HON'BLE SRI JUSTICE R. SUBHASH REDDY W.P.Nos.20656 of 2012 and Batch 25.09.2012 Thirumala Theatre, Khammam, rep. by its Partner & others. Government of A.P., rep. by its Principal Secretary, Home Department & others. For the petitioners: Sri S.Niranjan Reddy, Advocate. For Respondents: Sri N.Sridhar Reddy, Spl. Govt. Pleader. : ?CITATIONS:
1. AIR 198.AP 7.2. 1970 (2) SCC 74.3. AIR 196.SC 108.4. 1999 (5) ALD 69.5. (1999) 3 SCC 42.6. (1991) 2 SCC 4.7. AIR 196.SC 55.(1) 8. AIR 199.SC 151.9. AIR 198.SC 52.10. (2011) 12 SCC 1.11. (2009) 12 SCC 32.12. (2011) 6 SCC 71.C/15 (WRIT PETITION Nos.20656, 20658 & 20661 of 2011 and 3785 of 2012) COMMON ORDER : In this batch of cases, the petitioners have questioned the validity of the orders passed by the Government in G.O.Ms.No.181, Home (General- Administration) Department, dated 11.07.2011. By the aforesaid order, the 1st respondent-Government, in exercise of powers under A.P. Cinemas (Regulation) Act of 1955 (Act 4 of 1955), has fixed the rates of admission in cinema theatres. In view of the common questions of law which arise for consideration on similar set of facts, all these writ petitions are heard together and are being disposed of by this common order. For the purpose of disposal, I refer to the facts as arise in W.P.No.20656 of 2011.
2. The petitioner is a partnership Firm engaged in running a cinema theatre in Khammam town in the name of "Thirumala Theatre". The trade in cinema theatres is regulated by the provisions under the A.P. Cinemas (Regulation) Act of 1955 (Act 4 of 1955) and the Rules made thereunder, viz., the A.P. Cinemas (Regulation) Rules, 1970. The said Act 4 of 1955 is enacted primarily with an intent to regulate the exhibition by means of cinematography in the State of Andhra Pradesh. As per Section 3 of the said Act, the cinematography exhibitions are to be licenced by the licencing authority and the licencing authority under Section 4 of the said Act, is the District Collector. As per Section 2(1-A), the District Collector in relation to the cities of Hyderabad and Secunderabad means, the Commissioner of Police. Section 5 of the Act imposes restrictions on powers of the licencing authority. Under Section 5(2) of the Act, the licencing authority is empowered to grant licences to such persons as the authority thinks fit, subject to control of the Government, on such terms and conditions and subject to certain restrictions as it may determine. Under Section 11 of the said Act, Government is empowered to make Rules by way of Notification, for carrying out the purposes of the Act.
3. Rules are framed in G.O.Ms.No.1273, dated 14th August 1970, which are titled as "The Andhra Pradesh Cinemas (Regulation) Rules, 1970, and the relevant rule for the purpose of disposal of these writ petitions is Rule 11-A, which is under Chapter-III. Chapter-III deals with Licences and Certificates. Rule 11-B(3)(a),(b),(c) and (d) of the aforesaid Rules read as under: "11-B(3)(a): The licencing authority while granting or renewing a licence in Form-B shall also fix the maximum rates of payment for admission to the different claslses in the licenced premises. (b) These rates shall not be increased during the currency of the licence without an order in writing by the licencing authority permitting such increase. (c) The order of the licencing authority is liable to be cancelled or modified by the Government, if they consider such a course just or necessary. (d) Any person aggrieved by the order of the licencing authority may appeal to the Government who may make such order as it deemed fit." By the aforesaid rule, it is evident that the licencing authority, while granting or renewing licence in Form-B, is empowered to fix the maximum rates of payment for admission to different classes in the licenced premises, and the aggrieved party is also given a remedy of appeal under Rule 11-B(3)(d).
4. In this writ petition, it is the case of the petitioner that his theatre, which is being run in the name of "Thirumala Theatre" at Khammam, is providing best facilities and comforts to its audience and is regarded as one of the best theatres not only in Khammam, but in the entire State of Andhra Pradesh. Primarily, it is the case of the petitioner that Rule 11-B(3) of the A.P. Cinemas (Regulation) Rules, 1970, empowers only the licencing authority to fix the maximum rates of payment for admission into the licenced cinema building, as such, no power is conferred on the Government to fix the rates of admission as fixed in the impugned G.O. It is stated that though Rule 11-B(3) empowers the licencing authority for fixing the maximum rates of payment for admission into different classes, there are no guidelines for fixation of such rates and it is left to the discretion of the licencing authority. It is stated that evidently, such a power is conferred on the licencing authority on the premise that he would be directly dealing with the facilities provided by the theatre, as such, would be in a position to fix the rates by taking various aspects into consideration, namely, the facilities provided in the theatre, the location of the theatre etc. It is alleged that the 1st respondent-Government has no role or authority to prescribe uniform rate for different theatres, and in the absence of such power being conferred on the Government under the Act with regard to fixation of admission rates, without appreciating the legal position, the 1st respondent-Government has been issuing orders fixing the maximum rates of admission from time to time. It is stated that earlier, orders were issued in G.O.Ms.No.369, dated 18.12.2008, fixing the maximum rates of admission for higher classes and the said G.O. has been challenged in a batch of writ petitions, and when such petitions are pending, once again, the impugned G.O.Ms.No.181, dated 11.07.2011, is issued revising the admission rates for various types of theatres by providing a marginal increase over the rates notified in G.O.Ms.No.369, dated 18.12.2008.
