1999 Supreme(SC) 703

1999(6) Supreme 85
Supreme Court of India
(From Delhi High Court)
Mrs. Sujata V. Manohar, K. Venkataswami & R.C. Lahoti, JJ.
Union of India & Ors. —Appellants
versus
The Motin Picture Association & Ors. etc. etc. —Respondents
Civil Appeal Nos. 3766-67 of 1999
(Arising out of SLP (C) Nos. 4620-21 of 1996)
With
C.A. Nos. 3768-71/1999
(Arising out of SLP (C) Nos. 7235-36/1997, 7237/1997, 20111/1997 and W.P. (C) No. 550/1997)
Decided on 15-7-1999
Counsel for the Parties :
For the Appearing Parties : R.N. Trivedi, Additional Solicitor General, N.N. Goswami, Dr. R.K. Dhawan, V.A. Mohta, S.K. Dhola­kia, Sr. Advocates, (A.K. Goel, Additional Advocate General for State of U.P.) S.K. Dwividei A. Subba Rao, Hemant Sharma, (S.W.A. Qadri) for B.V. Balram Das, Ashok Jain, Umesh Kumar Bohre, Pra­deep Aggarwal, Sushil K. Jain, Pradeep Misra, Ms. Sangeeta Kumar, Vijay Kumar, H.K. Puri, Ujjwal Banerjee, Rathin Das, Advocates.

Important Points
1. Condition for grant of licence to exhibitors of cinemas im­posed by the Government to the effect that educational, scientif­ic and news films of Film Division of Government to be shown free of charge does not violate Article 19(1)(a) of the Constitution and Article 19(1)(g).
2. Charging 1 weekly collection of cinema exhibitors towards supply of films by Film Division of Government which films are to be exhibited free of charge is not tax within meaning of Article 265 of the Constitution.
3. If a “must carry” provision fur­thers informed decision-making which is the essence of the right to free speech and expression, it will not amount to any violation of the fundamental freedom of speech and expression.

Headnote:(i) Cinematograph Act, 1952—Sections 12(4) and 16 r/w Article 19(1)(a) of the Constitution of India —Conditions for grant of licence—Condition that exhibitor’s of Cinema to exhibit films intended for educationary purpose, films dealing with news and current events, documental films or indigenous films free of charge—Constitutional validity—Conditions amounting to ‘must carry’ provision furthers informed decision making which is essence of right to free speech and expression — Provisions although compel speech cannot be viewed as a restraint on free­dom of speech and expression.

       (ii) Constitution of India—Article 19(1)(a) r/w Cinematographic Act, 1952, Sections 16 and 12(4)—Freedom of speech and expression —Compelled speech — Must carry provision—When would amount to infringement of Article 19(1)(a)—If a ‘must carry’ provision furthers informed decision making which is the essence of right to free speech and expression, it will not amount to any violation of freedom of free speech and expression—Sections 12(4) and 16 of Cinematographic Act which compells showing of Scientific, Educational or Documentary or news films do not violate Article 19(1)(a).

       Held : Undoubtedly, free speech is the foundation of a democratic society. A free exchange of ideas, dissemination of information without restraints, dissemination of knowledge, airing of differ­ing view points, debating and forming one’s own views and ex­pressing them, are the basic indicia of a free society. This freedom alone makes it possible for people to formulate their own views and opinions on a proper basis and to exercise their so­cial, economic and political rights in a free society in an informed manner. Restraints on this right, therefore, have been jealously watched by the courts. Article 19(2) spells out the various grounds on which this right to free speech and expression can be restrained. (Para 12)

       It is contended that just as a restraint on free speech is a viola­tion of Article 19(1) [except as permitted under article 19(2)] compelled speech, often known as a “must carry” provision in a stat­ute, rule or regulation, is equally an infringement of the right to free speech, except to the extent permitted under Article 19(2). However, whether compelled speech will or will not amount to a viola­tion of the freedom of speech and expression, will depend on the nature of a “must carry” provision. If a “must carry” provision fur­thers informed decision-making which is the essence of the right to free speech and expression, it will not amount to any violation of the fundamental freedom of speech and expression. If, however, such a provision compels a person to carry our propaganda or project a parti­san or distorted point of view, contrary to his wish, it may amount to a restraint on his freedom of speech and expression. To give an exam­ple, at times a statute imposes an obligation to print certain infor­mation in public interest. Any food product must carry on its package the list of ingredients used in its preparation, or must print its weight. These are beneficial “must carry” provisions meant to inform the public about the correct quantity and contents of the product it buys. It enables the public to decide on a correct basis whether a particular product should or should not be used. Cigarettes cartons are required to carry a statutory warning that cigarette smoking is harmful to health. This is undoubtedly a “must carry” provision or compelled speech. Nevertheless, it is meant to further the basic pur­pose of imparting relevant information which will enable a user to make a correct decision as to whether he should smoke a cigarette or not. Such mandatory provisions although they compel speech cannot be viewed as a restraint on the freedom of speech and expression. (Para 14)

