2018 (11) TMI 1833 - HC - Indian Laws

Extension of benefit of subsidy which new cinema halls or multiplexes were required to derive under a set of rules notified by the State of Chhattisgarh on 23.10.1982 - Chhattisgarh Naye Cinemagharo (Ya Multiplex Cinemagharo) ke Nirman ko Protsahan Yojna ke Sahayata Anudaan Niyam, 1982 - HELD THAT - The reason for the petitioner to file the present writ application has arisen because of the nature of business in which they are. The modern trend is that large number of malls and shopping complexes are coming up not only in the state of Chhattisgarh but across the country and the petitioner- Company is one of the pioneers and leading company engaged in the business of exhibition of cinemas by becoming lessees as well as licensees of most of the cinema halls and especially multiplexes. It is their assertion supported by material evidence which has been annexed to the writ application that in most of the cases the builders of such cinema halls or multiplexes may be in a mall have been providing just a shell or space and thereafter this company makes significant investment by giving it a shape of a movie theatre/multiplex which includes providing, furnishing, sound proofing, acoustics, lighting etc. For the purpose of the Rules of 1982, a wider meaning to the word swami will have to be read and it cannot be confined to the actual owner who has no concern with the running or exhibition of a cinema hall or a multiplex. Neither is he meeting any obligations both under the license as well as other obligations including payment of entertainment tax etc. The word swami therefore, will be required to mean person who is actually at the helms of affairs in running of the cinema hall or multiplex. Meaning thereby that he is the entity who has made significant investment to make the space into a multiplex, is the licensee and is also making payments of entertainment tax etc. He meets all the requirements, obligations and duties imposed thereto in terms of the license and the agreement between him and the State under the Rules, 1982. The stand of the State that the Golden Rule of interpretation must be used to understand the word swami or 'malik' has to be rejected on the face of it since the same will make the Rule of 1982 to be unworkable and defeat the very object behind it. The wider definition given to the words proprietor or licensee in other enactments relating to cinema business keeping in mind the way such business is run or is allowed to run cannot be lost sight of - the word swami which has been used in Rules, 1982 especially in 'spastikaran' would not only include the actual owner but also the 'occupier'/licensee of the cinema hall or the multiplex for which the test laid down or noticed shall be the guiding principle. The decision of the respondent stand quashed - respondents are directed to take a fresh decision within a period of three months from the date of production of a certified copy of this order.

Summary

Issues Involved:
1. Interpretation of the term "swami" or "malik" in the context of the subsidy rules.
2. Eligibility for subsidy under the Chhattisgarh Naye Cinemagharo (Ya Multiplex Cinemagharo) ke Nirman ko Protsahan Yojna ke Sahayata Anudaan Niyam, 1982.
3. Applicability of the Madhya Pradesh Entertainments Duty and Advertisement Tax Act, 1936, to the subsidy rules.
4. The role of the licensee in the context of the Chhattisgarh Cinema Regulation Act, 1952, and the Chhattisgarh Cinema (Regulation) Rules, 1972.
5. The impact of the investment and operational responsibilities on the eligibility for subsidy.

Detailed Analysis:

1. Interpretation of the term "swami" or "malik":
The core issue revolves around the interpretation of the term "swami" or "malik" as used in the subsidy rules of 1982. The court noted that the term is not explicitly defined in the Rule of 1982 but is explained in Rule 5. The petitioner's counsel argued for a broader interpretation, suggesting that "swami" should include not just the physical owner but also the person responsible for running the cinema hall or multiplex. This interpretation aligns with the definition of 'proprietor' in the Madhya Pradesh Entertainments Duty and Advertisement Tax Act, 1936, which includes any person responsible for or in charge of the management of the entertainment venue.

2. Eligibility for subsidy under the 1982 Rules:
The petitioner, a company running multiplexes, argued that they should be eligible for the subsidy as they meet all operational and financial obligations, including the payment of entertainment tax. The court agreed that the term "swami" should be interpreted to include entities like the petitioner who are at the helm of operations and bear the financial responsibilities, even if they are not the physical owners of the cinema halls or multiplexes.

3. Applicability of the Madhya Pradesh Entertainments Duty and Advertisement Tax Act, 1936:
The court examined the definitions and obligations under the 1936 Act, noting that the term 'proprietor' has a broad meaning, encompassing not just the owner but also the manager or person responsible for the entertainment venue. This broader interpretation supports the petitioner's argument that the subsidy should be extended to those who manage and operate the cinema halls or multiplexes, not just the physical owners.

4. The role of the licensee under the 1952 Act and 1972 Rules:
The court also considered the Chhattisgarh Cinema Regulation Act, 1952, and the Chhattisgarh Cinema (Regulation) Rules, 1972, which define a 'licensee' to include managers nominated under Rule 108. This further supports the argument that the operational responsibilities and compliance with licensing requirements should be key factors in determining eligibility for the subsidy.

5. Impact of investment and operational responsibilities:
The court acknowledged the significant investments made by the petitioner in transforming spaces into functional multiplexes and their compliance with all regulatory and financial obligations. The court emphasized that the subsidy rules should encourage such investments by providing clarity and ensuring that the entities making these investments and fulfilling operational responsibilities are eligible for the subsidy.

Conclusion:
The court concluded that the term "swami" in the 1982 Rules should be interpreted broadly to include not just the physical owners but also the licensees and operators who meet all the obligations under the rules, including the payment of entertainment tax. The court quashed the respondent's decision to deny the subsidy and directed them to reconsider the petitioner's claim in light of this broader interpretation within three months.