5. Further, the case of the petitioner is that there is no rationale or basis for fixing the maximum rates of admission to the higher classes as has been done in the impugned orders passed by the Government. It is alleged that inspite of exorbitant increase in maintenance cost of theatres viz., increase in salaries of staff, high cost of electricity and other charges, uniform rates are fixed throughout the State irrespective of the location of the theatre, and the comforts provided in the theatres. It is submitted that by issuing the impugned order, the unequals are being treated equally and such an action on the part of the 1st respondent-Government infringes the rights guaranteed under Article 14 of the Constitution of India. It is specifically alleged that all the theatres in the specified Municipalities or Municipal Corporations cannot be equated as one. Alleging that the cost of setting up and running a theatre depends on the location of theatre, the type of Municipality or Municipal Corporation, the facilities provided in the theatre, including the quality of seats, sound and projection system etc., it is contended that the theatres cannot be classified merely on the single feature of the theatre being air-cooled/air-conditioned or not. It is alleged that a particular air-cooled theatre may offer better projection and sound system, better seats and fire facilities than an air- conditioned theatre, and in that view of the matter, there is no rationale basis for fixation of rates without taking into several capital costs invested by the theatre owners while constructing a cinema building. It is stated that such an action on the part of the Government, suffers from lack of reasonable classification and such an action is wholly irrational and amounts to discrimination.
6. Counter affidavit is filed on behalf of 1st respondent-Government. In the counter, it is stated that in view of the representations made by the President, A.P. Film Chambers of Commerce, Hyderabad and President, Telugu Film Producers Council, Hyderabad, vide representations, dated 30.03.2008 and 03.05.2008 respectively, for enhancement of rates of admission, on considering such requests, the Government, vide G.O.Rt.No.1072, Home (General-Administration) Department, dated 04.06.2008, have constituted a committee under the Chairmanship of Chief Secretary with Principal Secretary (Revenue), Principal Secretary (Home), Principal Secretary (Finance) and Special Commissioner, I & PR/ Managing Director, A.P. Film Television and Theatre Development Corporation, as its members. It is stated that the said Committee has a detailed discussion on 13th August 2008 with the representatives of the Telugu Film Producers Council, the A.P. Film Chambers of Commerce and the Hyderabad Film Chambers of Commerce and opined that it is not desirable to increase the rates further, at this juncture, which would be a burden to the cine-goers in the State, and hence, the request of the Associations for increasing the cinema ticket rates was not recommended.
7. In the counter, it is further stated that maximum rates for different classes have been fixed by the Government so as to bring uniformity. It is stated that if the control of the Government is not exercised over the theatres, citizens of the State will be harassed by the theatre managements by collecting exorbitant rates for admission into theatres, which would be a burden to the citizens at large. It is stated that the Government, having taken all conditions and circumstances into consideration, have issued orders in G.O.Ms.No.181, dated 11.07.2011, fixing the rates of admission, taking into account the cost of setting up and running a theatre, type of Municipality/Municipal Corporation in which the theatre is located, and the facilities provided in the theatre, including the quality of seats, sound and projection system etc. While referring to certain paragraphs in the judgment of this Court in the case of D.K.V.Prasada Rao & others V. Government of A.P.1, it is stated that the interest of public has to be kept in the forefront while fixing the rates of admission into cinema theatres. Referring to provision under Section 5(2) of the A.P. Cinemas (Regulation) Act, 1955, it is stated that in view of the controlling power on the licencing authority, the Government is empowered to fix the rates as has been done in the impugned G.O. In the counter, it is further stated that keeping in view the fact that more cine-goers are from middle and upper middle classes of the society, earlier, the Government has issued G.O.Ms.No. 369, dated 18.12.2008, enhancing the rates of admission for higher classes from Rs.40/- in air-conditioned class and from Rs.35/- in air-cooled class to that of Rs.50/-, without disturbing the rates of admission in other classes. It is stated that the Government, after taking into consideration the changing day-to-day economic scenario of the people of Andhra Pradesh, and after going through various recommendations and problems raised by the bodies representing the film industry as well as the Association represented by cine-goers, issued several G.Os. from time to time and the same are in accordance with the provisions of the A.P. Cinemas (Regulation) Act, 1955 and the Rules made there under. While referring to Section 11 of the A.P. Cinemas (Regulation) Act, 1955, which empowers the Government to make Rules, it is contended that the orders issued by the Government are in conformity with the said Rules.
