Research › Browse › Judgment

Allahabad High Court · body

1960 DIGILAW 68 (ALL)

Babu Ram Gupta v. N. M. Majumdar, Entertainment Tax Officer

1960-03-04

J.K TANDON

body1960
JUDGMENT J.K Tandon, J. - As an identical question will determine the fate of these petitions they have been heard together. This order will, therefore, govern all the lour petitions. 2. There are two cinema houses situate at Sitapur styled as Lakshmi Talkies arid Rampa Talkies. Babu Ram Gupta Petitioner in petitions Nos. 31 and 32 is lessee of this cinema house. V.K. Shukla who is the Petitioner in the other two petitions is the Manager thereof. A case was started against Babu Ram and some others in the year 1958 in respect of Lakshmi Talkies fir contravention of the provisions of the Entertainment and Betting Tax Act. Similarly there was another case in respect of Rampa Talkies in which besides Babu Ram Gupta, V.K. Shukla and two others were prosecuted, This case ultimately resulted in the conviction of Babu Ram, V.K. Shukla and others who are not before the Court in the present proceedings but three of them happened to be Gate Keepers. The only other fact which need be mentioned about these prosecutions is that though convicted for contravention of the provisions of the Entertainment and Betting Tax Act Babu Ram Gupta and V.K. Shukla were let off after admonition. This happened on 3-2-60. On 17.2.60, the District Magistrate of Sitapur put porting to act u/s 9A of the Entertainment and Betting Tax Act, 1937 made an order cancelling with immediate effect the licences for the two cinema houses. This order was communicated to the Petitioners the following day vide Annexure I, part of the petition. The order communicated to the Petitioners which in brief is thus: You are hereby informed that your Cinematograph licence in respect of Lakshmi Talkies Rampa Talkies Sitapur, has been cancelled by the District Magistrate, Sitapur vide his order dated February 17, 1960 with immediate effect. Henceforth you should not give any Ginematograph shows. Please note. 3. The Respondents have filed a copy of the order which the District Magistrate had made on the 17th of February, 1960 and it would appear from it that he cancelled the licences in favour of the Petitioners on the ground of their conviction for contravention of the provisions of the Entertainment and Belting Tax Act, 1937, as held in the cases started against these persons. It is unnecessary to refer to further details given in this order except the fact which has not been disputed, indeed it has been admitted by the Respondents, that the District Magistrate made the order without giving the Petitioners any warning or notice to be heard. It was, therefore, passed ex-parte without giving these persons an opportunity. 4. The present petitions are thus directed against the above order. The grounds urged are various but it will not be necessary to refer to all of them since these cases have been beard on the effect of making an ex parte order for cancellation against the Petitioners. The Petitioners contend that the District Magistrate was bound while acting u/s 9-A to give an opportunity to them of being heard. 5. Section 9A reads thus: Notwithstanding anything contained in any other law and without prejudice to the provisions of Sub-section (1) of Section 5, the District Magistrate may by order revoke or suspend any licence for an entertainment granted under any law for the time being in force, if the proprietor of such entertainment is convinced under the provisions of this Act. A copy of the order shall be communicated to the proprietor within one month who may appeal to Government within a similar period from the date on which the order is served. The order passed in appeal by Government shall be final and conclusive. 6. The word "Proprietor" has been defined in Clause (7) of Section 2 of the same Act and includes, in relation to an entertainment, any person responsible for the management thereof. In view of the above definition it was considered by the District Magistrate that Babu Ram and V.K. Shukla and the other persons who had been convicted for the contravention of the provisions of the Act fell within the description of the word "Proprietor" and penalty of cancellation of the licence could, therefore, be imposed. As the Petitioners have not addressed me against the above proposition in these petitions it may for their purposes be taken as not disputed and that aspect need not be discussed further. As a matter of fact, whatever the true position be in that regard the decision of these petitions will net be affected. 7. As the Petitioners have not addressed me against the above proposition in these petitions it may for their purposes be taken as not disputed and that aspect need not be discussed further. As a matter of fact, whatever the true position be in that regard the decision of these petitions will net be affected. 7. It will be noticed that Section 9A as such does not provide that the District Magistrate shall before revoking or suspending any licence give an opportunity to the licensee of being heard. In view of it the Respondents' contention is that the District Magistrate was not bound to give any opportunity to the Petitioners and was free, once a conviction had been recorded against them to revoke the licence on that ground. In this connection it will be relevant to state that the Entertainment and Betting Tax Act does not contain any provision to the effect that whenever a licensee or lessee is convicted for contravention of the Act the licence will of necessity Require to be cancelled. The mere fact, theretore, that a conviction has taken place cannot justify the revocation or suspension of the licence which can be made u/s 9A on the particular facts of each case. The District Magistrate has a discretion under this section to order revocation or suspension and in exercising that discretion he will no doubt be guided by the individual facts and circumstances attending a particular case and not act arbitrarily or without regard to the circumstances. 