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PETITIONER: VED GUPTA

       Vs.

RESPONDENT: APSARA THEATRES

DATE OF JUDGMENT11/08/1983

BENCH: ERADI, V. BALAKRISHNA (J) BENCH: ERADI, V. BALAKRISHNA (J) DESAI, D.A.

CITATION:  1983 AIR  978            1983 SCR  (3) 575  1983 SCC  (4) 323        1983 SCALE  (2)187

ACT:      Jammu and Kashmir (Cinematograph) Act, 1989 (1933 A.D.) -Licence for exhibition of cinematograph films in a theatre- Whether it  constitutes an interest attached to the premises in which  cinematograph is  installed ?-  When premises  and cinematograph are  owned by a partnership and the licence is held by  a partner  in his  individual capacity, Whether the partnership firm  acquires any  interest in  the licence  ?- Whether s.6F lends support to such a view ?

HEADNOTE:      The  appellant,  purporting  to  Act  on  behalf  of  a partnership consisting  of himself,  Todar Mal  and  Krishan Kumar, applied for and obtained permission in his individual capacity to  construct a  cinema theatre  on a  plot of land which was  taken on  lease jointly  by all the three of them after the application for the permission was made but before the same  was granted. They entered into a partnership along with 11  others for carrying on the business of constructing and running  a cinema  theatre and  the deed  of partnership contained a  clause that  the plot  of land  as well  as the permission obtained  for constructing  the theatre  shall be the property  of the firm. On completion of the construction the appellant  applied for, in his own name, and obtained in his personal  capacity, a  licence to  exhibit cinematograph films at  the Theatre. The partnership was re-constituted on retirement of  two partners and the new deed executed by the remaining partners  also contained  a clause  that the  firm shall have  the right to operate the licence. An application for inclusion of the names of Todar Mal and Krishan Kumar in the licence  was rejected  by  an  order  of  the  Licensing Authority who  held that the appellant was the sole licensee and the  said order  became final.  Another application  for renewal of  the licence  in the  name of  the Theatre on the ground  that  the  appellant  had  been  expelled  from  the partnership was  also rejected  by an order of the Licensing Authority which  was not  challenged. Thereafter  when, in a suit instituted  for a  declaration that the licence was the property of  the firm,  the trial court issued an injunction restraining  the   appellant  from   interfering  with   the possession and  running  of  the  Theatre  by  some  of  the partners of  the firm,  the appellant wrote to the Licensing

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Authority  disclaiming   responsibility  for   any  acts  of commission or  omission committed  by others in the premises of the  Theatre. The Licensing Authority, acting on a report from the  police that  films were  being  exhibited  in  the Theatre  by   persons  other   than  the  licensee,  ordered suspension of  exhibition of  films at  the Theatre.  A writ petition challenging the validity of this order filed in the name of  the Theatre  was dismissed by a Single Judge of the High Court. In tho Letters Patent Appeal heard by a Division Bench consisting  of the  Acting Chief Justice another Judge of the  High Court  the Acting  Chief Justice  held that the impugned order  was void but the other Judge agreed with the view of  the Single  Judge who  had dismissed  the  petition earlier. In view of 576 the divergence  of opinion,  the matter  was referred to the only other  Judge available in the High Court, but he having declined to  hear the  same for  good reason,  the  Division Bench decided  under sub-r.  (3) of  r. 23  of the Jammu and Kashmir High  Court Rules,  1975 that the view of the Senior Judge should  pre vail  and accordingly  the Letters  Patent Appeal was  allowed in conformity with the view taken by the Acting  Chief   Justice.  This  resulted  in  the  anomalous situation that as against the view concurrently taken by two Judges of  the High  Court, the  opinion of the Acting Chief Justice which  was really  the minority  view was allowed to prevail.      The reasons  given by  the Acting Chief Justice for the view he  took were:  (i) that a licence under the provisions of the  Jammu and Kashmir (Cinematograph) Act is granted for premises permanently  equipped for  cinematograph exhibition in the  name of the owner/manager of the cinematographs used in the  premises and  hence,  where  the  licensed  premises including  the  cinematograph  used  therein  belongs  to  a partnership and one of the partners obtains a licence in his separate name,  the other  partners automatically acquire an interest in  the licence  and that  the privilege granted by the licensing  authority "must  necessarily follow the title in  such  building  and  the  cinematograph"  and  that  the provision  contained   in  s.   6F  lends  support  to  this conclusion; (ii) that the partnership firm had a legal right in the licence which entitled it to notice and hearing under the  Act  before  the  licence  was  suspended;  (iii)  that inasmuch as  the said  procedure was  not  followed  by  the Licensing Authority  the impugned  order  was  void  and  in violation of  principles of  natural justice  and (iv)  that except for the power of revocation of licence embodied in s. 6F and  an  implied  power  to  suspend  a  licence  pending proceedings for  revocation, the  Licensing Authority had no power to  suspend the licence of the Theatre under any other circumstances.      Allowing the appeal, ^      HELD:  The   provisions  of   the  Act  and  the  Rules contemplate the grant of a licence to a person in respect of a  ‘place’   where  cinematographic   apparatus  have   been installed. Under  the Rules  and the terms and conditions of the licence, the grantee thereof is the person answerable to the Licensing  Authority for  breach of  the obligations and conditions. A licence granted under the Act is not analogous to a  licence in  the realm  of real  property law.  It  is, therefore, not  possible to accept the view that the licence is a  grant for  the premises  and constitutes  an  interest attached to  the premises. The provision contained in s. 6F, far from  supporting such  a view,  goes to  show  that  the

