TaxTMI 
TaxTMI 
1983 (4) TMI 301
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....d right. Whether the base thus created on their four pillars (writ petitions) stand erected on solid foundation or shifting sand, is the subject of broach hereinafter. The reliefs claimed thereon are : (a) for declaration that the conferment of the rule-making power under Section 11 of the Andhra Pradesh Cinema (Regulation) Act (4 of 1955), hereinafter referred to as "the Act" as ultra vires the Constitution; (b) to declare R. 12 (3) and the conditions if any imposed in Form 'B' Licence pursuant to the said rule fixing the prices of cinema tickets as illegal, void and ultra vires the Constitution and the rule-making power; (c) and to issue a direction to the respondents to permit the petitioner to revise the rates of admission to their theatres. 2. The allegations made in support thereof are that the petitioners are either proprietors or lessee-licensees of the theatres at their respective places of business. They constructed the theatres at a huge cost. They provided all amenities as per law. Pursuant to the licences granted under the provisions of the Act and the Rules in the prescribed 'B' Form to exhibit cinematographs, they are doing their business. As owner....
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....f India Act and various Control Orders issued in pursuance of the delegation thereunder, have been brought on statute book inhibiting the free right of a citizen to fix the prices of essential commodities. If the Legislature intended to invade into this right of fixation of rates of admission, being a legislative act, the Legislature would have specifically provided for such a power under the Act itself. But the Act does not envisage any such power. A reading of the preamble, all the provisions of the Act and Rules, does not indicate any such power being given to the Legislature. The Legislature intended its delegate to make rules only to operate in the field adumbrated and adverted to earlier. Therefore, exercise of power by the delegated authority, viz., the State Government in making Rule 12 (3) lacks legislative competency and therefore unconsitutional. Even admitting that there inheres such power. It is not incidental to the main purpose and is of excessive delegation. There are no guidelines provided under the Act or the Rules made thereunder. Therefore it is arbitrary leading to capricious exercise of power. Even otherwise, it is an unreasonable restriction on the exercise o....
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....affidavit filed in W. P. no. 1279/80 it was averred that the petitioner No. 2 did not apply for enhancement of rates of admission. Petitioners 1, 3 and 4 made their applications. It was referred to the concerned officer for inspection and reports. They submitted the reports pointing out lack of some of the basic amenities and of their giving direction for rectification thereof. Without rectifying those defects and to evade providing the wanting amenities and sanitary conditions in the theatres, they approached this Court suppressing those facts and obtained directions. 7. In pursuance of the interim directions issued by this Court, the Licensing Authority made personal inspection of all the theatres. He found deplorable insanitary conditions and lack of basic amenities prevalent in the theatres. Yet he objectively considered and received the rates of admission depending upon the existing amenities etc. in the respective theatres. With regard to petitioner No. 1, he gave in paragraph No. 4 the particulars thereof and the reasons for increase or otherwise and for others in the subsequent paragraphs. He stated the existing, proposed and revised rates. They read thus :- &nb....
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....al to the main purpose. He draws an analogy from the rules made for admission of students into medical courses and the University Acts and the Statutes made thereunder for the actual running of the University subsequent to the admission. He states that rules of admission are only made to select candidates. Once candidates are selected and were admitted into courses, the rules ceased to have any application and thereafter the students are bound by the University Act and the Statutes made thereunder. On that premise he urges that once the rules were made for construction of the theatres, and the theatres are constructed as per the rules, the power gets exhausted. There is no further power to inhibit the fixation of right of admission by the licensees of the theatres unless there is a separate provision in the Act to that effect. In support of his contention that fixation of rates of admission is not one of the purposes of the legislative act, he places strong reliance on the decisions reported in a Division Bench decision of the Delhi High Court in Durga Chand v. Union of India, AIR1979Delhi249 , a single Judge's decision of the Punjab and Haryana High Court in Deepak Theatres, D....
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....tes of admission, a legislative act, to the rule-making authority. Lastly it is contended that even assuming that the Act provides for making such a rule and the rules are not made in excess of the delegated legislation and are valid; even then, the rule infringes their fundamental right to carry on the trade and their incidental right to fix rates of admission is ultra vires and unreasonably invaded their right; therefore it is violative of their fundamental right guaranteed under Art. 19(1)(g) of the Constitution. He relied on the decision reported in R. M. Seshadri v. District Magistrate, Tanjore, [1955]1SCR686 . 12. We may mention at the outset that though in the course of argument the learned counsel stated certain figures of percentage said to be increased in the cost of exhibiting cinematographs, we are refraining to refer them in detail for what of any material placed before us to consider their correctness. Though the contention of arbitrariness in procedure violating Article 14 of the Constitution was raised in the pleadings, it is not pursued at the Bar. Therefore we are relieved to consider the same. 13. Sri A. Venkatarama Reddy, learned Government Pleader appeari....
