Madhya Pradesh High Court
Central Circuit Cine Association, ... vs State Of Madhya Pradesh, Bhopal on 22 July, 1986
Equivalent citations: AIR 1987 MADHYA PRADESH 113, (1986) MPLJ 641
JUDGMENT B.C. Varma, J.
1. The challenge in this petition is to the Madhya Pradesh Entertainments Duty and Advertisements Tax (Amendment) Act, 1983 (No. 34 of 1983) and the Madhya Pradesh Cinemas (Exhibition of Films by Video Cassette Recorder) Licensing Rules, 1983. The Act came into force in the State of Madhya Pradesh from 1-12-1983 while the Rules from 7-10-1983.
2. The petitioner No. 1 is an association of exhibitors of films through projectors in cinema talkies while petitioner No. 2 is a partner in one of such talkies known as Jayanti Talkies, Jabalpur'. The members of the petitioner association are engaged in the business of distribution and exhibition of cinematograph films. Such exhibition of films in this State is regulated by the Madhya Pradesh Cinemas (Regulation) Act, 1952 (No. XVII of 1952) and the Madhya Pradesh Cinemas (Regulation) Rules, 1972. These rules regulate the grant of license for running such exhibition of cinematograph films. The term 'cinema' is defined to mean 'any place wherein an exhibition by means of cinematograph is given'. Among others, it provides for the location as also the construction of particular type of the building for such exhibition. These rules also regulate the seating arrangement and specify the number of seats per hundred square feet. They also make provision for ventilation, sanitary conveniences, doors, gangways etc. The minimum width of cinema screen is also provided as ten feet. We have yet another Act, namely, the Madhya Pradesh Entertainments Duty and Advertisements Tax Act, 1936 which provides for levy and collection of the entertainment duty. Every proprietor of an entertainment is required to pay to the State Government a duty at the specified rate in respect of every payment for admission to the entertainment. With the development of new technique of exhibition of films by Video Cassette Recorder on a television screen, large number of persons came forward to adopt such exhibition on commercial basis. Necessity, therefore, arose for regulating such exhibition by proper enactment and also of subjecting them to payment of entertainment duty to the State as in the case of exhibition of films by means of cinematograph. The State of Madhya Pradesh, therefore, made certain regulations in exercise of powers conferred by Section 9 of the Madhya Pradesh Cinema (Regulation) Act, 1952. These rules are known as 'Madhya Pradesh Cinemas (Exhibition of Films by Video Cassette Recorder) Licensing Rules, 1983 and also amended the Madhya Pradesh Entertainments Duty and Advertisements Tax Act, 1936' by enacting the Madhya Pradesh Entertainments Duty and Advertisements Tax (Amendment) Act, 1983.
3. The challenge to the Madhya Pradesh Entertainments Duty and Advertisements Tax Act, 1983 and the M.P. Cinemas (Exhibition of Films by Video Cassette Recorder) Licensing Rules, 1983 is not restricted to any specific provision but the prayer is to strike them down completely. The argument is that the various provisions in these two legislations violate the guarantee of equality conferred by Article 14 of the Constitution. The submission is that while the provisions of the M.P. Cinemas (Regulation) Rules, 1972 and the provisions for payment of entertainment duty in the M.P. Entertainments Duty and Advertisements Tax Act, 1936 are more stringent and onerous regarding film exhibition by means of cinematograph, they are comparatively lenient in respect of exhibition of films through Video Cassette Recorder on television screen. This not only tends to affect but has already adversely affected the former trade.