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holder of a licence may be a person different from the owner or partner of a cinematograph. The object of that section is to empower  the Licensing Authority to revoke the licence in the event  of commission  of an offence under s: 6 or 6E not merely by  the licensee but also by any person who may be in actual charge  of the  cinematograph. [588  H, 589 A-B, G-H, 590 A]      2. (a)  In proceedings to which the Licensing Authority was a  party, the  High Court  as well this Court had upheld the order  of the  Licensing Authority holding the appellant to be the sole licensee and rejecting the case Put forward 577 on behalf  of the  firm. The firm and its partners are bound by the  said decision. It is, therefore, unnecessary to deal with the  reasons stated  by the Acting Chief Justice of the High Court in support or his concussion that the licence was granted to  the appellant  in  his  individual  capacity  as representing the partnership. [588 D-F]      (b) The  appellant was  the sole  licence in respect of the Theatre. By virtue of r. 88 (v) as well as cl. 11 of the licence issued,  there was  a clear  prohibition against the licensee  from   transferring,  assigning,   sub-letting  or otherwise transferring the licence without the permission of the Licensing  Authority and  also against  his allowing any other person  to exhibit films at the licensed place without obtaining such permission. The firm of partners had no right whatever to  exhibit  cinematograph  films  at  the  theatre without a  licence. It  was the  plain duty of the Licensing Authority  to  ensure  that  exhibition  of  films  was  not conducted in  the Theatre  by unautuorised  persons and  the impugned order  is  obviously  one  passed  by  him  in  the discharge of  the said  function. The  principles of natural justice are  not attracted to such a situation. The position would have been different if it was a case of even temporary suspension of  the licence  without notice  to the licensee. [590 D, F, 591 A, 592 A, C-F]      (c) The  Licensing Authority  had the power to make tho impugned order  suspending the  exhibition of  films in  the Theatre by  persons other  than the  licensee. The  power to control the exhibition of cinematography by grant of licence and the  power to  administer and  enforce the provisions of the Act and the rules included the implied power to take all steps necessary to ensure the due observance of the terms of the statute.  the rules  and the  conditions of licence. The view expressed  in the  impugned judgment  of the High Court that the  Licensing Authority  had  no  power  to  make  the impugned order  was based  on the fallacious assumption that what was  done under  the impugned  order was to suspend the licence while,  in fact,  what was  done was only to suspend the exhibition of films in the Theatre by persons other than the licensee.                                                 [593 D-F, B]      3. Although  there are  very serious  doubts about  the correctness of  the view  taken by the Division Bench of the High Court  regarding the  applicability of r. 23 (3) of the Jammu and  Kashmir High  Court Rules,  1975 to  the  instant case, it  is not necessary to consider that question in view of the conclusion arrived at on the merits on the case. [586 F-G]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeals No.  2611 and 2611-A of 1981.

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    From the Judgment and order dated the 1st July, 1981 of the High  Court of Jammu and Kashmir in L.P.A. No. 1 of 1981 and C.M.P. No. 454 of 1981.      A. K  Sen and  G. L.  Sanghi, Vineet Kumar and Devinder Gupta for the Appellant. 578      D.D. Thakur, S.N. Kacker and R.P. Bhatt, for respondent in 2611/81.      Soli. J. Sorabjee, K. K. Venugopal and R. P. Bhatt, for respondent in 2611-A/81.      E. C.  Agarwala, S.  P. Gupta,  R. Satish, V.K. Pandita and R.P. Sethi for respondent in 2611-2611-A.      L. N.  Sinha, Attn.  Genl. Altaf  Ahmad and Irfan Ahmad for respondent no. 2.      S. Ghosh and A. K. Nag for the intervener.      The Judgment of the Court was delivered by      BALAKRISHNA ERADI, J. When the hearing of these appeals was  concluded   on  November   11,  1982,  after  elaborate arguments had been addressed by learned counsel appearing on both sides,  we announced  our decision  allowing the appeal (C.A.No 2611 of 1981) by passing the following order:           "The appeal is allowed.           The Judgment  and order of the Division Bench      of the  High Court presided over by learned Acting      Chief Justice  is set  aside and  one  by  learned      Single Judge,  Dr. A.  S. Anand,  is restored  and      consequently the Writ Petition No. 436   of   1980      filed by  Respondents in  the High  Court of Jammu      and Kashmir stands dismissed. No order as to costs      of hearing in this Court.           The legal consequence of this order will take      effect from  November 16, 1982. ALL interim orders      passed by  this Court shall stand vacated from the      midnight between 15th and 16th November, 1982.           Reasons will follow." We now  proceed to  state in  this judgment  the reasons  in support of our aforesaid conclusion 579      In July,  1966, the  appellant  Ved  Gupta  decided  to embark upon  a venture  to construct  and  operate  an  air- conditioned Cinema  in a  plot of  land which he proposed to take on  lease in Gandhi Nagar, Jammu, in Collaboration with two osher  persons, namely,  Todar  Mal  and  Kishan  Kumar. Accordingly, on  July 22,  1966, Ved Gupta purporting to act on behalf of a partnership consisting of himself and the two persons aforementioned  (as a matter of fact, no partnership had been  constituted at  all by  that date), applied to the District Magistrate, Jammu, under section 3 of the Jammu and Kashmir (Cinematograph)  Act, 1989 (1933 A.D.) (herein-after referred to as the Act) for permission to construct a modern Cinema Hall  at the proposed site, a detailed description of which was  furnished in the plan annexed to the application. Shri Ved  Gupta was  informed by  the  District  Magistrate, Jammu by  his Memo  (Annexure-B)  that  the  Government  had approved the  construction of  a Cinema Hall at the proposed site and  had granted the requisite permission in his favour as per  letter dated  September  11,  1967,  issued  by  the Secretary to  Government, General Department. From Annexure- B, it  would appear  that the  permission so  granted was in favour of  Ved Ved  Gupta in his individual capacity and not as the  representative of  any firm.  In the  meantime, by a deed  dated  December  7,  1966,  which  was  registered  on December 24,  1966, the  plot in question was taken on lease jointly by  Ved Gupta,  Todar Mal  and Krishan  Kumar for  a period of  40 years  on the  terms and  conditions  set  out

