P.B.GAJENDRAGADKAR, C.J.I.

(1) THE short question of law which arises in this appeal relates to the construction of section 5(2) of the Punjab Cinemas (Regulation) Act, 1952 (No. 11 of 1952) (hereinafter called the Act). The respondent, Hari Krishan Sharma, who claims to be the owner of a certain site in the town of Jhajjar, desired to construct a cinema hall at the said place for the purpose of exhibiting cinematography. On 16/12/1956, he submitted an application to appellant No. 2, the Subdivisions Officer, Jhajjar, for the grant of the licence to construct and run a permanent cinema hall on his site. On 22/02/1957, appellant No. 2 forwarded the said application to the Tehsildar for inspection of the site. It appears that on 24/04/1957, the government of appellant No. 1, the State of Punjab, had issued instructions in regard to the grant of licences under the relevant provisions of the Act. These instructions required that all requests for the grant of permission for opening all new permanent cinemas should be referred to appellant No. 1 for orders. On 26/09/1957, the Tehsildar made a report that the site was in accordance with the provisions of the Act and that the respondent was its owner. On 30/09/1957, another memorandum was issued by appellant No. 1 addressed to all the District Magistrates and the Sub-Divisional Officers conveying the decision of appellant No. 1 that when an application for grant of permission to construct a permanent cinema was referred to the government, it should be accompanied by the particulars enumerated in the memorandum. Amongst the items thus enumerated were the population-of the town where the permanent cinema is proposed to be constructed; whether there are any permanent cinemas already in existence in the town, and if so, how many; whether the applicant/applicants has/have been taking any part in any activity undermining the security of the State; and whether the financial position of the applicant/applicants is/are sound. These notifications were issued by appellant No.1 while the application made by the respondent was pending co; sideration.

(2) ON 24/04/1958, appellant No. 2 informed the respondent that the site proposed by him for the construction of the cinema hall had been approved. The respondent was required to submit a plan of the building within a month and he was warned not to transfer the ownership of the site without the previous sanction of the licensing authority. On 23/05/1958, the respondent submitted the building plans. These plans were forwarded by appellant No. 2 to the Executive Engineer, Provincial Division, Rohtak, for scrutiny. While forwarding the plans to the Executive Engineer, appellant No. 2 had stated that the respondent had been allowed to construct a permanent cinema hall at Jhajjar and the site plans were being submitted for proper scrutiny and approval at an early date.

(3) MEANWHILE, it appears that one Mohan Lal had also applied for grant of a licence for construction of a cinema hall in June, 1958, but he was informed that permission had already been granted to one person, and there was no scope for a second cinema hall. That is why he was told that his application could not be considered. Yet another person, Sultan Singh by name, made a similar application on 26/08/1958. On 7/10/1958, the Provincial Town Planner, Punjab, wrote to the Executive Engineer that the building plans submitted by the respondent had been checked and they appeared to satisfy the rules framed under the Act so far as the structural features of the building were concerned. On 6/10/1958, however, appellant No. 2 addressed a memorandum to the respondent informing him that the site plans prepared by him for the construction of a permanent cinema hall would be referred to appellant No. 1 for approval `according to the latest instructions`.

(4) THEN followed a report made by appellant No. 2 to appellant No. 1/10/1958, mentioning all the relevant facts in regar