       We have to examine whether the purpose of compulsory speech in the im­pugned provisions is to promote the fundamental freedom of speech and expression and dissemination of ideas, or whether it is to restrain this freedom. The social context of any such legislation cannot be ignored. When a substantially significant population body is illiter­ate or does not have easy access to ideas or information, it is impor­tant that all available means of communication, particularly audiovis­ual communication, are utilised not just, for entertainment but also for education, information, propagation of scientific ideas and the like. The best way by which ideas can reach this large body of unedu­cated people is through the entertainment channel which is watched by all-literate and illiterate alike. To earmark a small portion of time of this enter­tainment medium for the purpose of showing scientific, educational or documentary films, or for showing news films has to be looked at in this context of promoting dissemination of ideas, information and knowledge to the masses so that there may be an informed debate and decision making on public issues. Clearly, the impugned provisions are designed to further free speech and expression and not to curtail it. None of these statutory provisions require the exhibitor to show a propaganda film or a film conveying views which he objects to. In fact, the exhibitors have not raised any objection to the contents of the films which they are required to show. They, however, contend that one of the important requirements for upholding such compulsory speech in the United States is that such speech should be content-neutral. While in the present case, the contents of the compulsory films are specified in the legislation concerned. In the context of Article 19(1) what we have to examine is whether the categories of films so required to be carried promote dissemination of infor­mation and education or whether they are meant to be propaganda or false or biased information. The statute quite clearly specifies the kinds of films which promote dissemination of knowledge and information. (Para 16)

       Undoubtedly, the exhibitors, in order to fulfil the conditions of the licence, are required to enter into an agreement with the Films Division, Government of India. This is not because of any statutory compulsion but because of the fact that the Films Division is the only organisation which produces such short films in sufficient quantities for regular distribution to the cinema exhibitors. The requirement of approval of such films is to ensure that the films, in fact, comply with the requirements specified in the statute. None of the provisions referred to make it mandatory for the exhibitors to procure such films only from the Films, Division. The reason why they do so is because of a lack of adequate alternative sources. The exhibitors contend that before their licence is renewed, it is necessary for them to obtain a “no objection” certificate from the Films Division. The purpose of this is to ensure that the statutory requirements have been complied with by the licensee in the previous year. If, however, any licensee is in a position to procure such approved films from any other source, there is nothing in the statutes which prohibits him from doing so. These provisions, therefore, do not violate Article 19(1)(a) of the Constitution. They are not in re­straint of free speech and expression. Therefore, Article 19(2) is not attracted. (Paras 17 & 18)

       (iii) Cinematographic Act, 1952 —Sections 12(4) and 16 r/w Article 19(1)(g) of the Constitution of India—Conditions for grant of licence—Condition that exhibitors must show scientific, educa­tional, documentary or news films of Film Division of Government free of charge and payment of 1 weekly collection to Govern­ment—Whether violative of Article 19(1)(g)?—No—Restrictions sought to be imposed are specific and tailored to fit public purpose behind the restrictions designed to further public pur­pose of dissemination of information and knowledge—Charging of 1 of weekly collection not excessive. (Paras 19, 22, 25 & 26)

       (iv) Delhi Cinematographic Rules, 1981—Conditions 15 and 22—Constitu­tion of India, Article 19(1)(g)—Conditions for grant of licence—Condition that exhibitors to show scientific, education­al and news films of Film Division of Government — Whether viola­tive of Article 19(1)(g) ?—No—Restrictions sought to be imposed are designed to further public purpose of dissemination of infor­mation and knowledge — Charging of 1 of weekly collections is not excessive.

