Civil Appeals No 2611 and 2611 A of 1981
From the Judgment and order dated the 1st July 1981 of the High Court of Jammu and Kashmir in LPA No 1 of 1981 and CMP No 454 of 1981
A K Sen and G L Sanghi Vineet Kumar and Devinder Gupta for the Appellant
578 DD Thakur SN Kacker and RP Bhatt for respondent in 261181
J Sorabjee K K Venugopal and R P Bhatt for respondent in 2611 A81
E C Agarwala section P Gupta R Satish VK Pandita and RP Sethi for respondent in 2611 2611 A L N Sinha Attn
Altaf Ahmad and Irfan Ahmad for respondent No 2
section Ghosh and A K Nag for the intervener
The Judgment of the Court was delivered by BALAKRISHNA ERADI J
When the hearing of these appeals was concluded on November 11 1982 after elaborate arguments had been addressed by learned counsel appearing on both sides we announced our decision allowing the appeal CANo 2611 of 1981 by passing the following order The appeal is allowed
The Judgment and order of the Division Bench of the High Court presided over by learned Acting Chief Justice is set aside and one by learned Single Judge Dr A section Anand is restored and consequently the Writ Petition No 436 of 1980 filed by Respondents in the High Court of Jammu and Kashmir stands dismissed
No order as to costs of hearing in this Court
The legal consequence of this order will take effect from November 16 1982
ALL interim orders passed by this Court shall stand vacated from the midnight between 15th and 16th November 1982
Reasons will follow
 We now proceed to state in this judgment the reasons in support of our aforesaid conclusion 579 In July 1966 the appellant Ved Gupta decided to embark upon a venture to construct and operate an air conditioned Cinema in a plot of land which he proposed to take on lease in Gandhi Nagar Jammu in Collaboration with two osher persons namely Todar Mal and Kishan Kumar
Accordingly on July 22 1966 Ved Gupta purporting to act on behalf of a partnership consisting of himself and the two persons aforementioned as a matter of fact no partnership had been constituted at all by that date applied to the District Magistrate Jammu under section 3 of the Jammu and Kashmir Cinematograph Act 1989 1933 AD herein after referred to as the Act for permission to construct a modern Cinema Hall at the proposed site a detailed description of which was furnished in the plan annexed to the application
Shri Ved Gupta was informed by the District Magistrate Jammu by his Memo Annexure B that the Government had approved the construction of a Cinema Hall at the proposed site and had granted the requisite permission in his favour as per letter dated September 11 1967 issued by the Secretary to Government General Department
From Annexure B it would appear that the permission so granted was in favour of Ved Ved Gupta in his individual capacity and not as the representative of any firm
In the meantime by a deed dated December 7 1966 which was registered on December 24 1966 the plot in question was taken on lease jointly by Ved Gupta Todar Mal and Krishan Kumar for a period of 40 years on the terms and conditions set out therein
Thereafter under a deed dated July 15 1969 the aforesaid three persons entered into a partnership along with 11 others under the name and style Metro Theatres for carrying on the business of constructing and running a modern air conditioned Cinema in the site covered by the permission granted by the Government
Clause 15 of the said deed provided that the site for construction of a Cinema which had been obtained on lease by Ved Gupta Todar Mal and Krishan Kumar in their own names shall not be their personal property but shall be the property of the partnership and that the permission which Ved Gupta had obtained from the Government for construction of the Theatre in the said plot shall be treated as the property of the partnership
By a subsequent agreement executed by the 14 partners on February 22 1969 the name of the Cinema business was changed from Metro Theatre  to Apsara Theatre
 The construction of the Cinema Theatre appears to have been completed by the middle of June 1969
On June 17 1969 Ved Gupta submitted an application to the District Magistrate Jammu reporting that the construction of the theatre and the installation of the cinema 580 tograph machinery and equipment had all been completed pursuant to the permission granted by the Government and requesting that the requisite licence for running the Cinema Theatre may be issued to him under the Act and the Rules
Annexure C is a copy of the said application and it shows that it was filed by Ved Gupta in his personal capacity without any mention whatever therein of the partnership
On July 22 1969 a licence was issued by the District Magistrate to Ved Gupta under Section 3 of the Act to give public exhibition of cinematograph films at the Apsara Theatre situated at Gandhi Nagar Jammu
Annexure D is a copy of the said licence and it is expressly stated therein that the said licence has been granted to Shri Ved Gupta and that it shall remain in force until March 31 1970 provided that Shri Ved Gupta or any person to whom with the consent of the licensing authority the licence is transferred continues to own or manage the cinematographs used ill the said Apsara Theatre
A Schedule of conditions imposing various duties and obligations on the licensee is also appended to the said licence
On March 31 1970 two partners Todar Mal and Sham Kumar retired from the partnership
Consequent thereon the firm was reconstituted and a new partnership deed was executed by the remaining partners on April 11 1970 Clause 18 of the said document contained the following recital The licence for running the Cinema by which Apsara Theatre is being run stands in the name of Shri Ved Gupta so Shakur Dass the 9th party
The right to operate the Cinema licence shall be the property of this partnership and changes in the constitution shall make no difference in this respect
