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Judgment
Nainar Sundaram, A.C.J.
The third respondent in W.P. No. 6177 of 1988 is the appellant in this writ appeal. The first respondent herein was the petitioner in the writ
petition and respondents 2 and 3 herein were respondents 1 and 2 in the writ petition. We are referring to the parties as per their nomenclature in
the writ petition. The third respondent obtained a no objection certificate, for putting up a permanent cinema theatre under the Tamil Nadu
Cinemas (Regulation) Act, IX of 1955, hereinafter referred to as the Act and the Tamil Nadu Cinemas (Regulation) Rules, 1957, hereinafter
referred to as the Rules. This happened on 1-3-1980. The very no objection certificate under the act and the rules clearly took note of the fact that
the land on which the permanent cinema theatre was sought to be located belonged to the third respondent and eight others. The parties own
different plots in the entirely of the land. Admittedly there was a partnership arrangement to construct and to run the cinema theatre. The petitioner
was one of the partners as per the regular deed of partnership dated 4-3-1981. The partnership was at will. The duration of the no objection
certificate being three years having lapsed, the third respondent was endeavouring to get extensions and he did succeed. On behalf of the
petitioner, it is stated that the extensions were objected to. Whatever that be, the fact remains that there were extensions. The last of the extensions
were granted on 27-4-1988. In the meanwhile, the parties have fallen out. The partnership has been dissolved. Litigation-strife has cropped up. It
must be noted here that the parties are the father namely the third respondent and his six daughters, two sons and a son-in-law, the petitioner. We
are told the sons are together with the father, the third respondent, but some of the daughters and the son-in-law, the petitioner are at loggerheads
with the father, the third respondent. The last of the extension was put in issue in W.P. No. 6177 of 1988 by the petitioner, who is one of the sons-
in-law of the third respondent. The main contention put forth by the petitioner before the learned single Judge, who heard the writ petition, was that
at the time when the impugned extension was granted, the possession of the third respondent could not be characterised as lawful within the
meaning of R.13(1) of the Rules and the impugned extension has to be struck down. The learned single Judge assessed this question taking note of
the materials exposed before him and came to the positive conclusion that the third respondent could not be stated to have had lawful possession
on the date of the impugned extension. The learned single Judge did accept the ground of attack put forth on behalf of the petitioner that the
impugned order the extension must be struck down also on the simple ground of it being a non-speaking one while doing so, the learned single
Judge took note of the ratio of the Division Bench of this Court in Chinnasamy Chettiar v. State of Tamil Nadu 98 L.W. 523=1985 (2) M.L.J.
383 to say that reasons, if they are expressed in or could be gleaned from the files, that would suffice the purpose. The learned single Judge,
however, frowned upon the impugned extension on the ground that on the question of the request for extension being genuine or otherwise there
has been no expression of opinion. The learned single Judge was also of the view that the principle of the pronouncement of the bench of this Court
in V.G. Balasundaram Vs. V.B. Gopalakrishnan and Others, that when a licence is granted to two persons jointly, a renewal of the same cannot be
granted on the application of one of them, will apply to the present case. Ultimately, the learned single Judge struck down the impugned extension
by allowing the writ petition. This has provoked the third respondent to prefer this writ appeal. Mr. R.D. Indrasenan, learned counsel appearing for
the third respondent, would first contend that this Court exercising jurisdiction under Art.226 of the constitution cannot interfere with the findings
and the decision rendered by the Authority under the Act and the Rules on the question of the possession of the appellant being lawful and do a re-
adjudication of the same. In this behalf, learned counsel relied on the following pronouncements:
(i) Om Prakash Gupta Vs. The Commissioner of Police, Madras and Others, .
(ii) C. Bhavarlal Managing Proprietor, Sri Meliata Talkies Vs. Mallay Gounder,
(iii M.C. Chockalingam and Others Vs. V. Manickavasagam and Others,
(iv) Rajakumari, T.R. v. The Commissioner of Police 99 L.W. 87=1986 Writ L.R. 31;
We shall examine every one of these pronouncements to find out as to whether there is a total bar or embargo set out in any of them for this Court
exercising powers under Art.226 of the Constitution to go into the question of lawful possession arising under the Act and the Rules. The relevant
passage in 1960 (2) M.L.J. 50 reads as follows :
Will it be open to this court in the exercise of special jurisdiction conferred by Art.226 of the Constitution to say that the licensing authority should
have been satisfied by the documentary evidence produced, as showing that the applicant is in lawful possession of the premises and equipment ?
