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PETITIONER: STATE OF  U.P. AND ANR.

       Vs.

RESPONDENT: RAJA RAM JAISWAL AND ANR-

DATE OF JUDGMENT29/04/1985

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

CITATION:  1985 AIR 1108            1985 SCR  (3)1021  1985 SCC  (3) 131        1985 SCALE  (1)1248

ACT:      Constitution  of   India  1950,  Article  226  Writ  of Mandamus-Issuance  of-To   statutory   authority   under   a licensing statute to grant a licence-Whether permissible.      U.P. Cinema  (Regulation) Act, 1955, sections 3 and 5 & U.P. Cinematograph Rules 1951 Rules 3 and 7.      Licence for  location and  construction of Cinema under Rule 3-Licence  for exhibition  of films  in cinema building under section 3-Grant of-Determination of ’public interest’- Stages of consideration-Explained.      Administrative   Law    Licensing   powers-Indisputable adjunct of  controlled  economy-Exercise  in  oppressive  or arbitrary  manner-Avoidance   of-Vigilance  ,   by   courts- Necessity of.      Construction  of   Cinema  theatre-Grant   of  licence- Objection of  Hindi  Sahitya  Sammelan-Refusal  of  Licence- Whether Justified.

HEADNOTE:      The respondent desired to construct a cinema theatre on a plot  of land. He submitted an application under Rule 3 of the  U.P.   Cinematograph  Rules   1951  to   the   District Magistrate,  for  obtaining  a  certificate  signifying  his approval of  the site  selected for constructing a permanent building  to  be  used  for  cinematograph  exhibition.  The District Magistrate  as the  licensing  Authority  issued  a public notice  specifying the  request of the respondent for grant  of   a  certificate   and  calling   objections.   An organisation  called   the  Hindi   Sahitya  Sammelan  alone submitted its  objection, The  District Magistrate  referred the application  of the  respondent to the State Government, which directed  the District Magistrate to carefully examine the matter.  The District Magistrate was of the opinion that the  Sammelan  can  neither  be  styled  as  an  educational institution  nor   a  residential   institution  within  the contemplation or  Rule 7(2)(b) because it was an institution wedded to and working for the propagation of Hindi language, and even though it may provide some research facility on its campus it  has no  regular programme  of class teaching, and that having regard to all the 1022 relevant  circumstances,   the  construction   of  a  cinema

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building  at  the  proposed  site  was  not  against  public interest. On  the  contrary,  it  was  held  that  a  modern beautiful fully  air-conditioned cinema  building apart from adding to  the beautification  of the  city would enrich the coffers of  the State exchequer in the form of entertainment tax.  The   District  Magistrate   granted  the  certificate informed the  respondent that construction of a cinema house and be  completed within  two years  from the  date  of  the issuance of  the  order.  Chagrined  by  the  grant  of  the certificate, the  Sammelan initiated  action for acquisition of the  plot  over  which  the  cinema  building  was  being constructed, should  under the  Land  Acquisition  Act.  The respondent successfully  assailed the  acquisition order  in the High Court.      In the meantime as the period of two years specified in the certificate issued under Rule 3 was about to expire, the respondent moved  an application  for extension  of time for completion of  the  construction  of  cinema  building,  and during the  pendency of  this application,  the building was completed.      The respondent  made an  application under section 3 of the U.P.  Cinema (Regulation)  Act, 1955  for a  licence  to exhibit  films   in  the   cinema  building.   The  District Magistrate refused  to grant  the  licence.  The  respondent preferred an   appeal under Sec. 5(3) of the 1955 Act to the State Government,  which allowed the appeal and remitted the matter to  the District  Magistrate with  a direction to re- examine the grounds on which he had refused to grant licence to run  the cinema  in accordance  with the  rules and  pass suitable and  legal order  after giving  an  opportunity  of hearing.      Against the  aforesaid order  of remand  the respondent filed a  Writ Petition  in the  High Court.A  Division Bench held that  even though  the order under challenge was one of remand, as  the respondent  has  journeyed  to  and  fro  on numerous occasions,  it was  necessary  to  dispose  of  the petition  on   merits,  and   held  that  while  granting  a certificate under  Rule 3  of the 1951 Rules, it was open to the licensing  authority to  take into consideration whether it would  be in   public  interest to  grant  the  necessary certificate or  to refuse  the same,  but after the grant of certificate when a full-fledged cinema building comes up and is shown  to comply with the relevant rules and regulations, cinematograph  licence   cannot  be  refused  on  the  vague consideration that  it would  not be  in public  interest to grant the  licence. It  was also  held that  the failure  to complete the  construction of the cinema building within the prescribed time, if properly explained would not be a ground to refuse the cinematograph licence, more so  because  the requirement  of rule 3(3) is directory and not mandatory. The High Court accordingly made the rule absolute and in modification of the order of the State Government, it directed  the  District  Magistrate-Licensing  Authority  to forthwith grant  to the  petitioner  the  requisite  licence subject to reasonable condition and restrictions.      In the  appeal to this Court it was contended on behalf of the  appellant state  that the scheme o f the U.P. Cinema (Regulation) Act, 1955 and the U.P. 1023 Cinematograph Rules 1951 reveal that the licensing authority has to  take into  consideration public interest both at the time of  granting a  certificate of approval as contemplated by Rule  3 as  also public  interest while granting a cinema licence under  Sec. 3  read with  See. 5,  and that the High Court was  in error  in holding  that one  while granting  a