 Soon thereafter on December 3 1975 Todar Mall who had retired from the firm and Krishan Kumar who continued to be a partner jointly issued a notice to the District Magistrate Jammu claiming that their names should also be included in the licence issued to Ved Gupta in respect of the Apsara Theatre
Subsequently on January 26 1976 Krishan Kumar addressed a communication to the District Magistrate stating that he had not actually signed the notice sent on December 3 1975 that Todar Mal had unauthorisedly purported to send the notice on his behalf also without his knowledge or consent and the said notice may therefore be treated as fictitious
A copy 581 of the said letter was sent by Krishan Kumar to Ved Gupta also
Strangely after the expiry of nearly two years thereafter Krishan Kumar submitted an application to the District Magistrate requesting that the names of himself and of Todar Mal should also be included as licensees in the licence for Apsara Theatre issued to Ved Gupta
Notice of the said application was issued by the District Magistrate to Shri Ved Gupta and the District Magistrate conducted an enquiry at which both sides were heard through their advocates
After considering the arguments advanced before him by the counsel appearing for the contending parties the District Magistrate passed a detailed order dated December 29 1977 rejecting the request of Todar Mal and Krishan Kumar and declaring Shri Ved Gupta to be the sole licensee authorized to run the Apsara Theatre
Thereupon Todar Mal preferred an appeal against the said order passed by the District Magistrate
Krishan Kumar was impleaded as a second respondent in that appeal
The Minister of State for Revenue and Law Government of Jammu and Kashmir heard counsel on both sides and ultimately dismissed Todar Mal s appeal by a detailed order of which Annexure G is a copy
Todar Mal did not leave the matter there
He filed a writ petition in the High Court of Jammu and Kashmir challenging the legality and validity of the orders passed by the District Magistrate and the appellate authority namely the State Government
Krishan Kumar was made a party respondent in the said petition
That writ petition was dismissed in limine by the High Court by an order dated April 29 1978
Thereafter Todar Mal came up to this Court praying for the grant of special leave to appeal SLP Civil No 3490 of 1978 against the said decision of the High Court
This Court rejected that Special Leave Petition by order dated November 13 1978
Krishan Kumar was a party respondent in the Special Leave Petition also
On April 19 1979
Krishan Kumar addressed a letter to the District Magistrate Jammu requesting that the renewal of the licence may be granted in the name of the premises of Apsara Theatre The District Magistrate rejected the said request by a detailed order dated April 21 1979
Annexure I Before the said order was passed by the District Magistrate an elaborate hearing appears to have been given by him to Krishan Kumar and Ved Gupta represented by their Advocates
It is seen from Annexure I that the contentions advanced before the District Magistrate on behalf of Krishan Kumar were that even though the licence had originally been issued in the name of Ved Gupta the right of operation of the licence had become the 582 property of the firm by virtue of clauses 13 and 18 of the partnership deed and since Ved Gupta had been expelled from the partnership and had thereby ceased to be connected with the firm he did not have the possession of the premises and he was not entitled to claim a renewal of the licence
These contentions were repelled by the District Magistrate who held that the renewal of the licence could not be made in the name of any party other than the original licensee namely Shri Ved Gupta who had been declared to be the sole licensee in respect of the Apsara Theatre by the proceedings of his predecessor dated December 29 1977 which was confirmed in appeal by the State Government and which had acquired finality between the parties by reason of the dismissal of the writ petition and the Special Leave Petition by the High Court and Supreme Court respectively
In March 1980 the licence for the Theatre was renewed by the District Magistrate in the name of Ved Gupta
On April 27 1979 a suit was instituted against Ved Gupta and seven others by seven of the partners including Krishan Kumar for a declaration that the Cinema licence dated July 22 1969 issued by the District Magistrate Jammu 8th defendant for exhibition of cinematographs in the building known as Apsara Theatre Gandhi Nagar Jammu is the property of the firm Apsara Theatre and for a prohibitory injunction restraining defendants 1 to 7 namely Shri Ved Gupta and six of the partners who were residing with him from interfering with the running of the Cinema by the plaintiffs and also for a prohibitory injunction against the District Magistrate defendant 8 restraining him from interfering in any manner with the exhibition by the plaintiffs of cinematographs in the premises of Apsara Theatre
On the date of the institution itself the District Judge Jammu issued an order of temporary injunction restraining defendants 1 to 7 from interfering with the possession and the running of the Theatre Apsara by the plaintiffs
In being served with the order of injunction Ved Gupta wrote to the District Magistrate on September 24 1980 that it had become impossible for him to operate the Cinema licence in view of the temporary injunction issued by the District Court and since it is only the licensee who is held responsible under the Act and the Rules for due compliance with all the terms and conditions of the licence and answerable to the licensing authority for all commissions and omissions in the Cinema premises he may be saved from any prosecution or other action under law in the capacity of licensee of the Apsara Theatre in respect of any illegal acts or offences committed by others in the said premises
On 583 September 26 1980 the Superintendent of Police Jammu City reported to District Magistrate that on verification by the Sub Inspector deputed for the purpose it had been found that the cinematographs were being conducted in the Apsara Theatre by persons other than the licensee and the Police had challaned the licensee under Section 6 of the Act
