- (1.) M. C. Agarwal, J. All these peti tions that have been filed by the same petitioners, are inter-linked and the main controversy is the same. They were, there fore, heard together and are being dis posed of by this common judgment.
(2.) THE business of exhibition of films in a cinema house is regulated by the statutory provisions contained in U. P. Cinemas (Regulation) Act, 1955 and the U. P. Cinematograph Rules, 1951. THE ex hibition of films in a cinema house invol ves entertainment and, therefore, the owner of a cinema house is liable to pay entertainment tax under the provisions of the U. P. Entertainment and Betting Tax Act, 1979. In order to promote construction of new permanent cinema houses in small towns in the State of U. P. , the Government had notified a scheme through a Govern ment Order dated 17th of October, 1983 where under the entertainment tax realised by a owner of a cinema house from the viewers could be retained by him by way of a grant-in-aid. The scheme did not attract sufficient response and, therefore, the scheme was modified by Government Order dated 21st of July, 1986, a copy of which is Annexure 1 to writ petition No. 20486 of 1989. It is admitted that it is this scheme of which the benefit was claimed by the petitioner and which is relevant for the purpose of these writ petitions. The provisions made in this Government Order dated 21-7-1986 provided that the benefit of the scheme would be available to permanent cinema house fulfilling the fol low conditions: (i) The application for approval of site plan should be moved between 1-1-1983 and thereafter; (ii) The application for license should be made between 1. 1. 1984 to31-3-1990; (iii) the rate of admission to the entertain ment including entertainment tax should not exceed Rs. 5/ -. The quantum of aid was- (l) for cinemas in places with a population of more than 20,0 (1)0 but less than 1 lac ac cording to 198 census: (1) for the first year equal to 100% of entertainment payable; (ii) for second year equal to 75% of enter tainment tax payable; (iii) for thirds year 50% of entertainment tax payable; (iv) thereafter nil. (2) For cinemas in places with population of less than 20,000: (i) for first and second years equal to 100% of entertainment tax payable; (ii) for third year equal to 75% of the entertainment tax payable; (iii) for fourth and fifth years 50% of the entertainment tax payable; (iv) for sixth year and thereafter nil. The scheme contained in said Government Order also provided for some procedural requirement as under: (i) the owner of the Cinema would keep account of all receipts from sale of tickets ac cording to Rule 13] of U. P. Entertainment and Betting Tax Rules and to prepare form kha; (ii) the amount of aid will be adjusted from the entertainment tax payable which the owner will prepare; every we account showing the income from the sale of tickets, the amount of entertainment tax due and the amount pay able, any, after adjustment of amount of grant-in-aid ; (iii) the amount of entertainment tax pay able in cash will be paid within three days of the end of the week; (iv) will not be necessary for the owner to deposit the amount of entertainment tax in cash. The owner shall prepare a monthly con solidation bill for the amount of aid in Form 41 (b) according to Rule 209 of Financial Hand book Vol. V Part I and get them counter-signed by the District Magistrate and present before the Treasury Officer a challan for the same amount. (v) the sanction for grant-in-aid will be made by the District Magistrate after the grant of licence and after the owner has signed an agreement. To avail the benefit of the abovementioned scheme, the petitioner Shitla Prasad Dubey wanted to construct a cinema house at Gopiganj District Varanasi (now district Bhadohi ). It, there fore, moved an application dated 13-3-1988 in terms of Rule 3 of the U. P. Cinematograph Rules for approving the site plan and specifications. The said rule states as under: "3. Application for constructing a build ing.- (1)A person desirous of constructing a permanent building to be used for cinematograph exhibition shall submit an ap plication specifying the site on which the proposed building is to be constructed together with a plain and specifications thereof to the officer authorised in this behalf by Government. (2) The plan mentioned in the aforesaid sub-rule contain the elevations and sections of the buildings. The prop-electrical installations, arrangements for ventilation, sanitation and parking of vehicles and the position of premises in relation to adjacent premises and public thoroughfares on which the building abuts, within a radium of one furlong. (3) The Licensing Authority may, if it is satisfied that the site-plans and specifications fully conform to the rule grant to the applicant a certificate signifying his approval thereto. The period within which the construction shall be completed shall also be stated in the certificate. " During the processing of the petitioner's application, it was found that the petitioner had started the construction of the proposed cinema house before the approval was granted by the licensing authority under sub-rule (3) of Rule 3. Rule 44 of the Rules that was enacted w. e. f. 1-5-1989 provided for imposition of com position charges while granting exemption under Section of the Act. Section 10 of the U. P. Cinemas (Regulation) Act, provided that the State Government may, in the interests of general public or any section thereof, by order in writing and stating, the reasons therefore, exempt, subject to such: conditions and restrictions as it may im pose, any exhibition or class of exhibitions by means of cinematograph or video from any of the provisions of this Act or Rules made there under. Rule 44 provide a com position charge of Rs. 50,000 for exemp tion from the provision of Rule 3 (3) aforesaid, meaning thereby in case the construction of a cinema house has begun or has completed before the approval of the plan and specifications under sub-rule (3) of Rule 3, the owner can be granted exemption from the compliance of the said rule on payment of a composition charge of Rs. 50. 