I

...

UNION OF INDIA AND ORS.

v.

MOTION PICTURE ASSOCIATION AND ORS. ETC. ETC.

JULY 15, 1999

[SUJA TA V. MANOHAR, K. VENKA T ASWAMY

AND R.C. LAHOTI, JJ.]

A

B

Constitution of India-Arts 19(/)(a), 19(2),-:-Freedom of speech and

expression-Scope-Requirement

to show short film, educational, scientific,

documentary film or a film carrying news or current events, along

with other C

films-Whether showing of compulsory films is violative of rights of exhibitors

under Art 19(/)(a)

of the Constitution-Held, No-Cinematograph Act, 1952;

West Bengal Cinemas (Regulation) Act. 1964, notification No. 7277-F dated

20-9-1957 issued thereunder; U.P. Cinemas (Regulation) Act, 1955; Delhi

Cinematograph

Rules, 1981.

Constitution of India-Art I9(1)(g), 19(6)-Freedom to carry

profession-Exhibiting cinematograph films

in cinema theatres-Lincensing

D

of cinema halls-Requirement to exhibit short Films, educational, scientific,

documentary film, or news film carrying current events, along with other

films-Whether violative

of rights of exhibitions under Art 19(/)(g) of the E

Constitution-Held No.

Cinematograph Act, 1952-West Bengal Cinemas (Regulation) Act,

1954-U.P. Cinemas (Regulation) Act, I955-Delhi Cinematograph Rules,

I981-Constitutional validity

to-Exhibition of cinematograph films­

Licensing-Requirement to exhibit a scientific, educational or documentary F

film or news film-Whether violates fundamental right to free speech and

expression and right

to profession of the exhibitors-Held, No-Constitutional

validity

of the provisions upheld

The respondents, Associations of organisations engaged in the business

of distribution and exhibition of motion pictures in the area of Delhi,

U.P. G

and in West Bengal challenged the validity of certain provisions of the West

Bengal Cinemas (Regulation) Act, 1964

and a notification No. 7277-F dated 20-9-1957 issued thereunder; the Cinematograph Act, 1952; the U.P. Cinemas

(Regulation) Act, 1955

and the Delhi Cinematograph Rules, 1981. According

to the impugned provisions of these legislation, in each cinema theatre the H

875

876 SUPREME COURT REPORTS [1999] 3 S.C.R.

A e~hibitor of films is required to show a short film which may be educational

or scientific, a documentary film, or a film carrying news or current events,

along with the other films. The duration of such films

is limited and only

a small proportion of this total viewing time

is devoted to the showing of such

films. Each exhibitor

is required to enter into an agreement

with the Films

B Division for the supply of such films for exhibition and the exhibitor is

required to pay to the films Division a rental amounting to 1 % of his net

weekly collection for the supply

of the films. The respondents challenged

these provisions as violative

of their rights under Art 19(1)(a) and 19(1)(g)

of the Constitution. The exhibitors alleged that the condition in the licence

requiring them to show these films even for a short duration

is now

C economically onerous and violates their right to carry on their chosen

business under Art. 19(1)(g);

that the charge of one percent on the net

recoveries

is a compulsory exaction in the form of a tax; and that a 'must

carry' provision in a statute, rule or regulation, is equally an infringement

of the right of free speech, except to the extent permitted under Art 19(2)

D of the Constitution. The High Court upholding the statutory provisions, held

that the condition in the agreement for charging a rental for the supply is

unconstitutional, directing the Films Division to supply such films to

each

exhibitor at his place of exhibition and that no charges should be levied for

the supply

of these films. Condition 15 of the licence issued under the

Cinematograph Act

was struck down as redundant The High Court declined

E to consider the validity of the provisions under Art 19(1)(a), there being no

averments to that effect.

These appeals had

been filed by the

Union oflndia and the writ petition

was filed

by the exhibitors against the findings recorded by the High Court

The questions raised for consideration were whether the purpose of

F compulsory show in the impugned provisions is to promote the fundamental

freedom

of speech and expression and dissemination of ideas, or whether it

is to restrain this freedom; and whether the expense incurred in showing

these films

is high or unreasonable.

G Allowing the appeals while dismissing the writ petition, this Court

HELD : 1.1. The social context of any such legislation cannot be

ignored. When a substantially significant population body

is illiterate or

does not have easy access to ideas or information, it is important that all

available means of communication, particularly audiovisual communication,

H are utilised not just for entertainment but also for education, information,

-

U.0.1. v. MOTION PICTURE ASSOCIATION 877

propagation of scientific ideas and the like. The best way by which ideas can A

reach this large body of uneducated people is through the entertainment

channel which

is watched by all illiterate and literate alike. To earmark a

small portion

of time of this entertainment medium for purpose of showing

scientific, educational

or documentary films, or for showing news films has

to be looked

at in this context of promotion of dissemination of ideas,

information and knowledge to the masses

so that there may be an informed B

debate and decision making on public issues. Clearly, the impugned provisions

,.

are designed to further free speech and expression and not to curtail it. None

of these provisions require the exhibitor to show propaganda film or a film

conveying views which he objects to. In the present case, the contents

of the

compulsory films are specified in legislation concerned.(888-G-H; 889-A-C]

C

1.2. Undoubtedly the exhibitors, in order to fulfil the conditions of the

licence,

are required to enter into an agreement with the Films Division,

Government

of India. This is not because of any statutory compulsion but

because of the fact that the Films Division is the only organisation which

produces such

short films in sufficient quantities for regular distribution D

to the cinema exhibitors. The requirement for approval of such films is to

ensure that the film,

in fact, comply with the requirements specified in the

statute. These provisions, therefore, do not violate Article 19(l)(a)

of the

Constitution. They

are not in restrain of free speech and expression.

Therefore, Article 19(2)

is not attracted. (889-E-F-H;

890-A] E

Express Newspapers Pvt. Ltd & Ors. v. Union of India, (1986] 1 SCC

133; S. Rangarajan v. P. Jagjivan Ram & Ors., (1989] 2 SCC 574; Indian

Express Newspapers (Bombay) Pvt.

Ltd & Ors. v.

