1. The Petitioner Jagat Talkies Distributors is aggrieved by the impugned order dated 7th February 2005 passed by the Deputy Commissioner of Police (Licensing), Delhi revoking the Cinematography licence issued to it, order of the Lieutenant Governor, Govt. of NCT of Delhi dated 28th April 2005 in appeal suspending the licence, and a subsequent order dated 22nd May 2007 of the DCP (Licensing), Delhi rejecting the renewal application of the Petitioner on the ground that an FIR had been registered against it.

2. The impugned order of 7th February 2005 states that on the complaint of one Shri S. Abhinandan Reddy and Shri Kailash Joshi of M/s Knight Watch Security Limited, a raid was conducted on 6th September 2004 by the authorized agent of Central Board of Film Certification (‘CBFC’), Ministry of Information and Broadcasting, New Delhi in the Jagat Cinema Hall situated in the area of Jama Masjid, Delhi. At that time, the film "Korean Ki Laila" was being screened. The film began at 4 pm. The raiding party bought tickets and watched the film up to 5.45 pm. It found that a pornographic film was being shown in the picture hall in the guise of the regular film "Korean Kil Laila". On the basis of said complaint from Shri Kailash Joshi on the spot, an FIR No. 116 dated 6th September 2004 under Section 7(i)(c) of the Cinematograph Act, 1952 (‘Act’) was registered at Police Station Special Cell, New Delhi. Three persons, namely Bal Kishan Malhotra working as Manager of Jagat Cinema, Pramod Kumar and Kuldeep working as Projector Operators, were arrested. It is stated that 19 film rolls of ‘Korean Ki Laila’, a photostat copy of the certificate issued by CBFC, counterfoils of sold tickets, the duty roster of the Jagat Cinema employees were also seized by the raiding party.

3. On 17th September 2004, the DCP (Licensing) issued a show cause notice to the Petitioner pointing out that the above facts constituted violations of the conditions of the Cinematograph Licence granted on Form ‘A’ under Section 10 of the Act which prohibited the licencee from exhibiting any film "other than a film which has been certified for public exhibition". The Petitioner was asked to show cause within 15 days as to why licence granted to it should not be revoked. 4. The order proceeds to narrate that seized prints of the film which was shown in Jagat Cinema Hall on 6th September 2004 and were verified by the CBFC on 6th October 2004 in the presence of one Advisory Panel and the Regional Officer, CBFC and the Sub-Inspector of Special Cell of Delhi Police. It is found that the seized prints contained "insertion of several objectionable visuals of highly erotic sexual acts," which are not available in the video copy of the film certified by the CBFC, Mumbai. A reference has been made to Rule 3(8) of the Delhi Cinematograph Rules, 2002 (‘DCR’) in terms of which the licencee shall be responsible for "all acts and omissions of his Managers, servants or agents, which are committed or made with his knowledge or consent arising out or in connection with the cinema to which licence relates".

5. The reply dated 4th October 2004 submitted by the Petitioner did not deny the screening of the pornographic film. It was contended that the licencing authority has exercised powers under Rule 8 DCR wrongly and that the licence cannot be suspended for an indefinite period of time on the ground that an FIR had been registered. Another application dated 31st January 2005 was submitted by the Petitioner wherein it was stated that some of the staff were being suspended for acting without his consent and knowledge and without any permission from him. He has, accordingly, initiated disciplinary action against them.

6. The order noted that on 3rd February 2005, the proprietor of the Petitioner was called for personal hearing during which "he admitted that the Manager of the cinema hall was exhibiting pornographic film, but without his knowledge." He further said that he had seen the repor