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Judgment
K.A. Swami, C.J.—When Writ Appeal No. 184 of 1996 came up for hearing, we considered it necessary to hear Writ Petition No. 16589
of 1995 and all other connected writ petitions. Accordingly, all the connected writ petitions are posted along with the writ appeal and we have
heard both sides.
In all these writ petitions, the validity of the amendment to Rule 14 as introduced by G.O.Ms. 1326, dated 6.9.1995 is challenged on the
grounds that the amendment is not consistent or in conformity with the object mentioned in the preamble to the order, that the amendment is
arbitrary and unreasonable and seriously affects the rights of the owners or proprietors of the permanent cinemas.
G.O.Ms. 1326, dated 6.9.1995 substituted Sub-rules (1) and (2) of Rule 14 of the Tamil Nadu Cinemas (Regulation) Rules, 1957. (hereinafter
referred to as the ''Rules''), Sub-rules (1) and (2) as existed before the substitution were as follows:
14(1) (a) In areas other than pilgrim towns, tourist centres, municipal corporations, the adequacy of existing places for the exhibition of
cinematograph films shall be decided on the basis of one theatre for a population for every 25,000 -
Explanation: Area for this purpose would mean area within 8 kilometres radius from the proposed site for which no objection certificate is sought
and the population of all the villages falling within that 8 Kilometres radius shall be taken into account.
(b) No travelling cinemas shall be allowed in towns with a population of 50,000 and above if there are three or more permanent cinemas.
(2) The restrictions in respect of distance between cinemas shall be as specified below.
A travelling cinema in any place shall not be allowed within a distance of 1.609 Km. of the nearest permanent cinema located in the same local
area or in the adjacent village, panchayat or town or in the City of Madras. Local area for this purpose means the area within the jurisdiction of a
municipal council or a Panchayat Board or a revenue village.
The distance between any two travelling cinemas shall be not less than Order 402 Km. There shall be no restriction in regard to the distance
between one permanent cinema and another permanent cinema.
The aforesaid Sub-rules (1) and (2) of Rule 14 of the Rules are substituted by the following sub-rules are substituted by the following sub-rules
under G.O.Ms. 1326, dated 6.9.1995:
In the said Rules:
(1) In Rule 14, for Sub-rules (1) and
(2), the following Sub-rules be substituted, namely:
(1) There shall be no restriction to the grant of licence to permanent and travelling cinemas on the basis of population
(2) A travelling cinema in any place should not be allowed within a distance of 1.609 Km. of the nearest permanent cinema located in the same
local area or in the adjacent local area.
Explanation: For the purpose of this clause, ""Local Area"" means the areas within the jurisdiction of a local authority:
Provided that the Government may for reasons to be recorded in writing permit a travelling cinema within the distance specified in this clause from
the nearest permanent cinema.
Provided further that a travelling cinema may be allowed to complete its full term of five years even if a permanent cinema comes up within the
distance specified in this clause:
(b) The distance between any two travelling cinemas shall be not less travelling than Order 402 km. Provided that the Government for reasons to
be recorded in writing may permit a travelling cinema within the distance specified in this clause from the nearest travelling cinema.
(c) There shall be no restriction in regard to the distance between one permanent cinema and another permanent cinema.
The object as stated for substituting Sub-rules (1) and (2) of Rule 14 was as follows:
Cinema theatres are the main sources of entertainment for the public and more particularly for those in rural areas. In view of the steep increase in
land prices and competition from Cable TV. Networks, satelite Television, etc. measures to provide for adequate return on investments in cinema
theatres have become necessary for encouraging the setting up of new cinema theatres. With this object in view, the Government have examined
the following suggestions in consultation with the Principal Commissioner and Commissioner of Land Administration, Madras:
(i) Granting of permission to put up cinema houses with shopping complexes.
(ii) Granting of ''No Objection Certificates'' to put up permanent cinemas without considering population criteria.
(iii) Granting of permission to travelling cinemas to complete their full term of five years even if a permanent cinema comes up within the prohibited
distance.
The Principal Commissioner and Commissioner of Land Administration, Madras, has stated that majority of the Collectors have concurred with
the above proposals. He has therefore, recommended that these suggestions may be implemented.
After detailed examination, the Government have decided that suggestion (1) mentioned in para 1 above may be implemented subject to certain
conditions. They have decided to implement the other two suggestions also.
