Judgment : COMMON ORDER: Except in W.P.Nos.20357 and 25403 of 2011, G.O.Ms. No.110 Home (General-A) Department dated 19.2.2009 is under challenge in all the other Writ Petitions which form part of this batch. While the relief sought for in W.P. No.20357 of 2011 is to declare the action of the respondents in not considering the petitioner’s request for grant of an on-line licence, and in preventing them from conducting their business as an on-line agency, as arbitrary and illegal; the relief sought for in W.P. No.25403 of 2011 is to declare the action of the respondents in interfering with the business carried on by the petitioner in conducting on-line booking through e-ticketing system of tickets in respect of theatres within the State of Andhra Pradesh, and in insisting on a separate licence, as arbitrary and illegal. However both Sri S.Niranjan Reddy, Learned Counsel for the petitioner in W.P. No.20357 of 2011, and Sri P.Sriraghuram, Learned Counsel for the petitioner in W.P. No.25403 of 2011, would submit that it would be suffice for disposal of these two Writ Petitions also if this Court were to restrict its examination to the validity of G.O.Ms. No.110 dated 19.2.2009. 2. The Andhra Pradesh Cinemas (Regulation) Rules, 1970 (hereinafter called the “Rules”) were amended by G.O.Ms. No.47, Home (General-A) Department dated 10.3.2006 whereby an online booking system was statutorily introduced in the State of Andhra Pradesh. Proposals were received from five agencies to operate the online ticket booking system in cinema theatres in the State of Andhra Pradesh. Galaxy Entertainers Private Ltd, (hereinafter called GEPL), also submitted a proposal to the Government on 5.2.2004 expressing interest in operating the online ticket booking system. The Government, vide G.O.Ms. No.48 Home (Gen A) Department dated 10.3.2006, accorded permission to GEPL to operate the said online ticket booking system. In view of adverse newspaper reports, G.O.Ms. No.48 dated 10.3.2006 was cancelled by G.O.Rt. No.837 Home (Gen A) Department dated 4.5.2006. Thereafter the Government issued G.O.Rt.No.1966, Home (General-A) Department dated 21.11.2006 constituting a committee, as computerized ticketing in cinema theatres in the State of A.P. would facilitate disclosure of sales volumes so as to prevent tax evasion; this system would bring transparency in ticket booking, and improvement in the entertainment tax collection system; and thereby black marketing of cinema tickets would be prevented to a great extent. The Government deemed it proper, therefore, to entrust the same to a suitable agency for selecting and short listing firms to operate such a system after duly examining their technical expertise, financial background etc. The Committee, constituted by G.O.Rt. No.1966, Home (General-A) Department dated 21.11.2006, was required to finalize agencies for providing the on-line cinema ticket booking system in cinema halls in the State of Andhra Pradesh. The committee was directed to examine in detail the scheme for its implementation either through a single agency or through multiple agencies. Thereafter the Committee submitted its report making 29 recommendations for implementation of the on-line ticket booking system. It recommended multiple agencies. The Government, by G.O.Rt. No.1571, Home (General-A) Department, dated 25.8.2008, constituted another committee to examine whether to have a centralized single state level operating system with one agency instead of multiple agencies, and to consider the representations received by it. The three member Committee heard the President, A.P. Film Chambers of Commerce, the Hyderabad State Film Chambers of Commerce, the Telugu Film Producers Council and five online ticket agencies including GEPL, and submitted its report dated 3.11.2008 to the Government. It is seen from the said report that the Home Department had forwarded the applications, along with the proposals and representations submitted by eight agencies including three trade bodies, for scrutiny and examination; the representatives of the trade bodies were heard on 25.09.2008; the trade bodies stated that the service charges, payable to the agency, would be a burden on the cine-goer; they desired the system to be fool-proof, exhibitors be allowed to introduce the system on their own, and the system be implemented at the behest of the theatre owners. The Committee report also notes that proposals were received from five agencies for implementing the on-line ticket booking system. The Committee considered the proposals made by each of these five agencies. While determining the service charges, and the period of operation, the Committee took into consideration the cost of setting up infrastructure at the theatres; payment to retail outlet stores for selling tickets; the cost of setting up telephone operators for selling tickets over phone; cost of setting up central infrastructure for maintaining information of all ticket sales across the State; and the cost of maintaining the web portal. Based on the information placed before it, the Committee was of the view that a service charge of Rs.6/- per ticket would enable the agency to break-even over a period of 7 to 10 years. 3. On the question whether to have a single or multiple agencies the Committee opined that, keeping in view the amount of co-ordination needed between various stake holders – particularly exhibitors, agencies and the cinegoers, the convenience of all the three parties should be factored in as appropriate; guidelines may be based upon mutual agreement between the government and the agency undertaking implementation, after reviewing the results from time to time; the arguments in favour of a single agency grossly outweighed the arguments in favour of multiple agencies; as long as the single on-line agency and the interface was clear, and a proper scale up model was followed and a service fee set up, the few problems/set-backs for a single agency could be addressed. On an overall view, the Committee felt that it was a clear advantage in going with a single agency. The Committee examined the set up costs and the recurring costs and opined that a minimum period of 10 years was needed for the agency to break even, and the initial period of license to be granted to the operating agency could be extended by another five years. 4. Among the five non-trade body representationists, the Committee held in favour of GEPL. The reasons which weighed in their favour were that GEPL was earlier awarded the contract for a period of 15 years; the contract was in operation for close to 3 months; GEPL had significantly invested in the project this year; their model had both the requirements of booking over the internet as well as booking over phone; this made it a very friendly model for the cine-goer; their model had a two hour window for releasing the unsold tickets and a membership model; and their model conformed to all the basic guidelines set forth for the online ticket booking system. 5. M/s Beyond Basiks Infotech Pvt. Ltd. (the petitioner in W.P. No.4430 of 2009), had submitted a representation for grant of an online-booking licence for the year 2008 and, as the licence was not granted, they filed W.P. No.17744 of 2008 before this Court. 5. M/s Beyond Basiks Infotech Pvt. Ltd. (the petitioner in W.P. No.4430 of 2009), had submitted a representation for grant of an online-booking licence for the year 2008 and, as the licence was not granted, they filed W.P. No.17744 of 2008 before this Court. The said Writ Petition was disposed of, by order dated 26.8.2008, directing respondents 2 and 3 therein to pass appropriate orders. The 2nd respondent, by order dated 16.9.2008, rejected the petitioner’s application holding that the Government had not formulated and communicated the terms and conditions envisaged in Rule 17A of the Rules. M/s Beyond Basiks Infotech Pvt. Ltd., by their representation dated 20.9.2008, again requested the 2nd respondent to accord permission. They filed W.P. No.21723 of 2008 and, by order in W.P.M.P. No.28354 of 2008 dated 23.10.2008, interim directions were passed permitting them to continue sale of online cinema tickets subject to the terms and conditions imposed for the previous years. 6. Based on the recommendations and the feasibility report of the Committee dated 3.11.2008, and as the committee had recommended a single agency, the Government, in the exercise of its powers under Section 11(2)(a) of the Act and Rule 17-A of the Rules, issued G.O.Ms. No.110, Home (General-A) Department dated 19.2.2009 permitting GEPL to operate the online ticket booking system in the State of A.P. in a phased manner, initially for a period of 10 years which could be extended, with mutual consent, by another 5 years. 7. Oral submissions were made on behalf of the petitioners, in this batch of Writ Petitions, by Sri E.Manohar, Learned Senior Counsel, and Sri P.Sriraghuram, Sri S.Niranjan Reddy, Sri O.Manohar Reddy, Sri K.Durga Prasad and Sri K.Raghavacharyulu. The Learned Advocate-General put forth his submissions on behalf of the State Government, and Sri S.Sriram, Learned Counsel, on behalf of GEPL. Written arguments were also submitted. 8. It is convenient to deal with the contentions put forth by counsel on either side under different heads. I. IS G.O.Ms.No.110 DATED 19-02-2009 ULTRAVIRES SECTIONS 4 AND 5 OF THE ACT AND RULE 17-A OF THE RULES? 9. Written arguments were also submitted. 8. It is convenient to deal with the contentions put forth by counsel on either side under different heads. I. IS G.O.Ms.No.110 DATED 19-02-2009 ULTRAVIRES SECTIONS 4 AND 5 OF THE ACT AND RULE 17-A OF THE RULES? 