The Licensee/Proprietor,Naga A/c. Theatre,Dindigul District v. The District Collector,Dindigul District

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 22.11.2010 CORAMTHE HONOURABLE MR.JUSTICE M.VENUGOPALW.P.No.18841 of 2003The Licensee/Proprietor,Naga A/c. Theatre,Dindigul District. ....Petitioner VsThe District Collector,Dindigul District.....RespondentPrayer:Writ Petition filed under Article 226 of the Constitution ofIndia praying for issuance of a writ of Certiorari to call for therecords of the Respondent herein made in his proceedings inRoc.No.43772/01-1 dated 22.06.2003 for suspending the 'C' Formlicense of the petitioner's theatre called Naga A/c. Theatre atDindigul for 5 days viz., 15.07.2003 to 19.07.2003 and quash the same.For Petitioner : Mr.N.ThiagarajanFor Respondent : Mrs.S.Anitha Government AdvocateO R D E RThe petitioner has filed the present Writ of Certiorari prayingto call for the records of the Respondent made in his proceedings inRoc.No.43772/01-1 dated 22.06.2003 for suspending the 'C' Formlicense of the Petitioner's Theatre called Naga A/c. Theatre atDindigul for 5 days viz., 15.07.2003 to 19.07.2003 and to quash thesame.2.The Learned counsel for the Petitioner urges before thisCourt that the impugned order of the Respondent in Roc.No.43772/01-1dated 22.06.2003 in suspending the 'C' form license of the Theatrefor 5 days 15.07.2003 to 19.07.2003 is an illegal and arbitrary oneand also that the Respondent's impugned order dated 22.06.2003 isillegal one because of the fact that he has failed to decide theissue whether the act of compounding of an offence made in thepresent case comes within the ambit of Section 9(1) of the Tamil NaduCinemas (Regulations) Act, 1955 and in the absence of suchdetermination, he has no jurisdiction to suspend the license, as persub section thereto. https://hcservices.ecourts.gov.in/hcservices/

3.According to the Learned counsel for the Petitioner, thePetitioner has paid a compounding fee of Rs.1,000/- for theirregularity viz., not writing the Daily Collection Report and as amatter of fact, there has been no evasion and the factum of notwriting/preparing Daily Collection Report in time is not anirregularity visualised under the Tamil Nadu Cinemas Regulation Act,1955 and the Rules thereto.4.The Learned counsel for the Petitioner vehemently contendsthat in the present case, the act of compounding has not been done asper Section 15 of the Tamil Nadu Entertainments Tax Act and as such,the Respondent/District Collector's order in suspending the 'C' FormLicense by applying Section 9(1) of the Tamil Nadu Cinemas RegulationAct, 1955 is a clear case of non application of mind, which hasresulted in miscarriage of justice.5.A plea is taken on behalf of the Writ Petitioner that thepurported violation in regard to the non preparation of DailyCollection Report in time is a violation of Rule 32 C(1) of the TamilNadu Entertainments Tax Act and as such, the Respondent/DistrictCollector ought not to have taken action as per Section 9(1) of theTamil Nadu Cinemas Regulation Act, 1955 and in short, there are noprovision in the Tamil Nadu Cinemas Regulation Act, 1955 forpunishing a Licensee in regard to the non completion of the DailyCollection Report within the time limit and hence, the order of theRespondent is to be interfered with by this Court to prevent anaberration of justice.6. Proceeding further, it is the contention of the Learnedcounsel for the Petitioner that the impugned order of the DistrictCollector in suspending the 'C' Form License for 5 days is inviolation of the principles of natural justice, although thePetitioner has asked for personal hearing in his his explanation sentthrough his counsel before passing the final order, no suchopportunity has been provided to the petitioner by the Respondent andin any event, the suspension of 'C' Form License for 5 days viz.,15.7.03 to 19.7.03 is an excessive, unwarranted and arbitrary one andtherefore, the same is to be set aside by this Court in the interestof justice.7. The Learned counsel for the Petitioner in support of thecontention that when an individual has compounded the offencenothing more is further required to be done cites the Division BenchJudgment of this Court 2000-2-L.W.255, (W.P.20224/94) SRI