P L D 1964 (W (PLP)

JAMIL HUSAIN RIZVI, J.‑This petition has been filed by Faqir Syed Fayyaz‑ud‑Din, minor, through his father Faqir Syed Waheed‑ud‑Din, petitioner No. 1 and Mst. Dr. Inayat Begum, mother of petitioner No. 1 in the following circumstances :‑ On the 15th of February 1961, Khan Farzand Ali Khan applied to the Licensing Authority (District Magistrate Lahore) for permission to build a cinema and for the grant of a no‑objec tion certificate, on his land situated near Chauburji at the junction of Sham Nagar and Multan Road. The plans of the proposed cinema building and the site were also submitted. The Licensing Authority after necessary enquiry from the Chairman, Lahore Improvement Trust, Chairman, Lahore Municipal Corporation, Senior Superintendent of Police, Lahore, and the Executive Engineer, 1st Provincial Division, Lahore, asked the applicant to amend the plans according to the suggestions of the Lahore Improvement Trust which was done. After receiving the concurrence of all the above‑mentioned persons the Licensing Authority ordered the issuing of a no‑objection certificate for the construction of a static air‑conditioned and sound‑proof cinema. Consequently Memorandum No. CLC/24726, dated the 13th of November 1961, (Annexure 'A') was issued by the Licensing Authority to the applicant wherein the permission to build the cinema was granted subject to the conditions mentioned therein. The petitioner No. 2 negotiated with Khan Farzand Ali Khan for the purchase of the cinema site but in order to be sure that the "no‑objection certificate" would be available to her, she sent a letter to the Licensing Authority on the 6th of February 1962 (Annexure B') to which a reply (Annexure 'C') was received that the permission granted to Khan Farzand Ali Khan to build the cinema would hold good in favour of a transferee in case the site was sold to her. Thereupon, petitioner No. 2 entered into a sale transaction with Khan Farzand Ali Khan and purchased the property on payment of Rs. 2 lacs. It is the petitioners' case that they paid this heavy price for the site because a no‑objection certificate for the construction of cinema on the site in dispute had already been granted. Thereafter, the petitioners informed the Licensing Authority about the purchase of the land by means of a letter dated the 26th of May 1962, (Annexure 'D') Petitioner No. 2 got the buildings plans completed and submitted to the Chairman, Municipal Corporation, Chairman Improvement Trust and the Executive Engineer, Lahore Division, Lahore. Lot of material for the construction of the proposed cinema building such as timber, bricks, steel and cement etc. was purchased and transferred to the site. The land was levelled, the water and electric connections were obtained and the petitioners informed the Licensing Authority by means of a letter dated the 28th of May 1962, (Annexure 'E') of these facts and also that the construction would start and would be finished within six months as soon as the buildings plans were approved. The approval of the plans was received and the buildings operations were started. The information of this was also conveyed to the Licensing Authority on the 4th of June 1962. However, on the 8th of June 1962, the petitioners received intima tion from the District Magistrate, Lahore, (Licensing Authority) vide No. CLC/8510, dated the 6th of June 1962 (Annexure F') not to start the construction of the cinema building till further orders. Thereupon, the petitioners wrote back to the Licensing Authority that they had already incurred an expense of Rs. 5,67,000, that there was no justification to stop the work and that the petitioners be permitted to continue the construction in view of the no‑objection certificate already granted. The Licensing Authority was also sent a letter by the petitioners through their Advocate that the directions to stop constructions could not be supported by any legal authority to which a reply was sent by the Licensing Authority on the 27th of June 1962, (Annexure 'I') in which it took the following stands :‑ (1) That no‑objection certificate is no more than an advice, that a license is likely to be given for running a cinema on the proposed site. (2) The instructions regarding no‑objection certificate have undergone a change and the Government has ordered that the cases of the cinema should be referred to the Cinema Committee before the issuance of no‑objection certificate. The petitioners sent another letter through their Advocate, on the 2nd of July 1962 objecting to the stoppage of their construction and finally on the 1st of August 1962, they sent a regular notice requesting that the petitioners be allowed to start the construction work which had been stopped by the petitioners on receipt of the letter from the Licensing Authority dated the 27th of June 1962, but by that time the site had been levelled and the foundations had been filled with reinforced cement. Ultimately, on the 20th of April 1963, the petitioners' counsel sent a final letter asking the Licensing Authority to withdraw its letter dated the 6th of June 1962. However, the District Magistrate by his letter dated the 25th of April 1963, (Annexure 'M') informed the petitioners that under the orders of the Government of West Pakistan the no‑objection certificate issued vide his letter of 13th of November 1961 was withdrawn.

