Protap Properties Private Ltd. Vs. State of West Bengal and ors. - Court Judgment

Sinha, J.

1. This application relates to the granting of a license and to the renewal thereof, of a cinema house known as the 'Ashok Cinema' situated in Howrah. This cinema has been a fruitful source of litigation between the parties and from time to time there have been rival claims in respect of its ownership and occupation. In this application we are not concerned with a detailed consideration of such litigation. It is sufficient to state the brief facts. The petitioner, Protap Properties Private Ltd., is the landlord of the house in which the cinema is situated. One Durga Pada Mukherjee was his tenant. He was carrying on a cinema business therein known as the 'Ashok Cinema'. A license for that cinema was originally issued in the name of Durga Pada Mukherjee, for the year 1950 and it was renewed annually from 1951 to 1955. It appears that Sri Mukherjee entered into a partnership in 1955 and the partnership was later converted into a Private Limited Co. In 1956, a license was issued in the name of Hiralal Sanyal and this again gave rise to litigation, including a number of suits. In the year 1957, a number of applications were received, namely, by Hiralal Sanyal, Bachhram Chamaria and Sri Mukherjee. In view of the pending litigations, the District Magistrate was not inclined to grant any license For 1957. Subsequently however, he reopened the matter and a license was granted for the year 1957 to Durga Pada Mukherjee. Against this, there was an appeal to the Commissioner, Burdwan Division, who set aside the order. Durga Pada Mukherjee thereupon appealed to the State Government and It appears that he was allowed to continue running his cinema. On 2-11-1957 Durga Pada Mukheriee died on 4-11-1957 the respondent No. 3 Kanika Mukheriee, widow of Durga Pada Mukherjee, made an application under Rule 19 of the West Bengal Cinemas (Regulation of Public Exhibition) Rules 1956 describing herself as successor-in-interest of her husband. Thereupon the District Magistrate renewed the license. Thereafter, two applications were made to thisCourt, numbered C. R. Nos. 544 and 345 of 1958. On 16-12-1958 I made an order quashing the order of the learned District Magistrate dated 30-12-1957/ 2-1-1958. This was done in C. R. No. 544. When the other rule, namely, C. R. No. 545 of 1958 came up for hearing, I directed that the learned Magistrate should hear all the parties and thereupon decide the question. Upon that, the learned Magistrate gave notice to all parties, heard them and made an order renewing the license of the respondent No. 3 for the year 1958-59. This means that the efforts on behalf of the other parties, including the petitioner, to get a license in respect of the said cinema have become infructuous.

2. In this Rule I permitted only two points to be raised. They are as follows:

1. That the West Bengal Cinemas (Regulation) Act, 1954 confers no power to renew an existing license or a license that has expired, and that any order of renewal is invalid.

2. That the provisions of Rules 6 and 19 of the Rules framed under the said Act are ultra vires inasmuch as they provide for renewal of a license.

3. In fact, the two points resolve into one, which is the question as to whether under the Act and the Rules, it is permissible or constitutional to provide for the renewal of a license for a permanent cinema house. According to Mr. Dutt appearing for the petitioner, there is no provision in the Act empowering the Licensing Authority to grant such a renewal, and the provisions in the Rules empowering such renewal are ultra vires the provisions of the Act and as such void. This is a point of importance, because ever since 1918, when a statute was introduced for regulating cinemas, and uptil now, renewals of licenses are regularly granted. As will be found, the relevant statute aid not, and does not now, in its body, contain any express provision empowering the Licensing Authority to make an order renewing a license for a permanent cinema house. Naturally, the point has to be decided authoritatively, as it affects numerous licensees who have renewed their licenses from year to year in the customary fashion. In order to decide this question we are concerned at the moment directly with the 'West Bengal Cinemas (Regulation) Act 1954', being the West Bengal Act XXXIX of 1954. This Act was passed by the West Bengal Legislature and received the assent of the President on 29-12-1954. It came into operation sometime in 1955. In respect of this Act, there have been two amendments. The first is the 'West Bengal Cinemas (Regulation) (Amendment) Act, 1957 being West Bengal Act XVII of 1957 and the other is the 'West Bengal Transferred Territories (Assimilation of Laws) Act, 1958' being West Bengal Act XIX of 1958. This Act as amended, is to be read with the 'West Bengal Cinemas (Regulation of Public Exhibition) Rules 1956 which have been drawn up, in exercise of the powers conferred by Section 9 of the 1954 Act, namely, Act XXXIX of 1954. I shall first of all consider Act XXXIX of 1954. Section 4 of the Act provides for the appointment of a Licensing Authority. This is the District Magistrate, within whose jurisdiction the place where the exhibition by cinematograph is proposed to be given, is situated. The State Government, however, can appoint other Licensing Authorities. Section 5 lays down that the Licensing Authority shall not grant a license under the Act unless it is satisfied that the Rules made under the Act have been substantially complied with and the prescribed precautions have been taken in respect of cinema houses, providing for the safety of persons attending exhibitions therein. It also lays down how licenses are to be given, on terms and conditions as may be prescribed. Section 9 grants power to the State Government to make Rules. Sub-section (1) of Section 9 empowers the State Government, by notification in the Official Gazette, to make Rules for the purpose of carrying out the provisions of the; Act. Sub-section (2) gives illustrative examples of such powers and provides for various contingencies, The relevant clause is Clause (e) of Sub-section (2) which runs as follows:

'(e) the payment of fees for a license under this Act or for a renewal of such license or for an appeal under Clause (a) of Sub-section (4) of Section 5 or for an application for revision under Sub-clause (i) of Clause (b) of that sub-section'.

4. Coming now to the amendment introduced by West Bengal Act XVII of 1957, we find that Section 14 has been introduced, which inter alia lays down-that a license which was granted under the 1954 Act, and purported to have been renewed under the 1957 Act shall be deemed for all purposes to have been granted under the 1957 Act. The 1958 amendment, namely, the West Bengal Act XIX of 1958, has introduced Section 15, where also, the word 'renewal' of a license is mentioned. I now come to the Rules framed under the 1954 Act. Rule 6 lays down about the rate of license fees. Sub-rule (3) of Rule 6 runs as follows:

'Any licensee who fails to apply for renewal of his license with the requisite fee within 15 days of the expiry of his term of license shall at the time of its renewal be required to pay a fine of Rs.80/-.....'

5. Rule 17 relates to the situation when a license granted or renewed under the Rules is lost or incidentally destroyed. Rule 19 lays down that a license granted under the Rules is ordinarily not transferable. If, however, the proprietorship of the business, to which the license related, passed during, the subsistence of the license, or the licensee died, then the Licensing Authority might, on receipt of a written application from the successor-in-interest of the licensee, substitute the name of such successor in. the license, for the remaining period. There might also be an application for renewal of such license and that would be dealt with in accordance with the Rules.

6. Those being the provisions as to renewal, in the body of the Act, and the Rules framed thereunder, the question is as to whether such a renewal of a license in respect of a permanent cinema house is within the bounds of law. Mr. Dutta has argued that in the body of the Act there is no provision for the granting of a renewal. He points out that by Sections 4 and 5 a Licensing Authority is constituted and is granted the power to issue a license. No power has been granted to renew any such license from year to year or at all. Coming to Section 9, he admits that the word 'renewal' has been mentioned, but he says that by such a mention in the section granting rule making power, it cannot be said that there is any substantive provision in the Act for the making of any order for renewal or for granting the renewal of any license issued under the Act. He says that the Rules would only be made under Section 9, for the purpose of carrying into effect the provisions of the Act. According to him, supplementary provisions cannot be introduced by way of Rules for granting substantive powers to the Licensing Authority, which it does not possess under the Act itself. It is admitted again that under the Rules as framed, powers have been granted specifically to grant the renewal of a license. Indeed, the scheme is that a license is granted from year to year and when one year is gone the license comes to an end unless it is renewed for the ensuing year by payment of the prescribed annual fee. The point, therefore, resolves itself Into this, namely, as to whether, regard being had: to the frame of the Act and the language of the section granting power to Government to make Rules,it is permissible to introduce a system of renewal of licenses in respect of permanent cinema houses. It will be remembered that there is a distinction between the granting of a license and its renewal. When a license is originally granted, a certain procedure has to be followed in respect of inviting objections, etc. and a detailed investigation has to be made to and out whether the house for which the license is being issued has conformed to the standards of security, etc., which must be observed, to ensure public salety. When it comes to a renewal, the matter is only formal. An application lor a renewal being made and the prescribed fees being paid, renewalis more or less a matter-of-course. Although a mass of authority has been cited on the question of the framing of Rules under an Act, it really comes to this, namely, as to whether the renewal of a license is a matter provided for in the rules but not contemplated by the Act or Inconsistent with its provisions. In my opinion, it is unnecessary for me at this stage to deal with the mass of authority cited. I think that the law is fairly clear. Delegated legislation, by conferring on Governmental authorities' the power to supplement the provisions of a statute by the making of Rules is now of frequent occurrence. Roughly speaking, they can be divided into three categories. The first is where the Legislature itself frames Rules, which then form an appendix or schedule to the Act. There can be no doubt that in such a case, the Rules are an integral part of the statute. If there is any inconsistency between the provisions, the ordinary rules of interpretation will come into play. Where there is a provision to the effect that upon the making of Rules it would have the same effect 'as if incorporated 111 the Act', then again, although rules are framed by an Administrative body, the effect of making and publishing such rules in accordance with law incorporates the. rules within the statute and then it becomes part of the Act. The legal consequences would be the same as in the first category, mentioned above. The third case is, where it has been provided that rules may be made to carry out the provisions of the Act. In such a case, the mootquestion is as to whether, when such rules have been framed, they should be considered in the same manner as rules framed under the first two categories mentioned above. I think that there is a difference. In this third category, the rules made are only in furtherance of the provisions of the Act, and therefore, they must confine themselves within the four corners of the Act. I have held this in the case of Huzrat Syed Shah Mustarshid Ali v. Commissionersof Wakfs, : AIR1954Cal436 , and this has been approved by a Division Bench of the Andhra High Court in Amaravathi Motor Transport Co. v. State or. Andhra, AIR 1956 Andhra 232 at p. 234. A decision of the Supreme Court has been cited before me, T. B. Ibrahim v. Regional Transport Authority, Tanjore, : [1953]4SCR290 . In that case Ghulam Hassan, J., said as follows:

'Reliance was placed on a passage at page 297 of Craies on Statute Law as laying down that a bye-law must not be repugnant to the statute or the general law. But bye-laws and rules made under a rule-making power conferred by a statute did notstand on the same footing, as such rules are part and parcel of the statute itself.'

7. If this statement of the law is taken with awide import then indeed, the above distinction which has so long been well established in law, must vanish. In other words, it must be held that the law as now declared, lays down that Rules when promulgatedunder a rule-making power in the Act, become a part of the Act, in all cases, and therefore, there is no question of any repugnancy or inconsistency. I am happy to say that there is now a decision of this High Court in which the meaning has not been takenin that wider sense. In fact, in the case of Nirmalya Niva Sashmal v. State of West Bengal, (unreported decision of the Court of Appeal dated 18-9-58 in Appeal Nos. 273 to 275 and 277 of 1955), the same argument was put forward by the learned Advocate-General, but Lahiri, J. (as he then was), definitely stated that the passage cited above did not mean that statutory rules will have the same force as the statute itself, in all cases, although that is not so stated in the section conferring the rule-making power. The learned Judge said that in the context in which the observation cited above was made, it meant only this, that if a statutory rule was within the rule-making power conferred by statute, it could not be challenged as offending against the general law. I, therefore, take it that the Supreme Court decision cited above has not altered the law. In this particular case, the matter comes under the third category, and I do not think it can be contested that in order to validate the rules, its provision must be kept within the bounds of the Act. The only point upon which a dispute might arise is as to the boundaries of the Act itself and as to whether the rules have been kept within the limits required by law. As I have stated, it is conceded that in the body of the Act there is no specific or substantive power granted to the Licensing Authority to renew a license. The power that is expressly mentioned is to grant a license. It must, however, be recollected that the Act, beyond slating that a license should be granted and that no exhibition of cinemas should be carried out without a license, does not profess to deal with any further particulars. The terms and conditions of a license, including the period for which it would remain effective, the fees to be charged, and all other details are left to the rule-making authority. As Mr. Banerjee has pointed out, Section 9 which grants power to make rules, may be divided into two parts. The first part grants the general power to make rules 'for the purpose of carrying into effect the provisions of this Act'. Sub-section (2) delineates various power, which are illustrative of the general power, but which do not limit it. In Clause, (e) of Sub-section (2), there is an express mention of the word, 'renewal' of a license. Then, as T have pointed out, and as is emphasised by Mr. Majumdar, in both the amendments there is an express- reference to a 'renewal'. Ever since 1918, this has been the practice followed, and there is a legislative exposition of the meaning in two successive amendments. Taking all these things together, I am of the opinion, that the renewal of a license for a permanent cinema house is well within the limit, or scope, of the statute concerned. It is true that the substantive power to effect a renewal is not mentioned in Section 4 or 5, but there is power given to issue a license on conditions prescribed. One of the conditions to be prescribed is the period during which a license is to subsist. Under the rules a license subsists for one year, but at the end of the year it is subject to renewal. It has now been held that the renewal of a license is not the granting of a fresh license but a continuation of the old, license. Vide V.C.K. Bus Service Ltd. v. Regional Transport Authority, (S) : [1957]1SCR663 . Therefore, when a license is renewed, it is really a continuation of the old license, and therefore, the period may, in that manner, be indefinitely enlarged, until it comes to an end by the expiry or a license, when it is either not renewed or the licensee fails to renew St. I do not see how this is outside the scope of the ride-making power. The rule-making power is sufficiently general and includes everything that is necessary to give effect to the provisions of the Act, and the renewal of a license can be said to be the manner of carrying into effect the licensing provisions of the Act, and indeed, is a very important partof the procedure provided to carry into effect the provisions of the Act. In such a case, namely, where there exists a general power, the interpretation of it must not be too limited.

