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PETITIONER: N. S. SHETHNA

       Vs.

RESPONDENT: VINUBHAI HARILAL PANCHAL

DATE OF JUDGMENT: 25/08/1966

BENCH: SHELAT, J.M. BENCH: SHELAT, J.M. RAO, K. SUBBA (CJ)

CITATION:  1967 AIR 1036            1967 SCR  (1) 574

ACT: Bombay Cinema (Regulation) Act 1953 and Bombay Cinema  Rules 1954-Licence  for exhibiting films and licence  for  selling tickets  renewable from year to year-Contravention of  Rules in  one year--Whether renewed licence for next year  can  be suspended.

HEADNOTE: The respondent carried on the business of exhibiting  cinema to  graphic pictures a Ahmedabad.  Under the  Bombay  Cinema Rules  1954 framed under the Bombay Cinema (Regulation)  Act 1953 such business could be carried on only under a  licence renewable from year to year.  The respondent held a  licence for the year 1960.  On June, 1960 a notice was served on him requiring  him to show cause why his licence should  not  be suspended  for contraventions of the Rules.  An enquiry  was instituted  in  this connection.  On December 31,  1960  the licence  issued to the respondent for the year 1960  expired and an endorsement renewing it for the next year i.e.,  1961 was made on the same date.  Subsequently as it result of the aforesaid  enquiry  the  first  appellant  passed  an  order suspending the respondent’s licence for two months from  the date  of service of the order.  The service was effected  on March 5, 1961.  Aggrieved by this order the respondent filed a  writ  petition  in the High  Court.   The,  petition  was allowed,  the  High Court faking the view that  the  renewed licence  was a ’separate licence and not in continuation  of the licence for 1960 and therefore the renewed licence could not  be  suspended without a fresh show cause  notice.   The appellants came to this Court with certificate. HELD  : Ile fact that under the Bombay Cinema Rules  renewal is  not  a  matter of course, the fact  that  the  licensing authority can in proper circumstances refuse an  application for  renewal  and is not precluded from  imposing  different conditions  and can grant it for a different period  coupled with   the  absence  of  any  Rules  for  renewal  are   all indications  leading to the result that renewal is  a  fresh grant  and  is  not  merely  continuation  of  the   licence previously issued.  The High Court was therefore correct  in allowing  the writ petition on -a conclusion that  the  show cause,  notice  relating to the licence for  the  year  1960 could  not be regarded as a show cause notice in respect  of

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the renewal for the next year and if the renewed licence was sought  to  be affected in the enquiry a  fresh  show  cause notice  relating to the renewed licence was necessary.  [180 B-D] V.C.K.   Bus   Service  Ltd.  v.  The   Regional   Transport Authorities  [1957]  S.C.R. 663 and Anish v.  R.T.S.  [1956] Andhra Law Times, 347,. referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 580 of 1964. Appeal  from the judgment and order dated April 3,  1961  of the Gujarat High Court in Special Civil Application No.  146 of 1961. 175 N. S. Bindra and B.R. G. R. Achar, for the appellant. S.  T.  Desai,  G. I Sanghi, and B. R.  Agarivala,  for  the respondent. The Judgment of the Court was delivered by Shelat,  J. This appeal by certificate is  directed  against the judgment and order of the High-Court of Gujarat quashing the  order  of suspension of a licence for  sale  of  cinema tickets passed by the first appellant on February, 28, 1961. At  all  material times the respondent was carrying  on  and still carries on the business of exhibiting  cinematographic picture  Lakshmi Talkies in Ahmedabad and had  obtained  for that  purpose a licence for sale of tickets which was  valid upto  December 31, 1960.  On an allegation that through  his manager  and  other employees he was indulging  in  safe  of tickets  contrary  to the Bombay Cinema Rules,  1954  framed under  the  Bombay  Cinema (Regulation) Act, XX  of  1953  a notice  dated  June 14, 1960 was served upon  .him  to  show cause  why the said licence should not be suspended.  On  an inquiry  having  been  held by  the  first  appellant,  that officer  passed  the  impeached order  suspending  the  said licence for a period of two months from the date of  service of the order.  But before the inquiry was completed and  the said  order  passed, the period for which  the  licence  was issued  expired and an order renewing it for the next  year, that  in  1961,  was  passed  on  December  31,  1960.   The impugned’  order  was served on the respondent on  March  5, 1961. Aggrieved  by  the said order the licensee took out  a  writ petition in the High Court for setting aside the said order. The  plea  urged  in the petition was that  the  show  cause notice  related  to  the licence for  the  year  1960  which expired  on December 31, 1960 and therefore did  not  affect the  renewed licence for 1961 sought to be suspended by  the impugned  order.   The  High Court took the  view  that  the renewed  licence was a separate licence and not in  continu- ation  of  the licence for the year 1960 and  a  fresh  show cause  notice ought to have been served for  Suspending  the renewed  licence and that not having been done  the  inquiry was not in consonance with the rules and quashed the order. The  question  arising  in this appeal  is  whether  on  the licence issued for the year 1960 having been renewed for the next  year  the renewed licence was in continuation  of  the licence previously issued and whether the show cause  notice issued  in  relation  to  the  original  licence  would   be sufficient and relate to the renewed licence also.   Chapter VII and Chapter VIII of the said rules deal with the licence called  the  cinema  licence and the  licence  for  sale  of tickets.   Rule  101 in Chapter VII provides that  no  place shall  be  opened  or allowed to remain open for  use  as  a

