ORDER
K.A. Swami, J.
1. In W.P. No. 11562/87, the petitioner has sought for the following reliefs :
'1) This Hon'ble High Court may be pleased to declare and strike done the expression 'before the date of commencement of the Karnataka Cinemas (Regulation) (Amendment) Rules, 1978 (hereinafter in this Rule referred to as the Amendment Rules)' in Rule 105(1) as null and void for want of previous publication.
2) This Hon'ble High Court may be pleased to issue a Writ of mandamus or a direction in the nature of a Writ of mandamus directing the respondent to apply Rule 105 of the Rules without reference to the expression 'before the date of commencement of the Karnataka Cinemas (Regulation) (Amendment) Rules, 1978' on the ground that Rule 105(1) has referred to non-existent Rules.
'a) This Hon'ble High Court may be pleased to declare and strike down the expression 'before the date of commencement of the Karnataka Cinemas (Regulation) (Amendment) Rules, 1978 (hereinafter in this rule referred as the amendment rule)' in Rule 105(1) of the Rules as violative of Article 14 of the Constitution.'
'b) This Hon'ble High Court may be pleased to declare that the expression 'amendment rules' wherever it appears in 105 refers to Karnataka Cinemas (Regulation) (Amendment) Rules, 1987.'
3) This Hon'ble High Court may be pleased to declare and strike down the words 'before the date of commencement of the amendment rules' in Rule 105(6) of the Rules as violative of Article 14 of the Constitution.
4) This Hon'ble High Court may be pleased to issue a Writ of mandamus or a direction in the nature of a Writ of mandamus directing the respondents to deem the touring cinema license granted to the petitioner as void for a period of one year ending on 12-3-1988.
5) This Hon'ble High Court may be pleased to issue a Writ of mandamus or a direction in the nature of a Writ of mandamus directing the respondent to treat the petitioner's application for conversion filed under Rule 105 as an application for semi permanent cinema license and dispose of the same in accordance with law.'
2. In W.P. No. 12525/87, the petitioner has sought for the following reliefs:
'a) Issue a Writ in the nature of certiorari to quash the impugned endorsement bearing No. MAG(1) CNM (Touring) 2/87-88 dated 18-8-1987 issued by respondent-1 as per Annexure-C ;
b) Issue a Writ of mandamus directing respondent-1 to consider the petitioner's application dated 23-5-1987 made in Form-AA under Sub-rule (1) of Rule 105 of the Karnataka Cinemas (Regulation) (Amendment). Rules, 1987 on its merits and in accordance with law;
c) Issue an appropriate Writ, order or direction directing respondent-1 to continue the petitioner's touring cinema license with effect from 19-8-1987 upto a period of one year as per Sub-rule (6) of Rule 105 of the amendment rules ;
d) Issue such other Writ, order or direction as deemed fit in the circumstances of the case and allow this petition with costs in the interest of justice.'
In this order, the Karnataka Cinemas(Regulation)(Amendment) Rules, 1987 are hereinafter referred to as '1987 Rules'
3. Even though the reliefs sought for in these petitions are not identical, but the same are heard together as the contentions raised are common.
4. The petitioner in W.P. No. 11562/87 held a No Objection Certificate (NOC) under the Karnataka Cinemas (Regulation) Rules, 1971 (hereinafter referred to as the '1971 Rules') on the date the 1987 Rules came into force. As per the averments made in the petition, pursuant to the N.O.C. granted under the 1971 Rules, he completed the construction of the theatre and sought for a touring cinema license on 29-3-1987. The license was granted for a period of three months on 29-4-1987. The further case of the petitioner is that he has also applied for conversion of the touring cinema into a semi-permanent cinema on 23-5-1987. However, the conversion sought for by him in Form-AA is not granted on the ground that he did not have the touring cinema license on the date the '1987 Rules' came into force. Therefore, the petitioner has challenged the validity of the 1987 Rules and has sought for the reliefs which are reproduced above.
5. The petitioner in W.P. No. 12525/87 held a valid N.O.C. granted under the 1971 Rules. However on the date '1987 Rules' came into force, he did not have the license for running a touring cinema. He has also made an application in Form-AA on 23-5-1987 for converting the touring cinema into a semi-permanent cinema. He was granted the touring cinema license on 16-5-1987 for a period of three months under the 1987 Rules, as such it came to an end on 15-8-1987. Thereafter the touring cinema license has not been either regranted or continued. The case of the petitioner is that he has constructed at great cost the theatre which satisfies all the requirements of a semi-permanent cinema. However, the permission to convert the touring cinema into a semi-permanent cinema is not granted only on the ground that on the date 1987 Rules came into force, he did not have a license for running the touring cinema.
6. Having regard to the contentions urged on behalf of the petitioners and the respondents, the following points arise for consideration.
'1) Whether Sub-rules (1) and (6) of Rule 105 of 1987 Rules are violative of Article 14 of the Constitution?
2) Whether on the basis of the N.O.C. granted under the 1971 Rules, on the coming into force of the 1987 Rules, a holder of such N.O.C. is entitled to have the touring cinema license granted under the 1971 Rules? In other words whether the right accrued or a proceeding pending under the 1971 Rules relating to grant of a touring cinema license is saved under the 1987 Rules?
3) Whether the application filed in Form-AA can be treated as the one filed in Form-A?
4) Whether the 1987 Rules are materially different from the draft rules that were published under the Notification No. HUD 365 CNA 8 dated 29-7-1986 in the Karnataka Gazette dated 31-7-1987?
5) Whether the reference to Karnataka Cinemas (Regulations) (Amendment) Rules, 1978, instead of 1987 has affected the enforceability of the 1987 rules?'
