JUDGMENT

S. C. AGRAWAL, J.:—Leave granted.

2. Heard learned counsel for the parties.

3. These appeals are directed against the judgment of the High Court of Punjab and Haryana dated August 5, 1992 dismissing the writ petitions filed by the appellants wherein they had challenged the orders refusing to grant or renew the licence for exhibition of video films through video cassette recorder (VCR),. video cassette player (VCP) and a video projector on a separate screen in the video parlours run by them. The appellants have also challenged the validity of the proviso to sub-rule (3) of Rule 10 and Rule 5(3) of the Punjab Exhibition of Films on Television Screen through Video Cassette Player (Regulation) Rules, 1989 (hereinafter referred to as the Rules) made by the Government of Punjab in exercise of the powers conferred on it by Punjab Cinemas (Regulation) Act, 1952 (hereinafter referred to as the Act).

4. The appellants are running video parlours wherein they exhibit pre-recorded video cassettes of cinematograph films with the aid of a VCR/ VCP and a video projector on a large screen of the size of (sic) inches or 120 inches. The premises in which they conduct the said business are having a capacity of more than 50 seats. In the Punjab Cinemas (Regulation) Rules, 1952 that were framed by the Government of Punjab in exercise of the powers conferred by the Act, there was no special provision for grant of licence for such public exhibition of films. On January 10, 1986, the Government of Punjab issued executive instructions for grant of licences for public exhibition of films on video under the Act and the Punjab Cinemas (Regulation) Rules, 1952 wherein it was stated that the Government have decided to frame Acts/ rules to regulate the video films through VCRs and while this process would take some time, the Government, in the meanwhile, have decided to take immediate remedial measure to provide for licensing of commercial exhibition of films through VCRs. By the said instructions, the District Magistrates were advised to issue licences to the applicants for public exhibition of films on video under the Cinematograph Act, 1952. In accordance with those instructions, temporary licences were granted to the appellants. Under those licences, the seating capacity for the premises used for public exhibition of films was in the range of 150-200.

5. By notification dated January 13,1989 the President of India promulgated the Rules providing for regulation of the exhibition of films on Television screen through VCPs. Rule 2 makes the Rules applicable to all the existing places where films are exhibited on television screen through video cassette players on payment for admission to such places and also to the places which shall be used for the said purpose after the commencement of the Rules. In Rule 4 it is laid down -

"4. Licensing - No person shall exhibit films on television screen through video cassette players on payment for admission basis in any place unless he has obtained a licence under and in accordance with the terms and conditions of a licence to be granted under these rules.

Provided that a person who, immediately before the commencement of these rules, holds a licence under any instructions issued by the State Government shall be required to obtain a licence within one month from such commencement or on the expiry of the licence, whichever period is earlier."

6. Part II (Rules 5 to 11) prescribes the procedure for granting licences. In sub-rule (3) of Rule 5, it is provided that the licence shall be granted for a Video Cassette Player in respect of a premises having seating capacity up to fifty seats only. Similarly in the proviso to sub-rule (3) of Rule 10, it is laid down that no licence shall be granted for a building under these rules, if such building is worth accommodating more than fifty spectators at a time.

7. The High Court construed the Rules to mean that they apply only to exhibition of films on the screen of television se