[Cites 11, Cited by 0]
Karnataka High Court
M/S Kesari Enterprises vs Chief Officer City Municipal Council on 5 February, 2026
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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WP No. 33841 of 2024
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®
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF FEBRUARY, 2026
BEFORE
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
WRIT PETITION NO. 33841 OF 2024 (LB-RES)
BETWEEN:
1. M/S. KESARI ENTERPRISES
A PROPRIETORSHIP CONCERN,
HAVING ITS OFFICE AT, NO.303,
2ND FLOOR, 3RD CROSS, 5TH MAIN,
GANDHINAGAR, BANGALORE-560 009,
REPRESENTED BY ITS PROPRIETRIX,
SMT. JYOTI MOHAN HEBBAR.
2. SMT. JYOTHI MOHAN HEBBAR
W/O SRI. K.V. VIJAYAKUMAR,
AGED ABOUT 55 YEARS,
PROPRIETRIX, M/S. KESARI ENTERPRISES
A PROPRIETORSHIP CONCERN,
HAVING ITS OFFICE AT NO.303,
2ND FLOOR, 3RD CROSS, 5TH MAIN,
GANDHINAGAR, BENGALURU-560 009.
...PETITIONERS
Digitally signed (BY SMT. A. ANUSHA, ADVOCATE)
by SHWETHA
RAGHAVENDRA
Location: HIGH AND:
COURT OF
KARNATAKA
1. CHIEF OFFICER
CITY MUNICIPAL COUNCIL,
CHINTAMANI TALUK,
MUNICIPAL CORPORATION,
DOUBLE RD, NR EXTENSION,
CHINTAMANI,
CHIKKABALLAPURA DISTRICT-563 125.
2. M/S. S.L.N. CHITRAMANDIRA
A PARTNERSHIP CONCERN,
1ST DIVISION, RAJABHOVI COLONY,
CHINTAMANI TOWN,
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CHIKKABALLAPURA DIST.-563 125,
REPRESENTED BY ITS PARTNER,
N.M. NAGENDRA.
3. SRI. K.K. NAGENDRA
S/O LATE N.N. KRISHNAIAH SETTY,
AGED ABOUT 50 YEARS,
RESIDING AT 'BALAJI NILAYA',
N.R. EXTENSION, BESIDES S.B.M.,
CHINTAMANI-563 125.
4. SMT. N.N. PADMASWETHA
W/O N.K. NAGENDRA
AGED ABOUT 42 YEARS,
RESIDING AT 'BALAJI NILAYA',
N.R. EXTENSION, BESIDES S.B.M.,
CHINTAMANI-563 125.
5. SRI. C. JAGANNATH
S/O LATE D.N. CHIKKAVENKATAPPA,
AGED ABOUT 64 YEARS,
NEAR ZILLA PARISHAD OFFICE,
ANJANI EXTENSION,
CHINTAMANI-563 125.
6. SRI. B.A. RAMAMOHAN
S/O B. ASHWATHAIAH,
AGED ABOUT 43 YEARS,
R/AT K.R. EXTENSION,
CHINTAMANI-563 125.
...RESPONDENTS
(BY SRI. MANJUNATH B.R., ADVOCATE FOR R1;
SRI. V. VINOD REDDY, ADVOCATE FOR R3 TO R6;
R2-SERVED)
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE
CONSTITUTION OF INDIA, PRAYING TO DIRECT, QUASHING THE
IMPUGNED NOTICE ISSUED BY RESPONDENT NO.1 BEARING
NO.NA.SA.CHI/AA.SA/C.R/123/2023-24, DATED 09.12.2024
(PRODUCED AT ANNEXURE-D), ALLOW THIS WRIT PETITION WITH
COSTS.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN
B-GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
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CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
ORAL ORDER
1. Petitioners are before this Court seeking for the
following reliefs:
"Issue a writ of certiorari or any other writ, order or
direction, quashing the impugned Notice issued by
respondent No.1, bearing No.Na.Sa.Chi/Aa.Sa/
C.R/123/2023-24. dated 9.12.2024 (produced at
Annexure 'D'), allow this writ petition with costs and
grant such other reliefs as this Hon'ble Court deems
fit to grant in the circumstances of the case, in the
interest of justice and equity."
