IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 05.08.2010 CORAM THE HONOURABLE MS. JUSTICE K.B.K. VASUKI W.P. No.23581 of 2008 Wood Lands, A firm represented by its Partner and licensee Mrs. N. Leelavathy, No.25, Westcott Road, Royapettah, Chennai-600 014 .. Petitioner vs 1. The Branch Manager, Films Division, Ministry of Information & Broadcasting, Shastri Bhavan, Chennai-600 006 2. The Officer in charge of Distribution, Films Division, Ministry of Information & Broadcasting, Government of India, 24, Dr.D.G. Marg (Pedder Road), Mumbai-400 026 .. Respondents PRAYER: Writ Petition is filed to issue a writ of mandamus forbearing the respondents their men, agents, servants, their subordinates or any one claiming or acting on their behalf from unilaterally supplying any films to the petitioner theatres namely (i) Wood Lands and (ii) Wood Lands Symphony and to further direct them to return the deposit amount of Rs.11,700 and Rs.1,670/- lying with them in the account of the above said theatres respectively to this petitioner within a stipulated period. For Petitioner : Mr. C. Umashankar For Respondents : Mr. M. Devadoss O R D E R On consent, the Writ Petition is taken up for final hearing. 2. The Writ Petition is filed for issuing direction to the respondents 1 and 2 for forbearing the respondents their men, https://hcservices.ecourts.gov.in/hcservices/ agents, servants, their subordinates or any one claiming or acting on their behalf from unilaterally supplying any films to the petitioner theatres namely (i) Wood Lands and (ii) Wood Lands Symphony and to further direct them to return the deposit amount of Rs.11,700 and Rs.1,670/- lying with them in the account of the above said theatres respectively to this petitioner within a stipulated period. 3. The brief facts which are relevant for consideration herein are that the petitioner's firm owns two theatres namely Woodlands and Woodlands Symphony and they are open to public since 1986, on the strength of due license issued by the appropriate authority. Originally, the petitioner entered into an arrangement with the I respondent-film division for the supply of approved documentary films for the purpose of screening and the same was periodically renewed and such arrangement expired on 31.07.2008. Thereafter, the petitioner requested the first respondent-film division on 15.07.2008 not to renew the contract and not to supply any films after 31.07.2008 as the petitioner intended to enter into similar agreement with private film producers for the supply of approved documentary films, after the expiry of their contract with film division on 31.07.2008. Accordingly, the petitioner had entered into an agreement with Indian Entertainment Media Corporation who is also one of the recognised suppliers of approved films to supply the approved films for the period from 01.08.2008 to 31.07.2009. 4. In the meanwhile, the first respondent-film division continued to supply the short films even after the expiry of the contractual period on 31.07.2008 and even after duly received the petitioner's letter dated 01.08.2008 addressed to the first respondent-film division to the effect that the petitioner is not interested in getting films division certificate from the I respondent-films division from 01.08.2008 and as there is no dues payable by the petitioner to the film division, the security deposit of Rs.11,700/- and Rs.1,670/- on account of two theatres respectively be duly refunded to him. But the films division was continuously making compulsory supply of approved films and also made a demand of 1% rental charges for the custody of the films so supplied on 12.08.2008 and the petitioner is directed to send demand draft for Rs.19,656/- towards rental dues for the period ending September 2008. Such demand made by the film division compelled the petitioner to approach this Court for the reliefs as stated supra. 5. The points arise for the consideration of this Court in this writ petition are as follows: (1) Whether the first respondent-films division has the right to make compulsory supply of approved films to the exhibitors and whether the exhibitors are duty bound to screen the same (2) Whether the exhibitors are having the right to procure the short films from other private producers https://hcservices.ecourts.gov.in/hcservices/ and (3) Whether film certificate from films division is mandatory for obtaining C Form Licence. In order to appreciate the issues involving in the present case, the relevant provisions of law to be read are under Section 12(4) of the Cinematograph Act and Section 6 of the Tamil Nadu Cinemas Regulation Act, 1955. The combined appreciation of the relevant provisions of law under Central and State enactments and Rules reveals that the Central and State Governments are empowered to issue direction to the licensee to screen films of particular interest such as scientific or educative value and the licensee is also bound to obtain fresh or renewal license before the stipulated period after giving such declaration together with the statement of the suppliers confirming the arrangements for obtaining the films referred to in Rule 26 of the Tamil Nadu Cinemas Regulation Rules and Section 6 of the Tamil Nadu Cinemas Regulation Act, 1955 and the films certified by the Central Government with the previous approval of the Central Film Advisory Board. 