Union of India & Ors.,

[1985] 1 SCC 641; K.A. Abbas v. Union of India & Anr., (1970) 2 SCC 780;

Life Insurance Corporation of India v. Prof Manubhai D. Shah, (1992] 3 F

SCC 637 and Secretary, Ministry of Infromation & Broadcasting, Govt. of

India & Ors. v. Cricket Association of Bengal & Anr., (1995) 2 SCC 161,

relied on.

1.3. In the present case, the restrictions sought to be imposed

are G

specific and tailored to fit the public purpose behind the restrictions. The

length of the film to be shown, the duration for which it is to be shown and

the nature of the films which are to be shown, are specified and are designed

to further the public purpose

of disseminating information and knowledge

so

that the general public can be educated on a number of issues of national

or general importance to enable them to function effectively in the democratic H

878 SUPREME COURT REPORTS [1999] 3 S.C.R.

A framework of this country with adult franchise. These restrictions, therefore,

have to be upheld as reasonable. [891-D-E)

1.4. The reasonableness

or otherwise of restrictions on their right to

carry on business will have to be examined in the context of the purpose

sought to be served

by imposing such restrictions. The rights of the exhibitors

B under Art. 19(l)(g) are subject to reasonable restrictions under Article

19(6).

There is a public purpose in requiring the exhibitors to show such

films. Requiring an entertainment medium like cinema theatre to show for

a short duration of

its programme, films which educate and impart information

cannot be considered as an unreasonable restriction on the right

to carry

on business. When there is adult franchise without literacy, it becomes all

C the more important that information and ideas reach the adult population.

[892-E-G)

1.5. Looking to the purpose for which films

are shown, the expense

incurred also cannot be considered as unreasonable. The Films Division

incurs

an expenditure of more than Rs. 12 crores per year only for taking

D out adequate prints, while their recovery in form of rental is only Rs. 7 to

8 crores

per year. Therefore, the Films Division is charging a very small

amount considering the expenditure outlay in producing and distributing

these films. In these facts and circumstances, the rental

of one per cent

cannot be considered as excessive. (893-H; 894-A-B)

E

F

1.6. The Film Division has a distribution network spread throughout

the country to serve

13000 cinema theatres. It has ten distribution branches

throughout the country. The Film Division packs the films, seals them

and

sends them by train to the cities, towns, and villages wherever the cinema

theatres are located. Therefore, there

is no special inconvenience caused to

the exhibitors for securing these films. The arrangements for supply

and

distribution which have been in existence unchallenged for the last

30 years

until the present proceedings were instituted cannot be considered as

unsatisfactory

or unreasonable. (894-C-D]

1. 7. The charge termed in the agreement as rental for the films covers

G charges for preparing the prints of the films for distribution, and for packing

them for delivery. These are clearly services.rendered by the Film Division

for which it

is paid one per cent of the net collection as a rental. The total

cost for preparing prints, packing them and distributing them

is higher than

the total recovery made by the Film Division by way

of rental from all the

exhibitors.

There is a clear nexus between the services rendered and the

H payment to be made. The payment, therefore, is in a nature of a fee rather

U.0.1. v. MOTION PICTURE ASSOCIATION 879

than a tax though there may not be an exact quid pro quo. This is clearly A

an agreed fee charged for rendering services. It cannot be viewed as a

compulsory exaction

or a tax. There is a statutory obligation which is cast

on the exhibitors to exhibit certain films. To carry out this statutory obligation,

if the exhibitors

enter into an agreement with the Films Division and agree

to

pay a certain amount of rental for procuring the films from the

Film

Division to comply with the statutory obligations, the levy must, since it is B

correlated with the Films Division discharging certain obligations under the

contract, be viewed,

at the highest, as a fee and not as a tax. It is an agreed

payment,

and is not unreasonable. [895-A-B; F-Hl

District Council

of the Jowai Autonomous Distt., Jowai v. Dwet Singh C

Rymbai etc., AIR (1986)

1930; Commissioner, Hindu Religious Endowments,

Madras v. Sri Lakshmindra Thirtha Swamiar of Sir Shirur Mutt, AIR (1954)

SC 282 and Ahmedabad Urban Development Authority v. Sharadkumar

Jyantikumar Pasawalla

&

Ors., AIR (1992) SC 2083, relied on.

1.8. Conditions 15

and 22 of the licence do not overlap, but refer to D

different sizes and types of short films, shorter films or lantern slides. The

High Court was, therefore, not right in holding that Condition No. 15 is

redundant since it is covered by Condition No. 22. Both conditions, however,

must be read in the light of Section 12(4) of the Cinematograph Act, 1952

and only films and lantern slides which fall within the description of such

films

under Section 12(4) can be so required to be shown. [896-F-G) E

R.M Seshadri v. The District Magistrate, Tanjore & Anr., [1955) 1

SCR

686; Chief Commissioner, Ajmer v. Brij Niwas Das, [1963] 2 SCR 145 and

Minerva Talkies, Bangalore & Ors. v. State of Karnantaka & Ors., [1988)

Suppl. sec 176, relied on. F

Neal R. Wooley, Etc_. v. George Maynard, [1977] 430 US 705 and Turner

Broadcasting System, Inc. v. Federal Communications Commission, (1997)

512 US 622, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3766-67 of G

1999 Etc. Etc.

From the Judgment and order dated 31.8.95 of the Delhi High Court in

C.W.P. No. 4408 and 4703of1993.

R.N. Trivedi, Additional Solicitor General, N.N. Goswami, Dr. R.K. Dhawan, H

....

880 SUPREME COURT REPORTS [1999] 3 S.C.R.

A V.A. Mohta, S.K. Dholakia, (A.K. Goel, Additional Advocate Genera[ for State

ofU.P.), S.K. Dwivedi, A. Subba Rao, Hemant Sharma, (S.W.A. Qadri), B.V.

Bairam Das, Ashok Jain, Umesh Kumar Bohre, pradeep Aggarwal, Sushi! K,

Jain, Pradeep Misra, Ms. Sangeeta Kumar, Vijay Kumar, H.K. Puri, Ujjawal

Banerjee and Rathin Das for the appearing parties.

B The Judgment of the Court was delivered by

MS. SUJAT A V. MANO HAR, J. Delay condoned.

Leave granted

in special leave petitions.