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....e writ petitions are entailed to be dismissed. 15. In view of the above respective contentions, the questions that emerged for decision are: (1) Whether the Act gives power to make the impugned Rule? (2) Whether the fixation of the rates of admission are illegal? (3) Whether the fixation of the rates of admission are illegal? 16. Before adverting to the above questions, it would be profitable to refer to the legislative history of the Act and the Rules. Legislative history: 17. For the first time in 1918, the Central Legislature stepped in to regulate proper control of cinematograph exhibitions with particular reference to the safety of the persons to witness them and to prevent exhibition to the public of improper or objectionable films. In implementation therefore, the Cinematographs Act (2 of 1918) was brought on Statute Book to obtain licence subject to the conditions prescribed thereunder and certification of films suitable for public exhibition. The Act reigned the field nearly for 34 years with amendments made from time to time. With the ushering of the Constitution and with the avowed pledge in the fundamental princip....
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.... Meaning of the word "Regulation" & Title a Key : 19. In view of the specific contentions raised by the parties, it is profitable to refer to the relevant provisions of the Act in detail. The prominent feature that strikes glaringly to the naked eye is the title of the Act, "The Andhra Pradesh Cinema (Regulation) Act, followed by its preamble. It is true", quoted Chief Justice Lefroy, by Craies on Statute Law, Seventh Edition at page 192 that "although the title of an Act cannot be made use of to control or express provisions of the Act, yet if there be in these provisions anything admitting of a doubt, the title of the Act is a matter proper to be considered, in order to assist in the interpretation of Act, and thereby to give to the doubtful language in the body of the Act a meaning consistent rather than at variance with the clear title of the Act (Shaw v. Ruddin, (1858) 9 CLR 214). The heart of the title is the word "Regulation". The prominence thus ascribed is to the word was "Regulation". But it lacks legislative definition of its own. Therefore, it is profitable to find what meaning has been ascribed to it either under the dictionaries or analogous statutes or Judge ma....
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....is given the meaning "to control, govern, or direct by rule or regulation". This entry thus, gives the power to Parliament to pass legislation for the purpose of directing or controlling all house accommodation in cantonment areas. Clearly, this power to direct or control will include within it all aspects as to who is to make the constructions under that conditions the constructions can be altered, who is to occupy the accommodation and for how long, on what terms is to be occupied, when and under what circumstances the occupant is to cease to occupy it, and the manner in which the accommodation is to be utilised. All these are ingredients of regulation of house accommodation and we see no reason to hold that this word "regulation" has not been used in this wide sense in this entirety. 24. It would, therefore, be reasonable to deduce that the word "regulation" is a word of broad import having wide meaning comprehending all facets not only specifically enumerated in the Act but also embrace within its fold the powers incidental to the regulation envisaged in good faith with an eye single to the public welfare. Court has to recognise this power of the Government in public interes....
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....antially complied with, and (b) adequate precautions have been taken in the place, in respect of which the licence is to be given, to provide for the safety of the persons attending exhibition herein. (2) "Subject to" the foregoing provisions of this Section and "to the control of" the Government, the Licensing Authority may grant licences under this Act, to such persons as that authority "thinks fit and on such terms and conditions and subject to such restrictions as it may determine; (3) The Government may, from time to time, issue directions to licensees generally or to any licensee in particular for the purpose of regulating the exhibition of any film or class of films, so that scientific films, films intended for educational purposes, films dealing with news and current events, documentary films or indigenous films secure an adequate opportunity of being exhibited, and where any such directions have been issued, those directions shall be deemed to be additional conditions and restrictions subject to which the licence has been granted. 31. In respect of the matters specified in clauses (a), (b) and (c) of S. 6(1) of the Act set ou....
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....n hereinafter called "Rules". They were published in the Andhra Pradesh Gazette and they came into force with effect from August 14, 1970. Now for the first time impugned rule was made. Therefore, these rules and appendices are statutory in character and form part of the integral scheme of the Act. 36. Rule 2 (c) defines 'building' means - in relation to a permanent cinema and temporary cinema, a building which is constructed for permanent use with stone, etc.; Rule 2 (n) defines 'place' means town or village (including the hamlet or hamlets attached to the village); Rule 2 (o) defines "prescribed' means prescribed by order of the Licensing Authority. Rule 2 (q) defines 'existing cinemas' mean the cinema buildings existing or those under construction prior to the commencement of these rules. Rule 4 empowers any person of the age of 20 years or any company or firm or association of individuals whether incorporated or not, to obtain or hold any permission or licence under the Act. 37. Rules 6 to 9 relate to compliance with the requirements of the specifications for construction of the cinema building and other general matters, as elaborated in the Ap....