2. It is urged by the petitioners that the order of withdrawal (Annexure 'M') was wholly illegal and there was no provision under the law for the withdrawal of such a certificate, that no reasons whatsoever were given for the withdrawal, neither any authority had been cited for the exercise of this arbitrary power nor any circumstance had been disclosed necessitating or warranting the action of the Government in this respect. That the petitioners had already invested Rs. 5 lacs for the proposed building of the cinema and had also made other commitments, it was therefore, necessary that they should complete the building and the cinema as early as possible. It was prayed that the orders of the District Magistrate contained in his letters dated the 6th of June 1962 and 25th of April 1963, be declared as devoid of legal authority and of no legal effect and that the District Magistrate may be directed to refrain from interfering with the building operations.

3. The petition came up for a preliminary hearing before this Bench on the 1st of May 1963, when a report from respon dent No. 2 was called. The petition was admitted after the receipt of the report on the 12th of June 1963. Thus there is the report of respondent No. 2 on record and also a written statement filed by the counsel for the respondents. The contentions raised in the report and the written statement may be summarised as follows:‑ According to the report as well as the written statement the factual averments of the petitioners were admitted, it has been remarked in the report that the Provincial Government took over the licensing powers in Lahore and certain other towns, as from the 31st of March 1962, and constituted a Cinema Committee as from the 12th of May 1962. That the Provincial Government, tinder section 5 of the Cinematograph Act can withdraw a license granted for a cinema on the same analogy the no‑objection certificate was withdrawn due to an executive necessity on the recommendations of the Cinema Committee. That the order of the District Magistrate withdrawing the no -objection certificate was based on the order of the Provincial Government, which was backed by legal sanction. In reply para. 22 of the petition the learned Advocate for the respondents raised the following contentions : ‑ "The Provincial Government under section 5 of the Cinemato graph Act, can withdraw a license granted for a cinema. On the same analogy the no‑objection certificate was withdrawn due to an executive necessity, on the recommendation of the Cinema Committee who raised the following points :‑‑ (a) There was a Mosque 139 feet away without any buildings intervening. (b) There had been public agitations against the proposed cinema. (c) The cinema would interfere if any garden was to be laid out by the Archeology Department. (d) The area around was residential. The following additional pleas were taken in the written statement:‑ (1) No‑objection certificate at the most amounted to an advance intimation that license is likely to be given. It does not bind the Licensing Authority to necessarily exercise its future discretion in a particular way. It was not by its own force a license and unless license was issued no legal right accrued to the petitioners to have a license issued. The Execu tive has the authority to issue or not to issue license and to cancel a license if issued. The no‑objection certificate in ant case has been withdrawn lawfully. The Licensing Authority being now different from the District Magistrate it is not in law bound to honour the no‑objection certificate issued by its predecessor. (2) That the building was stopped on the 16th of June 1962. At any rate, a clear intimation was given to the petitioner on the 27th of June 1962, that the previous intimation of no‑objection certificate has been cancelled. The writ was filed on the 27th of May 1963, i.e. more than eleven months after the stoppage of building. The discretionary relief under Article 98 should be refused on the grounds of laches alone. (3) That since the 31st March 1962 vide Notification A.V. 2 1/61, the District Magistrate is no longer a Licensing Authority. Provincial Government is the Licensing Authority. No‑objection certificate issued by District Magistrate therefore, in any case cannot bind the Provincial Government."