9. It is contended on behalf of the petitioners that the orders of the Government in G.O.Ms.No.110 dated 19.2.2009, according permission to GEPL to operate the online booking system in the entire State for a period of 10 years, is without jurisdiction and is ultravires Sections 4 and 5 of the Act and Rule 17A of the Rules; neither the Act nor the Rules enable the Government to exercise the original power of the primary authority, even though that authority has to be authorized by the Government itself; the licencees are entitled for renewal of their licence if there is no breach of the conditions of the licence by them; the Government had exceeded its jurisdiction in issuing directions to the licensing authorities not to renew the existing licence, and not to permit online ticket booking agencies after expiry of the existing licence/permission; Section 5(2), a general power conferred on the Government to give directions, cannot be construed as an original power to grant a licence; the permission accorded to GEPL is, in effect, the grant of a licence by the Government; neither Sections 5 or 11(2)(a) nor Rule 17-A confer power on the Government to grant permission/licence; so far the Government has neither authorized any person nor has it determined the terms and conditions as prescribed in Section 11(2)(a) of the Act or Rule 17-A of the Rules; the impugned G.O. is an executive order and, as it is in conflict with the statutory rules, it is illegal; Rule 17A does not enable the licensing authority to grant licence only to one person; the State cannot usurp the authority of the licensing officer in exercise of its powers of “control”; the impugned G.O, which grants licence for a period of 10 years, is contrary to Rule 13; and the Government does not have the power to issue directions contrary to Sections 4 and 5 of the Act and, in any event, in relation to matters not stipulated by or provided under the Act and the Rules. 10. 10. On the other hand, both the Learned Advocate-General and Sri S. Sriram, Learned Counsel for GEPL, would submit that Rule 17-A enables the Government to grant an on-line licence to any one person subject to fulfilment of the prescribed terms and conditions; Rule 17A provides for a scenario wherein there could be a single on-line agency for the entire State; the multiple operators scenario under Rule 17-A can happen only if there are individual operators in a part of the State; in the absence of a notification being issued under the proviso to Section 4 of the Act, notifying an authority for the entire State to grant an online licence, the Government is itself entitled to exercise the power conferred by the Act on the authority; the power under Section 5(2) encompasses the power to issue quasi- legislative general directions to the primary licensing authority; the power of “control” also includes the power to issue directions to fill the vacuum or gaps in the rules; there being no authority notified for the entire State as a unit and, since the licensing authorities are competent to grant licence only for a District, the impugned G.O. was issued; and, in the impugned G.O., directions were issued to the licensing authority to act in accordance with the conditions stipulated therein. 11. Section 4 of the A.P. Cinemas (Regulation) Act, 1955 (for brevity “the Act”) stipulates that the District Collector shall be the authority having power to grant licences under the Act (the licensing authority). Under the proviso thereto the Government is empowered, by notification, to constitute for the whole or any part of the State such other authority, as it may specify in the notification, to be the licensing authority for the purposes of the Act. In the exercise of its powers under Section 4, the Government issued notifications earlier constituting the Commissioner of Police, Hyderabad as the licencing authority for Hyderabad, and the Commissioner of Police, Cyberabad to be the licencing authority for the Cyberabad area. 12. Section 5(1) of the Act prohibits the licensing authority from granting a licence under the Act unless it is satisfied that (a) the rules made under the Act have been substantially 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 exhibitions therein. Section 5(1)(a) requires the licensing authority to satisfy himself that the Rules made under the Act have been substantially complied with. Section 5(2) provides, subject to Section 5(1) of the Act and to the control of the Government, that the licensing authority may grant licences under the Act to such persons as that authority thinks fit, and on such terms and conditions and subject to such restrictions as it may determine. Section 5(3) enables the Government, from time to time, to issue directions to licencees generally or to any licencee in particular for the purpose of regulating the exhibition of any film or a class of films. Since the dispute, in the present case, relates to the grant of an “on line licence”, it is not necessary for this Court to examine the scope of the power of the Government to issue directions under Section 5(3) of the Act. Section 7(1) enables any person, aggrieved by the decision of the licensing authority refusing to grant licence or permission under the Act, to prefer an appeal to the Government. Section 7-A (1) confers power of review on the Government which can be exercised either suo motu or on the application received from any “interested” person. Section 11 of the Act enables the Government, by notification, to make rules for carrying out the purposes of the Act and, under Sub-Rule (2)(a) thereof, such Rules may provide for the terms, conditions and restrictions, if any, subject to which licences and permissions may be granted under the Act. 13. In exercise of the powers conferred under Section 6 and Section 11(1) of the Act, the Rules were made and published in the A.P. Gazette on 27.8.1970. It is these Rules which were amended, and the amendments notified, in G.O.Ms. No.47, Home (General-A) dated 10.3.2006. Rule 2(t) defines an “on-line licencee” to mean a person who has obtained a licence, for booking tickets under the on-line system, under Rule 17-A of the Rules. Rule 11-A (f) requires a declaration to be made by the applicant, for grant of a cinema licence, to the effect that the person/firm has completed all arrangements to provide a booking office at the licenced premises to those persons who have obtained an on-line licence to sell tickets through telephone multi-point locations and internet or emerging technologies, kiosks (manned or unmanned). Rule 11-C(1) requires the person, in whose favour an “on-line” licence has been granted under Rule 17-A, to sell tickets only at the permitted licenced booking offices through telephone, multi-point locations and internet or emerging technologies and other counters, kiosks (manned or unmanned) except in the last class of admission for which booking shall be in the theatre premises only. The second proviso thereto stipulates that at least 50% of the tickets shall be reserved for sale by the cinema licencee in the licenced booking office at the cinema theatre in the current counters. Rule 11-C(3) provides that the division of tickets, that are to be sold by the cinematography licencee and the on-line licencee, shall be made with equal comfort and convenience to the cine-goers. Rule 12-A (c)(i) requires every application for renewal of a cinema licence to be accompanied by a declaration to the effect that the licencee has completed all arrangements to provide a booking office at the licenced premises to those persons who have obtained permission to sell tickets through telephone multipoint locations and internet or emerging technologies, kiosks (manned or unmanned). Rule 17-A reads as under: “Not withstanding anything contained in the Rules, the officer authorised by the Government for grant of cinema licence shall be authorized for issue of on-line licence to any person/agency to book not exceeding 50% of the total on-line tickets through telephone of multipoint locations and internet or emerging technologies and other counters, kiosks (manned or unmanned) through out the State or in any part thereof, on such terms and conditions and subject to such restrictions as may be determined by the Government from time to time in this behalf.” 14. G.O.Ms. No.110 dated 19.2.2009, (the order impugned in these Writ Petitions), records that the government, after a detailed examination of the recommendations of the committee report dated 3.11.2008, after careful examination of the issue and in exercise of the powers conferred under Section 11(2)(a) of the Act and Rule 17-A of the Rules, had accorded permission to GEPL to operate the on-line ticket booking system in the State in a phased manner initially for a period of 10 years. Phase I related to theatres located in the GHMC area, and areas in Visakhapatnam, Vijayawada, Guntur, Tenali, Tirupati, Kakinada, Rajahmundry, Eluru, Ongole and Warangal. Phase II relates to theatres located in all the District Headquarters and major towns. Phase I related to theatres located in the GHMC area, and areas in Visakhapatnam, Vijayawada, Guntur, Tenali, Tirupati, Kakinada, Rajahmundry, Eluru, Ongole and Warangal. Phase II relates to theatres located in all the District Headquarters and major towns. The Commissioner of Police, Hyderabad and the Commissioner of Police, Cyberabad were directed to entrust the theatres under their control for on-line ticketing to GEPL. The licensing authorities were also directed not to renew the existing licence/permission of on-line ticket booking agency, if any, after expiry of such existing licence/permission, unless there was a Court direction to that effect. 