The District Magistrate was requested by the said letter that exhibition of cinematographs in the Theatre may be suspended till the final decision was rendered by the Court in favour of either of the parties
Acting on the aforesaid material brought to his notice the District Magistrate passed the order Annexure J dated September 26 1980 directing that exhibition of cinematographic films in Apsara Theatre will remain suspended until further orders
The sole question arising for determination in these appeals concerns the validity of the said order passed by the District Magistrate and hence it will be convenient at this stage to reproduce the full text of the order
It reads Whereas it has been brought to my notice by Shri Ved Gupta sole licensee Apsara Theatre that the District and Sessions Judge Jammu has issued a temporary injunction against the exhibition of films by him in the above said Theatre And whereas the SP City by his letter No 1Conf
16980 has intimated that there was exhibition of films on 25th September 1980 in Apsara Theatre by persons other than the licensee And whereas under the provisions of the Cinematograph Act read with rules none other than licensee is permitted to exhibit films during the currency of the licence without permission of the licensing authority Now therefore I A Sahasranaman District Magistrate Jammu hereby order that exhibition of films in Apsara Theatre will remain suspended till further orders
This order shall come into force with immediate effect
 On Septembers 29 1980 a writ petition Writ Petition No 436 of 1980 was filed in the High Court of Jammu and Kashmir by 584 Mg Apsara Theatre seeking to quash the aforsaid order passed by the District Magistrate as being illegal ultra vires and void
It was contended inter alia by the petitioner that there had been a gross violation of the principles of natural justice inasmuch as the petitioner firm and its partners had not been given any notice or afforded hearing before the impugned order was passed
Another ground put forward by the petitioner was that the District Magistrate had no power to suspend the licence under any of the provisions of the Actor the Rules and that the only power vested in the licensing authority was to revoke the licence under Section 6F of the Act and that too only if the conditions precedent mentioned in the said Section were found to exist
The learned Single Judge of the High Court Dr Anand J by a well considered judgment rejected the contentions of the petitioners and dismissed the writ petition
Ms Apsara Theatre represented by Krishan Kumar preferred a Letters Patent Appeal LPA No l of 1981 against the judgment of the learned Single Judge
That appeal was heard by a Division 19 Bench consisting of Mufti Baha ud din Farooqi Acting Chief Justice and Mir J
The two learned Judges comprising the Division Bench however came to divergent conclusions
Mir J agreed with the view expressed by the learned Single Judge that the District Magistrate had acted strictly in accordance with law in passing the impugned order and that the writ petition was devoid of merit
But the Acting Chief Justice was of the view that where the licensed premises including the cinematographs used therein belonged to a partnership and one of the partners had obtained a licence in his separate name the other partners automatically acquired an interest in the licence
It was further held by The Acting Chief Justice that the effect of the licence was that it renders privilege the building of the cinematographs used therein and the privilege must necessarily follow the title in such building and the cinematograph
 on this reasoning it was held by him that the plaintiff firm had a legal right in the licence which entitled it to notice and hearing under the Act before the licence was suspended and inasmuch as the said procedure has not been followed by the District Magistrate the impugned order was void and in violation of the principles of natural justice
The learned Acting Chief Justice has further expressed the view that except only the power of revocation embodied in Section 6 F of the Act and an implied power to suspend a licence pending the proceed ings for such revocation the District Magistrate had no jurisdiction or power to suspend the licence of the Theatre under any other circumstances
Hence quite apart from the question of natural 585 justice the impugned order was also held by the Acting Chief Justice to be one passed without jurisdiction on this ground also
In view of the difference of opinion between the two learned Judges the Letters Patent Appeal was referred to Kotwal J under Rule 23 2 of the Jammu and Kashmir High Court Rules 1975
It may be mentioned at this stage that at that time the High Court was functioning with a srength of only four Judges and excluding the learned Single Judge who heard the writ petition and the two members of the Division Bench the Acting Chief Justice and Justice who comprised the Division Bench which heard the Letters Patent Appeal Kotwal J was the only other Judge available in the High Court
Unfortunately Kotwal J expressed his inability to hear the Appeal on the ground that at one stage he had appeared as an Advocate for Ms Apsara Theatres in the course of the earlier litigations between the parties concerning substantially the same matter
Consequently it became impossible for the Letters Patent Appeal being heard by a third Judge designated by the Chief Justice as contemplated by Rule 23 2
The matter was therefore placed before the Division Bench consisting of the Acting Chief Justice and Justice Mir as MP No 454 of 1981 for consideration of the question as to what rule of procedure was applicable
The learned Judges took the view that Rule 23 of the Jammu and Kashmir High Court Rules 1975 squarely covered the situation that had arisen before them