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therein. Thereafter,  under a  deed dated July 15, 1969, the aforesaid three  persons entered  into a  partnership  along with 11 others under the name and style "Metro Theatres" for carrying on  the business  of  constructing  and  running  a modern air-conditioned  Cinema in  the site  covered by  the permission granted  by the Government. Clause 15 of the said deed provided  that the  site for  construction of  a Cinema which had been obtained on lease by Ved Gupta, Todar Mal and Krishan Kumar in their own names shall not be their personal property, but  shall be the property of the partnership, and that the  permission which  Ved Gupta  had obtained from the Government for  construction of the Theatre in the said plot shall be  treated as  the property  of the partnership. By a subsequent agreement executed by the 14 partners on February 22, 1969,  the name  of the Cinema business was changed from ’Metro Theatre’ to ’Apsara Theatre."      The construction  of the Cinema Theatre appears to have been, completed  by the  middle of  June 1969.  On June  17, 1969, Ved  Gupta submitted  an application  to the  District Magistrate, Jammu,  reporting that  the construction  of the theatre and the installation of the cinema 580 tograph machinery  and  equipment  had  all  been  completed pursuant to  the permission  granted by  the Government  and requesting that the requisite licence for running the Cinema Theatre may  be issued  to him  under the Act and the Rules. Annexure-C is  a copy  of the  said application and it shows that it  was filed  by Ved  Gupta in  his personal  capacity without any  mention whatever therein of the partnership. On July  22,  1969,  a  licence  was  issued  by  the  District Magistrate to  Ved Gupta  under Section 3 of the Act to give public exhibition  of  cinematograph  films  at  the  Apsara Theatre situated at Gandhi Nagar, Jammu.      Annexure-D is  a copy  of the  said licence  and it  is expressly stated  therein that  the said  licence  has  been granted to  Shri Ved Gupta and that it shall remain in force until March  31, 1970,  provided that  Shri Ved Gupta or any person to whom, with the consent of the licensing authority, the licence  is transferred,  continues to own or manage the cinematographs used  ill the said Apsara Theatre. A Schedule of conditions imposing various duties and obligations on the licensee is also appended to the said licence.      On March  31, 1970,  two partners-Todar  Mal  and  Sham Kumar- retired from the partnership. Consequent thereon, the firm was  reconstituted  and  a  new  partnership  deed  was executed by the remaining partners on April 11, 1970, Clause 18 of the said document contained the following recital:           "The licence for running the Cinema, by which      Apsara Theatre  is being run stands in the name of      Shri Ved Gupta s/o Shakur Dass, the 9th party. The      right to  operate the  Cinema licence shall be the      property of  this partnership  and changes  in the      constitution shall  make  no  difference  in  this      respect."      Soon thereafter,  on December  3, 1975,  Todar Mall who had retired from the firm and Krishan Kumar who continued to be a  partner  jointly  issued  a  notice  to  the  District Magistrate, Jammu,  claiming that their names should also be included in  the licence  issued to  Ved Gupta in respect of the Apsara  Theatre.  Subsequently,  on  January  26,  1976, Krishan Kumar  addressed a  communication  to  the  District Magistrate stating  that he  had  not  actually  signed  the notice  sent  on  December  3,  1975,  that  Todar  Mal  had unauthorisedly purported  to send  the notice  on his behalf also without  his knowledge  or consent  and the said notice

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may, therefore, be treated as fictitious. A copy 581 of the  said letter  was sent  by Krishan Kumar to Ved Gupta also. Strangely,  after  the  expiry  of  nearly  two  years thereafter, Krishan  Kumar submitted  an application  to the District Magistrate requesting that the names of himself and of Todar  Mal should  also be  included as  licensees in the licence for  Apsara Theatre,  issued to Ved Gupta. Notice of the said  application was  issued by the District Magistrate to Shri  Ved Gupta  and the District Magistrate conducted an enquiry  at  which  both  sides  were  heard  through  their advocates. After  considering the  arguments advanced before him by the counsel appearing for the contending parties, the District Magistrate  passed a  detailed order dated December 29, 1977,  rejecting the  request of  Todar Mal  and Krishan Kumar and  declaring Shri  Ved Gupta to be the sole licensee authorized to  run the  Apsara Theatre. Thereupon, Todar Mal preferred an  appeal against  the said  order passed  by the District Magistrate. Krishan Kumar was impleaded as a second respondent in that appeal. The Minister of State for Revenue and Law,  Government of  Jammu and Kashmir, heard counsel on both sides  and ultimately dismissed Todar Mal’s appeal by a detailed order, of which Annexure-G is a copy. Todar Mal did not leave  the matter there. He filed a writ petition in the High Court  of Jammu  and Kashmir,  challenging the legality and validity of the orders passed by the District Magistrate and the  appellate authority,  namely, the State Government. Krishan Kumar  was  made  a  party-respondent  in  the  said petition. That  writ petition was dismissed in limine by the High Court  by an  order dated  April 29,  1978. Thereafter, Todar Mal  came up  to this  Court, praying for the grant of special leave  to appeal  (S.L.P. Civil  No. 3490  of  1978) against the  said decision  of the  High Court.  This  Court rejected that Special Leave Petition by order dated November 13, 1978.  Krishan  Kumar  was  a  party-respondent  in  the Special Leave Petition also.      On April  19, 1979. Krishan Kumar addressed a letter to the District  Magistrate, Jammu, requesting that the renewal of the  licence may be granted "in the name of the "premises of Apsara Theatre" The District Magistrate rejected the said request by a detailed order dated April 21, 1979. (Annexure- I)  Before  the  said  order  was  passed  by  the  District Magistrate, an  elaborate hearing appears to have been given by him  to Krishan  Kumar and Ved Gupta represented by their Advocates. It  is seen  from Annexure-I that the contentions advanced before the District Magistrate on behalf of Krishan Kumar were  that even though the licence had originally been issued in  the name  of Ved Gupta, the right of operation of the licence had become the 582 property of  the firm  by virtue of clauses 13 and 18 of the partnership deed  and since Ved Gupta had been expelled from the partnership  and had thereby ceased to be connected with the firm, he did not have the possession of the premises and he was not entitled to claim a renewal of the licence. These contentions were  repelled by  the District  Magistrate  who held that  the renewal  of the  licence could not be made in the name  of any  party other  than the  original  licensee, namely, Shri Ved Gupta, who had been declared to be the sole licensee in respect of the Apsara Theatre by the proceedings of his  predecessor  dated  December  29,  1977,  which  was confirmed in  appeal by  the State  Government and which had acquired finality  between the  parties  by  reason  of  the dismissal  of  the  writ  petition  and  the  Special  Leave Petition by  the High Court and Supreme Court, respectively.

