K.C. Cinema (Corret Name K.C. Theatre) vs The State Of Jammu And Kashmir

Civil Appeal No 77 of 2023 (Arising out of SLP(C) No 20784 of 2018)

K C Cinema (Correct Name K C Theatre) .... Appellant(s)

Versus

State of Jammu and Kashmir & Ors ....Respondent(s)

WITH

Civil Appeal No 78 of 2023 (Arising out of SLP(C) No 20904 of 2018)

Civil Appeal No 79 of 2023 (Arising out of SLP(C) No 21924 of 2018)

Transferred Case No 28 of 2019

Transferred Case No 29 of 2019

Signature Not Verified Digitally signed by Sanjay Kumar Date: 2023.01.16 14:58:59 IST Reason: JUDGMENT

Table of Contents

A. Background.................................................................................................................. 3

B. Cases relied upon by the respondents ...................................................................... 7

C. The High Court has transgressed its jurisdiction under Article 226 of the

Constitution ...................................................................................................................... 11

D. Parting remarks ......................................................................................................... 19

2 Dr Dhananjaya Y Chandrachud, CJI

Civil Appeal Nos 77, 78 and 79 of 2023

1. Leave granted.

A. Background

2. This batch of appeals arises from a judgment dated 18 July 2018 of a

Division Bench of the High Court of Jammu and Kashmir. A public interest

litigation was instituted before the High Court by two practicing advocates

with the grievance that cinema theatres in Jammu and Kashmir were

prohibiting movie goers from bringing eatables inside cinema halls. In this

context, it was averred that cinema owners paste a notice outside the hall

indicating the prohibition and that security personnel search the belongings

of every cinema goer with a view to enforce the prohibition. In the event that

movie goers are found in possession of eatables, they are (it was alleged)

prevented from entering the cinema hall.

3. The submission which was urged before the High Court was that, as a

consequence of the prohibition, movie goers are compelled to consume

food and beverages which are made available within the precincts of cinema

halls resulting in the audience being required to purchase food at “highly

exorbitant rates.” Moreover, it was submitted that the food which is sold is

not necessarily of a nutritious quality and that persons with chronic diseases

(such as diabetes) may be required to eat a specific type of food which

3 would not be available at the movie hall.

4. The High Court was persuaded to grant relief in the public interest litigation

on the basis of its findings in paragraph 6, which is extracted below:

“6. A perusal of these rules reveals that no where it has been provided that cinemagoers can be prohibited from carrying their own food articles and water bottles to multiplexes or private vendors are allowed to sell food inside such multiplexes/cinema hall premises at highly exorbitant prices. Therefore, in absence of any such provision, cinema goers cannot be forced or compelled by the multiplexes/cinema hall owners to purchase food and water from theatre premises nor they can be prohibited from carrying food items into malls and multiplexes from outside. Even the viewers, who come along with their infants/babies, also need milk to feed them because they cannot be kept empty stomach for about three long hours. The restrictions on bringing outside food to theatres and compelling/forcing to purchase junk food, sold at the food stalls inside theatre premises, that too at exorbitant rates, particularly affect young generation, senior citizens, diabetic patients and those who cannot eat for medical reasons. Such kind of acts on the part of Multiplex/Cinema Hall owners are against the right to choice of food, including the right not to eat junk food and right to good health, which comes under the purview of Article 21 of the Constitution of India guaranteeing protection of life and personal liberty of every citizen.”

5. The High Court noted that the State Government had notified the Jammu

and Kashmir Cinemas (Regulation) Rules 1975. 1 The High Court held that:

a. The 1975 Rules do not prohibit cinema goers from carrying their own

food articles and water bottles to multiplexes or cinema halls;

b. As a consequence of the prohibition which is imposed by cinema hall

owners, viewers are compelled to purchase food of such nature as is

offered for sale within the precincts of the theatre;

c. Infants who are required to be fed at periodic intervals cannot as a

consequence, be given food by accompanying parents or guardians;

1 “1975 Rules”

4 d. Viewers are compelled to purchase “junk” food at the food stalls within

the theatre and are required to pay exorbitant charges for the food

which is purchased. This particularly affects the younger generation,

senior citizens, patients with diabetes, and those who are unable to eat

the food sold within the theatre premises for medical reasons; and

e. The prohibition on carrying outside food and beverages into the movie

theatre violates the right to choice of food, including the right not to eat

“junk” food and the right to good health, under Article 21 of the

Constitution.

