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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.10091 OF 2010

PVR LIMITED        ...APPELLANT VERSUS

STATE OF KARNATAKA & ORS.     ...RESPONDENTS

WITH CIVIL APPEAL NO.10092 OF 2010

PVR LIMITED     ...APPELLANT VERSUS

THE FILMS DIVISION & ORS.     ...RESPONDENTS

WITH CIVIL APPEAL NO.10093 OF 2010

UNION OF INDIA     ...APPELLANTS VERSUS

PVR LIMITED & ORS.        ...RESPONDENTS

JUDGMENT

RANJAN GOGOI, J.

1. The appellant – PVR Limited – in Civil Appeal Nos. 10091  

of 2010 and 10092 of 2010 is engaged in the business of  

exhibiting  movies  at  various  locations  across  the  country  

including  Bangalore.   The  appellant  operates  eleven  (11)  1

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theaters in a multiplex at Bangalore for which it has been  

granted necessary permissions/approvals as well as requisite  

licence  for  exhibition  by  the  2nd respondent  i.e.  District  

Magistrate, Bangalore.  The appellant had filed a writ petition  

before the High Court of Karnataka challenging, inter alia, a  

communication dated 2nd April, 2005 issued by the Principal  

Secretary  to  Government  of  Karnataka,  Department  of  

Internal Administration and Transport,  Bangalore to the 2nd  

respondent  informing  the  said  respondent  that  theater  

owners  and  owners  of  M/s  PVR  Cinemas  are  required  to  

obtain compulsory certificates from Films Division under the  

Karnataka  Cinemas  Regulation  Act,  1994  (hereinafter  

referred  to  as  “the  Act”)  and  under  Rule  35(c)  of  the  

Karnataka  Cinemas  (Regulation)  Rules,  1971  (hereinafter  

referred to as “the Rules”) framed thereunder and to exhibit  

the films approved by the Films Division.  An endorsement  

dated  28th May,  2005  requiring  the  appellant  to  obtain  

“Compulsory  Certificate  from  Films  Division”  under  the  

aforesaid Act and the Rules was also put to challenge in the  

writ  petition  filed.   The  effect  of  the  aforesaid  impugned  

orders,  it  may  be  noticed,  is  that  the  appellant  before  

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screening the regular movies in its theaters was required to  

exhibit  documentary  films  produced  by  the  Films  Division  

only.

2. The  writ  petition  was  dismissed  by   a  learned  single  

judge of the High Court against which order the appellant  

had  instituted  Writ  Appeal  No.979  of  2006  (Cinema).  The  

aforesaid writ appeal, on the grounds and reasons recorded  

in the order dated 16th November, 2006, was allowed in the  

following terms:

“25. Accordingly, the Writ Appeal is allowed.  Order  of  learned  Single  Judge  is  set  aside.  Writ Petition is allowed.  The impugned notice  issued  by  the  second  respondent  and  the  order  passed  by  first  respondent  are  quashed.   Rule  issued  in  the  writ  petition  which  was  discharged  by  passing  the  impugned  order  is  set  aside  and  made  absolute.”

3. However,  on  18th November,  2006,  the  matter  was  

reconsidered  by  the  Bench  once  again  and  the  following  

order was passed:

“We have already held that the documentary  Films  referred  to  supra  produced  by  third  respondent  are  not  approved  by  the  State  Government 'from time to time' under Section  12(1)(c)  of  the  Act  read with  relevant  Rules  and the impugned order and notice in the writ  

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petition  are  quashed.   We  also  made  an  observation to constitute the Advisory Board  by the State Government under Rule 8 of the  Rules.   Since  this  process  may  take  some  time, in the meanwhile, it would be just and  proper for this Court to give direction to the  Licensing Authorities in the Karnataka State to  incorporate  the  terms and  conditions  in  the  licenses that would be issued in favour of the  licensees  stating  that  the  films  including  documentary  which  are  enumerated  under  Clauses (a) to (c) of Section 12 of the Act that  are  produced  by  third  respondent  shall  be  screened in the theatres of licensees on such  terms  and  conditions  that  may  be  imposed  upon them which are not objectionable to the  State Government. Ordered accordingly.”

4. It is the aforesaid part of the order dated 16th November,  

2006  pronounced  on  18th November,  2006  that  has  been  

challenged  by  the  appellant  in  Civil  Appeal  No.10091  of  

2010.  Insofar as the main part of the order i.e. dated 16th  

November,  2006  is  concerned,  the  same  has  been  

challenged by the respondent No.3 in the Writ Appeal (Writ  

Appeal No.979 of 2006) in Civil  Appeal No.10093 of 2010.  

