P L D 1965 Supreme Court 371 (PLP)

HAMOODUR RABMAN, J.‑This appeal, by special leave, arises out of a judgment and order of a Division Bench of the High Court of West Pakistan at Lahore in a writ petition, whereby two orders issued by the District Magistrate of Lahore on the 6th of June 1962, and the 25th of April 1963, respectively were declared void and of no legal effect. The first order directed the respondent Mst. Inayat Begum not to start construction of a new Static air‑conditioned and sound‑proof Cinema house near Chauburji at the junction of Sham Nagar and Multan Road, Lahore, until further orders, and the second order purported to withdraw an earlier no- objection certificate issued on the 13th of November 1961, in favour of one Khan Farzand Ali Khan for the construction of the said Static air‑conditioned and sound‑proof cinema house at the above‑mentioned site. It appears that the site originally belonged to Khan Farzand Ali Khan, who was then the Settlement Commissioner, Lahore. He applied on the 15th of February 1961, for permission to construct a new Static Cinema house near Chauburji at the junction of Sham Nagar and Multan Road, Lahore. On this application he was informed by the District Magistrate of Lahore on the 13th of November 1961, as follows:- "There is no objection to the construction by you of a new Static air‑conditioned and sound‑proof cinema near Chauburji at the junction of Sham Nagar and Multan Road, Lahore, subject to the following conditions :‑ (a) That there should be an access bridge over the nala. (b) That the minimum distance between the nearest corner of the proposed land for cinema site and Chauburji (historic protected monument) should be 260 feet. (c) The plans and cross‑sections of the building would be got approved from the Municipal Committee and the Executive Engineer, P. W. D. concerned, before the actual construction. (d) The cinema would be fitted with all the modern and latest equipment. You will also have to observe all formalities prescribed by the Punjab Cinematograph Rules, 1961, and other instructions issued by Government on the point from time to time. (Sd.)..... District Magistrate, Lahore." Subsequently Mst. Inayat Begum proposed to purchase the said plot if the permission to construct the cinema would enure in her favour as well. She, accordingly, wrote to. the District Magistrate of Lahore enquiring if the District Magistrate had any objection to the transfer of the said site along with the right to construct the cinema as proposed by Khan Farzand Ali Khan. The District Magistrate informed her by his letter of the 13th of February 1962, that the "no‑objection certificate" issued in favour of Khan Farzand Ali Khan "holds good for construction of a Static air‑conditioned and sound‑proof cinema at the proposed site by Khan Farzand Ali Khan or anybody else after he transfers the land to that person". The sale was thereafter completed on the 19th of February 1962, and an attested copy of the sale‑deed was sent to the Deputy Commissioner, Lahore, on the 26th of May 1962, by Mst. Inayat Begum. The purchaser Mst. Inayat Begum then, it is said, got the plans prepared and submitted for approval to the Lahore Improvement Trust, the Lahore Municipal Corporation and the Executive Engineer, Lahore Provincial Division. She also collected some building materials and had the ground levelled. Electric and water connections were also obtained and arrangements were completed for the import of air‑conditioned plant, projection and sound machinery. On the 6th of June 1962, however, the District Magistrate informed her not to commence the construction until further orders. She immediately protested and informed the District Magistrate that she had already invested about Rs. 5,67,000 in the purchase of the land, making arrangements for importation of the necessary machinery, acquiring some building materials and executing certain other items of work. She also prayed to be allowed to continue the construction and to be saved from suffering huge financial loss. This was followed by another letter written on her behalf by her learned Advocate. On the 27th of June 1962, the District Magistrate replied to her pointing out that the "no‑objection certificate" did not amount to anything more than an "advice that in the opinion of the District Magistrate a licence is likely to be given by the competent licensing authority." It did not bind the said authorities to issue the licence and, as such, the authorities were entitled to withdraw the said no‑objection certificate, particularly, since the instructions of Government in pursuance of which the said certificates had been issued had themselves undergone a change. In the case of big cities like Lahore a Cinema Committee had been set up under the chairmanship of the Commissioner of the Division and Government had ordered that the proposals for the construction of certain cinemas, including the cinema at the proposed site, should be re‑examined by the Committee. Mst. Inayat Begum made several other representations to the District Magistrate but to no avail. The