C This group of appeals is filed by the

Union of India, the State of West

Bengal and the State of Uttar Pradesh against a judgment and order dated

31.8.1995

of the Delhi High Court in

C.W.P. No. 4408 and 4703of1993; while

the writ petition is filed by the Eastern India Motion Picture Association

against the Union of India and others. This group of appeals and the writ

petition taise a common question

of law as to the validity of certain provisions

D of(l) the West Bengal Cinemas (Regulation) Act. 1954 and a notification No.

7277-F dated 20.9.1957 issued thereunder, (2) the Cinematograph Act, 1952, (3)

the

U.P. Cinemas (Regulation) Act, 1955 and (4) the Delhi Cinematograph

Rules, 1981.

E The respondents in the appeals are Associations of organisations

engaged in the business

of distribution and exhibition of motion pictures in

the area of Delhi and

U.P. commonly known as the Delhi"Uttar Pradesh Circuit

and

in

West Bengal.

In part III

of the Cinematograph Act, 1952 which applies only to the

F

Union Territories including Delhi, Section 12 imposes certain restrictions on

the powers

of the licensing authority to grant a licence for the exhibition of

cinematograph films.

Section 12 Sub-section (4) provides as follows :-

G

H

The Cinematograph Act :

"12(4): The Central Government may, from time to.time, issue directions

to licenses generally and to any licensee in particular for the purpose

of regulating the exhibition of any film or class of films, so that

scientific films, films intended for educational purposes, films dealing

with news and current events, documentary films or indigenous films

secure an adequate opportunity

of being exhibited, and where any

such directions have been issued those directions shall be deemed to

U.0.1. v. MOTION PICTURE ASSOCIATION [MRS. SUJA TA V. MANO HAR, J ) 88}

--

be additional conditions and restrictions subject to which the licence A

had been granted."

(underlining ours)

Under Section 16 which also fonns a part of Part III of the Cinematograph

Act, 1952, the Central Government

is empowered by notification in the official

gazette, to make rules, inter alia,

"(a) prescribing the tenns, conditions and B

restrictions, if any, subject to which licences may be granted under this Part."

Pursuant to the rule-making power so granted, rules have been framed by the

Central Government known as the Delhi Cinematograph Rules

of l 981.

Under

these rules various conditions for the grant of a licence to exhibit a

cinematograph film are stipulated. Conditions

15 and 22 are as follows :

c

"Condition No. I 5 : The licensee shall, when and so often as the

Administrator may require, exhibit free

of charge or on such tenns as

regards remuneration as the Administrator may detennine, films and

lantern slides provided by the Administrator;

Provided that the licensee shall not be required to exhibit at one

D

entertainment films or lantern slides the exhibition of which will take

more than fifteen minutes

in all or to exhibit films or alides unless they

are delivered to him at least twenty four hours before the entertainment

at which they are to

be shown is due to begin.

E

Condition No. 22 : The licensee shall cause to be exhibited at each

perfonnance given at the licensed place one or more approved films,

~

the total length of which may not be exceeding 600m (2000 feet) of

approved films of 3 5 m.m. size or the corresponding footage of approved

films

of 16m.m. size, and shall comply with any direction which the

Administrator or the licensing authority may give by general or special

F

order as to the manner in which the approved films shall be exhibited

in the course of any perfonnance.

Explanation I :

"Approved film" means cinematograph film approved

by the Central Government.

G --

Explanation 2 : For the purpose of computing the corresponding

footage

of films of 16m.m. size, in relation to films of35m.m. size, 120m. (400 feet) of films of 16m.m. size shall be deemed to be equivalent to

-$

300 m. (1000 feet) of films of35m.m. size."

Under Notification No. XXXM{l 6)/81 dated I Ith January, 1982 issued H

'

-i

...

'

'

882 SUPREME COURT REPORTS [1999) 3 S.C.R.

A under Section 5(4) of the Uttar pradesh Cinemas (Regulation) Act, 1955,

directions have been issued to the licensees which are as follows :

B

c

D

E

F

G

Directions :

"1. The licensees shall so arrange the exhibition of cinematograph

films that approved films are exhibited at every performance open to

the public. The ratio

of approved films to be exhibited at such

performances shall

in relation to other

films be one to five or the

nearest approximation thereto.

· Definition-For the purposes of these directions, an "approved"

film means (i) a film produced in India and approved by the Central

Government after considering the recommendations

of the Film

Advisory Board, Bombay, to be scientific films, films intended for

educational purposes, films dealing with news and current events or

documentary films,

(ii) Indian News Reviews produced in India and

approved by the Central Government after considering the

recommendations

of the Chief Producer, Films Division, Bombay, to be

films dealing with news and current events.

I

2. Nothin8 contained in these directions shall b~ construed as requiring

licensee-

(a) to exhibit at any performance more than

(2000 feet) approximately

610 metres ofapproved films of 35m.m. size or the corresponding

length

of approved films of 16 m.m. size; or

(b) to exhibit any approved film for more than two weeks

continuously; or

(c) to re-exhibit any approved film which has been shown for two

continuous weeks; or

(d) to exhibit approved films to the full extent indicated hereinbefore

in the event of sufficient number or length of approved films not

being available for the time being.

3. For the purpose of computing the corresponding length of films of

16m.m. size in relation to films of 35 m.m. size, approximately 122

metres

(400 feet) of 16m.m. film shall be deemed to be equivalent to

approximately 305 metres (1000 feet) of 35m.m. films."

H Under Section 5(3) of the West Bengal Cinemas (Regulation) Act, 1954,

-

. ..,-

-

..

...

--

-

U.0.1. v. MOTION PICTURE ASSOCIATION [MRS. SUJATA V. MANOHAR, J.] 883

it is provided as follows :

"5(3): The State Government may from time to time, issue directions

to licensees generally or in the opinion

of the

State Government

circumstances so justify, to any licensee in particular, for the purpose

A

of regulating, the exhibition of any film or class of films and in

particular the exhibition

of scientific films, films intended for educational B

purposes, films, dealing with news and current events, documentary

films or films produced in India, and where any such directions have

been issued, those directions shall be deemed to be additional

conditions and _restrictions subject to which the licence has been

granted."

By a Notification No. 7277-F dated 20.9.1957 issued by the West Bengal

Government under Section 5(3) of the above Act. The State Government has

given certain directions for the issue

of licenses for the exhibition of films.