4. In addition to the pleas raised in the writ petition, the petitioners filed an additional ground on the 10th of January 1964, wherein It was alleged that since the last hearing of the case on the 11th and 13th of December 1963, the Constitution of Pakistan has been amended by Act I of 1964 assented to by the President on the 10th of January 1964. That the action of the respondents and its enforcement violated Art. 6 of the Constitution and Fundamental Rights Nos. 8, 13 and 15.

5. The factual position being admitted, it is clear that the petitioners would not have purchased the site on payment of the huge amount unless it was accompanied with a "no‑objection certificate" to construct the cinema. The petitioners took precautions to ascertain the fact whether the permission would continue for the benefit of the purchaser, and the Licensing Authority (District Magistrate) informed the petitioners that it would continue. Consequently they purchased the land and incurred financial commitment to the extent of Rs. 5,67,000, In these circumstances, there is a heavy burden on the respondents to establish that they had a right under law to revoke the permission. granted for the building of a cinema on the site. The learned Advocate‑General has raised the following contentions :‑ (1) That this Court should not issue a writ in the present case because even if the order of the Licensing Authority without the no‑objection certificate is quashed the Licensing Authority would still have the discretion to refuse the grant of the license. Thus the order of this Court would be nullified. He has relied on Sh. Rahmatullah v. The Deputy Settlement Commissioner Centre `A', Karachi and others P L D 1963 S C

633. The facts in the case relied upon by the learned Advocate. General are that Sh. Rahmatullah, who was the allottee of some property in Karachi, applied for the transfer of the property by fling an NCS form. The Deputy Settlement Commissioner rejected his form and informed him that the property had been acquired by the State Bank of Pakistan. He failed to obtain any relief in appeal and revision. Consequently he filed a writ petition in the Supreme Court in which it was urged on behalf of the petitioner that immediately upon the issue by the Central Government on the 8th of August 1959, of a Notification under section 3, it acquired all properties in Karachi with the exception of certain categories (among which evacuee property for the sale of which approval had been given by the Central Government was not included, that all property so acquired came into compensation pool as provided by section 4 and thereafter it became the duty of the Central Government through the Statutory Authorities to make this property available for distribution to claimants and others under the Schedule to the D. P. Act and the schemes. This; argument of the petitioner was met by the contention that it was open to the Central Government which had acquired title in a large area of land in Karachi by mere issue of a notification to divest itself of a part of that land by issuing an amending notifica tion. It was urged that in the first notification it was by a pure oversight that evacuee property for the sale or acquisition of which approval by the Central Government had already been given was trot expressly excluded from the acquisition. The second contention on behalf of the Central Government was that under sub‑para. (2) of section 10 of the D. P. Act it could order the transfer in the public interest of any property out of the compensation pool in such manner as the Central Government may deem proper. The Honourable Judges, while dealing with this question, remarked "it is immaterial on what date such property came into the compen sation pool and, therefore, if the view be taken that this property having once entered the compensation pool, cannot be dealt with otherwise than under the D. P. Act, it is open to the Central Government today to make an order under section 10(2) of the D. P. Act transferring the property to the State Bank of Pakistan, for it is clear beyond doubt that such a transfer would be in the public interest. The Central Government has given ample proof of its firm intention so to transfer the property with the exception of the small area which remains in the possession of the petitioner in consequence of the proceedings before the Settlement Autho rities. It has been further remarked "but in my view the more correct appreciation of the position is that which I have already indicated, namely, that in relation to the entry into the compensa tion pool of properties consequent upon a notification under section 3 by the Central Government it is competent to the Central Government to act by notification to exclude certain of these properties from the effect of the earlier notification and such exclusion will be effective against everything except vested rights which may have accrued, between the dates of the two notifications." The Honourable. Judges further held that the petitioner had not acquired any vested rights on the property consequently the writ petition was dismissed. It is clear that in this authority the Court found that there was an absolute power in the Central Government to exclude the property from