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....specifies the requirements as to specifications for construction of the cinema building and other general methods. 46. Para 19 of Appendix I deal with : Seating arrangements : (1) The number of seats to be provided in the auditorium; (2) The number of persons to be admitted ......... calculating at the rate of 25 persons per 9 square meters of floor area, .... .... And at the rate of 30 persons per 9 square meters of floor area, etc.... 47. Para 22-A prohibits the use of licensed premises for any other purposes except for the purpose for which the licence has been granted. (The other appendices are not necessary to be dealt with in detail for the purpose of this case.) 48. Form 'B' is the licence for exhibiting cinematographs as required under sub-rule (2) of R. 12. 49. It is necessary to extract Condition (11) as prescribed in sub-rules (2) and (3) of R. 12 referred to and extracted earlier, which reads thus: 1. Maximum number of persons permitted and maximum rates of admission allowed in each part of the auditorium under sub-paragraph (2) of para 19 of Appendix I and sub-rule (3) of R. 12. Note: Th....
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....the so-called police power. The term "Police Power" ..... originally gave a signification "broad enough" to include within its scope "all the general regulative powers of the State and thus to embrace the specific power over public employment and those affected with public interest." 53. In a regulatory measure the Legislature should lay down its policy and indicate the rule of line of action which would serve as a guidance to the implementing authority. The Court would consider as to what is the scope of the regulation, its operation and effect on the exercise of the rights of the citizen in Part III of the Constitution. When large powers are given to certain authorities, the exercise whereof may make serious inroads into the rights of the citizen. Court has to see whether there is any guidance to be collected from the Act itself, its object, its controlling provisions in the light of the surrounding circumstances the Legislature takes note of which the Court might take judicial notice. The Court would put up such construction which would effectually implement the provisions of the Act to achieve its object and if possible avoid construction which would frustrate the very objec....
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....nnection therewith are made to acquire subject to the terms and conditions of the licence under the Act or Rules and further subject to such restrictions, terms and conditions as may be determined by the licensing authority. 56. In Jullundur Rubber Goods Manufacturers' Association v. Union of India, [1970]2SCR68 it was held: Where legislative policy is enunciated with sufficient clearness or a standard is laid down the Courts will not interfere. It will depend on consideration of the provisions of a particular Act including its preambles as to the guidance which has been given and the legislative policy which has been laid down in the matter. 57. Therefore, the Legislature indicated in Section 3 read with Section 5 and preamble laying down its broad policy specifying the purposes; adumbrated the powers and vested them in the licensing authority or notified officer and the State Government to carry out them. Power was given to the State Government to make rules regulating such conditions, restrictions and terms subject to which the licence could be granted and the general control. Thus, it could be seen that the purposes mentioned are neither exhaustive nor ....
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.... seen whether fixation of maximum rates of admission to different classes is one of the purposes envisaged under the Act. Witnessing cinematographs is an amusement to every person, rich or the lowest of the low. This habit has spread out widely even into the remotest villages or hamlets in the rural areas too and by now became an accustomed part of living. The Act itself provides for licence to permanent, semi-permanent and temporary theatres at any place. 'Place' has been defined in Rule 2 (n) to mean town or village including hamlet or hamlets attached to the village. Therefore, the leg intended that the power to regulate licensing of the exhibition of the cinematographs in all places situated at every nook and corner of the State. A majority of the population in the country are illiterates. Exhibition of cinematographs became media to impart education not only of the news, current events, but also of scientific, educational etc. (and) mythological stories of historical importance. Majority of population are poor, semi-middle class and middle class sections of the society. The business assumed public importance. 62. It is settled law that the Court can take judicial no....
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.... revenue. 65. It is not the contention that the Government is collecting any revenue from the rates of admission fixed. We will deal separately with the argument that the rates of admission are only motivated to fix the entertainment tax at an appropriate stage. But suffice to state here that the State is not deriving any revenue from the maximum rates of admission fixed under the impugned rule. 66. In Corporation of Calcutta v. Liberty Cinema, [1965]2SCR477 it is laid down by their Lordships of the Supreme Court that (at p. 1117): ... fixation of rates of taxes may be legitimately left by a statute to a non-legislative authority for we see no distinction in principle between delegation of power to fix rates of classes of goods and power to fix rates simpliciter, if power to fix rates in some cases can be delegated then equally the power to fix rates generally can be delegated. 67. In Sukhanandan Saran Dinesh Kumar v. Union of India, [1982]3SCR371 it was laid down that the power to fix minimum price or grant of rebate comprehends the power to provide such incidental and ancillary regulations which will ensure the price. Chief Justice Waite held in Munn v. Pe....
