District Magistrate, Haridwar vs Harish Malhotra

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.10855 OF 2014

(Arising out of SLP(C) No.1417 of 2011) District Magistrate, Haridwar and Anr. … Appellants

:Versus:

Harish Malhotra … Respondent

J U D G M E N T

Pinaki Chandra Ghose

1.Leave granted.

2.This appeal, by special leave, arises from the

judgment and order dated 09.09.2010 passed by the High

Court of Uttarakhand at Nainital in Special Appeal

No.92 of 2010, whereby the Division Bench of the High

Court while allowing the appeal filed by the

respondent set aside the order dated 11.5.2010 passed

by the learned Single Judge in Writ Petition No.671 of

2010 and quashed that part of the demand order dated

30.4.2010 passed by the District Magistrate, Haridwar, Signature Not Verified Vishal Anand Date: 2014.12.09 whereby a license fee of Rs.11,88,500/- was demanded Digitally signed by

15:46:00 IST Reason:

from the respondent.

2

3.The brief matrix of facts is that the Respondent is a

Cable Television Network Operator in Haridwar as

defined under Section 2(aa) of the Cable Television

Networks (Regulation) Act, 1995. He obtained necessary

Licence to run the Cable Network. As a Cable

Operator, he down-links the signals from Satellite and

retransmits the same through his Cable Network System

to different broadcasters. He is entitled to transmit

and retransmit broadcasts and is bound by the

liabilities and obligations pertaining to and

including the Cinematography Act. The respondent

started two private channels with effect from April 1,

2009 and thereby he started transmitting live

programmes of Haridwar and other programmes of

interest, including Hindi songs and movies, with the

assistance of a video recorder. On being informed

that a separate license was required to run these

channels, he approached the District Magistrate,

Haridwar for obtaining the necessary license. The

District Magistrate rejected his application in view

of the restrictions imposed under Rules 11(1) and

11(2) of the Uttarakhand Video Rules, 1988. 3

4.The respondent challenged the aforesaid rejection by

filing a writ petition in the High Court of

Uttarakhand at Nainital. The said writ petition was

disposed of on 13.4.2010 in terms of an earlier order

passed by the Division Bench of the High Court in Writ

Petition No.375 of 2006 and he was directed to apply

for license and deposit license fee and other taxes

under the Uttar Pradesh Cinemas (Regulation) Act, 1955

which applies to the State of Uttarakhand. The

respondent filed an application for the purpose and

the District Magistrate, after considering the

application, directed the respondent to pay a sum of

Rs.11,88,500/- as license fee under Sub-Rule (2) of

Rule 17 of the U.P. Cinemas (Regulation of Exhibition

by means of Video) Rules, 1988 made in exercise of

power under Section 13 of the Uttar Pradesh Cinemas

(Regulation) Act, 1955. Sub-Rule 1(2) thereof gives

the scope of the Rules. From a plain reading of the

text, the applicability of the said rules has been

confined to video libraries and exhibition by means of

video. The term “Exhibition by means of Video” has not

been defined under the rules, but it has been defined 4

under Section 2(aa) of the ‘Uttar Pradesh Cinemas

(Regulation) Act, 1955, which reads as under:

“Exhibition by means of Video” means exhibition in public, on payment for admission, of moving pictures or series of pictures by playing or replaying a pre-recorded cassette by means of video cassette player whether on screen of a television set or videoscope or otherwise”.

5.The State of Uttarakhand had adopted the said Act and

Rules framed in exercise of powers under section 13 of

the Act, namely the U.P. Cinema (Regulation of

Exhibition by means of Video) Rules 1988 had also been

adopted. The District Magistrate ordered that in view

of Section 2(aa) quoted above, the process of running

video channel private channel is within the definition

of Section 2(aa) and mandatory license is required for

that under Section 3(b) of the said Act. The operators

covered under Section 2(aa) of the U.P. Cinema

(Regulation of Exhibition by means of video) Rules,

1988, are liable to pay fee under Sections 17(1) and

17(2). Section 17(2) of the said Rules reads as under:

“In case there is any such arrangement where exhibition is given by means of video on a number of different television screens, video screens or video scopes, an additional license fee of Rs.100 per year 5

or part thereof, shall be levied for each such screen, fed by the said apparatus, by whatsoever name it may be called.”

6.The respondent complied with the payment of license

fee under section 17(1) of the U.P. Cinema Rules, 1988

by paying Rs. 2,400/- but denied the applicability of

the 1988 Rules and Rule 17(2) thereof and consequently

denied payment of license fee of Rs.11,88,500/-.

7. The learned Judge in the High Court observed that a

license is required for displaying on the screen

materials through the means of video at specified

place. Therefore if at a specified place such

displaying is done on more than one screen, then in

terms of Rule 17(2), additional fee of Rs.100/- is

leviable for such screen. Videography is generated for

being displayed at the premises of the respondent but

is displayed in screens outside the premises of the

respondent. In view of this, the said Rules do not

encompass a situation in the present case and the rule

imposes a liability to pay a license fee. Construing

the Rules strictly, the respondent cannot be fastened

with a liability. Consequently, the Learned Judges of

the High Court quashed that part of the order of the 6

learned District Magistrate dated 30th April 2010

whereby a license fee of Rs.11,88,500 was demanded

from the respondent under Rule 17(2).

8.It is claimed by the appellants that subsequently, the

respondent without obtaining any license under Section

3(b) of the U.P. Cinemas (Regulation) Act, 1955,

started two private channels and began transmitting

live programmes. He was informed that the process of

running video channel is within the definition of

video movie picture and it is mandatory to obtain

separate permission/license for it. The application

for license was rejected on 18.2.2010 as it was

against Rules 11(1) and 11(2) of the U.P. Rules 1988.