the operation of the earlier notification. If there was any such absolute power in the Licensing Authority, in the present case, we would have at once accepted this contention of the learned Advocate‑General, but we do not consider that there is any such absolute discretion or power in the Licensing Authority, irrespec tive of the fact that there has been a change in the Licensing Authority, that It could refuse to grant a license at its own sweet -will. The learned Advocate‑General has further argued that the Licensing Authority could revoke the no‑objection certificate at its will, because it has an absolute discretion in granting the license. Consequently, if, at any stage, the Licensing Authority is of the view that it would not grant a license to the person to whom a no‑objection certificate had been granted it could withdraw the no -objection certificate irrespective of the expenses incurred by the licensee and even in a case in which the building has been completed. In support of this argument the learned Advocate- General has relied on Rederiaktiobolaget Amphirite v. The King (1921 3 K B 500). The facts in this case are entirely different. In this case during the war neutral ships‑owners being aware of the liability of neutral ships to be detained in British ports obtained an undertaking from the British Government that if they sent a particular ship to this country with a particular class of cargo she should not be detained. On the faith of that undertaking the owners sent the ship to a British port with a cargo of this stipulated kind. The British Government subsequently withdrew their undertaking and refused tier clearance. On a petition for right claiming damages for the breach of the Governments under taking, it was held that the Government's undertaking was not enforceable in a Court of law, it not being within the competence of the Crown to make a contract which would have the effect of limiting its power of executive action in the future. It was remarked in the judgment that it was not competent by Government to fetter its future executive actions and it cannot by contract hamper its freedom of action in matters which concerned the welfare of the State. It was because of the special circumstances of the case that it was held that the Government could go back upon the undertaking given by it earlier. In the present case, the action is not being taken in a matter which concerns the welfare of the State. This authority has no application to the facts of the present case. The action of the Government in the present case is controlled by the statute. The rules under the Cinematograph Act were framed in the year 1921 and later on in 1930 but they were all superseded by the rules published in the Gazette of 24th of October 1941. Rule 5 dealt with the applica tion for the grant of a license under the Cinematograph Act. The applications under sub‑rule (2) of rule 5 are to be submitted before the construction is begun. The Licensing Authority before granting a license shall call upon the Executive Engineer and the Electric Inspector to make inspections and report if the building and the electric fittings complied with the rules and instructions on the subject. A perusal of these rules indicates that if the required conditions as regards the construction etc. are complied with the Licensing Authority shall issue a license, and according to rule 8 the Licensing Authority may at any time revoke or suspend a license granted by it for a breach of any of these rules or of the conditions of the license or for any other reasons recorded by him in writing. So far as the Act is concerned, section 5 deals with the granting of a license which runs as follows :‑ "The Licensing Authority shall not grant a license under this Act unless it is satisfied that: 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 license as to be given to provide for the safety and health of persons attending exhibitions therein. (2) A condition shall be inserted in every license that the licensee will not exhibit, or permit to be exhibited, in such place any film other than a film which leas been certified as suitable for public exhibition by an authority constituted under section 7 and which, when exhibited, displays the prescribed mark of that authority, and has not been altered or tampered with in any way since such mark was axed thereto. (3) Subject to the foregoing provisions of this section, and to the control of the appropriate Government, the Licensing Authority may grant licenses under this Act to such persons as it thinks fit, and on such terms and conditions and subject to such restrictions as it array determine." A plain reading of this section and the rules shows that a person who complies with the requirement of the rules and constructs a building according to the specifications given by the Licensing Authority will be entitled to get the license, which is liable to cancellation only as provided in rule 8 for any breach of the rules or the conditions of the license or for any other reason recorded in writing. The reason would naturally be something which was based on justice and equity. Thus, so far as the no- objection certificate is concerned, there was nothing either in the rules or in the Act as to