Rule 23 is in the following terms 23 1 In the event of a difference of opinion among the judges composing any bench of the court the decision shall be in accordance with the opinion of the majority of the Judges
2 If the judges composing the bench are equally divided on any point they shall state the point upon which they differ and the case shall then be heard upon that point by one or more of the other Judges designated for the purpose by the Chief Justice and such point shall be decided according to the opinion of the majority if any of the judges who have heard the case including those who first heard it
3 If there is no such majority then the decision shall be in accordance with the decision of the senior Judge except in the case of an appeal from a decree where such decree shall be confirmed 586 In the opinion of the Division Bench the present case was governed by sub rule 3 of Rule 23 and consequently the decision in the case had to be in accordance with the opinion of the senior Judge
Accordingly the Division Bench passed orders in CMP No 454 of 1981 that the Letters Patent Appeal will stand allowed in conformity with the view taken by the Acting Chief Justice in his judgment
This has resulted in the highly anomalous situation that as against the view concurrently taken by the two Judges of the High Court viz Anand J and Mir J the opinion of the Acting Chief Justice which was really the minority view has been allowed to prevail on the basis of the reasoning that the case was governed by sub rule 3 of Rule 23
Aggrieved by the decision of the High Court Ved Gupta has filed these appeals after obtaining special leave from this Court
Civil Appeal No 2611 of 1981 is directed against the judgment of the learned Acting Chief Justice which has been treated as the final judgment in the Letters Patent Appeal and Civil Appeal No 2611 A of 1981 has been preferred against the order passed by the Division Bench CMP No 454 of 1981
The sole question raised in CMP No 454 of 1981 relates to the legality and correctness of the procedure adopted by the High Court in allowing the Letter Patent Appeal in the manner indicated above
Although we entertain very serious doubts about the correctness of the view taken by the Division Bench of the High Court regarding the applicability of Rule 23 3 to the instant case we do not feel called upon to examine the said question in depth or to pronounce upon it in this case in view of the conclusion arrived at by us on the merits of the case that the conclusions recorded by the Acting Chief Justice on the points that arose for decision in the Letters Patent Appeal cannot be legally sustained and that there was no justification for interference by the Division Bench with the judgment of the learned Single Judge dismissing the writ petition
In the judgment of the learned Acting Chief Justice he has opened the discussion of the merits of the case by an elaborate consideration of the question as to whether the licence in respect of the Apsara Theatre had been granted to Shri Ved Gupta in his individual capacity or as representing the partnership
In making this approach to the case the learned Acting Chief Justice has 587 wrongly lost sight of certain crucial facts which clinch the issue
Admittedly the licence in respect of the Apsara Theatre was granted by the District Magistrate in the sole name of Ved Gupta and in all the relevant columns of the document of licence Ved Gupta has been shown as the licensee and there is no mention at all of the firm or its partners
An application filed by Shri Krishan Kumar for a declaration that the licence was the property of the firm and for inclusion of his name and that of Todar Mal in the said licence as joint licensees was rejected by the District Magistrate by his order dated December 29 1977
It was expressly declared in the said order that Ved Gupta was the sole licensee and that the mere fact that a partnership had been entered into for running the cinema business did not mean that the firm was the licensee
The Appeal preferred by Todar Mal against the order of the District Magistrate was dismissed by the concerned Minister of the State Government on April 26 1978
Krishan Kumar had been joined as a party respondent in that appeal
The legality of the aforesaid orders was challenged before the High Court of Jammu and Kashmir in Writ Petition No 74 of 1978 filed by Todar Mal
The District Magistrate and the State Government whose orders were sought to be quashed were the main respondents in this writ petition
That writ petition was dismissed by the High Court on May 9 1978 SLP Civil No 3490 of 1978 filed by Todar Mal against the High Court s order dismissing his writ petition was rejected by this Court on November 13 1978
Krishan Kumar was a party to the writ petition in the High Court as well as to the Special Leave Petition in this Court The declaration made by the District Magistrate that Ved Gupta was the sole licensee and that Krishan Kumar or the film could not be treated as licensees of the Theatre had thus become final
Subsequent to the dismissal of the Special Leave Petition by this Court Krishan Kumar made an application to the District Magistrate on April 19 1979 for renewal of the licence in the name of the firm Apsara Theatre
That application was dismissed by the District Magistrate as per his order dated April 21 1979 that the G renewal could not be made in the name of any party other than the original licensee so long as there had not been any transfer of the licence by the original licensee in favour of another with the sanction of the licensing authority
No steps were taken by Krishan Kumar to challenge the said order passed by the District Magistrate
From the facts set out above it becomes manifest that rightly or wrongly the licensing authority had granted the licence in respect 588 of the Apsara Theatre to Ved Gupta treating him as the sole licensee
The order of the licensing authority was confirmed on appeal by the State Government
The challenge raised by Todar Mal against the refusal by the District Magistrate to include the names of himself and Krishan Kumar in the licence was rejected by the High Court as well as by this Court