15. Clause (2) of the Annexure to G.O.Ms. No.110 dated 19.2.2009 requires GEPL to operate the system as per the directions given thereunder. Clause (2) contains 20 such directions. Clause (3) of the said annexure stipulates that on-line ticketing permission shall be subject to imposition of any further terms and conditions as deemed fit by the Government from time to time. The directions in the annexure to G.O.Ms. No.110 dated 19.2.2009 are conditions imposed on GEPL, and not the terms and conditions or directions issued by the Government to the licensing authority in the exercise of its powers of control under Section 5(2) of the Act. 16. Rule 17-A starts with a non-obstante clause and authorizes the officer, authorised by the Government for grant of a cinema licence, to issue an on-line licence. The said rule restricts grant of licence to any person/agency to book not exceeding 50% of the total “on-line tickets”. The Rule also authorises the licencing authority to grant licence either throughout the State or in a part thereof. On a conjoint reading of the second proviso to Rule 11-C(1) and Rule 17-A, it is evident that atleast 50% of the tickets are reserved for sale by the cinema licencee in the licenced booking office at the cinema theatre in the current counters; and not more than 50% of the total “online tickets” can be booked by the agency which has been granted “on-line licence”. As at least 50% of the total cinema tickets are to be sold by the cinema licencee at the cinema theatre, it is only from out of the remaining extent, (which cannot exceed 50% of the total tickets for a show), can each on-line licencee book tickets, that too not exceeding 50% of the total on-line tickets. As at least 50% of the total cinema tickets are to be sold by the cinema licencee at the cinema theatre, it is only from out of the remaining extent, (which cannot exceed 50% of the total tickets for a show), can each on-line licencee book tickets, that too not exceeding 50% of the total on-line tickets. Even among the total on-line tickets, (which cannot constitute more than 50% of the total tickets), only 50% thereof can be booked by an agency which has been issued an on-line licence. Rule 17-A envisages at least two, if not more, on-line agencies to be granted a licence to book the “total on-line tickets” which constitute less than 50% of the total tickets of a particular show. Inherent in the Rule is the requirement of issuing on-line licences to more than one person/agency as no person or agency can be authorised to book more than 50% of the total “on-line tickets”. The contention, urged on behalf of respondents, that Rule 17-A enables the Government to grant licence to any one person subject to fulfillment of terms and conditions does not, therefore, merit acceptance. Though grant of licence under Rule 17-A is to be on such terms and conditions, and subject to such restrictions, as may be determined by the Government from time to time, the Government has neither stipulated any terms and conditions nor has it determined any restrictions for the grant of an “on-line” licence till date. 17. While Section 5(1) places fetters on the power of the licensing authority to grant a licence, Section 5(2) empowers him to grant a licence under the Act to such persons as he thinks fit on such terms and conditions and such restrictions as may be determined. The power of the licensing authority, under Section 5(2) of the Act, to grant a licence is subject to the provisions of Section 5(1), and to the control of the Government. As noted hereinabove Section 5(1)(a) requires the licencing authority to satisfy himself that the Rules made under the Act have been substantially complied with. It is necessary, therefore, to examine the scope and ambit of the words “subject to the control of the Government” used in Section 5(2) of the Act. 18. As noted hereinabove Section 5(1)(a) requires the licencing authority to satisfy himself that the Rules made under the Act have been substantially complied with. It is necessary, therefore, to examine the scope and ambit of the words “subject to the control of the Government” used in Section 5(2) of the Act. 18. In Karnati Rangaiah v. A. Sultan Mohiddin and Brothers AIR 1957 AP 513, a Division bench of this Court held: “……….It is to be noticed that the Statute expressly provides that the grant of licences by the licensing authority to such persons as it thinks fit, is subject to the control of the State Government. The power of control extends over the whole range of the power to grant licences and the word "control " has a very wide connotation. In our view, the Statute does not in any way delimit the ambit of controlling power. Such control may take the shape of either general or particular instructions. It cannot be said that the District Magistrate is the statutory authority solely entrusted with the power to grant or refuse a licence…………..” “………….The words, in section 5(3) " to such persons as it thinks fit " and "such terms and conditions, and. . . . such restrictions as it may determine" do not, in our opinion, necessarily detract from the power of the State Government to give directions to the licensing authority in regard either to the "persons" or to the "terms, conditions and restrictions". This control over the exhibition of cinematograph films is conceived in the interest of 'safety, convenience, morality and welfare of the public', to use a phrase of the Supreme Court in the cited decisions, and as such made subject to the over-all supervision of the State Government. ……….” (emphasis supplied) 19. The view taken by the Division bench, in Karnati Rangaiah, on the scope of the Government’s “power of control” was held by the Supreme Court, in the State of Punjab v. Hari Kishan Sharma AIR 1966 SC 1081 , not to represent the true legal position under the relevant provisions of the Act. As the scope and ambit of Section 5(3) of the Cinematograph Act, 1918 fell for consideration in “Hari Kishan Sharma” it is useful to read Section 5(3) of the Cinematograph Act, 1918 in juxta-position with Section 5(2) of the A.P. Cinema (Regulation) Act, 1955. As the scope and ambit of Section 5(3) of the Cinematograph Act, 1918 fell for consideration in “Hari Kishan Sharma” it is useful to read Section 5(3) of the Cinematograph Act, 1918 in juxta-position with Section 5(2) of the A.P. Cinema (Regulation) Act, 1955. Section 5(3) of the Cinematograph Act, 1918 5(3) Subject to the foregoing provisions of this section, and to the control of the (provincial government), the licensing authority may grant licences under this Act to such persons as it thinks fit, and on such terms and conditions and subject to such restrictions as it may determine. Section 5(2) of the A.P. Cinema Regulation Act 5(3) 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 it thinks fit, and on such terms and conditions and subject to such restrictions as it may determine. 20. As Section 5(3) of the Cinematograph Act is in parimateria with Section 5(2) of the A.P. Cinema (Regulation) Act, and as the Supreme Court in Hari Kishan Sharma2 held that the view taken by the Division bench, in Karnati Rangaiah1, did not represent the true legal position under the relevant provisions of the Act, the submission, that the word “control” has a very wide connotation and the power of control extends over the whole range of the power to grant licences, does not merit acceptance. 21. The primary authority to grant or refuse permission is the licensing authority which may grant or refuse to grant the permission applied for. But such a permission granted by the licensing authority is made by the Act subject to the control of the State Government. The words “subject to control” confers both appellate as well as revisional jurisdiction on the State Government, and also empowers it to issue quasi - legislative general directions to the primary licensing authority. But over and beyond that, those words do not confer any power on the State Government. They would not empower the State Government to exercise an original jurisdiction. What is made “subject to the control” of the Government is neither action nor inaction of the permit-holder, but the action of the licensing authority. The Section provides for control by the State Government over the licensing authority and its activity, and not over the permit-licence-holder. They would not empower the State Government to exercise an original jurisdiction. What is made “subject to the control” of the Government is neither action nor inaction of the permit-holder, but the action of the licensing authority. The Section provides for control by the State Government over the licensing authority and its activity, and not over the permit-licence-holder. If the Section is construed as State control extending to, and covering the activity of the permit licence-holder, it would to that extent supplant the primary authority with the State Government. Thereby the revisional or appellate quasi-judicial power of the State Government would be turned into an original power. This interpretation would upset the hierarchical two-tier system of power set up by the Act. While exercising the power of control the Government cannot directly deal with the permit holder and his conduct. (D. Satyanarayana v. Govt. of A.P. AIR 1979 AP 259 ). The power of control vested in the Government, under sub-section (2) of Section 5 of the Act, springs into action only when there is vaccum in the Rules made by the Government in exercise of the powers under Section 11 of the Act. (Nataraj Theatre v. Govt. of Andhra Pradesh 1999(5) ALD 693 ). 22. The control of the Government contemplated by Section 5(2) may justify the issue of general instructions or directions which may be legitimate for the purpose of the Act, and these instructions and directions may necessarily guide the licensing authority in dealing with applications for licences. The said control may involve the exercise of revisional power after an order has been passed by the Licensing Authority. In the context in which the control of the Government has been provided for by Section 5(2), it would be permissible to hold that the said control can be exercised generally before applications for licences are granted, or particularly by correcting individual orders if they are found to be erroneous. The Government cannot, however, assume for itself the powers of the Licensing Authority which have been specifically provided for by Section 5(1) and (2) of the Act. To hold that the control of the Government would justify their taking away the entire jurisdiction and authority from the Licensing Authority is to permit the Government, by means of its executive power, to change the statutory provisions in a substantial manner; and that position clearly is not sustainable. To hold that the control of the Government would justify their taking away the entire jurisdiction and authority from the Licensing Authority is to permit the Government, by means of its executive power, to change the statutory provisions in a substantial manner; and that position clearly is not sustainable. (Hari Kishan Sharma2 andNataraj Theatre). 