7. Before taking up Point No. 1 for consideration, it is necessary to notice in brief 1987 Rules. Chapter XII in 1971 Rules dealt with all the aspects of a Touring Cinema. It contained Rules 88 to 111. This Chapter is now substituted by the new Chapter XII under 1987 Rules which in addition to substituting Chapter XII of 1971 Rules also substitute Sub-clause (ii) of Clause (14) of Rule 3 of 1971 Rules and insert Rule 7 A in 1971 Rules. 1987 Rules have simplified the procedure for obtaining a license for a touring cinema and at the same time have taken care to see that a touring cinema remains a touring cinema in the real sense of the term - 'touring cinema'. As per the definition of the expression 'Touring Cinema' found in 1987 Rules, means an outfit comprising the cinema apparatus with accessories taken from place to place for exhibition of cinematograph films or shows at any one place for a period not exceeding three months In conformity with this definition, the duration of a touring cinema license is limited to three months from the date of issue of license under Sub-rule (9) of Rule 90 of 1987 Rules. Thus under the 1987 Rules, a touring cinema cannot continue at any one place for a period more than three months. Consistent with this short duration, the elaborate procedure prescribed under the 1971 Rules for obtaining 'No Objection Certificate' even for a touring cinema has been done away with under 1987 Rules. Now the procedure prescribed under Rules 89 and 90 of the 1987 Rules enables the applicant to obtain a touring cinema license within 30 days from the date the application is made. At the same time, the simplified procedure prescribed under 1987 Rules has also taken care to ensure that all the necessary aspects are satisfied before a license is issued. These aspects are enumerated in Clauses (i) to (vii) of Sub-rule (2) of Rule 90 of the 1987 Rules.The authorities having jurisdiction over the area where a touring cinema building is proposed to be raised are made to examine the application for grant of a touring cinema with reference to the place where license is sought and several other matters as enumerated in Clauses (i) to (vii) of Sub-rule (2) of Rule 90 of the 1987 Rules and certify or report to the licensing authority within fifteen days from the date of receipt of the application. After receipt of the Certificates or reports, the licensing authority has to take a decision and pass an order either granting or refusing to grant the license within fifteen days from the date of receipt of the reports or certificates. In deciding whether to grant or refuse license for exhibition of films, the licensing authority shall have regard to the public interest generally and the status, antecedents and previous experience of the applicant. The licensing authority has no discretion but to reject the application if the applicant fails to substantially comply with the requirements of 1987 Rules and fails to satisfy that he had taken adequate precautions in the place regarding the safety, convenience and comfort of the persons attending exhibition of films. At the same time, 1987 Rules safeguard the interest of the applicant and ensure that the licensing authority does not become arbitrary in the exercise of his power. It is to prevent arbitrary exercise of power apart from placing time limit for disposal of the application, the licensing authority is made to communicate to the applicant the order in writing containing reasons in the event he refuses to grant license under Sub-rule (7) of Rule 90 of 1987 Rules in conformity with Sub-section (3) of Section 5 of the Karnataka Cinemas (Regulation) Act, 1964 (hereinafter referred to as the 'Act'). In addition to this, Rules 94 to 104 of the 1987 Rules prescribe several conditions which are to be satisfied by the applicant before he becomes entitled to a license. These conditions are intended to ensure safety, convenience and comforts of the persons attending exhibition of films. The conditions cover several aspects such as - building, sanitary convenience, material to be used for construction of the building, accommodation in the auditorium, lights, including a provision for alternative lights, fire extinguishers, distance between a touring cinema and a permanent cinema and between two touring cinemas, arrangement of seats, eaves, doorway etc., projection room and store room for films. Rule 105 deals with conversion of touring cinema into semi-permanent cinema. Thus 1987 Rules provide for every aspect of a touring cinema including conversion of it into a 'semi-permanent cinema' even though they do away with No Objection Certificate for a touring cinema.
POINT NO. 1 :
8. The contention of the petitioners is that under the 1971 Rules, no license for a touring cinema could be obtained and no building for a touring cinema could be constructed without obtaining, a No Objection Certificate; that it was not only a major step but it formed the very basis for obtaining a license for a touring cinema; that the procedure prescribed for obtaining the No Objection Certificate was as much elaborate as it is in the case of a semi or permanent cinema. Therefore it is the submission of the petitioners that there cannot be much difference between a person who has obtained a No Objection Certificate for putting up a touring cinema and a person who has obtained a license for a touring cinema on the basis of such No Objection Certificate. Therefore, it is contended that the classification made under the 1987 Rules placing 'holders of a No Objection Certificate' and the 'holders of license for a touring cinema' into different categories is based on no intelligible differentia and has no rational basis and that there is no nexus to the object sought to be achieved by the 1987 Rules. Hence Rule 105(1) and (6) of 1987 Rules are violative of Article 14 of the Constitution. In support of these submissions, the provisions contained in 1971 Rules relating to grant of No Objection Certificate and a license for a touring cinema are relied upon.
9. On the contrary, it is contended on behalf of the respondents by the learned High Court Government Pleader that there is a definite distinction between a 'holder of a No Objection Certificate' and a 'holder of a license' for a touring cinema, in as much as mere N.O.C. was not sufficient under the 1971 Rules to commence exhibition of films in a touring cinema even though it was necessary for obtaining a license; that even after obtaining a No Objection Certificate, an applicant was required to satisfy the conditions laid down in Rule 97 of the 1971 Rules. Therefore certain advantages have been conferred on those who held touring cinema licenses on the date 1987 Rules came into force in order to ensure that their business is not adversely affected and their establishment does not suffer and exhibition of films is not stopped; that the object of 1987 Rules is not to abolish or discontinue a touring cinema. It is one of the objects of 1987 Rules to enable the existing touring cinemas to seek conversion of the same into a semi-permanent cinema because under the 1987 Rules, license for the existing touring cinema cannot at all be renewed if a touring cinema has been in existence for over a period of three months. Hence it is contended by the learned Government Pleader that the classification of 'holder' of a touring cinema license' and a 'holder of a No Objection Certificate' into different categories is based on well-recognized distinction existing between the two and has a definite nexus with the objects of 1987 Rules which, as already pointed out, are not only to enable the existing touring cinemas to convert themselves into semi-permanent cinemas but also to allow a touring cinema at any one place for a period of three months only, therefore, Rule 105(1) and (6) of the 1987 Rules are not violative of Article 14 of the Constitution.
