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2007 DIGILAW 2 (GUJ)

SWASTIK INDUSTRIES PVT LTD v. STATE OF GUJARAT

2007-01-08

R.S.GARG

body2007
( 1 ) THE plaintiff appellant being aggrieved by the judgment and decree dtd. 5/2/1992 passed in Regular Civil Appeal No. 2 of 1992 by the learned Assistant Judge, Junagadh at Porbandar reversing the judgment and decree dtd. 4/10/1991 passed in Regular Civil Suit No. 179 of 1986 by the learned Civil Judge (SD), Porbandar, has filed this Second Appeal under 100 of the Code of Civil Procedure. ( 2 ) THE appeal was admitted for hearing the parties on 31/7/1992 on the following substantial question of law; "whether the Lower Appellate Court had committed error in holding that an opportunity of being heard was being given to the plaintiff Company before cancelling the license and whether the license could be cancelled without complying with the statutory provisions of the Rule 131 of the Bombay Cinema Rules, 1954 " ( 3 ) SHORT facts necessary for disposal of the present appeal are that M/s. Swastik Industries Pvt. Ltd. is running a cinema talkies in the name of Harish Talkies at Porbandar. The license to exhibit the film is in the name of plaintiff M/s. Swastik Industries Pvt. Ltd. ( 4 ) IN accordance with Rule 117 of Bombay Cinema Rule, a license is required to be renewed every year. A licensee or his nominee must remain present at the cinema theater to which license applies, be he an owner, a license holder, a manager or some persons authorized by the license holder. Originally M/s. Harish Talkies, a partnership firm was engaged as Managing Agent for M/s. Swastik Industries Pvt. Ltd. but for some reason, plaintiff M/s. Swastik Industries Pvt. Ltd. made an application to the District Magistrate / Collector / Competent Authority for change of the name i. e. insertion of name of M/s. Satyam Enterprise in place of M/s. Harish Talkies. The said application was made on 3/6/1985, but came to be rejected on 14/3/1986 (Exh. 37 ). It appears that in the meantime, certain inspections were made and the competent authority, after finding that the plaintiff had committed certain illegalities by not observing the provisions of the Act and the Rules, issued a notice on 6/9/1985 (Exh. 44) to the plaintiff to show cause that for the reasons stated in the notice and illegalities found, why the license be not suspended. 44) to the plaintiff to show cause that for the reasons stated in the notice and illegalities found, why the license be not suspended. The plaintiff filed his reply and submitted to the authority that he did not transfer the license in favour of anybody, but had simply changed the management and under the circumstances, he had not committed any wrong, nor had violated any provision of the Act or the Rules. The Licensing Authority did not feel convinced by the reply, therefore, vide order dtd. 30/5/1986 (Exh. 35) directed cancellation of the license. The plaintiff instead of filing an appeal under sec. 8-A of the Bombay Cinema Regulation Act, came to the Civil Court on the ground that the order dtd. 14/3/1986 and order dtd. 30/5/1986 (Exh. Nos. 37 and 35, respectively) were patently illegal and without jurisdiction. The trial court entertained the suit and required the State Government to file its Written Statement. The State Government appeared, filed its Written Statement and submitted before the court that the Civil Court had no jurisdiction in view of the appellate provisions under the Act. And in view of the violation of Rule 117 read with Rule 129 of the Bombay Cinema Rules, the provisions of Rule 131 could be applied and the authority could cancel the license. It was also submitted that the notice in itself was a composite notice and was complete in all terms. ( 5 ) THE learned trial court, after recording the evidence and hearing the parties, came to the conclusion that the Civil Court had jurisdiction, because, there was a civil dispute between the parties and, the Civil Court would be entitled to examine the correctness, validity and propriety of the orders dtd. 14/3/1986 and 30/5/1986. It accordingly held that the order dtd. 14/3/1986 (Exh. 37) and order dtd. 30/5/1986 (Exh. 35) were illegal and without jurisdiction. It restrained the defendants from implementing the said orders. ( 6 ) BEING aggrieved by the said judgment and decree, the State took up the matter in appeal. The appellate court, however, held that the Civil Court would have no jurisdiction in view of sec. 8-A of the Bombay Cinema Regulation Act, the court was also of the opinion that as the appellate provisions are providing adequate alternative remedy, the Civil Court would have no jurisdiction. The appellate court, however, held that the Civil Court would have no jurisdiction in view of sec. 8-A of the Bombay Cinema Regulation Act, the court was also of the opinion that as the appellate provisions are providing adequate alternative remedy, the Civil Court would have no jurisdiction. It also held that after non-insertion of the name of M/s. Satyam Enterprises, management by M/s. Satyam Enterprises would amount to transfer of the license. The Court accordingly held that the licensing authority was justified in cancelling the license. The plaintiff, being aggrieved by the said judgment and decree of the first appellate court, is before this court. ( 7 ) THOUGH the appeal has been admitted for hearing the parties on the above referred questions, but after hearing the parties, I