The  third  appeal  i.e.  Civil  Appeal  No.10092  of  2010  

challenges a separate order dated 18th April, 2007 passed in  

Writ  Petition  No.6222  of  2007  (Cinema)  which  essentially  

turns on the issues involved in the other two appeals.  That  

is how all the cases were listed analogously and are being  4

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disposed of by this common order.  

5. We have heard Mr. Shyam Divan, learned Senior Counsel  

appearing for the appellant in Civil Appeal No.10091 of 2010,  

Mr.  Dinesh Kumar Garg, learned counsel appearing for the  

appellant  in  Civil  Appeal  No.10092 of  2010,  Mr.  R.S.  Suri,  

learned Senior Counsel appearing for the Union of India and  

Mr. V.N. Raghupathy, learned counsel appearing for the State  

of Karnataka.   

6. The  relevant  provisions  of  the  concerned  statutory  

enactments that will require to be noticed may be set out  

hereunder:

“  Section  12  of  the  Karnataka  Cinemas    (Regulation) Act, 1964.

12.  Power  of  State  Government  to  issue  directions.-  (1)  The  State  Government  may,  from  time  to  time,  issue  directions  to  any  licensee  or  to  licensees  generally,  requiring  the licensee or licensees to exhibit,-

(a)  such film or class of films having a  scientific or educational value;

(b)  such  films  dealing  with  news  and  current events;

(c)  such  documentary  films,  indigenous  films, or such other films having special  value to the public,

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as  may  have  been  approved  by  the  State  Government in that behalf from time to time.

(2)  Where  any  directions  have  been  issued  under sub-section (1), such directions shall be  deemed  to  be  additional  conditions  and  restrictions subject  to  which the licence has  been granted:

Provided that no direction issued under  this  section  shall  require  the  licensee  to  exhibit any such film or films exceeding two  thousand feet at, or for more than one-fifth of  the entire time taken for, any one show.

Rules 8, 17, 18, 19, 20 and 35(c) of the  Karnataka  Cinemas  (Regulation)  Rules,  1971

8. Constitution of Film Advisory Board.- The  State  Government  shall  constitute  a  Film  Advisory Board for the purpose of advising the  State Government in the matter of approval of  films under Section 12.

(2) The Film Advisory Board shall consist of:-

1. The Divisional Commissioner,  Bangalore (Chairman)

2. The District Magistrate, Bangalore.

3. The Director of Public  Instruction.

4. The Director of Collegiate  Education

5. The Officer on Special  Duty,  Film  Unit.

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6. The  Commissioner  of  Police,  Bangalore.

7. Not less  than  three non- official  members  including  a  representative  of  the  Karnataka  Film  Chamber  of  Commerce,  appointed  by  Government.

17. Declaration in respect of film certified by  the Central Government.- Film certified by the  Central  Government  with  the  previous  approval of the Central Film Advisory Board to  be  scientific  films,  films  intended  for  educational  purposes,  films  dealing  with  news  and  current  events  or  documentary  films or films of the type specified in Section  12 produced by the State Government or by a  Corporation owned or controlled by the State  Government or by an industrial  undertaking  of the State Government and certified by the  Board of Film Censors may be approved by  the State Government under Section 12 and  the  provisions  of  Rules  18  to  24  shall  not  apply to such films.

18. Application  of  the  Board.-  Any  person,  desirous of having any films approved by the  State Government under Section 12 shall send  an application in writing to the Chairman of  the Film Advisory Board stating the title of the  film  and  the  source  from  which  it  can  be  obtained  by  exhibitors  and  such  other  particulars  as  may  be  required  by  the  Film  Advisory Board and shall also produce a copy  of  the film.   He shall  arrange to exhibit  the  film before the Advisory Board at  Bangalore  on the date and time to be fixed by the Board.  Every such application shall be accompanied  by the fee specified in Rule 21.

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19. Action  to  be  taken  by  the  Board.-  On  receipt of an application under Rule 18, the  Chairman  shall  arrange  to  have  the  film  examined by the Film  Advisory Board at its  next  meeting  with  a  view  to  determining  whether  it  could  advise  the  State  Government  to  approve  the  film  under  Section 12.  If the applicant desires to make  any  representation  in  regard  to  the  film  concerned, the Film Advisory Board shall give  him  an  opportunity  to  do  so.   Such  representation shall be in writing and shall be  taken into consideration by the Film Advisory  Board in making its recommendation to the  State Government.