10. In order to adjudge the validity of these rival contentions, it is necessary to refer to the procedure that was required to be followed for obtaining a No Objection-Certificate under the 1971 Rules.
a) Rule 90 of the 1971 Rules provides the procedure to be followed for constructing a touring cinema building. It provides that a person who intends to construct a building for the exhibition of cinematograph film by a touring cinema shall make an application in Form-A. That application shall have to be accompanied by the following documents: (i).a receipt for having paid the fee, if any, at the rates prescribed by the local authority for construction of building and installation of machinery ; (ii) a treasury receipt for having paid the fee prescribed under Rule 100 for issue of 'No Objection Certificate'. (iii) an extract in triplicate of the plan of site showing the location with reference to the town or village, as the case may be, and indicating the surrounding roads and buildings which exist upto a distance of two hundred metres from the proposed site ; (iv) a plan in triplicate showing the details of construction of the building giving its area and dimensions in metres. In addition to this, the applicant is required to put up a notice in the Kannada language and also in the regional languages in Form-B in this behalf on a Board on the proposed site in such a position that it can be plainly seen from the public thoroughfare. The notice on the Board shall have to be on display until the application for license is decided by the Licensing Authority. The Board shall have to be 1.25 metres x 1 metre in size and the notice shall have to be in bold and clearly legible letters.
(b) Rule 91 relates to conditions regarding building. This Rule also provides that the building shall be provided on all its sides with an open space which in no part thereof shall be less than 10 metres in width. It also provides that the building shall have a road frontage on the public thoroughfare upon which the site of such building abuts. It also further requires that there shall be suitable means of entrance and exit for the public in such frontage. The caves of the building shall have a height of not less than 2 1/2 metres.
c) Rule 92 provides for sanitary conditions. Rule 93 states the circumstances under which the license shall not be granted. Rule 94 provides that in every building constructed of inflammable materials, there shall be on each side an aperture of atleast two metres high and five and half metres wide and it may be closed by that ties fixed on split bamboo frame and fastened by twine on the inside. Rule 95 deals with doors and apertures. Rule 96 relates to the procedure to be followed on receipt of an application for grant of No Objection Certificate. It stipulates that on receipt of an application under Rule 90, the licensing authority is required to notify the application at the cost of the applicant and also publish in one English and one Kannada Daily newspaper having the largest circulation in the area and also by such other methods as it may deem fit inviting objections. Such notices shall have to be in Form-C and the period within which objections shall be sent to the licensing authority shall be 10 days from the date of publication of the notice.
d) According to Rule 96, the licensing authority granting N.O.C. is required to inspect the site before he takes up the application for consideration. The licensing authority after being satisfied that the applicant has com-plied with all the requirements of Sub-rule (1) of Rule 90, shall have to forward the application together with the plans and other connected records to the local authority for its opinion regarding suitability or otherwise of the site for the location of the cinema. The licensing authority is required to depute an officer not below the rank of a Tahsildar for a joint inspection of the site with the concerned officers of the local authority. Upon return of the records from the local authority with its opinion, the licensing authority has to consider the objections, if any, received from the members of the public and the opinion of the local authority and decide whether to grant or refuse No Objection Certificate. Rule 96(5)(i) deals with grant of 'No Objection Certificate' for the second year. It, provides that the licensing authority, if satisfied after inspection or such enquiry as it may consider necessary and is of the opinion that the site continues to conform to the provisions of Clauses (h), (i), (j) and (k) of Sub-rule (1) of Rule 27 and of Rule 107, dispense with the requirement of notice under Sub-rule (1) of Rule 90 and the procedure specified in Sub-rule (3) for grant of 'No Objection Certificate' to the second year. This exemption is not available in respect of a camp site which had been licensed for a period of two years excluding the break period specified in Sub-rule (2) of Rule 98 immediately preceding the date of the application.
11. Thus from the aforesaid Rules, it is clear that before granting 'No Objection Certificate', elaborate procedure is required to be followed. Members of the public are afforded an opportunity to file objections. The local authority is also afforded an opportunity to express its opinion regarding suitability or otherwise of the site for location of the cinema. It is only thereafter, the licensing authority decides as to whether the No Objection Certificate has to be granted to the applicant for going ahead with the construction of the building. The requirements of the building, as already referred to, are dealt with in Rules 91 to 95 of I the Rules. The rules relating to the requirements of the building also indicate that sufficient precautions are taken to ensure the safety, convenience and comfort of the persons attending exhibition of film in the theatre.
12.1. It is on the completion of the construction in accordance with Rules 91 to 95, the N.O.C. holder is entitled to make an application as per Rule 97 of the 1971 Rules for grant of a license for a touring cinema which has to be considered under Rule 98 of the Rules. Rule 99 of the Rules provides for the duration of the license. At the stage of grant of license, the applicant is required to satisfy the following conditions:
i) He must produce a copy of the No Objection Certificate granted under Rule 96 of the 1971 Rules ; (ii) a certificate from the electrical Inspector or Deputy Electrical Inspector and declaration prescribed in Clause (c) of Rule 35 ; (iii) a treasury receipt for payment of fees for the license at the rates prescribed in Rule 106 ; (iv) a certificate from the concerned Assistant Executive Engineer in-charge of Communications and Buildings in respect of matters covered by Rules 91, 93, 94 and 95.
12.2 Thus at the stage of granting a license, the applicant is also required to comply with certain requirements which are not required to be satisfied at the stage of granting N.O.C.
12.3. On the basis of these provisions, it is submitted that grant of N.O.C. is not a mere formality but it is an important and integral part of the process of granting a license for a touring cinema ; that once N.O.C. is granted, a right is created in the holder of the N.O.C. to put up a building on the site in respect of which N.O.C. is granted and to secure license for a touring cinema. Therefore, it is the case of the petitioners that there is not much difference between the holder of a license and the holder of N.O.C.; that in fact they do not belong to or form two different categories. Therefore, the distinction made by the 1987 Rules between the N.O.C. holder and the license holder as on the date 1987 Rules came into force is neither real nor has any nexus to the objects sought to be achieved by the 1987 Rules.