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certificate of  approval under  Rule 3,  public interest has been taken  into consideration.  The question  of  examining whether such  building should  be licensed for exhibition of cinematograph does not call for a re-examination whether the grant is  not otherwise  contrary to public interest. Public interest cannot be fitted into a straight jacket formula and what  relevant   considerations  would   constitute   public interest at  the time  of granting a certificate of approval under Rule 3 may materially vary or differ from the relevant considerations which  may constitute  public interest  while licensing  the   cinema  theatre   for   exhibition   of   a cinematograph under See. 3.      Dismissing the appeal, ^      HELD: 1 The High Court was, clearly in error in issuing a mandamus  directing the  District Magistrate  to  grant  a licence. The  High Court was hearing a Writ Petition praying for a  Writ of Certiorari for quashing the order of removal. The High Court should have quashed the order of remand if it was satisfied  that the  order  of  suffers  from  an  error apparent on  the record.  But there  its jurisdiction  would come to  an end.  The High Court cannot then proceed to take over the functions of the licensing authority and direct the licensing authority  by a  mandamus to  grant a  licence. To that extent  the judgment  of the  High Court  is set aside. [1040D,F]      2. Where  a statute  confers power  and casts a duty to perform any  function before  the power  is exercised or the function is  performed, to  the Court  cannot in exercise of writ jurisdiction  supplant the licensing authority and take upon itself  the function  of the licensing authority. [1040 E]      3. The High Court was in error in holding that once the public interest  has been  taken  into  consideration  while granting certificate  of approval,  consideration of  public interest would  not arise  and cannot  be countenanced while granting a  cinematograph licensee  under See.  3 read  with Sec. 5. [1037H, 1038]      4.  Licensing   powers,  an   indisputable  adjunct  of controlled  economy,   take  various   forms  and  they  are numerous. They  are generally  couched in  a language giving wide scope for exercise of powers. Therefore the Courts have been vigilant  to see  that they  are not  exercised  in  an oppressive or  arbitrary manner.  The powers being vide, the question of  its  exercise  on  relevant  or  considerations germane to  the determination  more  often  arises.  If  the licence is refused on grounds which appear to be irrelevant, the court can legitimately interfere. [1039H,1040A]      The scheme  manifested by U.P. Cinema (Regulation) Act, 1955 and  the U.P.  Cinematograph Rubs  1951  establish  the legislative intention that the 1024 licensing authority has to keep in view public interest both at the  time of  granting the  certificate of approval under Rule 3  and granting  a cinematograph  licence under Sec. 5. While granting  a certificate  of approval under Rule 3, the licensing authority  may take into consideration the various aspects set  out  in  Rule  4  as  well  as  the  conditions prescribed in  Rule 7.  But even  where all  the  conditions prescribed in  Rule 4  and Rule  5 as  well as various other relevant rules  are satisfied  still the licensing authority may refuse  to grant  the certificate  of approval, if it is satisfied that  the  location  of  cinema  at  the  site  in question is not a public interest. [1034G-, 1035A]      6. Rule  7(2)(c) casts  an  obligation  to  record  the

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reason in  writing which must necessarily sufficient reasons for refusing to grant the certificate on the ground that the location of  a cinema  at the site of the building is not in public interest. The licensing authority has not an absolute discretion but it is hedged in by relevant considerations as also by  the proviso  that if  the  licensing  authority  is inclined to  refuse the  licence  on  the  ground  that  the location of  a cinema  at the site of the building is not in public interest,  it cannot  do so  except without the prior approval of the State Government. [ 1035C-D]           In the instant case, the District Magistrate while granting the certificate of approval on March 24,1972 bad in terms  held  that  Hindi  Sahitya  Sammelan  is  neither  an educational institution nor a residential institution nor it has a  public hospital  and that  it cannot  be styled as an educational institution  for the purpose of Rule 7(2)(b)(i). This determination is final and conclusive. [1035F]      7. While  granting the  cinema licence under Sec. 3 the licensing authority  has to  keep in  view the  provision of Sec. 5.  Sec. 5(])(c)  provides that  no  licence  shall  be granted unless the licensing authority is satisfied that the grant  of  licence  is  not  otherwise  contrary  to  public interest. Undoubtedly,  the para  meters of  public interest while refusing  to grant  licence  under  Sec.  5(1)(c)  for exhibition of  cinematograph would  be materially  different than the one which would enter the verdict while considering the application for granting a certificate of approval under Rule 7(2)(c). [1035G-1036]

JUDGMENT:      CIVIL APPEALLATE JURISDICTION: Civil Appeal No. 2437 of 1981      From the  Judgment and  Order dated  25.8.1981  of  the Allahabad High Court in C.M.W.P.No. 3241 of 1980      R.N. Trivedi,  Addl. Adv.  Genl., Gopal Subramaniam and Ms. Shobha Dikshit for the Appellants.       F.S. Nuriman, Raja Ram Agarwal, Yogeshwar Prasad, Rani Chhabra and Ms. Suman Bagga for the Respondents, 1025      The Judgment of the Court was delivered by      DESAI, J.  Respondent Raja  Ram Jaiswal  alongwith  the members of  his family  (’respondent’ for  short)  purchased premises No.  26/30, a  plot of  land with a small structure standing  on   it  admeasuring  2978  sq  yds.  situated  at K.P.Kakkar Road,  somewhere in  March 1970.  The  respondent desired to  construct a  cinema theatre  on the plot of land after demolishing  the existing  structure. As a first step, he got  prepared the  plans for  a  modern  air-conditioned, sound proof cinema building and got the same approved by the Local Municipal  Corporation and  the  District  Magistrate. Subsequently on  July 6,  1971, the  respondent submitted an application as  required by  Rule 3 of the U.P.Cinematograph Rules,  1951   (1951  Rules’  for  short)  to  the  District Magistrate  for   obtaining  a  certificate  signifying  his approval of  the site  selected for constructing a permanent building to  be used  for cinematograph  exhibition.  Before granting the  requisite certificate  the District Magistrate as the  Licensing Authority  has to  be satisfied  that  the requirements of  the 1951  Rules have  been  fully  complied with. Inter  alia it  must be  satisfied that any recognised educational institution  (other than  primary school) or any residential institution  attached thereto  is  not  situated within a  radius of  75  metres  from  the  proposed  cinema