the granting of a no‑objection certificate to an intending builder of a cinema. Although new rules have now been framed under this Act but those would not apply to the present case as these rules came into operation on the 24th of July 1962. Rule 5 of these rules makes provision for the grant of a no‑objection certificate. It seems that the granting of the no‑objection 'certificate before the rules of 1962 came into operation was being done in pursuance of a letter of the Home Secretary to the Government of Punjab to all the District Magistrates, dated the 10th of August 1935. This letter has been relied upon by the learned counsel for the parties and it would be advantageous to reproduce the same. "I am directed to address you in regard to the issue of Licenses under section 5 of the Cinematograph Act, 1913. An impression appears to prevail in certain quarters, probably as the result of the existence of regular rules framed by the Local Government prescribing the precautions to be observed in cinema houses, that District Magistrates are under an obligation to issue a license to any and every applicant whose premises are constructed and maintained in conformity with those rules. Such an impression is altogether incorrect. Section 5(3) of the Act confers on the Licensing Authority a discretion in regard to the issue of cinema licenses which is fettered only by the condition that the provisions of the first two subsections must have been fulfilled before a license is issued and by the control of the Local Government. The terms of the section prohibited a District Magistrate from issuing a license in a case where compliance has not been made with the Local Govern ment's rules, but there is no corresponding obligation of the District Magistrate to issue license in all cases where the conditions of the rules are fulfilled. In accordance with the general principles of law the discretion conferred by section 5(3) must be exercised with the rules of reason and justice, not arbitrarily. It would not, for example, be permissible for a District Magistrate so to use his powers under subsection as to prohibit cinematograph exhibitions altogether in a district or a town, it being clearly the intention of the Act to regulate cinema houses, not to ban them. The Local Government are further advised that it would not be proper for a District Magistrate to refuse an application for a license merely on the ground that the number of cinemas, in the town is already sufficient. The District Magistrate's power is limited by this condition that it must not be exercised arbitrarily. He is, nevertheless, left with a wide discretion to refuse application in particular cases where for any definable reason he considers that the issue of license would be inappropriate. He has full authority in the terms of the section to refuse a license on the ground, for example, that the proposed cinema building would be in undue proximity to a religious edifice, or is in a neighbourhood where the location of a cinema would be a nuisance to other residents, or is so sited that traffic obstructions are likely to result. District Magistrates are of course expected to exercise judgment in this as in any other matter, and to pay due regard to the legitimate interests of property owners, but in cases where they are satisfied that the constructions of a cinema‑house on a particular sites would be against the public interest they would have no hesitation in refusing to license. If a license for a cinema house Is to be refused It is obviously desirable that the order should be communicated at the earliest possible stage, rather than that an applicant should be confronted with a refusal after the completion of his building the District Magistrate should, therefore, take such action as may be open to them to secure advance information of the Intended construction of new cinema‑houses in their district and should advise intending builders before they commence constructions to ascertain from the Licensing Authority whether a license is likely to be given for a cinema on the proposed site." A perusal of these instructions shows that the District Magistrate was to exercise his discretion in granting a license within the rules of reason and justice and after he was satisfied taking into consideration all the factors which are mentioned in the letter. It has been provided in paragraph 3 that if a license for a cinema‑house was to be refused it was desirable that the order should be communicated at the earliest possible stage, rather than that an applicant should be confronted with a refusal after the completion of his building, it was there fore, required that the District Magistrate should take such action as may be open to him to secure advance information of the intended construction of new cinema houses in his district and should advise intending builders before they commence construc tion to ascertain from the Licensing Authority whether a license is likely to be given for a cinema on the proposed site. A perusal of all these provisions indicates that the Cinematograph Act and the rules do not grant absolute and arbitrary discretion to the Licensing Authority to grant or withhold a license at his pleasure. In the present case the Licensing Authority