There may be, we concede, exceptional cases where this court might hold that the order of the licensing authority is prima facie perverse. To give
an extreme example - suppose there is a Judgment of the Supreme Court, declaring that the applicant is in lawful possession of the premises and
that judgment is produced before the licensing authority, but the authority, nevertheless, says that he is not satisfied that the applicant is in lawful
possession, this court would interface. Barring such exceptional cases, we think that it does not lie within the province of this court to examine the
correctness of the view taken by the licensing authority in the case of each applicant as to whether he is or is not in lawful possession of the
premises and equipment.
The learned judge of the bench have not completely ruled out the examination by this court under any circumstances of the question of lawful
possession and they have expressed the view that there could be exceptional cases, where the finding of the authority is prima facie perverse.
Under the said circumstances, the province of this court exercising writ powers to examine the correctness or otherwise of the view by the
authority on the question of lawful possession cannot be said to have been lost. The learned judges of the bench have cited only an extreme
example. Certainly we cannot take that as exhaustive.
Coming to C. Bhavarlal Managing Proprietor, Sri Meliata Talkies Vs. Mallay Gounder, this question has been dealt with in the following manner
:
The jurisdiction to grant or refuse renewal of a licence is entrusted to the licensing authority which is not the court. The nature of the jurisdiction so
entrusted is clearly for the licensing authority to see whether on the documentary evidence produced ,he is satisfied that the applicant was in lawful
possession of the site. In exercise of his jurisdiction the licensing authority looks into the matter prima facie and for the purpose of his being satisfied
whether, the applicant, is in lawful possession. He is not called upon to decide the issue finally between the parties as in a suit. This aspect of the
matter should be kept in view when it comes up in the form of a writ petition under Art.226 of the Constitution. In exercise of this power this court
will not, in the background, take upon itself to investigate as to the legality of possession of the site in the hands of the applicant. All that can be
looked into by this court as we are inclined to think, is whether the licensing authority has applied his mind to the documentary evidence produced
before him and weighed it with a view to satisfy himself as to the legality. Short of caprices arbitrariness or mala fides the licensing authority would
more than have done his duty if he had gone through that process. If this court is satisfied about it, it will not further go into the rival position to
regard to the legality of possession of the site which will not necessarily be the final pronouncement between the parties but leave the issue to be
tried as between them in a suit in the appropriate civil court,
Here again we find that the observations are not unqualified. There is scope for review by this Court in exercise of powers under Art.226 of the
Constitution when there has been non-application of mind to the documentary evidence placed before the Authority or where the exercise of
power is vitiated by caprice or arbitrariness or mala fides. The non-application of mind may result in a misconception of the factual position on the
question of lawful possession and may also result in not taking note of patent legal implications flowing out of admitted or undisputed facts.
In M.C. Chockalingam and Others Vs. V. Manickavasagam and Others, the Supreme Court was concerned with the case of a lessee, whose
lease expired and who held over and who wanted to get a renewal of the licence under the Act. The board of Revenue set aside the order of the
Commissioner of police granting the licence in favour of the erstwhile lessee. The lessee challenged it under Art.226 of the Constitution before this
Court. The learned single Judge of this Court dismissed the writ petition. Thereafter the lessee preferred a Letters Patent Appeal to a Bench of this
Court, and the Bench allowed the appeal of the lessee. The matter went to the Supreme Court by way of Special Leave. The principal question
that came up for decision before the Supreme Court was as to whether a lessee, who is not a statutory lessee, is entitled to claim to be in lawful
possession of the premises on determination of the tenancy on the expiry of the lease. The concept of lawful possession under R.13 was summed
up in the following manner:
Turning to R.13, even in the first part if the applicant for the licence is the owner of the property he has to produce before the licensing authority the
necessary records not only relating to his ownership but also regarding his possession. It is implicit, that the owner having a title to the property, if
he can satisfy the licensing authority with regard to his possession also, will indeed be in ''lawful possession'', although the word ''lawful'' is not used
in the first part. It is in that context that the word ''possession'' is even not necessary to be qualified by ''lawful'' in the first part of R.13, if, however,
the applicant for the licence is not the owner, there is no question of his showing title to the properly and the only requirement of the taw is to
produce to the satisfaction of the authority documentary evidence with regard to his lawful possession of the property. The word ''lawful'',
therefore, naturally assumes significance in the second part while it was not even necessary in the first part. The fact that after expiry of the lease the
tenant will be able to continue in possession of the property by resisting a suit for eviction does not establish a case in law to answer the
requirement of lawful possession of the property within the meaning of R.13. Lawful possession cannot be established without the concomitant
existence of a lawful relationship between the landlord and the tenant. This relationship cannot be established against the consent of the landlord
unless, however, in view of a special law, his consent becomes irrelevant Lawful possession is not litigious possession and must have some
foundation in a legal right to possess the property which cannot be equated with a temporary right to enforce recovery of the property in case a
person is wrongfully or forcibly dispossessed from it.