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building. There  were other  conditions to  be satisfied but this one  is being  referred to by us because the allegation is that this condition has been contravened. It also appears that before  granting the requisite certificate, with a view to giving  an opportunity  to the  public in the locality to express their  opinion for  or  against  the  grant  of  the certificate, if  they so desired, a public notice was issued specifying the  request by  the respondent  for issue  of  a certificate of  approval of  the  site  for  constructing  a cinema theatre.  An organisation  called The  Hindi  Sahitya Sammelan  (’Sammelan’   for  short)   alone  submitted   its objection. The  District Magistrate referred the application of  the  respondent  to  the  State  Government.  The  State Government directed  the District  Magistrate  to  carefully examine the  matter and  determine whether it would or would not be  in public  interest to  grant the certificate. There ensued some  correspondence between  the District Magistrate and the  State Government,  the query  centering  round  the question whether  the Sammelan  was a recognised educational institution as  envisaged by Rule 7(2)(b) of 1951 Rules. The District Magistrate  in his letter dated March 24,1972 inter alia stated that Sammelan can neither be styled as an 1026 educational institution nor a residential institution within the  contemplation   of  Rule   7(2)(b)  because  it  is  an institution wedded  to and  working for  the propagation  of Hindi language  and even though it may provide some research facility on its campus, it has no regular programme of class teaching. The  District Magistrate  was also  of the opinion that having  regard to  all the  relevant circumstances, the construction of cinema building at the proposed site was not against public interest. On the contrary according to him, a modern beautiful fully air-conditioned cinema building apart from adding  to the  beautification of the city would enrich the  coffers   of  the   State  exchequer  in  the  form  of entertainment tax.  He concluded   by  observing that in his opinion public  interest will  not be  adversely affected if the per  mission is  granted for  construction of the cinema house at the proposed site and that he proposed to grant the permission. Accordingly,  on  March  28,1972,  the  District Magistrate informed  the respondent  that ’with reference to his application  dated July  6,1971 in  connection with  the construction of a cinema house over Plot No. 26, Crosthwaite Road, the  site plans  checked and   signed by the Executive Engineer, P.W.D.  Allahabad have  been approved  on  certain conditions including  that the  construction of  the  cinema house will  be completed  within two  years from the date of the issue  of the  order and  the cinema house will be fully air-condition and  according to the plans and specifications submitted  to  him.’ There  was a  small building  over  the  plot  in respect of  which the certificate signifying the approval of the District  Magistrate  was  granted.  This  building  was demolished and construction of the cinema building according to the  plan was  commenced. Chagrined  by the  grant of the certificate, Sammelan  initiated action  for acquisition  of the  plot   over  which   the  cinema   building  was  being constructed somewhere  in August, 1973. As the various steps taken for  acquisition of  land  form  part  of  a  separate controversy to  be dealt  with in  Civil Appeal No. 2458/80, the same  may be skipped over here. Suffice it to state that a notification  under Sec. 4(1) of The Land Acquisition Act, 1894 was  issued by  the  Collector,  Allahabad  on  January 31,1974 notifying that Plot No. 26 admeasuring 2865 Sq. Yds. was proposed  to be  acquired for  a public purpose viz. for

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extension of  Hindi Sangrahalaya  of Hindi  Sahitya Sammelan The respondent challenged this notification in Writ Petition No. 1932/74  in the High Court of Allahabad. In the meantime as the  period of  two years  specified in  the  certificate issued under r. 3 was  about to expire, the respondent moved an application on March 1027 26,1974 before the District Magistrate for extension of time for   completion of the construction of cinema building. The State Government  withdrew the  notification  dated  January 31,1974 with  the result that the writ petition filed by the respondent was dismissed on January 30,1975 as having become infructuous. Within a period of six days on February 6,1975, the Collector of Allahabad issued a fresh notification under Sec. 4(1) of the Land Acquisition -13 Act for acquiring land described as  bearing Plot  No. 62 admeasuring 8265 sq. yds. for the same purpose. The respondent questioned the validity and legality of the second notification in Writ Petition No. 3174/75. During  this period,  the application for extension of time  for the construction of cinema building was pending with the  District Magistrate. By Letter dated July 25,1975, the District  Magistrate informed  the respondent that ’with reference to his application dated March 26,1974 praying for extension of time, it is not possible to grant the extension as the  matter is  pending before  the  High  Court  at  the instance of  the respondent  and as  they have obtained stay against the  land acquisition  proceedings, it  would not be proper  for  the  District  Magistrate  to  pass  any  order regarding this  very land  so long as the stay order granted by the  High Court is in force. It was also noticed that the period of  two years initially granted had expired in March, 1974 and  the same  cannot be extended. It appears, however, that during  the time  the application for extension of time for completion  of the cinema building was pending  with the District Magistrate,  the work  of construction  was going a pace and  it was  completed presumably  sometime before  the District Magistrate  declined to grant extension of time. As the cinema  building was  complete, the  respondent made  an application on  May 25,1979  under Sec. 3 of the U.P. Cinema (Regulation) Act,  1955 (’1955 Act’ for short) for a licence to exhibit films in the cinema building. Though the District Magistrate is  a statutory authority for grant or refusal of licence under  the 1955  Act, surprisingly,  he referred the application of  the respondent  for grant  of licence to the State Government  specially in  view of  the pendency of the Writ Petition  No. 3174/75  challenging the notification for acquisition of  the land  on which  the cinema  building was constructed.A communication  from the Joint Secretary of the State Government  to the  District Magistrate concerning the question of  grant of  cinema licence has a material bearing on the  issue involved  in the  writ petition. Therefore the relevant portion  of the  communication may be extracted. It reads as under: 1028           "With reference to your letter No. 23/MAOKA./79-80      dated June  27, 1979,  I have been directed to say that      you may  grant licence to Chandralok Cinema constructed      by Sri  Raja Ram  Jaiswal on the Hindi Sahitya Sammelan      Marg, for  one year  if you  are  satisfied  that  this      cinema complies  with the  requirements  of  the  Uttar      Pradesh Chalchitra  Niyamawali, 195’ with the condition      that if  in the  mean time  the case pending before the      Hon’ble  High   Court  is  decided  in  favour  of  the      Government,  the   licence  would  automatically  stand      cancelled."