am of the opinion that the following substantial questions of law deserve to be framed; (a) Whether on the facts and in the circumstances of the case, Civil Court would have jurisdiction to entertain and decide the suit" (b) Whether on the facts and in the circumstances of the case, order dtd. 14/3/1986 (Exh. 37) rejecting the application for nomination is illegal" ( 8 ) NOTICE of both the questions is given to Mr. A. Y. Kogje, learned AGP for respondents State. ( 9 ) SO far as the question of jurisdiction is concerned, Sec. 9 of the Code of Civil Procedure clearly provides that the Courts shall (subject to the provisions contained in the Code of Civil Procedure) have jurisdiction to try all the suits of civil nature except suits of which their cognizance are expressly or impliedly barred. In the matter of CHAR VS. SA, reported in 1964 S. C. 807, the Supreme Court has observed that inclusion of jurisdiction of the Civil Court would be subject to two limitations, first, Civil Court would have jurisdiction to examine into the cases where the provisions of the Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure and the second is as regards the exact extent to which powers of the statutory provisions are exclusive. In the matter of Ghusabhai Vs. State, reported in AIR 1969 S. C. 78, and other judgments, following 7 propositions of law regarding exclusion of jurisdiction of Civil Court have been laid down ; "9. In the matter of Ghusabhai Vs. State, reported in AIR 1969 S. C. 78, and other judgments, following 7 propositions of law regarding exclusion of jurisdiction of Civil Court have been laid down ; "9. Exclusion of jurisdiction-Seven propositions-The following seven propositions of law regarding exclusion of jurisdiction of Civil Court have been laid down; where the statute gives a finality to the orders of the special tribunals the Civil Courts jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Court would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the Civil Court. Where there is no express exclusion the examination becomes necessary to find out the intendment and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability and provisions for its determination and further lays down that all questions about the said right or liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed. Challenge to the provisions of the particular Act as ultra vires cannot be brought before the tribunal constituted under that Act. Even the High Court cannot go into that question on revision or reference from the decision of the tribunal. When a provision is already declared unconstitutional or the constitutionality of any provision is to be challenged, a suit is open. Where the particular Act contains no machinery for refund of tax collected in excess of constitutional limits or illegality collected, a suit lies. Questions of correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. Questions of correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case, the scheme of the particular Act must be examined because it is a relevant enquiry. An inclusion of jurisdiction of the Civil Court is not readily to be inferred unless the conditions above set down apply. " ( 10 ) THE Supreme Court clearly observed that exclusion of jurisdiction of Civil Court is not readily to be inferred unless conditions as provided in law apply. ( 11 ) IN the matter of State of Andhra Pradesh Vs. Manjeti Laxmi Kantha Rao, reported in A. I. R. 2000 SC 2220, the Supreme Court has made almost same observations. It would be trite to say that normal rule of law is that the Civil Courts have jurisdiction to try all the suits of civil nature except those of which cognizance by them is either expressly or impliedly excluded as provided under Section 9 of the Code of Civil Procedure, but such exclusion is not readily inferred and the presumption to be drawn must be in favour of the existence, rather than exclusion of jurisdiction of the Civil Courts to try the civil suit. ( 12 ) IN the present case, allegations of the plaintiff are that a notice in accordance with Rule 131 proposing the cancellation of the license was not issued to the plaintiff and under the circumstances, an order of cancellation of license could not be made. ( 13 ) SHOW Cause notice dtd. 16/9/1985 is available on the record as Exh. 44, it clearly reads that for illegalities committed and non-observation of the Rules and other provisions including the conditions of the license, why the license be not kept under suspension. Undisputedly, a notice proposing cancellation of the license was not issued. Rule 131 provides that the licensing authority may suspend or cancel any license granted under Rules for contravention of any of the rules or the conditions of license granted under the Rules provided that the authority shall give the licensee an opportunity to show cause before taking any action under sub-rule 1 of Rule 131. Rule 131 provides that the licensing authority may suspend or cancel any license granted under Rules for contravention of any of the rules or the conditions of license granted under the Rules provided that the authority shall give the licensee an opportunity to show cause before taking any action under sub-rule 1 of Rule 131. ( 14 ) RULE 131 (1) clearly provides that the licensing authority may suspend the license or cancel any license provided it gives an opportunity of hearing to the person holding license. In case, the licensing authority