These are as follows :

"Directions : A licensee shall so regulate the public exhibition of

films by .means of a cinematograph that, at every such exhibition,

there shall be exhibited notified films

of such length as bears to the

length

of other films exhibited approximately the ratio of one to five

(a) to exhibit at any such public exhibition more than

2,000 ft. of

notified films of35 m.m. size or 800 ft. ofnotified films of 16m.m. size;

or

(b) to exhibit any notified films for more than two

weeks continuously;

or

( c) to re-exhibit any notified film which has been shown for two

continuous weeks; or

( d) to exhibit notified films beyond the limit upto which notified films

c

D

E

F

are available for exhibition for the time being, or to exhibit any notified G

films when such films are not available for the time being.

Provided further that of the total time taken in the exhibition of

notified films at every such exhibition, not less than half shall be

.allotted to the exhibition

of films approved by the Central Government

after considering the recommendations

of the Films Advisory Board, H

884 SUPREME COURT REPORTS [1999) 3 S.C.R.

A Bombay, if films of the latter description are available.

Explanation :

In these directions

"notified film" means a film which is

produced in India in which is-

(i) a scientific films, or

B (ii) a film intended for educational purpose, or

c

D

(iii) a film dealing with news and current events, or

(iv) a documentary film,

certified or exempted from certification,

as the case may be, under

Part

II of the Cinematograph Act, 1952 (XXX:VII of 1952), which is notified

by the State government in the "Calcutta Gazette" for exhibition for

the purpose

of Sub-section (3) of

Section 5 of the West Bengal

Cinemas (Regulation) Act, 1954 (West Bengal Act XXXIX of 1954);

Provided that any

of the films as referred to above, which is

approved by the Central Government after considering the

recommendations of the Film Advisory Board, Bombay, shall be deemed

to be a notified film for the purpose

of this

notification."

All these provisions are similar in nature, and have been in force for

E some decades. They are hereinafter referred to as the "impugned provisions".

Thus, under Section 12(4) of the Cinematograph Act, 1952 the Central

Government may issue directions to the licensees that scientific films, films

intended for educational purposes, films dealing with news and current events,

documentary

films-or indigenous films have to be exhibited by the licensee

along with the other films which the licensee

is exhibiting. The length and the

F duration of such films is regulated by conditions 15 and 22 of the licence

which require only a film

of a short length being thus shown along with the

other films.

Similarly, under the West Bengal Cinemas (Regulation) Act, 1954

also Section 5(3) requires an identical class of films which are required to be

shown along with the other films which· the respondents exhibit in their

G cinema theatres. The notification of 20th of September, 1957 specifies the

duration

of such films and its length, making it clear that the length of such

films which are required to be exhibited will not exceed the ratio

of 1:5. The

length

of these films is also specified. The licence conditions refer to

"approved

filll}S" or "notified films" which are defined.

H As a result, in each cinema theatre the exhibitor of films is required to

,..

l

U.0.1. v. MOTION PICTURE ASSOCIATION [MRS. SUJATA V. MANOHAR, J.] 885

show a film which may be educational or scientific; a documentary film, or a A

film carrying news or current event, along with the other films. The duration

of such film is strictly limited and only a small proportion of the total viewing

time is devoted to the showing

of such films.

Since short films in these

categories are normally produce by the films division of the government of

India; each exhibitor is required to enter into an agreement with the films

division for the supply

of such films for exhibition .

Under the terms and B

condition of the agreement between the exhibitor and the film division; the

exhibitor

is required to pay to the films division a rental amounting to l % of

his net weekly collection for the supply of the films. This rental has remained

the same for the past several decaders and

is a rental which is fixed as a result

of negotiations with the Films Federation of India. C

These Impugned provisions have been in force or several decades. The

respondents however; in 1993 challenged these provisions as violative

of

their rights under Articles l9(l)(a) and 19 (l) (g) of the constitution. The

Delhi High

Court; by the impugned judgment has held that the condition in

the agreement between Films Division and the exhibitor, for charging a rental D

for the supply of the said films is unconstitutional. The Delhi High Court

has also held that the provision by which the exhibitor

is required to collect

a film from the Film Division

is also onerous and, therefore, invalid. It has

also struck down condition

15 of the licence issued under the Cinematograph

Act; 1952 as redundant. Therefore, while upholding the statutory provisions,

E

the court has directed that such films should be supplied by the Films

Division to each exhibitor at his place

of exhibition and that no charges

should be levied for the supply

of these films. Aggrieved by these finding,

the present

app~als have been filed. The writ petition which is filed by the

Eastern India Motion pictures Association, has challenged the validity

of the

same provision under Article 19(1) (a)

of the constitution, since the Delhi F

High Court declined to consider the validity of these provisions under Article

19 (l) (a), without any averments to that effect.

The exhibitors contend that the above provisions which compel them

to

show' a scientific, educational or documentary film or a news film, even for G

a short duration of fifteen to twenty minutes per show, violate their fundamental

rights to free speech and expression under Article 19(1)(a)

of the Constitution.

They also contend that Article 19(2) which permits a reasonable restraint on

this freedom on the grounds

of sovereignty and integrity of India, security

of the

State, friendly relations with foreign States, public order, decency or

morality

or in relation to contempt of court, defamation or incitement to an H

886

SUPREME COURT REPORTS (1999} 3 S.C.R.

A offence, does not cover this kind of compulsion to show educational, scientific

and documentary films or other kinds

of films specified in the above provisions.

Undoubtedly, free speech is the foundation of a democratic society. A

free exchange

of ideas, dissemination of information without restraints,

dissemination

of knowledge, airing of differing view points, debating and

B forming one shown views and expressing them, are the basic indicia of a free

society. This freedom alone makes it possible for people to formulate their

own views and opinions on a proper basis and to exercise their social,

economic and political rights

in a free society in an informed manner. Restraints

on this right, therefore, have been jealously watched by the courts. Article

C 19(2) spells out the various grounds on which this right to free speech and

expression can be restrained. Thus

in Express Newspapers pvt. Ltd. and

Ors.

