The possession of the building and equipment was deemed unlawful as the lessor had not agreed to renew the lease, and the petitioner had no right to insist on renewal.

ORDER :- The legality of the order of the Licensing Authority under the Karnataka Cinemas (Regulation) Act. 1964 (hereinafter referred to as 'the Act') refusing to regrant the cinematograph licence to the petitioner, on the ground that the possession of the petitioner of the building in which she has been exhibiting the cinematograph films and the equipment, is not lawful and the order of the appellate authority confirming the order of the Licensing Authority is questioned by the petitioner in this writ petition.

2. The petitioner became the lessee of the premises together with equipments meant for exhibiting cinematograph films, called IMPERIAL TALKIES situate in the City of Bangalore. The People's Charity Fund, a Trust registered under the Trust Act, is the owner, and lessors of the aforesaid building and equipments. After the expiry of the earlier period of leases of the same premises and equipment, the latest lease which is relevant for this case came into existence through a registered deed dated 12-12-1962. The period of lease was fixed at 15 years, on a monthly rent of Rs. 1,450/ and was due to expire on 11-12-1977. Even before the expiry of the lease period, the 1st respondent filed a Civil Suit against the petitioner for eviction on the ground of breach of covenant by sub-letting. The suit was dismissed by the trial Court, but was decreed by the appellate Court and the second appeal, R. S. A. 802/73, filed by the petitioner is pending before this Court. Even as the said second appeal is pending, the period of lease itself came to an end on 11-12-1977.

3. In the lease deed (Exhibit-A) there is a renewal cl. in para (i) (b) of the deed, which reads as follows:

"On the expiry of the period of lease specified here-in-before and in respect of any new lease, the Lessors may enter into at that time, the Lessors are agreeable to give first priority to the Lessees' application for fresh lease provided the Lessees agree to the terms and conditions of the Lessors to be stipulated at that time."

4. About six months prior to the expiry of the lease period, with the intention of seeking renewal of the lease for a further period, a letter dated 13th June 1977 was addressed on behalf of the petitioner to the 1st respondent (Exhibit-B) and the same reads as follows :

"As you are aware, the above referred premises is leased to us and we have been in occupation of the same for more than two decades. The present lease expires on 12th Dec.1977, Due to the addition of several cinema houses in Bangalore equipped with modern amenities such as air-cooling etc., the competition has increased tremendously. The distributors of foreign films are not inclined to screen first-class pictures in our premises due to the inadequate facilities. In order to procure first-class pictures it is absolutely essential that we modernise the theatre including providing air conditioning or air-cooling plants. This obviously involves investment of money running into several lakhs of rupees. We, on our part, are agreeable to make this investment provided we are given renewal of the lease for a period of 15 years with the option to renew for a further period of 15 years. The lease period requested for is absolutely essential in order to recover our investment for modernising the theatre. As you know, we have been paying monthly rent of Rs. 1,450/- and we are agreeable to enhance the rent to Rs. 2,500/- per month with effect from 12th Dec. 1977 for the next 15 years and Rs. 4,000/- per month after the expiry of first 15 years.

We hope you will consider our proposal favourably and request you to kindly let us have your confirmation as early as possible."

To the said letter the 1st respondent sent a reply on 18th Aug. 1977 (Ex. C). The entire case of the petitioner is based on the said letter, the contents of which are as follows :

"This is to acknowledge receipt of your letter dated 13th June 1977 pertaining to the lease of the New Imperial Cinema at 23, Residency R