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cinema unless 176 the  person being the owner, tenant or occupier thereof  has obtained  a  cinema  licence  therefor.   This  licence   is obviously    for   opening   a   cinema    for    exhibiting cinematographic  films.  That is clear from the language  of Rule  102  which  requires that certain  documents  set  out therein  have to accompany an application for this  licence. Rules  103 and 104 confer power on the  Licensing  Authority either  to grant or refuse to grant the licence.   Rule  106 provides  for the period of such a cinema licence and  under that Rule the maximum period is one year.  Rule 107  confers power  on the licensing Authority to renew a cinema  licence and provides that an application in the manner laid down  in Rule  102  has  to  be made except  that  it  would  not  be necessary  in  such  an application for  renewal  to  attach copies  of  a  no objection certificate  or  of  a  Building permission issued under Rules 6 and 93.  Rule 108 lays  down fees for the cinema licence and its renewal and the fees for both  are  the same.  Chapter VIII inter alia deals  with  a licence  for  sale  of tickets.  Rule 11C lays  down  a  ban against  selling, keeping, offering or exposing for sale  or causing  to be sold, kept or exposed for sale any ticket  of admission,  pass  or  any other evidence  of  the  right  of admission  to  any cinema without having  first  obtained  a licence  for the same from the Licensing  Authority.   Under that  Rule a licence for sale of tickets etc., has to be  in Form  "F" attached to the Rules.  Rules Ill and 112  provide that  the  tickets have to be sold at the  licensed  booking office  and require the prices and the hours of sale  to  be notified on a board.  Rule 113 provides that such prices are to be printedon the tickets.  Under Rule 114 such  alicensee has  to  maintain accurate sets of records showing  sale  of tickets and their rates and is required also to produce them for  inspection by a police officer of the  specified  rank. Obviously  these Rules are intended to prevent the  mischief of black-marketing in cinema tickets.  Rule 116 provides for fees  to  be  levied for a licence granted under  R.  I  10. There is no separate Rule or provision in this Chapter for a renewal  of  this licence ,except that R. 110  as  aforesaid provides  that the licence will be in form F. Form E is  the form of a cinema licence issued under R. 102 while form F is the form of a licence for sale of tickets issued under R.  1 10.  Clauses 3 and 4 of form F are as follows:-               "3.    This    licence    is    valid     till               the............day  of.....  19 and a  fee  of               Rs.......... due for the same has been paid by               the Licensee.               4. This licence is granted or renewed  subject               to  the provisions of the Bombay Cinema  Rules               1953   and  is  liable  to  be  suspended   or               cancelled for breach of any of the  provisions               of  the  said  Rules, and any  breach  of  the               provisions  of  the said Rules  is  punishable               under the provisions of section 7 of the Act." 177 Thus  there  is no separate rule  or  provision  ’conferring power  to renew.  There is also no provision in these  Rules laying  down  procedure  for renewal or for  fees  for  such renewal or the conditions on which it may be granted  except the  insertion in cl. 4 of the word "  renewed"  which  only suggests that a renewal is competent.  Rule 131 provides for suspension  or cancellation of a licence and lays down  that the  Licensing Authority may suspend or cancel  any  licence granted under these Rules for contravention of any of  these