13. The rule-making authority must be deemed to have had the knowledge of the legal position obtaining regarding the No Objection Certificate for a touring cinema Vis a vis the license for a touring cinema when it framed the Rules. In CHANNAGIRI RANGAPPA & SONS v. DISTRICT MAGISTRATE, CHITRADURGA AND ANOTHER, 1971(1) KLJ 60 a Division Bench of this Court while considering the provisions of 1971 Rules relating to No Objection Certificate, held thus:
'The Act does not make mention of 'No Objection' Certificate. But, in our opinion, a 'No Objection' Certificate is, in substance, merely the first stage in the grant of a license for the construction of a cinema theatre on a particular site or for conversion of existing premises into a cinema theatre. A 'No Objection' Certificate must be regarded as a part of a license. The scheme of the Rules appears to the to determine in two stages, the question whether a license should be granted to a permanent cinema. At the first stage, namely, the stage of granting or refusing a 'No Objection' Certificate, the situation of the site proposed for a permanent cinema theatre, the suitability of such site and the objections of the public for the location of the theatre, are considered.
Presumably, these two stages in licensing of cinema, are intended to eliminate expenditure and hardship that may result by allowing a person to construct a permanent theatre at huge expenditure and then refusing license to run a cinema in that theatre on the ground of unsuitability of the situation of that theatre or on the ground of objections of the public. If a 'No Objection' Certificate is granted to a person in respect of the proposed site after considering the objections that may be received, much of the risk and uncertainty is removed. If the grantee of a 'No Objection' Certificate constructs the theatre on such site so as to conform to the conditions set out in Rule 11 and if the electrical installations are certified to be satisfactory by the Electrical Inspectorate, the grant of a license ordinarily follows.
We find it difficult to accede to the contention of the learned Government Pleader that issue of 'No Objection Certificate' is no part of the process of licensing.....'
Again in D. RAMAIAH v. DISTRICT MAGISTRATE, BANGALORE, : AIR1985Kant151 Rules relating to No Objection Certificate came up for consideration before another Division Bench. In that decision, it was held thus :
'9. An application for an NOC either for a permanent theatre or a touring talkies is really an application for a license under Act. An NOC is also a part and parcel of the license and is the primary and most important step for issue of a license under the Act. All questions touching on the issue of a license under the Act are generally decided in a proceeding for grant of an NOC. After the NOC the grantee constructs the building in conformity with the terms and conditions imposed in the NOC and if the construction of the building is in conformity with the same, the DM normally issues a license to the grantee under the Act.'
Thus it was the established legal position as on the date the 1987 Rules came into force that NOC was a part and parcel of the license and it was a primary and most-important step in the process for issue of a license under the Act and an application for NOC was really an application for license and on construction of the building pursuant to NOC, grant of license followed.
Despite this legal position, the rule-making authority has tried to make a distinction between a holder of a No Objection Certificate and a holder of a license for a touring cinema which is not justified in law. Such a classification is based on no intelligible differentia.
13.2 By now it is well-established that a rule or a legislation, in order to pass the test of classification permissible under Article 14 of the Constitution, must satisfy two conditions viz., (1) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group: and (2) that that differentia must have rational relation to the object sought to be achieved by the legislation or the rule which is challenged being violative of Article 14 of the Constitution. Though the classification may be founded on different basis, but what is necessary is that there must be a nexus between the basis of classification and the object of the Act or the Rule concerned in a given case (See BUDHAN v. STATE OF BIHAR, : 1955CriLJ374 HANEEF v. STATE OF BIHAR, : [1959]1SCR629 , HARAK CHAND v. UNION OF INDIAN, : [1970]1SCR479 , PATHUMMA v. STATE OF KERALA, : [1978]2SCR537 and STATE OF WEST BENGAL v. ANWAR All
13.3. This takes us to find out the objects of 1987 Rules ; there are three objects which the 1987 Rules purport to achieve viz., (1) to enable all those who held the touring cinema licenses on the date 1987 Rules came into force-to convert the existing N.O.C. for touring cinemas into N.O.C. for semi-permanent cinemas ; (2) to limit the operation of the touring cinema for a period of three months only at any one place ; and (3) to simplify the procedure for obtaining a touring cinema license.
13.4. These objects are not in any way affected by allowing the holders of NOC for a touring cinema as on the date 1987 Rules came into force to have the NOC converted fora semi-permanent cinema. In fact there is no difference between a N.O.C. holder and license holder for a touring cinema for the purpose of conversion of a touring cinema into semi-permanent cinema. As per Sub-rule (1) of Rule 105 of the 1987 Rules, it is the N.O.C. of a touring cinema that is permitted to be converted into an NOC for a semi-permanent cinema. Therefore, the fact that one held a license on the date of coming into force of 1987 Rules and another held a mere NOC should not make any difference inasmuch as the NOCs held by both of them relate to a touring cinema only. As it is already pointed out, one of the objects of 1987 Rules is to permit the NOC of a touring cinema to be converted into an NOC for a semi-permanent cinema. As long as the N.O.C. issued under the 1971 Rules form an integral part of the license and it is that NOC that is converted into NOC for a semi-permanent cinema, there cannot be any justification for classifying an NOC holder and a license holder into two different categories and such a classification is neither based on any intelligible differentia nor it has any nexus with the object of the 1987 Rules. There is no understandable and reasonable basis at all for such a classification. When for all practical purposes and for purposes of 1971 Rules, NOC for a touring cinema forms an integral part of license, the holder of it cannot be classified into a different category and he cannot be subjected to a differential treatment and placed at a disadvantage.