23. G.O.Ms. No.110 dated 19.2.2009 is not referable to Section 5(2) of the Act firstly because GEPL has alone been granted an on-line licence for the entire State of A.P. to the exclusion of all others; such entrustment of total “on-line” tickets to a single agency is ultra vires Rule 17-A which stipulates that less than 50% of the total on-line tickets can be entrusted to any one agency; and secondly because the Government cannot usurp the powers of the licensing authority under Section 4 and 5 of the Act, and grant a licence on its own accord to GEPL. The submission that, in the absence of a notification under the proviso to Section 4 of the Act notifying an authority for the entire State to grant an online licence, the Government itself is entitled to exercise the power conferred by the Act on the licensing authority does not merit acceptance. The proviso to Section 4 of the Act enables the Government, by notification, to constitute an authority to be the licencing authority for the purposes of the Act. While the Government has the power, under the aforesaid proviso, to notify the licencing authority for the entire State, it cannot take advantage of its own lapse and contend that, having failed to appoint the authority to grant on-line licences for the entire State, they are entitled to grant the on-line licence on their own accord. Where the legislation or the Rules prescribe a mode for the exercise of power, that power can be exercised only in that manner and in none other. (Nazir Ahmed v. King Emperor AIR 1936 PC 253; Ballabhdas Agarwala v. J.C. Chakravarthi AIR 1960 SC 576 ;State of U.P. v. Singhara Singh AIR 1964 SC 358 ; Gujarat Electricity Board v. Girdharlal Motilal AIR 1969 SC 267 and Haresh Dayaram Thakur v. State of Maharashtra AIR 2000 SC 2281 ). 24. (Nazir Ahmed v. King Emperor AIR 1936 PC 253; Ballabhdas Agarwala v. J.C. Chakravarthi AIR 1960 SC 576 ;State of U.P. v. Singhara Singh AIR 1964 SC 358 ; Gujarat Electricity Board v. Girdharlal Motilal AIR 1969 SC 267 and Haresh Dayaram Thakur v. State of Maharashtra AIR 2000 SC 2281 ). 24. All that the Government is entitled to do, in the exercise of its powers of control, is to issue quasi-legislative general instructions or directions to the primary licencing authority, and not to substitute or supplant itself for the primary licencing authority. The impugned G.O.Ms. No.110 dated 19.2.2009, issued by the Government permitting GEPL to operate the on-line ticket booking system in the entire State of A.P. for a period of 10 years, is without jurisdiction and is ultra vires Sections 4 and 5 of the Act and Rule 17-A of the Rules. The impugned G.O. must therefore be, and is, accordingly, set aside. II. DOES G.O.Ms. No.110 DATED 19.02.2009, WHEREBY GEPL HAS BEEN CONFERRED MONOPOLY RIGHTS, VIOLATE ARTICLE 19(1)(g) AND 14 OF THE CONSTITUTION OF INDIA? 25. The impugned G.O. must therefore be, and is, accordingly, set aside. II. DOES G.O.Ms. No.110 DATED 19.02.2009, WHEREBY GEPL HAS BEEN CONFERRED MONOPOLY RIGHTS, VIOLATE ARTICLE 19(1)(g) AND 14 OF THE CONSTITUTION OF INDIA? 25. It is contended on behalf of the Petitioners that no person can be excluded from carrying on business, and any such exclusion would be in violation of Article 19(1)(g) of the Constitution of India; the Government lacked jurisdiction to accord monopoly rights in favour of GEPL contrary to the Act and the Rules; as selective accord of exclusive rights on GEPL to book tickets “on-line” for the entire State violates the rights of the petitioners, and others similarly situated, the action of the Government is arbitrary, illegal, unreasonable and in violation of Articles 14 of the Constitution of India; creation of monopoly rights in favour of GEPL is against public interest; in appointing a single agency for a long period of 10 years, extendable for a further period of five years, the Government has created a class and thereby aspiring licencees, who are also entitled to be considered for grant of licence under Sec.4 of the Act, have been excluded; the impugned G.O. is discriminatory; selection of GEPL, and conferring monopoly status on them, does not have any nexus with the purported objects of the Act; Rule 17(A) does not enable or admit of monopoly; just like cinematography licences under Rule 11 (A), Rule 17(A) enables on-line licences to be granted to more than one person; and it is intrinsically provided therein that there cannot be a monopoly. 26. 26. On the other hand it is contended on behalf of the respondents that all the petitioners herein are companies and not citizens and a complaint by them, of violation of Article 19 of the Constitution of India, would not be entertained by this Court; as Rule 17-A is not under challenge in these Writ Petitions, it is not open to the petitioners to contend that adherence to Rule 17-A by the Government has resulted in monopoly status being conferred on GEPL; the Government has placed a cap on the service charges which can be collected by the agency; that itself would remove one of the characteristics of a monopoly; Section 11 (2)(a) of the Act and Rule 17(A) of the Rules empower the State Government to impose conditions or restrictions subject to which a licence or permission can be granted to exhibitors; the petitioners have no right to insist that either the District Collector or any other authority should grant them a licence or permission to sell cinema tickets online; the petitioners have no right, much less a fundamental right, to carry on a particular business i.e., selling of cinema tickets either online or otherwise; the impugned G.O. does not create a monopoly in GEPL as only 50% of the tickets are permitted to be sold online; the petitioners, being non-citizens, do not have a fundamental right under Article 19(1)(g) of the Constitution of India; by operation of law and the policy of the State, the right to be granted a licence can be regulated and restricted; having regard to the nature of the right, and also the subject matter, the State preferred a single on-line agency to multiple operators, and the same is valid in law; canalization of agencies for operating under a statute, and entrustment or selection of an agency authorized under a statute, (which is not under challenge per se), does not amount to violation of the fundamental right of other operators under Article 19(1)(g) of the Constitution, and does not amount to creation of a monopoly; restrictions on a fundamental right under Article 19 can be imposed by law which includes intra-vires subordinate legislation; and restrictions on the fundamental right under Article 19(1)(g) can also be by way of an administrative order passed under Article 162 of the Constitution. 27. 27. It is no doubt true that the right to the grant of a licence can be regulated and restricted by legislation-plenary or subordinate. Section 11(2)(a) enables the Government, by notification, to make rules which may provide for terms and conditions and restrictions, if any, subject to which licences and permissions may be granted under the Act. The terms, conditions and restrictions, subject to which licenses and permissions may be granted under the Section 11(2)(a) of the Act, can be prescribed only by rules made by the Government by way of a notification. The rules which the Government has made, in exercise of its powers under Section 11, are the A.P. Cinema (Regulation) Rules, 1970 which has been amended in G.O.Ms. No.47 dated 10.03.2006. The only rule, which prescribes the terms, conditions and restrictions for the grant of an “online licence” is Rule 17-A. The said Rule does not empower the Government either to grant a licence or accord permission for an agency to sell cinema tickets “on-line”. While the Government has the power to issue general directions to the licensing authority, in exercise of its powers of control under Section 5(2), the power to issue such directions are always subject to the provisions of the Act and the Rules. Even if it be considered necessary to issue directions in matters which are governed by statutory provisions, the directions cannot be so made or utilised as to override statutory provisions, as such a method would destroy the very basis of the rule of law, and strike at the very root of orderly administration of law. (Mannalal Jain v. State of Assam (1962) 3 SCR 936 ). 28. The meaning of the word “regulation” in the Shorter Oxford Dictionary is "the act of regulating" and the word "regulate" is given the meaning "to control, govern, or direct by rule or regulation". The word "regulation" is a word of broad import comprehending all facets not only specifically enumerated in the Act but also embraces within its fold powers incidental to the “regulation”. The legislature cannot delegate its power to make a law but it can make a law delegating the power to determine some facts, or state of things, upon which the law makes or intends to make its own action depend. The legislature cannot delegate its power to make a law but it can make a law delegating the power to determine some facts, or state of things, upon which the law makes or intends to make its own action depend. The law having laid down the broad principles of its policy, the Legislature can then leave the details to be supplied by the administrator bearing in mind the need to adjust to the rapidly changing circumstances. (D.K.V. Prasada Rao v. Govt. of A.P. AIR 1984 AP 75 ; Indu Bhushan Bose v. Rama Sundari Debi AIR 1970 SC 228 ). Though it is in the realm of a private contract, when persons undertake the business or occupation of exhibiting cinematography, or matters incidental thereto, it is "clothed with a public interest" as the cine-going public acquire a direct interest in having easy access of admission into the theatres. Thereby the business ceases to be "Juris Privati", tends to a common charge, and becomes a thing of public interest and use. It becomes necessary to override the private rights of persons and property so as to effectuate the public order for the general welfare of the citizens. When private property is affected with a public interest, it ceases to be "juris privati", and is clothed with a public interest when used in a manner affecting the community at large. A common law regulation of trade or business may be changed by Statute. While the right of property created by common law cannot be taken away, the law itself, as a rule of conduct, may be changed at the will of the Legislature, unless prevented by constitutional limitations. Such restriction or regulation must also not fall foul of any of the provisions of the Constitution. (D.K.V. Prasada Rao). Judgment : COMMON ORDER: Except in W.P.Nos.20357 and 25403 of 2011, G.O.Ms. No.110 Home (General-A) Department dated 19.2.2009 is under challenge in all the other Writ Petitions which form part of this batch. Such restriction or regulation must also not fall foul of any of the provisions of the Constitution. (D.K.V. Prasada Rao). Judgment : COMMON ORDER: Except in W.P.Nos.20357 and 25403 of 2011, G.O.Ms. No.110 Home (General-A) Department dated 19.2.2009 is under challenge in all the other Writ Petitions which form part of this batch. While the relief sought for in W.P. No.20357 of 2011 is to declare the action of the respondents in not considering the petitioner’s request for grant of an on-line licence, and in preventing them from conducting their business as an on-line agency, as arbitrary and illegal; the relief sought for in W.P. No.25403 of 2011 is to declare the action of the respondents in interfering with the business carried on by the petitioner in conducting on-line booking through e-ticketing system of tickets in respect of theatres within the State of Andhra Pradesh, and in insisting on a separate licence, as arbitrary and illegal. However both Sri S.Niranjan Reddy, Learned Counsel for the petitioner in W.P. No.20357 of 2011, and Sri P.Sriraghuram, Learned Counsel for the petitioner in W.P. No.25403 of 2011, would submit that it would be suffice for disposal of these two Writ Petitions also if this Court were to restrict its examination to the validity of G.O.Ms. No.110 dated 19.2.2009. 