The renewal of the licence was subsequently given to Ved Gupta after rejecting the prayer of Krishan Kumar as representative of the firm for the grant of the renewal in the name of the firm
Hence the factual situation was that the licence granted by the District Magistrate in favour the Apsara Theatre was in favour of Ved Gupta in his individual capacity and he alone was the licensee
Such being the case we are unable to appreciate why the learned Acting Chief Justice has devoted a considerable part of his judgment to a discussion of the aforesaid question as to whether the licence belonged to Ved Gupta alone or whether it was the property of the firm
In the view of the preceding factual history of the case there was no scope in law for countenancing any contention being advanced on behalf of the firm that Ved Gupta had obtained the licence and had been holding the same for and on behalf of the partnership
In proceedings to which the licensing authority was a party the High Court as well as this Court had upheld its order holding Ved Gupta to be the sole licensee rejecting the case put forward on behalf of the firm and the firm and its partners are bound by the said decision
In this view we consider it wholly unnecessary to deal with the reasons stated by the learned Acting Chief Justice in support of his conclusion that the licence was granted to Ved Gupta in his individual capacity as representing the partnership
It is sufficient to state that these reasons do not appeal to us as correct or tenable
We are also unable to accept as correct the view expressed by the learned Acting Chief Justice that under the Act the licence is granted for premises permanently equipped for cinematograph exhibition in the name of the owner Manager of the Cinematographs used in the premises and hence it necessarily follows that where the licensed premises including the cinematograph used therein belongs to a partnership and one of the partners obtains a licence in his separate name the other partners automatically acquire interests in the licence and that the privilege granted by the licensing authority must necessarily follow the title in such building and the cinematograph
An examination of the relevant provisions of the Act and the Rules shows beyond doubt that they contemplate the grant of a licence to a person in respect of a place where cinematographic apparatus have been 589 installed
Under the Rules and the terms and conditions of the licence the grantee thereof is the person answerable to the licensing authority for breach of the obligations and conditions and he is also punishable for contravention of the provisions of the Act and the Rules
We are of the opinion that on a reading of the provisions contained in the Act and the Rules and the explicit terms of the licence itself it is impossible to sustain the view expressed in the judgment under appeal that the licence is a grant for the premises and constitutes an interest attached to the premises
The analogy drawn by The learned Acting Chief Justice with licence in the realm of real property law is a meaningless exercise for the licence granted under the Act is almost in all respects a completely different concept
It is therefore not possible to uphold the view expressed in the impugned judgment that the effect of the licence is that it renders privileged the building and the cinematograph used therein and that the privilege must necessarily follow the title in such building and the cinematograph
Section 6 F has been relied on by the learned Acting Chief Justice as lending support to the aforesaid view expressed by him
That Section is in the following terms 6 F Power to revoke licence Where the holder of a licence or a person in charge of a cinematography or management thereof or an owner or partner thereof or an employee thereof has been convicted of an offence under Section 6 or Section 6 E of this Act or under Section 15 of the Jammu and Kashmir Entertainments Duty Act 1959 the licence may be revoked by the licensing authority
 On a careful reading of this Section it will be seen that far from supporting the view taken by the learned Acting Chief Justice this provision goes to show that the holder of a licence may be a person different from the owner of the cinematograph or a partner of the cinematography
The object and purpose of this Section obviously is to empower the licensing authority to revoke the licence in the event of the commission of an offence under Section 6 or Section 6 E of the Act not merely by the licensee but also by any person who may be in actual charge of a cinematography or management of the cinematograph
In other words a licence is liable to be revoked not merely when the licensee is convicted of an offence under Section 6 or Section 6 E of the Act but also in the event of conviction of such offence of any person belonging to the class of persons other 590 than the licensee enumerated therein
The provisions of the Section contain a clear indication that the holder of the licence licensee may be a person different from the owner or manager or partner of the cinematograph
In the light of the foregoing discussion we have no hesitation to hold that the view expressed by the learned Single Judge that Ved Gupta was a sole licensee and that the firm had no interest in the licence was perfectly correct and sound and the contrary view taken by the learned Chief Justice is erroneous
The next ground stated in the impugned judgment for quashing the order passed by the District Magistrate is that the said order was violative of the principles of natural justice in as much as no notice or hearing had been given to the partnership firm before the order was passed
This finding is based largely if not wholly on the premise that the firm of partners had derived a right and interest in the licence and that the revocation or suspension of the licence has the potential of seriously affecting the proprietary and business interests of the partnership