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In March,  1980 the  licence for  the Theatre was renewed by the District Magistrate in the name of Ved Gupta.      On April  27, 1979,  a suit  was instituted against Ved Gupta and  seven others  by seven  of the partners including Krishan Kumar  for a  declaration that  the  Cinema  licence dated July  22, 1969,  issued by  the  District  Magistrate, Jammu (8th  defendant) for  exhibition of  cinematographs in the building  known as  Apsara Theatre, Gandhi Nagar, Jammu, is the  property of  the  firm  Apsara  Theatre  and  for  a prohibitory  injunction   restraining  defendants  1  to  7, namely, Shri  Ved Gupta  and six  of the  partners who  were residing with  him from  interfering with the running of the Cinema  by   the  plaintiffs  and  also  for  a  prohibitory injunction against  the District  Magistrate  (defendant  8) restraining him  from interfering  in any  manner  with  the exhibition  by  the  plaintiffs  of  cinematographs  in  the premises of  Apsara Theatre.  On the date of the institution itself, the  District  Judge,  Jammu,  issued  an  order  of temporary injunction  restraining defendants  1  to  7  from interfering with  the possession  and  the  running  of  the Theatre Apsara  by the  plaintiffs. In being served with the order  of  injunction,  Ved  Gupta  wrote  to  the  District Magistrate  on   September  24,  1980  that  it  had  become impossible for  him to operate the Cinema licence in view of the temporary  injunction issued  by the  District Court and since it  is only the licensee who is held responsible under the Act  and the Rules for due compliance with all the terms and  conditions   of  the  licence  and  answerable  to  the licensing authority for all commissions and omissions in the Cinema premises,  he may  be saved  from any  prosecution or other action  under law  in the  capacity of licensee of the Apsara Theatre  in respect  of any  illegal acts or offences committed by others in the said premises. On 583 September 26,  1980, the  Superintendent  of  Police,  Jammu City, reported  to District  Magistrate that on verification by the  Sub-Inspector deputed  for the  purpose, it had been found that  the cinematographs  were being  conducted in the Apsara Theatre  by persons  other than  the licensee and the Police had  challaned the  licensee under  Section 6  of the Act. The  District Magistrate  was  requested  by  the  said letter that  exhibition of cinematographs in the Theatre may be suspended  till the  final decision  was rendered  by the Court in  favour of  either of  the parties.  Acting on  the aforesaid material  brought  to  his  notice,  the  District Magistrate passed the order (Annexure-J) dated September 26, 1980, directing  that exhibition of cinematographic films in Apsara Theatre  will remain  suspended until further orders. The sole question arising for determination in these appeals concerns the  validity of  the  said  order  passed  by  the District Magistrate and hence, it will be convenient at this stage to reproduce the full text of the order. It reads:           "Whereas it  has been brought to my notice by      Shri Ved Gupta, sole licensee, Apsara Theatre that      the District and Sessions Judge, Jammu, has issued      a temporary  injunction against  the exhibition of      films by him in the above-said Theatre;           And whereas  the S.P.  City by his letter No.      1/Conf. dt.  16.9.80 has  intimated that there was      exhibition of  films on  25th September,  1980, in      Apsara Theatre by persons other than the licensee;           And  whereas  under  the  provisions  of  the      Cinematograph Act,  read with  rules,  none  other      than licensee is permitted to exhibit films during      the currency  of the licence without permission of