6. The High Court, while accepting the grievances, issued a slew of directions

in the impugned judgment and order. The challenge to the judgment of the

High Court is confined to direction (i) which is extracted below:

“i. Multiplexes/Cinema Halls Owners of the State of J&K are directed not to prohibit cinema goers/viewers henceforth from carrying his/her own food articles and water inside the theatre.”

7. Mr K V Viswanathan, senior counsel, appearing with Mr Niranjan Reddy,

senior counsel and Mr Sumeer Sodhi, on behalf of the appellants submitted

that:

a. The precincts of a cinema hall constitute private property into which

admission is reserved by the owner of the theatre;

b. The 1975 Rules which have been framed by the State Government do

not provide that the movie goer should be allowed to bring eatables or

beverages from outside into the precincts of the cinema hall;

5 c. There is no compulsion on any person either to visit the theatre or to

purchase food within the precincts of the theatre once they have bought

a ticket to view a movie;

d. As regards the sale of drinking water, cinema halls make adequate

provisions to ensure that hygienic drinking water is made available free

of cost within the precincts of the movie theatre for movie goers so that

they are not compelled to pay for packaged drinking water;

e. As a matter of practice, the prohibition of bringing food or beverages

from outside the hall is not enforced in the case of infants and babies,

for whom the parents or accompanying guardians are allowed to bring

a reasonable quantity of food or beverages which may be required for

the duration of their visit to the theatre; and

f. The cinema tickets issued by the appellant theatre in Civil Appeal No.

78 of 2023 to the movie goers stipulate that eatables from outside as

well as bottles (empty or filled) are not allowed inside the cinema hall.

The tickets also mention that the cinema reserves the right of

admission.

8. On the other hand, Mr Bimal Roy Jad, senior counsel appearing on behalf of

the original petitioners before the High Court (Respondents No. 3 and 4 in

these proceedings), submitted that:

a. The cinema ticket which is issued by the cinema hall represents a

contract with the movie goer and in the absence of any prohibition on

6 the printed terms of the ticket, a movie goer cannot be prevented from

bringing eatables or beverages inside the theatre;

b. As a consequence of the prohibition which is imposed by the cinema

hall, the movie goers are placed at a substantial inconvenience since

they are required to purchase food and beverages at exorbitant rates

within the movie halls; and

c. The 1975 Rules do not contain any prohibition on bringing food or

beverages from outside within the precincts of the cinema halls.

B. Cases relied upon by the respondents

9. Counsel for the respondents has relied on the following judgments in support

of the directions issued in the impugned judgment:

a. Parker v. The South Eastern Railway Co (1877) 2 CDP 416;

b. Olley v. Marlborough Court Ltd (1949) 1 KB 523;

c. McCutcheon v. David Macbrayne Ltd (1964) 1 WLR 125; and

d. Thornton v. Shoe Lane Parking Ltd (1970) EWCA Civ 2.

10. In order to understand whether the rulings in these judgments are applicable

to the case before us, it is necessary to advert to the context in which they

originated, the question(s) of law which fell for the court’s determination, and

the relief claimed therein.

11. In Parker’s case (supra), the plaintiff deposited some of his belongings with

7 the cloakroom at a railway station. At the time of depositing them, he

received a ticket which had the words “see back” printed on it. The reverse

side of the ticket contained a term stating, “the company will not be

responsible for any package exceeding the value of 10l.” A placard with the

same condition printed on it was also hung on the wall. The plaintiff’s

belongings were lost or stolen and he brought an action against the

defendant for the value of the lost articles. The plaintiff had not seen the

condition regarding the defendant’s liability for any articles deposited, either

on the ticket or on the placard on the wall. The question before the court in

that case was whether the respondent was liable for the loss of the plaintiff’s

belongings.