is of the opinion that the case on hand is one where suspension of the license for some period would provide adequate penalty, then, it may issue such a notice but in a case where the licensing authority records an opinion that the case on hand is such where license should be cancelled, it may issue such a notice. The licensing authority, if, issues a notice to show cause why the license be not suspended, then, it shall always be held that the licensing authority was of the opinion that the case on hand was not a case for cancellation of license. ( 15 ) IN the present case, though notice to show caue dtd. 16/9/1985 (Exh. 44) was for suspension of the license, the authority less realizing its authority and jurisdiction stepped outside its jurisdiction and issued an order for cancellation of license. ( 16 ) WHEN an authority, tribunal, court or officer passes any order beyond its jurisdiction or exercises power stepping outside its jurisdiction, then, the correctness and validity of such an order can always be examined by a Civil Court. The Civil Court is not denuded of its powers examining the allegations in a case where the plaintiff comes and says that the principles of natural justice have been violated or the authority had no jurisdiction or the authority who had jurisdiction, but it did not act in accordance with its jurisdiction or so. ( 17 ) IN the present case, Rule 131 has not been observed in accordance with its spirit, the order passed by the licensing authority cancelling the license, will have to be termed as an order beyond its jurisdiction and if that be so, the Civil Court would be entitled to examine the correctness, validity and propriety of the order passed by the authority / tribunal. ( 18 ) IN the present case, it is also to be seen that the notice to show cause was not proposing cancellation of the license. If a notice is not given and action is taken against the party then such an action cannot be defended by the authority simply on the ground that some notice was issued by the said authority. Rule 131 of the Bombay Cinema rules would clothe authority with jurisdiction if the authority acts in accordance with Rule 131. In the present, the authority had chosen to issue notice proposing suspension of the license and if that was the foundation of the jurisdiction, the authority could not go or travel beyond its jurisdiction and at this juncture, I must hold that the authority did not provide proper opportunity of hearing to the plaintiff. Therefore, the order dtd. 30/5/1986 (Exh. 35) cannot be held to be valid or made by an authority in accordance with the jurisdiction conferred upon it. The trial court was absolutely justified in holding that the order dtd. 30/5/1986 was illegal, though the reasoning given by the learned trial court for holding that it has jurisdiction, cannot be approved, but for the reasons stated aforesaid, I must hold that the Civil Court had jurisdiction to entertain and decide the matter. ( 19 ) SO far as the question of validity of the order dtd. 14/3/1986 is concerned, the order passed by the Civil Court is patently illegal. If the trial court was of the opinion that the application filed under Rule 117 for change of the management had to be decided in accordance with law, then the Civil Court was only required to set aside the order and remit the matter back to the authority with a direction to decide the application afresh. When statutory authority has to take a decision then the Civil Court cannot exercise the jurisdiction which is vested in the said authority. The order dtd. 14/3/1986, in the opinion of this Court, cannot be sustained, because the said order does not take into consideration the provisions of Rule 117 that a cinema license holder is entitled to change the management and if the license holder is not allowed to change the management, it would lead to many problems and may even lead to cancellation of the license. The licensing authority would be entitled to proceed afresh in the matter of the application of the plaintiff for change of the management from M/s. Harish Talkies to Satyam Enterprises. Though I am holding that the order dtd. 30/5/1986 (Exh. 35) is illegal, but I would still give an authority to the State Government / licensing authority to proceed with their notice to show the cause contained in order dtd. 16/9/1985 (Ex. 44 ). The State / Licensing Authority would be entitled to pass necessary orders suspending the license if they ultimately find that the cinema license holder had committed breach of the provisions of the Act or of the Rules of the license conditions. ( 20 ) I make it clear that after rejection of the application and on passing of the order dtd. 14/3/1986 (Exh. 37), the plaintiff was not entitled to change the management and that change of the management, in fact, was breach of rules on their part. The question now tobe considered would be that what punishment should be awarded or what penalty should be imposed. The authority shall give an opportunity of hearing to the plaintiff in relation to the penalty or suspension of the license. It is, however, observed that the authority while awarding punishment would take into consideration that the illegalities were alleged to be committed almost two decades back and the plaintiff since thereafter under one order or other, is running the cinema theater. ( 21 ) THE appeal to the extent indicated above is allowed. No costs. A decree be framed accordingly.