2. The Andhra Pradesh Cinemas (Regulation) Rules, 1970 (hereinafter called the “Rules”) were amended by G.O.Ms. No.47, Home (General-A) Department dated 10.3.2006 whereby an online booking system was statutorily introduced in the State of Andhra Pradesh. Proposals were received from five agencies to operate the online ticket booking system in cinema theatres in the State of Andhra Pradesh. Galaxy Entertainers Private Ltd, (hereinafter called GEPL), also submitted a proposal to the Government on 5.2.2004 expressing interest in operating the online ticket booking system. The Government, vide G.O.Ms. No.48 Home (Gen A) Department dated 10.3.2006, accorded permission to GEPL to operate the said online ticket booking system. In view of adverse newspaper reports, G.O.Ms. No.48 dated 10.3.2006 was cancelled by G.O.Rt. No.837 Home (Gen A) Department dated 4.5.2006. The Government, vide G.O.Ms. No.48 Home (Gen A) Department dated 10.3.2006, accorded permission to GEPL to operate the said online ticket booking system. In view of adverse newspaper reports, G.O.Ms. No.48 dated 10.3.2006 was cancelled by G.O.Rt. No.837 Home (Gen A) Department dated 4.5.2006. Thereafter the Government issued G.O.Rt.No.1966, Home (General-A) Department dated 21.11.2006 constituting a committee, as computerized ticketing in cinema theatres in the State of A.P. would facilitate disclosure of sales volumes so as to prevent tax evasion; this system would bring transparency in ticket booking, and improvement in the entertainment tax collection system; and thereby black marketing of cinema tickets would be prevented to a great extent. The Government deemed it proper, therefore, to entrust the same to a suitable agency for selecting and short listing firms to operate such a system after duly examining their technical expertise, financial background etc. The Committee, constituted by G.O.Rt. No.1966, Home (General-A) Department dated 21.11.2006, was required to finalize agencies for providing the on-line cinema ticket booking system in cinema halls in the State of Andhra Pradesh. The committee was directed to examine in detail the scheme for its implementation either through a single agency or through multiple agencies. Thereafter the Committee submitted its report making 29 recommendations for implementation of the on-line ticket booking system. It recommended multiple agencies. The Government, by G.O.Rt. No.1571, Home (General-A) Department, dated 25.8.2008, constituted another committee to examine whether to have a centralized single state level operating system with one agency instead of multiple agencies, and to consider the representations received by it. The three member Committee heard the President, A.P. Film Chambers of Commerce, the Hyderabad State Film Chambers of Commerce, the Telugu Film Producers Council and five online ticket agencies including GEPL, and submitted its report dated 3.11.2008 to the Government. It is seen from the said report that the Home Department had forwarded the applications, along with the proposals and representations submitted by eight agencies including three trade bodies, for scrutiny and examination; the representatives of the trade bodies were heard on 25.09.2008; the trade bodies stated that the service charges, payable to the agency, would be a burden on the cine-goer; they desired the system to be fool-proof, exhibitors be allowed to introduce the system on their own, and the system be implemented at the behest of the theatre owners. The Committee report also notes that proposals were received from five agencies for implementing the on-line ticket booking system. The Committee considered the proposals made by each of these five agencies. While determining the service charges, and the period of operation, the Committee took into consideration the cost of setting up infrastructure at the theatres; payment to retail outlet stores for selling tickets; the cost of setting up telephone operators for selling tickets over phone; cost of setting up central infrastructure for maintaining information of all ticket sales across the State; and the cost of maintaining the web portal. Based on the information placed before it, the Committee was of the view that a service charge of Rs.6/- per ticket would enable the agency to break-even over a period of 7 to 10 years. 3. On the question whether to have a single or multiple agencies the Committee opined that, keeping in view the amount of co-ordination needed between various stake holders – particularly exhibitors, agencies and the cinegoers, the convenience of all the three parties should be factored in as appropriate; guidelines may be based upon mutual agreement between the government and the agency undertaking implementation, after reviewing the results from time to time; the arguments in favour of a single agency grossly outweighed the arguments in favour of multiple agencies; as long as the single on-line agency and the interface was clear, and a proper scale up model was followed and a service fee set up, the few problems/set-backs for a single agency could be addressed. On an overall view, the Committee felt that it was a clear advantage in going with a single agency. The Committee examined the set up costs and the recurring costs and opined that a minimum period of 10 years was needed for the agency to break even, and the initial period of license to be granted to the operating agency could be extended by another five years. 4. Among the five non-trade body representationists, the Committee held in favour of GEPL. 4. Among the five non-trade body representationists, the Committee held in favour of GEPL. The reasons which weighed in their favour were that GEPL was earlier awarded the contract for a period of 15 years; the contract was in operation for close to 3 months; GEPL had significantly invested in the project this year; their model had both the requirements of booking over the internet as well as booking over phone; this made it a very friendly model for the cine-goer; their model had a two hour window for releasing the unsold tickets and a membership model; and their model conformed to all the basic guidelines set forth for the online ticket booking system. 5. M/s Beyond Basiks Infotech Pvt. Ltd. (the petitioner in W.P. No.4430 of 2009), had submitted a representation for grant of an online-booking licence for the year 2008 and, as the licence was not granted, they filed W.P. No.17744 of 2008 before this Court. The said Writ Petition was disposed of, by order dated 26.8.2008, directing respondents 2 and 3 therein to pass appropriate orders. The 2nd respondent, by order dated 16.9.2008, rejected the petitioner’s application holding that the Government had not formulated and communicated the terms and conditions envisaged in Rule 17A of the Rules. M/s Beyond Basiks Infotech Pvt. Ltd., by their representation dated 20.9.2008, again requested the 2nd respondent to accord permission. They filed W.P. No.21723 of 2008 and, by order in W.P.M.P. No.28354 of 2008 dated 23.10.2008, interim directions were passed permitting them to continue sale of online cinema tickets subject to the terms and conditions imposed for the previous years. 6. Based on the recommendations and the feasibility report of the Committee dated 3.11.2008, and as the committee had recommended a single agency, the Government, in the exercise of its powers under Section 11(2)(a) of the Act and Rule 17-A of the Rules, issued G.O.Ms. No.110, Home (General-A) Department dated 19.2.2009 permitting GEPL to operate the online ticket booking system in the State of A.P. in a phased manner, initially for a period of 10 years which could be extended, with mutual consent, by another 5 years. 7. Oral submissions were made on behalf of the petitioners, in this batch of Writ Petitions, by Sri E.Manohar, Learned Senior Counsel, and Sri P.Sriraghuram, Sri S.Niranjan Reddy, Sri O.Manohar Reddy, Sri K.Durga Prasad and Sri K.Raghavacharyulu. 7. Oral submissions were made on behalf of the petitioners, in this batch of Writ Petitions, by Sri E.Manohar, Learned Senior Counsel, and Sri P.Sriraghuram, Sri S.Niranjan Reddy, Sri O.Manohar Reddy, Sri K.Durga Prasad and Sri K.Raghavacharyulu. The Learned Advocate-General put forth his submissions on behalf of the State Government, and Sri S.Sriram, Learned Counsel, on behalf of GEPL. Written arguments were also submitted. 8. It is convenient to deal with the contentions put forth by counsel on either side under different heads. I. IS G.O.Ms.No.110 DATED 19-02-2009 ULTRAVIRES SECTIONS 4 AND 5 OF THE ACT AND RULE 17-A OF THE RULES? 9. Written arguments were also submitted. 8. It is convenient to deal with the contentions put forth by counsel on either side under different heads. I. IS G.O.Ms.No.110 DATED 19-02-2009 ULTRAVIRES SECTIONS 4 AND 5 OF THE ACT AND RULE 17-A OF THE RULES? 