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    the licensing authority;           Now, therefore,  I, A. Sahasranaman, District      Magistrate, Jammu, hereby order that exhibition of      films in Apsara Theatre will remain suspended till      further orders.           This  order   shall  come   into  force  with      immediate effect."      On Septembers  29, 1980,  a writ petition-Writ Petition No. 436  of 1980-was  filed in  the High  Court of Jammu and Kashmir by 584 M/g Apsara  Theatre, seeking  to quash  the  aforsaid  order passed by  the District  Magistrate as  being illegal, ultra vires  and   void.  It  was  contended  inter  alia  by  the petitioner that  there had  been a  gross violation  of  the principles of  natural justice  inasmuch as  the petitioner- firm and  its partners  had not  been given  any  notice  or afforded hearing  before  the  impugned  order  was  passed. Another ground  put forward  by the  petitioner was that the District Magistrate  had no  power to  suspend  the  licence under any  of the provisions of the Actor the Rules and that the only  power vested  in the  licensing authority  was  to revoke the licence under Section 6.F of the Act and that too only if  the conditions  precedent  mentioned  in  the  said Section were found to exist. The learned Single Judge of the High Court  Dr. Anand,  J), by  a  well-considered  judgment rejected the  contentions of  the petitioners  and dismissed the writ petition. M/s Apsara Theatre represented by Krishan Kumar preferred a Letters Patent Appeal- L.P.A No. l of 1981 against the  judgment of  the  learned  Single  Judge.  That appeal was  heard by a Division 19 Bench consisting of Mufti Baha-ud-din Farooqi,  Acting Chief  Justice and  Mir, J. The two learned  Judges comprising  the Division Bench, however, came to  divergent conclusions. Mir, J. agreed with the view expressed by  the learned  Single Judge  that  the  District Magistrate had  acted strictly  in accordance  with  law  in passing the  impugned order  and that  the writ petition was devoid of  merit. But,  the Acting  Chief Justice was of the view  that   where  the   licensed  premises  including  the cinematographs used  therein belonged  to a  partnership and one of  the partners  had obtained a licence in his separate name, the  other partners automatically acquired an interest in the  licence. It  was further  held by  The Acting  Chief Justice that  the effect of the licence was that "it renders privilege the  building of  the cinematographs  used therein and the  privilege must necessarily follow the title in such building and  the cinematograph."  on this reasoning, it was held by him that the plaintiff-firm had a legal right in the licence which  entitled it  to notice  and hearing under the Act before  the licence  was suspended,  and inasmuch as the said  procedure  has  not  been  followed  by  the  District Magistrate, the  impugned order was void and in violation of the principles  of natural justice. The learned Acting Chief Justice has  further expressed the view that except only the power of  revocation, embodied in Section 6-F of the Act and an implied  power to  suspend a licence pending the proceed- ings for  such revocation,  the District  Magistrate had  no jurisdiction or  power to suspend the licence of the Theatre under any  other circumstances.  Hence quite  apart from the question of natural 585 justice, the  impugned order  was also  held by  the  Acting Chief Justice  to be one passed without jurisdiction on this ground also.      In view  of the  difference of  opinion between the two

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learned Judges,  the Letters  Patent Appeal  was referred to Kotwal, J.  under Rule  23 (2) of the Jammu and Kashmir High Court Rules, 1975. It may be mentioned at this stage that at that time,  the High Court was functioning with a srength of only four Judges, and excluding the learned Single Judge who heard the  writ petition and the two members of the Division Bench the Acting Chief Justice and Justice who comprised the Division  Bench  which  heard  the  Letters  Patent  Appeal, Kotwal, J.  was the  only other  Judge available in the High Court. Unfortunately,  Kotwal, J  expressed his inability to hear the  Appeal on  the ground  that at  one stage,  he had appeared as  an Advocate  for M/s  Apsara  Theatres  in  the course  of  the  earlier  litigations  between  the  parties concerning substantially  the same  matter. Consequently, it became impossible  for the Letters Patent Appeal being heard by a  third  Judge  designated  by  the  Chief  Justice,  as contemplated by  Rule 23  (2). The  matter  was,  therefore, placed before  the Division  Bench consisting  of the Acting Chief Justice  and Justice  Mir as  M.P. No. 454 of 1981 for consideration of  the question  as to what rule of procedure was applicable.  The learned  Judges took the view that Rule 23 of the Jammu and Kashmir High Court Rules, 1975, squarely covered the  situation that  had arisen before them. Rule 23 is in the following terms:           "23 (1)  In the  event  of  a  difference  of      opinion among  the judges  composing any  bench of      the court,  the decision  shall be  in  accordance      with the opinion of the majority of the Judges.           (2) If  the judges  composing the  bench  are      equally divided on any point, they shall state the      point upon  which they  differ and  the case shall      then be  heard upon  that point  by one or more of      the other Judges designated for the purpose by the      Chief Justice  and such  point  shall  be  decided      according to  the opinion of the majority (if any)      of the  judges who  have heard the case (including      those who first heard it).           (3) If  there is  no such  majority, then the      decision shall  be in accordance with the decision      of the  senior Judge  except in  the  case  of  an      appeal from  a decree  where such  decree shall be      confirmed" 586 In the  opinion of  the Division Bench, the present case was governed by  sub-rule (3) of Rule 23, and, consequently, the decision in  the case  had to  be  in  accordance  with  the opinion of  the senior Judge. Accordingly the Division Bench passed orders  in C.M.P.  No. 454  of 1981  that the Letters Patent Appeal will stand allowed in conformity with the view taken by  the Acting Chief Justice in his judgment. This has resulted in  the highly  anomalous situation that as against the view  concurrently taken  by the  two Judges of the High Court, viz.  Anand, J. and Mir, J. the opinion of the Acting Chief Justice  which was  really the  minority view has been allowed to  prevail on  the basis  of the reasoning that the case was governed by sub-rule (3) of Rule 23.      Aggrieved by  the decision of the High Court, Ved Gupta has filed  these appeals  after obtaining special leave from this Court.  Civil Appeal  No.  2611  of  1981  is  directed against the  judgment of  the learned  Acting Chief  Justice which has  been treated as the final judgment in the Letters Patent Appeal  and Civil  Appeal No. 2611-A of 1981 has been preferred against  the order  passed by  the Division  Bench C.M.P. No. 454 of 1981.      The sole  question raised  in C.M.P.  No. 454  of  1981

