited, displays the prescribed mark of  that authority  and has not been altered or tampered with in  any way since such mark was affixed thereto. But, section 10(2), which is also struck down by the High Court in its  judgment under appeals reads:               "No person licensed under this Act for keeping               a  Video  Library  shall sell,  let  to  hire,               distribute,  exchange or put into  circulation               in any manner whatsoever any film other than a               film which has been certified as suitable  for               public exhibition by the authority constituted               under section 3 of the Cinematograph Act, 1952               (Central Act XXXVII of 1952), and which,  when               exhibited,  displays  the prescribed  mark  of               that  authority, and has not been  altered  or               tampered  with in any way since such mark  was               affixed thereto." 7.      When  we come to other sections of  the  Act,  while section  11  empowers the Government or licensing  authority to  suspend exhibition of film in certain cases, section  12 of  the  Act  refers to their power  to  revoke  or  suspend licences.  While section 13 of the Act refers  to  appellate authority’  before which a person aggrieved by an  order  of the licensing authority 67 refusing  to  grant  or  renew a  licence  or  an  order  of revocation or suspension of a licence or a decision refusing to approve any transfer or assignment of a licence under the Act can appeal against, section 14 of the Act refers to  the powers  of  revision  exercisable  by  Government  in   such matters. 8.      Section  15, which deals with penalties,   while  by sub-section  (1) thereof makes every person who  contravenes or attempts to contravene or abets the contravention of  the provisions of section 10 punishable with imprisonment  which may extend to three months or with fine which may extend  to one  thousand  rupees  or with both and in  the  case  of  a continuing  offence with a further fine which may extend  to one  thousand rupees for each day during which  the  offence continues, by sub-section (2) thereof makes every person who contravenes   or  attempts  to  contravene  or   abets   the contravention of any of the provisions of the Act other than section  10 or any rule made thereunder or of the terms  and conditions  of, and restrictions upon, any  licence  granted under the Act punishable with imprisonment which may  extend to one year and shall also be liable to fine. Section 16  of the Act while provides for offences by companies, section 17 of the Act deals with the power to enter, search and  seize. Section  18  of  the Act deals with  confiscation  of  films exhibited or kept in contravention of the provisions of  the Act and the rules made thereunder. Section 19 states that no court  inferior  to that of a Metropolitan Magistrate  or  a Judicial Magistrate of the first class shall try any offence punishable under the Act. Section 20 of the Act states  that any  offence punishable under the Act shall be a  cognizable

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offence. While section 22 deals  with  power  of  the Government  to  make  rules  for carrying the purpose of the Act,  the remaining sections  in the Act deal with ancillary or incidental matters. 9.      Thus, from the above Preamble and the provisions  of the  Act, it becomes obvious that the State  Legislature  by enacting  the  Act has evolved a  comprehensive  legislative scheme aimed at regulating in the whole State of Tamil  Nadu of  the  exhibition  of cinematograph  films  on  Television screen through Video Cassette Recorders by requiring persons who  want  to give exhibition of such  films  outside  their households and persons who want to keep Video Libraries,  to obtain  licences  as provided for thereunder and  by  making such   licensees  liable  for  penalties  for  breaches   of restrictions imposed upon them, as envisaged thereunder 10.   When the respondents in the present appeals, who  were keeping  Video Cassette libraries in several places  of  the State  of Tamil Nadu challenged  before the High  Court  the constitutionality  of the various provisions of the Act   as being  ultra  vires  on the ground of  want  of  legislative competence on the part of the State Legislature,  a thorough examination of that challenge made by that Court, led it  to the  conclusion that the Act in ’pith and  substance’  being ’cinema’,  the subject which finds its place in Entry 33  of List  11  to the Seventh Schedule of  the  Constitution  was within the legislative competence of the State  Legislature. However, the High Court, insofar as the provision in section 9(2) of the Act is concerned, reached the conclusion that it had  been enacted by the State Legislature  on  ’copyright’, the   subject   in  List-1  of  Seventh  Schedule   to   the Constitution by going 68 beyond  the permitted limit of encroachment and hence  ultra vires.  The  conclusion reached by the High  Court  in  that regard, as recorded by it, reads thus: "We  are  of  the  view that Section  9(2)  is  not  a  mere incidental encroachment on the entry ’Copyright’ falling  in List  1, but it amounts to an addition to the provisions  of the  Copyright  Act  and  therefore  it  falls  outside  the permitted  limit  of encroachment and as such it  should  be taken to be ultra vires." 