14. The requirements laid down in 1971 Rules for the purpose of construction of a semi-permanent cinema are not altered by 1987 Rules. As per Sub-rule (2) of Rule 105 of the 1987 Rules, the licensing authority, after inspection or holding such enquiry, as it may consider necessary, is satisfied that the touring cinema building conforms to the requirements of the construction of semi-permanent building, is entitled to exempt such licensee from the requirement of the grant of No Objection Certificate. A No Objection Certificate holder even though he might have constructed similar touring theatre as on the date 1987 Rules came into force, is not entitled to have this benefit because he was not able to get the license for a touring cinema by the time 1987 Rules came into force. As already pointed out, the grant of license to a large extent depends upon the No Objection Certificate. In fact and in law, No Objection Certificate for a touring cinema under the 1971 Rules formed part of a license. Therefore, the distinction made between the holder of No Objection Certificate for a touring cinema and a licensee of a touring cinema on the basis of a license for a touring cinema held as on the date 1987 Rules came into force cannot be accepted as real one nor can it be accepted as the one based on intelligible differentia.
15. At this stage let us consider Rule 105 of the 1987 Rules. Rule 105 of the 1987 Rules reads thus :
'105. Conversion of Touring cinemas into semi-permanent cinemas.- (1) Any person who is having touring cinema license under these Rules before the date of commencement of the Karnataka Cinemas (Regulation) (Amendment) Rules, 1978 (hereinafter in this Pulse referred to as the Amendment Rules) and desires to convert such touring cinemas into semi-permanent Cinema may, within three months from the date of commencement of the Amendment Rules, applied in form-AA for conversion of existing No Objection Certificate into No Objection Certificate for semi-permanent cinema.
2) The licensing authority on receipt of application under Sub-rule (1) if satisfied, after inspection or such enquiry as it may consider necessary that the licensed touring cinema building conforms to the requirements of provisions relating to construction of semi-permanent cinema building may exempt such licensees from the requirement of the grant of the said No Objection Certificate.
3) If the licensing authority on inspection of the touring cinema is satisfied that the touring cinema building requires any modification in relation to structure of the building or otherwise, it may grant No Objection Certificate to the applicant in Form 'D' specifying that the applicant shall conform to the provisions relating to the semi-permanent cinema building within three years from the date of issue of such No Objection Certificate.
4) If the licensing authority is satisfied that no such No Objection Certificate is required in respect of conversion of a touring cinema into a semi-permanent cinema, it may grant license to the applicant for semi-permanent cinema.
5)The provisions of Rule 111G shall not apply to the No Objection Certificate granted under this Rule.
6) The license granted for a touring cinema under these Rules before the date of commencement of the amendment Rules be deemed to have been continued fora period of one year from the date of the commencement of the amendment rules.
Provided that such license shall not be deemed to have been so continued after the expiry of the period specified under Sub-rule (i) if such licensee does not apply for No Objection Certificate within the said period :
Provided further that if the licensing authority is satisfied that sufficient progress regarding conversion of existing touring cinema into semi-permanent has been made, and the licensee has also applied for the No Objection Certificate under Sub-rule (1), it may extend the license fora further period not exceeding one year at a time but the total period including the period so extended shall not exceed three years from the date of the commencement of the amendment rules.'
In order to avail the benefit of Sub-rule (1)of Rule 105 as it now stands, a person must have held a touring cinema license granted under the 1971 Rules and such a license must have been in force on the date the 1987 Rules came into force. It is only such licensee who will be entitled to have his touring cinema converted into a semi-permanent cinema if he makes an application in Form-AA within three months from the date of coming into force of the 1987 Rules. It is very pertinent to notice that what is to be converted is not the license but the No Objection Certificate granted in respect of the touring cinema. Again for the purpose of obtaining the benefit under Sub-rule (2) of Rule 105, what is necessary is that the touring cinema must be a 'licensed cinema'. If the application is filed under Sub-rule (1) of Rule 105 in Form-AA and it the licensing authority on inspection or such enquiry as it may consider necessary is satisfied that the building conforms to the requirements of the provisions relating to construction of a semi-permanent cinema building, it may exempt such licensee from the requirement of the grant of the NOC and straightaway grant a license to the applicant for a semi-permanent cinema. This follows on a reading of Sub-rules (2) and (4) of Rule 105 together. In fact after Sub-rule (2), Sub-rule (4) ought to have been placed and the present Sub-rule (3) ought to have been made Sub-rule (4). On the contrary, if the licensing authority is not satisfied that the building satisfies the requirement of a semi-permanent cinema, it is open to it to grant the No Objection Certificate in Form-D specifying that the applicant shall conform to the provisions relating to a semi-permanent cinema building within three years from the date of issue of such N.O.C. Thus a reading of Sub-rules (2) and (4) and also (3) of Rule 105 makes it clear that a touring cinema theatre constructed pursuant to the No Objection Certificate granted under the 1971 Rules is entitled to be considered under the 1987 Rules for the purpose of converting it into a semi-permanent theatre. Sub-rule (1) of Rule 105 as worded, insists that the applicant must have held a license for running a touring cinema on the date 1987 Rules came into force. So also Sub-rule (2) thereof uses the expression 'licensed touring cinema building.' When the license for running a touring cinema is only a last step in the matter and it is the No Objection Certificate for a touring cinema that is converted into a No Objection Certificate for a semi-permanent cinema and pursuant to a No Objection Certificate, the license normally follows, the absence of license should not make any difference for conversion of No Objection Certificate for a touring cinema into No Objection Certificate for semi-permanent cinema, as it is not the license that is converted but it is the No Objection Certificate that is converted. Therefore, the absence of license itself should not result in depriving a No Objection Certificate holder who has invested huge sum, pursuant to the No Objection Certificate, from the benefit of conversion of a touring cinema into a semi-permanent cinema. If it is held that unless a license had been obtained on the date the 1987 Rules came into force, holder of No Objection Certificate is not entitled to have the No Objection Certificate for a touring cinema converted into a No Objection Certificate for a semi-permanent cinema, it would result in discrimination in as much as both being the holders of No Objection Certificates for a touring cinema both are entitled to be treated alike. license is only a consequence which follows the N.O.C. Main thing is the N.O.C. Therefore license cannot form a basis for classification as it has no independent existence. Without N.O.C. no license can be granted and N.O.C. is a part of license. Therefore, Rule 105(1) to (5) if interpreted literally as they are, apart from resulting in discrimination among the persons forming one class, will also result in causing irreparable injury and loss to No Objection Certificate Holder as he will be deprived from obtaining a license in respect of the building constructed by him under the N.O.C. In such an event, he will have to be a fresh applicant and will be required to satisfy several other conditions such as those contained in Rule 111G of 1971 Rules which, in a given case, may result in complete deprivation of the benefit of the N.O.C. which is not the intendment of the, 1987 Rules as pointed out above. Further he will not be permitted to run a touring cinema for more than three months at any one place.