We have already recorded our conclusion that Ved Gupta was the sole licensee in respect of the Theatre and that the firm of partnership could not be regarded either as licensees or persons having an interest in the licence
Hence it becomes obvious that the basic premise on which the learned Acting Chief Justice has founded his reasoning cannot be accepted as correct or sound
While the firm and the partners may have a right to share in the profits of the business which may be conducted in the Theatre on the strength of licence issued to Ved Gupta they have no right or interest in the licence which was granted to Ved Gupta in his personal and individual capacity
In this connection it is relevant to refer to Rule 88v
That Rule reads 88v
The licensee shall not without the permission of the licensing authority assign sublet or otherwise transfer the licence or the licensed place or the cinematograph nor shall the licensee without permission as aforesaid allow any other person during the period of currency of the licence to exhibit the films in the licensed place  Clause 11 of the licence issued to Ved Gupta in Form A prescribed under the Rules incorporates in identical language the provision aforementioned contained in Rule 88v as one of the conditions subject to which the licence was granted
There was thus a clear 591 prohibition against the licensee from transferring assigning subletting or otherwise transferring the licence without the permission of the licensing authority and also against his allowing any other person to exhibit films in the licensed place without obtaining such permission
Thus the right to conduct the exhibition of the cinematograph films in the Theatre was vested solely in Ved Gupta Gupta the licensee
It is now relevant to recall that what has happened in this case is that in a suit filed by Krishan Kumar along with 11 other partners an order of temporary injunction was issued on September 23 1980 restraining Ved Gupta from interfering in any manner with the running of the Theatre by the plaintiffs
The effect of the order was that Ved Gupta had no longer possession or control over the Theatre premises or the cinematograph apparatus installed therein despite the fact that the was the licensee responsible to the authorities under the statute for the due discharge of the obligations contained in the Rules and in the conditions appended to the licence
Quite understandably Ved Gupta on receipt of the order of temporary injunction informed the District Magistrate by his letter dated September 24 1980 that as a result of the order of temporary injunction it had become impossible for him for the time being to operate the cinema licence with effect from the date of the said letter and that he may be absolved from any liability for prosecution or any other action in law in the capacity of the licensee of the Theatre in the event of any illegal act or offence being committed by others in the Cinema premises
On September 26 1980 the Superintendent of Police Jammu reported to the District District Magistrate that cinema exhibition in Apsara Theatre was being conducted by some persons other than the licensee and hence the licensee had been challenged by him under Section 6 of the Act
The District Magistrate was requested by the said letter that orders may be passed suspending the exhibition of films in the Cinema till the final decision of the court is made in favour of either of the parties
It was in the context of these developments that the District Magistrate passed the impugned order dated September 26 1980
A mere reading of the District Magistrate s order is sufficient to show that what was done thereudder was not to suspend or revoke even temporarily the licence granted in respect of the Theatre
What was done by the District Magistrate was only to suspend the exhibition of cinematograph films in Apsara Theatre by persons who are not licensees and who had no authority in law to conduct such exhibition of films
There was no suspension of the licence issued to Ved Gupta in respect of the Theatre
Hence the assumption made by the learned Acting Chief that this was a case of temporary sus 592 pension of the licence issued for the Theatre is manifestly erroneous
The firm of partners had no right whatever to exhibit cinematograph films in the Theatre without a licence
If Ved Gupta the licensee bad been expelled from the partnership the proper course to be adopted by the firm and its partners was to move the authorities for the grant of a licence and to run the Theatre only after obtaining such licence
So long as they did not have a licence we have already found that the licence had been granted to Ved Gupta only in his individual and personal capacity and not as a representative of the firm the firm and the partners had no legal right whatever to operate the cinema
Any such operation by them would have been in clear and gross contravention of the law embodied if the relevant provisions of the Act and the Rules
It was the plain duty of the District Magistrate as the statutory authority charged with the enforcement of the provisions of the Act to ensure that exhibition of films was not conducted in the Theatre by unauthorized persons in violation of the law
The impugned order is obviously one passed by him in the discharge of the said function
No legal right or legitimate expectation of the firm or its partners can be said to have been affected by the said order passed by the District Magistrate for the simple reason that no person can be recognised as having a right to contravene the provisions of the statute prohibiting exhibition of cinematograph films in public by any one other than the licensee or his authorised representative
The principles of natural justice are not attracted to such a situation and there was no obligation on the part of the District Magistrate to give a notice or hearing to the firm or its partners before he passed the impugned order