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....al. Thereby it became a legitimate ancillary or incidental step in furtherance of the regulation under the Act. 70. The decision in B. C. Banerjee v. State of M. P., [1971]81ITR105(SC) relied on by the petitioners for the proposition that the tax cannot be levied under the rule has no application to the facts in this case. Therein, the question that arose was, whether the Government under the guise of the rule making power can impose excise duty through an amendment to the rule. The object of the Excise Act is to get revenue to the State by imposing duty on the exercisable articles. Section 25 , as stated in para 12 of the judgment, limits, the power to impose excise duty on specified four items. Section 62 gives power to the Government to make rules to carry out the purposes of the Act. During the currency of the contract, rules were amended imposing levy of duty of minimum quantity of the liquor and to pay monthly deficit of the minimum duty on unlifted liquor. It was challenged as being ultra vires. While considering the scope of the Act, their Lordships have considered in paragraphs 17 and 18 of the judgment holding that the Legislature has levied excise duty on those articl....
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.... view as that of the Delhi High Court referred to above, but therein, the learned Judges proceeded on the assumption that the Act postulates only three enumerated objects referred to therein and were to be exhaustive of the purposes. On the premise the learned Judge held that there is no section in the Act authorising the licensing authority to prescribe classes in the cinema hall and to fix the rates of those classes. It is more in the nature of a dictum without providing any persuasive reasoning. In view of the consideration made on the subject by us, we are unable to agree with the learned Judge that there is no power under the Act to fix rates of admission. Therefore we are not persuaded to accept the same as correct law. 73. Similarly, the decision in Royal Arts v. State of Madras, AIR1969Mad211 (supra) also does not provide us any assistance. Therein the Government amended the rule directing the owner of the cinema theatre to collect fee of 0-05 ps. For each cycle kept in the cycle stand. That was challenged as being ultra vires of the power that learned Judge followed the earlier decision of that Court and held that the principle laid down in that decision apart from bein....
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....ve rules and regulations binding both upon their subordinates and upon the police, fixing in detail the manner in which the requirements of the statute are to be met and the rights created therein to be enjoyed. Therefore, what is left to the administrative official is not the Legislative determination of what public policy demands but simply the ascertainment of what the facts the case require to be done according to the terms of the law by which it is governed. It Union Bridge Co. v. United States, (1906) 204 US 364 , approved the statement of law in Lock's Appeal, 72 Pa. 491 at 498 wherein it was held: To assert that law is less than a law, because it is made to depend on future event or act, is to rob the legislature of the power to act wisely for the public welfare whenever a law is passed relating to a state of affairs and yet developed or to things future or importance to fully know........ To deny this would be to stop the wheels of the Government. There are many things upon which wise and useful legislation must depend which cannot be known to the law making power and must therefore be subject to enquiry and determination outside the ha....
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....utta v. Liberty Cinema, [1965]2SCR477 (supra) the Supreme Court, per majority, held (at p. 1109): No doubt a delegation of essential legislative power would be bad. But the fixation of rates of tax is not of the essence of legislative power of taxation. The fixation of rates of taxes may be legitimately left by a statute to a non-legislative authority, for there is no distinction in principle between delegation of power to fix rates of taxes to be charged on different classes of goods and power to fix rates simpliciter, if power to fix rates in some cases can be delegated then equally the power to fix rates generally can be delegated. 86. In Arnold Rodrick v. State of Maharashtra, [1966]3SCR885 , it was laid down that the delegation is necessary and the rules made are "ancillary and subserve" the purpose of the Act. That is the reason why the Legislature appears to have given wide power under Section 5 read with Section 11 in that behalf. 87. In Vasanlal Maganbhai v. State of Bombay, 1978CriLJ1281 their Lordships of the Supreme Court, speaking through Gajendragadkar, J. (as his Lordship then was) while considering the question relating to the delegation of powe....