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relates to  the legality  and correctness  of the  procedure adopted by  the High  Court in  allowing the  Letter  Patent Appeal in the manner indicated above.      Although we  entertain very  serious doubts  about  the correctness of  the view  taken by the Division Bench of the High Court regarding the applicability of Rule 23 (3) to the instant case, we do not feel called upon to examine the said question in  depth or  to pronounce  upon it in this case in view of the conclusion arrived at by us on the merits of the case that  the conclusions  recorded  by  the  Acting  Chief Justice on the points that arose for decision in the Letters Patent Appeal cannot be legally sustained and that there was no justification for interference by the Division Bench with the judgment  of the  learned Single  Judge, dismissing  the writ petition.      In the,  judgment of  the learned Acting Chief Justice, he has opened the discussion of the merits of the case by an elaborate consideration  of the  question as  to whether the licence in respect of the Apsara Theatre had been granted to Shri Ved Gupta in his individual capacity or as representing the partnership.  In making  this approach  to the case, the learned Acting Chief Justice has 587 wrongly lost sight of certain crucial facts which clinch the issue. Admittedly,  the licence  in respect  of  the  Apsara Theatre was  granted by  the District Magistrate in the sole name of  Ved Gupta  and in  all the  relevant columns of the document of  licence,  Ved  Gupta  has  been  shown  as  the licensee and  there is  no mention at all of the firm or its partners. An  application filed  by Shri Krishan Kumar for a declaration that  the licence  was the  property of the firm and for  inclusion of  his name and that of Todar Mal in the said  licence  as  joint  licensees,  was  rejected  by  the District Magistrate by his order dated December 29, 1977. It was expressly  declared in the said order that Ved Gupta was the sole  licensee and that the mere fact that a partnership had been  entered into  for running  the cinema business did not  mean  that  the  firm  was  the  licensee.  The  Appeal preferred by  Todar Mal  against the  order of  the District Magistrate was  dismissed by  the concerned  Minister of the State Government  on April  26, 1978. Krishan Kumar had been joined as a party respondent in that appeal. The legality of the aforesaid orders was challenged before the High Court of Jammu and  Kashmir in  Writ Petition No. 74 of 1978 filed by Todar Mal. The District Magistrate and the State Government, whose orders  were sought  to  be  quashed,  were  the  main respondents in  this writ  petition. That  writ petition was dismissed by the High Court on May 9, 1978, S.L.P. Civil No. 3490 of  1978 filed  by Todar  Mal against  the High Court’s order dismissing  his writ  petition was  rejected  by  this Court on November 13, 1978. Krishan Kumar was a party to the writ petition  in the  High Court  as well as to the Special Leave Petition  in this  Court: The  declaration made by the District Magistrate that Ved Gupta was the sole licensee and that Krishan  Kumar or  the film  could not  be  treated  as licensees of the Theatre had thus become final.      Subsequent  to  the  dismissal  of  the  Special  Leave Petition by this Court, Krishan Kumar made an application to the District Magistrate on April 19, 1979 for renewal of the licence in  the  name  of  the  firm  Apsara  Theatre.  That application was  dismissed by the District Magistrate as per his order  dated April 21, 1979 that the G renewal could not be made  in the  name of  any party  other than the original licensee, so  long as there had not been any transfer of the licence by  the original  licensee in favour of another with

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the sanction of the licensing authority. No steps were taken by Krishan  Kumar to  challenge the said order passed by the District Magistrate.      From the  facts set out above, it becomes manifest that rightly or  wrongly, the licensing authority had granted the licence in respect 588 of the  Apsara Theatre to Ved Gupta treating him as the sole licensee. The order of the licensing authority was confirmed on appeal  by the  State Government. The challenge raised by Todar Mal  against the refusal by the District Magistrate to include the  names of  himself  and  Krishan  Kumar  in  the licence was  rejected by  the High  Court as well as by this Court. The  renewal of the licence was subsequently given to Ved Gupta  after rejecting  the prayer  of Krishan  Kumar as representative of  the firm  for the grant of the renewal in the name  of the  firm. Hence the factual situation was that the licence granted by the District Magistrate in favour the Apsara Theatre  was in favour of Ved Gupta in his individual capacity and he alone was the licensee. Such being the case, we are,  unable to  appreciate why  the learned Acting Chief Justice has devoted a considerable part of his judgment to a discussion of  the aforesaid  question  as  to  whether  the licence belonged  to Ved  Gupta alone  or whether it was the property of  the firm.  In the view of the preceding factual history  of  the  case,  there  was  no  scope  in  law  for countenancing any contention being advanced on behalf of the firm that  Ved Gupta  had obtained  the licence and had been holding the  same for  and on  behalf of the partnership. In proceedings to which the licensing authority was a party the High Court  as well  as this  Court  had  upheld  its  order holding Ved Gupta to be the sole licensee rejecting the case put forward  on behalf  of the  firm and  the firm  and  its partners are  bound by  the said  decision. In this view, we consider it  wholly unnecessary  to deal  with  the  reasons stated by the learned Acting Chief Justice in support of his conclusion that  the licence was granted to Ved Gupta in his individual capacity  as representing  the partnership. It is sufficient to  state that  these reasons do not appeal to us as correct or tenable.      We are  also unable  to  accept  as  correct  the  view expressed by the learned Acting Chief Justice that under the Act the licence is granted for premises permanently equipped for cinematograph  exhibition in  the  name  of  the  owner/ Manager of the Cinematographs used in the premises and hence it necessarily  follows that  where  the  licensed  premises including  the  cinematograph  used  therein  belongs  to  a partnership and one of the partners obtains a licence in his separate name,  the  other  partners  automatically  acquire interests in  the licence  and that the privilege granted by the licensing  authority "must  necessarily follow the title in such  building and  the cinematograph". An examination of the relevant  provisions of  the Act  and  the  Rules  shows beyond doubt that they contemplate the grant of a licence to a person  in respect  of  a  "place"  where  cinematographic apparatus have been 589 installed. Under  the Rules  and the terms and conditions of the licence, the grantee thereof is the person answerable to the licensing  authority for  breach of  the obligations and conditions and  he is  also punishable  for contravention of the provisions  of the  Act and  the Rules.  We are  of  the opinion that on a reading of the provisions contained in the Act and  the Rules  and the  explicit terms  of the  licence itself, it  is impossible  to sustain  the view expressed in