8. In the counter, it is stated that the Government has issued G.O.Ms.No.2071, Home (General-Administration) Department, dated 02.12.2010, constituting a high power committee and the said committee, which is under the Chairmanship of the Chief Secretary to Government along with the members who are senior officers of the Government, has made its recommendations, keeping in mind the requests made by the A.P. Film Chamber of Commerce, Hyderabad, Telangana Film Chamber of Commerce, Secunderabad and the Telugu Producers Council, Hyderabad, upon which, the Government has issued the orders in G.O.Ms.No.181, Home (General-Administration) Department, dated 11.07.2011, enhancing the rates of upper classes to Rs.60/- in air-conditioned and from Rs.50/- in air-cooled classes to that of Rs.55/- without disturbing the admission rates of lower classes. Thus, pleading that the impugned orders issued in G.O.Ms.No.181, dated 11.07.2011, are in accordance with law and legally valid, prayed for dismissal of the writ petition.
9. Heard Sri S.Niranjan Reddy, learned counsel for petitioners in these writ petitions and Sri N.Sridhar Reddy, learned Special Government Pleader, appearing on behalf of Advocate-General, for respondents.
10. It is contended by Sri S.Niranjan Reddy, learned counsel for petitioners that in view of the provision under Rule 11-B(3)(a) of the A.P. Cinemas (Regulation) Rules, 1970, when the power for fixation of maximum rates for admission into different classes in the licenced premises of the cinema building are conferred on the licencing authority, it is not open for the Government to fix the rates of admission into various classes. It is submitted that a comprehensive reading of Rule 11-B(3)(a), (b), (c) and (d) makes it clear that the licencing authority is empowered to fix the rates of admission into different classes and any person aggrieved by the order of the licencing authority, is given the right of appeal to the Government, which is empowered to examine and modify. In that view of the matter, it is submitted that when the rules specifically prescribe the licencing authority to fix the rates, it is not for the 1st respondent-Government to exercise the power of primary authority, denying the remedy of appeal to the aggrieved person. It is submitted that such a power is conferred on the licencing authority so as to take several aspects into consideration, namely, the location of the theatre, quality of seating system, quality of sound system and the maintenance of theatre etc., before fixing the rates of admission, as such, the impugned order issued by the Government, fixing the rates of admission by merely classifying the theatres as air-cooled or air-conditioned, and on the basis of Corporations and Municipalities, is illegal and arbitrary. It is submitted by the learned counsel that when the licencing authority is empowered under Statutory rules framed under the Act, only such authority has to fix the rates, but no other person. It is further submitted that in any event, there is no rationale basis for fixing the rates of admission for higher classes as fixed in the impugned G.O. It is submitted that there are no guidelines for fixing the rates of admission, and certain theatres, which are providing extremely high-end facilities to the audiences, are also clubbed in the same class for the purpose of collecting the admission rates. Thus, it is submitted that dissimilar persons are treated in similar manner for the purpose of collecting admission rates and such fixation made in the impugned order offends Article 14 of the Constitution of India, and hence, the same is to be set aside. It is submitted by the learned counsel that though there is steep increase in the workers' wages, capital cost on investment and the apparatus, land rates etc., there is no reasonable classification, as rates are fixed uniformly, by the impugned G.O., merely classifying the location of theatres in Municipalities and Municipal Corporations, and dividing the cinema buildings into air-cooled and air-conditioned ones. It is submitted that even assuming that the Government is having such power, the fixation, which is made without having any rational basis, is arbitrary and illegal. The learned counsel has also referred to certain material placed before this Court with regard to the rates of admission in various multiplex theatres in the city of Hyderabad and the subsequent revisions allowed on the applications filed by the owners of such theatres, increasing the rates of admission. It is submitted that though the petitioners are also providing similar such facilities, which are being provided in the multiplex theatres, they are deprived of reasonable admission rates, which they are entitled to collect in the cinema buildings owned by the petitioners in these writ petitions. In support of his argument, the learned counsel has relied on the judgments of Hon'ble Supreme Court in the case of State of Gujarat V. M/s.Krishna Cinemas & others2, and in State of Punjab & another V. Hari Kishan Sharma3, on the judgment of a learned Single Judge of this Court, dated 27th February 2012, in W.P.No.4430 of 2009 and batch, on the judgment of a learned Single Judge of this Court in the case of Nataraj Theatre V. Government of Andhra Pradesh4, on the judgments of Hon'ble Supreme Court in the case of Babu Verghese & others V. Bar Council of Kerala & others5, in Prem Chand Somchand Shah & another V. Union of India & another6 and in the case of Kunnathat Thathunni Moopil Nair etc., V. State of Kerala & another7.