Accordingly, the Government pass the following orders:
(i) Construction of cinema theatres with shopping complex be permitted by the licensing Authorities subject to the condition that the licensing
Authorities at the time of processing applications for the issue of ""No objection Certificate"" should consider the requirement of open space in
consultation with the planning, Police, Fire services and Public Works Department authorities, keeping in view the number of persons expected to
visit the shopping complex as well as the cinema theatre and other aspects concerning free movement of persons/vehicles and the space required to
facilitate rescue operation in limes of emergencies.
(ii) ''No Objection Certificate'' to put up permanent cinemas be granted by the Licensing Authorities without considering the population criteria.
(iii) Travelling Cinemas be allowed to complete their full term of five years even if a permanent cinema comes up within the prohibited distance.
(iv) Travelling cinemas be permitted to be put up even within the prescribed distance from the adjoining theatres by the Government.
Before we deal with the validity of Sub-rules (1) and (2) as contended on behalf of the petitioners, we may point out the true scope of Sub-rules
(1) and (2). Sub-rule (1) abolishes the population criteria that was prescribed under the old rule. It specifically provides that there shall be no
restriction to the grant of licence to permanent and travelling cinemas on the basis of population, whereas Sub-rule (2) maintains the distance
between the travelling cinema and the permanent cinema. According to the said sub-rule, no travelling cinema should be allowed in a place, within
a distance of 1.609 km. of the nearest permanent cinema located in the same area or in the adjacent local area. The explanation to Sub-rules (1)
and (2) consists of three clauses. Clause (a) provides that for the purpose of Sub-rule (2) of Rule 14, local area means the area, within the
jurisdiction of a local authority. The first proviso to the explanation empowers the State Government to permit a travelling cinema within the
distance specified in Sub-rule (2) from the nearest cinema, for the reasons to be recorded by the Government. Thus, the distance prescribed under
Sub-rule (2) of Rule 14 between the travelling cinema and the permanent cinema can be reduced and a travelling cinema can be permitted within
the distance of 1.609 km. from a permanent cinema provided the Government is satisfied for the reasons recorded in writing that such permission
is necessary. The second proviso further provides that a touring cinema may be allowed to continue to remain in existence for a full term of five
years, even if a permanent cinema comes up within the distance specified in Clause (a). Normally, when a permanent cinema comes into existence,
no touring cinema can be allowed within a distance of 1.609 kms. as stated in Sub-rule (2) of Rule 14. The first proviso provides for an exception
to that rule and enables the Government to permit the travelling cinema, within the distance of 1.609 kilometres and further to allow a travelling
cinema to complete the full term of five years. Clause (b) provides that the distance between two travelling cinemas shall not be less than 0.402
kilometres. This requirement also can be done away with by the Government, for the reasons recorded in the order by permitting travelling cinema,
within the distance of 0.402 kilometres between two travelling cinemas. Clause (e) further permits that there shall be no restriction in regard to the
distance between one permanent cinema and another permanent cinema. From a reading of Sub-rules (1) and (2) of Rule 14 of the Rules, it
becomes clear that having regard to the fact that the population criteria is given up, the distance between two permanent cinemas is of little
consequence. Therefore the distance criterion between the two permanent cinemas is given up. Therefore, the requirement of distance between
permanent cinemas and travelling cinemas, if considered not necessary in a given case need not be insisted by the Licensing Authority provided the
Government passes an order by giving reasons in writing for doing so. Thus, in order to whittle down the requirement of Sub-rule (2) of Rule 14, a
Government Order is necessary and that order must contain reasons in writing.
The question for consideration is as to whether the proviso to Sub-rule (2) of Rule 14 can be held to be beyond the rule making power and
whether it is unreasonable.
Section 5 of the Tamil Nadu Cinemas (Regulation) Act, 1955 (hereinafter referred to as the ''Act'') specifically provides that the Licensing
Authority shall, in deciding whether to grant or refuse a licence, have regard to the several matters enumerated in Section 5. For our purpose, some
of them would be relevant, namely the interest of the cinema going public and other sections of the public generally, the suitability of the place
where the cinematograph exhibitions are proposed to be held, the adequacy of existing place for the exhibition of cinematograph films in the
locality. In order to enforce these and other matters Section 10 empowers the State Government to frame the rules. Clause (b) of Sub Rule (2) of
Rule 10 specifically provides for framing rules regarding terms, conditions, and restrictions subject to which the licensing authority may accord
approval in respect of the matters referred to in Clause (g). Clause (g) in turn provides the matters to be taken into consideration by the Licensing
authority before approving the site for the construction of the building, or the plans for the construction or reconstruction of the building or the
installation of the machinery. Section 11 of the Act empowers the State Government to exempt the conditions and restrictions of the
Cinematograph Act and the Rules, provided it passes and order in writing and subject to such conditions and restrictions as may be imposed.