The position would of course have been different if it was a case of even temporary suspension of the licence without notice to the licensee However as we have explained this is not a case of suspension of the licence and the complainant before the court is not the licensee
The writ petitioners before the High Court were some of the partners of the firm who wanted to run the Theatre without a licence in contravention of the provisions of the Act and the Rules The impugned order passed by the District Magistrate directing the suspension of cinema shows in the Theatre cannot be said to have visited the writ petitioners with any adverse civil consequences
They had no legal right whatever to conduct the cinema shows in the Theatre without a licence in contravention of the law
The writ petitioners could not also have any legitimate expectation that they will be allowed to run the Theatre without a licence in violation of the law
In the absence of any legal right or legitimate expectation being 593 available to the petitioners there was no obligation on the part of the District Magistrate to afford them a hearing before passing the impugned order
We are therefore unable to uphold the view taken by the High Court that the impugned order was violative of principles of natural justice
The only other reason stated by the High Court for quashing the District Magistrate s order is that the District Magistrate had no power under the Act or the Rules to make such an order
This conclusion is again based on the fallacious assumption that what was done by the District Magistrate under the impugned order was to suspend the licence
Proceeding on that premise the learned Acting Chief Justice has said that under the provisions of the Act the power to suspend a licence is conferred only by Section 6 F of the Act as one implicit in the larger power of revocation and unless the conditions precedent mentioned in the said Section are present the licensing authority had no jurisdiction to suspend the licence
As already observed by us the impugned order is not one suspending the licence issued in respect of the Theatre
What was done thereunder is to suspend the exhibition cinematograph films in the Theatre by persons other than the licensee
The power to control the exhibition of cinematography by grant of licence and the power to administer and enforce the provisions of the Act and the Rules clearly include the power to take all steps necessary to ensure the due observance of the terms of the statute the rules and the conditions of the licence as otherwise the competent authority under the Act would have to be a helpless spectator when cinematograph films are publicly exhibited by persons other than the licensee
The impugned order is one obviously passed by the District Magistrate in the exercise of his function of administering the provision of the Act and the Rules and the aforesaid implied power to take all incidental steps necessary for effective enforcement of the statute
We fail to see how it can be said on the facts and circumstances of the case that the District Magistrate had no jurisdiction to pass the impugned order
It this becomes manifest that all the grounds stated by the Division Bench of the High Court for upsetting the judgment of the learned Single Judge dismissing the writ petition are incorrect an unsustainable in law
Hence it was that we passed the order dated November 11 1982 allowing Civil Appeal No 2611 of 1981 and setting aside the judgment of the Division Bench
Civil Appeal No 261 l A of 1981 which is directed against the order passed in CMP No 454 of 1981 is disposed of as infructuous 594 in view of our having set aside the judgment of the Division Bench on the merits
We make it clear that the inter se rights and claims of Shri Ved Gupta on the one hand and the firm and its partners on the other in respect of the Apsara Theatre are left open to be decided in the civil suit that is said to be pending
HLC Appeal allowed


Summary:
The appellant purporting to Act on behalf of a partnership consisting of himself Todar Mal and Krishan Kumar applied for and obtained permission in his individual capacity to construct a cinema theatre on a plot of land which was taken on lease jointly by all the three of them after the application for the permission was made but before the same was granted
They entered into a partnership along with 11 others for carrying on the business of constructing and running a cinema theatre and the deed of partnership contained a clause that the plot of land as well as the permission obtained for constructing the theatre shall be the property of the firm
On completion of the construction the appellant applied for in his own name and obtained in his personal capacity a licence to exhibit cinematograph films at the Theatre
The partnership was re constituted on retirement of two partners and the new deed executed by the remaining partners also contained a clause that the firm shall have the right to operate the licence
An application for inclusion of the names of Todar Mal and Krishan Kumar in the licence was rejected by an order of the Licensing Authority who held that the appellant was the sole licensee and the said order became final
Another application for renewal of the licence in the name of the Theatre on the ground that the appellant had been expelled from the partnership was also rejected by an order of the Licensing Authority which was not challenged
Thereafter when in a suit instituted for a declaration that the licence was the property of the firm the trial court issued an injunction restraining the appellant from interfering with the possession and running of the Theatre by some of the partners of the firm the appellant wrote to the Licensing Authority disclaiming responsibility for any acts of commission or omission committed by others in the premises of the Theatre
The Licensing Authority acting on a report from the police that films were being exhibited in the Theatre by persons other than the licensee ordered suspension of exhibition of films at the Theatre
A writ petition challenging the validity of this order filed in the name of the Theatre was dismissed by a Single Judge of the High Court