16. No doubt the general rule of interpretation is that the language of an Act or the Rule, as the case may be, has to be read according to its ordinary grammatical construction unless so reading would result in some absurdity, repugnancy or injustice but at the same time an interpretation which advances the object/s of the statute and saves the statute from being rendered as unconstitutional should be preferred. The Courts have normally acceded to the interpretation which has the effect of making the statute more meaningful and rational and Provides unjust consequences and also saves the statute from being unconstitutional. Maxwell while dealing with the topic 'Modification of the language to meet the intention' in Chapter 11 'Exceptional Construction' in his treatise The Interpretation of Statutes', Twelfth Edition, has stated thus:
'Where the language of a statute, in its ordinary meaning and grammatical construction, leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity which can hardly have been intended, a construction may be put upon it which modifies the meaning of the words and even the structure of the sentence. This may be done by departing from the rules of grammar, by giving an unusual meaning to particular words, or by rejecting them altogether, on the ground that the legislature could not possibly have intended what its words signify, and that the modifications made are mere corrections of careless language and really give the true meaning. Where the main object and intention of a statute are clear, it must not be reduced to a nullity by the draftsman's unskilfulness or ignorance of the law, except in a case of necessity, or the absolute intractability of he language used. Lord Reid has said that he prefers to see a mistake On the part of the draftsman in doing his revision rather than a deliberate attempt to introduce an irrational rule: 'the canons of construction are not so rigid as to prevent a realistic solution'.
What is, then, being discussed here are instances in which the Courts will depart from the literal rule. Such instances, are however, exceptional, and it is impossible to lay down any categories of cases in which ordinary grammatical interpretation will inevitably be abandoned: the Courts are very reluctant to substitute words in a statute or to add words to it, and it has been said that they will only do so where there is a repugnancy or something which is opposed to good sense.'
The Supreme Court in STATE OF U.P. & ORS. v. BASTI SUGAR MILLS CO. LTD. AND ORS., : 1961CriLJ570 was called upon to consider the scope of Clause (b) of Section 3 of the U.P. Industrial Disputes Act. In order to save the said provision from the vice of Article 14 of the Constitution, the Supreme Court departed from the rule of literal interpretation and placed a particular construction even though the wordings of the clause in clear terms did not so provide. The relevant portion of the Judgment is as follows :
'....The opening words of Section 3 themselves indicate that the provision's thereof are to be availed of in an emergency. It is true that even a reference to an arbitrator or a conciliator could be made only if there is an emergency. But then an emergency may be acute. Such an emergency may necessitate the exercise of powers under Clause (b) and a mere resort to those under Clause (d) may be inadequate to meet the situation. Whether to resort to one provision or other must depend upon the subjective satisfaction of the State Government upon which powers to act under Section 3 have been conferred by the legislature. No doubt, this result is arrived at by placing a particular construction on the provisions of that Section but we think we are justified in doing so. As Mr. Pathak himself suggested in the course of his arguments, we must try and construe a statute in such a way, where it is possible to so construe it. as to obviate a conflict between its various provisions and also so as to render the statute or any of its provisions constitutional. By limiting the operation of the pro-visions of Clause (b) to an emergency we do not think that we are doing violence to the language used by the legislature. Further, assuming that the width of the language could not be limited by construction it can be said that after the coming into force of the Constitution the provisions can, by virtue of Article 13, have only a limited effect as stated above and to the extent that they are inconsistent with the Constitution, they have been rendered void.'......Upon the construction we place on the provisions of Clause (b) of Section 3 it is clear that no question of discrimination at all arises......'
From the aforesaid decision it follows that it is open to the Court to place a construction on a statute which renders the statute constitutional and saves it from being rendered unconstitutional ; but at the same time, the Court must also take care to see that such an interpretation does not conflict with the various other provisions of the statute and does not defeat the objects of the statute.
In SURAJMULL NAGARMULL AND ORS. v. THE COMMISSIONER OF INCOME TAX, : AIR1961Cal578 the Calcutta High Court also held that the grammatical constructions leading to manifest contradiction of the apparent purpose of the enactment or to some inconvenience or absurdity, hardship or injustice not intended by the statute should be avoided and the construction may be put upon a statute which modifies the meaning of the words in order to avoid a conflict between its various provisions and to preserve constitutionality.
Beamount C.J. in EMPEROR v. SOMABHAI GOVIND BHAI, 178 IC 588 observed thus :
'But I protest against the suggestion that a Judge construing an Act of Parliament, is a mere automation whose only duty is to give out what he considers to be the primary meaning of the language used. A Judge must always consider the effect of any construction which he is asked to put on an Act or Parliament and if he comes to the conclusion that a particular construction leads to a result which he considers irrational or unfair, he is entitled and indeed bound to assume that the legislature did not intend such a construction to be adopted and to try to find some more rational meaning to which the words are sensible.'
17. In the light of these decisions and in view of the effect of literal interpretation of Sub-rules (1) to (5) of Rule 105 of the 1987 Rules, as pointed out above, it is necessary to examine whether without striking down the offending portions, it is possible to a void discrimination by putting upon the construction on Sub-rule (1)to (5) of Rule 105 of the 1987 Pules which even if modifies the meaning of the words used therein but saves the rule from the vice of Article 14 of the Constitution and at the same time advances the objects of the Rules.