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    It would  thus appear  that the District Magistrate had to consider  the application  for  licence  uninfluenced  by another litigation  pending between  the respondent  and the State Government.  On receipt  of this  letter the  District Magistrate after  obtaining reports from various authorities vis-a-vis the  building reiterated  his view  to  the  State Government on  October 19,1979  that as the writ petition of the respondent  challenging the notification for acquisition of land  is pending,  it would not be proper to grant cinema licence to the respondent. On December 7,1979, writ petition filed by  the respondent  challenging the  notification  for acquisition  of  land  on  which  the  cinema  building  was constructed was  allowed by  a Division  Bench of  the  High Court  and   the  notification  dated  February  6,1975  was quashed.  On   December  9,1975,   the  respondent   made  a representation to  the State  Government for  issuance of  a cinema licence.  By the, notification date December 13,1979, the  State  Government  directed  the  first  respondent  to contact the District Magistrate in this behalf. Accordingly, on December  18, 1979,  the respondent wrote to the District Magistrate that  all the concerned authorities had inspected the building  and reported  that the  building complies with all the  rules and  regulations  and  recommended  grant  of licence. By  its communication  dated December 24, 1979, the Additional District  Magistrate informed the respondent that ’with reference  to his application for cinema licence dated May 4,  1979 to  run Chandralok  Cinema he has to inform him that the  District Magistrate’  by his  order dated December 24, 1979  has refused  to grant the licence.’ The respondent preferred an  appeal under  Sec. 5(3) of the 1955 Act to the State  Government   against  the   order  of   the  District Magistrate refusing  to grant the licence. The reasons which weighed with  the District  Magistrate in  rejecting ll  the application will  be dealt  with a  little while  after. The State 1029 Government  called   for  the   comments  of   the  District Magistrate with  regard to  the contentions  raised  by  the respondent in his appeal and after taking into consideration the comments,  the State  Government as  per its order dated February 15,1980  allowed the appeal and remitted the matter to the  District Magistrate  with a direction, to re-examine the grounds  on which he had refused to grant licence to run the Chandralok  cinema in accordance with the rules and pass suitable and legal order after giving them an opportunity of hearing. If  the District Magistrate feels necessary to seek prior approval  of the Government to refuse to grant licence in public interest, he may express his opinion and send full facts through  the Commissioner  for prior  approval.’  This order of  remand was  questioned by  the respondent  in Writ Petition No. 3241/80 in the Allahabad High Court.      A Division  Bench of  the High  Court  held  that  even though the  order under  challenge was one of remand, as the respondent has  journeyed to  and fro on numerous occasions, it is necessary to dispose of the petition on merits. It was further held  that while granting a certificate under Rule 3 of the 1951 Rules, it was open to the licensing authority to take into  consideration  whether  it  would  be  in  public interest to grant the necessary certificate or to refuse the same, hut  after the  grant of  the certificate  when a full fledged cinema building comes up and is shown to comply with the relevant  rules and  regulations, cinematograph  licence cannot be  refused on  the vague consideration that it would not be  in public interest to grant the licence. It was also held that the failure to complete the construction of cinema

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building within  the prescribed  time, if properly explained would not  be a ground to refuse cinematograph licence, more so because the requirement of rule 3(3) is directory and not mandatory. The High Court accordingly made the rule absolute and in  modification of  the order  of the  State Government dated February  15,1980 it directed the District Magistrate- Licencing Authority-to forthwith grant to the petitioner the requisite  licence  subject  to  reasonable  conditions  and restrictions. An  order in the nature of mandamus was issued accordingly. Hence this appeal by the State of Uttar Pradesh and the District Magistrate by special leave.      Before we advert to the contentions canvassed before us on behalf  of the  appellants, a  brief resume of the stages through which 1030 the proceedings  journeyed in  this Court  may be mentioned. The petition  for special  leave came  up for  admission  on September 17,  1981 when special leave to appeal was granted and the  operation of  the judgment  of the  High Court  was stayed. Consequently,  the mandamus  directing the  District Magistrate to  grant licence  stood suspended.  CMP 26710/81 was moved  on behalf of the present  respondent for vacating the stay  granted  by  this  Court.  The  proceedings  dated December 15,  1981 as recorded show that after the arguments were heard  at some  length, the  Court in  the interest  of justice thought  it expedient to modify the stay order dated September 17,1981  to the effect that the stay order granted by the  Court will   be in operation for a further period of two months  only and  that the  hearing of the appeal may be expedited. The  present appeal  and the  cognate Appeal  No. 2458/81 came  up together for hearing and the cognate appeal was first  taken up  for hearing for the obvious reason that if the  challenge to the notification for acquisition of the plot on  which the cinema building is constructed failed  in the appeal  on behalf of the State of U.P., it would have an impact on  the present  appeal because if the land was to be acquired, the  question of  granting licence  for running  a cinema  on  the  land  under  acquisition  could  hardly  be envisaged. The  hearing as  usual  in  this  Court  went  on merrily. Therefore,  after hearing  the parties, we made the order on  January 20,1983  directing the District Magistrate to comply with the remind order. It may be recalled that the order under challenge in this appeal was the order of remand made by  the State Government to the District Magistrate for considering and  disposing of  the application  for a cinema licence on  merits. We had some hesitation whether the court can grant  a mandamus  directing a  statutory  authority  to grant a licence at a stage when the  District Magistrate was yet to  apply his mind and examine the application on merits because doing  so would tantamount to the court substituting itself  as  a  licensing  authority  without  the  licensing authority performing its duty, which would be impermissible. We were  conscious of  the fact that the District Magistrate was bound  to take  some time in processing and disposing of the application  for   a cinema  licence pending  with  him. Accordingly, we  directed the District Magistrate to proceed to consider the application of the respondent for grant of a cinema licence  and dispose  of  it  in  the  light  of  the observations made  in the order. Pursuant to this order, the District Magistrate,  Allahabad  proceeded  to  examine  the application of  the respondent  for cinema licence on merits and   having given him an opportunity of being heard, by his order dated 1031 February 20,  1983  rejected  the  application  for  licence