6. The learned counsel for the petitioner states that the films covered in the direction above referred to is not applicable to the approved short films to be procured from the films division and the exhibitors are entitled to obtain the short films from other private producers provided the private producers have the approval of the Central Government. In this regard the learned counsel for the petitioner would further submit that the issue whether it is mandatory to obtain films division certificate for fresh or renewal of licence is clarified by the Government in its letter Ms. No.1086, dated 20.07.2007 enclosed at pages 1 and 2 of the typed set of papers as per which though it is mandatory to screen the approved short films it is not mandatory to have the supply from the films division, but the exhibitors have the choice to get it from other private approved producers subject to certain condition. The learned counsel has also relied upon the unreported judgment of Division Bench of our High Court in W.P. No.463 of 2003 dated 20.02.2007 following the earlier Supreme Court judgments referred therein. Whereas according to the learned counsel for the first respondent/film division, it is but mandatory, for renewal of the licence to receive the supply of films from film division and to screen those films so supplied and thereafter to make payment of 1% rental charges in the film exhibited. The learned counsel for the respondents has also relied upon the communications from the State Government and Central Government to the licensing authority as well as to the Cinematographers and exhibitors to the effect that they are duty bound to screen the films supplied by the film division. 7. Heard the rival submissions. https://hcservices.ecourts.gov.in/hcservices/ 8. The perusal of the records show that all those communications referred to on the side of the respondents enclosed in the typed set of papers filed by the respondents are much before the letter of clarification dated 20.07.2007 issued by the Home Secretary relied upon by the petitioner/firm. The clarification was sought for by Chennai City Films Exhibitors Association in view of the conflicting legal position emerged from the judgment of Supreme Court in Motion Pictures Case and the judgment of Karnataka High Court in W.P. No.15237 of 2005 in PVR Ltd. vs State of Karnataka and others wherein the High Court has contrary to the Supreme Court judgment observed that it is mandatory on the part of licensee to produce valid films division certificate for renewal of C Form resulting in instructions issued to all the licensing authorities and owners of cinema theatres by the Secretary to Government for the production of valid films division certificate at the time of renewal of C form license. The same compelled the Chennai City Films Exhibitors Association to approach the State Government in this regard and the matter was duly considered by the Government resulting in issuing clarification letter dated 20.07.2007 wherein both the judgments of Supreme Court and Karnataka High Court are referred to and the clarification issued was based on judgment of the Supreme Court in Union of India vs The Motion Picture Association and other (J.T. 1999 (4) SC 250) and the clarification issued in paras 4 and 5 of the letter dated 20.07.2007 is as follows. “4. As far as this State is concerned the statutory provisions governing the grant and renewal of C Form licence and obtaining films approved by the State Government and certified by the Central Government with the previous approval of the Central Film Advisory Board as given under rule 92(1) read with rule 41(2) and rule 26 of the Tamil Nadu Cinemas (Regulation) Rules 1957 and Section 6 of the Tamil Nadu Cinemas (Regulation) Act 1955 does not specifically prohibit the licensees in procuring documentary films from private producers provided they have been approved by the Central Government with the previous approval of Central Film Advisory Board. 5. In the above circumstances, I am directed to clarify that the arrangement for obtaining the films referred in rule 26 of the Tamil Nadu Cinemas (Regulation) Rules, 1957 and Section 6 of the Tamil Nadu Cinemas (Regulation) Act, 1955 and the films certified by the Central Government with the previous approval of the Central Film Advisory Board are mandatory for the grant/renewal of C Form licence. However, it is not mandatory for the licensee to obtain such documentary films produced by the Film Division of Government of India alone. The licensee can obtain such films from the private producers also, if they have been approved by the https://hcservices.ecourts.gov.in/hcservices/ Central Government with the previous approval of the Central Film Advisory Board.” 