18. If the words Touring Cinema license, and 'licensed 'touring cinema building' occurring in Sub-rules (1) and (2) respectively of Rule 105 of 1987 Rules are interpreted to include 'No Objection Certificate held for a touring cinema on 25-2-1987' and a 'touring cinema building constructed pursuant to No Objection Certificate', it would enable a holder of No Objection Certificate for a touring cinema to seek conversion of such No Objection Certificate into the No Objection Certificate for a Semi-Permanent,Cinema as per the provisions contained in Sub-rules (1) to (5) of Rule 105. In such an event, neither there will be any discrimination between the holder of a touring cinema license and a No Objection Certificate nor the holder of No Objection Certificate will be deprived of the benefit of Sub-rules (1) to (5) of Rule 105 of the 1987 Rules. Further such reading of Sub-rules (1) to (5) of Rule 105 of the Rules does not also affect the objects and intendment of 1987 Rules and also 1971 Rules. It is not the object of 1987 Rules to deprive the No Objection Certificate holder from such benefit. If Sub-rules (1) to (5) of Rule 105 of the 1967 Rules are read in the aforesaid manner, the holder of No Objection Certificate, as on the date 1987 Rules came into force, will be eligible to seek conversion of a touring cinema building and No Objection Certificate pertaining to it as per Sub-rule (1)of Rule 105 into a semi-permanent cinema and he will be entitled to file an application in 3 months for converting the existing No Objection Certificate into No Objection Certificate for a Semi-Permanent Cinema. Consequently both a license holder and a N.O.C. holder will be treated alike for the purpose of Sub-rules (1) to (5) of Rule 105 of the 1987 Rules and the contention based on Article 14 of the Constitution will lose its efficacy. At the same time such an interpretation advances the objects of the 1987 and 1971 Rules and does not confront any difficulty in the working out or implementation of Sub-rules (1) to (5) of Rule 105 of 1987 Rules.
In Sub-rule (2), the words used are : 'licensed touring cinema building 'and 'licensees'. If the words 'touring cinema license' occurring in Sub-rule (1) are to include 'No Objection Certificate' also, the words 'licensed touring cinema building' and 'licensees' occurring in Sub-rule (2) will also include a 'touring cinema building constructed pursuant to No Objection Certificate' and 'holders of No Objection Certificates' respectively. Sub-rule (2) is not independent of Sub-rule (1). It only directs that on receipt of the application made under Sub-rule (1), if the licensing authority is satisfied that the touring cinema building conforms to the requirements of provisions relating to construction of semi-permanent cinema building, he may exempt such licensee from the requirement of the grant of the No Objection Certificate for a semi-permanent cinema. The words 'licensed touring cinema building' and 'licensees' occurring in Sub-rule (2) in conformity with the interpretation placed on the words 'touring cinema license occurring in Sub-rule (1) to include the 'No Objection Certificate' shall have to be interpreted to include the 'touring cinema building constructed pursuant to No Objection Certificate' and 'holders of No Objection Certificates' respectively.
If Sub-rules (1) and (2) are so read, there is no difficulty in complying with Sub-rules (3) to (5) because Sub-rule (3) only relates to inspection of the building by the licensing authority. If on inspection it is not satisfied with the building, then it has to issue No Objection Certificate granting time to modify the building and comply with the requirements. Sub-rule (4), as already pointed out, provides that if the authority is satisfied that the building conforms to the requirement of a semi-permanent theatre, the licensing authority shall have to straight away issue the license for a semi-permanent cinema. As far as Sub-rule (5) is concerned, it only provides that the provisions of Rule 111G are not applicable to No Objection Certificate granted under the 1987 Rules. It does not make any distinction between the license holder and the No Objection Certificate holder.
19. Thus from what is stated above, it is clear that Sub-rules (1) to (5) of Rule 105 of 1987 Rules, if read and understood and applied in the manner stated above, the same will not be violative of Article 14 of the Constitution and at the same time will advance, and does not defeat, the objects and intendment of the Rules. This interpretation find sits root in the very concept of 'touring cinema license' and 'licensed touring cinema building'. From the preceding discussion it becomes apparent that under the 1971 rules, there could not have been a touring cinema license without a 'No Objection Certificate' in as much as 'No Objection Certificate' was a basis for a touring cinema license. Similarly, a touring cinema building could not become a 'licensed touring cinema building' unless it was constructed pursuant to 'No Objection Certificate. In the same manner under the 1971 Rules, a person could not become a 'licensee' unless he had obtained No Objection Certificate and constructed the touring cinema building pursuant to it. It was then only he could obtain a license and become a licensee. Thus it suffices to point out that the aforesaid interpretation does not either introduce new conception nor does it amount to reenactment. It only explains the true scope of the Rule and makes the Rule more rational, just and fair and removes the anomalies and avoids unjust results.
20. The next question for consideration is as to whether Sub-rule (6) of Rule 105 of the 1987 Rules is violative of Article 14 of the Constitution.
The contention of the petitioner is that this sub-rule also classifies the holder of a No Objection Certificate for a touring cinema and the holder of a license for a touring cinema into different categories and enables only the holder of a license to continue the touring cinema for a period of one year from the date of commencement of the 1987 Rules. Therefore, it is contended that if the holder of a No Objection Certificate as on the date of coming into force of 1987 Rules is also held to be entitled to the benefit of this sub-rule, no such discrimination exists. Therefore it is contended by the petitioners that a holder of No Objection Certificate for a touring cinema shall also be held to be entitled to have the license granted for a period of one year from the date of coming into force of the 1987 rules.
21. It is not possible to accept the contention urged on behalf Of the petitioners. The scope and object of Sub-rule (6) of Rule 105 of the 1987 Rules are quite different from those of Sub-rules (1) to (5) thereof. Sub-rule (6) relates to the touring cinema license granted under the 1971 Rules and was in operation on the date 1987 Rules came into force. Sub-rule(6) without the provisos reads thus :
'The license granted for a touring cinema under these rules before the date of commencement of the amendment rules be deemed to have been continued for a period of one year from the date of the commencement of the amendment rules.'
