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2017 DIGILAW 1180 (JHR)

Sujata Picture Palace v. State of Jharkhand

2017-07-18

RAJESH SHANKAR

body2017
ORDER : Heard learned counsels for the parties. 2. The present writ petition has been filed for quashing the part of the resolution (Sankalp) issued by the Government of Jharkhand through Department of Urban Development vide Memo no.-35 dated 06.01.2006, specially Clause-12 of the said resolution by which the licence fee for Cinema house has been enhanced. The petitioners have further prayed for issuance of direction upon the respondents to renew the licence of the petitioners as per the old Rule in terms of which only Rs.2000/- is required to be deposited as licence fee for renewal of licence. The petitioners have also prayed for quashing of letters dated 20.06.2007 and 29.06.2007 issued by respondent no.4 and also for refund of excess licence fee deposited by them for renewal of licence of Cinema houses from time-to-time. 3. The factual matrix of the case is that the petitioners are engaged in business of exhibiting cinematograph film in the city of Ranchi having licence under the Bihar Cinemas (Regulation) Act, 1954 (corresponding to the Jharkhand Cinemas (Regulation) Act, 2000) (hereinafter referred to as “the Act”). The respondent-State has increased the annual licence fee payable by the Cinema houses under the Act from Rs.2,000/- to Rs.20,000/- having seat capacity of 1000 and above. The petitioners coming under the said slab made an application for renewal of licence on 30.12.2006. However, the respondent no.4 vide letters dated 20.06.2007 and 29.06.2007 informed the petitioners that if the enhanced licence fee is not deposited in terms with clause-12 of resolution dated 06.01.2006 within a period of one week, coercive steps shall be taken for the closure of the Cinema houses and therefore, the petitioners deposited the enhanced licence fee on 12.12.2006. Thus, the petitioners have challenged the clause-12 of resolution dated 06.01.2006 and consequential letters dated 20.06.2007 and 29.06.2007. 4. Learned counsel for the petitioners submits that the grant of licence to the Cinema houses is regulated by Section 5 of the Act. Section 5(2) of the Act provides that the licencing authority may grant licence under this Act to such persons as that authority thinks fit and on such terms and conditions, subject to such restrictions as it may determine and on payment of such fee as may be prescribed in the rule framed under the Act subject to a maximum of Rs.5,000/-. It is further submitted that Section 9 of the Act confers powers to the State Government to make rules for carrying out the provisions of the Act. In terms with the power conferred under Section 9 of the Act, Bihar Cinemas (Regulation) Rules, 1974 was framed by the then State of Bihar (corresponding to the Jharkhand Cinemas (Regulation) Rules, 2000) (hereinafter referred to as “the Rules”). Rule 10 of the Rules provides the period of validity of permanent licence fee and the quantum of the licence fee to be paid by the Cinema houses/exhibitors. Learned counsel for the petitioners while referring to the slab, as mentioned in Rule 10, submits that as per the said provision, a Cinema house exceeding 1000 seats is required to pay licence fee of Rs.2,000/- for a period not exceeding one year. However, surprisingly, the Government of Jharkhand vide Clause-12 of the impugned resolution dated 06.01.2006 has enhanced the licnece fee for the Cinema houses having more than 1000 seats, from Rs.2,000/- to Rs.20,000/-. Learned counsel further submits that the said enhancement of the licence fee by the Government of Jharkhand is without jurisdiction particularly in view of the fact that there has been a ceiling of Rs.5,000/-on the licence fee by virtue of Section 5(2) of the Act. Moreover, any enhancement of licence fee can only be done by making suitable amendment in the Rules in which the licence fee for a period not exceeding one year, has been provided as Rs.2,000/- for the Cinema houses exceeding 1000 seats. It is, thus, submitted that the Clause-12 of the Resolution dated 06.01.2006 enhancing licence fee to the extent of Rs.20,000/- may be set aside. 5. Learned counsel for the State while referring to the counter affidavits filed on behalf of the respondents submits that it would be apparent from the perusal of Rule 10 that licence fee is not charged for providing any service to the owners of Cinema houses. The Rules mandates inspection/supervision etc. to be made by different Departments like Building Department, Electricity Department, Commercial Tax Department, Fire Service etc. The State Government maintains law and order, public safety etc. for smooth running of the Cinema houses. The rate mentioned in Bihar Cinema (Regulation) Rules, 1974 was quite low. The consumer price index have increased over the years and in the changed scenario, the revision of fee for renewal of licence was mandated. The State Government maintains law and order, public safety etc. for smooth running of the Cinema houses. The rate mentioned in Bihar Cinema (Regulation) Rules, 1974 was quite low. The consumer price index have increased over the years and in the changed scenario, the revision of fee for renewal of licence was mandated. The State Government has not levied any new fee rather the rate of licence fees levied earlier, has simply been revised. It is further submitted that vide the impugned resolution, the Government