000/. Therefore, the District Magistrate, Varanasi by a letter dated 17-11-1989 (copy Annexure 11 to W. P. No. 20846/89) informed the petitioner that since he has completed almost 50% of the construction of the cinema house, this ac tion was in violation of the aforesaid rule and according to the U. P. Cinematograph Rules, 19 w. e. f. 1-5-1989, a compounding fee of not exceeding Rs. 50,000 will be payable and that if the petitioner was will ing he should get the construction in spected by the Executive Engineer, P. W. D. Varanasi and furnish a certificate that the construction so far made were in accord ance with the site plan submitted and the Regulations. The petitioner did not deposit the amount and, therefore, by another letter dated 15lh September, 1980, copy of which is Annexure 12 to the writ petition, the District Magistrate Varanasi informed the petitioner that its application is rejected for violation of Rule 3. It is these two orders that the petitioner challenges in W. P. No. 20846 of 1989. The petitioner's case is that under the provisions of the aforesaid scheme, an application for grant of a cinema licence had to be made before 31-1-1990 and such application could not be made unless the cinema building was ready, he started the construction of cinema building so that it could be completed before the said date. His case is that as and when the petitioner approached the office of the District Magistrate and the entertainment tax of ficer regarding the grant of permission under Rule 3 (3), he was informed that since the petitioner is constructing the cinema house in accordance with the rules, the formal sanction will be communicated and the petitioner should go on with the construction in order to meet the red lines by 31-3-1990. According to the petitioner he had done everything that was required for grant of approval under Rule 3 (3 ). Since the District Magistrate did not com municate to the petitioner his approval under Rule 3 (3), the petitioner filed a writ petition in this Court which was disposed of by order dated 21-7-1989 at the admis sion stage with a direct to the District Magistrate, Varanasi to pass final orders on the application made by the petitioner for sanction of the cinema building plan within a period of six weeks. A copy of the order is Annexure 9 to the writ petition. Thereafter the aforesaid order dated 17-7-1989 was communicated to the petitioner and later the subsequent order dated 15-9-1989 rejecting the site plans was communi cated.
(3.) THE petitioner's case in this writ petition is Rule 3 (3) is not mandatory and as far back as 1970 the Government had taken a decision that where a cinema has been built without approval of the plans under Rule 3 (3), a cinema licence can still be granted. A copy of the Government Order dated 19-2-1970 has been annexed to the writ petition as Annexure 14. Ac cording to the petitioner, the cinema building constructed by him is in accord ance with the provisions of the U. P. Cinematograph Rules and the petitioner is entitled for the grant of a cinema licence but the same is being refused only on the ground that the petitioner has not deposited Rs. 50,000 as composition char ges. THE petitioner, therefore, prayed for the following reliefs: " (1) A suitable writ, order or direction in the nature of certiorari be issued calling for the record of the case quashing the orders dated 17-7-89 and 15-9-89 passed by respondent Nos. 3 and 4 (Annexure Nos. 12 and 12); (2) A suitable writ, order or direction be issued declared that he 20th amendment of the U. P. Cinematograph Rules, is arbitrary, illegal and discriminatory; (3) A writ of mandamus, order or direc tion in the nature of mandamus be issued direct ing the respondents to consider the petitioners applications for the grant of permanent licence excluding the alleged non-compliance of Rule 3 (3) as referred to in the orders dated 17-7-89 and 15-9-89" An interim order dated 10th May, 1990 was passed by this Court to the fol lowing effect: "if the petitioner deposits a sum of Rs. 50,000 the impugned order dated 15th Septem ber, 89 shall remain stayed. It has been brought to our notice that the petitioner has filed an application for grant of permanent licence for exhibiting cinematograph films, we think it proper to direct that the same would be con sidered and decided strictly in accordance with law. THE deposits made by the petitioner shall be disbursed according to the direction in the final decision of the writ petition. " On the same day, the writ petition was admitted arid was order to be con nected with W. P. No. 1828 of 1990. A counter-affidavit has been filed on behalf of the respondents. THEir case, (sic) stated, is that the petitioner started the construc tion of the cinema building and completed about 50% of it before the site plans and specifications were approved by the Licensing Authority and thus violated Rule 3 of the Rules for which it was liable to pay a composition charge of Rs. 50,000 in terms of Rule 44. According to the respondents the petitioner having not paid the sum of Rs. 50,000 in spite of demand, his application for approval of the site plans and specifications was rightly rejected. In the next writ petition (No. 12765 of 1991) it is prayed that the Licensing Authority be directed to issue a formal licence for exhibition of films in the aforesaid newly constructed cinema house. The petitioner' case is that in com pliance with the interim order of this Court in writ petition No. 20846 of 1989, he has deposited the sum of Rs. 50,000. He moved an application dated 25-2-1990 for the grant of licence before the respondent No. 1. The Licensing Authority by a letter dated 3-4-1991, copy of which is An-nexure-3 to the writ petition, offered to grant the licence subject to the following conditions: (i) The owner deposits Rs. 50,000 in the Treasury. (ii) The owner will not be entitled to the benefit of the grant in aid under the incentive scheme and would execute an agreement to this effect. (iii) Deposits Rs. 20,000 towards security for the regular payment of entertainment tax. (iv) Deposits R. S. 300 per month towards licence fee. (v) Furnishes a certificate for the supply of approved films from the Ministry of Informa tion and Broadcast Government of India, Films Division, Lucknow. (vi) Complies with the provisions of U. P. Entertainments and Betting Tax Act and Rules framed there under.;