9. It is contended on behalf of the petitioners that the orders of the Government in G.O.Ms.No.110 dated 19.2.2009, according permission to GEPL to operate the online booking system in the entire State for a period of 10 years, is without jurisdiction and is ultravires Sections 4 and 5 of the Act and Rule 17A of the Rules; neither the Act nor the Rules enable the Government to exercise the original power of the primary authority, even though that authority has to be authorized by the Government itself; the licencees are entitled for renewal of their licence if there is no breach of the conditions of the licence by them; the Government had exceeded its jurisdiction in issuing directions to the licensing authorities not to renew the existing licence, and not to permit online ticket booking agencies after expiry of the existing licence/permission; Section 5(2), a general power conferred on the Government to give directions, cannot be construed as an original power to grant a licence; the permission accorded to GEPL is, in effect, the grant of a licence by the Government; neither Sections 5 or 11(2)(a) nor Rule 17-A confer power on the Government to grant permission/licence; so far the Government has neither authorized any person nor has it determined the terms and conditions as prescribed in Section 11(2)(a) of the Act or Rule 17-A of the Rules; the impugned G.O. is an executive order and, as it is in conflict with the statutory rules, it is illegal; Rule 17A does not enable the licensing authority to grant licence only to one person; the State cannot usurp the authority of the licensing officer in exercise of its powers of “control”; the impugned G.O, which grants licence for a period of 10 years, is contrary to Rule 13; and the Government does not have the power to issue directions contrary to Sections 4 and 5 of the Act and, in any event, in relation to matters not stipulated by or provided under the Act and the Rules. 10. 10. On the other hand, both the Learned Advocate-General and Sri S. Sriram, Learned Counsel for GEPL, would submit that Rule 17-A enables the Government to grant an on-line licence to any one person subject to fulfilment of the prescribed terms and conditions; Rule 17A provides for a scenario wherein there could be a single on-line agency for the entire State; the multiple operators scenario under Rule 17-A can happen only if there are individual operators in a part of the State; in the absence of a notification being issued under the proviso to Section 4 of the Act, notifying an authority for the entire State to grant an online licence, the Government is itself entitled to exercise the power conferred by the Act on the authority; the power under Section 5(2) encompasses the power to issue quasi- legislative general directions to the primary licensing authority; the power of “control” also includes the power to issue directions to fill the vacuum or gaps in the rules; there being no authority notified for the entire State as a unit and, since the licensing authorities are competent to grant licence only for a District, the impugned G.O. was issued; and, in the impugned G.O., directions were issued to the licensing authority to act in accordance with the conditions stipulated therein. 11. Section 4 of the A.P. Cinemas (Regulation) Act, 1955 (for brevity “the Act”) stipulates that the District Collector shall be the authority having power to grant licences under the Act (the licensing authority). Under the proviso thereto the Government is empowered, by notification, to constitute for the whole or any part of the State such other authority, as it may specify in the notification, to be the licensing authority for the purposes of the Act. In the exercise of its powers under Section 4, the Government issued notifications earlier constituting the Commissioner of Police, Hyderabad as the licencing authority for Hyderabad, and the Commissioner of Police, Cyberabad to be the licencing authority for the Cyberabad area. 12. Section 5(1) of the Act prohibits the licensing authority from granting a licence under the Act unless it is satisfied that (a) the rules made under the Act have been substantially 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 exhibitions therein. Section 5(1)(a) requires the licensing authority to satisfy himself that the Rules made under the Act have been substantially complied with. Section 5(2) provides, subject to Section 5(1) of the Act and to the control of the Government, that the licensing authority may grant licences under the Act to such persons as that authority thinks fit, and on such terms and conditions and subject to such restrictions as it may determine. Section 5(3) enables the Government, from time to time, to issue directions to licencees generally or to any licencee in particular for the purpose of regulating the exhibition of any film or a class of films. Since the dispute, in the present case, relates to the grant of an “on line licence”, it is not necessary for this Court to examine the scope of the power of the Government to issue directions under Section 5(3) of the Act. Section 7(1) enables any person, aggrieved by the decision of the licensing authority refusing to grant licence or permission under the Act, to prefer an appeal to the Government. Section 7-A (1) confers power of review on the Government which can be exercised either suo motu or on the application received from any “interested” person. Section 11 of the Act enables the Government, by notification, to make rules for carrying out the purposes of the Act and, under Sub-Rule (2)(a) thereof, such Rules may provide for the terms, conditions and restrictions, if any, subject to which licences and permissions may be granted under the Act. 13. In exercise of the powers conferred under Section 6 and Section 11(1) of the Act, the Rules were made and published in the A.P. Gazette on 27.8.1970. It is these Rules which were amended, and the amendments notified, in G.O.Ms. No.47, Home (General-A) dated 10.3.2006. Rule 2(t) defines an “on-line licencee” to mean a person who has obtained a licence, for booking tickets under the on-line system, under Rule 17-A of the Rules. Rule 11-A (f) requires a declaration to be made by the applicant, for grant of a cinema licence, to the effect that the person/firm has completed all arrangements to provide a booking office at the licenced premises to those persons who have obtained an on-line licence to sell tickets through telephone multi-point locations and internet or emerging technologies, kiosks (manned or unmanned). Rule 11-C(1) requires the person, in whose favour an “on-line” licence has been granted under Rule 17-A, to sell tickets only at the permitted licenced booking offices through telephone, multi-point locations and internet or emerging technologies and other counters, kiosks (manned or unmanned) except in the last class of admission for which booking shall be in the theatre premises only. The second proviso thereto stipulates that at least 50% of the tickets shall be reserved for sale by the cinema licencee in the licenced booking office at the cinema theatre in the current counters. Rule 11-C(3) provides that the division of tickets, that are to be sold by the cinematography licencee and the on-line licencee, shall be made with equal comfort and convenience to the cine-goers. Rule 12-A (c)(i) requires every application for renewal of a cinema licence to be accompanied by a declaration to the effect that the licencee has completed all arrangements to provide a booking office at the licenced premises to those persons who have obtained permission to sell tickets through telephone multipoint locations and internet or emerging technologies, kiosks (manned or unmanned). Rule 17-A reads as under: “Not withstanding anything contained in the Rules, the officer authorised by the Government for grant of cinema licence shall be authorized for issue of on-line licence to any person/agency to book not exceeding 50% of the total on-line tickets through telephone of multipoint locations and internet or emerging technologies and other counters, kiosks (manned or unmanned) through out the State or in any part thereof, on such terms and conditions and subject to such restrictions as may be determined by the Government from time to time in this behalf.” 14. G.O.Ms. No.110 dated 19.2.2009, (the order impugned in these Writ Petitions), records that the government, after a detailed examination of the recommendations of the committee report dated 3.11.2008, after careful examination of the issue and in exercise of the powers conferred under Section 11(2)(a) of the Act and Rule 17-A of the Rules, had accorded permission to GEPL to operate the on-line ticket booking system in the State in a phased manner initially for a period of 10 years. Phase I related to theatres located in the GHMC area, and areas in Visakhapatnam, Vijayawada, Guntur, Tenali, Tirupati, Kakinada, Rajahmundry, Eluru, Ongole and Warangal. Phase II relates to theatres located in all the District Headquarters and major towns. Phase I related to theatres located in the GHMC area, and areas in Visakhapatnam, Vijayawada, Guntur, Tenali, Tirupati, Kakinada, Rajahmundry, Eluru, Ongole and Warangal. Phase II relates to theatres located in all the District Headquarters and major towns. The Commissioner of Police, Hyderabad and the Commissioner of Police, Cyberabad were directed to entrust the theatres under their control for on-line ticketing to GEPL. The licensing authorities were also directed not to renew the existing licence/permission of on-line ticket booking agency, if any, after expiry of such existing licence/permission, unless there was a Court direction to that effect. 