no‑objection certificate was ultimately withdrawn on the 25th of April 1963. She thereupon filed a petition under Article 98 of the Constitution in the High Court on the 29th of April 1963. A report was called for from the District Magistrate. In this report it was not contested that the said respondent had been informed that the no‑objection certificate issued in favour of Khan Farzand Ali Khan would enure .in her favour, even after the sale of the said plot by Khan Farzand Ali Khan but the previous stand taken was reiterated, namely, that the issuance of the no‑objection certificate did not vest the person in whose favour the no‑objection certificate was issued with any legal right. The licensing of the cinema house had still to be done under the Cinematograph Act and the rules framed thereunder in 1962. The no‑objection certificate, in no way, bound the licensing authorities. It was further maintained that these no‑objection certificates were not issued under the Cinematograph Act and the rules framed thereunder but under instructions of Government. These instructions had been changed on the 12th of May 1962, and a new procedure had been laid down which required that in future all recommendations for the grant of a no‑objection certificate should be examined by a committee. These instructions had also directed the commissioner of Lahore Division that three no objection certificates, including the one granted for the proposed site, should be examined afresh by the Cinema Committee set up by Government. The Government had also on the 31st of March 1962, notified under section 4 of the Cinematograph Act, 1918, that the Provincial Government shall be the licensing authority under the said Act for the urban areas of the cities of Karachi, Lahore, Rawalpindi and Peshawar. It was in these circumstances that the no‑objection certificate was withdrawn and the withdrawal, it was claimed, was backed by legal sanction. In the High Court, however, the view that prevailed was that even though there was nothing either in the Cinematograph Act or the rules framed thereunder as to the granting of no- objection certificate, "the no‑objection certificate virtually amounted to a permission to construct the cinema in accordance with the directions contained in the no‑objection certificate", and that "after the grant of a no‑objection certificate the grant of a licence 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 licence." In this view of the matter the High Court made the rule absolute and quashed the orders of the District Magistrate. The District Magistrate of Lahore and the Government of West Pakistan have now come up on appeal to this Court and it is urged on their behalf that the view taken by the High Court cannot be supported either upon the provisions of the Cinematograph tact or upon general principles. Under section 3 of the Cinematograph Act, 1918, no person can exhibit a cinematograph film "elsewhere than in a place licensed under this Act, or otherwise than in compliance with any conditions and restrictions imposed by such licence". Under section 4 the District Magistrate is made the licensing authority but under the proviso to the said section the Provincial Government can by notification constitute for the whole or any part of a Province such other authority as it may specify in the notification to be the licensing authority. Under section 5 the licensing authority is directed to be satisfied with regard to certain matters specified therein before issuing a licence and under subsection (3) thereof the licensing authority acts under the control of the appropriate Government. Section 8 gives power to the appropriate Government to make rules for the purpose of carrying into effect the provisions of the Act. Such rules were first framed 'in l 1921 and were amended from time to time but there is nothing either in the Act or in the rules in force at the relevant time providing for the issuance of no‑objection certificates. The rules framed under the Act, it may be stated here, are upon publication in the official Gazette, to have effect as if enacted in the Act itself. Under the rules elaborate provisions have been made in Part III thereof regarding buildings for exhibition of cinematograph films. It appears that such buildings have to be licensed annually. The rules also empower the licensing authority to revoke or suspend a licence granted by it for a breach of the rule or of the conditions of the licence or for any other reasons recorded in writing. It would thus appear that the licensing authority, which need not necessarily be the District Magistrate, has been vested by the statute with the discretion which is only subject to the control of the Provincial Government. But since the construction of a cinema house involved consideration of various other factors, such as the suitability of the site, its proximity to places of worship, the inconvenience likely to be caused to residents of the locality and other factors which were not specifically required by the Act to be taken into consideration for the purposes of a licence under