Case: State Of Punjab And Another Vs. Hari Krishan Sharma

has to act under the control of the Government; but it is the licensing authority which has to act and not the Government itself. The result of the instructions issued by appellant No. 1 is to change the statutory provision of S. 5(2) and obliterate the licensing authority from the Statute-book altogether. That, in our opinion, is not justified by the provision as to the control of Government prescribed by S. 5(2). 14. The control of Government contemplated by S. 5(2) may justify the issue of general instructions or directions which may be legitimate for the purpose of the Act and these instructions and directions may necessarily guide the licensing authority in dealing with applications for licences The said control may, therefore, take the form of the issuance of general directions and instructions which are legitimate and reasonable for the purpose of the Act. The said control may also involve the exercise of revisional power after an order has been passed by the licensing authority. It is true that S. 5(2), in terms, does not refer to the revisional power of the Government; but having regard to the scheme of the section, it may not be unreasonable to hold that if the Government is satisfied that in a given case, licence has been granted unreasonably, or contrary to the provisions of S. 5(1), or contrary to the general instructions legitimately issued by it, it may suo motu exercise its power to correct the said order by exercising its power of control. In other words, in the context in which the control of the Government has been provided for by S. 5(2), it would be permissible to hold that the said control can be exercised generally before applications for licences are granted, or particularly by correcting individual orders if they are found to be erroneous, but in any case, Government has to function either as an appellate authority or as a revisional authority, for that is the result of S. 5(2) and (3). Government cannot assume for itself the powers of the licensing authority which have been specifically provided for by S. 5(1) and (2) of the Act. To hold that the control of the Government contemplated by S. 5(2) would justify their taking away the entire jurisdiction and authority from the licensing authority, is to permit the Government by means of its executive power to change the statutory provision in a substantial manner; and that position clearly is not sustainable. 15. Section 5(3) provides for an appeal at the instance of the party which is aggrieved by the rejection of its application for the grant of a licence. No appeal is provided for against an order granting the licence; but as we have just indicated, in case it appears to the Government that an application has been granted erroneously or unfairly, it can exercise its power of control specified by S. 5(2) and set aside such an erroneous order, and that would make the provision as to appeal or revision self-contained and satisfactory. 16. The scheme of the Act clearly indicates that there are two authorities which are expected to function under the Act the licensing authority, as well as the Government. Section 8 is an illustration in point. It empowers the State Govt. or the licensing authority to suspend, cancel or revoke a licence on the grounds specified by it: and that shows that if a licence is granted by the licensing authority, it has the power to suspend, cancel or revoke such a licence just as Government has a similar power to take action in respect of the licence already granted. We are, therefore, satisfied that the High Court was right in coming to the conclusion that appellant No. 1 has no authority or power to require all applications for licences made under the provisions of the Act to be forwarded to it, and to deal with them itself in the first instance. Section 5 clearly requires that such applications must be dealt with by the licensing authorities in their respective areas in the first instance, and if they are granted, they may be revised by Government under S. 5 (2); and if they are rejected, parties aggrieved by the said orders of rejection may prefer appeals under S. 5(3) of the Act. The basic fact in the scheme of the Act is that it is the licensing authority which is solely given the power to deal with such applications in the first instance, and this basic position cannot be changed by Government by issuing any executive orders, or by making rules under S. 9 of the Act. 17. It appears that this question has been considered by the Andhra Pradesh, and the Rajasthan High Courts and they have taken the view that the Government can, by virtue of the power of control, deal with the applications for licences themselves in the first instance [vide Karnati Rangaiah v. Sultan Mohiddin and Brothers, Tadipatri, AIR 1957 Andh Pra 513 and M/s. Vishnu Talkies v. State, ILR (1962) 12 Raj 44 respectively]. We are satisfied that this view does not correctly represent the true legal position under the relevant provisions of the Acts prevailing in the two respective States. In Bharat Bhushan v. Cinema and City Magistrate, (S) AIR 1956 All 99 , also, the powers of the State Government under S. 5(3) of the Cinematograph Act, 1918 have been similarly construed and that again, in our opinion, cannot be said to be right. In dealing with the question about the scope and effect of the power of control conferred on the State Government the Allahabad High Court has taken the view that the power of control which has been conferred on the State Government by S. 5(2) is wide enough to enable the State Government to revise an order passed by a licensing authority granting a licence. This observation, in our opinion, correctly represents the true scope and effect of the power of control conferred on the State Government.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It is true that S. 5(2) provides that the licensing authority may grant licences subject to the provisions of S. 5(1) and subject to the control of the Government, and it may be conceded that the control of the Government subject to which the licensing authority has to function while exercising its power under S. 5(1) and (2), is very wide; but however wide this control may be, it cannot justify appellant No. 1 to completely oust the licensing authority and itself usurp his functions. The Legislature contemplates a licensing authority as distinct from the Government. It no doubt recognises that the licensing authority has to act under the control of the Government; but it is the licensing authority which has to act and not the Government itself. The result of the instructions issued by appellant No. 1 is to change the statutory provision of S. 5(2) and obliterate the licensing authority from the Statute-book altogether. That, in our opinion, is not justified by the provision as to the control of Government prescribed by S. 5(2)in the context in which the control of the Government has been provided for by S. 5(2), it would be permissible to hold that the said control can be exercised generally before applications for licences are granted, or particularly by correcting individual orders if they are found to be erroneous, but in any case, Government has to function either as an appellate authority or as a revisional authority, for that is the result of S. 5(2) and (3). Government cannot assume for itself the powers of the licensing authority which have been specifically provided for by S. 5(1) and (2) of the Act. To hold that the control of the Government contemplated by S. 5(2) would justify their taking away the entire jurisdiction and authority from the licensing authority, is to permit the Government by means of its executive power to change the statutory provision in a substantial manner; and that position clearly is not sustainable15. Section 5(3) provides for an appeal at the instance of the party which is aggrieved by the rejection of its application for the grant of a licence. No appeal is provided for against an order granting the licence; but as we have just indicated, in case it appears to the Government that an application has been granted erroneously or unfairly, it can exercise its power of control specified by S. 5(2) and set aside such an erroneous order, and that would make the provision as to appeal or revision self-contained and satisfactoryWe are, therefore, satisfied that the High Court was right in coming to the conclusion that appellant No. 1 has no authority or power to require all applications for licences made under the provisions of the Act to be forwarded to it, and to deal with them itself in the first instance. Section 5 clearly requires that such applications must be dealt with by the licensing authorities in their respective areas in the first instance, and if they are granted, they may be revised by Government under S. 5 (2); and if they are rejected, parties aggrieved by the said orders of rejection may prefer appeals under S. 5(3) of the ActIn dealing with the question about the scope and effect of the power of control conferred on the State Government the Allahabad High Court has taken the view that the power of control which has been conferred on the State Government by S. 5(2) is wide enough to enable the State Government to revise an order passed by a licensing authority granting a licence. This observation, in our opinion, correctly represents the true scope and effect of the power of control conferred on the State Government.