15. Clause (2) of the Annexure to G.O.Ms. No.110 dated 19.2.2009 requires GEPL to operate the system as per the directions given thereunder. Clause (2) contains 20 such directions. Clause (3) of the said annexure stipulates that on-line ticketing permission shall be subject to imposition of any further terms and conditions as deemed fit by the Government from time to time. The directions in the annexure to G.O.Ms. No.110 dated 19.2.2009 are conditions imposed on GEPL, and not the terms and conditions or directions issued by the Government to the licensing authority in the exercise of its powers of control under Section 5(2) of the Act. 16. Rule 17-A starts with a non-obstante clause and authorizes the officer, authorised by the Government for grant of a cinema licence, to issue an on-line licence. The said rule restricts grant of licence to any person/agency to book not exceeding 50% of the total “on-line tickets”. The Rule also authorises the licencing authority to grant licence either throughout the State or in a part thereof. On a conjoint reading of the second proviso to Rule 11-C(1) and Rule 17-A, it is evident that atleast 50% of the tickets are reserved for sale by the cinema licencee in the licenced booking office at the cinema theatre in the current counters; and not more than 50% of the total “online tickets” can be booked by the agency which has been granted “on-line licence”. As at least 50% of the total cinema tickets are to be sold by the cinema licencee at the cinema theatre, it is only from out of the remaining extent, (which cannot exceed 50% of the total tickets for a show), can each on-line licencee book tickets, that too not exceeding 50% of the total on-line tickets. As at least 50% of the total cinema tickets are to be sold by the cinema licencee at the cinema theatre, it is only from out of the remaining extent, (which cannot exceed 50% of the total tickets for a show), can each on-line licencee book tickets, that too not exceeding 50% of the total on-line tickets. Even among the total on-line tickets, (which cannot constitute more than 50% of the total tickets), only 50% thereof can be booked by an agency which has been issued an on-line licence. Rule 17-A envisages at least two, if not more, on-line agencies to be granted a licence to book the “total on-line tickets” which constitute less than 50% of the total tickets of a particular show. Inherent in the Rule is the requirement of issuing on-line licences to more than one person/agency as no person or agency can be authorised to book more than 50% of the total “on-line tickets”. The contention, urged on behalf of respondents, that Rule 17-A enables the Government to grant licence to any one person subject to fulfillment of terms and conditions does not, therefore, merit acceptance. Though grant of licence under Rule 17-A is to be on such terms and conditions, and subject to such restrictions, as may be determined by the Government from time to time, the Government has neither stipulated any terms and conditions nor has it determined any restrictions for the grant of an “on-line” licence till date. 17. While Section 5(1) places fetters on the power of the licensing authority to grant a licence, Section 5(2) empowers him to grant a licence under the Act to such persons as he thinks fit on such terms and conditions and such restrictions as may be determined. The power of the licensing authority, under Section 5(2) of the Act, to grant a licence is subject to the provisions of Section 5(1), and to the control of the Government. As noted hereinabove Section 5(1)(a) requires the licencing authority to satisfy himself that the Rules made under the Act have been substantially complied with. It is necessary, therefore, to examine the scope and ambit of the words “subject to the control of the Government” used in Section 5(2) of the Act. 18. As noted hereinabove Section 5(1)(a) requires the licencing authority to satisfy himself that the Rules made under the Act have been substantially complied with. It is necessary, therefore, to examine the scope and ambit of the words “subject to the control of the Government” used in Section 5(2) of the Act. 18. In Karnati Rangaiah v. A. Sultan Mohiddin and Brothers AIR 1957 AP 513, a Division bench of this Court held: “……….It is to be noticed that the Statute expressly provides that the grant of licences by the licensing authority to such persons as it thinks fit, is subject to the control of the State Government. The power of control extends over the whole range of the power to grant licences and the word "control " has a very wide connotation. In our view, the Statute does not in any way delimit the ambit of controlling power. Such control may take the shape of either general or particular instructions. It cannot be said that the District Magistrate is the statutory authority solely entrusted with the power to grant or refuse a licence…………..” “………….The words, in section 5(3) " to such persons as it thinks fit " and "such terms and conditions, and. . . . such restrictions as it may determine" do not, in our opinion, necessarily detract from the power of the State Government to give directions to the licensing authority in regard either to the "persons" or to the "terms, conditions and restrictions". This control over the exhibition of cinematograph films is conceived in the interest of 'safety, convenience, morality and welfare of the public', to use a phrase of the Supreme Court in the cited decisions, and as such made subject to the over-all supervision of the State Government. ……….” (emphasis supplied) 19. The view taken by the Division bench, in Karnati Rangaiah, on the scope of the Government’s “power of control” was held by the Supreme Court, in the State of Punjab v. Hari Kishan Sharma AIR 1966 SC 1081 , not to represent the true legal position under the relevant provisions of the Act. As the scope and ambit of Section 5(3) of the Cinematograph Act, 1918 fell for consideration in “Hari Kishan Sharma” it is useful to read Section 5(3) of the Cinematograph Act, 1918 in juxta-position with Section 5(2) of the A.P. Cinema (Regulation) Act, 1955. As the scope and ambit of Section 5(3) of the Cinematograph Act, 1918 fell for consideration in “Hari Kishan Sharma” it is useful to read Section 5(3) of the Cinematograph Act, 1918 in juxta-position with Section 5(2) of the A.P. Cinema (Regulation) Act, 1955. Section 5(3) of the Cinematograph Act, 1918 5(3) Subject to the foregoing provisions of this section, and to the control of the (provincial government), the licensing authority may grant licences under this Act to such persons as it thinks fit, and on such terms and conditions and subject to such restrictions as it may determine. Section 5(2) of the A.P. Cinema Regulation Act 5(3) 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 it thinks fit, and on such terms and conditions and subject to such restrictions as it may determine. 20. As Section 5(3) of the Cinematograph Act is in parimateria with Section 5(2) of the A.P. Cinema (Regulation) Act, and as the Supreme Court in Hari Kishan Sharma2 held that the view taken by the Division bench, in Karnati Rangaiah1, did not represent the true legal position under the relevant provisions of the Act, the submission, that the word “control” has a very wide connotation and the power of control extends over the whole range of the power to grant licences, does not merit acceptance. 21. The primary authority to grant or refuse permission is the licensing authority which may grant or refuse to grant the permission applied for. But such a permission granted by the licensing authority is made by the Act subject to the control of the State Government. The words “subject to control” confers both appellate as well as revisional jurisdiction on the State Government, and also empowers it to issue quasi - legislative general directions to the primary licensing authority. But over and beyond that, those words do not confer any power on the State Government. They would not empower the State Government to exercise an original jurisdiction. What is made “subject to the control” of the Government is neither action nor inaction of the permit-holder, but the action of the licensing authority. The Section provides for control by the State Government over the licensing authority and its activity, and not over the permit-licence-holder. They would not empower the State Government to exercise an original jurisdiction. What is made “subject to the control” of the Government is neither action nor inaction of the permit-holder, but the action of the licensing authority. The Section provides for control by the State Government over the licensing authority and its activity, and not over the permit-licence-holder. If the Section is construed as State control extending to, and covering the activity of the permit licence-holder, it would to that extent supplant the primary authority with the State Government. Thereby the revisional or appellate quasi-judicial power of the State Government would be turned into an original power. This interpretation would upset the hierarchical two-tier system of power set up by the Act. While exercising the power of control the Government cannot directly deal with the permit holder and his conduct. (D. Satyanarayana v. Govt. of A.P. AIR 1979 AP 259 ). The power of control vested in the Government, under sub-section (2) of Section 5 of the Act, springs into action only when there is vaccum in the Rules made by the Government in exercise of the powers under Section 11 of the Act. (Nataraj Theatre v. Govt. of Andhra Pradesh 1999(5) ALD 693 ). 22. The control of the Government contemplated by Section 5(2) may justify the issue of general instructions or directions which may be legitimate for the purpose of the Act, and these instructions and directions may necessarily guide the licensing authority in dealing with applications for licences. The said control may involve the exercise of revisional power after an order has been passed by the Licensing Authority. In the context in which the control of the Government has been provided for by Section 5(2), it would be permissible to hold that the said control can be exercised generally before applications for licences are granted, or particularly by correcting individual orders if they are found to be erroneous. The Government cannot, however, assume for itself the powers of the Licensing Authority which have been specifically provided for by Section 5(1) and (2) of the Act. To hold that the control of the Government would justify their taking away the entire jurisdiction and authority from the Licensing Authority is to permit the Government, by means of its executive power, to change the statutory provisions in a substantial manner; and that position clearly is not sustainable. To hold that the control of the Government would justify their taking away the entire jurisdiction and authority from the Licensing Authority is to permit the Government, by means of its executive power, to change the statutory provisions in a substantial manner; and that position clearly is not sustainable. (Hari Kishan Sharma2 andNataraj Theatre). 