4. Cases setting out principles applicable to question commonly arising under Article 14 are numerous. Different facets of problems have been touched. Mathew, J. in State of Gujarat v. Shri Ambica Mills Ltd., Ahmadabad, AIR 1974 SC 1300 therefore, observed that "it would be an idle parade of familiar learning to review the multitudinous cases in which the constitutional assurance of equality before the law has been applied." We would, therefore, mention only a few cases which may help us in deciding the problem posed. On a review of certain cases, the Supreme Court in In re, Special Courts, Bill, AIR 1979 SC 478, set out certain propositions as emerging from the prior decisions. It was pointed out that second part of Article 14 which is a corollary of the first and is based upon the last clause of the first section of the Fourteenth Amendment of the American Constitution, is a pledge of the protection of equal law, that is, laws that operate alike on all persons under like circumstances. The guarantee is that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Equal laws would have to be applied to all in the same situation, and there should be no discrimination between one person and another if as regards of subject-matter of legislation, their position is substantially the same. Power must, therefore, be conceded to the State of distinguishing and classifying persons or things to be subjected to laws operating differently on different groups or classes of persons within its territory with a view to attain particular ends in giving effect to its policies. The classification need not be constituted by an exact or scientific exclusion or inclusion of persons or things. "Classification is justified if it is not palpably arbitrary. (1) The classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others and (2) that that differentia must have a rational relation to the object sought to be achieved by the Act." The principle was reiterated in R.K. Garg v. Union of India, AIR 1981 SC 2138. It was observed that Article 14 does not forbid reasonable classification of persons, objects and transactions by the legislature for the purpose of attaining specific ends. The classification, however, should not be arbitrary, artificial or evasive and must be based upon some real and substantial distinction bearing a just and reasonable relation to the object sought to be achieved by the legislature. It was pointed out that when a given statute is assailed on being violative of Article 14 of the Constitution, what is to be borne in mind is that there is always a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. It was stressed that when the law to be tested on the touchstone of Article 14 relates to economic activities, it should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion, etc. Reference may also be made to the decision in Meenakshi v. State of Karnataka, AIR 1983 SC 1283. In that case, on abolition of the octroi and with a veiw to raise the revenue, tax on passenger vehicle was increased and no like increase was effected in respect of the goods vehicle. It was held that in spite of the use of the same road, the types of vehicles would not form the same class. It was observed that 'in the matter of taxation the rate of tax and objects to be taxed are to be determined by the Legislature and unless it is found to be so unreasonable, the Court would not interfere with the latitude enjoyed by the legislature in this behalf.
5. Some persons including proprietors of restaurants holding commercial license for the Video Cassettes Recorder installed in their premises were found exhibiting motion pictures by playing back pre-recorded cassettes on movies at particular times. They did not hold any license under the M.P. Cinema (Regulation) Act. In Restaurant Lee v. State, AIR 1983 Madh Pra 146 question arose whether such user of the video cassette recorders and television sets under commercial licenses as distinguished from the domestic licenses under the Licensing of Wireless Receiving Apparatus Rules, 1965 and the Indian Wireless Telegraphy (Possession) Rules, 1965, framed under Section 7, Telegraphy Act 1885 and Section 10, Wireless Telegraphy Act, 1933 respectively, contravene the provisions of the M.P. Cinema (Regulation) Act, 1952 and the M.P. Entertainments Duty and Advertisements Tax Act, 1936. It was held that the activity amounts to exhibition by means of cinematograph bringing the activity within the meaning of S. 3 of the M.P. Cinema (Regulation) Act, 1952. It was held that the exhibition of movies from video cassette recorder on television in the manner in the restaurant fell within the ambit of "cinema", in Entry 33 of List II and is governed by the regulatory provisions of the M.P. Cinema (Regulation) Act. This decision was rendered by the Court on 28-4-1983. It was thereafter that the two enactments, namely, M. P. Cinemas (Exhibition of Films by Video Cassette Recorder) Licensing Rules, 1983 and M.P. Entertainment Duty and Advertisements Tax (Amendment) Act, 1983, were brought into force from 7-10-1983 and 1-12-1983 respectively.
Shri Dharmadhikari, learned counsel for the petitioners, submitted that exhibition of films through the cinematograph on a large screen and through the video cassette recorder by playing back pre-recorded cassettes on a television screen serve the same purpose, namely, the entertainment of the people. The quality and the type of entertainment provided through both the media is also similar. Besides the source of authority to legislate is also the same. Thus, the two being equal are entitled to similar treatment and, therefore, the Regulations treating them differently cannot be allowed to stand together. It was, therefore, urged that the lenient treatment shown to the exhibition of films by video cassette recorder is violalivc of Article 14. We are. however, of opinion that this is not so. There is a radical difference between the two types of exhibition. to begin with, the apparatus used distinctly differs from each other. A small video cassette recorder playing back the prerecorded cassettes on small television set is entirely a different process of exhibition of film than the one where the cinema film by means of a projector is projected on a wide screen at quite some distance. The sound recording system is also quite distinct in both the cases. Experience also shows that at present at least in this State, the exhibition by video cassette recorder is on a comparatively small television screen of 27" or so. The screen on which the film is shown through projector is very wide. On that screen even three dimensional film can be exhibited. The large screen can admit of a big and comparatively wider hall where the viewers can see the picture from larger distances. That is not so in case of exhibition of films on a television set. Shri Dharmadhikari, however, pointed out with reference to certain pamphlets that the television screen can as well be wider. However, no instance was shown where film in this State is exhibited on a television set as wide as we usually find in a cinema theatre exhibiting film through a projector. This being the position, it is difficult to say that the two exhibitions stand on similar footing and, therefore, need similar treatment and that if by Regulations different and lenient treatment is shown to exhibition of films by video cassette recorder, those Regulations violate the principle underlying Article 14.