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....gislature from time to time. Section 8(2)(b) of the Central Sales Tax does not suffer from the vice of abdication or excessive delegation of legislative power. 89. It is to be seen that in fixation of maximum rates of admission to different classes regard must be had (a) to the theatres-permanent, semi-transparent or temporary; (b) different places at which the theatres are situated i.e., the city, town, village or hamlet; and (c) consideration of varied and inumerable fluctuating factors like cost of production, nature of amenities provided, cost of exhibition and (d) other relevant circumstances. "It is to be remembered that a regulation is to operate not only to the existing theatres but also the theatres to be constructed or reconstructed in the years to ensue." The legislature thereby might well have thought that the problem should be left to be tackled by the licensing authority. Thus it left enough freedom to the State Government to make rules or amend them from time to time. The problem is to be approached from the above perspectives. Rule 12 (3) is part of the composite scheme evidenced by the Act and the Rules made thereunder and if it is examined in the light of the a....
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....uram, 1961CriLJ773 speaking through Subbarao, J. (as his Lordship then was) considering the scope of the Rule when it vires was assailed vis-à-vis the power of the Court to take judicial notice of the presumptions for the purpose of construction of rule and held thus (para 23): Rules made under a statue must be treated for all purposes of construction or obligation exactly as if they were in the Act and are to be of the same effect as if contained in the Act, and are to be judicially noticed for all purposes of construction or obligation. The statutory rules cannot be described as, or equated with administrative directions. 94. In Mulchand v. Mukund, AIR1952Bom296 a Division Bench of the Bombay High Court consisting of Chief Justice Chagla and Gajendragadkar, J. (as he then was) has to consider the scope of rule and held in that connection: Parliament or Legislature, instead of incorporating the rules into the statute itself, ordinarily authorise Government to carry out the details of the policy laid down by the Legislature by framing the rules under the Statute, and once the rules are framed, they are incorporated in the statute itself and b....
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....ing certain individuals or corporations to hostile or discriminating legislation. The principles apply proprio vigore to amendments to the Act and amendments to rules as well. 98. In Attorney General v. Great Eastern Railway, (1880) 5 AC 473, Lord Selborne held that: The doctrine of ultra vires ought to be reasonably and not unreasonably understood and applied and that whatever may be fairly regarded as incidental to or consequential upon those things which the Legislature has authorised ought not (unless expressly prohibited) to be held by judicial construction to be ultra vires. 99. We respectfully follow the dictum as it would tersely apply to the facts of this case. When the enactment is assailed as being ultra vires and unconstitutional what has to be ascertained is the true character of the legislation and for that purpose regard must be had to the enactment as a whole, its object, purpose and true intention and to the scope and effect of its provision and what they are directed against and what they aim at. 100. Of course, the Legislature cannot by-pass such constitutional prohibitions by employment of indirect methods. Therefore, the Court has to loo....
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.... Legislature intended to give power to the rule-making authority to regulate the rates of admission. We are unable to accept this contention as being tenable. 105. In Home Building Loans Association v. Blaisdell, (1933) 290 US 398, Chief Justice Hughes, speaking on behalf of the majority of the Supreme Court of America laid down that : When we consider the contract clause and the decisions which have expounded it in harmony with the essential reserved power of the States to protect the security of their peoples we find no warrant for the conclusion that the clause has been warped by these decisions from its proper significance or that the founders of our Government would have interpreted the clause differently had they had occasion to assume that responsibility in the conditions of the later day. The vast body of law which has been developed was unknown to the fathers but it is believed to have preserved the essential content and the spirit of the Constitution. With a growing recognition of public needs and the relation of individual right to public security, the Court has sought to prevent the perversion of the clause through its use as an instrument to throttle ....
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....uld the law to subserve public weal so as to be a living law. Thus the delegated authority is empowered to amend the Rules from time to time attuned to the new situations emerged in the working of the regulation. That is the reason, the impugned R. 12 (3) though found no place in 1962 Rules but was engrafted in the recast rules of 1970. The reason therefore is thus obvious. 108. It is, therefore, reasonable to conclude that with the passage of time and the experience gained by the administrator, it became imperative to regulate the fixation of the maximum rates of admission too. Therefore, the prevailing circumstances at the time of making the amendment shall also be taken into account. Whether motive to make Rule can be looked into: 109. In this context, the contention of Sri. M. R. K. Choudary, learned counsel for the petitioners is that the impugned Rule was made with an oblique motive to get the revenue under the Entertainment Tax Act is to b e disposed of. It is now settled law that the Court cannot go into the motives for enacting the legislation. Therefore it is not permissible for the Court to go into the motives alleged to have prevailed with the State Government ....