v. Union of India & Ors., [1986] 1 SCC 133 (at page 195), this Court stressed

that, "Freedom of thought and expression, and the freedom of the press are

not only valuable freedoms in themselves but are basic to a democratic form

of Government which proceeds on the theory that the problems of the

D Government can be solved by the free exchange of thought and by public

discussion

of the various issues facing the nation .......... This right is one of

the pillars of individual liberty freedom of speech, which our constitution has

always unfailingly guarded ........ however precious and cherished the freedom

of speech is under Article 19(l)(a), this freedom is not absolute and unlimited

E at all times and all circumstances but is subject to the restrictions contained

in Article

19(2)." In S. Rangarajan v. P. Jagjivan Ram and Ors., [1989] 2 SCC

574 (at page 592), this Court again observed: "The democracy is a government

by the people via open discussion. The democratic form

of government itself

demands

of its citizens an active and intelligent participation in the affairs of

the community ....... The democracy can neither work nor prosper unless

F people go out to share their

views." The importance of freedom of speech and

expression including freedom

of the press has been repeatedly stressed by

this Court

in a number of decisions

(See in this connection (Indian Express

Newspapers (Bombay) Private Ltd.

and

Ors v. Union of India and Ors.,

tl985] 1 SCC 641, K.A. Abbas v. The Union of India and Anr., [1970] 2 SCC

G 780, Life Insurance Corporation of India v. Prof Manubhai D. Shah, [ 1992]

3

sec 637.

In Secretary, Ministry of Information & Broadcasting, Govt. of India

and

Ors., v. Cricket Association of Bengal and Anr., [1995] 2 SCC 161, this

Court, after citing Article 10 of the European Convention on Human Rights,

H went on to state (at page 213), "The freedom of speech and expression

A

-

U.0.I. v. MOTION PICTURE ASSOCIATION [MRS. SUJATA V. MANOHAR,J.) 887

includes right to acquire information and to disseminate it. Freedom of speech A

and expression is necessary, for self-expression which is an important means

of free conscience and self-fulfilment. It enables people to contribute to

debates on social and moral issues. It

is the best way to find a truest model

of anything, since it is only through it that the widest possible range of ideas

can circulate. It

is the only vehicle of political discourse so essential to

democracy, Equally important

is the role it plays in facilitating artistic and B

scholarly endeavours of all sorts. The right to communicate, therefore,

includes right to communicate through any media that

is available whether

print or electronic or audio-visual such as advertisement, movie, article.

speech etc.

"

It is contended that just as a restraint on free speech is a violation of

Article 19(1) [except as permitted under article 19(2)] compelled speech, often

known as a "must· carry" provision in a statute, rule or regulation, is equally

c

an infringement of the right to free speech, except to the extent permitted

under Article 19(2). However, whether compelled speech will or will not

amount to a violation

of the freedom of speech and expression, will depend D

on the nature of a

"must carry" provision. If a "must carry" provision furthers

informed decision-making which

is the essence of the right to free speech and

expression, it will not amount to any violation

of the fundamental freedom of

speech and expression. If, however, such a provision compels a person to

carry out propaganda or project a partisan or distorted point

of view, contrary E

to his wish, it may amount to a restraint on his freedom of speech and

expression. To give an example, at times a statute imposes an obligation to

print certain information

in public interest. Any food product must carry on

its package the list

of ingredients used in its preparation, or must print its

weight. These are beneficial

"must carry" provisions meant to inform the

public about the correct quantity and contents

of the product it buys. It F

enables the public to decide on a correct basis whether a particular product

should or should not be used. Cigarettes cartons are required to carry a

statutory warning that cigarette smoking is harmful to health. This

is

undoubtedly a

"must carry" provision or compelled speech. Nevertheless, it

is meant to further the basic purpose of imparting relevant information which G

will enable a user to make a correct decision as to whether he should smoke

a cigarette or not. Such mandatory provisions although they compel speech

cannot

be viewed as a restraint on the freedom of speech and expression.

In Neal R. Wooley, etc. v. George Maynard, [1977]

430 US 705, the

United States Supreme Court considered a New Hampshire state law which H

888 SUPREME COURT REPORTS [1999] 3 S.C.R.

A compelled the state motto "Live Free or Die," to be embossed on car licence

plates. A follower

of Jehovah's Witnesses objected to carrying the motto on

his car licence plate. The Court held that the state's requirement that non­

commercial vehicles licence plates be embossed with the state motto invaded

First Amendment rights and could not

be justified as facilitating the

identification

of passenger vehicles or as promoting an appreciation of history,

B indi_vidualism, and state

pri~e. In the more recent case of Turner Broadcasting

system, Inc.

v. Federal Communications Commission, [1997] 512

US 622, the

US Supreme Court examined Sections 4 and 5 of the Cable Television Consumer

protection and Competition Act of 1992 which required cable operators to

carry the signals

of specified numbers based on cable system size of local

C commercial television stations and local non-commercial educational television

stations.

On the basis of the material brought on record after remand, the

majority came to the conclusion that the "must carry" provisions were

consistent with the First Amendment, because the purpose

of the

"must

carry" provision was to preserve the benefits of free over-the-air local

broadcast television, promoting wide-spread dissemination

of information

D from a multiplicity of sources and promoting fair competition in the television

programme market. Breyer

J. in his partly concurring judgment balanced the

restraints which such a compulsory carriage clause would impose because it

would interfere with the protected interests

of the cable operators to choose

their own programming, against an -important First Amendment interest in

E favour of the provision viz. promoting the widest possible dissemination of

information from diverse and antagonistic sources to facilitate public discussion

and informed deliberation. The latter being basic democratic government

purposes which the First Amendment seeks to achieve, they outweighed

objections relating to interference with the cable operators' right to choose

their own programme.

F

Although the First Amendment right under the

U.S. Constitution is not

subject to reasonable restraint as

in Article 19(2), the raison de'tre of a

constitutional

guarantee of free speech is the same. We have to examine

whether the purpose

of compulsory speech in the impugned provisions is to

G promote the fundamental freedom of speech and expression and dissemination

of ideas, or whether it is to restrain this freedom, the social context of any

such legislation cannot be ignored. When a substantially significant population

body

is illiterate or does not have easy access to ideas or information, it is

important that all available means of communication, particularly audiovisual

communication, are utilised not

just for entertainment but also for education,

H information, propagation of scientific ideas and the like. The best way by

(

-·

U.O.l. v. MOTION PICTURE ASSOCIATION [MRS. SUJATA V. MANOHAR, J.] 889

which ideas can reach this large body of uneducated people is through the A

entertainment channel which is watched by all-literate and illiterate alike. To

earmark a small portion

of time of this entertainment medium for the purpose

of showing scientific, educational or documentary films, or for showing news

films has to be looked at in this context

of promoting dissemination of ideas,

information and knowledge to the masses so that there may

be an informed

debate and decision making on public issues. Clearly, the impugned provisions

B

are designed to further free speech and expression and not to curtail it. None

of these statutory provisions require the exhibitor to show a propaganda film

or a film conveying views which he objects to.