6. Even if it were to be held that the two types of exhibitions of films fall in the same category, the classification of the two does not appear to us to be either arbitrary or evasive or artificial The classification appears to be quite reasonable. The licensing Rules, 1983 define 'cinema' to mean any place wherein a public exhibition of film by means of video cassette recorder is given for a commercial purpose. License is required to run such a cinema. Rule 4 provides for entrance and exit to be on public thoroughfare and Rule 5 provides for the seating arrangement in the auditorium where the film has to be exhibited. Rule 6 requires the cinema to have sufficient and separate water closet and privity accommodation for the use of the males and females. Rule 8 requires the necessity of a license for use of any place as cinema. Rule 14 prescribes the license fee. If the seats do not exceed 50 a license fee of Rs. 100/- is prescribed but when the seats exceed 50 but do not exceed 200 the license fee is fixed at Rs. 200/-. The license is made not transferable and the authorities have been given due power under Rule 18 to cancel or suspend the license for contravention of any of the rules. The application for obtaining such a license shall be in Form I appended to those rules which besides other information, requires the applicant to inform whether certificates regarding public safety, convenience and health have been obtained from the concerned authorities. The license to be granted under Rule 10 is to be in Form II annexed to those Rules. Various conditions and restrictions are imposed while granting such a license. In his attempt to substantiate the plea of discriminatory treatment to the petitioners now by two sets of Rules, learned counsel for the petitioners pointed out that while the cinema under the 1983 Rule can be located anywhere, the cinema under the 1972 Rules has to be located at a particular place and under many restrictions. We, however, find that even in these 1983 Rules, a certificate of Superintendent of Police regarding public safety and convenience has to accompany the application for grant of license. Ruie 3 of the 1972 Rules, of course, requires a person desirous of erecting a Cinema or converting existing premises into a cinema to give a public notice and also notice to the authority of his intention to do so. Notice of existence of schools, hospitals, temples or other like places up to a distance of 200 meters is required to be given. Objections are then invited and the application and report of the licensing authority are sent to the State Government which may grant a no objection certificate or may refuse to grant such certificate. Now, looking to the size of the cinema building where film is exhibited on a large screen through a projector and the sound is made through powerful loudspeakers, the large number of visitors, crowd usually collecting outside the theatre, the number of vehicles and big posters hung round the walls, and the cinema premises, it is not unreasonable to see that schools, hospitals, temples or other like places are not within the close vicinity of such cinema theaters. It is quite reasonable not to have such a restriction on the cinema where exhibition of films is done by video cassette recorder because that would require a smaller television screen installed in a small room and the film is exhibited by playing a pre-recorded cassette. This is usually done in a comparatively small room of the usual capacity of 50 to 100 persons. The sound usually does not travel beyond the room. It is more or less similar to playing a cassette recorder on a television film at home in a house not on commercial basis. Under these circumstances, the conditions imposed for grant of no objection certificate under Rule 3 of 1972 Rules need not be necessary for grant of no objection certificate under 1983 Rules. However, even the 1983 Rules require the applicant for grant of license to obtain a certificate from the Superintendent of Police regarding public safety and convenience. This necessity of a certificate from the Superintendent of Police serves similar purpose as is sought to be achieved by grant of no objection certificate from the Government under the 1972 Rules; To us there does not appear to be much distinction in this behalf in these two Rules and even if there is any, as argued by the learned counsel for the petitioners, the differentia is intelligible in view of the method of exhibition of film and the place of such exhibition.
7. With reference to Rule 14 of the 1983 Rules, it was pointed out by the learned counsel for the petitioners that even the cinema exhibiting films through video cassette recorder can have any number of seats. This statement has been denied on oath by the respondent and it is submitted that the rules have been framed keeping in view that the usual seating capacity of a cinema exhibiting films on television screen through video cassette recorder is between 50 to 100. The license fee prescribed under that rule, according to learned counsel for petitioner, however, does not restrict the seating capacity of the cinema under the 1983 Rules. Rule 14 is as follows:
" 14. Fee. -- The fee for a licence or renewal of a licence shall be as follows :
Not exceeding 50 seats Rs. 100 Exceeding 50 seats, but not exceeding 200 seats Rs. 200."