11. Per contra, Sri N.Sridhar Reddy, learned Special Government Pleader appearing for Advocate-General, submits that in view of the clear provision under Section 5(2) of the A.P. Cinemas (Regulation) Act, 1955, the power conferred on the licencing authority for grant of licences and to impose such restrictions including the power for fixation of admission rates, is restricted and subject to control of the Government. It is submitted that in view of the regulatory mechanism provided under the Statute, it cannot be said that the Government has no power or authority or jurisdiction for issuing the impugned G.O., for fixation of admission rates. It is further submitted that in view of the representations made by the organizations, namely, A.P. Film Chamber of Commerce, Hyderabad and the Telugu Film Producer Council, Hyderabad, the matter was considered from time to time and in view of the requests made, the Government has constituted a high power committed Chaired by the Chief Secretary, Government of Andhra Pradesh. It is stated that in view of the recommendations made by the said committee, the impugned orders are issued increasing the rates of admission over the rates notified in the earlier orders in G.O.Ms.No.369, dated 18.12.2008. The learned Government Pleader, in support of his argument, has relied on the judgments of Hon'ble Supreme Court in the case of Deepak Theatre, Dhuri V. State of Punjab & others8 and in the case of Minerva Talkies & others V. State of Karnataka & others9. Reliance is also placed on a Division Bench judgment of this Court in the case of D.K.V.Prasada Rao (1 supra).
12. In view of the submissions made by the learned counsel appearing for the parties in this batch of cases, mainly two questions fall for consideration, namely, whether the power conferred on the licencing authority for grant of licence and for fixation of rates of admission in a cinema building, is absolute or controlled by the Government in view of the provision under Section 5(2) of the A.P. Cinemas (Regulation) Act, 1955, and the further question which requires to be considered is, whether the fixation of rates of admission into higher classes as ordered by the Government is based on reasonable classification or not, and whether the Government has taken relevant material and aspects into consideration while fixing the rates of admission by classifying the areas into Municipal Corporations and Municipalities and by further classifying the theatres into air-cooled and air-conditioned etc.
13. At the outset, it is to be noticed that there are two Legislations governing the field; one relating to certification of films and the other one relating to regulation of exhibitions by means of cinematography. The Cinematograph Act, 1952, which is a Central Legislation, is enacted to make a provision for certification of cinematograph films and regulation of exhibitions by means of cinematography. Further, the Andhra Pradesh Cinemas (Regulation) Act, 1955 is an Act, which is enacted to provide for Regulation of exhibitions by means of cinematography in the State of Andhra Pradesh. A perusal of various provisions under the A.P. Cinemas (Regulation) Act, 1955 shows that it deals with the licencing for cinema buildings and the authorities empowered to grant such licences and the power of Government to regulate the exhibition of films.
14. For the purpose of considering the first submission of the learned counsel for petitioners with regard to the power of Government in fixing the rates of admission, it is to be noticed that a perusal of the provisions under Section 5(1) and (2) of the A.P. Cinemas (Regulation) Act, 1955, shows that the powers of the licencing authority are subject to control of the Government. At the same time, Section 11 of the Act empowers the Government to make Rules for carrying out various objectives of the Act. It is true that under Section 11- B(3) of the Act, the power for fixation of rates was conferred on the licencing authority. A perusal of the said provision shows that the licencing authority, while granting or renewing licence in Form-B, shall also fix maximum rates for payment of admission to different classes in the licenced premises. The said provision cannot be read in isolation and if it is read in conformity with the substantive provision under Section 5(2) of the Act, this Court is of the view that the power of the licencing authority is regulated and is subject to control of the Government. A perusal of Section 5 of the Act itself makes it clear that it restricts the powers of the licencing authority. The licencing authority is empowered to grant licence, provided it is satisfied that the applicant complies with the rules made under the Act substantially. By a further reading, it also makes clear that under Section 5(1)(b) of the Act, it is obligatory on the part of the licencing authority before grant of licence, to satisfy whether the applicant has taken adequate precautions to provide for safety of the persons attending the exhibition therein. A reading of Section 5(2) also makes it further clear that the powers conferred on the licencing authority shall be subject to the provisions under Section 5(1)(a) and (b), and further subject to control of the Government. A harmonious reading of the aforesaid provisions makes it clear that it is always open for the Government to issue appropriate directions by way of restrictions, for their imposition while granting or renewing the licences under Form-B. In that view of the matter, it is very difficult to accept the contention advanced by the learned counsel for petitioners that there is no power at all to the Government for fixing the rates of admission, as has been done in the impugned G.O.