8. A licence to carry on a cinema house is granted to a person under the UP Cinema (Regulation) Act, 1955 (UP Act No, III of 1956). It assures once the licence has been granted to the person the right to carry on a business which in the context of Article 19(1)(g) of the Constitution is a fundamental right belonging to a citizen. An order canceling or suspending a licence is therefore, an order which affects the fundamental right of the person entitled to carry on the business. Under Clause (6) of Article 19 of the Constitution reasonable restrictions on the exercise of the right to carry on business can be placed and an order revoking or suspending a licence to carry on the business may be said to be in the nature of a restriction. Under Clause (6) of Article 19 of the Constitution reasonable restrictions on the exercise of the right to carry on business can be placed and an order revoking or suspending a licence to carry on the business may be said to be in the nature of a restriction. In order, however, that the restriction also satisfies the test of reasonableness if is necessary, particularly so, in the confer of the language of Section 9-A that the person affected is afforded an opportunity before the revocation or cancellation or suspension is ordered. Section 9A does not state the grounds on which revocation or suspension can be ordered except the condition that the proprietor of the entertainment is convicted under the provisions of the Entertainment and Betting Tax Act. The proprietor's conviction may under the circumstances be a condition upon the fulfilment of which an order for revocation or suspension can be made but since the power given to the District Magistrate is discretionary, i.e. he is not bound in every case of conviction to make the order it is doubtless necessary upon him to give an opportunity to the person convicted of being heard before making the order. 9. When right of property or other substantial right of a person is affected by an order it is the duty of the authority making the order to give an opportunity to the person affected. The rule of fairplay, which is often called the rule of natural justice, demands that the authority making the order should not condemn a man without giving him the opportunity of being heard. This rule has been held to apply not only to judicial and quasi judicial orders but also to cases where some substantial right of the person proceeded against is affected. It is embodied in the rule of equality before the law assured by Article 14 of the Constitution. 10. It is, therefore, immaterial that Section 9A does not in itself fix an obligation on the District Magistrate to give the opportunity before making the order of revocation or suspension. This obligation exits under the Constitution itself which is the basic law. So long as the Act does not provide to the contrary, in which case slightly different considerations might apply, the obligation to give an opportunity to the person affected is imported into the provision by virtue of the Constitution itself. This obligation exits under the Constitution itself which is the basic law. So long as the Act does not provide to the contrary, in which case slightly different considerations might apply, the obligation to give an opportunity to the person affected is imported into the provision by virtue of the Constitution itself. It is not necessary for me to cite authorities as the principle is well established and has been repeatedly stressed in a number of decisions by this and ether courts and by the highest court in the land. As a matter of fact, the learned Standing Counsel has not been able to place any decision which might have supported a contrary inference even upon the language of Section 9A. I am, therefore, clearly of the opinion that the District Magistrate acted illegally in cancelling the licences without saving the Petitioners an opportunity of being heard. His order is, therefore, attended with illegality and is entitled to be quashed. The learned Standing Counsel raised the objection also that these petitions were not entertainable as the Petitioners had failed to avail fie remedy of appeal to the State Government open to them u/s 9A. This section does confer a right of appeal to the State Government where a licence has been revoked as in the present case. Admittedly the Petitioners have not filed any appeal against the order of the District Magistrate yet to the Government. The question that arises is whether it will be proper to reject I he petitions on the above ground. The rule regarding the existence of an alternative remedy and refusal to act Under Article 226 of the Constitution on that grounds is not an absolute rule but is a rule in the nature of self discipline imposed upon itself by this Court. In appropriate cases where owing to urgency or other similar considerations the Court considers that a substantial injustice will be caused to the person affected by requiring him to pursue the alternative remedy the Court will not hesitate in granting redress Under Article 226. In the instant case the order of the District Magistrate cancelled the licences without giving notice to the Petitioners and to the cancellation was to take effect forthwith. As a result they were debarred immediately from carrying on the business. In the instant case the order of the District Magistrate cancelled the licences without giving notice to the Petitioners and to the cancellation was to take effect forthwith. As a result they were debarred immediately from carrying on the business. The damage to their right to carry on the business had already occured and by not intervening in the matter Under Article 226 the Court will only allow in continuance of the inroad on that right in future. In view of the above circumstances I consider this to be a fit case in which not to decline the relief on the ground of the existence of an alternative remedy. 11. In the result accordingly the petitions are allowed. The order of the District Magistrate dated the 17th of February, 1960, is quashed. The consequent notice dated the 18th February, 1960, is also quashed. The Petitioners shall get their costs from the Respondents.