Case: N. S. Shethna Vs. Vinubhai Harilal Panchal

2. At all material times the respondent was carrying on and still carries on the business of exhibiting cinematographic pictures at Lakshmi Talkies in Ahmedabad and had obtained for that purpose a licence for sale of tickets which was valid upto December 31, 1960. On an allegation that through his manager and other employees he was indulging in sale of tickets contrary to the Bombay Cinema Rules, 1954, framed under the Bombay Cinema (Regulation) Act, XI of 1953 a notice dated June 14, l960 was served upon him to show cause why the said licence should not be suspended. On an inquiry having been held by the first appellant, that officer passed the impeached order suspending the said licence for a period of two months from the date of service of the order. But before the inquiry was completed and the said order passed, the period for which the licence was issued expired and an order renewing it for the next year, that is 1961, was passed on December 31, 1960. The impugned order was served on the respondent on March 5, 1961.3. Aggrieved by the said order the licensee took out a writ petition in the High Court for setting aside the said order. The plea urged in the petition was that the show cause notice related to the licence for the year 1960 which expired on December 31, 1960 and therefore did not affect the renewed licence for l961 sought to be suspended by the impugned order. The High Court took the view that the renewed licence was a separate licence and not in continuation of the licence for the year 1960 and a fresh show cause notice ought to have been served for suspending the renewed licence and that not having been done the inquiry was not in consonance with the rules and quashed the order.

Court's reasoning:
The Rules relating to the licence for sale of tickets provide as aforesaid that the maximum period for which such a licence can be issued is one year. Renewal of a licence is provided for but only indirectly and in a sort of an off-hand manner by cl. 4 of Form F. It appears therefrom that a licensee has to produce his licence, pay the renewal fee and get entries made on its reverse as to the date of renewal the period upto which it would be valid on such renewal and the fees having been paid therefor. Since the rules do not provide as to how much are the fees for renewal it must be presumed that the fees are the same as for the licence itself. It is clear from the Rules that they do not contain anything to show that the renewed licence is a continuation of the licence previously issued except the fact that the Authority has to make the said entries on the reverse of the licence. The fact that the Rules do not make any provision for the power to renew, the procedure for renewal and for its fees as is done in Chapter VII in the case of a cinema licence is an indication that the draftsman equated renewal of a licence with the issuance of a licence. It may also be observed that it is not as if renewal is automatic nor is it to be granted as a matter of course. If the Licensing Authority desires to impose any fresh conditions there is nothing in the Rules to prevent him from doing so. That being so, a renewal cannot, unless the context requires otherwise, be regarded as a continuation of the licence previously issued. There is also nothing in Chapter VIII or in Form F indicating that the renewal is such athe first place we do not see how such a consequence must follow. The procedure for an action under R. 131 is not an elaborate one which would make an inquiry thereunder a prolonged one. In the second place, unless the Rules are found to be ambiguous we do not see how a particular consequence can affect the construction of the Rules. On the other handif we were to treat renewal as continuation of the licence previously granted in a case where a licence is renewed from year to year as it would be in a large number of cases, if a licensee has committed breach of one of the conditions of the licence in any particular year, action against him can be taken in any subsequent year and his licence would be liable to be cancelled or suspended during any such subsequent year for a breach committed by him several years ago. That in some cases penalty by way of suspension might be nullified by reason of expiry of the period of the licence cannot be allowed to affect the interpretation of plain and unambiguous words in a statute or ais thus clear that the decision did not lay down a general rule that renewal in all cases must mean continuation of the grant previously made but was rested on the language of the provisions of the Motor Vehicles Act and the Rules made thereunder. As already observed there are no such Rules in the Bombay Cinema Rules 1954 which led this Court to the conclusion in that case that the renewed permit for stage carriage was continuation of the permit previously granted and therefore this decision would not assist the appellant.In our view the fact that renewal is not a matter of course, the fact that the Licensing Authority can in proper circumstances refuse an application for renewal and is not precluded from imposing different conditions and can grant it for a different period coupled with the absence of any Rules for renewal are all indications leading, to the result that renewal is a fresh grant and is not merely continuation of the licence previously issued. The High Court was therefore correct in allowing the writ petition on a conclusion that the show cause notice relating to the licence for the year 1960 could not be regarded as a show cause notice in respect of the renewal for the next year and if the renewed licence was sought to be affected in the inquiry a fresh show cause notice relaing to the renewed licence was necessary.