15. Though the learned counsel for petitioners has placed reliance on the judgments referred above, in support of his argument, disputing the power of Government in fixing the rates of admission, having perused the aforesaid judgments, this Court is of the view that the said judgments would not render any assistance in support of the case of petitioners. In the case of State of Gujarat (2 supra), arising under Bombay Cinemas (Regulation) Act, 1953, wherein, the very provision in the Act itself empowers the District Magistrate for issuance of 'no objection certificate' for constructing the building for cinematography purposes, when the Government has issued directions to the Magistrate not to issue the certificate, and when such an action was interfered by the High Court by issuing a Writ of Mandamus, the judgment of the High Court was upheld. In the case of State of Punjab (3 supra), which is arising out of Punjab Cinemas (Regulation) Act, 1952, when the Government has issued instructions to send all applications for licences to be forwarded to it for disposal, in the said context, while examining the power of the licencing authority under the aforesaid Act itself, the Hon'ble Supreme Court has held that under the guise of controlling power, the State Government cannot completely oust the powers of licencing authority and thus usurp its functions. In the aforesaid judgment, a distinction is drawn between the powers of the licencing authority and the Government and it is held that the Legislature contemplates the licencing authority as distinct from the Government and though the licencing authority has to act under the control of the Government, it is the licencing authority which has to act and not the Government itself. In a judgment of this Court in W.P.No.4430 of 2009 and batch, dated 27th February 2012, a learned Single Judge of this Court, while examining the orders of the Government issued in G.O.Ms.No.110, dated 19.02.2009, with regard to online booking through e-ticketing system in the State of Andhra Pradesh, has held as under : "All that the Government is entitled to do, in the exercise of its powers of control, is to issue quasi-legislative general instructions or directions to the primary licencing authority, and not to substitute or supplant itself for the primary licencing authority. The impugned G.O.Ms.No. 110, dated 19.02.2009, issued by the Government permitting GEPL to operate the on-line ticket booking system in the entire State of A.P. for a period of 10 years, is without jurisdiction and is ultra vires Sections 4 and 5 of the Act and Rule 17-A of the Rules." On the aforesaid ground, the said G.O. is quashed. In the case of Nataraj Theatre (4 supra), when an application was filed for reduction of seating capacity in a cinema theatre, and when such reduction was ordered by the licencing authority at the behest of the Government without taking independent decision, it is held that such an action on the part of the licencing authority, is illegal and it amounts to abdication of statutory duty imposed on the licencing authority.
16. Having regard to the fact situation as narrated above, the judgments referred above would not render any assistance in support of the case of the petitioners in these writ petitions. In all the aforesaid judgments, the powers of primary authority were exercised by the Government, and in such context, it is held that there was no independent consideration by the licencing authority. In those judgments, power is conferred by the statute itself on the licencing authority and such power was not exercised independently by the licencing authority, but either exercised directly by the Government or at the instance of the Government. In the context of such facts in all the cases referred above, the conduct of the respondents therein was faulted with. But, coming to the facts on hand, there is no provision in the substantive enactment, conferring absolute power either for grant of licences or to impose such restrictions including the fixation of the rates of admission. Such a power is conferred in the Rules, namely, the A.P. Cinemas (Regulation) Rules, 1970, which are framed in exercise of powers under Section 11 of the A.P. Cinemas (Regulation) Act, 1955. At the same time, it is to be noticed that there is a substantive provision under Section 5(2) of the said Act, which confers limited power on the licencing authorities for grant of licences and its renewals, subject to certain restrictions. Even such power is further controlled by the provision under Section 5(3)(2) of the said Act, and in that view of the matter, the impugned order passed by the Government in G.O.Ms.No.181, dated 11.07.2011, based on the recommendations made by the steering committee constituted for the said purpose, cannot be faulted on the ground that the Government lacks jurisdiction to fix the rates of admission.
17. Coming to the judgments relied on by the learned Government Pleader appearing for respondents, in the case of Deepak Theatre, Dhuri (8 supra), while examining the regulatory power of the Government under Punjab Cinemas (Regulation) Act, 1952, and while interpreting the analogous provision, the Hon'ble Supreme Court has clearly held; "The right to fix the rates of admission is a business incident, as the theatre owner having created an interest in the general public therein, it has become necessary for the State to step in and regulate the activity of fixation of maximum rates of admission to different classes, as a welfare weal. Thereby, fixation of rates of admission became a legitimate ancillary or incidental power in furtherance of regulation under the Act. Access to and admission in to theatre is a facility and concomitant right to a cine-goer public. Classification of seats and fixation of rates of admission according to paying capacity of a cine-goer is also an integral power of regulation." If the aforesaid judgment of the Hon'ble Supreme Court is read coupled with the provision under Section 5(2) of the A.P. Cinemas (Regulation) Act of 1955, it cannot be said that the Government has no power for issuing directions for fixation of rates of admission into cinema buildings. In the case of Minerva Talkies (9 supra), when rule was amended limiting cinema shows to 4 per day, the Hon'ble Supreme Court, while examining the power of the State Government in limiting the shows, has held that the Act confers wide powers on the State Government for regulation of exhibition of cinematograph films, which includes the power to regulate the hours during which the cinematograph films may be exhibited, the seating arrangements for the members of the public and any other allied matters pertaining to public safety, health, sanitation and incidental matters. In that context, it is held that in view of the regulatory power conferred on the authorities, it is within the purview of the regulatory mechanism under the Act. The said reasoning also supports the case of respondents.