12. In Olley’s case (supra), the plaintiff was a paying guest in the defendant’s

hotel. After paying for the room, she received her keys and went to her room.

There, a notice containing numerous terms and conditions was displayed.

One of the conditions was “The proprietors will not hold themselves

responsible for articles lost or stolen, unless handed to the manageress for

safe custody.” The plaintiff’s possessions were later stolen from her room.

The plaintiff instituted a suit against the defendant and claimed the value of

the goods stolen from her. The court was required to adjudicate whether the

defendant could rely on the terms of a contract to exempt itself from liability

under common law. In other words, the question that arose for determination

was whether the defendant was responsible for the loss suffered by the

plaintiff.

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13. In McCutcheon’s case (supra), the plaintiff engaged an agent to have his

car delivered to another town by sea. The agent paid the defendant,

received a receipt, and delivered the car. The car was loaded onto the ship

which set sail. Before it could reach its destination, however, it sank due to

the negligence of the defendant’s employees. The plaintiff sued the

defendant for the value of his car. The defendant disclaimed liability on the

ground that it usually asked customers to sign a risk note which contained

certain terms and conditions regarding its liability for damage to the goods

shipped by customers. No such risk note was signed by the plaintiff’s agent

in this case, but he had signed risk notes on previous occasions when he

had used the defendant’s shipping services. The defendant argued that it

would not be liable for the loss of the car because the plaintiff’s agent was

aware of the terms and conditions in the course of their dealings with one

another. In this case, too, the question which arose for the court’s

consideration was whether the defendant could be held liable for the loss of

the plaintiff’s car.

14. Finally, in Thornton’s case (supra), the plaintiff drove to an automatic car

park owned by the defendant. The charges for availing of this service were

displayed outside the car park. The plaintiff drove to the entrance and a

machine dispensed a ticket which said, “This ticket is issued subject to the

conditions of issue as displayed on the premises.” The plaintiff parked his

car in the car park. When he later returned there to collect his car, he

suffered an accident and was severely injured. He instituted proceedings

against the defendant seeking damages for his injuries. The question before

9 the court was whether the defendant would be liable for the injuries

sustained by the plaintiff.

15. All four cases concern the issue of whether liability can be affixed on one of

the parties based on the terms and conditions of the contract in question.

Each of the decisions addresses when the contract was entered into and

what the terms of the contract were. The court considered whether a

particular term which was intended by one of the parties to form a part of the

contract, would in actuality form a part of the contract and bind the other

party, thereby exempting the first party from liability for the loss suffered.

16. The case before us differs from the four cases relied upon by the

respondents in that the original petitioners before the High Court did not file

a suit for damages or other relief for a loss or injury suffered by them. They

instituted a Public Interest Litigation and invoked the High Court’s jurisdiction

under Article 226 of the Constitution. They claimed the following relief in their

petition before the High Court:

“(ii) Writ of prohibition prohibiting Respondents No. 3 – 6 from restraining the movie goers for taking with them outside eatables inside Cinema Halls required to be consumed during the time they see the feature film in the cinema hall”

17. By instituting a writ petition, Respondents 3 and 4 have invited an

adjudication on whether the terms of entry determined and enforced by

theatre owners are just and fair. The test to be applied by this Court would

therefore not address which of the terms and conditions between the theatre

owners and the movie goers are binding upon them and whether the

10 prohibition on carrying outside food within the theatre premises is a binding

term. Similarly, this Court is not called upon to decide whether Respondents

3 and 4 suffered any injury due to the enforcement of the prohibition on

outside food and whether they are entitled to damages, as a result of the

injury suffered. Rather, this Court will evaluate whether this was a case fit for

the exercise of the High Court’s writ jurisdiction under Article 226 of the

Constitution.