has introduced the Multiplex Cinema policy and many facilities have been given to the Cinema houses, specially exemption from Entertainment Tax and upper limit of cinema tickets. Besides this, procedure for grant of licence has been made easier by the said resolution. The Government of Jharkhand has also extended the period of renewal of licence i.e. three years in place of one year. In other words, renewal of licence of a Cinema house is to be made after completion of three years. This facility has been made applicable in the interest of Cinema house owners. In course of introduction of Jharkhand Cinema Promotion Policy, the Government has revised the rate of annual licence fee payable under the Act. 6. Learned counsel for the State, however, admits that before issuance of the impugned resolution dated 06.01.2006, no amendment was carried out in Section 5 of the Act as well in Rule 10 of the Rules. He further submits that by way of notification dated 30th March, 2016, the amendment in Section 5(2) of the Act has been carried out and the words appearing in Section 5(2) of the Act to the extent “subject to a maximum of Rs.5,000” has been repealed. Learned counsel for the State also submits that since new cinema policy has been notified, a proposal for amending Clause-10 of the Jharkhand Cinema (Regulation) Rules, 2000 has been prepared for cabinet approval. 7. Having heard the learned counsels for the parties and on going through the relevant documents placed on record, it appears that the Government of Jharkhand came up with a policy known as Jharkhand Cinema Promotion Policy, 2005 issued vide resolution contained in Memo No. 35 dated 06.01.2006. The existing licence fee was also enhanced by reason of Clause-12 of the said resolution. The existing licence fee was also enhanced by reason of Clause-12 of the said resolution. The petitioners were earlier paying yearly licence fee of Rs.2,000/- per year, which was enhanced to Rs.20,000/- per year by way of impugned Clause-12 of the Resolution. 8. Section 5 of the Act deals with the restriction of powers of licencing authority. Section 5(2) of the Act reads as under:- “Subject to the foregoing provisions of this section and to the control of the State Government, the licensing authority may grant licence under this Act to such persons as that authority thinks fit and on such terms and conditions and subject to such restrictions as it may determine and on payment of such licence fee as may be prescribed in the rule framed under the said Act subject to a maximum of Rs.5,000.” 9. Further, Section 9 of the Act confers power to the State Government to make rules for carrying out the provisions of the Act. The then State of Bihar by virtue of power conferred under Section 9 of the Act came out with the Bihar Cinemas (Regulation) Rules, 1974 (after creation of the State of Jharkhand, same was adopted as Jharkhand Cinemas (Regulation) Rules, 2000). Rule 10 provides for the period of validity of permanent licence and the quantum of licence fee to be paid by Cinema houses. As per Rule 10, the maximum yearly licence fee to be paid by the Cinema house/Exhibitor is Rs.2,000/- for a period not exceeding one year (petitioners fall in this slab). 10. In view of the aforesaid provisions of the Act and Rules, it is, thus, clear that at the time of issuance of the impugned Resolution dated 06.01.2006, the maximum yearly licence fee chargeable from a Cinema house as per Rule 10 was Rs.2,000/- and the maximum ceiling provided by virtue of Section 5 of the Act was Rs.5,000/-. Since the quantum of licence fee could not have been fixed beyond the ceiling of Rs.5,000/-, provided by Section 5 of the Act, Clause-12 of the impugned resolution, whereby the licence fee was revised to the extent of Rs.20,000/- per year, is apparently in contravention of Section 5 of the Act and thus, it is an unlawful action by the State Government. 11. The Hon’ble Supreme Court in the case of State of Orissa Vs. 11. The Hon’ble Supreme Court in the case of State of Orissa Vs. Prasana Kumar Sahoo reported in (2007) 15 SCC 129 in paragraph-12 has held as follows:- “12. Even a policy decision taken by the State in exercise of its jurisdiction under Article 162 of the Constitution of India would be subservient to the recruitment rules framed by the State either in terms of a legislative Act or the proviso appended to Article 309 of the Constitution of India. A purported policy decision issued by way of an executive instruction cannot override the statute or statutory rules far less the constitutional provisions.” 12. Since the impugned clause-12 of the Resolution is in direct contravention of Section 5 of the Act, there is no need of further discussing the legality of Clause-12 of the impugned Resolution without making suitable amendment in Rule 10. 13. In view of the aforesaid discussion, Clause-12 of the impugned Resolution dated 06.01.2006 cannot be sustained in law and as such, the same is quashed and set aside. Consequently, the follow up orders of the respondent no. 4 issued vide Memo No. 3439 dated 20.06.2007 (Annexure-3 to the writ petition) and Memo no. 3582 dated 29.06.2007 (Annexure-3/1 to the writ petition) are also set aside. The respondent no.4 is directed to adjust the excess licence fee paid by the petitioners for the relevant years, in their current/future liability of licence fee. 14. The writ petition is, accordingly, allowed and disposed of in terms with aforesaid observations and directions.