9911796707
TMI Blog1983 (4) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... erected on solid foundation or shifting sand, is the subject of broach hereinafter. The reliefs claimed thereon are : (a) for declaration that the conferment of the rule-making power under Section 11 of the Andhra Pradesh Cinema (Regulation) Act (4 of 1955), hereinafter referred to as the Act as ultra vires the Constitution; (b) to declare R. 12 (3) and the conditions if any imposed in Form 'B' Licence pursuant to the said rule fixing the prices of cinema tickets as illegal, void and ultra vires the Constitution and the rule-making power; (c) and to issue a direction to the respondents to permit the petitioner to revise the rates of admission to their theatres. 2. The allegations made in support thereof are that the petitioners are either proprietors or lessee-licensees of the theatres at their respective places of business. They constructed the theatres at a huge cost. They provided all amenities as per law. Pursuant to the licences granted under the provisions of the Act and the Rules in the prescribed 'B' Form to exhibit cinematographs, they are doing their business. As owners thereof and as incident to their business avocation, they have got a right to fix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been brought on statute book inhibiting the free right of a citizen to fix the prices of essential commodities. If the Legislature intended to invade into this right of fixation of rates of admission, being a legislative act, the Legislature would have specifically provided for such a power under the Act itself. But the Act does not envisage any such power. A reading of the preamble, all the provisions of the Act and Rules, does not indicate any such power being given to the Legislature. The Legislature intended its delegate to make rules only to operate in the field adumbrated and adverted to earlier. Therefore, exercise of power by the delegated authority, viz., the State Government in making Rule 12 (3) lacks legislative competency and therefore unconsitutional. Even admitting that there inheres such power. It is not incidental to the main purpose and is of excessive delegation. There are no guidelines provided under the Act or the Rules made thereunder. Therefore it is arbitrary leading to capricious exercise of power. Even otherwise, it is an unreasonable restriction on the exercise of their fundamental right enshrined under Article 19(1)(g). It is also arbitrary, offendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for enhancement of rates of admission. Petitioners 1, 3 and 4 made their applications. It was referred to the concerned officer for inspection and reports. They submitted the reports pointing out lack of some of the basic amenities and of their giving direction for rectification thereof. Without rectifying those defects and to evade providing the wanting amenities and sanitary conditions in the theatres, they approached this Court suppressing those facts and obtained directions. 7. In pursuance of the interim directions issued by this Court, the Licensing Authority made personal inspection of all the theatres. He found deplorable insanitary conditions and lack of basic amenities prevalent in the theatres. Yet he objectively considered and received the rates of admission depending upon the existing amenities etc. in the respective theatres. With regard to petitioner No. 1, he gave in paragraph No. 4 the particulars thereof and the reasons for increase or otherwise and for others in the subsequent paragraphs. He stated the existing, proposed and revised rates. They read thus :- Petitioner No. 1 : Petitioner No. 3 : Petitioner No. 4 : Petitioner No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... niversity Acts and the Statutes made thereunder for the actual running of the University subsequent to the admission. He states that rules of admission are only made to select candidates. Once candidates are selected and were admitted into courses, the rules ceased to have any application and thereafter the students are bound by the University Act and the Statutes made thereunder. On that premise he urges that once the rules were made for construction of the theatres, and the theatres are constructed as per the rules, the power gets exhausted. There is no further power to inhibit the fixation of right of admission by the licensees of the theatres unless there is a separate provision in the Act to that effect. In support of his contention that fixation of rates of admission is not one of the purposes of the legislative act, he places strong reliance on the decisions reported in a Division Bench decision of the Delhi High Court in Durga Chand v. Union of India, AIR1979Delhi249 , a single Judge's decision of the Punjab and Haryana High Court in Deepak Theatres, Dhuri v. State, and also a judgment of the Madras High Court in Royal Arts v. State, AIR1969Mad211 . He further contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t provides for making such a rule and the rules are not made in excess of the delegated legislation and are valid; even then, the rule infringes their fundamental right to carry on the trade and their incidental right to fix rates of admission is ultra vires and unreasonably invaded their right; therefore it is violative of their fundamental right guaranteed under Art. 19(1)(g) of the Constitution. He relied on the decision reported in R. M. Seshadri v. District Magistrate, Tanjore, [1955]1SCR686 . 