There was a further discussion and finding about possession being lawful or not on the following lines:
Law in general prescribes and insists upon a specified conduct in human relationship or even otherwise. Within the limits of the law, courts strive to
take note of the moral fabric of the law. In the instant case, under the terms of the lease, the property had to be handed over to the lessor. Besides
under S.108(g) of the Transfer of Property Act, on the determination of the lease, the lessee is bound to put the lessor into possession of the
property. Since the landlord has not assented to the lessee''s continuance in possession of the property, the lessee will be liable to mesne profits
which can again be recovered only in terms of his wrongful possession. Under S.5(1) of the Act, the licensing authority in deciding whether to grant
or refuse a licence has regard, amongst others, to the interest of the public generally. Public interest is, therefore, also involved in granting or
refusing a licence. That being the position, the expression ''lawful possession'' in R.13 assumes a peculiar significance of its own in the context of
the provisions of the Act. Hence in any view of the matter possession of the respondents on the expiry of the lease is not lawful possession within
the meaning of R.13. The High Court is, therefore, not correct in its interpretation of R.13. The Board of Revenue in appeal was, on the right in
interfering with the order of the licensing authority and the learned single judge of the High Court rightly refused to interfering with the order of the
Board under Art, 226 of the Constitution.
The Supreme Court has expressed the view that there being no manifest error of law in the order of the Board of Revenue, there is no scope for
interference by the High Court under Art.226 of the Constitution. Thus, we find that if there is a manifest error of law, certainly that could be
corrected by this Court exercising powers under Art.226 of the Constitution.
The pronouncement in Rajakumari, T.R. v. The Commissioner of Police 99 L.W. 87=1986 Writ L.R., 31, which was rendered by one of us
(Nainar Sundaram, J) (as be then was) related to a prayer not to grant renewal even before there is a consideration of the question of renewal by
the authority concerned and such move after adverting to the principles was rightly repelled by saying that this matter has got to be adjudicated
upon by the authority concerned, who is already seized of the matter. We do not think that this case could be pressed forth for any useful purpose
with regard to the resolution of the question now in issue before us. Hence, we are not prepared to subscribe support to a broad proposition that
under no circumstances there is scope for this Court to review the question of lawful possession within the meaning of R.13 of the Rules, when it
exercises powers under Art.226 of the Constitution.
Next Mr. R.D. Indrasenan, learned counsel for the third respondent, would contend that extension of the no objection certificate is
contemplated under the proviso to R.36(3) of the Rules, and the no objection certificate having been granted initially after looking into all the
relevant factors, there need not be a further consideration of lawful possession at the stage of granting extension. It is better that we extract R.36(3)
and the proviso thereto as follows:
The no objection certificate so issued by the licensing authority shall be valid for a period of three years. If within this period, the proposed cinema
is not put up, a fresh no objection certificate should be applied for;
Provided; that the Government in genuine cases and for reasons to be recorded in writing, may extend the period of validity of the no Objection
certificate beyond three years.
Mr. K.T. Paipandian, learned counsel for the petitioner, would submit and in our view rightly that the same conditions required to be satisfied for
the grant of the no objection certificate must continue to prevail and hold good even at the time of the grant of extension. The no objection
certificate has come to be granted on satisfaction of certain conditions. One of the conditions is that where the appellant is not the owner of the site,
he shall, to the satisfaction of the licensing authority, produce documentary evidence to show that he is in lawful possession of the site. We cannot
contemplate a situation where this condition is absent at the time of grant of extension. Otherwise the very concept of extension will become a
misnomer. Extension could be only on the basis of the very same conditions which prevailed at the time of the original grant. There is a pointer to
this effect even in R.36(3) when it says that if within the initial period of three years for which the no objection certificate is to be issued, if the
proposed cinema is not put up, a fresh no objection certificate should be applied for. That is the basic proposition of the rule. When a fresh no
objection certificate is to be applied for, there cannot be escape from satisfying the conditions prerequisite for its grant. The proviso speaks only
about extension of the currency of the period of the no objection certificate in genuine cases. Certainly, we cannot construe the proviso as
completely abrogating the conditions pre-requisite for the grant of the no objection certificate. They must continue to exist even at the time of grant
of extension. Hence, we cannot accept this contention put forth by the learned counsel for the third respondent.