       Held : The basic purpose of the impugned laws which deal with licensing of cinema halls, and prescribing conditions subject to which such licences can be granted, is to regu­late the business acti­vity of the exhibitors of cinematograph films. Obtaining a licence for running such cinema theatres is for the pur­pose of regulating this business. This purpose has a direct nexus with Articles 19(1)(g) and 19(6) of the Constitution. The source of legis­lation under this head can be traced to Entry 33 of List II which entitles the States to legislate on “theatres and dramatic perform­ances; cinemas subject to the provisions of Entry 60 of List, 1, sports, entertainments and amusements.” That is why State Laws have been framed for regulating the terms and conditions on which a licence for exhibiting films at cinema theatres can be obtained. Part III of the cinematograph Act, 1952 which applies to Union Territories is also in the exercise of the legislative powers under Entry 33 of List II. Since Delhi was a Union Territory and is now National Capital Territo­ry since 1991 by virtue of the Constitution 69th Amendment Act, 1991, Parliament has the power to legislate under this Entry also. {see Article 246(4) and the relevant provisions of Article 239(AA)}. Entry 60 List I on the other hand deals with “sanctioning of cinematograph films for exhibition.” Censorship provisions, for example, would come under Entry 60 of List I and these would directly relate to Article 19(1)(a) and Article 19(2) of the Constitution. The basic purpose of these impugned provisions is, therefore, to regulate the business of exhibiting films in cinema theatres under Entry 33 List II. (Para 19)

       The restrictions sought to be imposed are specific and tailored to fit the public purpose behind the restrictions. The length of the film to be shown, the duration for which it is to be shown and the nature of the films which are to be shown, are specified and are designed to further the public purpose of disseminating information and knowledge so that the general public can be educated on a number of issues of national or general importance to enable them to function effectively in the democratic framework of this country with adult franchise. These restrictions, therefore, have to be upheld as reasonable. (Para 22)

       The reasonableness or otherwise of restrictions on their right to carry on business will have to be examined in the context of the purpose sought to be served by imposing such restrictions. There is no dispute that the rights of the exhibitors under Article 19(1)(g) are subject to reasonable restrictions under Article 19(6). There is a public purpose in requiring the exhibitors to show such films. We have already stated that where a large percentage of population is illiterate and has very limited access to knowledge, information and ideas, it is important that such knowledge and information is disseminated to this vast volume of population in a manner which will ensure that ideas and information are in fact conveyed to them and they can assimilate and debate these ideas before accepting or reject­ing them. Requiring an entertainment medium like cinema theatres to show for a short duration of its programme, films which educate and impart information cannot be considered as an unreasonable restriction on the right to carry on business. When there is adult franchise without literacy, it becomes all the more important that information and ideas reach the adult population. Looking to the purpose for which such films are shown, the expense incurred also cannot be considered as unreasonable. (Paras 25 and 26)

       Held further that the Films Division is charging a very small amount consid­ering the expenditure outlay in producing and distributing these films. In these facts and circumstances, the rental of one per cent cannot be considered as excessive. (Para 28)

       (v) U.P. Cinemas (Regulations) Act, 1982—Section 5(4) r/w Article 19(1)(a) and (g) of Constitution of India—Conditions for grant of licence—Condition to show educational, scientific and news films of Film Division of Government free of charge and payment to Government 1 of weekly collection—No violative of Article 19(1)(a) and (g). (Paras 19, 22, 25, 26 and 28)

       (vi) West Bengal Cinemas (Regu­lations) Act, 1954—Section 5(3) r/w Article 19(1)(a) and (g)—Conditions for grant of licence—Condi­tion to show educational, scientific and news films of Government free of charge and payment of 1 weekly collection—Not violative of Article 19(1)(a) and 19(1)(g). (Paras 19, 22, 25, 26 and 28)

       (vii) Delhi Cinematograph Rules, 1981—U.P. Cinemas (Regulations) Act, 1982 — Section 5(4) — West Bengal Cinemas (Regulation) Act, 1954—Section 5(3) — Constitution of India—Article 265—Condi­tions for grant of licence—Payment of 1 weekly collections to Government towards charges for films of Film Division of Govern­ment to be exhibited free of charge—Whether amounts to tax within meaning of Article 265 of Constitution?—Whether violative of Article 265?—No—Amount in question required to be paid under agreement—Payment is in consideration of supplying films.