12. We may mention at the outset that though in the course of argument the learned counsel stated certain figures of percentage said to be increased in the cost of exhibiting cinematographs, we are refraining to refer them in detail for what of any material placed before us to consider their correctness. Though the contention of arbitrariness in procedure violating Article 14 of the Constitution was raised in the pleadings, it is not pursued at the Bar. Therefore we are relieved to consider the same. 13. Sri A. Venkatarama Reddy, learned Government Pleader appearing for the respondents, strenuously repelled all the above contentions. He argues in the first instance, that the Act it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erged for decision are: (1) Whether the Act gives power to make the impugned Rule? (2) Whether the fixation of the rates of admission are illegal? (3) Whether the fixation of the rates of admission are illegal? 16. Before adverting to the above questions, it would be profitable to refer to the legislative history of the Act and the Rules. Legislative history: 17. For the first time in 1918, the Central Legislature stepped in to regulate proper control of cinematograph exhibitions with particular reference to the safety of the persons to witness them and to prevent exhibition to the public of improper or objectionable films. In implementation therefore, the Cinematographs Act (2 of 1918) was brought on Statute Book to obtain licence subject to the conditions prescribed thereunder and certification of films suitable for public exhibition. The Act reigned the field nearly for 34 years with amendments made from time to time. With the ushering of the Constitution and with the avowed pledge in the fundamental principles of State Policy to promote welfare of the people, economic, social and cultural, to secure social order vis- -vis the fundamental rights designed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act in detail. The prominent feature that strikes glaringly to the naked eye is the title of the Act, The Andhra Pradesh Cinema (Regulation) Act, followed by its preamble. It is true , quoted Chief Justice Lefroy, by Craies on Statute Law, Seventh Edition at page 192 that although the title of an Act cannot be made use of to control or express provisions of the Act, yet if there be in these provisions anything admitting of a doubt, the title of the Act is a matter proper to be considered, in order to assist in the interpretation of Act, and thereby to give to the doubtful language in the body of the Act a meaning consistent rather than at variance with the clear title of the Act (Shaw v. Ruddin, (1858) 9 CLR 214). The heart of the title is the word Regulation . The prominence thus ascribed is to the word was Regulation . But it lacks legislative definition of its own. Therefore, it is profitable to find what meaning has been ascribed to it either under the dictionaries or analogous statutes or Judge made law to understand its scope and reach and whether it would comprehend within its ambit the power to make rules to regulate maximum rates of admission. The te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antonment areas. Clearly, this power to direct or control will include within it all aspects as to who is to make the constructions under that conditions the constructions can be altered, who is to occupy the accommodation and for how long, on what terms is to be occupied, when and under what circumstances the occupant is to cease to occupy it, and the manner in which the accommodation is to be utilised. All these are ingredients of regulation of house accommodation and we see no reason to hold that this word regulation has not been used in this wide sense in this entirety. 24. It would, therefore, be reasonable to deduce that the word regulation is a word of broad import having wide meaning comprehending all facets not only specifically enumerated in the Act but also embrace within its fold the powers incidental to the regulation envisaged in good faith with an eye single to the public welfare. Court has to recognise this power of the Government in public interest. Relevant provisions in the Act and Rules and their salient features: 25. When such is the sweep of the word Regulation engrafted in the title of the Act, what is the ambit it embraced in the Act is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of this Section and to the control of the Government, the Licensing Authority may grant licences 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; (3) The Government may, from time to time, issue directions to licensees generally or to any licensee in particular for the purpose of regulating the exhibition of any film or class of films, so that scientific films, films intended for educational purposes, films dealing with news and current events, documentary films or indigenous films secure an adequate opportunity of being exhibited, and where any such directions have been issued, those directions shall be deemed to be additional conditions and restrictions subject to which the licence has been granted. 31. In respect of the matters specified in clauses (a), (b) and (c) of S. 6(1) of the Act set out in sub-section (1) of S. 6 are excluded in their application with reference to construction or reconstruction or use of or the installation of any machinery in anyplace or building to be used exclusively for the holding of cinematograph exhibitions. The applications for permis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) defines 'building' means - in relation to a permanent cinema and temporary cinema, a building which is constructed for permanent use with stone, etc.; Rule 2 (n) defines 'place' means town or village (including the hamlet or hamlets attached to the village); Rule 2 (o) defines prescribed' means prescribed by order of the Licensing Authority. Rule 2 (q) defines 'existing cinemas' mean the cinema buildings existing or those under construction prior to the commencement of these rules. Rule 4 empowers any person of the age of 20 years or any company or firm or association of individuals