18. In view of the aforesaid judgments and having regard to the controlling powers conferred on the Government under Section 5(2) of the Act, the submission made by the learned counsel for petitioners that the Government has no power to fix the rates of admission at all, merits no acceptance and such a contention is, therefore, rejected.
19. The next question, which falls for consideration is whether, while fixing the rates of admission in cinema theatres, the Government has taken relevant aspects into consideration or not. It is the specific case of petitioners that all the theatres within the specified Municipalities or Municipal Corporations cannot be equated as one. It is argued by the learned counsel that the cost of setting up and running a theatre depends on several aspects, namely, value of the land, facilities provided in the theatre, including the quality of seats, sound and projection system etc. It is submitted that merely basing on the location of a theatre in Municipal Corporations and other locations, the 1st respondent-Government could not have fixed the rates. It is submitted that sometimes, an air-cooled theatre located in a more expensive location, would entail additional capital cost than that of an air-conditioned theatre which is constructed in an area, where, available land rate is cheaper than that of the other one. It is also the case of petitioners that reasonable classification is not made by the Government while fixing the rates and that rates are fixed uniformly by placing all the theatres in similar class. It is submitted by the learned counsel that the petitioner-theatres are almost in comparison with multiplex theatres in Hyderabad, in which, admission rates are fixed at much higher rate and they were also increased further by entertaining the representations made by the owners of such multiplexes. The learned counsel, in this connection, has placed reliance on the judgments of Hon'ble Supreme Court in Saradamani Kandappan V. S.Rajalakshmi & others10, in Rampur Fertiliser Limited V. Vigyan Chemicals Industries11 and in the case of Karnataka Industrial Areas Development Board & another V. Prakash Dal Mill & others12.
20. By the impugned G.O.Ms.No.181, dated 11.07.2011, the rates of admission into air-conditioned class was increased from Rs.40/- to Rs.50/- and in air- cooled theatres from Rs.35/- to Rs.50/-. In the said order, reference is made to earlier orders of the Government in G.O.Ms.No.175, dated 02.04.2005, in which, rates of admission in theatres were fixed. Earlier to the impugned orders issued in G.O.Ms.No.181, by which, rates of admission were fixed by marginally enhancing the earlier rates, orders issued in G.O.Ms.No.369, dated 18.12.2008, were in force. A perusal of the said orders in G.O.Ms.No.369 indicate that earlier orders were passed in G.O.Ms.No.175, dated 02.04.2005, fixing the rates of admission in cinema theatres in the State, basing on the location of theatres in Municipal Corporation area and other theatres located in selection grade and special grade Municipalities. Coming to the impugned G.O., basing on the recommendations made by the high power committee constituted vide G.O.Ms.No.2071, dated 02.12.2010, rates of admission are revised and fixed as under: Class Municipal Corporations Areas (Rs.) Other Locations (Rs.) Existing Rates Revised rates recommended Existing Rates Revised rates recommended Air-Conditione”
60. 30 40 Air Coole”
65. 25 30 Ordinar”
30. 20 25 From a perusal of the aforesaid table, it appears, broadly, the classification is made with regard to theatres located in areas of Municipal Corporations and other locations. At this point of time, it is to be noticed that in recent years, several Municipalities which were constituted under the A.P. Municipalities Act, 1965, were notified as Corporations under the A.P. State Municipal Corporations Act, 1984. Two Decades back, there were very few Corporations, including the Municipal Corporation of Hyderabad. In recent past, several towns which are headquarters and other than headquarters in the Districts, are notified as Municipal Corporations. There has been a galloping inflation and prices of immovable properties have increased steeply by leaps and bounds. This Court can take judicial notice of such steep increase in the land values in the last about a Decade. The land cost differs from place to place even in the notified Corporations. Land values in cities which are Corporations, are on much higher side in comparison to the towns, which are also notified as Corporations in the recent past. In such towns, which are also notified as Corporations, the land for construction of a theatre will be available at lesser cost than that of the land for construction in bigger Corporations like Hyderabad etc. As much as the rates now fixed are not only applicable to the existing theatres, but are also applicable for the threatres which will come up in future, such factor play an important role in fixing the admission rates. At the same time, it is to be noticed that several other important factors, which are required to be considered, are the quality of interiors, quality of seating system and availability of safety and security system, fire-fighting system, 100% stand-by generators, quality of sound system etc. The petitioner has placed on record the orders passed by the Government with regard to rates of admission in multiplex theatres in multiplex complexes. The multiplex complex as defined in the Rules framed under the Andhra Pradesh Urban Areas (Development) Act, 1975, shall mean an integrated entertainment and shopping centre/complex or a shopping mall and having at least three (3) cinema halls/screens. Apart from cinema halls, the entertainment area may have restaurants, cafeteria, fast food outlets, video game parlors etc. This Court is conscious of the fact that the petitioners, who