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observing   that it would not be in public interest to grant the cinematograph licence applied for by the respondent. The appeal was  again placed  on board for further directions on March 10,  1983. After  giving anxious  consideration to the order of  the District  Magistrate, the  Court made an order vacating interim  stay granted  by this  Court  staying  the operation of  the judgment  of the High Court. The effect of this order was that the mandamus granted by the State became operative. Accordingly.  On March  19,  1983,  the  District Magistrate granted the licence to run Chandralok cinema. Two CMPs Nos.  12718-19/83 were moved in this Court, one of them being for taking action for contempt and another for certain directions. They  were a sequel to the granting of a licence and  public   annoyance  demonstrably   exhibited   by   the authorities  of  the  Sammelan.  While  disposing  of  these petitions,  we  directed  that  the  City  Magistrate  would withdraw the impugned order under Sec. 144, Cr.P.C. within a fortnight from  the date  of  the  order  and  the  District Magistrate shall  renew the  licence of Chandralok cinema to be operative  and in  force till  the decision  of appeal by this Court  and the  City Magistrate  shall  make  necessary arrangements  to  maintain  public  order  near  and  around Chandralok cinema  if necessary by posting additional police force  and   grant  necessary  protection  to  the  licensee enabling  him   to  run   the   cinema   house   peacefully. Regrettably, it  must be concluded from this resume that the dispute is  hardly between  the  State  Government  and  the respondent, but  it is  a proxy  fight consequent  upon  the clash of  ego between the Sammelan and Jaiswal. Uninfluenced by this  irrelevant aspect, the appeal may be disposed of on merits.      It may  be mentioned  that even though the Sammelan had moved an application for being joined as a party to the writ petition in  the High  Court which was rejected, we, without the  slightest   hesitation,   granted   the   request   for intervention made  by Shri  S.N Kacker,  learned counsel for the  Sammelan   to  intervene   and  suspending  the  normal procedure  that  the  interventionist  is  not  entitled  to address oral arguments, we heard Mr. Kacker on all points he wanted to  canvass and  at some  length and permitted him to put his written submissions on record.      While the  introduction has  become some what long, the Contentions canvassed  in the  dispute are  relatively of an insignificant 1032 nature  save  and  except  the  one  whether  the  statutory licencing authority  acting within  the  parameters  of  the statute under  which it  is set  up  can  be  supplanted  in exercise of  the  writ  jurisdiction  before  the  statutory authority has  yet to  discharge  its  functions  under  the statute. Incidently, whether public interest has a relevance at the  time of  issuance of a certificate of approval under Rule 3  or at  the  time of grant of licence under Sec. 3 is another important question ? Other contentions are minor and of incidental nature.      The present  situation viewing the background of public interest have  a direct  bearing on the rival contentions in this appeal.A  cinema building  in which for the purposes of the record,  we may  note that  Rs. 60  lakhs have been sunk stares into  our face.  Admittedly,  it  is  a  modern  air- conditioned sound-proof  cinema building. It abuts on a road named K.K.Marg, a very prominent locality in Allahabad town. it is  equally true  that Hindi  Sahitya  Sammelan  has  its campus at  a distance  of roughly  95 feet  from the   outer boundary of  the cinema building. Hindi Sahitya Sammelan was

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founded for  the development  and propagation  of Hindi, and certainly it  is a prestigious institution devoted to making Hindi the  Lingua Franca  of India.  Though Hindi Films have contributed immeasurably to the propagation of Hindi yet the Sammelan  championing Hindi appears not to have taken kindly to the  modern mass  media communication  and  detested  the existence of  a theatre  somewhere near  its campus. That is the genesis  of the present litigation. Sincere efforts were made to  assuage  all  the  authorities  in  charge  of  the Sammelan, but they proved of no avail. May be an institution devoted to  research may  consider cinema theatre a nuisance but in  an urban  area like  Allahabad. the  Sammelan cannot hope to  live in  isolation of  the existence  of theatre as also the noise OF transport vehicles.      Let us  have a glance at the relevant provisions of the 1955 Act  and the  1951 Rules  which should  be our starting point. 1955   Act  was enacted  as its  long title shows for making provisions  and regulating  exhibitions by  means  of cinematographs in  the State  of U.P.  Sec. 3  provides that ’save as otherwise provided in the Act, no person shall give an exhibition  by means of a cinematograph elsewhere than in a place  licensed  under  this  Act  or  otherwise  than  in compliance with  conditions and restrictions imposed by such licence.’ Sec.  4 constitutes  District Magistrate to be the Licensing 1033 Authority. There  are two  provisos conferring  power on the State Government  to constitute  other licensing  authority. They are  hardly material  for the  present purpose. Sec. 5‘ prescribes  restrictions  on  the  power  of  the  licensing authority  and  inter  alia  provides  that  ’the  licensing authority has  to be  satisfied that  the building  or other place in which cinematograph exhibition proposed to be given (i) .....  (ii) is  situated at such minimum distance as may be Ii  prescribed  from  other  public  buildings  and  from recognised educational  and other  public  institutions  and public  hospitals..  ’  Sec.  5  (1)(c)  provides  that  the licensing authority  must be  satisfied that  the  grant  of licence otherwise  is not  contrary to public interest. Sub- sec. (3)  of Sec.  5 confers  right of  appeal to  the State Government, on  any person  aggrieved by the decision of the licensing authority  refusing  to  grant  licence.  Sec.  13 confers power  on the  State Government  to make  rules  for carrying out the purposes of the Act. 1951 Rules were framed in exercise  of  the  power  conferred  by  Sec.  9  of  the Cinematograph Act,  1918 and  by the deeming fiction enacted in Sec.  12 of  the 1985  Act they  remain in  force. Rule 3 provides as under      "3.  Application for constructing a building-      (1) A  person  desirous  of  constructing  a  permanent      building to  be used for cinematograph exhibition shall      submit an  application specifying the site on which the      proposed building is to be constructed together with‘ a      plan  and   specifications  thereof   to  the   officer      authorised in  this behalf  by Government. (2) The plan      mentioned in  the aforesaid  sub-rule shall contain the      elevations and  sections of the buildings, the proposed      electrical installations, arrangements for ventilation,      sanitation and  parking of  vehicle and the position of      the premises  in  relation  to  adjacent  premises  and      public thoroughfare on which the building abuts, within      a radius  of one  furlong. (3)  The Licensing Authority      may, if  it  is  satisfied  that  the  site  plans  and      specifications fully conform to the rules, grant to the      applicant  a   certificate  signifying   his   approval

