R.N. Vallinayagam Pillai, Proprietor of Sri Shanmugananda Touring Talkies vs State of Madras and Another

Rajamannar, C.J.—The petitioner applied to the District Magistrate, Tirunelveli the licensing authority under the Cinematograph Act, to run a

touring cinema called ""Sri Shanmugananda Touring Talkies"" at Mela Ambasamudram village. He had previously obtained the necessary licence

under the Places of Public Resort Act, paid the prescribed fee for the license and he states in his affidavit that he has complied with other rules and

conditions under the Cinematograph Act. The District Magistrate passed an order on 4-12-1950 refusing to grant a licence to him. It is now

common ground that this refusal was because of certain instructions issued by the Government in two orders dated 5-5-1950 and 11-11-1950. In

the first of these orders, the Government instructed licensing authorities to restrict the number of touring cinemas in places where there were

permanent cinemas in order to prevent unhealthy competition and to ensure public safety. In places where there was only one permanent cinema,

the licensing authorities were instructed to use the discretion vested in them to grant or refuse licenses to touring cinemas. There were detailed

instructions as regards the grant of licenses to permanent and touring cinemas based on the population of the area sought to be exploited. It was

''inter alia.'' directed that for places with a population of over 50000 no touring cinema should be allowed within a distance of three miles from the

nearest permanent cinema. We are not concerned with other instructions in this application. By the later order, the Government further instructed

the licensing authorities not to grant a license to a touring cinema within three miles of a place with a population of over 50000 even if there was no

permanent cinema there, as the intention of the Government was to encourage the construction of permanent cinemas in such places. In a village,

municipal or panchayat area adjoining a town with a population of over 50000 no touring cinema was allowed within three miles of the nearest

permanent cinema in the latter town. Licensing authorities were directed to strictly follow the instructions given in the earlier order of the

Government as well as in the later order and that they should not make any relaxation to suit any individual case. They were further intimated that

they should obtain the order of the Government in border line cases or in cases where they had any doubt on the question of granting or refusing

the license.

On behalf of the petitioner the validity of the refusal by the licensing authority to grant a license to the petitioner was challenged on the ground

that it was based on instructions from the Government which (1) were beyond the scope of the Act and (2) were in contravention of the article of

the Constitution which conferred a right on the petitioner to carry on the business of running a touring cinema.

There is no substance whatever in the first ground. The Cinematograph Act was passed to make provision for regulating exhibitions by means of

cinematograph. u/s 4 the licensing authority outside the Presidency town is the District Magistrate. But under S. 5(3) which confers a power on the

licensing authority to grant licenses to such persons as it thinks fit and on such terms and conditions subject to such restrictions as it may determine,

the licensing authority is subject to the control of the Provincial Government. It is presumably in exercise of this power of control that the

instructions above mentioned were issued by the Government to the licensing authorities. It is not strictly accurate to speak of these instructions as

rules framed u/s 8 of the Act, and so it is not necessary to deal with the contention that they go beyond the rule-making power contained in Section

8.

The second ground evidently presupposes that the petitioner has an unfettered and unrestricted right to carry on the business of running a touring

cinema at whatever place he likes. This obviously is not the correct position. Article 19(6) clearly contemplates that the State may impose

reasonable restrictions in the interests of the general public on the exercise of the right conferred by Article 19 (1) (g) on every citizen to carry on

any business. As was observed in the well-known case of ''Nebbia v. New York'', (1934) 291 U S 502: 78 Law Ed 940.

The Constitution does not guarantee the unrestricted privilege to engage in a business or to conduct it as one pleases. Certain kinds o� business

may be prohibited; and the right to conduct a business, or to pursue a calling, may be conditioned. Regulation of a business to prevent waste of the

State''s resources may be justified. And statutes prescribing the terms upon which those conducting certain businesses may contract, or imposing

terms if they do enter into agreements, are within the State''s competency.

This principle was applied in a subsequent case by the Supreme Court of the United States in the matter of granting permits for the construction of

radio broadcasting stations, ''Federal Communications Commission v. Pottsville Broadcasting Co.'', (1940) 309 U S 134: 84 Law Ed 656. In our

opinion the instructions contained in the two Government Orders contain restrictions which are reasonable and in the interests of The general

public. It is riot difficult to perceive that the said restrictions are in the interests of the safety and the health of the general public and designed to

prevent unhealthy competition which itself indirectly would have deleterious influence on the general public. It was not suggested that there has

been any discrimination of any sort, nor has mala fides been alleged. It was said during the course of the arguments that the authority erred in

considering that the area for which the license was asked for contains a population of over 50000; but we cannot canvass this fact which must be

peculiarly in the knowledge of the licensing authority. In any event, it is not open to us in this application to embark on an enquiry as to the correct

population figure of the area. There is no reason to interfere with the order of the licensing authority refusing to grant a license to the petitioner.

The applications must be dismissed with costs in C. M P. No. 5939 of 1951 only which we fix at Rs. 100.