9.In W.P. (C) No.226 of 2010, the respondent never

disputed the applicability of the Rules. The U.P.

Cinema (Regulation) Act, 1955 was enacted to regulate

exhibition by means of video and cinematograph. The

State of Uttarakhand has adopted the Act under Section

86 of U.P. State Reorganization Act. The State of

U.P. in exercise of power under Section 13 of the 1955

Act, framed U.P. Cinema (Regulation of Exhibition by 7

means of Video) Rules, 1988 which have also been

adopted by the State of Uttarakhand. The respondent is

a cable operator registered under the Cable Television

Networks (Regulation) Act, 1995 and under the

Cinematograph Act, 1952. Under these Acts, he renders

cable services by down-loading signals from the

Satellite for distribution to multiple subscribers.

For showing any other programme on separate video

channel, he will be covered under Section 2(aa) of the

U.P. Cinema Regulation Act, 1955 and is required to

obtain a separate license.

10. In pursuance of Section 21 of the Cable Television

Network Act, 1995, the provisions of the Cinematograph

Act, including the programme code, are fully

applicable to the Cable operator. The respondent got

himself registered under Section 3 by depositing

Rs.500/- as registration fee. The respondent wants to

run two private channels subscribing to 11,885 TV

screens. In view of the above, respondent is covered

under Section 2(aa) of the U.P. Cinema Rules, 1988 and

is liable to pay fee under Rule 17.

8

11. Thus, by conduct the respondent accepted the Rules,

as he submitted an undertaking before the Court to

comply with the Rules. He also deposited a license fee

of Rs. 2400/- per year as imposed under Rule 17(1).

The respondent cannot choose and be selective as to

which Rules will be applicable to him. The Respondent

has also given an undertaking to comply with Rules

17(1) and 17(2). This Court in Laxmi Video Theatres &

Ors. v. State of Harayna and Ors., (1993) 3 SCC 715,

while considering the expression “Cinematograph” under

the Cinematograph Act, 1952 and its applicability on

VCR and VCP which was developed in 1970, held that a

definition must be given a meaning which takes into

account the subsequent scientific developments in the

field.

12. The claim of the respondent is that the business

carried out by him does not come within the purview of

Section 2(aa) of the U.P. Rules 1988, and thus the

liability of fee imposed under Rule 17(2) is bad in

law. From a plain reading of Section 2(aa), it is

clear that it would not apply to the Respondent who is

a cable operator telecasting video channels “to the 9

public” and not “in public”. It is an established

principle of statutory interpretation that plain

meaning is to be given to words contained in a

statute.

13. The notification No. 145/XXVII (5) Entertainment

Tax/2005 dated 17.8.2005 doesn’t apply to the

respondent as it seeks to tax “Exhibition by means of

Video”. The respondent’s activities are not covered by

the aforementioned expression. For the definition of

the said expression the U.P. Cinemas Regulation Act,

1955 has to be referred even though the notification

has been issued under U.P. (Entertainment and Betting)

Tax Act, 1979. The expression can be said to be in

pari materia and definition of a term under one Act,

can be used to interpret provisions of rules under the

other Act.

14. The provisions of the U.P. (Cinemas) Regulation

Act, 1955 do not apply to the Respondent and for the

reason the expression “Exhibition by means of Video”

within the meaning of 2(aa) of the said Regulation is

not applicable to the respondent. Thus, Rule 17 is

also not applicable to the respondent. 10

15. As long as there is no statutory sanction for

imposition of a tax, no liability of paying a fee can

be imposed relying on the alleged “consent” or

acquiescence to the same imposition in part. The

statutory sanction cannot be found under the Uttar

Pradesh Entertainment and Betting Tax Act, 1979 or any

rules made thereunder.

16. From a plain reading of the relevant provisions it

is clear that the same are not applicable to the

respondent and hence the demand as well as the

Recovery Certificate dated 6.8.2011 issued under Rule

17(2) of the Rules are bad in law. We, therefore, find

no infirmity in the impugned judgment passed by the

High Court. This appeal is accordingly dismissed.

However, there shall be no order as to costs.

17. I.A. No.5 of 2013 application for intervention is

allowed.

……………………………………………………J (M.Y. Eqbal)

……………………………………………………J (Pinaki Chandra Ghose)

New Delhi;

December 09, 2014 11

ITEM NO.1A COURT NO.12 SECTION X (For Judgment) S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Civil Appeal No.10855 of 2014 (@Petition(s) for Special Leave to Appeal (C) No(s). 1417/2011)

DISTRICT MAGISTRATE, HARIDWAR AND ANR. Petitioner(s)

VERSUS

HARISH MALHOTRA Respondent(s)

Date: 09/12/2014 This petition was called on for Judgment today.

For Petitioner(s)

Ms. Rachana Srivastava,Adv.

For Respondent(s)

M/s. Karanjawala & Co.,Adv.

Mr. Vivek Gupta,Adv.

–--------

Hon'ble Mr. Justice Pinaki Chandra Ghose pronounced the Judgment of the Bench comprising Hon'ble Mr. Justice M.Y. Eqbal and His Lordship.

Leave granted.

Civil Appeal is dismissed in terms of the signed Reportable Judgment.

I.A. No.5 of 2013 application for intervention is allowed.

(VISHAL ANAND) (SNEH LATA SHARMA) COURT MASTER COURT MASTER

(Signed Reportable Judgment is placed on the file)