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.... being unreasonable cannot be saved by its being administered in a reasonable manner. The constitutional validity of the Statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed. In this case except making a contention, no specific instance has been brought to our notice that the State Government has abused its discretionary power and made the impugned rule beyond the scope of the power entrusted in it or arbitrary. Therefore we do not find any unreasonableness in the exercise of the discretionary power in making the impugned Rule. Whether laying guidelines are conditions precedent to exercise power: 114. It is further contended that there are no rules made giving guidance to the Licensing Authority. It is manifest that fixation of maximum rates of admission has to be done depending upon the local conditions in the particular theatre be it permanent, semi-permanent or temporary situated either in the city, town, village or hamlet. Therefore it is impracticable to lay down any particular rule in that regard. Guidance may be obtained in the light of the prevailing surrounding circumstances. The Licensing Author....
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.... 117. Sri Choudary further contended that the rules were initially framed under the Act of 1918 and they continued to be in operation even after the Act and the Rules came into force. The instructions referred to earlier in the first G. O. were issued under the old Act and they were continued to operate; therefore they have no legal force. We are unable to accept the said contention. It is sealed law that any rules, regulations or instructions issued under the repealed Act shall be continued to be in force unless they are clearly inconsistent with the amended Act or instructions or the new rules framed. Since there is no inconsistency with the Act or the Rules made thereunder, the guidelines issued under the repealed Act shall continue to be in operation. It is also further settled law that it is not incumbent that Rules should be made before exercise of statutory power. It is further settled law that it is not mandatory to lay the Rules made before the Legislature to be operative. So the absence of such a provision in the Act does not whittle down the effect of the Rule if it is otherwise valid. 118. On consideration of the above facts, circumstances and principles of law, we....
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....ely that if the plea of the petitioners is allowed to prevail, the wheels of the Government would be brought to a grinding halt; prevents to take stock of growing imperative public need made manifest by course of events ensued and thereby frustrate the purpose of the regulation public welfare depleted; cine-going public be made to crave for mercy of the licensee if admission fee is beyond his paying capacity or else to forgo the amusement; and to deny to the poor the benefit of imparting education or learning culture. Therefore the construction should be leaned infavour of sustaining the regulation to subserve the public good and avoid frustration of public purpose. Thus it is in the interest of the general public. It is a social and welfare measure. Whether impugned Rule is valid: 120. Thus we reach consideration of the impugned Rule as the subject of attack. Rule 12 (3) has already been extracted in extenso in the earlier part of our judgment; therefore it is not necessary to reproduce once over, but suffice to state that it consists of four clauses. Clause (a) gives power to the Licensing Authority while granting or renewing licence to fix the maximum rates of admission to....
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.... Authority and the right of the licensee to bring to the notice of the Licensing Authority such altered circumstances to revise the rates of admission even during the currency of the licence. Without written permission, there is no authority for the licensee to alter unilaterally the rates of admission. It also goes without saying that the licensee obtains a right to exhibit cinematographs subject to the terms and conditions of the licence. Having obtained licence, it is not open to him to resile therefrom and contend that the rates of admission are unreasonable. 122. With regard to R. 12 (3) (c) in a given case where the Government finds that the maximum rates of admission to different classes fixed by the Licensing Authority found to be excessive or ridiculously low or unreasonable, then the State Government may cancel or modify the said order if such a course found to be just or necessary. It is implicit from it that such a cancellation or modification by the State Government would be consistent with the observance of the principles of fair play of prior notice to the affected parties, reasonable opportunity of hearing and the reasons therefor. It is a valuable built-in safeg....
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.... conferring that power in the Government. Thereby Government sought to defeat the legislative effect through rule-making power. Hence it was found ultra vires. 127. The other decision relied on by the learned counsel in Sant Saran Lal v. Parsuram, [1966]1SCR335 (supra), is equally inapplicable. Therein, while making the Rule the Government have fixed the upper limit of loans outstanding at any particular time by the money-lender. The Rule was asssailed as being ultra vires. While considering the said contention, Raghubar Dayal, J. speaking for the Bench held that : ... Act does not anywhere provide for the fixing of the upper limit for the loans remaining outstanding at any particular time. The rule-making power of the Government does not extend to the fixing of such a limit ....... The rule-making power given to the State Government is not expressed in the usual form i.e., is to to the effect that the State Government may make rules for the purpose of the Act. The rule-making power is limited to what is stated in clauses (a) to (e) of S. 27 and these clauses do not empower the State Government to prescribe the limit up to which the loans advanced by money-lender ....