whether incorporated or not, to obtain or hold any permission or licence under the Act. 37. Rules 6 to 9 relate to compliance with the requirements of the specifications for construction of the cinema building and other general matters, as elaborated in the Appendices attached to the Rules etc. 38. Rule 11 in Chapter III provides the procedure for applying to the Licensing Authority for grant or renewal of licence under the Act and the formalities to be complied with. 39. Rule 12 gives power to the Licensing Authority to grant licence or permission on satisfacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loor area, .... .... And at the rate of 30 persons per 9 square meters of floor area, etc.... 47. Para 22-A prohibits the use of licensed premises for any other purposes except for the purpose for which the licence has been granted. (The other appendices are not necessary to be dealt with in detail for the purpose of this case.) 48. Form 'B' is the licence for exhibiting cinematographs as required under sub-rule (2) of R. 12. 49. It is necessary to extract Condition (11) as prescribed in sub-rules (2) and (3) of R. 12 referred to and extracted earlier, which reads thus: 1. Maximum number of persons permitted and maximum rates of admission allowed in each part of the auditorium under sub-paragraph (2) of para 19 of Appendix I and sub-rule (3) of R. 12. Note: These rates of admission shall not be increased during the currency of this licence without an order in writing by the Licensing Authority permitting such increase. (The other conditions are not necessary to be dealt with.) 50. A resume of the relevant provisions thus surveyed would indicate the broad spectrum spread out the whole gamut of controlling the regulation of exhibiting cinemato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as a guidance to the implementing authority. The Court would consider as to what is the scope of the regulation, its operation and effect on the exercise of the rights of the citizen in Part III of the Constitution. When large powers are given to certain authorities, the exercise whereof may make serious inroads into the rights of the citizen. Court has to see whether there is any guidance to be collected from the Act itself, its object, its controlling provisions in the light of the surrounding circumstances the Legislature takes note of which the Court might take judicial notice. The Court would put up such construction which would effectually implement the provisions of the Act to achieve its object and if possible avoid construction which would frustrate the very object of the legislation. The Court would also endeavour to find whether the Act provides any policy or nourishment by proper environment to the rule-making authority to frame rules to regulate the exhibition of cinematographs. Whether the Act intended only limited purpose: 54. Before embarking on consideration of the provisions in the Act, it is to be considered whether the Act intended to serve only the limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is laid down the Courts will not interfere. It will depend on consideration of the provisions of a particular Act including its preambles as to the guidance which has been given and the legislative policy which has been laid down in the matter. 57. Therefore, the Legislature indicated in Section 3 read with Section 5 and preamble laying down its broad policy specifying the purposes; adumbrated the powers and vested them in the licensing authority or notified officer and the State Government to carry out them. Power was given to the State Government to make rules regulating such conditions, restrictions and terms subject to which the licence could be granted and the general control. Thus, it could be seen that the purposes mentioned are neither exhaustive nor conclusive. 58. Section 11 gives power to the Government to make rules by notification to carry out the purpose of this Act; in particular and without prejudice to the generality of the foregoing power, such rules may provide for the terms, conditions and restrictions, if any subject to which the licences and permission may be granted under the Act. Thus, the Act specifies the purposes, adumbrates the power and vests th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d temporary theatres at any place. 'Place' has been defined in Rule 2 (n) to mean town or village including hamlet or hamlets attached to the village. Therefore, the leg intended that the power to regulate licensing of the exhibition of the cinematographs in all places situated at every nook and corner of the State. A majority of the population in the country are illiterates. Exhibition of cinematographs became media to impart education not only of the news, current events, but also of scientific, educational etc. (and) mythological stories of historical importance. Majority of population are poor, semi-middle class and middle class sections of the society. The business assumed public importance. 62. It is settled law that the Court can take judicial notice of the matters of common knowledge or well-known facts. Therefore we can safely take notice of them. In such circumstances, the question for consideration is whether the right to fix the right of maximum admission is incidental to the exercise of the said power. It admits of no argument that when the object of the cinematograph is to impart education or amusement to the cine-going public it is of a welfare measure. Wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Calcutta v. Liberty Cinema, [1965]2SCR477 it is laid down by their Lordships of the Supreme Court that (at p. 1117): ... fixation of rates of taxes may be legitimately left by a statute to a non-legislative authority for we see no distinction in principle between delegation of power to fix rates of classes of goods and power to fix rates simpliciter, if power to fix rates in some cases can be delegated then equally the power to fix rates generally can be delegated. 