The third contention put forth by the learned counsel for the third respondent is, the possession of his client in the present case must be factually
held to be lawful and the learned single Judge was not in order in expressing an opinion contrary to it. But we find that the facts do not support this
contention of the learned counsel for the third respondent. As already noted, at the time of the grant of the no objection certificate on 1-3-1980,
the land was found to belong to the third respondent and eight others. The parties own different plots in the land. Obviously there was a consensus
amongst all concerned earlier with regard to the putting up of a permanent cinema theatre making available the entirety of the extent of the land. But
that consensus got disrupted and the parties were and are at loggerheads. The other parties are not prepared to permit the third respondent to
have the benefit of the lawful and peaceful possession of the extents of the land owned and belonging to them. They do not assent to the third
respondent having possession of the extents of land owned by them. The partnership has been dissolved. What semblance of right the third
respondent has to be in possession of the extents of land, belonging to others, we are not enlightened with. In that contingency we cannot but
characterise the possession claimed by the third respondent as litigious possession. As pointed out by the Supreme Court in M.C. Chockalingam
and Others Vs. V. Manickavasagam and Others, lawful possession is not litigious possession and it must have some foundation in a legal right to
possess the property, which cannot be equated with a temporary right to enforce recovery of the property, in case a person is wrongfully or
forcibly dispossessed from it. Again, as pointed out by the Supreme Court in the above pronouncement, the question of lawful possession has got
to be assessed from the angle of public interest also and hence it assumes a peculiar significance of its own. It is not possible to maintain the litigious
possession of the applicant as the basis for the grant to serve public interest. However much we tried, we are not able to spell out any semblance
of legal right for the third respondent to possess the entirety of the extent of land in question. This patent feature is one, which stares in the face of
the court. Though the impugned order of extension is not portent on the aspect, yet the factual materials exposed in the case, when looked into and
assessed, only indicate that the possession claimed by the third respondent is nothing short of litigious possession. It is a case of a manifest error
committed by the first respondent when the impugned order of extension was passed. We can also characterise the impugned order of extension
passed by the first respondent as suffering from non-application of mind to the patent and relevant aspects of the case It is an arbitrary one, and it
is prima facie perverse. The learned single Judge was right in striking down that order.
7 Mr. R.D. Indrasenan, learned counsel for the third respondent, would then comment that though the learned single Judge in one portion of his
order following the ratio of the bench in Chinnasamy Chettiar v. State of Tamil Nadu 98 L.W. 523=1985-II-M.L.J. 383, has expressed the view
that reasons though not apparently found in the impugned order of extension, if could be found in the records of the case, that would suffice the
purpose, has in another place found fault with the impugned order of extension on the ground it has not expressed any reason with regard to the
case being a genuine one. This observation of the learned single Judge has come to be made with reference to the language of the proviso to
R.36(3) of the Rules, which contemplates that in genuine cases, there could be extension. We need not strain our concentration over this aspect,
for the simple reason, we have found a warrant for concurring with the view of the learned single Judge on the main question of the third
respondent not having lawful possession of the site to enable him to get the extension of the no objection certificate.
Learned counsel for the third respondent would also adversely comment about the learned single Judge applying the ratio of the pronouncement
in Balasundaram v. Gopalakrishnan AIR 1974 S.C. 104, to the facts of the case and according 10 the learned counsel for the third respondent that
is totally inapplicable to the facts of the case because that pronouncement dealt with the case of a joint licence and here, such is not the position.
Mr. K.T. Palpandian, learned counsel for the petitioner, however, would contend that the third respondent was only representing the other owners
of the land and the no objection certificate was granted to him only in his representative capacity and there is a warrant for applying the ratio of that
pronouncement. Here again, we find that this question need not be gone into for the simple reason we have found that the third respondent could
not be stated to be in lawful possession and that is sufficient to frown upon the impugned order of extension.
Lastly, learned counsel for the third respondent would submit that his client has put up the cinema theatre at a very, heavy cost and on equitable
grounds there should be the upholding of the grant of extension. When legal principles come in the way and they speak against the grant of
extension in favour of the third respondent, it is not possible to build a case for him on the abstract basis of equity.
The above being our assessment of the contentions raised by the learned counsel for the third respondent, this writ appeal fails and the same is
dismissed. No costs. At this stage, Mr. K. Venkatraman, learned counsel on record for the third respondent, prays leave of us to appeal to the
Supreme Court of India. We have decided the points purely on factual basis, of course applying the law as set down only by the highest court in
the land itself. We do not think that the matter raises any substantial question of law of general importance, requiring resolution of the same by the
Supreme Court. Hence the oral leave asked for is refused.