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....ographs. As incident thereof, they have unbriddled power to fix the rates of admission to the persons who seek admission into the various classes in their theatres. Therefore the impugned Rule impedes it unreasonably trenching upon their fundamental free right to business and fixation of maximum rates of admission, violates Art. 19(1)(g) of the Constitution. Though the State has got the power to regulate, it is not being part of the scheme of the regulation nor being incidental, the restriction imposed is not saved by Cl. (6) of Art. 19 and, therefore, it is unconstitutional. To appreciate this contention, it is necessary to see, what is the nature of the right the petitioners possessed of; whether the right the petitioners claimed is absolute and whether the restriction imposed is in public interest and therefore reasonable. It is undoubted that Art. 19(1)(g) reserves to every citizen fundamental right to practice any profession or to carry on any occupation, trade or business. When exercise thereof is impaired or controlled or limitations are put thereon, then, it is for the party that supports such impairment, etc. to satisfy that the restriction is reasonable in the interest of....
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....as upheld in two Division Bench decisions reported in Mulchand v. Mukund, AIR1952Bom296 (supra) and Rangaswamy v. Industrial Tribunal, AIR1954Mad553 . 134. When a right to receive pension by a Government servant was hedged with a condition, though the advocate has a right to practice, so long as he wishes to receive pension, he shall be bound to obey the condition imposed in the recent decision rendered by us in Y. G. Rama Murthy v. Chairman, Central Board of Excise & Custom and Excise Union, W. A. No. 1079/82 dated 25-3-83. 135. When a right to membership of a Society is created under a Statute and the said society is restricted to a specified period, it was held by a Full Bench of this Court in Kamareddy Suryanarayana v. District Co-operative Officer, AIR1976AP340 that : The Society in question is a creature of the Statute formed under the provisions of the Andhra Pradesh Co-operative Societies Act. The right of the petitioner to contest the election for membership of the Committee emanated only out of the provisions of the Act, the Rules and Bye-laws. That right he cannot claim otherwise than under those provisions. His right to become a member of the Societ....
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....fected with a public interest, it ceases to be "juris private" only and it becomes clothed with a public interest when used in a manner to make it of public consequence and affect the community at large; and so using it, the owner grants to the public an interest in that use, and must submit to be controlled by the public for common good. This statement was approved by the Supreme Court of America, a century ago in 18786, in the leading judgment in Munn v. The People of Illinois, (1876) 94 US 113 (supra). The facts therein also are similar to the present case under consideration. Therefore it is proper to state the facts in bried. Therein, the Illinois Legislature passed an Act imposing restriction to fix the rates for storage of grains in warehouses by a Statute of 1871. It was challenged on the ground of constitutional virus. The majority of their Lordships upheld the validity. Their Lordships noticed the impact of the business of storage of foodgrains in the warehouses, the mode of operation of the business, the need of the public and its tendency in the business of near monopoly in regulating the storage and its steep impact on the public utility. While considering the valid....
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....ed by the proper authorities for the common good. They entered upon their business and provided themselves with the means to carry it on subject to this condition. If they did not wish to submit themselves to such interference, they should not have clothed the public with an interest in their concern. When a contention of loss of profit and the immunity of private contracts vis-à-vis statutory legislation was pleaded, their Lordships considered and held: What they did was, from the beginning, subject to the power of the body politic to require them to conform to such regulations as might be established by the proper authorities for the common good. They entered upon their business and provided themselves with the means to carry it on the subject to this condition. If they did not wish to submit themselves to such interference, they should not have clothed the public with an interest in their concerns. It is insisted, however, that the owner of property is entitled to a reasonable compensation for its use, even though it be clothed with a public interest, and that what is reasonable is a judicial and not a legislative question. As has already been shown, the....
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....t should be made for such services. In Georgia R & BkG Co. v. Smith, (1887) 128 US 174, Field, J. who rendered dissenting judgment in Mann v. Illinois, (1876) 94 US 113 (supra) held that the Legislature has power to prescribe the charges for the carriage of persons and merchandise within its limits. 138. In German Alliance Insurance Co. v. Lewis, (1913) 233 US389 where the constitutional validity of fixation of rates of fire insurance was assailed, Justice Mc. Kenaa, speaking on behalf of the Court upholding the power of regulation held: The underlying principle is that business of certain kinds hold such a peculiar relation to the public interest that there is super-induced upon it the right of public regulation. It would be a bold thing to say that the principle is fixed, inelastic, in the precedents of the past, and cannot be applied though modern economic conditions may make necessary or beneficial its application ... ... .. Its personal character certainly does not of itself preclude regulation .... No doubt the petitioners while undertaking exhibition of cinematographs have adopted the field of private contract. But it assumed of public importance. The qu....