67. In Sukhanandan Saran Dinesh Kumar v. Union of India, [1982]3SCR371 it was laid down that the power to fix minimum price or grant of rebate comprehends the power to provide such incidental and ancillary regulations which will ensure the price. Chief Justice Waite held in Munn v. People of Illinois, (1876) 94 US 113 that the right to establish the maximum of charges as one of the means of regulation is implied. In fact, the common law rule which requires the charges to be reasonable is itself a regulation as to price. Without it the owner could make his rates at will and compel the public to yield to his terms or forego the use. 68. In Craies on Statute Law, 7th Edition at page 258, it is stated that if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose excise duty through an amendment to the rule. The object of the Excise Act is to get revenue to the State by imposing duty on the exercisable articles. Section 25 , as stated in para 12 of the judgment, limits, the power to impose excise duty on specified four items. Section 62 gives power to the Government to make rules to carry out the purposes of the Act. During the currency of the contract, rules were amended imposing levy of duty of minimum quantity of the liquor and to pay monthly deficit of the minimum duty on unlifted liquor. It was challenged as being ultra vires. While considering the scope of the Act, their Lordships have considered in paragraphs 17 and 18 of the judgment holding that the Legislature has levied excise duty on those articles which come within the scope of Section 25. The rule making authority has not been conferred with any power to levy duty on any article which do not fall within the scope of Section 25. Rule was amended giving power to the Government to levy duty on liquor which the contractor failed to lift. While considering that question, it was held that : No tax can be imposed by any bye-law or rule or regulation unless the statute under w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a dictum without providing any persuasive reasoning. In view of the consideration made on the subject by us, we are unable to agree with the learned Judge that there is no power under the Act to fix rates of admission. Therefore we are not persuaded to accept the same as correct law. 73. Similarly, the decision in Royal Arts v. State of Madras, AIR1969Mad211 (supra) also does not provide us any assistance. Therein the Government amended the rule directing the owner of the cinema theatre to collect fee of 0-05 ps. For each cycle kept in the cycle stand. That was challenged as being ultra vires of the power that learned Judge followed the earlier decision of that Court and held that the principle laid down in that decision apart from being applicable, the impugned order itself states that what is to be collected from the users of the cycle-stand is a fee for such user. In that event the licensee can correlate the quantum of the fee to the actual expenses incurred for providing amenities. That is the basis on which the learned Judge proceeded. Therefore it is also not of any help to decide the point in this case. 74. Thus, on principle and on authority, it leads to an unmista ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s governed. It Union Bridge Co. v. United States, (1906) 204 US 364 , approved the statement of law in Lock's Appeal, 72 Pa. 491 at 498 wherein it was held: To assert that law is less than a law, because it is made to depend on future event or act, is to rob the legislature of the power to act wisely for the public welfare whenever a law is passed relating to a state of affairs and yet developed or to things future or importance to fully know........ To deny this would be to stop the wheels of the Government. There are many things upon which wise and useful legislation must depend which cannot be known to the law making power and must therefore be subject to enquiry and determination outside the halls of legislation. 79. This statement of law in Lock's appeal was approved by the Lordships of the Supreme Court in Hamdard Davakhana v. Union of India, 1960CriLJ671 . 80. In Corpus Juris Secundum, Vol. 73, at page 326, it is stated thus- The effectuation of principle and policy declared by legislature can be confided to agency created to administer the law in which the principle and policy are declared. 81. At pages 327-328 it is stated: The legislature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cases can be delegated then equally the power to fix rates generally can be delegated. 86. In Arnold Rodrick v. State of Maharashtra, [1966]3SCR885 , it was laid down that the delegation is necessary and the rules made are ancillary and subserve the purpose of the Act. That is the reason why the Legislature appears to have given wide power under Section 5 read with Section 11 in that behalf. 