Cinematograph licensing discretion cannot be arbitrary; refusal without proper reasons and factual consideration was held invalid.

A statutory licensing authority for a cinematograph theatre could not be treated as having unfettered discretion under Rule 5(2) of the Bombay Cinema Rules, 1954. The text states that the State Government's control remained subject to the statutory scheme, which contemplated municipal sanction, plan approval and even conversion of an existing building into a cinema; refusal based solely on prior construction was inconsistent with that framework. It further states that rejection of the application and the appellate order were vitiated because the authorities acted on an incorrect factual assumption and failed to apply their mind or give reasons in the exercise of quasi-judicial power. The resulting legal principle is that statutory licensing discretion must be exercised on relevant considerations and cannot be arbitrary.

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Issues: (i) whether the State Government could refuse a no objection certificate for a cinematograph theatre by treating Rule 5(2) of the Bombay Cinema Rules, 1954 as conferring absolute discretion, and whether such refusal was valid when the building already existed and complied with the statutory requirements; (ii) whether the order rejecting the application and the appellate order were vitiated for failure to apply mind and for want of reasons in the exercise of statutory power.

Issue (i): whether the State Government could refuse a no objection certificate for a cinematograph theatre by treating Rule 5(2) of the Bombay Cinema Rules, 1954 as conferring absolute discretion, and whether such refusal was valid when the building already existed and complied with the statutory requirements.

Analysis: The statutory scheme vested the licensing function in the Licensing Authority, subject to the State Government's control, and the rules regulating construction and permission for a cinema building contemplated compliance with municipal sanction, plan approval, and permission to build. The fact that the annexe had already been constructed did not bar consideration of the application, because the rules also permitted conversion of an existing building into a cinema. The expression "absolute discretion" in the rules could not enlarge the statutory power into arbitrary authority or allow the State Government to supplant the Licensing Authority. The refusal based solely on the prior construction of the building was therefore inconsistent with the statutory framework.

Conclusion: The refusal to grant the no objection certificate was not justified, and the contention that the State Government had unfettered discretion was rejected.

Issue (ii): whether the order rejecting the application and the appellate order were vitiated for failure to apply mind and for want of reasons in the exercise of statutory power.

Analysis: The record showed that the authorities proceeded on an incorrect assumption that the building had yet to be constructed, although it was already in existence and had been shown to comply with the rules. The appellate order merely reaffirmed the earlier decision without indicating consideration of the objections or recording reasons. Since the power exercised was quasi-judicial in character, it had to be exercised on relevant facts and with due application of mind; an unexplained refusal in these circumstances was legally infirm.

Conclusion: The orders rejecting the application and the appeal were rightly set aside.

Final Conclusion: The statutory power to regulate cinema licensing had to be exercised on relevant considerations and could not be converted into arbitrary executive control; the appeal failed.

Ratio Decidendi: Where a statutory licensing power is quasi-judicial and subject to statutory limits, the authority cannot invoke "absolute discretion" to act arbitrarily or to ignore relevant facts, and an order refusing relief without proper application of mind and reasons is invalid.

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