In fact, the exhibitors have

not raised any objection to the contents

of the films which they are required

to show. They, however, contend that one

of the important requirements for C

upholding such compulsory speech in the United States is that such speech

should be content-neutral. While in the present case, the contents

of the

compulsory films are specified

in the legislation concerned. In the context of

Article 19( 1) what we have to examine is whether the categories of films so

required to be carried promote dissemination

of information and education or

whether they are meant to be propaganda or false or biased information. The

D

statute quite clearly specifies the kinds of films which promote dissemination

of knowledge and information.

Undoubtedly, the exhibitors, in order to fulfil the conditions

of the

licence, are required to enter into an agreement with the Films Division,

E

Government of India. This is not because of any statutory compulsion but

because

of the fact that the Films Division is the only organisation which

produces such short films on sufficient quantities for regular distribution to

the cinema exhibitors. The requirement

of approval of such films is to ensure

that the films,

in fact, comply with the requirements specified in the statute.

None

of the provisions referred to make it mandatory for the exhibitors to F

procure such films only from the Films Division. The reason why they do so

is because of a lack of adequate alternative sources.

The exhibitors contend that before their licence

is renewed, it is

necessary for them to obtain a

"no objection" certificate from the Films G

Division. The purpose of this is to ensure that the ~tatutory requirements

have been complied with by the licensee

in the previous

'Year. If, however, any

licensee is in a position to procure such approved films from any other

source, there

is nothing in the statutes which prohibits him from doing so.

These provisions, therefore, do not violate Article 19(1) (a)

of the Constitution.

They are not in restraint

of free speech and expression. Therefore, Article H

890

SUPREME COURT REPORTS [1999) 3 S.C.R.

A 19(2) is not attracted.

The main challenge

of the exhibitors to these provisions is, however,

under Article

19( 1 )(g) of the Constitution. In fact, this was the only challenge

before the Delhi High Court. The basic purpose

of the impugned laws which

deal with licensing

of cinema halls, and prescribing conditions subject to

B which such licences can be granted, is to regulate the business activity of -

the exhibitors

of cinematograph films. Obtaining a licence for running such

cinema theatres

is for the purpose of regulating this business. This purpose

has a direct nexus with Articles

19(1 )(g) and 19( 6) of the Constitution. The

source oflegislation under this head can

be traced to Entry 33 of List II which

C entitles the

States to legislate on "theatres and dramatic performances; cinemas

subject to the provisions

of Entry

60 of List l, sports, entertainments and

amusements." That is why State Laws have been framed for regulating the

terms and conditions on which a licence for exhibiting films at cinema theatres

can be obtained. part III

of the cinematograph Act, 1952 which applies to

Union Territories

is also in the exercise of the legislative powers under Entry

D 33 of List IL

Since Delhi was a Union Territory and is now National Capital

Territory since

1991 by virtue of the Constitution 69th Amendment Act, 1991, Parliament has the power to legislate under this Entry also. [see Article 246(4)

and the relevant provisions

of Article 239(AA)]. Entry

60 List I on the other

han~ deals with "sanctioning of cinematograph films for exhibition." Censorship

E provisions, for example, would come under Entry 60 of List I and these would

directly relate to Article 19(1) (a) and Article 19(2)

of the Constitution. The

basic purpose

of these impugned provisions is, therefore, to regulate the

business

of exhibiting films in cinema theatres under Entry 33 List II.

In the case of R.M Seshadri v. The District Magistrate, Tanjore and

F Anr., [1955] l

SCR 686, this Court was required to examine under Article

19( l )(g) the conditions attached to a licence to exhibit cinematograph films in

cinema theatres requiring the licensee to exhibit at every performance one or

more approved films

of such duration as the Provincial Government or the

Central Government may, by general or special order, direct. The Court said

G that neither the length of the films nor the duration for which the film had to

be shown were prescribed. No maximum limit was placed on the time to be

· taken in showing such films. Looking to the unguided discretion given to the

Government

in this regard, the restrictions placed were unreasonable and

arbitrary and could not

be considered as reasonable restrictions under Article

19(6). The Court expressly excluded from its considerations the question

H whether educational or instructional films could be thus shows.

-

U.0.1. v. MOTION PICTURE ASSOCIATION [J\i ~UJAT AV. MANO HAR, J.] 891

In Brij Niwas Das v. Chief Commissioner, Ajmer, ILR (1958) Raj. 1076, A

the Rajasthan High Court upheld conditions in the licence which required that

educational and instructional slides should be shown for a duration

of 15 · minutes, and approved films should be shown for a duration which was 1/

5th of the total time. Looking to the specific provisions, the Court upheld

these provisions under Article 19( l )(g) read with Article 19( 6). The Court also·

upheld Section 12(4) of the Cinematograph Act, 1952. The Court, however, B

said that the requirement in one of the impugned conditions that films produced

in India should be shown in this fashion without specifying the categories

of such films was not valid. The Chief commissioner, Ajmer came in appeal

before this court. This Court by its judgment and order reported

in Chief

Commissioner, Ajmer, Brij Niwas Das, [1963] 2

SCR 145, held the condition C

applicable to films produced in India as also valid, the purpose being to

promote indigenous films.

Time and place constraints on cinema halls have also been upheld

as

regulatory provisions in Minerva Talkies, Bangalore &

Ors. v. State of

Karnataka & Ors., [1988] Supp. SCC 176. In the present case, the restrictions D

sought to be imposed are specific and tailored to fit the public purpose

behind the restrictions. The length

of the film to be shown, the duration for

which it

is to be shown and the nature of the films which are to be shown,

.are specified and are designed to further the public purpose

of disseminating

information and knowledge so that the general public can be educated on a

E

number of issues of national or general importance to enable them to function

effectively

in the democratic framework of this country with adult franchise.

These restrictions, therefore, have to be upheld as reasonable.