20. Approval  of  film by State Government.-  The Film Advisory Board shall forward to the  State Government within five days after  the  examination  of  the  film  under  Rule  19,  its  recommendation as to whether the film may  be approved by the State Government under  Section  12.   If  after  considering  the  recommendation  of  the  Film  Advisory  Board  and after making such enquiry as it deems fit,  the State Government decides to approve the  film, it shall notify the title of the film in the  Karnataka Gazette together with the address  of  the  persons,  firm,  organisation  or  Government  with  whom  the  licensee  can  enter  into  agreement  for  the  supply  of  the  film:

Provided  that  the  State  Government  shall not approve any film that has not been  certified as suitable for  public  exhibition by  the Central Board of Film Censors under the  Cinematograph  Act,1952  (Central  Act  37  of  1952)

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35. Application for Licence.- After obtaining  the  certificates  referred  to  in  Rule  34  the  applicant may make his application for licence  in  writing  to  the  licensing  authority,  the  application shall be accompanied by- (a) …................

  ….................

  .…................

(c) a  declaration  by  the  applicant  that  he  has completed all arrangements for obtaining  films  approved  by  the  Central  Government  with the previous approval of the Films Division  for  exhibition  at  each  performance  together  with a statement from the suppliers confirming  that such arrangements have been made;”

The provisions of the Rules by virtue of Section 19(3) are  

deemed to have been made as if enacted under the Act.

7. The provisions of the Act and the Rules extracted herein  

above  are  unambiguous  and  self-explanatory.   The  State  

Government under Section 12 of the Act is vested with the  

power to issue directions to any licensee requiring him to  

exhibit  the type of films mentioned in sub-clauses (a),  (b)  

and (c)  thereof as may have been approved by the State  

Government.   Such  directions,  if  issued,  are  are  to  be  

deemed to be additional conditions of the licence granted.  

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This is by virtue of sub-Section (2) of Section 12 of the Act.   

8. Under  Rule 8  of  the Rules  framed under the Act,  the  

State Government is required to consider the advice of a Film  

Advisory Board for the purposes of approval of films under  

Section 12.  Rule 8(2) prescribes the composition of the Film  

Advisory Board.  Under Rule 17, films certified by the Central  

Government with the previous approval of the Central Film  

Advisory  Board  as  scientific  films;  films  intended  for  

educational purposes; films dealing with news and current  

events or documentary films or films of the type specified  

under Section 12 may be approved by the State Government  

under Section 12 without resorting to the provisions of Rules  

18 to 24.  The aforesaid Rules i.e. Rules 18 to 24 deal with  

the manner of application to the Advisory Board for approval  

of films by the State Government on the advice of the Film  

Advisory  Board.   Rule  35  imposes  the  requirement  on  an  

applicant making an application for licence to furnish along  

with its application “a declaration by the applicant that he  

has completed all arrangements for obtaining films approved  

by the Central Government with the previous approval of the  

Films Division for  exhibition at each performance together  10

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with  a  statement  from the suppliers  confirming that  such  

arrangements have been made” [Clause (c)].

9. It  is the correctness of the impugned communications  

dated  2nd April,  2005  and  28th May,  2005  that  has  to  be  

tested  against  the  aforesaid  backdrop  of  the  statutory  

provisions.  

10. It  is  the  case  of  the  appellant  that  the  documentary  

films that it had been exhibiting are not produced or certified  

by the Films Division but are made and supplied by different  

private sources.  The averments in the writ petition indicate  

that  while  the appellant  was screening such documentary  

films  obtained  from  private  sources,  a  notice  dated  4th  

March,  2005  was  received  by  the  appellant  from  the  2nd  

respondent  requiring  the  appellant  to  pay  an  amount  of  

Rs.7,33,200/- (Rupees Seven Lakh Thirty Three thousand and  

Two hundred only) to the respondent No.3 under Rule 35(c)  

of the Rules failing which appropriate legal action was stated  

to be in contemplation.    On a clarification being sought by  

the  appellant  as  to  the  basis  of  the  charges  leveled,  the  

appellant was informed by the 2nd respondent that the said  

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amount  of  Rs.7,33,200/-  (Rupees Seven Lakh Thirty  Three  

thousand  and  Two  hundred  only)  was  on  account  of  

outstanding payable to  respondent  No.3 since educational  

and documentary films were being obtained by the appellant  

from a private supplier and not from the respondent No.3.  

Thereafter,  on exchange of further correspondences in the  

matter,  order  dated 2nd April,  2005 was  issued by the  1st  

respondent  which  was  followed  by  the  

Notice/Communication dated 11th April, 2005.

11. Given  the  circumstances  in  which  the  aforesaid  

impugned action was taken and the notices were issued, as  

already noticed, the effect thereof is that the appellant was  

necessarily required to exhibit documentary films produced  

by the Films Division only.

