High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE RAJU
M. Ganapathy Swamy
Versus
The District Collector, Periyar District, Erode & Others
W.P. No. 17249 of 1994
Decided On :Decided on : 22-11-1994
CINEMA LICENCE RENEWAL - PARTNERSHIP FIRM - REQUIREMENT OF CONSENT OF ALL PARTNERS - REJECTION OF RENEWAL APPLICATION BY LICENSING AUTHORITY - VALIDITY - TAMIL NADU CINEMA (REGULATION) RULES, 1957 - RULES 92 TO 97.
Fact of the Case:
The petitioner, a partner in a partnership firm that held a C-form license for operating a cinema theatre, applied for renewal of the license. The application was rejected by the licensing authority on the ground that it was not signed by all the partners, as required by the Tamil Nadu Cinema (Regulation) Rules, 1957. The petitioner challenged the rejection order before the appellate authority and the revisional authority, but his appeals were dismissed. He then filed a writ petition in the High Court.
Finding of the Court:
The High Court held that the licensing authority was justified in rejecting the petitioner's application for renewal of the license. The court noted that the license was issued in the names of all four partners of the firm, and that the renewal application was made by only two of the partners. The court held that, under the Tamil Nadu Cinema (Regulation) Rules, 1957, a renewal application can only be made by all of the partners whose names are listed on the license. The court also noted that the petitioner owned only 20% of the shares in the firm, while the other partners owned the remaining 80%. The court held that, in these circumstances, the petitioner could not force the other partners to continue the business against their wishes.
Issues: 1. Whether the licensing authority was justified in rejecting the petitioner's application for renewal of the license? 2. Whether the petitioner could force the other partners to continue the business against their wishes?
Ratio Decidendi: 1. The Tamil Nadu Cinema (Regulation) Rules, 1957, require that a renewal application for a cinema license be made by all of the partners whose names are listed on the license. 2. A partner who owns a minority share in a partnership firm cannot force the other partners to continue the business against their wishes.
Final Decision: The writ petition was dismissed.
1. The above writ petition has been filed for issue of a writ of certiorarified mandamus to call for the records and quash the proceedings of the 3rd respondent in G.O.(D) No. 873, Home Cinema S.O. Department, dated 12.9.1994 whereunder the 3rd respondent exercising the powers of revision, has rejected the revision petition filed by the petitioner. The salient features of the facts which are relevant for deterrmining the issue in question are as hereinafter:
The petitioner and three others by name R. Shanmugham, M. Kumarasami and R. Perumalsami found a partnership firm known as Ganapathysamy & Partners. It is seen that initially a share of each one of the four partners was equal, each having 25% of the shares. At the time of hearing before me, it has been brought to my notice by the learned counsel for the 5th respondent that there has been subsequent change in the percentage of shares held and that the present position is that the petitioner owns 20% of the snares whereas the 5th respondent owns 40%, 4th respondent 10% and respondents 6 and 7 together owning 30% of share in the firm. The partnership firm represented by four partners have applied for and obtained Form, Clicence for carrying on business (“Shanmugha Theatre (Permanent)” at Punjai Puliyampatti, Periyar District. It appears that the licence initially was issued on 6.12.1964 in favour of the firm and periodically, the same was being renewed. The petitioner also claims to have been running the theatre in the capacity as Managing Director of the firm with effect from 1.3.1988. When the last renewed licence in Form-C relating to the Theatre in question was to expire by 31.10.1990, and two of the partners R. Shanmugham and R. Perumalsamy appear to have sent telegram on 23.8.1990 followed by a petition received on 27.8.1990, to the Licensing Authority, the 1st respondent herein, objecting to the renewal of the licence for the period beyond 31.10.1990 in view of certain disputes among the partners. The Licensing Authority appears to have called for a report from the Revenue Divisional Officer, Gobichettipalayam and a report was said to have been submitted on 25.9.1990 by the said Authority. The petitioner appears to have filed an application for renewal of the C-form licence on 1.10.1990. The 1st respondent noticed that the application dated 1.10.1990 requesting for renewal beyond 31.10.1990 was received from M. Ganapathy Swamy, the petitioner herein and M. Kumaraswamy, the 4th respondent herein and the other two partners R. Shanmugam, the 5th respondent herein and R. Perumalsamy, the predecessor-in-interest of Respondents 6 and 7 have not signed in the application for renewal. Dispute in the Civil Court was also said to be pending. In the circumstances, after considering the materials on record, the Licensing Authority rejected the application for renewal for the period beyond 31.10.1990 by his order dated 19.10.1990 on the ground that when the licence is in more than one persons name, all of them should sign the application for renewal and that not only the same has not been done, but there has been dispute with reference to the possession and actual objection for renewal also from the other two partners.
2. Aggrieved, the petitioner and the fourth respondent herein filed an appeal before the second respondent Appellate Authority. The Appellate Authority also concurred with the order of the Licensing authority rejecting the claim for renewal. It is during the stage of appeal, on account of the death of Mr. Perumalsamy-one of the partners who was a respondent before the appellate authority, his wife— the sixth respondent was brought on record. Thereupon the petitioner pursued the matter before the third res pondent by filing a revision which also rejected the revision confirming thereby the order of the authorities below by the impugned order dated 12.9.1994. Hence the above writ petition.
3. Mr. N.R. Chandran, the learned senior counsel appearing for the writ
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