18. If it was the case of Respondents 3 and 4 that they had suffered some injury

due to the prohibition on carrying food and beverages into the movie hall or

that the terms of the contract were made known to them only at the time of

its enforcement and they sought a refund of the amount paid for the ticket

because they did not assent to such a term or damages, the proper remedy

would be to file a suit and not to seek the issuance of a writ. The decisions in

Parker (supra), Olley (supra), McCutcheon (supra), and Thornton (supra)

which the respondents rely on do not have a bearing on the issue before this

Court i.e., whether the High Court was justified in exercising its jurisdiction

under Article 226 of the Constitution. It is therefore not necessary for this

Court to address itself to the ratio decidendi of these cases any further.

C. The High Court has transgressed its jurisdiction under Article 226 of

the Constitution

19. Article 19(1)(g) of the Constitution recognizes the right of citizens to practice

any profession, or to carry on any occupation, trade or business. This right

includes all activities which enable citizens to generate economic benefits

11 and earn a livelihood. 2 The right recognized in Article 19(1)(g) is not an

unfettered right and the state may impose reasonable restrictions on the

exercise of that right, in terms of Article 19(6).

20. The fundamental aspect which needs to be noted is that the trade and

business of operating cinema theatres is subject to regulation by the state. In

this case, the State Government has framed the 1975 Rules to regulate the

industry. Admittedly, the 1975 Rules do not contain a rule compelling the

owner of a cinema theatre to allow a movie goer to bring food or beverages

from outside within the precincts of the theatre. Similarly, other enactments

and rules which regulate the industry, namely, the Cinematograph Act 1952,

the Cinematograph (Certification) Rules 1983, the Jammu and Kashmir

Cinematograph Act 1989, and the Jammu and Kashmir Cinematograph

Rules 1989 do not contain a provision which requires theatre owners to

permit movie goers to carry food and beverages of their own into the cinema

hall. The rule making power of the state must be exercised consistent with

the fundamental right of the cinema hall owner to carry on a legitimate

occupation, trade, or business within the meaning of Article 19(1)(g) of the

Constitution.

21. The majority opinion of a nine judge bench of this Court in Mafatlal

Industries Ltd. v. Union of India 3 was authored by Jeevan Reddy, J. who

held that the High Court must have regard to legislative intent while

exercising its jurisdiction under Article 226:

2 Alagaapuram R. Mohanraj v. T.N. Legislative Assembly, (2016) 6 SCC 82 3 (1997) 5 SCC 536

12 “108 (i). While the jurisdiction of the High Courts under Article 226 — and of this Court under Article 32 — cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act … This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it.”

22. The legislature’s omission of a provision requiring the cinema owner to allow

eatables and beverages to be brought from outside is significant. In the

absence of a specific mandate in the 1975 Rules (or any other applicable

law) in this regard, the High Court was not justified in issuing a direction

prohibiting theatre owners from disallowing food and beverages to be

brought in by persons entering a movie theatre who enter it for viewing a

film. The High Court has erred in the exercise of its writ jurisdiction under

Article 226 of the Constitution. The exercise of its jurisdiction was not

consistent with the provisions of the enactments regulating movie theatres.

23. The cinema hall is a private property of the owner of the hall. The owner of

the hall is entitled to stipulate terms and conditions so long as they are not

contrary to public interest, safety and welfare. Like with any other business,

the proprietor or the management is entitled to determine the business

model that is to be followed and to give effect to their own conceptions of the

economic viability of a particular business model. The owner of a cinema hall

is entitled to determine whether she will set up or engage an entity for setting

up counters for the sale of food and beverages and to regulate the terms on

which such sale should take place. A prohibition on carrying food and

beverages from outside into the precincts of the movie hall is not contrary to

13 public interest, safety or welfare.

24. Of late, multiplexes or movie halls are not operated or envisaged solely as

places where movies are screened. A more accurate characterization of a

movie hall is as an entertainment centre or as an entertainment bundle. The

sale of different kinds of food and beverages forms a portion of the entire

package of entertainment available at the cinema hall. In other words, a

movie hall is not a movie hall alone but also doubles up as an eatery when

food and beverages are sold within its premises. Viewed from this lens, it is

immediately evident that patrons of a movie hall cannot demand to bring

their own food to eat there when a condition to the contrary is enforced by

the cinema hall owners. This would be akin to permitting a customer who

visits a restaurant to carry their own food to that restaurant and eat it within

the premises of that restaurant.