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Rules, provided that the Licensing Authority shall give  the licensee  an  opportunity to show cause  before  taking  any action under this sub-rule. The  contention urged by Mr. Bindra on behalf of the  appel- lant  was that the High Court was in error in  holding  that the show cause notice did not relate to the renewed  licence and  that the renewed licence was a separate and a  distinct licence  from the licence previously granted.  According  to him  on  a proper interpretation of the  Rules  the  renewed licence is a continuation of the licence previously granted, that the effect of a renewal is merely to extend the term of the  licence but that in essence both are one and the  same. Therefore,  said  he, the show cause  notice  though  issued before  the  term of the original licence  had  expired  and though it mentioned that licence, suspension of the  licence proposed  therein  must affect the renewed  licence  if  the licence   previously  granted  were  to  be   cancelled   or suspended.  The renewed licence being only for extending the period  of the licence previously granted, both are one  and the  same  and  if  the original  licence  is  suspended  or cancelled the renewal also must be affected.  The suspension of  the licence is a condition subsequent on the  occurrence of  which the licence would be suspended even if it  happens during  the  renewed period.  Mr. Desai on  the  other  hand argued that suspension can only affect a licence during  the period  for which it is granted and not during a  subsequent period and that a renewal granted under Chapter VIII is  not a  continuation of the licence previously granted.  He  also argued that the words "renewed" and "renewal" should not  be construed  as  carrying  the same meaning  in  case  of  all licences  issued  under different enactments  and  that  the meaning  of these words would depend on the scheme  and  the provisions  of each statute.  Construed in the light of  the present  Rules a renewal must mean not a continuation but  a separate grant. We now proceed to examine the validity of these contentions. The  Rules relating to the licence for sale of tickets  pro- vide  as aforesaid that the maximum period for which such  a licence can be issued is one year.  Renewal of a licence  is provided  for but only indirectly and in a sort of  an  off- hand manner by cl. 4 of Form F. It appears therefrom that  a licencee has to produce his licence, pay the renewal fee and get entries made 178 on  it  reverse as to the date of renewal, the  period  upto which it would be valid on such renewal and the fees  having been  paid therefore.  Since the Rules do not provide as  to how  much are the fees for renewal it must be presumed  that the fees are the same as for the licence itself It is  clear from  the  Rules that they do not contain anything  to  show that  the renewed licence is a continuation of  the  licence previously issued except the fact that the Authority has  to make  the said entries on the reverse of the  licence.   The fact  that the Rules do not make any provision forthe  power to renew, the procedure for renewal and for its fees .as  is done  in Chapter VI in the case of a cinema licence  is  all indication  that the draftsman equated renewal of a  licence with  the  issuance of a licence.  It may also  be  observed that  it  is  not as if renewal is automatic nor  is  to  be granted  as a matter of Course.  If the Licensing  Authority desires  to impose any fresh conditions there is nothing  in the  Rules to prevent him from doing so.  That being  so,  a renewal  cannot, unless the context requires  otherwise,  be regarded as a continuation of the licence previously issued. There  is  also  nothing  in  Chapter  VIII  or  in  Form  F

