JUDGMENT

DESAI, J.:— This appeal by special leave is directed against the order dated 27th December 1977 made by the State of Madhya Pradesh granting a licence for a quasi-permanent cinema to respondent No. 3 Prem Narayan son of Ganpatlal Chouksey, prorietor, Chitra Talkies, Lalbagh, Burhanpur (M. P.) against which a petition under Art. 226 of the Constitution by the petitioners was dismissed in limine by a speaking order by the High Court of Madhya Pradesh at Jabalpur on 6th March 1978.

2. Third respondent made an application on 5th December 1975 for grant of a licence for a temporary cinema and the District Magistrate having jurisdiction issued a no-objection certificate vide his order dated 10th February 1976 for a period of six months. This licence was renewed up to 30th June 1976 and there was a further renewal up to 30th September 1976. A subsequent application for renewal was turned down by the District Magistrate by his order dated 29th June 1977 on the ground that Paras Talkies with permanent cinema licence which was closed, has now been functioning in the locality and, therefore, a renewal of the licence for a temporary cinema in the same locality would not be proper. Respondent 3 carried the matter in appeal to the State Government which by its order dated 27th December 1977 granted a licence fot a quasi-permanent cinema under the M. P. Cinemas Regulation Rules to the third respondent. Present petitioners filed a petition under Aricle 226 questioning the validity of the aforementioned order of the State Government contending, inter alia, that they were the residents of the locality and that they had objected to the grant/renewal of licence on the ground that there is a mosque, a madrasa and a temple in the vicinity of the place where the cinema house is to be constructed and even though their objections were upheld by the licensing authority, the District Magistrate, they were not heard in the appeal preferred by the third respondent and, therefore, the order of the first respondent State of Madhya Pradesh suffers, inter alia, from the vice of violation of the principles of natural justice. The High Court was of the opinion that District Magistrate was not influenced by the fact that there was a mosque a madrasa and a temple in the vicinity of the place where the proposed cinema house was to be constructed but he was influenced by an extraneous consideration that a cinema having a permanent cinema licene having been reopened in the locality there was no need for a cinema house with a temporary licence and that it being a matter left to the subjective satisfaction of the State Government, the state Government on being satisfied that there was no impediment to the grant of such a licence, was perfectly justified in granting the same and, therefore, it is not a fit case for the interference of the High Court. The appellants thereupon filed this appeal by special leave.

3. Mr. G. B. Pai, learned counsel who appeared for the petitioners, contended that if before the grant of a quasi-permanent cinema licence to the third respondent the appellants filed their objections which were taken into consideration by the District Magistrate, the licensing authority, and if the District Magistrate was impressed by the objections and, therefore, turned down the request for temporary cinema licence, in an appeal against this order preferred by the third respondent, the appellants as objectors should have been heard and the decision arrived at by the State Government in appeal at their back was violative of the principles of natural justice and the order granting licence for quasi-permanent cinema by the State Government is invalid.

4. Before we examine the contention canvassed on behalf of the appellants it is necessary to glance at the relevant provisions of M. P. Cinemas (Regulation) Act, 1952 (Act for short). Section 3 imposes a restriction on exhibition by means of cinematograph at any place other than a licenced place under the Act