This rule indicates that maximum licence fee charged is Rs. 200/- and the seating capacity is not to exceed 200. This is so because no licence fee is prescribed for a cinema accommodating more than 200 seats. This rule gives a strong indication that the 1983 Rule is to apply to a cinema seating capacity of which does not exceed 200. It is preposterous to suggest that the rule permits any number of seats in such cinema. The suggestion of the learned counsel for the petitioners would have substance if licence fee was prescribed for any number of seats beyond 200. The rule, however, is just the opposite, i.e., it prescribes fee for a cinema With the maximum of 200 seats. This argument also does not at all further the petitioners' cause.
No other point on distinction was pressed before the Court in relation to the two Regulations, i.e., M.P. Cinemas (Regulation) Rules, 1972 and M.P. Cinemas (Exhibition of Films by Video Cassette Recorder) Licensing Rules, 1983.
8. With reference to the M.P. Entertainments Duty and Advertisements Tax (Amendment) Act, 1983, providing for different mode of levy and collection of duty on entertainment by video cassette recorder and other modes of entertainment, it was submitted that the classification is wholly unreasonable, artificial and arbitrary. Here again, the learned counsel does not appear to be right. From, the statement of objects and reasons given out at the time of introduction of the Bill, it appears that it was felt that the existing provision of M.P. Entertainments Duty and Advertisements, Act, 1936 providing for levy of duty on payment for admission is not suitable for collection of duty on exhibition of films by video cassette recorder on television screen. This is said to be the reason to charge duty on number of shows instead of duty on payment for admission to an entertainment by individuals. Prior to this amendment every proprietor of an entertainment in respect of every payment for admission to an entertainment was required to pay the State Government a duty at the rate of certain percentage thereof. The effect of the amending Section 3 of the M.P. Entertainments Duty and Advertisements Tax Act, 1936 is that while the duty payable in respect of every payment for admission to a cinematograph exhibition continues to be certain fixed percentage of the payment for each admission to the entertainment, the entertainment duty on entertainment by video cassette recorder is to be charged per show and not per admission. To us there does not seem to be any arbitrariness or unreasonableness in this levying entertainment duty on entertainment provided by these two modes of exhibition of films. In a big cinema hall capable of accommodating larger number of viewers, usually the seating arrangement is by dividing the entire space in different categories such as second class, first class, special class, Balcony, Box, etc. The admission fee varies from class to class, depending on the distance from the screen and the available comforts. Necessarily, therefore, the entertainment duty has also to differ being proportionate to the fee charged. Such, however, is not the case where a film is exhibited on a television set by video cassette recorder. Comparatively in small room usually with only one entrance, containing 50 to 100 seats, the seating arrangement is not classwise as in the case of cinematograph exhibition. Every viewer is to pay the same amount of admission fee. Fixed amount per show would be a very just mode of payment of entertainment duty under these circumstances. Even while fixing the entertainment duty at a certain amount for every show, the Government has taken care to safeguard the interest of the proprietors of an entertainment by cinematograph exhibition. The table annexed to Section 3 (as amended) would show that the entertainment duty differs from town to town with varying population, the higher the population the higher the duty per show. At the same time a higher duty is charged where there is existing cinema in the town than the one where no cinema exists. Town having population up to a lakh, where there is a cinema the duty charged is twice the amount per show than the duty charged where there is no cinema. It is only for those towns where the population is more than a lakh, duty charged is Rs. 50/-per show irrespective of the fact that the town has or has not cinema. The Government seems to have taken enough care to safeguard the interest of cinema by prescribing different amount of duty payable in towns with or without cinema.
9. It will thus appear that while the entertainment through exhibition of films has been subjected to entertainment duty, the difference in levying of such entertainment duty in these two cases is on a very sound footing and in no case can be said to be unreasonable. Interest of cinematograph exhibitors has been amply safeguarded. It will not only be inconvenient but also unjust to charge entertainment duty on every admission to the entertainment by video cassette recorder. The challenge to the constitutionality of the M.P. Entertainments Duty and Advertisements Tax (Amendment) Act, 1983 must, therefore fail.
10. For the reasons aforesaid, we are of opinion that'no valid challenge can be made to the constitutionality of the M.P. Cinemas (Exhibition of Films by Video Cassette Recorder) Licensing Rules, 1983 and the MR Entertainments Duty and Advertisements Tax (Amendment) Act, 1983 (No. 34 of 1983). The two enactments do not suffer from the alleged vice of infringing of Article 14 of the Constitution. They are valid pieces of legislation.
11. The petition fails and is dismissed. There shall be no order as to costs. Security amount be refunded to the petitioners.