87. In Vasanlal Maganbhai v. State of Bombay, 1978CriLJ1281 their Lordships of the Supreme Court, speaking through Gajendragadkar, J. (as his Lordship then was) while considering the question relating to the delegation of power to the rule-making authority to fix the market rate of rent, held that: The relevant factors having been specified by Section 12(3) when the Provincial Government considers the question of fixing a lower rate of maximum rent payable in any particular area it is expected to adopt a basis which is suitable to that particular area. The relevant conditions of agriculture would not be uniform in different areas and the problem of fixing a reduced maximum rent payable in the respective areas would have to be tackled in the light of the special features and condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances. It is to be remembered that a regulation is to operate not only to the existing theatres but also the theatres to be constructed or reconstructed in the years to ensue. The legislature thereby might well have thought that the problem should be left to be tackled by the licensing authority. Thus it left enough freedom to the State Government to make rules or amend them from time to time. The problem is to be approached from the above perspectives. Rule 12 (3) is part of the composite scheme evidenced by the Act and the Rules made thereunder and if it is examined in the light of the above law and the area in which the Act intends to operate and facts and circumstances, it would be difficult to uphold the plea of the petitioners. 90. We are therefore inclined to hold that the Act being applicable not only to existing theatres but to be constructed or reconstructed in the years to ensure, at different places at which fluctuating factors prevail in praesenti as well as state of affairs yet (not?) developed or things in future fully not known, the regulation is a wise and useful welfare measure. It is thereby impracticable to lay down definite comprehensive rule. It is subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with administrative directions. 94. In Mulchand v. Mukund, AIR1952Bom296 a Division Bench of the Bombay High Court consisting of Chief Justice Chagla and Gajendragadkar, J. (as he then was) has to consider the scope of rule and held in that connection: Parliament or Legislature, instead of incorporating the rules into the statute itself, ordinarily authorise Government to carry out the details of the policy laid down by the Legislature by framing the rules under the Statute, and once the rules are framed, they are incorporated in the statute itself and become part of the statute, and the rules, must be governed by the same principles as the statute by itself. 95. In J. K. Cotton Spinning Weaving Mills v. State of Uttar Pradesh, (1961)ILLJ540SC , Das Gupta, J. held: In the Interpretation of Statutes the Court always presume that the Legislature inserted every part thereof for a purpose and the legislative intention is that every part of the Statute should have effect. These presumptions will have to be made in the case of rule-making authority also. 96. We have no hesitation to hold that the Rules being statutory having been duly made by delegated authority, mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would tersely apply to the facts of this case. When the enactment is assailed as being ultra vires and unconstitutional what has to be ascertained is the true character of the legislation and for that purpose regard must be had to the enactment as a whole, its object, purpose and true intention and to the scope and effect of its provision and what they are directed against and what they aim at. 100. Of course, the Legislature cannot by-pass such constitutional prohibitions by employment of indirect methods. Therefore, the Court has to look behind the form and appearance to discover the true character and nature of the legislation. 101. We have to consider the plea in the light of the above law, whether the impugned rule is ultra vires of the rule-making power. Section 11 empowers the State Government to make rules regulating the terms, conditions and restrictions to be incorporated in the licence subject, to which a citizen should exhibit cinematographs in the licensed theatre. This section itself is not challenged. The power to fix maximum rates of admission to different classes is already held to be incidental or ancillary to the regulation exhibiting cinematographs. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f our Government would have interpreted the clause differently had they had occasion to assume that responsibility in the conditions of the later day. The vast body of law which has been developed was unknown to the fathers but it is believed to have preserved the essential content and the spirit of the Constitution. With a growing recognition of public needs and the relation of individual right to public security, the Court has sought to prevent the perversion of the clause through its use as an instrument to throttle the capacity of the States to protect their fundamental interests. This development is a growth from the seeds which the fathers planted. It is a development forecast by the prophetic words of Justice Johnson in Ogden v. Saudnders, (1824-27) 12 Wheat 286 6 LEd 631. 106. The exhibition of cinematographs are to be licensed under the Act to the theatres constructed or to be constructed or reconstructed at various places in the State at different times under varied circumstances. As seen earlier, the theatres consists of permanent, semi-permanent or temporary and the Act intended to operate even in the remotest village or hamlets. Under those circumstances, the Legisl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taken into account. Whether motive to make Rule can be looked into: 109. In this context, the contention of Sri. M. R. K. Choudary, learned counsel for the petitioners is that the impugned Rule was made with an oblique motive to get the revenue under the Entertainment Tax Act is to b e disposed of. It is now settled law that the Court cannot go into the motives for enacting the legislation. Therefore it is not permissible for the Court to go into the motives alleged to have prevailed with the State Government in making the impugned rule so long as we found that the rule made was to subserve the public purpose, viz., to enable every person to have an easy access into the theatres to witness the exhibition of cinematographs at reasonable rates. Abuse of power - whether a ground to declare Rule invalid? 