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the judgment  under appeal  that the  licence is a grant for the premises  and constitutes  an interest  attached to  the premises. The  analogy drawn  by The  learned  Acting  Chief Justice with  licence in the realm of real property law is a meaningless exercise  for the  licence granted under the Act is almost in all respects a completely different concept. It is, therefore,  not possible to uphold the view expressed in the impugned  judgment that  "the effect  of the  licence is that  it   renders   privileged   the   building   and   the cinematograph used  therein" and  that "the  privilege  must necessarily follow  the  title  in  such  building  and  the cinematograph". Section  6-F  has  been  relied  on  by  the learned Acting  Chief Justice  as  lending  support  to  the aforesaid view  expressed by  him. That  Section is  in  the following terms:           "6-F.  Power   to  revoke  licence-Where  the      holder of  a licence  or a  person in  charge of a      cinematography, or  management thereof or an owner      or partner  thereof or  an- employee  thereof, has      been convicted  of an  offence under  Section 6 or      Section 6-E  of this  Act, or  under Section 15 of      the Jammu  and Kashmir  Entertainments  Duty  Act,      1959, the  licence may be revoked by the licensing      authority." On a  careful reading  of this Section, it will be seen that far from  supporting the  view taken  by the  learned Acting Chief Justice,  this provision  goes to show that the holder of a licence may be a person different from the owner of the cinematograph or a partner of the cinematography. The object and purpose  of this  Section obviously  is to  empower  the licensing authority  to revoke  the licence  in the event of the commission  of an offence under Section 6 or Section 6-E of the  Act, not  merely by  the licensee  but also  by  any person who  may be  in actual  charge of a cinematography or management of  the cinematograph.  In other words, a licence is liable  to be  revoked not  merely when  the licensee  is convicted of  an offence  under Section  6 or Section 6-E of the Act  but also in the event of conviction of such offence of any person belonging to the class of persons other 590 than the  licensee enumerated therein. The provisions of the Section contain  a clear  indication that  the holder of the licence (licensee)  may be a person different from the owner or manager or partner of the cinematograph.      In the  light of  the foregoing  discussion, we have no hesitation to  hold that  the view  expressed by the learned Single Judge that Ved Gupta was a sole licensee and that the firm had  no interest  in the  licence was perfectly correct and sound  and the  contrary view taken by the learned Chief Justice is erroneous.      The next  ground stated  in the  impugned judgment  for quashing the order passed by the District Magistrate is that the said  order was  violative of  the principles of natural justice in as much as no notice or hearing had been given to the partnership-firm  before  the  order  was  passed.  This finding is based largely, if not wholly, on the premise that the firm  of partners  had derived  a "right and interest in the licence"  and that  "the revocation or suspension of the licence  has   the  potential  of  seriously  affecting  the proprietary and  business interests  of the partnership". We have already  recorded our conclusion that Ved Gupta was the sole licensee in respect of the Theatre and that the firm of partnership could  not be  regarded either  as licensees  or persons having an interest in the licence. Hence, it becomes obvious that  the basic  premise on which the learned Acting

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Chief Justice  has founded  his reasoning cannot be accepted as correct  or sound.  While the  firm and  the partners may have a  right to  share in the profits of the business which may be  conducted in  the Theatre on the strength of licence issued to  Ved Gupta,  they have no right or interest in the licence which  was granted  to Ved Gupta in his personal and individual capacity.  In this  connection, it is relevant to refer to Rule 88(v). That Rule reads:           "88(v). The  licensee shall  not, without the      permission of  the  licensing  authority,  assign,      sublet or  otherwise transfer  the licence  or the      licensed place  or the cinematograph nor shall the      licensee, without  permission as  aforesaid, allow      any other  person during the period of currency of      the licence  to exhibit  the films in the licensed      place.’: Clause 11  of the  licence issued  to Ved  Gupta (in  Form A prescribed  under   the  Rules)  incorporates  in  identical language the  provision  aforementioned  contained  in  Rule 88(v) as  one of the conditions subject to which the licence was granted. There was, thus, a clear 591 prohibition  against   the   licensee   from   transferring, assigning, subletting  or otherwise transferring the licence without the  permission of  the licensing authority and also against his  allowing any  other person  to exhibit films in the licensed  place without obtaining such permission. Thus, the right  to conduct  the exhibition  of the  cinematograph films in  the Theatre was vested solely in Ved Gupta, Gupta, the licensee.  It is  now relevant  to recall  that what has happened in  this case  is that  in a  suit filed by Krishan Kumar along  with 11  other partners,  an order of temporary injunction was issued on September 23, 1980, restraining Ved Gupta from interfering in any manner with the running of the Theatre by  the plaintiffs. The effect of the order was that Ved Gupta  had no  longer possession  or  control  over  the Theatre premises  or the  cinematograph apparatus  installed therein  despite   the  fact   that  the  was  the  licensee responsible to the authorities under the statute for the due discharge of  the obligations  contained in the Rules and in the   conditions    appended   to    the   licence.    Quite understandably, Ved  Gupta,  on  receipt  of  the  order  of temporary injunction,  informed the  District Magistrate  by his letter dated September 24, 1980, that as a result of the order of  temporary injunction, it had become impossible for him, for  the time being, to operate the cinema licence with effect from  the date  of the said letter and that he may be absolved from  any liability  for prosecution  or any  other action in law in the capacity of the licensee of the Theatre in the  event of  any illegal act or offence being committed by others in the Cinema premises. On September 26, 1980, the Superintendent of  Police, Jammu,  reported to  the District District Magistrate that cinema exhibition in Apsara Theatre was being conducted by some persons other than the licensee, and, hence  the licensee  had been  challenged by  him under Section 6  of the Act. The District Magistrate was requested by the  said letter that orders may be passed suspending the exhibition of films in the Cinema till the final decision of the court is made in favour of either of the parties. It was in the  context of  these  developments  that  the  District Magistrate passed  the impugned  order dated  September, 26, 1980. A  mere reading  of the District Magistrate’s order is sufficient to  show that what was done thereudder was not to suspend or  revoke even  temporarily the  licence granted in respect of  the Theatre.  What  was  done  by  the  District