12. Under  Section  12  of  the  Act,  the  power  of  the  State  

Government to issue directions with regard to the exhibition  

of  documentary  films  is  in  respect  of  such  films  that  are  

approved  by  the  State  Government.   The  reading  of  the  

provisions of the Rules earlier extracted would go to show  

that  there are two modes in  which such approval  can be  

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granted by the State Government.  The first is on the basis of  

the  advice  of  the  Film  Advisory  Board;  the  second  is  by  

action  taken  under  the  provisions  of  Rule  17  in  terms  of  

which the State Government can, without the advice of the  

Board,  approve  films  that  are  certified  by  the  Central  

Government with the previous approval of the Central Film  

Advisory Board.   

13. The purport and effect of Rule 35(c) may be noticed at  

this stage.  Under Clause (c) of Rule 35, it is the duty of the  

applicant  applying  for  a  licence  to  enclose  with  his  

application a declaration that the applicant has completed all  

arrangements  for  obtaining  films  approved by the Central  

Government with the previous approval of the Films Division  

for  exhibition  along  with  a  statement  from  the  suppliers  

confirming that such arrangements have been made.  Clause  

35(c) does not vest any power in the State Government to  

issue any direction.  On the contrary, it casts a duty on the  

applicant seeking a licence to submit a declaration that he  

has complied with the requirements contemplated therein.   

14. Whether  the  appellant  was  exhibiting  films  obtained  

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from private sources which are or not approved by the State  

Government  is  a  matter  of  some controversy.   The same,  

however, need not detain the court.  Even assuming that the  

documentary films obtained from private sources exhibited  

by  the  appellant  did  not  have  the  approval  of  the  State  

Government the question has to be answered is whether the  

same would constitute sufficient justification on the part of  

the State Government to issue directions to the effect that  

the appellant should exhibit documentary films produced by  

the  Films  Division  only.   A  consideration  of  the  various  

provisions contained in the Act and the Rules including those  

extracted above do not indicate the availability of the power  

to  the  State  Governments  to  issue  any  such  blanket  

directions.   The power  conferred is  to  issue directions  for  

exhibition of films approved by the State Government which  

approval, as noticed earlier, can be obtained in two different  

modes.   

15. It is not in dispute that at the relevant point of time the  

State Advisory Board had not be constituted.  It is also not in  

dispute that the said Board came into existence in the year  

2007.  However, what is not clear is whether the said Board  14

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continues to remain in office as on date.  Be that as it may, if  

the Advisory Board was not available at the relevant point of  

time even the absence of such Board cannot clothe the State  

with the power to issue the impugned directions inasmuch as  

in that event the alternative mode of approval under Rule 17  

has to be availed of.   

16. So construed, we have no doubt that the initial  order  

passed by the Division Bench allowing the Writ Appeal and  

setting  aside  the  impugned  notice  was  perfectly  justified.  

The  subsequent  order  passed  on  18th November,  2006  

virtually reverses the relief granted in the Writ Appeal and  

once  again  imposes  the  requirement  on  the  appellant  to  

exhibit  documentary films produced by and procured from  

the Films Division only.   In fact,  the said requirement was  

directed to be made an express condition of the licence to be  

granted to theater owners including the appellant. We do not  

find  any  authority  or  sanction  in  any  provisions  of  the  

Act/Rules to sustain the said later direction of the High Court.  

17. However,  as  the  order  of  the  Division  Bench  clearly  

states that the impugned later direction is only during the  

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interregnum i.e. valid till such time that the Advisory Board is  

constituted, there can be no doubt that if at present there is  

a Advisory Board functioning the said direction must cease  

to  remain  in  force  and  consequently  the  conditions  

incorporated in the licence of the appellant to the said effect  

will have to be deleted.  We order accordingly and further  

direct that if the Advisory Board is functioning as on date it  

will be open to all concerned including the appellant to seek  

approval under the provisions of Rules 18, 19 and 20 of the  

Rules of the documentary films it intends to exhibit.    

18. Consequently, the part of the impugned order passed on  

18th November, 2006 in reversal of the main part of the order  

dated 16th November, 2006 stands set aside and Civil Appeal  

No.10091 of 2010 is allowed to the extent indicated above.   

19. Civil Appeal No.10093 of 2010 filed by the Union of India  

is consequently dismissed whereas Civil Appeal No.10092 of  

2010 stands disposed of in terms of the order passed in Civil  

Appeal No.10091 of 2010.  

…....................,J. (RANJAN GOGOI)

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......................,J. (N.V. RAMANA)

NEW DELHI MARCH 25, 2015.

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