25. Respondents 3 and 4 have urged that they ought to be permitted to carry

their own food because the cinema halls sell exorbitantly priced food and

beverages, which are also not nutritious. The High Court was persuaded to

issue the direction which has been noted earlier based on the consideration

that what is offered for sale is “junk food”. Theatre owners may decide the

contents of the menu they offer, similar to restaurants deciding their menu or

similar to theatre owners themselves deciding which movies to screen. As

mentioned above, this is a commercial decision which the theatre owners

are entitled to make. The price point at which the goods and services will be

sold is likewise subject to being fixed by the movie theatre. Whether or not

14 the cost of a good or service is affordable or exorbitant is unrelated to the

conditions of entry enforced by a business.

26. The second level of argumentation in the judgment of the High Court is that

the prohibition in question impinges upon the right to choice of food, the right

not to eat “junk” food, and the right to good health. However, this line of

reasoning fails to notice that movie goers are not compelled to buy food at

the cinema hall. Whether or not to purchase food or beverages after gaining

admission to the cinema hall is entirely within the choice of the movie goer.

Viewers visit cinema halls for the purpose of entertainment. The transaction

of purchasing a ticket permits them to view the movie they have opted to

watch. If the food and beverages on sale at the movie hall are not to their

taste, they are free to refrain from purchasing them. In this way, they are not

being prevented from exercising their right to choice of food. We also note

that the right of movie goers to purchase or eat a dish of their choice is

unfettered outside the confines of privately operated movie theatres (subject

to safety and public welfare).

27. Whether or not to watch a movie is entirely within the choice of viewers. If

viewers seek to enter a cinema hall, they must abide by the terms and

conditions subject to which entry is granted. Having reserved the right of

admission, it is open to theatre owners to determine whether food from

outside the precincts of the cinema hall should be permitted to be carried

inside.

28. We are therefore of the view that the High Court transgressed its jurisdiction

15 under Article 226 of the Constitution by directing the cinema hall owners not

to prohibit movie goers from carrying eatables and beverages from outside

within the precincts of a cinema hall and by directing the state to enforce this

direction to the cinema hall owners. Absent a statutory regulation which

regulates the right to conduct the business of operating a cinema hall, the

imposition of such a restraint would affect the legitimate rights of a theatre

owner.

29. However, this is not to say that the terms and conditions imposed by cinema

owners or other commercial entities bind the consumer or the customer in

every case. As held by a catena of decisions of this Court, when one party

has unequal bargaining power relative to the other party, any terms and

conditions which are unreasonable may not be enforced as against the party

with lower bargaining power. 4 In Central Inland Water Transport Corpn. v.

Brojo Nath Ganguly 5, this Court held that whether parties can be said to

have unequal bargaining power and whether a bargain is unfair or

unreasonable must be decided on the facts and circumstances of each case:

“89. … This principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. … It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that

4 Central Inland Water Transport Corporation v. Brojo Nath Ganguly, (1986) 3 SCC 156; IREO Grace Realtech (P) Ltd. v.

Abhishek Khanna, (2021) 3 SCC 241; Jacob Punnen v. United India Insurance Co. Ltd., (2022) 3 SCC 655 5 (1986) 3 SCC 156

16 contract or form or rules may be. … there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its own facts and circumstances.”

30. The test in Central Inland Water Transport Corpn. (supra) is not only to

assess whether the parties have unequal bargaining power relative to one

another but also to ascertain whether a contractual term or a contract is

unfair, unreasonable or unconscionable. A contract (or a term in a contract)

can be said to be unfair or unreasonable if it is one-sided or devoid of any

commercial logic. In the present case, although theatre owners may

unilaterally determine the conditions of entry into cinema hall, the condition

imposed in this instance is not unfair, unreasonable or unconscionable.