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.... Court must always lean in favour of holding the validity of an Act rather than against it. There may be cases where a law is alleged to contravene fundamental rights. In such a case, undoubtedly, the Court must zealously scrutinize the provisions of the impugned Act in order to see that fundamental rights are not violated. But where what is challenged is only the letter of the law and substance is in the interest of a large body of citizen, then as far as possible the Court must try to uphold the substance and not permit the letter to defeat the object of the Legislature. Keeping this instructive caution, let us proceed to enquire whether the impugned rule imposes unreasonable restriction. Every citizen has fundamental right to pursue any lawful profession, occupation, trade or business. But it is obviously subject to such reasonable conditions as may deem expedient or essential to the safety, health, peace, order, morals or well-being of the community. In order to determine reasonableness, regard must be had to the nature of the business, the conditions prevailing in that trade, the interest of the general public sought to be achieved by imposing the restriction and whether it....
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....ction on the fundamental right of the citizen." .... .... "It is the substance and the practical result of the act of the State that should be considered rather than its purely legal aspect. The correct approach in such cases should be to enquire as to what in substance is the loss or injury caused to the citizen and not merely what manner and method has been adopted by the State in placing the restriction. It is instructive to note the oft-quoted statement of law laid down by their Lordships of the Supreme Court speaking through Patanajali Sastri, C. J. in State of Madras v. V. G. Row, 1952CriLJ966 that: It is important in this context (restrictions on trade) to bear in mind that the test of reasonableness wherever prescribed, should be applied to each individual statute impugned, and no abstract standard, or general pattern of reasonableness can be laid down as applicable to all case. The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent of urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicia....
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....s the power to provide such incidental and ancillary regulations which will ensure the price. Price fixation measure is for protection of the farmer from the exactions of producers against which he cannot protect himself. The impugned measure ensures price either fixed or negotiated and, therefore, it is a restriction which is undoubtedly reasonable and imposed in the interest of general public and the guarantee of freedom of trade is not violated. 146. These two decisions have direct application to the facts in this case. The cine-going public at large cannot be allowed to be at the whim or vagary of the licensee seeking admission into the theatres to witness pictures to be exhibited in the theatres. The loss of profit is no ground to declare the rule unreasonable. Though patent injustice may not be encouraged, a reasonable return on investment or a reasonable rate of profit is not the sine qua non of the validity of an action taken in furtherance of the power conferred under the Act. The interest of the public has to be kept in the forefront and the prime consideration is the easy access to admission into theatre at reasonable rates. The problem has to be broached from social ....
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....reby the fixation of rates of admission has become an absolute necessity to avoid (a) arbitrary exercise of the power of the licensee to fix his own rates of admission; (b) to avoid co-competitors from the field by more powerful monied persons and thereby tend to avoid near monopoly; (c) to avoid keeping the people at the whim and vagary of the licensee in fixing the rates of admission; (d) to provide a reasonable facility for the public; (e) it prevents the petitioners from charging varied rates of admission based on fluctuating fortuitous factors ensuring consequential curb or unjust enrichment but even otherwise preserved reasonable rates of profit return on the investment made and avocation pursued; and (f) in the general admission has thus become an integral and essential part of the power or regulation of exhibition of the cinematographs. It does not have the inevitable effect of driving out the licensee from the trade or business. In other words it assures orderly exercise of right to trade, business, avocation or occupation. Thus, it does not impinge nor impose unreasonable restriction upon the fundamental right to trade or business or exhibition the cinematographs. But in ....
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....racted in the counter-affidavit in the earlier part of our judgment. On the facts in these cases, the fixation of rates of admission to different classes cannot be said to be unreasonable nor beset with illegality. The refusal in one case remained unchallenged. Under these circumstances, we hold that the petitioner did not make out any case for the issuance of the writs as prayed for. The foundation was laid only on shifting sand and consequently collapsed. Accordingly, the writ petitions are dismissed with costs. Advocate's fee Rs. 250/- in each. Oral representation for leave to appeal to the Supreme Court. 150. The learned counsel for the petitioners makes an oral application for leave to appeal to the Supreme Court under Article 134-A of the Constitution of India. We do not think that we can rightly certify under Article 133(1) of the Constitution that this is a fit case for leave to appeal to the Supreme Court. The oral application is rejected. 151. Petitions dismissed. ============= Document 1 Sl. No. Class. the management. Existing rates Rates proposed by Rates enhanced now 1. Balcony Rs. 2-60 Rs. 2-80 Rs. 2-80 2. I Class 2-00 ....