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Issues Involved:
1. Validity of the Karnataka Cinemas (Regulation) (Amendment) Rules, 1979. 2. Competence of the State Government to enact Rule 7A. 3. Whether Rule 7A is ultra vires Section 5(2) of the Karnataka Cinemas (Regulation) Act, 1964. 4. Whether Rule 7A violates Article 19(1)(g) of the Constitution. 5. Whether Rule 7A violates Article 301 of the Constitution. 6. Whether the Licensing Authority has exclusive power to impose conditions on licenses. Issue-wise Detailed Analysis: 1. Validity of the Karnataka Cinemas (Regulation) (Amendment) Rules, 1979: The petitioners challenged the Amendment Rules, specifically condition 12A, which mandated the exhibition of Kannada films for not less than twelve weeks in a year. The respondents justified the rule, stating it was in the public interest to promote Kannada culture and cater to the Kannada-speaking population's desires. The court examined the Preamble and provisions of the Karnataka Cinemas (Regulation) Act, 1964, concluding that the Act's purpose includes regulating the exhibition of films, not just the cinematographs and licensing of places. 2. Competence of the State Government to Enact Rule 7A: The petitioners argued that Rule 7A was beyond the State Government's competence, contending that the Act's purpose was not to regulate the exhibition of films. The court, however, held that Section 19(1) of the Act confers broad powers on the State Government to make rules to carry out the Act's purposes, which include regulating the exhibition of films. The court referred to the Supreme Court's judgment in Minerva Talkies, which upheld similar regulatory rules, affirming the State Government's competence to enact Rule 7A. 3. Whether Rule 7A is Ultra Vires Section 5(2) of the Karnataka Cinemas (Regulation) Act, 1964: The petitioners contended that the State Government could not impose conditions on licenses, as this power was exclusively vested in the Licensing Authority. The court disagreed, stating that Section 5(2) of the Act allows the Licensing Authority to impose conditions subject to the Act and the rules made thereunder. Thus, Rule 7A, framed under Section 19(1), validly becomes a condition of the license. 4. Whether Rule 7A Violates Article 19(1)(g) of the Constitution: The petitioners claimed that Rule 7A unreasonably restricted their fundamental right to carry on their trade or business. The court acknowledged that while the rule aimed to promote Kannada culture, it imposed an arbitrary and unreasonable burden on exhibitors, particularly given the limited production of Kannada films. The court found that the rule's requirement to exhibit Kannada films for 12 weeks could lead to significant financial loss for exhibitors and was, therefore, violative of Article 19(1)(g). 5. Whether Rule 7A Violates Article 301 of the Constitution: The petitioners also argued that Rule 7A violated Article 301, which ensures freedom of trade and commerce. The court did not find sufficient grounds to uphold this claim, focusing instead on the rule's reasonableness under Article 19(1)(g). 6. Whether the Licensing Authority has Exclusive Power to Impose Conditions on Licenses: The court clarified that the power to impose conditions on licenses is not exclusively vested in the Licensing Authority. Section 19(1) of the Act empowers the State Government to make rules, which can include conditions for licenses. Thus, Rule 7A, made by the State Government, validly forms part of the licensing conditions. Conclusion: The court concluded that while Rule 7A and condition 12A were made in the public interest and within the State Government's competence, the specific requirement to exhibit Kannada films for 12 weeks was arbitrary and unreasonable. Consequently, the court struck down the 12-week requirement as violative of Article 19(1)(g) but upheld the State Government's authority to impose such conditions in principle. The petitions were allowed to the extent that Rule 7A and condition 12A were invalidated regarding the 12-week exhibition requirement.
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