In tho Letters Patent Appeal heard by a Division Bench consisting of the Acting Chief Justice another Judge of the High Court the Acting Chief Justice held that the impugned order was void but the other Judge agreed with the view of the Single Judge who had dismissed the petition earlier
In view of 576 the divergence of opinion the matter was referred to the only other Judge available in the High Court but he having declined to hear the same for good reason the Division Bench decided under sub r
3 of r 23 of the Jammu and Kashmir High Court Rules 1975 that the view of the Senior Judge should pre vail and accordingly the Letters Patent Appeal was allowed in conformity with the view taken by the Acting Chief Justice
This resulted in the anomalous situation that as against the view concurrently taken by two Judges of the High Court the opinion of the Acting Chief Justice which was really the minority view was allowed to prevail
The reasons given by the Acting Chief Justice for the view he took were i that a licence under the provisions of the Jammu and Kashmir Cinematograph Act is granted for premises permanently equipped for cinematograph exhibition in the name of the ownermanager of the cinematographs used in the premises and hence where the licensed premises including the cinematograph used therein belongs to a partnership and one of the partners obtains a licence in his separate name the other partners automatically acquire an interest in the licence and that the privilege granted by the licensing authority must necessarily follow the title in such building and the cinematograph and that the provision contained in section 6F lends support to this conclusion ii that the partnership firm had a legal right in the licence which entitled it to notice and hearing under the Act before the licence was suspended iii that inasmuch as the said procedure was not followed by the Licensing Authority the impugned order was void and in violation of principles of natural justice and iv that except for the power of revocation of licence embodied in section 6F and an implied power to suspend a licence pending proceedings for revocation the Licensing Authority had no power to suspend the licence of the Theatre under any other circumstances
Allowing the appeal  HELD The provisions of the Act and the Rules contemplate the grant of a licence to a person in respect of a place  where cinematographic apparatus have been installed
Under the Rules and the terms and conditions of the licence the grantee thereof is the person answerable to the Licensing Authority for breach of the obligations and conditions
A licence granted under the Act is not analogous to a licence in the realm of real property law
It is therefore not possible to accept the view that the licence is a grant for the premises and constitutes an interest attached to the premises
The provision contained in section 6F far from supporting such a view goes to show that the holder of a licence may be a person different from the owner or partner of a cinematograph
The object of that section is to empower the Licensing Authority to revoke the licence in the event of commission of an offence under s 6 or 6E not merely by the licensee but also by any person who may be in actual charge of the cinematograph
588 H 589 A B G H 590 A 2
a In proceedings to which the Licensing Authority was a party the High Court as well this Court had upheld the order of the Licensing Authority holding the appellant to be the sole licensee and rejecting the case Put forward 577 on behalf of the firm
The firm and its partners are bound by the said decision
It is therefore unnecessary to deal with the reasons stated by the Acting Chief Justice of the High Court in support or his concussion that the licence was granted to the appellant in his individual capacity as representing the partnership
588 D F b The appellant was the sole licence in respect of the Theatre
By virtue of r 88 v as well as cl 11 of the licence issued there was a clear prohibition against the licensee from transferring assigning sub letting or otherwise transferring the licence without the permission of the Licensing Authority and also against his allowing any other person to exhibit films at the licensed place without obtaining such permission
The firm of partners had no right whatever to exhibit cinematograph films at the theatre without a licence
It was the plain duty of the Licensing Authority to ensure that exhibition of films was not conducted in the Theatre by unautuorised persons and the impugned order is obviously one passed by him in the discharge of the said function
The principles of natural justice are not attracted to such a situation
The position would have been different if it was a case of even temporary suspension of the licence without notice to the licensee
A 592 A C F c The Licensing Authority had the power to make tho impugned order suspending the exhibition of films in the Theatre by persons other than the licensee
The power to control the exhibition of cinematography by grant of licence and the power to administer and enforce the provisions of the Act and the rules included the implied power to take all steps necessary to ensure the due observance of the terms of the statute
the rules and the conditions of licence
The view expressed in the impugned judgment of the High Court that the Licensing Authority had no power to make the impugned order was based on the fallacious assumption that what was done under the impugned order was to suspend the licence while in fact what was done was only to suspend the exhibition of films in the Theatre by persons other than the licensee
593 D F B 3
Although there are very serious doubts about the correctness of the view taken by the Division Bench of the High Court regarding the applicability of r 23 3 of the Jammu and Kashmir High Court Rules 1975 to the instant case it is not necessary to consider that question in view of the conclusion arrived at on the merits on the case
586 F G