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Magistrate  was   only  to   suspend   the   exhibition   of cinematograph films in Apsara Theatre by persons who are not licensees and  who had  no authority  in law to conduct such exhibition of  films. There was no suspension of the licence issued to  Ved Gupta  in respect  of the Theatre. Hence, the assumption made  by the learned Acting Chief that this was a case of temporary sus- 592 pension of  the licence issued for the Theatre is manifestly erroneous. The  firm of  partners had  no right  whatever to exhibit  cinematograph   films  in  the  Theatre  without  a licence. If  Ved Gupta, the licensee, bad been expelled from the partnership, the proper course to be adopted by the firm and its  partners was  to move the authorities for the grant of a  licence and  to run  the Theatre  only after obtaining such licence. So long as they did not have a licence-we have already found that the licence had been granted to Ved Gupta only in  his individual  and personal  capacity and not as a representative of  the firm-the firm and the partners had no legal  right  whatever  to  operate  the  cinema.  Any  such operation by  them  would  have  been  in  clear  and  gross contravention of the law embodied if the relevant provisions of the  Act and  the Rules.  It was  the plain  duty of  the District Magistrate  as the statutory authority charged with the enforcement  of the provisions of the Act to ensure that exhibition of  films was  not conducted  in the  ’Theatre by unauthorized persons  in violation  of the law. The impugned order is obviously one passed by him in the discharge of the said function.  No legal  right or legitimate expectation of the firm  or its  partners can be said to have been affected by the said order passed by the District Magistrate, for the simple reason  that no  person can be recognised as having a right  to   contravene  the   provisions  of   the   statute prohibiting exhibition  of cinematograph  films in public by any  one   other  than   the  licensee   or  his  authorised representative. The  principles of  natural justice  are not attracted to such a situation and there was no obligation on the part  of the  District Magistrate  to give  a notice  or hearing to  the firm  or its  partners before  he passed the impugned order.  The position  would, of  course, have  been different if  it was  a case of even temporary suspension of the licence  without notice  to the  licensee However, as we have explained,  this is  not a  case of  suspension of  the licence and  the complainant  before the  court is  not  the licensee. The writ-petitioners  before the  High Court  were some of  the partners  of the  firm who  wanted to  run  the Theatre without a licence in contravention of the provisions of the  Act and  the Rules  The impugned order passed by the District Magistrate directing the suspension of cinema shows in the  Theatre cannot  be said  to have  visited the  writ- petitioners with any adverse civil consequences. They had no legal right  whatever to  conduct the  cinema shows  in  the Theatre without  a licence  in contravention of the law. The writ-petitioners  could   not  also   have  any   legitimate expectation that  they will  be allowed  to run  the Theatre without a  licence in  violation of the law.  In the absence of any legal right or legitimate expectation being 593 available to the petitioners, there was no obligation on the part of  the District  Magistrate to  afford them  a hearing before passing the impugned order. We are, therefore, unable to uphold the view taken by the High Court that the impugned order was violative of principles of natural justice.      The only  other reason  stated by  the High  Court  for quashing  the   District  Magistrate’s  order  is  that  the

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District Magistrate  had no power under the Act or the Rules to make such an order. This conclusion is again based on the fallacious assumption  that what  was done  by the  District Magistrate under  the impugned  order  was  to  suspend  the licence. Proceeding  on that  premise,  the  learned  Acting Chief Justice  has said that under the provisions of the Act the power  to suspend a licence is conferred only by Section 6-F of  the Act  as one  implicit in  the  larger  power  of revocation and  unless the conditions precedent mentioned in the said Section are present, the licensing authority had no jurisdiction to  suspend the licence. As already observed by us, the  impugned order  is not  one suspending  the licence issued in  respect of  the Theatre. What was done thereunder is to  suspend the  exhibition cinematograph  films  in  the Theatre by  persons other  than the  licensee. The  power to control the exhibition of cinematography by grant of licence and the  power to  administer and  enforce the provisions of the Act  and the Rules clearly include the power to take all steps necessary to ensure the due observance of the terms of the statute,  the rules and the conditions of the licence as otherwise the  competent authority  under the Act would have to be  a helpless  spectator when  cinematograph  films  are publicly exhibited  by persons  other than the licensee. The impugned order  is one  obviously  passed  by  the  District Magistrate in  the exercise of his function of administering the provision  of the  Act and  the Rules  and the aforesaid implied power  to take  all incidental  steps necessary  for effective enforcement  of the statute. We fail to see how it can be  said on the facts and circumstances of the case that the District  Magistrate had  no jurisdiction  to  pass  the impugned order.      It this becomes manifest that all the grounds stated by the Division  Bench of  the High  Court  for  upsetting  the judgment of  the learned  Single Judge,  dismissing the writ petition, are  incorrect an  unsustainable in  law. Hence it was that  we passed  the  order  dated  November  11,  1982, allowing Civil Appeal No. 2611 of 1981 and setting aside the judgment of the Division Bench.      Civil Appeal  No. 261  l-A of  1981, which  is directed against the  order passed  in C.M.P.  No. 454  of  1981?  is disposed of as infructuous 594 in view of our having set aside the judgment of the Division Bench on the merits.      We make it clear that the inter se rights and claims of Shri Ved Gupta on the one hand and the firm and its partners on the  other in respect of the Apsara Theatre are left open to be decided in the civil suit that is said to be pending. H.L.C.                                       Appeal allowed. 595