110. It is further contended that if it is held that the Legislature has confined to the rule-making authority the power to make the impugned rule, then there will be abuse of power by the State Government in making the rule. It is now settled law that it is improper to start with an assumption that the State Government would abuse the discretionary power and decide the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: 114. It is further contended that there are no rules made giving guidance to the Licensing Authority. It is manifest that fixation of maximum rates of admission has to be done depending upon the local conditions in the particular theatre be it permanent, semi-permanent or temporary situated either in the city, town, village or hamlet. Therefore it is impracticable to lay down any particular rule in that regard. Guidance may be obtained in the light of the prevailing surrounding circumstances. The Licensing Authority will gather all the material facts including the cost of exhibition, etc., which have got a bearing in determining the rates of admission and then decide the rates of admission. Of course it would be on observing the principles of natural justice and fair play. 115. In State of Punjab v. Hari Kishan, [1966]2SCR982 , while considering the similar provisions of Punjab Cinemas (Regulation) Act, S. 5(2) thereof, their Lordships of the Supreme Court have laid down that the power of the State Government is wide to give general or special instructions for the legitimate purposes of the Act. Same is the view of our learned brother, Choudary, J. in D. Satyanarayana v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntinue to be in operation. It is also further settled law that it is not incumbent that Rules should be made before exercise of statutory power. It is further settled law that it is not mandatory to lay the Rules made before the Legislature to be operative. So the absence of such a provision in the Act does not whittle down the effect of the Rule if it is otherwise valid. 118. On consideration of the above facts, circumstances and principles of law, we have no hesitation to hold that the impugned Rule is not ultra vires the power of regulation. It is not either unguided or unbriddled or uncanalised or arbitrary. Whether petitioners have unbriddled power to fix rates of admission: 119. It is further contended that the petitioners have got an unbriddled right to fix the rates of admission and that the licence is the best person to fix the reasonable rates of admission, keeping in view, the investment made, amenities provided, cost of exhibition and reasonable rate of profit. It is an incident to the right to trade. But the impairment thereof by the State is unreasonable and hampers free play. It is true. It is already noticed that it has become an amusement to every person m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd welfare measure. Whether impugned Rule is valid: 120. Thus we reach consideration of the impugned Rule as the subject of attack. Rule 12 (3) has already been extracted in extenso in the earlier part of our judgment; therefore it is not necessary to reproduce once over, but suffice to state that it consists of four clauses. Clause (a) gives power to the Licensing Authority while granting or renewing licence to fix the maximum rates of admission to different classes; (b) the rates shall not be increased during the currency of the licence without an order in writing by the Licensing Authority permitting such increase; (c) a right of appeal is provided to the State Government against the order of the Licensing Authority; and (d) the order of the Licensing Authority is liable to be cancelled or modified by the Government if they consider that such a course is just or necessary. That is the setting of the Rule. With regard to R. 12 (3) (a) if it is read in conjunction with the guidelines referred to above and para 19 of Appendix I, and Form 'B' as integral part, it goes without saying that it provides enough guidelines for determining the rates of admission in the initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound to be excessive or ridiculously low or unreasonable, then the State Government may cancel or modify the said order if such a course found to be just or necessary. It is implicit from it that such a cancellation or modification by the State Government would be consistent with the observance of the principles of fair play of prior notice to the affected parties, reasonable opportunity of hearing and the reasons therefor. It is a valuable built-in safeguard. It is amenable to correctional jurisdiction of this Court under Article 226 of the Constitution. Therefore, though the Rule is not explicit in this regard, the principles of natural justice should be read into this Rule and the vires of this Rule can be sustained. Such a course was held to be valid by their Lordships of the Supreme Court in Maneka Gandhi v. Union of India, [1978]2SCR621 and Swadeshi Cotton Mills v. Union of India, [1981]2SCR533 . 123. It is not the case of the petitioners that the State Government has exercised its power without affording any reasonable opportunity of observing the principles of natural justice. Therefore this R. 12 (3) (c) is also beyond the pale of assailment. 