31. The condition of entry is imposed as a direct result of the exercise of the

right of cinema owners to carry on a business or trade under Article 19(1)(g)

of the Constitution. The commercial logic of prohibiting movie goers from

carrying their own food to the cinema hall is to stimulate and boost a vital

aspect of the business – the sale of food and beverages. If business owners

are not permitted to determine the various facets of their business (in

accordance with law), economic activity would come to a grinding halt. While

movie goers may have no choice but to sign on the proverbial dotted line

(and thereby not carry any food of their own into the theatre) in order to enter

the cinema hall and watch a movie of their choice, this does not by itself

render the condition of entry unfair, unreasonable or unconscionable.

32. Most businesses impose some or the other condition which the customer

17 may find less than ideal. For instance, many private museums do not permit

customers to take photographs of the objects on display. This is also true of

many clothing boutiques or jewellery stores. Audience members are often

banned from recording musical performances at concerts. Music festivals,

much like movie theatres, do not permit attendees to carry their own food or

beverages to the venue. Similar is the case with stand-up comedy shows or

plays that are conducted in collaboration with eateries or bars. Although the

customer is paying for a ticket to watch the music performance (or the stand-

up act or the play, as the case may be), the essence of the business model

is to provide a fillip to the revenue generated by another arm of the business.

This being the case, movie goers are bound by the condition of entry

determined by the theatre owners in the instant case i.e., the prohibition on

carrying food and beverages from outside into the precincts of the movie

hall.

33. We note that during the course of arguments, statements were made on

behalf of the appellants that in order to obviate any inconvenience to movie

goers, due arrangements are made for the supply of hygienic drinking water

without levying any charge within the precincts of the cinema hall. Moreover,

it has also been stated that when an infant or young child accompanies a

parent, as a matter of practice, the cinema hall owners have no objection to

a reasonable amount of food or beverages being carried inside the cinema

hall to serve the nutritional requirements of the infant or child.

34. As for movie goers with chronic diseases who may have received dietary

18 instructions from their doctors or who may otherwise be under dietary

restrictions due to their medical condition, we request cinema hall owners to

consider requests from such movie goers on a case-by-case basis.

35. In view of the above position, we allow the appeals and set aside the

impugned judgment and order of the High Court dated 18 July 2018 in

regard to direction (i) which has been referred to above. The remaining

directions of the High Court do not form the subject matter of the appeals

and are, therefore, not dealt with in the present judgment.

D. Parting remarks

36. Before concluding, it needs to be noticed that Rule 87 of the 1975 Rules is in

the following terms:

“87. (i) The licensing authority shall ensure that the sale price of tickets in all the cinemas of the State holding licence under these rules in uniform.

(ii) The licensing authority shall ensure that reduced rates are charged by the licensee for any picture screened for the second time in any auditorium.”

37. The validity of Rule 87 was not in challenge before the High Court. The High

Court in paragraph 8(iii) of its judgment issued the following directions in

regard to sub-clauses (i) and (ii) of Rule 87:

“iii. The Government of J&K as well as Licensing Authority/every District Magistrate in the State is directed to ensure proper uniformity be maintained with respect to the sale price of tickets in all the cinemas of the State in terms of Rule 87(i) & (ii) of the Jammu & Kashmir Cinemas (Regulation) Rules, 1975.”

38. The above direction of the High Court shall not be construed as imposing

any requirement over and above Rule 87 as it currently stands.

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39. Pending applications, if any, stand disposed of.

TC (C) Nos 28 of 2019 and 29 of 2019

40. In view of the judgment delivered above in Civil Appeal No. 77 of 2023, the

writ petitions transferred from the High Court of Delhi in TC (C) No 28 of

2019 and the Bombay High Court in TC (C) No 29 of 2019 are dismissed.

The Transferred Cases are accordingly disposed of.

41. Pending applications, if any, stand disposed of.

..………..…....…........……………….…........CJI.

[Dr Dhananjaya Y Chandrachud]

……….…..…....…........……………….…........J. [Pamidighantam Sri Narasimha]

New Delhi;

January 03, 2023

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