In the decision in N. Kailasam v. The Secretary to Tamil Nadu (Cinema), Fort St. George, Madras-9, and Ors. (1981)2 M.L.J. 210 the
validity of Section 11 of the Act was challenged. A Division Bench of this Court in the aforesaid case has upheld the validity of Section 11,
following the decision in T. Shanmugam (Kandan Touring Talkies) Vs. M. Arumugam, Proprietor, Prabhat Talkies and Others, . Thus it is clear
that the very Act itself contains a provision enabling the State Government to exempt any cinematograph exhibition or class of cinematograph
exhibitions or any place where cinematograph exhibition is given, from any of the provisos of the Act and the rules made thereunder. Even in the
absence of the provisos to Clause (a) of Sub-rule (2) of Rule 14, such a power was available to the State Government. Merely because that
power is incorporated in the form of a rule, it does not become vulnerable, as long as Section 11 of the Act has been held to be valid.
Rule 14 as it stood prior to the present amendment, came up for consideration in the decision in Janardhana Raja Vs. The Collector of North
Arcot District and Another, and it was held to be valid, following the earlier decision of Division Bench in W.A.No. 491 of 1968. It was held that
the rule being regulatory, from the point of view of public interest, public health, safety, convenience, comfort and welfare, such a rule must be held
to be valid.
It is not possible to agree with the contention of the learned Counsel appearing for the petitioners that the provisos to Sub-rule (2) of Rule 14 go
counter to the object mentioned in the order. In the preamble portion of G.O.Ms. 1326, dated 6.9.95 it has been stated that the cinema theatres
are the main sources of entertainment for the public and more particularly for those in rural areas, that there is steep increase in land prices, that
competition from cable T.V. Networks, Satellite Television, etc. has affected the investment to be made in cinema theatres, the before it has
become necessary to encourage setting up of new cinema theatres. For that purpose the measures to be taken are mentioned in the subsequent
portion of the order. The provisos to Sub-rule (2) cannot be held to be contrary to the object mentioned therein. On the contrary the provisos
enable the State Government to effectively accomplish the object mentioned therein. There may be cases where if the distance criteria is strictly
applied, a vast number of the population may go without a cinema. Further such relaxation is not to be granted as a matter of course. The
Government has to be satisfied as to whether the requirement of Sub-rule (2) of Rule 14 of the Rules should be done away with or not, if so, the
reason/s for doing away with such requirements is are to be recorded in writing. The insistence of the reasons to be recorded by the State
Government for relaxing the requirement of Sub-rule (2) of Rule 14 acts as a safety device to prevent arbitrary exercise of the power. When the
reasons a to be recorded and if the reasons recorded are not valid and sustainable it is always open to the aggrieved party to invoke the
jurisdiction of this Court under Article 226 of the Constitution and have such an order quashed. Further a mere apprehension that a power
conferred on the State Government is likely to be exercised arbitrarily, is not a ground for invalidating such a rule. The Government is expected to
exercise its power reasonable and such exercise of power has to be free from arbitrariness.
In S.P. Shanmugham Chettiar, Managing Director, Jai Hind Talkies (Paramakudi) Private Ltd. Vs. P.S. Somasundaram and Others, a Division
Bench of this Court, while considering the scope of Section 11 of the Act empowering the Slate Government to exempt any cinematograph or the
place where the cinematograph is located, from any of the purview of the provisions of the Act and the Rules, has specifically held that Section 11
of the Act gives power to the State Government to exempt by order in writing, subject to such conditions and restrictions as they may impose, any
cinematograph exhibition or any place where cinematograph exhibition is given, from any of the provisions of that Act or of any of the rules made
thereunder, that it cannot be held to be ultra vires, because no guidelines are laid down for grant of exemption, that it will give room for arbitrary
exercise of power on the part of the Government and will not also be a ground to annul such a provision.
It has been held that in such cases, the Government should adopt the policy outlines in the preamble to the Act as well as in the other portions of
the Act and the Rules, that the power has to be exercised in conformity with the policy thus spelt out in the preamble of the Act and the other
provisions contained in the Act and the Rules, that if in an individual case, power is exercised not in conformity with the principles and policy of the
legislation, it is open to the challenged.