From the words underlined, it is clear that Sub-rule (6) saves the license granted under the 1971 Rules and was in force on the date 1987 Rules came into force No doubt while interpreting Sub-rules (1) to (5) of Rule 105 of the 1987 Rules, it has been pointed out in the preceding paragraphs of this order that the words 'touring cinema license' ; 'licensed touring cinema building,' 'licensees' occurring in Sub-rules (1) and (2) of Rule 105 are required to be construed to include 'No Objection Certificate;' 'touring cinema building constructed pursuant to No Objection, Certificate' and 'holders of No Objection Certificates' respectively. But the aforesaid interpretation of Sub-rule (1) and (2) is not intended to mean or hold that 'No Objection Certificate' is a license for a touring cinema; and a holder of No Objection Certificate is a holder of a license for a touring cinema or a licensee and the building constructed pursuant to No Objection Certificate is a licensed touring cinema building. In actually it is not so. A license for a touring cinema includes and takes into its fold a No Objection Certificate for a touring cinema, a licensed touring cinema building also includes a building constructed pursuant to a No Objection Certificate for a touring cinema; similarly the expression 'Licensee' also includes a holder of No Objection Certificate because these are integral parts, rather stages of 'touring cinema license'; 'licensed touring cinema building' and 'licensee' respectively, but not vice versa. They are parts of the whole and not the whole by themselves. Whenever a thing is deemed to be some thing, the only meaning possible is that whereas it is not in reality that some thing but it is treated as if it were that. Therefore, a No Objection Certificate for a touring cinema cannot be held to be a touring cinema license as in actuality it is not so. It is one thing to say that a touring cinema license includes No Objection Certificate for a touring cinema or a No Objection Certificate for a touring cinema to be treated in par or deemed to be touring cinema license and it is quite another thing to say that the No Objection Certificate for a touring cinema is a license for a touring cinema. Therefore the holder or a No Objection Certificate will not be entitled to the benefit of Sub-rule (6) of Rule 105 of the 1987 Rules. There is no classification involved in Sub-rule (6) of Rule 105 of the 1987 Rules. It is a simple rule providing that the license granted for a touring cinema under the 1971 Rules and in operation on the date the 1987 Rules came into force is deemed to have been continued for a period of one year from the date of commencement of the 1987 Rules. This deeming provision has become necessary as otherwise the license granted under the 1971 Rules after the coming into force of the 1987 Rules could not have been continued if that license was more than three months old because Sub-rule (9) of Rule 90 of the 1987 Rules and the definition of the expression 'touring cinema' do not permit the exhibition of cinema to-graph films or shows in a touring cinema at any one place for a period exceeding 3 months. Therefore, it is neither possible to hold that sub-rule (6) of Rule 105 of the 1987 Rules is violative of Article 14 of the Constitution nor the holder of a No Objection Certificate for a touring cinema granted under the 1971 Rules is entitled to have the benefit of this Rule so as to enable him to have the touring cinema license for a period of one year from the date of commencement of 1987 Rules. For the reasons stated above, point No. 1 is answered as follows :
'Sub-rules (1) and (6) of Rule 105 of the 1987 Rules are not violative of Article 14 of the Constitution; the words 'touring cinema license' occurring in Sub-rule (1) and the words 'licensed touring cinema building' and 'licensees' occurring in Sub-rule (2) of Rule 105 of the 1987 Rules are to be read so as to include 'No Objection Certificate' and 'touring cinema building constructed pursuant to the No Objection Certificate' and to include 'holders of No Objection Certificates' respectively and a holder of No Objection Certificate for a touring cinema is not entitled to the benefit of Sub-rule (6) of Rule 105 thereof.'
POINT NO. 2 :
22. Sri Sridharan, learned Counsel for the petitioner in W.P.No. 12525/87 contends that on grant of No Objection Certificate for a touring cinema under the 1971 Rules a right accrues to the applicant to have the touring cinema license granted under the 1971 Rules and that right even after the coming into force of the 1987 Rules is not taken away by the 1987 Rules ; as such the petitioner is entitled to seek license for a touring cinema under the 1971 Rules even though 1987 Rules have repealed Chapter XII of 1971 Rules. Learned Counsel has placed reliance on Clauses (c) and (e) of the Karnataka General Clauses Act. It is not possible to accept these contentions.
23.1. No doubt 1987 Rules have repealed the rules contained in Chapter XII of 1971 Rules and replaced the same by the new rules. The provisions of Section 6 of the Karnataka General Clauses Act are applicable; but the benefit of Clauses (a) to (e) thereof will be available only if there is no different intention appearing in the new rules.
23.2. In the instant case, 1987 Rules contain different intention. Under the 1971 Rules, a license for a touring cinema could be granted for a period of one year and it could be regranted or renewed for a further period of one year with a gap of one month between the two periods, Whereas under the 1987 Rules, a touring cinema cannot be allowed to exhibit cinematograph films or shows at any one place for a period not exceeding three months. Further a license for a touring cinema cannot at all be granted for a period exceeding three months from the date of issue of license. Under the 1987 Rules, it is also not necessary to go through the procedure of obtaining No Objection Certificate for a touring cinema before seeking the grant of a license of a touring cinema. Further a person holding touring cinema license on the date 1987 Rules came into force would be entitled to have his touring cinema converted into a semi-permanent cinema. Thus under the 1987 Rules, different intention appears as pointed out above. Therefore, it is not possible to hold that either the right to obtain a touring cinema license pursuant to No Objection Certificate granted for a touring cinema under the 1971 Rules or the proceeding initiated under the 1971 Rules for grant of license can be held to have been saved by the 1987 Rules. Therefore, the petitioner in W.P. No. 12525/1987 is not entitled to seek license under Rules 97 and 98 of the 1971 Rules. For the reasons stated above, Point No. 2 is answered in the negative.
POINT NOS. 3 to 5 :
24. In view of the aforesaid findings recorded on point Nos. 1 and 2, Sri K. Srinivasan and Sri B.C. Sridharan learned Counsel appearing for the petitioners submit that it is not necessary to record findings on points 3 to 5 because the same do not survive for consideration having regard to the interpretation placed by the Court on Sub-rules (1) to (5) of Rule 105 of the 1987 Rules by which the petitioners will be benefited. in view of this submission, I refrain from recording my finding on points 3 to 5.
OPERATIVE PORTION OF THE