are running isolated theatres, cannot seek the rates of admission as applicable for multiplexes, where several other facilities are available for recreation, but at the same time, it is to be noticed that in the Municipal Corporation limits of Hyderabad, when a multiplex by name M/s.P.V.R. Cinemas Pvt. Ltd., Punjagutta has submitted an application for increasing the rates of admission, the Government has issued orders in G.O.Ms.No.60, dated 11.03.2010, permitting to increase the rates from Rs.100/- to Rs.150/- for three screens, by considering the request of the said Company, on the ground that they have provided several facilities, namely, luxurious interiors, plush carpeting in the lobby and auditoriums, State of the art LCD screen in the box office counter, comfortable stadium style high-back seating with a seat width of 22 inches with comfortable leg space between the rows, auto flush toilet facility with high levels of hygiene, inherently fire retardant seat fabrics, modern safety and security systems and fire fighting system, smoke exhaust fans inside all auditoriums, etc. By taking similar aspects into consideration, the Government has also issued orders in G.O.Ms.No.61, dated 11.03.2010, granting permission for increase of rates of admission in M/s. Big Cinemas (Ad labs Films Pvt. Ltd.), Ameerpet, increasing the rates of admission from Rs.100/- to Rs.150/-. Considering the similar request, orders were also issued in G.O.Ms.No.63, dated 15.03.2010, increasing the rates of admission in 6-screen multiplex in Seavalley Resorts Pvt. Ltd., Visakhapatnam. Similarly, further orders were issued in G.O.Ms.No.77, dated 07.04.2010, increasing the rates of admission in M/s.Cinemax R.K.Cineplex, Hyderabad, by increasing the rates of admission by considering several factors, which are already referred above. It is the specific case of the petitioners in some of the writ petitions that they are providing same facilities like sound system, quality of seats, quality of screen, parking area etc., similar to that of multiplexes, inspite of the same, rates are fixed uniformly, only by classifying the theatres on the ground that such theatres are located in Municipal Corporations. It is true that so far as the multiplexes are concerned, they are governed by a separate set of rules with regard to rates of admission etc., but at the same time, I have referred to the aforesaid facts, only for the purpose of examining whether relevant aspects were taken into consideration or not for the purpose of fixing the rates of admission in the theatres which are regulated under the provisions of the A.P. Cinemas (Regulation) Rules, 1970. In that view of the matter, this Court is of the view that though the respondents have controlling power with regard to regulation of admission rates for cinema buildings, at the same time, fixation made by the Government is irrational and is not based on relevant material and study required for fixation of rates of admission. The respondents cannot fix uniform rates for all the theatres which are air-conditioned and located in Corporations. An air-conditioned theatre which is constructed with high standards cannot be compared with that of an air-conditioned theatre without providing all other facilities with high standards. It is the case of the petitioner in this case that his theatre is located in a town which is a notified Corporation. His case is that it is one of the best theatres and is having modern facilities in respect of seating arrangements, ambiance etc.
21. In the judgment in the case of Saradamani Kandappan (10 supra), which is a case arising out of a suit for specific performance, the Hon'ble Supreme Court, while confirming the judgment of the lower Court, by which, decree for specific performance was rejected, has observed that there is a galloping inflation of prices of immovable properties by leaps and bounds in recent times. In the case of Rampur Fertiliser Limited (11 supra), the Hon'ble Supreme Court, while considering the claim for award of interest under Section 34 of CPC, held that the Courts of law can take judicial notice of both inflation as also fall back in bank rate of interest. Further, in the case of Karnataka Industrial Areas Development Board (12 supra), the Hon'ble Supreme Court, while examining the power of Karnataka Industrial Areas Development Board for fixation of price, observed as under: "The Board being State within the meaning of Article 12 of the Constitution of India is required to act fairly, reasonably and not arbitrarily or whimsically. The guarantee of equality before law or equal protection of the law under Article 14 embraces within its realm exercise of discretionary powers by the State. The High Court examined the entire issue on the touchstone of Article 14 of the Constitution of India. It has been observed that the fixation of price done by the Board has violated Article 14 of the Constitution of India. It is correctly observed that though Clause 7(b) permits the Board to fix the final price of the demised premises, it cannot be said that where the Board arbitrarily or irrationally fixes the final price of the site without any basis, such fixation of the price could bind the lessee. In such circumstances, the Court will have the jurisdiction to annul the decision, upon declaring the same to be void and non est." In the case of Kunnathat Thathunni Moopil Nair (7 supra), while examining the Constitutionality of Travancore-Cochin Land Tax Act, 1955, the Hon'ble Supreme Court has held that it is one of those cases, where the lack of classification creates inequality, therefore, hit by the prohibition to deny equality before the law as contained under Article 14 of the Constitution of India. Further, in the case of Prem Chand Somchand Shah (6 supra), the Hon'ble Supreme Court has held as under : "As regards the right to equality guaranteed under Article 14 the position is well settled that the said right ensures equality amongst equals and its aim is to protect persons similarly placed against discriminatory treatment. It means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Conversely discrimination may result if persons dissimilarly situate are treated equally. Even amongst persons similarly situate differential treatment would be permissible between one class and the other. In that event it is necessary that the differential treatment should be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and that differentia must have a rational relation to the object sought to be achieved by the statute in question." 