KAMATCHITHEATRE, BY ITS LICENSEE K.RAMAKRISHNAN, DEVATHAMPATTI, MADURAIDISTRICT V. THE DISTRICT COLLECTOR, MADURAI, (W.P.12640/94)T.MUTHIAN, LICENSEE, NEW CINEMA THEATRE, CUDDALORE V. THE COLLECTOR,SOUTH ARCOT VALLALAR DISTRICT, CUDDALORE, (W.P.228/96)THEATE PAVALAMREP. BY ITS PARNTER K.S.SETHUPATHY V. THE APPELLATE AUTHORITY CUM- https://hcservices.ecourts.gov.in/hcservices/ ASST. COMMISSIONER, CHEPAUK, MADRAS-5 AND ANOTHER, wherein it is heldas follows:"The expression "composition" or "compounding ofoffence or irregularity" means accepting the acquiescence ofirregularity committed or the violation of the statutoryprovision and by compounding the offence, the person who ispermitted to compound, admits the irregularity or violation.It may be for ever so many reasons, or it may be to avoidembarrassment or the situation, to purchase peace. By merecompounding, such an individual is not exonerated, nor ablank shield or protection cover is thrown against him forthe commission or omissions for which compounding ispermissible under law. Therefore, it follows when once thelicensee compounds the offence under Section 15 of the Act,it would mean that the licensee had committed or isreasonably suspected of having committed an offence and onhis application, is permitted to compound the offence. Inother words, it is a clear verdict by confession to avoidpenal consequences."Also, in the aforesaid decision, at pages 256 and 257, it is laiddown as follows:"Section 15 of the Entertainments Tax Act is anenabling provision which enables the authorities to compoundsuch person who has committed an offence or reasonablysuspected of having committed an offence against theprovisions of the Act or the Rules made thereunder. Bycompounding the offence, by invoking Section 15 of the Act,the licensee or the person authorised by him admits thecommission or omission of those offences or violations ofstatutory provisions for which a penalty or fine orimprisonment is provided for, as the case may be. In otherwords, it is an admission of the guilt and on payment ofcertain compounding fee, the accused person is to beproceeded, which would not ipso facto mean that he has beencleared of the accusations or the offences committed by him.Para 52 In other words, it is an admission of the guiltwhich has led to the passing of an order of permission tocompound, and there is nothing further to be tried or to begone into after the licensee had been permitted to compoundan offence under Section 15 of the Entertainment Tax Act.It is a verdict by confession and, therefore, theconsequences follows.Para 56The admission of facts on the part of the licenseeand his application for compounding would amount to hisadmitting the offence or violation or commission of anoffence under the Entertainments Tax Act which, by itself,is a ground for taking action under Section 9(1) of theCinemas (Regulations) Act. "As such, we are of the view that https://hcservices.ecourts.gov.in/hcservices/ the approach of S.S Subramani,J., has to be sustained and weare of the considered view and with respect we hold that theview taken by Dinakaran,J., directing an enquiry to be heldeven after compound of offence is not warranted and such anapproach would defeat the very statutory provision, asaccording to us, in our view compounding would meanconfession of the incident or violation or offence."8.Continuing further, in the decision aforesaid at page 257, itis held thus:"The situation in the present case is in no waydifferent. As already pointed out, there has beencompounding of the offences under Section 15 of theEntertainments Tax Act and based upon that compounding,further action is taken under Section 9(1) and therefore, asprovided in Section 9(2), a show cause notice alone issufficient, and it is not necessary to hold a detailedenquiry as has been held by Dinakaran,J. "We agree andapprove the view taken by Dinakaran,J. In other words, wehold that when once the licensee is permitted to compoundthe offence, which means that there exists a pre-existingconviction or order of composition which does not requireany further enquiry and it would be sufficient to issue ashow cause notice as provided in Sub Section (2) of Sec.9.We also make it clear that when the petitioners themselveshad