       Held : It is true that neither the relevant Act nor the notification nor the rules nor the terms and conditions of the licence stipulate the payment of any rental. This amount is required to be paid under an agreement which the exhibitors individually enter into with the Films Division for the supply of these films. It is a payment under the terms of a contract between the two parties. It cannot, therefore, be viewed as a tax at all. The exhibitors contend that because they are required to enter into these agreements, any payment under the agreement is a compulsory exaction and is, there­fore, tax. We do not agree. Under the terms of the agreement, the Films Division has to supply certain prints to the theatre owners at stated intervals. The Films Division is required to maintain a distri­bution network for this purpose. It is required to pack these films and is required to allow the exhibitors to retain these films in their possession for a certain period. The films are to be returned to the Films Division thereafter. The charge is termed in the agreement as rental for the films. It covers charges for preparing the prints of the films for distribution, and for packing them for delivery. These are clearly services rendered by the Films Division for which it is paid one per cent of the net collection as a rental. As stated earli­er, the total cost of preparing prints, packing them and distributing them is much higher than the total recovery made by the Films Division by way of rental from all the exhibitors. There is a clear nexus between the services rendered and the payment to be made. The payment, therefore, is in the nature of a fee rather that a tax though there may not be an exact quid pro quo. (Para 30)

       The rental is charged by the Films Division by virtue of an agreement between the Films Division and the individual exhibitor. This is in consideration of the Films Division supplying films to the exhibitor, packing the film and arranging for its delivery. This is clearly an agreed fee charged for rendering services. It cannot be viewed as a compulsory exaction or as a tax. There is a statutory obligation which is cast on the exhibitors to exhibit certain films. To carry out this statutory obligation, if the exhibitors enter into an agreement with the Films Division and agree to pay a certain amount of rental for procuring the films from the Films Division to comply with the statutory obligation, the levy must, since it is co-related with the Films Division dis­charging certain obligations under the contract, be viewed, at the highest, as a fee and not as a tax. It is an agreed payment, and is not unreasonable. (Para 31)

       (viii) Delhi Cinematograph Rules, 1981—Conditions 15 and 22—Cinemato­graph Act, 1952—Sections 12(4) and 15—Whether conditions 15 and 22 overlap—No condition 15 is not redundant.

       The High Court has struck down Condition 15 of the licence issued under the Delhi Cinematograph Rules as being too wide, and unnecessary in view of Condition 22 of the licence. (Para 32)

       Held: Under Condition 15, the licen­see is required to exhibit films or lantern slides, the exhibition of which will take not more than 15 minutes in all, as required by the administrator. Such exhibition may be free of charge or on such terms a regards remuneration as the administrator may determine. The High Court has held that the kind of films and lantern slides required to be exhibited under Condition 15 are not specified and hence this condition is too wide and not related to the object of placing such a restriction. Condition 15, however, has to be read along with Section 12(4) of the Cinematograph Act, 1952, since Delhi Cinematograph Rules, 1981 are issued under the Cinematograph Act, 1952; and any conditions imposed on the licence cannot go beyond the purposes speci­fied in Section 12(4). Condition 15, therefore, has to be read in con­junction with Section 12(4) of the Cinematograph Act under which only scientific films, films intended for educational purposes, films dealing with news and current events, documentary films or indigenous films can be so required to be exhibited. The films referred to in Section 15 must also be of this kind. Lantern slides also take colour from the same provision and lantern slides compulsorily required to be shown must also fall in the categories mentioned in Section 12(4). When it is so read, Condition 15 will have a direct nexus with the object sought to be achieved, and it can be upheld as a reasonable restriction. We accordingly so hold. Condition No. 22 refers to exhi­bition of approved films the total length of which may not exceed 600m of 35mm or a corresponding size of approved films of 60mm. These are somewhat longer films as compared to lantern slides and films referred to in Condition 15. Therefore, Conditions 15 and 22 do not overlap, but refer to different sizes and types of short films, shorter films or lantern slides. The High Court was, therefore, not right in holding that Condition No. 15 is redundant since it is covered by Condition No. 22. Both conditions, however, must be read in the light of Section 12(4) of the Cinematograph Act, 1952 and only films and lantern slides which fall within the description of such films under Section 12(4) can be so required to be shown. (Para 32)