after having ascertained all the relevant factors permitted the petitioner to commence the building of the cinema and the no objection certificate virtually amounted to a permission to construct the cinema in accordance with the directions contained in the no‑objection certificate. The Licensing Authority had taken into consideration all the relevant factors and if after that it had taken a decision it could not go back especially when as a result of that decision the petitioners had purchased the land at such an exhorbitant price and had also made other commitments and investments. The learned counsel for the petitioners has relied on The Montgomery Flour and General Mills v. The Director, Food Purchases, West Pakistan Mr. F. A. Saleem, Assistant Director, Food Accounts, West Pakistan Lahore and others (P L D 1957 S C (Pak.) 914) wherein it was held that no discretion vested in an executive officer is an absolute and arbitrary discretion. The discretion is vested in him for a public purpose and must be exercised for the attainment of that purpose. Even though there be no express words in the relevant legal provision to that effect, the discretion is always circumscribed by the scope and object of the law that creates it and has at the same time to be exercised justly, fairly, and reasonably. In this case the District Food Controller had cancelled the quota of sugar which had been granted to the petitioner Montgomery Flour and General Mills Ltd., Montgomery on the ground that they had not paid the Department a certain sum of money on a supply of wheat for grinding account. The order of the District Food Controller was quashed for the reason that the discretion had not been properly exercised in refusing the quota to the petitioner. The learned counsel has further relied on Shahbaz v. The Crown (P L D 1956 S C (Pak.) 46). This was a case in which the Government had remitted the sentence of transportation for life of Shahbaz unconditionally with the permission that he should be released on the Independence Day i.e., the 14th of August 1954 but this order was cancelled on the 13th of August with the result that the petitioner was not released on the Independence Day. In a writ filed by the petitioner it was contended that the Government could not cancel its order. The learned Judges of the Federal Court upheld the action of the Government on the ground that the power of receding till a decisive step is taken is left with Government if the uncondi tional order had not been carried into effect. Till then, there is no reason to restrict the power to modify or cancel such an order. Since the order of remission was to take effect from the 14th of August 1954, the order could have been cancelled on the 13th of August 1954. At the relevant time when the no -objection certificate was granted there were no specific rules for the grant of a no‑objection certificate and the case was covered by the provisions of section 5 of the Cinematograph Act. These provisions were amplified by means of the letter of the Home Secretary to the Government of Punjab to all the District Magistrates. Section 5 of the Act does not lay down as to when a license is to be granted. It starts laying down the conditions of the refusal of a license which evidently means that the grant of a license can be refused only if the conditions laid down in section 5, were not complied with. The action of the Licensing Authority is subject to the control of the appropriate Government but that control had to be exercised before the Licensing Authority gives assurance to an intending builder of a cinema to start construction and in any case before the intending builder takes his decisive steps towards the construction of the building and in the present case it should have been before the petitioners had entered into a contract for the purchase of the land for the building of the cinema. The points that have been raised by the Cinema Committee must have been undoubtedly taken into consideration by its predecessor Licensing Authority. If these were proper grounds for refusal, the no‑objection certificate should not have been granted. If the Licensing Authority was allowed to go back on such solemn promises as in the present case the grant of no‑objection certificate, it would shatter the confidence of the people in the Government. It is not the case of the present Licensing Authority that its predecessor who issued the license acted either dishonestly or mala fide in granting the no‑objection certificate. May be, if such an allegation is established the Government or the Licensing Authority be permitted to revoke a no‑objection certificate. After the grant of no‑objection certifi cate the grant of a license is almost an automatic affair. If the building is constructed in accordance with the specifications given in the no‑objection certificate and other conditions laid down in the no‑objection certificate are complied with there will be no discretion left in the Licensing Authority to refuse the grant of a license.

6. In view of what has been stated above, we would quash the orders of the District Magistrate dated the 6th of June 1962 and the 25th of April 1963. The respondents will pay the costs of the petitioners. K. B. A. Petition accepted.