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    thereto. The period within which the construction shall      be completed shall also be stated in the certificate."      Rule 4  provides for the contents of an application for a 1034 licence. Rule  7  prescribes  conditions  for  granting  and renewal of  a licence,  the one  to be noted for the present purpose is the one prescribed in Rule 7(2)(b)(i) which is to the effect  that ’no building shall be so licensed, if it is situated within  a radius  of 75  metres from any recognised educational institution  (other than  primary school) or any residential  institution   attached  thereto.  Rule  7(2)(c) provides that  ’no building shall be so licensed, if for any other  sufficient  reason  to  be  recorded,  the  licensing authority is  satisfied that the location of a cinema at the site of that building is not in Public interest.      Learned Advocate  General of Uttar Pradesh who appeared for the  appellant urged  that the scheme of the Act and the relevant rules  reveal that  the licensing  authority has to take into  consideration public interest both at the time of granting a certificate of approval as contemplated by Rule 3 as also  public interest  while granting  a  cinema  licence under Sec.  3 read  with Sec.  5. It was urged that the High Court was  in error  in holding  that once  while granting a certificate of  approval under  Rule 3,  public interest has been taken into consideration and it has been found that the location of  a cinema  at the  site of  the building  is not shown  to  be  not  in  public  interest,  the  question  of examining whether  such  building  should  be  licenced  for exhibition of  a cinematograph  does  not  call  for  a  re- examination whether  the grant  is not otherwise contrary to public interest. It was urged that public interest cannot be fitted into  a straight  jacket formula  and  what  relevant considerations would  constitute public interest at the time of granting  a certificate  of approval  under  Rule  3  may materially vary or p differ from the relevant considerations which may  constitute public  interest while  licensing  the cinema theatre  for exhibition of a cinematograph under Sec. 3. The  scheme manifested  by the relevant provisions of the Act  and   the  Rules   would  demonstrably   establish  the legislative intention  that the  licensing authority  has to keep in  view public  interest both  at the time of granting the certificate  of approval  under Rule  3 and  granting  a cinematograph  licence   under  Sec.  3.  While  granting  a certificate  of   approval  under   Rule  3,  the  licensing authority may  take into  consideration the  various aspects set out  in Rule  4 as  well as the conditions prescribed in Rule 7. But even where all the conditions prescribed in rule 4 and  Rule 5  as well  as various  other relevant rules are satisfied still  the licensing authority may refuse to grant the 1035 certificate  of  approval,  if  it  is  satisfied  that  the location of cinema  at the site in question is not in public interest. What  constitutes public  interest at  the time of consideration for  granting certificate  of approval  may be culled out  from the  various conditions  prescribed in  the various statutes  as well  as all other considerations which may enter the verdict while granting the certificate. But it will be  a paper compliance with the relevant rules if it is merely stated  that even  though all  other  conditions  are satisfied and  complied with  the licensing  authority would refuse to  grant the  certificate as  it is  not  in  public interest to  do so.  Rule 7(2)(c)  casts  an  obligation  to record the  reasons in  writing which  must  necessarily  be