124. Sub-rule (3) (d) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment does not extend to the fixing of such a limit ....... The rule-making power given to the State Government is not expressed in the usual form i.e., is to to the effect that the State Government may make rules for the purpose of the Act. The rule-making power is limited to what is stated in clauses (a) to (e) of S. 27 and these clauses do not empower the State Government to prescribe the limit up to which the loans advanced by money-lender are to remain outstanding at any particular moment of time. 128. In view of the facts and point raised therein, it has no application to the facts on hand. 129. Yet another decision relied on by the learned counsel is A. K. Sinha, v. A. K. Biswas, 1974CriLJ885 (supra). Far from helping the petitioners for his contention, it supports the view we have taken. Therein, the High Court has taken the view that the definition of 'gold' in R. 126-A (d) does not include the smuggled gold. Thereby the High Court has given restrictive meaning to the word 'gold'. His Lordships chandrachud, J. (as his Lordship then was) considered the definition of 'gold' in R. 126-A (d) and held that (para 20): ... it is couched in wide t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the restriction imposed is in public interest and therefore reasonable. It is undoubted that Art. 19(1)(g) reserves to every citizen fundamental right to practice any profession or to carry on any occupation, trade or business. When exercise thereof is impaired or controlled or limitations are put thereon, then, it is for the party that supports such impairment, etc. to satisfy that the restriction is reasonable in the interest of the general public and not arbitrary nor disproportion to public interest and so constitutional. If the right is not hedged or clothed with any public interest, then it is onerous on the respondent to establish with strong reasons for unwarranted interference with the exercise of the said fundamental right. The Court also has to zealously scrutinize with more care. On the other hand, if the right which the citizen claim is itself acquired under a particular statute or regulation or a rule, then his exercise thereof would be subject to the limitation imposed under the said statute or regulation or rule. Therefore, the first question to be considered is what is the right the petitioners possessed of. Nature of right - Not an absolute right: 132. Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 976AP340 that : The Society in question is a creature of the Statute formed under the provisions of the Andhra Pradesh Co-operative Societies Act. The right of the petitioner to contest the election for membership of the Committee emanated only out of the provisions of the Act, the Rules and Bye-laws. That right he cannot claim otherwise than under those provisions. His right to become a member of the Society or a member of the Committee is not the common law or a general right given to him from an Association and which is guaranteed under Article 19(1)(c) of the Constitution. The Act under which the Society is formed confers certain rights and privileges and also imposes certain obligations and restrictions on the Society and its members. A member claiming rights under provisions is also bound by any restrictions imposed thereunder ......................... There is no compulsion or bar for one to become a member of a Society under the Act or not ................... If a Society is formed and is registered under the Act and its members claim special privileges and advantages conferred by the Act and the Rules framed thereunder, they cannot turn round and say that they are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llenged on the ground of constitutional virus. The majority of their Lordships upheld the validity. Their Lordships noticed the impact of the business of storage of foodgrains in the warehouses, the mode of operation of the business, the need of the public and its tendency in the business of near monopoly in regulating the storage and its steep impact on the public utility. While considering the validity of fixation of rates from that background, majority of their Lordships, speaking through Chief Justice Waite, while reiterating the dictum of Lord Chief Justice Hale held that : Under such circumstances it is difficult to see why, if the common carrier, or the miller, or the ferrymen or the innkeeper, or the wharfinger or the baker, or the cartman, or the hackney-coachman, pursues a public employment and exercises a sort of public office , these plaintiffs in error do not. They stand to use again the language of their counsel, in the very gateway of commerce and take toll from all who pass. Their business most certainly tends to a common charge, and is become a thing of public interest and use. Then continued and held: For our purposes, we must assume that, if a stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch interference, they should not have clothed the public with an interest in their concerns. It is insisted, however, that the owner of property is entitled to a reasonable compensation for its use, even though it be clothed with a public interest, and that what is reasonable is a judicial and not a legislative question. As has already been shown, the practice has been otherwise. In countries where the common law prevails, it has been customary from time immemorial for the Legislature to declare what shall be reasonable compensation under such circumstances, or perhaps more properly speaking, to fix a maximum beyond which any charge made would be unreasonable. Undoubtedly, in mere private contracts, relating to matters in which the public has no control over such a contract. So too, in matters which do affect the public interest, and as to which legislative control may be exercised if there are no statutory regulations upon subject, the Courts must determine what is reasonable. The controlling fact is the power to regulate at all. If that exists, the right to establish the maximum of charges, as one of the means of regulation, is implied. In fact, the common law rule, which require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied though modern economic conditions may make necessary or beneficial its application ... ... .. Its personal character certainly does not of itself preclude regulation .... No doubt the petitioners while undertaking exhibition of cinematographs have adopted the field of private contract. But it assumed of public importance. The question therefore is no longer merely that of one party to a contract as against the other, but of the use of reasonable means to safeguard the well-being of the people. Under such circumstances, reasonable exercise of the protective power reserved in the State is to be read into all the contracts clothed with public interest. 