22. In the back-drop of the aforesaid judgments, which support the case of petitioners, this Court is of the view that the fixation of rates of admission, made in the impugned G.O. by making marginal increase over the rates notified earlier, is irrational and not based on any valid material. It is not open to fix the rates of admission merely basing on classification of theatres into air- conditioned, air-cooled and others, or the theatres, which are located in areas of Municipal Corporations and others. In view of the controlling and regulatory power conferred under the provisions of the A.P. Cinemas (Regulation) Act of 1955, while the Government may issue such general directions with regard to rates of admission by fixing the same by making reasonable classification, but irrespective of reality of rate of land and quality of apparatus used by the owner of the cinema building for the purpose of sound system, screening etc., all cannot be treated equally by applying uniform rate, merely on the ground that all are air-conditioned theatres or air-cooled theatres, or that they are located in Corporations and other locations. Even this classification based on the Corporations itself, is also discriminatory inasmuch as the theatres which are in Corporations like Hyderabad, Visakhapatnam and Vijayawada cannot be compared with the theatres which are located in other Corporations in the State. Even among the other Corporations excluding the aforesaid Corporations, there must be a reasonable classification for the purpose of fixation of admission rates. When several aspects with regard to quality of sound system, quality of seating, safety norms, parking area etc., are taken into consideration while fixing the rates of admission of the screens in multiplexes, there is no justifiable reason for not taking such aspects into consideration while fixing the rates of admission for the theatres regulated under A.P. Cinemas (Regulation) Rules, 1970. If such aspects are taken into consideration, there will be a vast difference in capital cost for establishing a theatre. Therefore, such factor is a relevant factor to be considered for the purpose of fixation of admission rates. It is true that the un-controlled and un-bridled power cannot be conferred on the licencing authorities in view of the controlling power conferred on the Government as contemplated under Section 5(2) of the Act, but at the same time, there must be a reasonable classification by the Government while fixing the rates of admission in cinema theatres. All the theatres located in Corporations cannot be treated equally. There are Corporations like cities of Hyderabad, Visakhapatnam, Vijayawada etc., which cannot be compared with the smaller towns which are also notified as Corporations under the A.P. State Municipal Corporations Act, 1984. Further, all the theatres which are air-conditioned and which are located in Corporations cannot be treated as one class. Such classification should be based on location of the theatre and the facilities provided, parking area, quality of sound system, quality of screening etc. Therefore, I am of the considered view that the impugned G.O. is discriminatory and rates fixed in the said G.O. are not based on any reasonable classification and such classification would amount to treating the dissimilar theatres as one, and it offends the rights enshrined under Article 14 of the Constitution of India.
23. For the aforesaid reasons, the impugned G.O. i.e. G.O.Ms.No.181, dated 11.07.2011, is quashed, with the following directions to the Government:
1. The 1st respondent-Government is directed to constitute a fresh committee within a period of six weeks from the date of receipt of this order, with the Chief Secretary as Chairperson, with such other members as deemed fit and proper, for the purpose of suggesting the factors to be considered while fixing the rates of admission into various classes of cinema theatres.
2. The proposed committee be requested to submit its recommendations within a period of two months, with regard to classification of theatres and for fixation of rates of admission into different classes in such theatres, in view of the observations made by this Court in this judgment.
3. On receipt of recommendations of the Committee, the 1st respondent- Government shall issue necessary orders with such classification and such rates of admission, based on the recommendations made by the committee, within a period of four weeks from the date of receipt of recommendations of the committee.
4. Till appropriate fresh orders are issued fixing the rates by making reasonable classification as observed by this Court in this judgment, the rates, which are notified in the impugned G.O., shall continue to operate. The writ petitions are allowed with the above directions. No costs. As a sequel, WPMP.Nos.7425 and 10993 of 2012 in W.P.No.3785 of 2012 stand allowed, whereas, WPMP.No.25089 of 2011 in W.P.No.20656 of 2011, WPMP.No.25091 of 2011 in W.P.No.20658 of 2011, WPMP.No.4753 of 2012 in W.P.No.3785 of 2012 and WPMP.No.25094 of 2011 in W.P.No.20661 of 2011, shall stand closed. ______________________ R. SUBHASH REDDY, J 25th September 2012