11.   The said conclusion of the High Court, has since  been assailed in the present appeals, as the one wrongly  reached by  the  High  Court,  the sustainability of that conclusion warrants  our examination in the light of rival  contentions raised before us. 12.    Section 9(2) of the Act, which according to the  High Court  covers the subject of copyright in List-1 of  Seventh Schedule of the Constitution - Union List, is enacted by the State Legislature traversing outside the permitted limit  of encroachment  on  the subject of  ’copyright’  purported  to enact  on  the  subject of ’cinema’ in  List-II  of  Seventh Schedule  -  State  List, lying within  its  competence,  is reproduced  by us already while adverting to the  scheme  of the  Act.   That  sub-section, as could  be  seen  therefrom requires  of every person keeping a Video  Cassette  Library licensed under the Act to produce in respect of each film in his  possession, when demanded by an officer  authorised  by the Government in that behalf, a letter of consent from  the person,  who  is  the first owner of the  copyright  of  the cinematograph  film under section 17 of the  Copyright  Act, 1957  and  in case such copyright has  been  assigned  under section 18 of that Act, from the assignee of such copyright. The  High Court, placing reliance on the  definition  clause (f) of section 2 of the Copyright Act, 1957 has, as a matter

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of fact, held in its judgment under appeals that a copyright should  be taken to have been created in respect of a  video film   under  the  Copyright  Act,  1957,   negativing   the contention raised before it, to the contrary. The High Court also does not say that every person carrying on the business of  selling,  letting  to hire,  distribution,  exchange  or putting  into circulation in any manner whatsoever  of  such film  for  the  purpose of exhibition,  can  carry  on  such business   without the consent from the person, who  is  the first  owner of such copyright or its assignee according  to the provisions of the Copyright Act, 1957.  Therefore,  when under  the  Act a person who is given a licence  to  keep  a Video  Cassette  Library  for purposes of  carrying  on  his business of selling, letting to hire, distribution, exchange or  putting  into circulation in any  manner  whatsoever  of video films recorded on Video Cassette tape, if is  required by section 9(2) of the Act to keep a letter of consent  from the  first  owner of the copyright in any of such  films  or from the assignee thereof, so that he may not carry on  such business infringing the copyrights of the owner or  assignee in such films  under the Copyright Act, such section enacted covering  a  matter  which is incidental  to  regulation  of business of video films, cannot fall outside the  competence of the State Legislature. But, what the High Court has  said is  that  the non-keeping of the letter of  consent  by  the person  keeping the Video Cassette Library in respect  of  a film, has since been made a cognizable offence under another provision  of the Act, while the same is not  a  congnizable offence under the Copyright Act, and yet by another pro- 69 vision  of the Act makes him liable for a higher  punishment than  that  awardable under the Copyright Act,  1957  -  the provision  in section 9(2) of the Act has to be regarded  as that  enacted  by the State Legislature on  the  subject  of copyright  itself,  which is a subject on  which  Parliament alone  under  List-l  is  competent  to  legislate.    Then, according to the High Court the non-possessing by a licensee of  Video Library  of a letter of consent from the owner  or assignee of copyright of such film to be dealt with’ by  him since  makes  him liable for a cognizable offence and  of  a higher  punishment  not provided for in  the  Copyright  Act itself, the provision in section 9(2) requiring the  keeping of  such consent letter cannot be regarded as an  incidental or  ancillary  provision made on the  subject  of  ’cinema’, although  the Act is in  pith and substance the  subject  of ’cinema’   lying   within  the  competence  of   the   State Legislature. 13.    We  are of the opinion, as rightly contended  for  on behalf  of  the  appellants  before us  that  the  fact  the provisions in the Act make the non-possessing of the  letter of  consent  from the holder of copyright  of  the  film  or assignee thereof for doing business in such  films makes  it a  cognizable offence or an offence punishable, can  be   no ground  for  holding that the State Legislature in requiring the keeping of a consent letter from the copyright holder or his  assignee  for  doing  business in  the  film  which  is necessary for carrying on the such business lawfully can  be said  to make the State Legislature to lose the  legislative competence which it had on the subject of ’cinema’ in  List- II of Seventh Schedule to the Constitution. The High  Court, in  our  view, in taking into consideration  the  cognizable nature  of the offence and a severe penalty  impossible  for the offence of not keeping a letter of consent obtained from the  first  owner of the copyright of the film  or  assignee thereof,   for  reaching  the  conclusion  that  the   State