8. Mr. Majumdar has drawn my attention to a case that arose before me under the. Bengal Village Self-Government Act, and the rules made thereunder. What had happened was that under the said Act there was, and is. a provision for demarcating the limits of a Union Board, but there is no provision for a further demarcation of a Union Board into wards. This defect has been supplied by the Rules made under the Act, namely, the Bengal Village Self-Government Rules, 1952. It was argued that inasmuch as the Act did not provide for the subdivision of a Union into wards, no such subdivision could he effected. Although I felt some doubts in that matter, I held1 that this was a legal exercise of the rule-making power and that it had been so exercised since 1919, it never having been contended that the power was in excess of the provision of the statute. My decision was upheld by the Court of Appeal in Annada Prosad Guin v. District Magistrate and Collector of Murshidabad, : AIR1955Cal529 . I followed this in Ramesh Chandra Dutta v. Abdul Hamid Sardar, 60 Cal WN 264. It is obvious that the case under the Village Self-Gov-prnment Rules is much more drastic than the present case. In the present case, the Act, as well as its amendments, specifically refer to a renewal, whereas the Village Self-Government Act makes no reference whatsoever to any power of subdividing a Union into 'wards. Indeed, it conferred powers of de-limiting the area of the Union Board, but stopped there and said nothing about further subdivisions. It was, however, held that the rules introducing the system of division into wards were perfectly valid. In my opinion, the present case is much clearer on the point. In other words, iF such a rule contained inthe Bengal Village Self-Government Rules could be found valid, there is little doubt that the rules in the present case empowering the renewal of a license are well within the limits or boundaries of the statute and it is a legal exercise of the power granted under Section 9. After all, the basic reason for saying that a new power should not be introduced which was not in contemplation of the Legislature, which is responsible for the enactment of the statute, is that it would amount to legislation by an administrative body, and it may be that the Legislature never intended that such a provision should ever be made. That basic factor is absent here. The Act itself refers to renewal, and the amendments have expanded this idea further. It is impossible to say in the circumstances that the question of renewal was absent from the contemplation of the Legislature which was responsible for the promulgation of this Act. All that has happened is that the broad policy and principles having been enacted in the statute, the working out of the details have been left to the State Government, which has been empowered to make rules for the purpose of carrying into effect the provisions of the Act. The preamble of the Act says that it is an Act to provide for the regulation of cinemas in West Bengal. The primary instrument of control is the licensing of such cinemas. The details in respect of such licenses are to be worked out. not by the licensing authority, but by rules framed by Government. It is easy to see that from time to time exigencies may arise which would call for a rapid alteration of the rules to suit seasonable demands, and this could not be conveniently done through the Legislature. In my opinion, the subject of renewal of a license is well within the rule-making power and that the rules framed in respect thereof, particularly rules 6 and 19, arc valid and intra vires.

9. Mr. Banerjee draws my attention to the way in which the State of West Bengal has been made a party. In the cause-title, it has been described as the 'State Government of West Bengal'. Mr. Banerjee says that this is not permissible inasmuch as the Government is only a machinery for carrying the functions of the State, and cannot be said to be identical with the State. Interesting as this point raised is, I think that this is too technical, and in view of my finding, it is unnecessary to spend any further time upon it.

10. The result is that the two points that have been raised are answered against the petitioner's contention. I hold that the Act of 1954 does confer power to renew an existing license which has expired, and that the provisions of the rules in respect thereof arc perfectly valid and intra vires. These being the only points to be considered in this case, this application must fail and must be dismissed.

11. The rule is discharged. Interim orders,if any, are vacated. There will be no order as tocosts.