Judgment

SHAH, J.;- The respondents in this appeal carry on the business of exhibiting cinematograph films in a theatre named Krishna Cinema at Rajkot. On a plot of land adjacent to the Krishna Cinema the respondents desired to construct "an annexe" for exhibiting foreign films with independent screen and auditorium. On May 14, 1963 the respondents applied to the District Magistrate (who is the Licensing Authority under the Bombay Cinemas (Regulation) Act 11 of 1953) for a no objection certificate to the user of the "annexe" to be constructed on the site for exhibiting cinematograph films. On the same day they submitted to the Executive Engineer plans of the proposed building of "annexe" to be used as a cinematograph theatre. They also applied to the local Municipality for leave to construct a building to be used for cinematograph theatre. The Municipality sanctioned construction of the building. The Executive Engineer also signified his assent by letter addressed to the Additional District Magistrate to the grant of a "no objection certificate".

2. By an application submitted on May 14, 1963 the respondents prayed that "no objection certificate under the Bombay Cinemas (Regulation) Act be granted in respect of the "annexe" to be constructed. As required by the rules framed under the Act the District Magistrate notified the application and invited objections to the proposal. The District Magistrate then forwarded his report to the Government of Gujarat that according to the rules the respondents should have commenced construction of the "annexe" only after obtaining the no objection certificate under the Act, but since the building was constructed with the sanction of the Municipality and the building was in conformity with the rules, he recommended that the "no objection certificate" be granted. The Government of Gujarat intimated by a letter written by the Additional District Magistrate, Rajkot that the application filed by the respondents could not be granted. An appeal filed against the order communicated through the Additional District Magistrate to the State Government was rejected and the respondents were asked not to make any further representations in that behalf.

3. The respondents then filed a petition in the High Court of Gujarat for a declaration that Rule 5, sub-rule (2) of the Bombay Cinema Rules,1954 infringes Article 19(1) (f) & (g) of the Constitution and for a direction calling upon the Government of the State of Gujarat to grant no objection certificate as applied for by them for setting up a cinematograph theatre in the "annexe" and for an order quashing or setting aside the communications from the District Magistrate and the order in appeal passed by the State of Gujarat and to direct the State of Gujarat and the District Magistrate to consider the application of the respondents for no objection certificate in accordance with law. The High Court of Gujarat upheld the contention raised by the respondents and set aside the orders of the State Government and of the District Magistrate. The High Court directed that a writ of mandamus be issued directing the State Government to permit the District Magistrate to issue a no objection certificate and the District Magistrate to issue such a certificate to the respondents as prayed in their application. The State of Gujarat has appealed to this Court with special leave.

4. Exhibition of cinematograph films and licensing of places for such exhibition is governed by the Bombay Cinemas (Regulation) Act 11 of 1953. By virtue of the provisions contained in the Bombay State Reorganisation Act 1960, the Act and the Rules are applicable to the territory of the State of Gujarat. By Section 3 of the Bombay Cinemas (Regulation) Act, 1953, "save as otherwise provided in the Act no person shall give an exhibition by means of a cinematograph elsewhere than in a place licensed under the Act or the otherwise than in compliance with any conditions and restrictions imposed by