139. From this consideration, we have no hesitation to conclude that fixation of the rates of admission is itself a regulation. Though it is in the realm of private contract, when the persons undertake the business or occupation of exhibiting cinematography, it is clothed with a public interest as the cine-going public acquired direct and positive interest to have easy access of admission into the theatres. Thereby the business ceased to Juris Privati and the business tends to a common charge and became a thing of pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eem expedient or essential to the safety, health, peace, order, morals or well-being of the community. In order to determine reasonableness, regard must be had to the nature of the business, the conditions prevailing in that trade, the interest of the general public sought to be achieved by imposing the restriction and whether it is unnecessarily harsh and overrides the objects to achieve which the law was enacted. 142. Reasonable restriction connotes that the limitation imposed on a person in enjoyment of a right should not be arbitrary or of excessive nature beyond what is required in the interests of the public. The word reasonable implies an intelligent care and deliberations, i.e., the choice of a course which reason dictates. Legislature which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed and the social control permitted by Cl. (6) it must be held to be wanting in that quantity. The test of reasonableness has to be considered in the context of the issues which faced the legislation. In the construction of such laws, and particularly in judging thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to all case. The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent of urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict. 144. In Harakchand v. Union of India, [1970]1SCR479 , Ramaswami, J. speaking for the Bench laid down that (at p. 1464): It is not necessary to emphasise that the principles which underline the structure of the rights guaranteed under Article 19 of the Constitution is the principle of balancing of the need for individual liberty with the need for social control in order that the freedoms guaranteed to the individual subserve the larger public interests. It would follow the reasonableness of the restrictions imposed under the impugned Act would have to be judged by the magnitude of the evil which it is the purpose of the restraints to curb or eliminate. Loss of profit no ground for attack: 145. The contention of Sri Choudary that the petitioners are subjected to loss of profit return is answered by their Lordships of the Supreme Court in Nazeeria Motor Service v. Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an action taken in furtherance of the power conferred under the Act. The interest of the public has to be kept in the forefront and the prime consideration is the easy access to admission into theatre at reasonable rates. The problem has to be broached from social purpose. As held in Joseph Bcauharnais v. Illinois, (1951) 96 L Ed 919 . It is the price for the trial and error inherent in effect with obstinate social issue. 147. The decision relied upon by the learned counsel for the petitioners in R. M. Seshadri v. District Magistrate, Tanjore, [1955]1SCR686 (supra) has no application to the facts in this case. Therein a special condition in the licence obliging the cinema owners to exhibit at the commencement of each performance not less than two thousand feet one or more approved films, was assailed as an unreasonable restriction on their right. We have examined the decision in detail and we are unable to see how the ratio therein is applicable to the facts in this case : The fixation of rates of admission by itself is not violative of Art. 19(1)(g) unless it smacks of unreasonableness. We have to consider whether the rule is unreasonable. 148. Keeping these well settled p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade or business. In other words it assures orderly exercise of right to trade, business, avocation or occupation. Thus, it does not impinge nor impose unreasonable restriction upon the fundamental right to trade or business or exhibition the cinematographs. But in a given case, if the fixation of the rates is so unreasonable, arbitrary or capricious or the relevant factors were not taken into account, then it would be a case of assailing the individual action of the licensing authority, but on that account it cannot be held that the fixation of the maximum rates of admission to different classes is unreasonable. We conclude that interference is called for when the impugned statute adopts veiled and subtle trespass into a field unassigned or transgression of constitutional limitations. But when a beneficent legislation is assailed, the Court would adopt benevolent approach to lean in favour of sustaining the validity of the Act to subserve public interest, because the presumption is that the Legislature would not deliberately flout a constitutional safeguard or right. The infraction, however, may appear to be unjust or oppressive trenching upon private contracts, etc., the Court has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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