9. Relying upon such clarification it is now argued on the side of the petitioner that the licensing authority cannot insist for obtaining films division certificate from the films division and licensee is at liberty to obtain such films from the private distributors approved by the Central Government and the Central Film Advisory Board. The same view is also expressed in the unreported judgment of Division Bench of our High Court dated 20.02.2007 in W.P. No.463 of 2003 in Tamil Nadu Film Exhibitors Association vs The Branch Manager, Films Division and another following the judgment of the Supreme Court in Union of India vs Motion Pictures Association as above referred to. Both Supreme Court and Division Bench of our High Court, have though on different context, clearly observed that the exhibitors are not under any statutory compulsion to enter into any agreement with the films division in order to fulfill the conditions of license and it is always open for the exhibitors to obtain the approved films from other approved film producers. It is clearly observed in paras 18 and 19 of the Apex Court judgment made in Motion Pictures Association case as follows: "18. Undoubtedly, the exhibitors, in order to fulfill the conditions of the licence are required to enter into an agreement with the Films Division, Government of India. This is not because of any statutory compulsion but because of the fact that the Films Division is the only organisation, which produces such short films in sufficient quantities for regular distribution to the cinema exhibitors. The requirement of approval of such films is to ensure that the films, in fact, comply with the requirements specified in the statute. None of the provisions referred to make it mandatory for the exhibitors to procure such films only from the Films Division. The reason why they do so is because of a lack of adequate alternative sources. 19. The exhibitors contend that before their licence is renewed, it is necessary for them to obtain a "no objection" certificate from the Films Division. The purpose of this is to ensure that the statutory requirements have been complied with by the licensee in the previous year. If, however, any licensee is in a position to procure such approved films from any other source, there is nothing in statutes, which prohibits him from doing so. These provisions, therefore, do not violate Article 19(1)(a) of the Constitution. They are not in restraint of free speech and expression. Therefore, Article 19(2) is not attracted." https://hcservices.ecourts.gov.in/hcservices/ 10. As far as Karnataka High court judgment is concerned, the case is filed questioning the direction issued by the Government to produce the certificate from films division as per Rule 35 and to exhibit only such movies which are supplied by films division. The direction so issued was sought to be defended on the strength of the power vested with the Government to issue such direction from time to time to screen films of particular interest as such the High Court is pleased to uphold the same. In this case, there is no such direction issued by the State Government to the licensee or to the licensing authorities to exhibit only such movies obtained from the film division and insisting for production of certificate from the films division for issuing fresh renewal of 'C' form licence. 11. On the other hand, the State Government has, under the letter above referred to, issued clear instructions to the licensing authority not to insist for such certificate from films division. It is further made clear that it is open to the licensees to obtain the same from private producers. The judgment of the Supreme Court and the Division Bench of our High Court have clearly laid down that the licensee, who screens the approved films supplied by other approved film producers but which satisfies other statutory requirements, cannot be said to have contravened any of the the relevant provisions of the State Act or the directions of the State or the Central Government. 12. When that being the factual and legal position, the first respondent/films division cannot be heard to say that the same has the right to make compulsory supply and the licensee is bound to screen the same and to pay 1% rental charges. The said right is not based on any law or rule, but is sought to be enforced by the films division contrary to the ruling of the Supreme Court and our High Court. As against such compulsory supply, the petitioner is entitled to approach this Court for appropriate preventive order against the films division forbearing it from making any unilateral supply, in the absence of any contract between the petitioner and the first respondent particularly when the petitioner/firm has expressed its intention not to do so. When there is no such contract between the two, the first respondent is also not entitled to keep the security and other amounts lying in the account of the theatres owned by the petitioner/firm and the same is liable to be refunded to the petitioner. Thus for the discussion held above the petitioner is held entitled to both the reliefs as sought for herein. https://hcservices.ecourts.gov.in/hcservices/ 13. In the result, the writ petition is allowed as prayed for. The time for refund of the amounts to the petitioner/firm is four weeks from the date of receipt of the copy of the order. No costs. Consequently, connected M.Ps are closed. vga Sd/- Asst. Registrar //True Copy// Sub Asst. Registrar To 1. The Branch Manager, Films Division, Ministry of Information & Broadcasting, Shastri Bhavan, Chennai-600 006 2. The Officer in charge of Distribution, Films Division, Ministry of Information & Broadcasting, Government of India, 24, Dr.D.G. Marg (Pedder Road), Mumbai-400 026 + 1 cc to Mr. M.Devadoss, Advocate SR No.57985 + 1 cc to Mr. C.Umashankar, Advocate SR No.57249 BK(CO) SR/6.9.2010 W.P. No.23581 of 2008 https://hcservices.ecourts.gov.in/hcservices/