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Legislature  has no legislative competence to  legislate  on the subject of ’cinema’ has taken into consideration matters which were not germane to the consideration of the  question of legislative competence of a legislature on a subject.  It is,  however,  difficult  to think that  when  a  regulatory legislative measure is enacted by a legislature on a subject within its competence requiring a person to obtain a licence for  doing  certain  business concerned  with  the  subject, imposes certain restrictions  upon  such  person to make him conduct  the business concerned for which he is granted  the licence,  lawfully,  could  be regarded   as  a  legislative provision which is not ancillary to the main subject of  the regulation,  when  once the subject of regulation  is  found within the pith and substance of the concerned legislature’s competence. 14.   Hence, we are constrained to hold that the High  Court faulted in having reached the conclusion that the  provision in  section 9(2)of the Act enacted by the State  Legislature was  not  an  ancillary  provision  enacted,  in  pith   and substance,  on  the  subject of ’cinema’  lying  within  its legislative  competence.   Consequently, we  hold  that  the provision  in  section 9(2) of the Act  being  an  ancillary provision  on  the  subject of the Act  which  in  pith  and substance is ’cinema’, lay within its legislative competence and hence is constitutionally valid. 15.    Now, we shall turn to section 10(2) of the Act  which the High Court has held 70 to  be invalid and unworkable. The High Court  for  reaching the said conclusion has stated thus:               "Having regard to the fag that the  provisions               of the Cinematograph Certification Rules, 1983               do  not  contemplate the  certification  of  a               video  film  for  private  exhibition  in  the               residence of the members of the video library,               the   requirement  of  the  production  of   a               certificate  in  respect of  the  video  films               hired  out by a video library to  its  members               under  Section 10(2) is invalid.   As  pointed               out already, the certification is contemplated               in   the  certification  rules  only  if   the               applicant for certification intends to use the               video film for public exhibition and not  when               he  does  not  intend to  do  so.   Thus,  the               insistence on certification under the impugned               Act  and  the rules framed thereunder  is  not               valid. A video film for their own use and  not               for public show or exhibition cannot  approach               the  Censor Board for a Certificate, for,  the               owner  of the library does not intend  to  use               the video tapes for public exhibition. In this               view of the matter, we have to hold that  Sec.               10(2)  of  the  Act is not  only  invalid  but               unworkable." 16.    The High Court, as could be seen from  the  excerpted portion  of its judgment under appeals, has  concluded  that Section  10(2)  of the Act is invalid and  unworkable.  That conclusion, as becomes clear therefrom, is based on its view that Section 10(2) requires a person keeping a Video Library of  films which are not meant for public exhibition,  cannot sell,  let  to  hire,  distribute,  exchange  or  put   into circulation  in  any manner whatsoever any  of  them  unless certified as suitable for public exhibition by the authority constituted  under section 3 of the Cinematograph Act,  1952 and  which, when exhibited, displays the prescribed mark  of

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that Authority and has not been altered or tampered with in any way since such mark was affixed thereto. 17.    The  said  view,  as  contended  on  behalf  of   the appellants   before   us,  is  not  based  upon   a   proper construction  of subsection (2) of section 10 having  regard to  its setting in section 10.  The contention was, if  sub- section  (2)  of section 10 has to  be  properly  understood having  regard to its setting in section 10 of the  Act,  it could  only  relate to those films which are not  meant  for public  exhibition  and  if so  understood,  the  conclusion reached  by the High Court that the sub-section  is  invalid and  unworkable  becomes  unsustainable. There  is,  in  our opinion,  substance in the contention advanced on behalf  of the appellants. Section 10 as a whole reads thus:               "10. Licensee to exhibit only certified  films               --(  1 ) No person licensed under this Act  to               give  an  exhibition  of  film  on  Television               screen  through Video Cassette Recorder  shall               exhibit  or  permit to be exhibited  any  film               other than a film which has been certified  as               suitable   for   public  exhibition   by   the               authority  constituted under section 3 of  the               Cinematograph Act, 1952 (Central Act XXXVII of               1952), and which, when exhibited, displays the               prescribed mark of that authority, and has not               been altered or tampered with in any way since               such mark was affixed thereto.               (2)   No  person licensed under this  Act  for               keeping  a  Video Library shall sell,  let  to               hire,   distribute,  exchange  or   put   into               circulation in any manner whatsoever any  film               other than a film which has been certified  as               suitable   for   public  exhibition   by   the               authority  constituted under section 3 of  the               Cinematograph Act, 1952 (Central Act XXXVII of               1952), and which, when exhibited, displays the               prescribed mark of that authority, and has not               been altered or tampered with in any way since               such mark was affixed thereto."               71               18.    The heading of section 10, as could  be               seen  therefrom, indicates that the  provision               in the sub-sections thereunder are intended to               apply  to only licensees who want  to  exhibit               certified  films.  Under sub-section  (1),  as               becomes clear therefrom, no person -  licensed               under  the  Act could give  an  exhibition  of               films  through  Video  Cassette  Recorder   or               permit  to be exhibited any film other than  a               film which has been certified as suitable  for               public exhibition by the authority constituted               under section 3 of the Cinematograph Act, 1952               and   which,  when  exhibited,  displays   the               prescribed mark of that authority and has  not               been altered or tampered with in any way since               such  mark was affixed thereto. In  fact,  the               High   Court  does  not  say  that  the   said               provision  is  in  any  way   constitutionally               invalid.  When sub-section (2) appears in  its               setting  in  section 10 after  the  said  sub-               section  (1)  which deals with  the  licensees               under  the  Act  who  are  required  to   give               exhibition  of certified films on  televisions               through  Video  Cassette  Recorders  and  when               while dealing with the persons keeping a Video

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             Library  sub-section (2) says that  no  person               keeping  a  Video Library shall sell,  let  to               hire,   distribute,  exchange  or   put   into               circulation in any manner whatsoever any  film               other than a film which has been certified  as               suitable   for   public  exhibition   by   the               authority  constituted under section 3 of  the               Cinematograph   Act,  1952  and  which,   when               exhibited,  displays  the prescribed  mark  oF               that  authority  and has not been  altered  or               tampered  with in any way since such mark  was               affixed thereto the legislative intendment. In               imposing such restriction on the Video Library               or a person keeping a Video Library cannot  be               anything other than imposing it in respect  of               films   which   are   intended   for    public               exhibition.  If  that  be the  effect  of  the               provision  and  its requirement,  question  of               invalidating it on the ground that it  applies               to  films with licensed persons keeping  Video               Library  for films other than those meant  for               public  exhibition, cannot arise,  as  rightly               contended  for  on behalf of  the  appellants.               Hence,  the view taken by the High Court  that               section  10(2)  is  invalid  and   unworkable,               cannot be sustained.               19.     Thus, the view of the High Court  that               section 9(2) was invalid and ultra vires being               enacted  by  State  Legislature  without   the               required legislative competence  and its  view               that section 10(2) was invalid and  unworkable               because  it applied to films other than  those               which  are  meant for  public  exhibition  and               hence  both of them were liable to  be  struck               down, require  to be interfered with, in that,               in our opinion, section 9(2) and Section 10(2)               of the Act are constitutionally valid.               20.     In the result, we allow these  appeals               and  dismiss  the writ petitions in  the  High               Court  out of which the present  appeals  have               arisen.  However, in the circumstances of  the               present appeals, we make no order as to costs. 74