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indicating that the renewal is such a continuation. Mr.  Bindra  however argued that such a  construction  would result in nullifying the effect of all order of cancellation or  suspension  for  it  is  hardly  to  be  expected   that proceedings  for such a punishment can be  completed  during the  period of the licence, the maximum duration for such  a licence  being one year only.  In the first place we do  not see  how such a consequence must follow.  The procedure  for an  action under R. 131 is not an claborate one which  would make  an inquiry thereunder a prolonged one.  In the  second place, unless the Rules are found to be ambiguous we do  not see how a particular consequnce call affect the construction of the Rules.  On the other hand if we were to treat renewal as continuation of the licence previously granted in a  case where a licence is renewed from year to year- as it would be in a large number of cases, even if a licensee has committed breach  of  one  of the conditions of  the  licence  in  any particular  year,  action against him can be  taken  in  any subsequent  year  and  his licence would  be  liable  to  be cancelled or suspended during any such Subsequent year for a breach  committed  by him several years ago.  That  in  some cases  penalty  by way of suspension might be  nullified  by reason  of  expiry of the period of the  licence  cannot  be allowed   to   affect  the  interpretation  of   plain   and unambiguous words in a statute or a rule. In support of his contention that a renewal is no more  than a continuation of the licence previously granted, Mr. Bindra heavily leaned on the decision in V. C. K. Bus Service  Ltd. v.  The  Regional Transport Authority.(1) Ill  that  case  a permit for stage carriage was (1) [1957] S.C.R. 663. 179 granted to the appellant under the Motor Vehicles Act, 1939. The appellate authority at the instance of the  unsuccessful applicant  set  aside  that  order  and  the  government  in revision  approved the order of the appellate authority  and dismissed  the revision.  The appellant then moved the  High Court  by  a writ petition and during the pendency  of  that petition  the High Court stayed the order, with  the  result that  the appellant could run his buses notwithstanding  the cancellation  of the order granting him the permit.  In  the meantime the period fixed Linder that permit expired and the appellant applied for and got a renewal of the permit  under sec. 58(2) of the Act.  The High Court ultimately  dismissed the  writ  petition.  The question arose is to  whether  the renewal was a continuation of the permit previously  granted and  whether such renewal went away along with the  original permit  on  its  cancellation.  This  Court  held  that  the renewal was a continuation of the previously granted  permit and  not a fresh grant and the cancellation of the  original permit  resulted  in the cancellation of the  renewal  also. The argument urged on behalf of the appellant was that under the  Act  an application for renewal had to  be  dealt  with exactly  in  the  same manner as an application  for  a  new permit,  that  when  renewal  was  granted  it  was  on   an Independent consideration of the merits and further that the granting  of  renewal  was not a matter  of  right  for  the authorities would be acting within their power if they  were to refuse an application for renewal. It was also  contended that  though  in  the case of a  lease  renewal  might  mean continuation  of the lease for a further period on the  same terms and conditions contained in the lease and therefore  a renewed lease would be treated as extension of the  original lease  that consideration was not available in the  case  of renewal  of  a  licence  as it was  open  to  the  Licensing

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Authority  to  impose new conditions, to  alter  the  period during  which it was to operate and generally to modify  its terms.   Therefore,  the use of the word renewal  would  not lead  to an inference that it was the original permit  which was  being  continued.  It is  noteworthy  that  Venkatarama Ayyar  J. who spoke for the Court said that there was  force in those contentions.  But lie did not sustain them  because in the context of s. 58 and the Rules made under the Act and in  particular Rule 185 the conclusion that renewal in  that case was continuation of the original permit was inevitable. In dealing with the reasoning in Anish v. R. T. S. Guntur(1) which was relied on and in which a contrary view was  taken, the  learned  Judge  again observed at p.  673  that  "these considerations  though  not  without force  cannot,  in  our opinion,  outweigh the inference to be drawn from the  other provisions to which we have made reference............ It is thus clear that the decision did not lay down a general rule that renewal in all cases must mean, (1)  (1946) Andhra Law Times, 347. 180 continuation of the grant previously made but was rested  on the language of the provisions of the Motor Vehicles Act and the Rules made thereunder.  As already observed there are no such  Rules in the Bombay Cinema Rules, 1954 which led  this Court to the conclusion in that case that the renewed permit for stage carriage was continuation of the permit previously granted  and  therefore this decision would not  assist  the appellant. In our view the fact that renewal is not a matter of course, the  fact  that  the  licensing  authority  can  in   proper circumstances  refuse an application for renewal and is  not precluded  from imposing different conditions and can  grant it  for a different period coupled with the absence  of  any Rules for renewal are all indications leading to the  result that renewal is a fresh grant and is not merely continuation of  the  licence  previously issued.   The  High  Court  was therefore  correct  in  allowing  the  writ  petition  on  a conclusion  that  the  show cause  notice  relating  to  the licence  for the year 1960 could not be regarded as  a  show cause notice in respect of the renewal for the next year and if  the  renewed licence was sought to be  affected  in  the inquiry  a fresh show cause notice relating to  the  renewed licence was necessary. In the result, the appeal fails and is dismissed with costs.      G.C.                         Appeal dismissed. 181