23. G.O.Ms. No.110 dated 19.2.2009 is not referable to Section 5(2) of the Act firstly because GEPL has alone been granted an on-line licence for the entire State of A.P. to the exclusion of all others; such entrustment of total “on-line” tickets to a single agency is ultra vires Rule 17-A which stipulates that less than 50% of the total on-line tickets can be entrusted to any one agency; and secondly because the Government cannot usurp the powers of the licensing authority under Section 4 and 5 of the Act, and grant a licence on its own accord to GEPL. The submission that, in the absence of a notification under the proviso to Section 4 of the Act notifying an authority for the entire State to grant an online licence, the Government itself is entitled to exercise the power conferred by the Act on the licensing authority does not merit acceptance. The proviso to Section 4 of the Act enables the Government, by notification, to constitute an authority to be the licencing authority for the purposes of the Act. While the Government has the power, under the aforesaid proviso, to notify the licencing authority for the entire State, it cannot take advantage of its own lapse and contend that, having failed to appoint the authority to grant on-line licences for the entire State, they are entitled to grant the on-line licence on their own accord. Where the legislation or the Rules prescribe a mode for the exercise of power, that power can be exercised only in that manner and in none other. (Nazir Ahmed v. King Emperor AIR 1936 PC 253; Ballabhdas Agarwala v. J.C. Chakravarthi AIR 1960 SC 576 ;State of U.P. v. Singhara Singh AIR 1964 SC 358 ; Gujarat Electricity Board v. Girdharlal Motilal AIR 1969 SC 267 and Haresh Dayaram Thakur v. State of Maharashtra AIR 2000 SC 2281 ). 24. (Nazir Ahmed v. King Emperor AIR 1936 PC 253; Ballabhdas Agarwala v. J.C. Chakravarthi AIR 1960 SC 576 ;State of U.P. v. Singhara Singh AIR 1964 SC 358 ; Gujarat Electricity Board v. Girdharlal Motilal AIR 1969 SC 267 and Haresh Dayaram Thakur v. State of Maharashtra AIR 2000 SC 2281 ). 24. All that the Government is entitled to do, in the exercise of its powers of control, is to issue quasi-legislative general instructions or directions to the primary licencing authority, and not to substitute or supplant itself for the primary licencing authority. The impugned G.O.Ms. No.110 dated 19.2.2009, issued by the Government permitting GEPL to operate the on-line ticket booking system in the entire State of A.P. for a period of 10 years, is without jurisdiction and is ultra vires Sections 4 and 5 of the Act and Rule 17-A of the Rules. The impugned G.O. must therefore be, and is, accordingly, set aside. II. DOES G.O.Ms. No.110 DATED 19.02.2009, WHEREBY GEPL HAS BEEN CONFERRED MONOPOLY RIGHTS, VIOLATE ARTICLE 19(1)(g) AND 14 OF THE CONSTITUTION OF INDIA? 25. The impugned G.O. must therefore be, and is, accordingly, set aside. II. DOES G.O.Ms. No.110 DATED 19.02.2009, WHEREBY GEPL HAS BEEN CONFERRED MONOPOLY RIGHTS, VIOLATE ARTICLE 19(1)(g) AND 14 OF THE CONSTITUTION OF INDIA? 25. It is contended on behalf of the Petitioners that no person can be excluded from carrying on business, and any such exclusion would be in violation of Article 19(1)(g) of the Constitution of India; the Government lacked jurisdiction to accord monopoly rights in favour of GEPL contrary to the Act and the Rules; as selective accord of exclusive rights on GEPL to book tickets “on-line” for the entire State violates the rights of the petitioners, and others similarly situated, the action of the Government is arbitrary, illegal, unreasonable and in violation of Articles 14 of the Constitution of India; creation of monopoly rights in favour of GEPL is against public interest; in appointing a single agency for a long period of 10 years, extendable for a further period of five years, the Government has created a class and thereby aspiring licencees, who are also entitled to be considered for grant of licence under Sec.4 of the Act, have been excluded; the impugned G.O. is discriminatory; selection of GEPL, and conferring monopoly status on them, does not have any nexus with the purported objects of the Act; Rule 17(A) does not enable or admit of monopoly; just like cinematography licences under Rule 11 (A), Rule 17(A) enables on-line licences to be granted to more than one person; and it is intrinsically provided therein that there cannot be a monopoly. 26. 26. On the other hand it is contended on behalf of the respondents that all the petitioners herein are companies and not citizens and a complaint by them, of violation of Article 19 of the Constitution of India, would not be entertained by this Court; as Rule 17-A is not under challenge in these Writ Petitions, it is not open to the petitioners to contend that adherence to Rule 17-A by the Government has resulted in monopoly status being conferred on GEPL; the Government has placed a cap on the service charges which can be collected by the agency; that itself would remove one of the characteristics of a monopoly; Section 11 (2)(a) of the Act and Rule 17(A) of the Rules empower the State Government to impose conditions or restrictions subject to which a licence or permission can be granted to exhibitors; the petitioners have no right to insist that either the District Collector or any other authority should grant them a licence or permission to sell cinema tickets online; the petitioners have no right, much less a fundamental right, to carry on a particular business i.e., selling of cinema tickets either online or otherwise; the impugned G.O. does not create a monopoly in GEPL as only 50% of the tickets are permitted to be sold online; the petitioners, being non-citizens, do not have a fundamental right under Article 19(1)(g) of the Constitution of India; by operation of law and the policy of the State, the right to be granted a licence can be regulated and restricted; having regard to the nature of the right, and also the subject matter, the State preferred a single on-line agency to multiple operators, and the same is valid in law; canalization of agencies for operating under a statute, and entrustment or selection of an agency authorized under a statute, (which is not under challenge per se), does not amount to violation of the fundamental right of other operators under Article 19(1)(g) of the Constitution, and does not amount to creation of a monopoly; restrictions on a fundamental right under Article 19 can be imposed by law which includes intra-vires subordinate legislation; and restrictions on the fundamental right under Article 19(1)(g) can also be by way of an administrative order passed under Article 162 of the Constitution. 27. 27. It is no doubt true that the right to the grant of a licence can be regulated and restricted by legislation-plenary or subordinate. Section 11(2)(a) enables the Government, by notification, to make rules which may provide for terms and conditions and restrictions, if any, subject to which licences and permissions may be granted under the Act. The terms, conditions and restrictions, subject to which licenses and permissions may be granted under the Section 11(2)(a) of the Act, can be prescribed only by rules made by the Government by way of a notification. The rules which the Government has made, in exercise of its powers under Section 11, are the A.P. Cinema (Regulation) Rules, 1970 which has been amended in G.O.Ms. No.47 dated 10.03.2006. The only rule, which prescribes the terms, conditions and restrictions for the grant of an “online licence” is Rule 17-A. The said Rule does not empower the Government either to grant a licence or accord permission for an agency to sell cinema tickets “on-line”. While the Government has the power to issue general directions to the licensing authority, in exercise of its powers of control under Section 5(2), the power to issue such directions are always subject to the provisions of the Act and the Rules. Even if it be considered necessary to issue directions in matters which are governed by statutory provisions, the directions cannot be so made or utilised as to override statutory provisions, as such a method would destroy the very basis of the rule of law, and strike at the very root of orderly administration of law. (Mannalal Jain v. State of Assam (1962) 3 SCR 936 ). 28. The meaning of the word “regulation” in the Shorter Oxford Dictionary is "the act of regulating" and the word "regulate" is given the meaning "to control, govern, or direct by rule or regulation". The word "regulation" is a word of broad import comprehending all facets not only specifically enumerated in the Act but also embraces within its fold powers incidental to the “regulation”. The legislature cannot delegate its power to make a law but it can make a law delegating the power to determine some facts, or state of things, upon which the law makes or intends to make its own action depend. The legislature cannot delegate its power to make a law but it can make a law delegating the power to determine some facts, or state of things, upon which the law makes or intends to make its own action depend. The law having laid down the broad principles of its policy, the Legislature can then leave the details to be supplied by the administrator bearing in mind the need to adjust to the rapidly changing circumstances. (D.K.V. Prasada Rao v. Govt. of A.P. AIR 1984 AP 75 ; Indu Bhushan Bose v. Rama Sundari Debi AIR 1970 SC 228 ). Though it is in the realm of a private contract, when persons undertake the business or occupation of exhibiting cinematography, or matters incidental thereto, it is "clothed with a public interest" as the cine-going public acquire a direct interest in having easy access of admission into the theatres. Thereby the business ceases to be "Juris Privati", tends to a common charge, and becomes a thing of public interest and use. It becomes necessary to override the private rights of persons and property so as to effectuate the public order for the general welfare of the citizens. When private property is affected with a public interest, it ceases to be "juris privati", and is clothed with a public interest when used in a manner affecting the community at large. A common law regulation of trade or business may be changed by Statute. While the right of property created by common law cannot be taken away, the law itself, as a rule of conduct, may be changed at the will of the Legislature, unless prevented by constitutional limitations. Such restriction or regulation must also not fall foul of any of the provisions of the Constitution. (D.K.V. Prasada Rao).