According to the exhibitors, even

if the nature of the film, its duration

and length are specified, their right to carry on their business

of exhibiting F

motion pictures is nevertheless adversely affected because at every show,

·they are required to exhibit for a duration of 15 to 20 minutes these educational

scientific films, etc, thus cutting into their business time. They also contend

that they are subjected to inconvenience because they are required to procure

these films expending time and money. Moreover, under the terms

of their G

agreement with the Films Division, they are also required to pay one per cent

of their net weekly collection as rental for the films so procured. They contend

that when such films are shown over television, the Govemment

is required

to pay for the showing time while

in their case they are required to pay a rent

to the Films Division. These are all unreasonable restrictions on their right to

carry on business.

H

892 SUPREME COURT REPORTS [1999] 3 S:C.R.

A According to the exhibitors, although these provisions have been in

force for almost three decades and they have regularly complied with these

provisions by exhibiting educational, scientific films etc.

of the Films Division

for the stipulated duration

in their shows, they are now seeking to challenge

these provisions because according to them, the business

of exhibiting

cinematograph films

is no longer as profitable as it used to be. They contend

B that with the arrival of the electronic media, popular attraction for watching

movies

in cinema theatres has dwindled.

People like to watch entertainment

programmes over television or with the help

of a video or through internet

in their homes. They do not flock to cinema theatres as they used to. As a

result, the cost

of showing the short films of the Films Division can no longer

C be borne by them. The condition, therefore, in the licence requiring them to

show these films even for a short duration,

is now onerous and violates their

right to carry on their chosen business under Article 19( l )(g). In this context

they further submit that the restrictions imposed cannot now be considered

as reasonable because the exhibitors,

in view of their reduced profit making,

cannot bear the expenses relating to the showing

of these films, including the

D rental.

The reasonableness or otherwise

of restrictions on their right to carry

on business will have to be examined in the context

of the purpose sought

t-0 be served by imposing such restrictions. There is no dispute that the rights

E of the exhibitors under Article 19(1 )(g) are subject to reasonable restrictions

under Article I 9(6). There is a public purpose in requiring the exhibitors to

show such films.

We have already stated that where a large percentage of

population is illiterate and has very limited access to knowledge, information

and ideas, it

is important that such knowledge and information is disseminated

to this vast volume

of population in a manner which will ensure that ideas

F and information are in fact conveyed to them and they can assimilate and

debate these ideas before accepting

or rejecting them. Requiring an

entertainment medium like cinema theatre to show for a short duration

of its

programme, films which educate and impart information cannot

be considered

as an unreasonable restriction on the right to carry on business. When there

G is adult franchise without literacy, it becomes all the more important that

information and ideas reach the adult population.

Next we have to examine whether the expense incurred

in showing these

films

is high or unreasonable. According to the exhibitors, their machinery,

their show-time, their theatre are used for the duration

of these films and,

H therefore, they have to incur a certain amount of expense for showing these

)

-

I

"'

U.0.1. v. MOTION PICTURE ASSOCIATION [MRS. SUJATA V. MANOHAR, J.] 893

films. This expense, in our view, cannot be considered as a high or unreasonable A

expense. There may be many conditions of a licence which may require

expense to

be incurred by the licensee. For example, a condition in the licence

which requires a cinema theatre owner to provide for fire-fighting equipment

would also require them to incur expenses. But that does not mean that such

a requirement

is unreasonable.

Similarly, looking to the purpose for which B

such films are shown, the expense incurred also cannot be considered as

unreasonable.

The exhibitors have also not submitted any facts and figures to support

their plea that these requirements

of exhibiting a

Films Division and/or

educational, scientific films etc. are economically onerous. The appellants on

C

the other hand, in the affidavit filed on behalf of the Films Division, have

given detailed figures showing that in ddition to the cost

of production of

these films, the expenses incurred by them in taking out prints for distribution

to about 13000 cinema theatres

in the country, for packing and supplying

these

films to them and for maintaining distribution centres for supplying

these films, are heavy. They have submitted that

as against the cost so D

incurred by them, the rental which is charged fetches them a much lower

income.

The appellants,

in their affidavit in reply, have pointed out that the

recovery

of one per cent of the net collections as a rental from the cinema E

owners for the supply of approved films has been in force since 1.4.1958. This

rental was decided after discussions with the

Films Federation of India which

is the apex body of the various sections of the film industry, and it was so

fixed after considering various suggestions and representations that were

received from a number

of cinema organisations. The Films Division of the

Union of India is incurring heavy expenditure towards production of about F

125 films every year. It takes out about 400 prints of each film for distribution

to the cinema theatres. The cost

of production, negative/positive prints, raw

stock, processing, printing, laboratory charges have all increased substantially

during the

last 35 years. In addition, the Films Division maintains a chain of

distribution network for supply of approved films to as many as 13000 cinema G

theatres spread over the various parts of the country. The films are dubbed

in

15 languages to serve the interest of every region. About

50000 film prints

are to

be retained in circulation at any given point of time. Maintaining such

a large network

of distribution of approved

films throughout the year requires

heavy expense

to be incurred. As against all these costs, the lowest minimum

rental

of one per cent is being imposed and it cannot be considered as H

894 SUPREME COURT REPORTS [1999] 3 S.C.R.

A unreasonable or excessive. It is also pointed out that the Films Division.incurs

an expenditure

of more than Rs. 12 crores per year only for taking out

adequate prints, while their recovery

in the form of rentals is only Rs. 7 to

8 crores per year. Therefore, the Films Division is charging a very small

amount

consider-ing the expenditure outlay in producing and distributing

these films.

In these facts and circumstances, the rental of one per cent

B

cannot be considered as excessive.

The cinema theatre owners have also alleged inconvenience

in procuring

the films. The Films Division in its affidavit has pointed out that it has a

distribution network spread throughout the country to serve

13000 cinema

C theatres. It has ten distribution branches throughout the country. The Films

Division packs the films, seals them and sends them by train to the cities,

towns and villages wherever the cinema theatres are located. In fact, the

owners

of the theatres used

fo pay the freight charges prior to the judgment

of the High Court. Therefore, there is no special inconvenience caused to the

exhibitors for securing these films. The arrangements for supply and distribution

D have to be examined from the point of view of what is practically

feasible, We

do not think that the arrangements which have been in existence unchallenged

for the last 30 years until the present proceedings were instituted can be

considered as unsatisfactory or unreasonable.