The Supreme Court in P.J. Irani Vs. The State of Madras, considered the validity of Section 13 of the Madras Buildings (Lease and Rent
Control) Act, which also empowered the Slate Government to make an exemption from the provisions of the Act. The Supreme Court held,
Enough guidance is afforded by the preamble and operative provisions of the Madras Buildings (Lease and Rent Control) Act, 1949, for the
exercise of the discretionary power vested in Government u/s 13 to exempt any building, or class of buildings from all or any of the provisions of
the Act, so as to render the impugned section not open to attack as a denial of the equal protection of the laws. But any individual order of
exemption passed by the Government can be the subject of judicial review by the courts for finding out whether (a) it was discriminatory so as to
offend Article 14 of the Constitution, (b) the order was made on grounds which were germane or relevant to the policy and purpose of the Act and
(c) it was not otherwise mala fide.
That being so, we are of the opinion that the amendment does not given a go-by to the distance rule, but it only gives a go-by to the population
criteria. But at the same time as per Section 5 of the Act, it is necessary for the licensing authority to consider whether in a given place licence for
locating a cinema theatre should be granted or not. While deciding that question the. existence of the number of the cinema theatres in the local
area and the necessity for having another theatre and also the distance between the permanent cinema and touring cinema will have to be taken into
consideration. It is not as though in all cases, the distance rule should be ignored, because the proviso enables the State Government to exempt.
The exemption is an exception to maintain the distance between a permanent cinema and travelling cinemas as per the rules.
12.1. As far as the permitting of the travelling cinema to continue for the full period of 5 years even after the coming into existence of the permanent
cinema with in the distance of 1.609 kilometres from the existing touring cinema is concerned, it may be pointed out that would be a case where
the rule cinema will be in existence and while such a touring cinema is in existence the permanent cinema comes up. The person who locates the
permanent cinema comes up. The person who locates the permanent cinema, would be knowing very well that there is a touring cinema and it is
going to remain for a period of five years. Even after knowing that fact, he embarks upon the construction of a permanent cinema theatre, he
cannot make any grievance, because it is his choice and nobody compelled him to seek licence to have the permanent cinema theatre within the
distance of 1.609 kilometres from the existing travelling cinema. Therefore, it is not possible to hold that the proviso which enables permitting of the
existing travelling cinema to continue for a full period of five years even after the coming into existence of the permanent cinema within the distance
of 1.609 Kilo metres, cannot be held to be bad in law. If the order continuing the travelling cinema for give years is not informed by valid reasons it
is always open to challenge.
In the counter filed by the State, it has been specifically stated that the petitioners have not made out any ground for holding that Sub-rule (2)
and the proviso thereto of Rule 14 are unreasonable, that imposing of restrictions or removal of restrictions due to changed circumstances will
benefit one set of people and may affect another set of people, that what is required is whether the executive has considered all the aspects without
bias in amending the rules or not, that the State Government wanted to ensure that here is adequate return on investment in cinema theatres in view
of the competition from Cable T.V. and Satellite T.V. and also to encourage setting up of new cinema theatres, that therefore, in the light of the
changed circumstances, after the rules were framed in the year 1957, it is claimed that the modification has become necessary, hence Sub-rules (1)
and (2) of Rule 14 of the Rules have been substituted.
We also do not find any substance in the contention that there is no nexus between Sub-rules (1) and (2) and the objects mentioned in the
preamble portion. It may be pointed out here that as the construction of cinema theatre and acquiring of land have become very costly and as there
is stiff competition due to Cable T.V. network, it may not be possible wherever necessary to have permanent cinema theatres. Therefore, one of
objects of the rule is to encourage touring cinemas to ensure entertainment through cinema to the public outside the cities. Similarly, to enable the
permanent cinema to come up in suitable place, the distance between the two permanent cinemas and the population criteria have been done away
with. This goes a long way to help the persons who are interested in locating the permanent cinemas. Therefore, we are of the view that there is
nexus between the objects stated in the preamble and the Sub-rules (1) and (2) of Rule 14 of the Rules.
Thus, looked at from any point of view, we are of the view that the provisos to Sub-rule (2) of Rule 14 of the Rules and also the Sub-rules (1)
and (2) cannot be held to be either ultra vires of the rule making powers of the Government or are hit by Article 14 of the Constitution. Hence, we
are of the view that Sub-rules (1) and (2) as substituted by G.O.Ms. 1326, dated 6.9.1995 are intra vires of the powers of the State Government
and are not violative of Article 14 of the Constitution.
For the reasons stated above, the writ petitions are dismissed. The connected W.M.Ps. are also dismissed.
In view of the dismissal of the writ petitions, the Writ Appeal No. 184 of 1996 does not survive. It is, accordingly, dismissed, as the said writ
appeal is preferred against the order vacating the interim order passed in the writ petition. The C.M.R is also dismissed. However, in the facts and
circumstances of the case, there will be no order as to costs.