concedingly admitted the irregularities by compoundingthe offences, nothing more is required to hold that thepetitioner or their managers or agents or attorneys haveviolated the licensing conditions, and no further enquiry iswarranted for an action being taken under Section 9(1) ofthe Tamil Nadu Cinemas (Regulations) Act and the authorityis well justified in passing an order after issuing the showcause notice."Para 61, 62 9.The Learned counsel for the Petitioner also cites the order ofthis Court in W.P.No. 18401 of 1998 dated 24.11.1998, THE LICENSEE,MEENAKSHI THEATRE, KUMBAKONAM TALUK, THANJAVUR DISTRICT V. THE GOVT.OF TAMIL ANDU, REP. BY ITS SECRETARY TO GOVT. (HOME) CINEMA, DEPT. ,FORT ST. GEORGE, MADRAS-9 AND 2 ANOTHER, wherein it is held asfollows:"...In the result, I set aside the order of theRevisional Authority and I direct the First Respondent toconsider the question as to whether there are circumstancesto compound the offence under Section 8A of the Act 30 of1997. For the said limited purpose, the matter is remittedback to the Revisional Authority the First Respondentherein, which shall pass fresh orders on the same with anotice to the petitioner."He also cites the Division Bench order of this Court dated https://hcservices.ecourts.gov.in/hcservices/

13.11.2002 in W.A.3426 of 2002 wherein this Court has inter aliaobserved as follows:"...Having regard to the above fact, we lift thesuspension on condition of the Appellant depositingRs.20,000/- (Rupees Twenty Thousand only) with the SpecialTahsildar (Adi Dravidar Welfare) Palani by tomorrow evening.If the above amount is paid, then the Appellant shall beentitled to continue the screening of the films from 15.11.2002 without reference to any suspensionperiod."10.Also, the Learned counsel for the Petitioner brings to thenotice of this Court that order in W.P.No.22816 of 2004 dated12.08.2004 wherein it is held as follows:"...Having regard to the facts brought to my notice;the unreported judgment dated 26.08.2003 passed by a Learnedsingle Judge of this Court in W.P.No.23734 of 2003 andanother unreported judgment dated 13.11.2002 passed by aDivision Bench of this Court in W.A.No.3426/2004, whileholding that the violation alleged against the petitionerstands fully established, I am inclined to reduce thesuspension period from 15 days to 7 days. The suspensionorder will come into effect from 16.08.2004 and will expireon 22.08.2004, both days inclusive. The writ petitionstands disposed of accordingly. Consequently,W.P.M.P.No.27588/2004 is closed."11.Conversely, it is the contention of the Learned GovernmentAdvocate for the Respondent that the officials of the EnforcementWing of the Commercial Taxes Department on 14.04.2002 at 07.20 p.m.has inspected the Petitioner's Theatre by surprise and though theMovie has started at 6.05 on that day, the Daily Collection Reporthas not been closed till 07.20 p.m. after a lapse of one hour and 15minutes in violation of the provisions of the Tamil NaduEntertainments Tax Act 1939 and a Statement to this effect has beenobtained by the Entertainment Tax Officials from the Licensee and infact, the Licensee has admitted the offence and paid a compoundingfee of Rs.1,000/- to the Commercial Taxes Department.12.The Learned Government Advocate appearing for the Respondentcontends that on receipt of a Report from the Commercial TaxesDepartment, a show cause notice has been issued to the Licensee inthe proceedings Roc.No.43772/01-13/C1 dated 12.6.2002 requiring himto explain as to why action should not be taken action against him asper Section 9(1) of the Tamil Nadu Cinemas Regulation Act, 1955,etc., and the Petitioner's written explanation dated 19.07.2002 hasbeen found to be an unacceptable one and the Respondent/Collector hasbeen perforced to suspend the 'C' Form license as per his order dated22.06.2003 for 5 days from 15.7.2003 to 19.7.2003. https://hcservices.ecourts.gov.in/hcservices/