E The exhibitors also contend that the charge of one per cent on the net

recoveries

is a compulsory exaction in the form of a tax. Neither the Act nor

the provisions

of the licence stipulate payment of any such tax. Hence

imposition

of this amount is in violation of Article 265 of the Constitution.

it

is true that neither the relevant Act nor the notification nor the rules nor

the terms and conditions

of the licence stipulate the payment of any rental.

F This amount is required to be paid under an agreement which the exhibitors

individually enter into with the Films Division for the supply

of these films.

It is a payment under the terms of a contract between the two parties. It

cannot, therefore,

be viewed as a tax at all. The exhibitors contend that

because they are required to enter into these agreements, any payment under

G the agreement is a compulsory exaction and is, therefore, tax. We do not

agree,

Under the terms of the agreement, the Films Division has to supply

certain prints to the theatre owners at stated intervals. The Films Division

is

required to maintain a distribution network for this purpose. It is required to

pack these films and

is required to allow the exhibitors to retain these films

in their possession for a certain period. The films are to be returned to the

H Films Division thereafter. The charge is termed in the agreement as rental for

U.0.1. v. MOTION PICTURE ASSOCIATION [MRS. SUJATA V. MANOHAR, J.] 895

the films. It covers charges for preparing the prints of the films for distribution, A

and for packing them for delivery. These are clearly services rendered by the

Films Division for which it

is paid one per cent of the net collection as a rental.

As stated earlier, the total cost

of preparing prints, packing them and

distributing them

is much higher than the total recovery made by the Films

Division by way

of rental from all the exhibitors. There is a clear nexus

between the services rendered and the payment to be made. The payment,

B

therefore, is in the nature of a fee rather than a tax though there may not be

an exact

quid pro quo. Nevertheless the element of quid pro quo is very

much present.

The exhibitors relied upon a number

of cases which distinguish a tax C

from a free. We will only refer to some of them. In the case of District Council

of the Jowai Autonomous Distt., Jowai &

Ors. v. Dwet Singh Rymbai etc.,

AIR (1986) SC 1930, this Court held that a compulsory exaction for public

purposes would amount to a tax while a payment for services rendered would

amount to a fee. On the facts in that case, the Court said that there was no

element

of quid pro quo which will justify the imposition of royalty as a fee. D

In Commissioner, Hindu Religious Endowments, madras v.

Sri Lakshmindra

Thirtha Swamiar

of

Sri Shirur Mutt, AIR (1954) SC 282, this Court as far as

back in 1954, laid down the distinction between a tax and a fee. This Court

has described a tax

as a compulsory exaction for public purposes which does

not required the tax-payer's consent; while fee

is a charge for specific service E

to some, and it must have some relation to the expenses incurred for the

service. In

Ahmedabad

Urban Development Authority v. Sharadkumar

Jyantikumar Pasawalla

&

Ors., AIR (1992) SC 2038, this Court has said that

an express authorisation for the levy

of a fee is necessary. In the present case,

however, the rental

is charged by the Films Division by virtue of an agreement

between the Films Division and the individual exhibitor. This

is in consideration F

of the Films Division supplying films to the exhibitor, packing the film and

arranging for its delivery. This is clearly an agreed fee charged for rendering

services. It cannot be viewed

as a compulsory exaction or as a tax. There is

a statutory obligation which is cast on the exhibitors to exhibit certain films.

To carry out this statutory obligation,

ifthe exhibitors enter into an agreement G

with the Films Division and agree to pay a certain amount of rental for

procuring the films from the Films Division

to comply with the statutory

obligation, the levy must, since it

is co-related with the Films Division

discharging certain obligations under the contract, be viewed, at the highest,

as a fee and not as a tax. It is an agreed payment, and is not unreasonable.

The High Court has rightly negatived the contention

of the respondent H

896

SUPREME COURT REPORTS (1999] 3 S.C.R.

A exhibitors.

The High Court has struck down Condition

15 of the licence issued

under the

Delhi Cinematograph Rules as being too wide, and unnecessary in

view of Condition 22 of the licence. Under Condition 15, the licensee is

required to exhibit films or lantern slides, the exhibition of which will take not

B more than 15 minutes in all, as required by the administrator. Such exhibition

may be free

of charge or on such terms as regards remuneration as the

administrator may determine. The High Court has held that the kind

of

films

and lantern slides required to be exhibited under Condition 15 are not specified

and hence this condition

is too wide and not related to the object of placing

C such a restriction. Condition 15, however, has to be read

along with Section

12(4)

of the Cinematograph Act, 1952, since

Delhi Cinematograph Rules, 1981

are issued under the Cinematograph Act, 1952; and any conditions imposed

on the licence cannot go beyond the purposes specified

in Section 12(4)

Condition 15, therefore, has to be read

in conjunction with Section 12(4) of

the Cinematograph Act under which only scientific films,

films intended for

D educational purposes, films dealing with news and current events, documentary

films or indigenous films can

be so required to be exhibited. The

films referred

to

in Section 15 must

also be of this kind. Lantern slides also take colour from

the same provision and lantern slides compulsorily required to be shown must

also fall

in the categories mentioned in Section 12(4). When it is so read

Condition

15 will have a direct nexus with the object sought to be achieved,

E and it can be upheld as a reasonable restriction. We accordingly so

nold.

Condition No. 22 refers to exhibition of approved films the total length of

which may not exceed 600m of 35mm or a corresponding size of approved

films

of 60mm. These are somewhat longer

films as compared to lantern slides

and films referred to in Condition 15. Therefore, Conditions 15 and 22 do not

F overlap, but refer to different sizes and types of short films, shorter films or

lantern slides. The High Court was, therefore, not right

in holding that Condition

No

15 is redundant since it is covered by Condition No. 22. Both conditions,

however, must be read

in the.light of Section 12(4) of the Cinematograph Act,

1952 and only films and lantern slides which fall within the description

of such

films under Section 12(4) can be so required to be shown.

G

In the premises, the appeals are allowed and the impugned judgment of

the High Court in so far is it strikes down the rental and directs the Films

Division to

deliver the films to the exhibitors is set aside. The writ petition

is dismissed. There will, however, be no order as to costs.

H R.A. Appeals allowed and petition dismissed.

"

_,--