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sufficient reasons  for refusing to grant the certificate on the ground  that the location of a cinema at the site of the building is  not in public interest. The licensing authority has not  an absolute  discretion but  it  is  hedged  in  by relevant considerations  as also  by the proviso that if the licensing authority is inclined to refuse the licence on the ground that  the location  of a  cinema at  the site  of the building is  not in  public interest, it cannot do so except without the prior approval of the State Government. There is an explanation  which provides  that for  the purpose of the sub-rule, the  licensing authority  shall,  subject  to  the general control of the State Government, determine what is a public hospital or a recognized educational institution, and its decision  shall be  final and  conclusive.’ It  will  be presently pointed  out that  the District  Magistrate  while granting the  certificate of  approval on March 24, 1972 had in term’s  held that  Hindi Sahitya  Sammelan is  neither an educational institution nor a residential institution nor it has a  public hospital  and that  it cannot  be styled as an educational institution  for the purpose of Rule 7(2)(b)(i). In  view   of  the   explanation  herein   extracted,   this determination is final and conclusive.      Now while granting the cinema licence under Sec. 3, the licensing authority  has to  keep in  view the provisions of Sec. 5  Sec. 5(1)(c)  provides  that  no  licence  shall  be granted unless the licensing authority is satisfied that the grant  of  licence  is  not  otherwise  contrary  to  public interest. One  has to  compare the  language of Rule 7(2)(c) with the  language implied  in Sec. 5(1)(c). Undoubtedly the parameters  of  public  interest  while  refusing  to  grant licence under  Sec 5(1)(c)  for exhibition  of cinematograph would be materially different than the one which would 1036 enter the  verdict while  considering  the  application  for granting a  certificate of  approval under  Rule 7(2)(c). It must, however,  be made  absolutely clear  so as  to put  it beyond the  pale of  controversy that  the relevant  aspects required to be kept in view as prescribed under Rule 7 while granting or  refusing to grant certificate of approval under Rule 3 cannot be reviewed in The name of public interest for rejecting an  application for  cinematograph  licence  under Sec. 3  read with  Sec. 5  of the  Act.  To  wit,  if  while granting the  certificate of approval the question whether a particular institution  is an educational institution and is within or outside the prohibited distance, is examined and a decision is  reached that  the institution is held not to be an educational  institution within  the contemplation of the relevant rule  nor it  is within  the prohibited  area, this aspect cannot be reviewed to refuse to grant a licence under Sec. 3  read with  Sec. 5 in the name of public interest. If any other view is taken, it would lead to startling results. Again to  wit, if  the  Sammelan  was  held  not  to  be  an educational institution  with in  the contemplation  of Rule 7(2)(b)(i) and  the necessary  certificate  of  approval  is granted, the  licensing authority  cannot turn  round in the name of  public interest and hold at the time of considering the application  for a  cinematograph licence that the Hindi Sahitya Sammelan  is an  educational institution  and it  is also situated  within the  prohibited area  because such  an approach would  do irreparable  and irreversible harm to the person to whom certificate of approval is granted because by the time  he applies  for a cinematograph licence under Sec. 3, he has sunk a large sum of money in constructing a cinema building. To  refer to  the facts  of this  case, if now the District Magistrate  chooses not  to grant  licence  on  the

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ground that it would be contrary to public interest to grant licence only because the authorities of the Sammelan may act in a  manner so as to disturb public peace and that it is an educational institution, Rs. 60 lakhs sunk by the respondent would go  down the drain and would be an irreparable wastage affecting  both   the  national   interest  and  the  public interest. Therefore,  while accepting  the submission of the learned Advocate General that the concept of public interest statutorily recognised  has to  be kept  in view both at the time of  granting certificate  of approval  under Rule 3 and licence under  Sec. 3  read with  Sec. 5  of the  1955  Act, permitting  exhibition  of  a  cinematograph,  the  relevant parameters of  public interest  would differ and they cannot overlap each  other and have to be justified on the relevant grounds  stricter   view  about  the  parameters  of  public interest has to be taken at the 1037 second stage  because by  that time  the person who has been granted   certificate of  approval has sunk a fortune in the venture.      Before we  conclude on  this point, we may refer to the two decisions  to which  our attention  was  drawn  by  the; learned Advocate  General. In  The King  v.  London  Country Council, Exparte  London and  Provincial  Electric  Theatres Limited(l) it  was held  that the  statutory  authority  was justified in exercise of their discretion to sefuse to grant licence to  a company,  the majority  of whose  shareholders were alien  enemies..A submission  was made  on the basis of the ratio of this decision that even if a cinema building is constructed, licence can be refused on the ground that it is not in  public  interest  to  do  so.  The  decision  in  R. v.Barnstaple justices,  Exparte Carder.(8)  is hardly of any assistance  because   it  proceeds  on  the  scheme  of  the Cinematograph act,  1909. The  Act empowered County Councils or justices  where the  power have been delegated to them to grant licences  to persons  to use  premiss specified In the licence’ for  the purposes  of a  cinema, subject to certain conditions, terms  and restrictions. The practice was stated to be  in existence  whereby, in cases where it was intended to erect  premises for  use as a cinema, justices were asked to approve  the plans  of the  building to  be erected,  and thereby honourably  to commit themselves or their successors to grant  the licence  after  completion  of  the  premises. Disapproving this  practice, it  was held  that the practice was beyond the powers given by the Act and is unenforceable. It was  observed that  it was  improper for  justices  by  a gentlemen’s agreement  to fetter,  limit control,  or in any way affect  their own  future decisions,  or those  of their successors or  of other  justices. The scheme of the Act and the rules  at present under examination envisages two stages when the licensing authority has to examine the application: (i) at  the stage of grant of certificate Of approval of the site and  (ii) at  the stage  of grant of cinema licence. In view of  this difference  in the  scheme,  the  decision  is hardly of  any assistance.  We have  reached the  conclusion purely on  the examination  and interpretation of the scheme merging from the Act and the Rules.       The High Court was therefore, in our opinion, in error in holding that once the public interest has been taken into cosidera- (1) [1915] 2 K.B. 266 (2) [1937] 4 All E.R. 263 1038 tion while  granting certificate  of approval, consideration of  public   interest  would   not  arise   and  cannot   be