13. Added further, it is the submission of the LearnedGovernment Advocate for the Respondent that after the act of thePetitioner in compounding offence with the Commercial TaxesDepartment, the Respondent/District Collector on receipt of Reportfrom the Commercial Taxes Department is to take action as per Section9(1) of the Tamil Nadu Cinemas Regulations Act, 1955 and accordingly,the Respondent/District Collector has taken necessary action in theinstant case on hand, which cannot be found fault with by thePetitioner in any manner whatsoever.14. It is the stand of the Respondent/District Collector thatnon preparation of the Daily Collection Report is a serious offenceas per the relevant provisions of the Tamil Nadu Entertainments TaxAct, 1939 and once the Petitioner/Licensee has been permitted tocompound the offence it will be sufficient for theRespondent/District Collector to issue a show cause notice as perSection 9(2) of the Tamil Nadu Cinemas Regulation Act, 1955 and assuch, there is no need to afford an opportunity of personal hearingto the petitioner and as such, the writ petition is devoid of merits.15.This Court has heard the Learned counsel for the Petitioneras well as the Learned Government Advocate for the Respondent andnoticed their contentions.16.It is to be noted that Section 7 of the Tamil Nadu CinemasRegulations Act, 1955 speaks of the power of the Government or theDistrict Collector to suspend exhibition of film in certain cases.As a matter of fact, Section 8 A of the Act confers powers on theLicensing Authority to compound the offence. Section 9 of the Actspecifies the power to revoke or suspend the license. 17.It is to be borne in mind that the right to takeadministrative action under the condition of a license can in no waybe affected by the penal sections specified in the Tamil NaduCinemas Regulations Act, 1955 in respect of violation of any of theprovisions of the Act and Rules. Sections 8 and 9 of the Tamil NaduCinemas Regulations Act, 1955 pertains to prosecution entailing thetermination of license as well, and the sanction provided as perCondition 16 of the licensee issued under the Act or Rule as anadministrative punishment intended to enforce.18.Be that as it may, when the licensee has admitted the guiltand compounded the offence with any further enquiry, an order as perSection 9(1) of the Tamil Nadu Cinema Regulations Act, 1955 viz.,suspending or cancelling the 'C' Form license can be issued. In theinstant case on hand, a show cause notice as per Section 9(2) of theAct has been issued to the Petitioner and when the Authority as perSection 9(1) of the Act is empowered to cancel or suspend the 'C'Form license, the issuance of show cause notice is of little avail https://hcservices.ecourts.gov.in/hcservices/ when the cancellation is based on the mere compounding of offence bythe licence and when no further enquiry is visualised, then theissuance of show cause notice will only be futile, an empty formalityto be adhered to, in the considered opinion of this Court.19.It is not out of place for this Court to make a significantmention that as per Section 9(1) of the Tamil Nadu CinemasRegulations Act, 1955 compounding of an offence is not a ground torevoke or suspend license as per decision 1999 MLJ CRL 263 (MADRAS),THE LICENSEE, BHUVANESWARI TALKIES, GUDIYATHAM V. APPELLATEAUTHORITY, JOINT COMMISSIONER I, LOCAL ADMINISTRATION DEPARTMENT,MADRAS 8.20.At this juncture, this Court recalls the decision of thisCourt GANESH TALKIES V. THE DISTRICT COLLECTOR, NORTH ARCOT AMBEDKARDISTRICT, 2000 (1) MLJ 658 (MADRAS) wherein for the irregularitiescommitted by the Petitioner therein, the Tax Authorities compoundingthe offence and the Petitioner paying the fine amount subsequent tothe notice as per Section 9(1) of the Tamil Nadu Entertainments TaxAct X of 1939 and the Petitioner's License being cancelled for 30days is held to be a proper one by this Court.21.A Licensee is permitted to compound an offence as perSection 15 of the Tamil Nadu Entertainment Tax Act X of 39 can beproceeded with, as opined by this Court.22. A closure reading of Section 9(1) of the Tamil Nadu CinemasRegulations Act No.IX of 1955 indicates that even after compoundingthe offence as per Section 15 of the Tamil Nadu Entertainment Tax Act1939, the License for the cinema may be revoked or suspended andindeed, the compounding of an offence is neither a premium nor leverto revoke or suspend the license, in the considered opinion of thisCourt. Suffice it for this Court to point out that even after alicensee is permitted to compound an offence as per Section 