the Act, the practice grew up from 1935, in pursuance of certain instructions issued by Government, of first obtaining a no‑objection certificate from the District Magistrate before commencing the construction of a cinema house at a particular site. The Government of Punjab, by its circular issued on the 10th of August 1935, sought to clarify the position regarding the granting of licences by pointing out to District Magistrates concerned that the licensing authority had a discretion in regard to the issue of cinema licences, which is fettered only by the provisions of the Act and by the general rule that the discretion should not be exercised arbitrarily. Apart from these he had full authority in terms of the Act to refuse a licence where "the proposed cinema building would be in an undue promixity 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." These instructions also indicated that it was desirable that if the authority was not likely to approve of the site, the view of the authority should be communicated‑ at the earliest possible stage and not after the completion of the building. For this purpose District Magistrates were instructed to take such action as may be open to them "to secure advance information of the intended construction of new cinema houses in their districts and should advise intending builders, before they commence constructions", whether a licence was likely to be given for a cinema on the proposed site. It is after these instructions of 1935 that this practice of issuing no‑objection certificate drew up, but it cannot be said from this c that the grant of such a no‑objection certificate legally fettered the discretion of the licensing authority. Learned counsel appearing on behalf of the respondents has sought to contend that the no‑objection certificate is something more than a mere advance intimation of the likelihood of the grant of a licence. According to him, the no‑objection certificate is a certificate granted under the Cinematograph Act itself. He points out that applications under section 3 of the Act for the grant of a licence in respect of premises in which cinematograph films are sought to be exhibited had, under rule 5 (iv) of the rules framed thereunder, to be submitted before the construction of a new building or before alteration to any existing building was sought to be made for its adaptation for cinematograph exhibitions, and applications had to be accompanied by a site plan in duplicate showing the position of the proposed site in relation to adjacent premises or to public thoroughfares upon which the site abutted, and the arrangements proposed to be made for the parking of cars and other vehicles. It is, therefore, urged that it is clear from this that advance intimation has to be submitted to the licensing authority in order to enable it to issue the certificate. But we are unable to agree that this advance intimation has to be given along with an application for a no‑objection certificate. Rule 5 deals only with applications for the grant of a licence. Even after the grant of a no‑objection certificate, the person seeking to exhibit cinematograph films has still to make an application for a licence and this application has to comply with the conditions laid down in the said rule

5. We are also unable to agree that the application in this rule refers to any kind of application whether for a licence or for something to be done before the issuance of a licence. One further reason given is that since under the new rules that have come into operation from the 24th of July 1962, provision has now been made for first making an application for the grant of a no‑objection certificate, this supports the contention that even before this the no‑objection certificate was a certificate granted under the Act. The new rules, it is said, have only given legal recognition to the practice that prevailed before but it has' to be pointed out that even under the new rules it is provided that the grant of a no‑objection certificate will, in no way, affect, the discretion of a licensing authority to refuse or grant the licence vide rule 5 (5). As already stated, under the old rules which were in force when the certificate was withdrawn in this case there was nothing governing the issuance of no objection certificates. There was no legal authority, therefore, for the issuance of such a no-objection certificate. In the absence of any such legal sanction, therefore, it is difficult to appreciate how it could create a legal fetter on the discretion of the licensing authority empowered under the Act to grant licences or vest the person to whom such a certificate has been granted with the legal right to get a licence as a matter of course. We are unable, therefore, to agree with the view taken by the High Court that after the grant of a no‑objection certificate the issuance of a licence is an automatic affair or that there is no further discretion left in the licensing authority thereafter to refuse to grant the licence. If the issuance of such a no‑objection certificate is not contemplated by the Act or