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countenanced while  granting a  cinematograph licence  under Sec. 3 read with Sec. 5.      The next question is whether the District Magistrate in this case  was justified in refusing to grant the licence in public interest on relevant consideration.      The District  Magistrate  initially  refused  to  grant licence  against  which  in  the  appeal  preferred  by  the respondent, the order impugned in the writ petition was made by the  State Government The State Government called for the comments of  the District  Magistrate  qua  the  contentions raised by  the respondent  in his appeal. Briefly summarised the  view  expressed  by  the  District  Magistrate  in  his comments, which  was the  view that prevailed with him while rejecting the application for license, was that the relevant rules having  not been  complied with:  (i) inasmuch  as the cinema hall has been constructed in the restricted area a; d educational institutions  are situated  within 100  yards of cinema house; (ii) there is no provision to give conditional licence under  the cinema  rules; (iii)  the allegation that the District Magistrate has some bias against the respondent was not correct; (iv) the licence has been refused in public interest on consideration of public peace and order; (v) the construction of cinema building was not completed within the prescribed period  of two  years; (vi)  if  the  licence  is granted, there  is apprehension  of breach  of peace.  These comments provide  a peep  into  the  mind  of  the  District Magistrate while  rejecting the application for licence. The State Government  while quashing  the order  of the District Magistrate refusing  to grant  licence held that the reasons on the basis on which the licence to run cinema was rejected do not  fall within the cinematograph Rules and violation of no specific  rule is  shown. That sets at naught ground Nos. (i), (v)  and (vi).  The charge  of bias was shown to be not merited and  failure to complete the construction within the specified time  did not  merit rejection  of the application for licence. Location of educational institutions within the prohibited area  would not  enter the  verdict at  the stage granting cinematograph  licence because  the same  was taken care of  and rejected  while  granting  the  certificate  of approval. It is even factually not correct. Accordingly, the State  Government  remitted  the  matter  to  the  incensing authority to  consider whether  licence could  be refused in public interest  and if  it is  to be  so refused, the prior appro- 1039 val of  the State  Government may be obtained. Therefore the remand  order limited the enquiry by the District Magistrate to question  of  grant  or  refusal  of  licence  in  public interest. Other aspects are concluded by the remand order.      Therefore,  the   only  question   that  survives   for consideration is  whether the  District  Magistrate  is  now justified in refusing to grant licence on the ground that it is not  in public interest to do so. Reading the order dated February 20,  1983, as a whole the influence of the Sammelan permeates through  the order. Curiously, after the direction given by  the  Court  that  the  District  Magistrate  shall process and  dispose of  the application  for  licence,  the District Magistrate give a public notice inviting objections to the  grant of  cinematograph licence.  The only  objector again appears  to have been the Sammelan and it has repeated all those  objections which  it had preferred at the time of granting of  certificate of  approval. The objections of the Sammelan were founded on two environmental aspects: (i) that the surroundings  of the  campus of  Sammelan are  calm  and quiet and  there is such an atmosphere as would be conducive

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to  the  research  work  conducted  on  the  campus  of  the Sammelan; (ii)  granting of  a  cinematograh  licence  would disturb the  cultural and  educational  environment  of  the locality and  would be  a traffic  nuisance. In our opinion, both are  irrelevant considerations  for the obvious reasons that they are deemed to have been disposed of while granting certificate of approval and affirmed by the State Government in appeal.  They ought  to be  rejected for  the  additional reason that the cinema building is an air-conditioned sound- proof  building.   It  is   not  possible  to  believe  that conducting  cinematograph   exhibition  in   a   sound-proof building will  add to the noise. The grievance was that once a cinema theatre comes up, tea stalls will spring up, hawers would crowd  the locality  and  traffic  would  increase  is hardly relevant.  There is  nothing special about it. Anyone living in  a developing  urban area  has obviously to put up with this  situation. Noise  can  be  mitigated  not  wholly obliterated. Therefore, the District Magistrate rejected the application on  extraneous and irrelevant considerations not germane to the issue at the stage of granting the licence.      Licensing powers, an indisputable adjunct of controlled economy, take  various forms and they are numerous. They are generally couched  in  a  language  giving  wipe  scope  for exercise of powers 1040 Therefore the courts have been vigilant to see that they are not exercised  in an  oppressive or  arbitrary  manner.  The powers being  wide, the question of its exercise on relevant or considerations  germane to  the determination  more often arises. If the licence is refused on grounds which appear to be irrelevant, the court can legitimately interfere. In this case the  sole ground  of refusal  of  licence is that it is not in  public interest  to grant  it. Lifting  the veil  of public interest  what transpires  is that the license should not be granted because the Sammelan is not reconciled to the existence of  a cinema  theater in  its vicinity.  In  other words, public  interest is shown to be co-extensive with the likes and  dislikes of  the authorities  in  charge  of  the Sammelan. This  cannot be  countenanced. Dislike  of a  body howsoever  prestigious   it  may  be,  is  not  an  adequate substitute for  public interest. The licensing authority has clearly acted  on irrelevant  consideration in  refusing the licence.            The High Court was of course, clearly in error in issuing a  mandamus directing  the  District  Magistrate  to grant a  licence. Where  a statute confers power and casts a duty to  perform any  function before the power is exercised or the  function is  performed, the Court cannot in exercise of  writ   jurisdiction  supplant  the  licensing  authority hearing a  writ petition praying for a wit of certiorari for quashing the  order of  remand. The  High Court  could  have quashed the  order of  remand if  it was  satisfied that the order suffers  from an  error apparent  on the  record.  But there its  jurisdiction would come to an end. The High Court cannot then  proceed to  take  over  the  functions  of  the licensing authority  and direct the licensing authority by a mandamus to  grant license.  To that  extent the judgment of the High  Court is  set aside.  However, as pointed earlier, while narrating  the chronology  of events through which the appeal proceeded  in this  Court, the  present situation  is that the District Magistrate by its order dated February 20, 1983 refused  to grant  licence on extraneous and irrelevant considerations, and  it has  failed to exercise jurisdiction vested in  it. This  Court, therefore,  on  March  10,  1983 vacated the  interim stay  of the operation of the judgement

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of the  High Court.  Within a  week thereafter  the District Magistrate granted  license and lt was renewed for a further period of one year in April, 1984. That licence is valid and in force  and holds good, subject to the application for its renewal at prescribed intervals. The order dated 1041 February 20,  1983  refusing  to  grant  license  in  public interest is  quashed and  set aside. The District Magistrate as licensing  authority shall  examine the  application  for renewal of  licence whenever  made, on  relevant and legally valid considerations germane to the determination and in the light of the observations made in this judgment.      Subject to  the modifications set out in this judgment, the appeal  fails and  is dismissed  but with no order as to costs. N.V.K.                                     Appeal dismissed. 1042