15 of theTamil Nadu Entertainment Tax Act X of 39, a Licensee can be proceededwith as per decision 2000 MLJ (SUPPL) P.168 MADRAS, PROBOTH CHANDRAGHOSH V. URMILA DASSI.23.In regard to the compounding of an offence, it is bounded bythis Court that the compounding of an offence is only a confession ofan Act /offence and when a show cause notice has been issued as persub Section 2 of Section 9 of the Tamil Nadu Cinema Regulations Act,1955 in a case where a Licensee compounding an offence as perprovisions of the Tamil Nadu Entertainments Tax Act then there is noquestion of providing either reasonable opportunity of hearing or apersonal hearing because of the simple fact there is nothing to begone into after a licensee compounding the offence and in short, theAct of compounding an offence by the Writ Petitioner is nothing but atacit confession, which is not a favourable circumstance in hisfavour. https://hcservices.ecourts.gov.in/hcservices/

24. In regard to the contention that in the present casecompounding has not been made as per Section 15 of the Tamil NaduEntertainments Tax Act 1939 viz., the non preparation of DailyCollection Report in time, it is to be pointed out that Rule 32 C(1)of the Tamil Nadu Entertainments Tax Rules, 1939 enjoins that theProprietor of the Cinema Theatre is to keep a correct and completeaccount in Form II in duplicate in respect of all shows heldeveryday, etc., and that the entries shall be written up and theaccount closed within ninety minutes of the time notified for thecommencement of the show and this account and tickets remaining instock shall be shown to the Inspecting Officer along with otherconnected records when demanded etc., and in the instant case, theCommercial Taxes Department officials of the Enforcement Winginspected the Licensee the Petitioner's Theatre on 14.04.2002 at07.20 p.m. by making a surprise visit and has found that the DailyCollection Report has not been closed and the Collector upon receiptof the Report from the Commercial Taxes Department that thePetitioner has compounded the offence has taken action as per Section9(1) of the Tamil Nadu Cinema Regulations Act, 1955 and the same isin order and therefore the contra view taken by the Writ Petitionerthat non preparing/writing Daily Collector Report in time is not aviolation under the the Tamil Nadu Cinema Regulations Act, 1955cannot stand a moment scrutiny in the eye of law. 25.Apart from the above, this Court points out that when thePetitioner has compounded the offence by paying a sum of Rs.1,000/-then there is a pre existing conviction and therefore, the samerequires any another enquiry and the ends of justice will be *met* ifa show cause notice as per Section 9(2) is issued to the Petitionerand in the instant case on hand, a show cause notice has been issuedbefore passing the suspension of license as per Section 9(1) of theAct and the concerned Authority is well within its purview to passthe appropriate order after issuing show cause notice and in thepresent case before us, the order of the Respondent in proceedingRoc.No.43772/01-1 dated 22.06.2003 in suspending the 'C' Form Licenseof the Petitioner's Theatre viz., Naga A/c.Theatre, Dindigul Districtfrom 15.07.2003 to 19.07.2003 is a valid one and the same does notsuffer from material irregularity or with patent illegality and inany event, on an overall assessment of the facts and circumstancesof the case, in an integral fashion, it cannot be said to be anexcessive or arbitrary one but the same is minimal and prudent oneto turn a new leaf in the near future, in the considered opinion ofthis Court. Viewed in that perspective, the impugned order of theRespondent which is not to be interfered with and resultantly, thewrit petition fails. https://hcservices.ecourts.gov.in/hcservices/

26.In the result, the writ petition is dismissed leaving theparties to bear their own costs.Sd/Asst.RegistrarDated : 14.12.2010* Corrected order to be issuedSd/-Asst. RegistrarDated : 11.02.2011/true copy/Sub Asst.RegistrarvriToThe District Collector,To be substitutedDindigul District.to the order already1 cc To Mr.N.Thiagarajan, Advocate, SR.83066.despathced on 1 cc To The Government Pleader, SR.83288.30.12.2010W.P.No.18841 of 2003 SJ(CO)RVL 20.12.2010RVL 11.02.2011