by the Rules framed thereunder, then the grant of such a certificate cannot fetter the discretion given under the Act itself. It cannot possibly create any kind of an estoppel against the statute. In saying this, however, we are not to be understood to be laying down any rule that the licensing authority can act either fancifully or arbitrarily, for, the discretion vested under the Act must like any other discretion be exercised reasonably and upon just and proper grounds. In the present case, the respondents) have made no allegation of mala fides against the District Magistrate, for, all that they had stated is that the withdrawal was illegal and that it had been made without assigning any reason. Even this allegation is not correct, for, it appears that the District Magistrate had duly informed the respondent that whatever had been done was done under the instructions of Government, contained in its letter of the 12th of May 1962, which clearly directed that the no objection certificates issued to the said respondent and two others for the construction of new cinema houses should be examined by the Cinema Committee set up by the Government in 1962 and necessary action taken thereafter. It was after this that the case of the respondents was referred to the Cinema Committee, which examined it and came to the conclusion that the no‑objection certificate should be withdrawn for the following reasons :‑ (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 Archaeology Department. (d) The area around was residential." The withdrawal of the no‑objection certificate was, therefore, by no means, arbitrary or fanciful. It was made after proper scrutiny of the Cinema Committee's recommendation which had itself taken into consideration relevant circumstances. Mr. Mahmud Ali, the learned counsel for the respondents, has also relied upon certain observations made by this Court in a petition being Civil Petition for Special Leave to Appeal No. 100 of 1964 (Government of West Pakistan v. Begum D. Feroze Hassan) in support of his contention that such a certificate cannot be withdrawn. That also was a petition by the Government for special leave to appeal from an order of the High Court holding that the withdrawal of the no‑objection certificate granted in that case was invalid. In that case leave was refused to the Government because it appeared that the two reasons which had been given by Government for the withdrawal of the no‑objection certificate were reasons which did not in fact exist. Thus the action of the Government was found there to be a colourable exercise of power and it was on that ground that the High Court's decision was held to be correct and leave was refused. In the present case, it is not suggested that the grounds given by the Cinema Committee for revoking the no‑objection certificate were either non‑existent or colourable grounds. Indeed, the High Court took the view that these very grounds must have been taken into consideration by the District Magistrate when he issued the certificate and, as such, the same grounds could not furnish a valid basis for the subsequent revocation of the certificate. In the present case, however, the revocation has been made in accordance with the directions of Government on the recommendation of the Cinema Committee for sufficiently weighty reasons. There is no suggestion also that the cinema committee has been actuated by any ill will or malice against the respondents. t Hence since the District Magistrate under subsection (3) of section 5 of the Cinematograph Act acts under the control of the appropriate Government, he was bound to carry out the orders of the Government and it cannot be said that he acted either illegally or without lawful authority. For these reasons we are of the opinion that the High Court went too far in transforming the no‑objection certificate into virtually a licence under the Cinematograph Act. There appears to us to be no legal basis for taking such a view. We, therefore, allow this appeal and set aside the order of the High Court but having regard to the facts and circumstances of this case make no order for costs. Before parting with this case we must point out that the plea advanced on behalf of the respondents that they had already commenced the construction of the building and thereby incurred large expenditure in that behalf does not appeal to us, for, from the statement given by the respondent Mst. Inayat Begum herself in her letter of the 8th of June 1962, addressed to the Deputy Commissioner, Lahore, it does not appear that any construction work had till then been commenced. All that had been done was possibly that the ground had been levelled and some building materials collected. The site, however, is a very valuable site and may well be utilised for other profitable purposes. The land itself must also have greatly appreciated in value since the purchase by the respondents for Rs.2,00,

000. We are not impressed, therefore, by the plea that the respondents will suffer irreparable loss by the withdrawal of the no‑objection certificate. A. H. Appeal allowed.