2. The petitioners have called in question the legality
and validity of the Notice dated 09.12.2024 issued by
Respondent No.1, whereby they have been directed
to obtain a trade licence under Section 256 of the
Karnataka Municipalities Act, 1964 (hereinafter
referred to as "the Act"). By way of the present writ
petition, the petitioners seek quashing of the said
Notice, contending that the requirement imposed
therein is without authority of law and beyond the
scope of the statutory provisions of the Act.
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3. Ms. A. Anusha, learned counsel appearing for the
petitioners, submits that:
3.1. The impugned Notice dated 09.12.2024 issued
by Respondent No.1, whereby the petitioners
have been called upon to obtain a trade licence
under Section 256 of the Karnataka
Municipalities Act, 1964 (hereinafter referred to
as "the Act") is not sustainable.
3.2. It is her primary submission that the very
foundation of the impugned Notice is
misconceived in law. According to her, the
activity carried on by the petitioners--namely,
the exhibition of cinematographic works, does
not fall within the scope of "trade" or
"profession" contemplated under Section 256 of
the Act so as to attract the requirement of a
municipal trade licence.
3.3. Learned counsel submits that the petitioners
are engaged in the activity of exhibiting
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cinematographs. Such activity, it is contended,
is governed by a distinct and self-contained
statutory regime, including the Karnataka
Cinemas (Regulation) Act, 1964 and not under
the Municipalities Act.
3.4. It is further argued that Section 256 of the Act
contemplates regulation of trades and
operations which may have implications for
public health, sanitation, safety, or municipal
governance. The said provision cannot be
expansively interpreted so as to include within
its fold every activity generating revenue or
conducted for consideration. The expression
"trade" occurring in Section 256, according to
learned counsel, must receive a contextual and
purposive interpretation consistent with
municipal regulatory objectives.
3.5. In this regard, she relies upon the decision of a
co-ordinate Bench of this Court in the case of
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Kiran Chitra Mandira v. Town Municipality
reported in 2012 SCC Online Kar 6600 more
particularly para 5 thereof, which is reproduced
hereunder for easy reference:
"5. The Impugned notification Annexure-E dated
28.12.2006 reveals that Rs.5,000/- is levied on the
petitioners- cinema theatre owners on the ground
that the business run by them falls within Part I of
Schedule XIII of the Act. At the most, the
petitioners' case may fall under Entries 2 and 3 of
Part I of Schedule XIII of the Act; so also their case
may fall under Entry 22(xvi) of Part I of the
Schedule XIII of the Act. But it appears under the
scheme of the Act, there is a clear distinction made
between taxes and licence fees. The power of
levying licence fees conferred by sub-section (4) of
Section-256 on Municipal Councils is referable to
the power of regulation of trades and in exercise of
that power the Municipal Council is not competent
to impose fees for purpose of revenue. As has been
held by the Division Bench of this Court in the case
of K. PUNDALIKA NAYAK V. CITY MUNICIPAL
COUNCIL reported in 1973 (1) Mys. LJ 298, the fee
levled has no correlation to the cost of Issuing
licences and the cost of Inspection and supervision.
The levy of tax in disguise on shops and other
places of business falling under Section 94(1)(xi) of
the Act is not permissible. No tax can be levied
without following the procedure laid down in
sections 95 or 97 of the Act. The fees prescribed
under the notification Annexure-E is in the nature
of levy of tax and not levy of fee inasmuch as the
power of levying fee conferred upon sub-section (4)
of Section 256 on Municipal Councils is referable to
the power of regulation of trade, In the matter on
hand, the trade of running cinema theatre is not to
be regulated by the Municipalities. It is to be
regulated by the Deputy Commissioner under the
provisions of Karnataka Cinemas (Regulation) Act,
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1964. However, it is open for the Municipalities to
levy tax under Sections 95 to 97 of the Act if the
petitioners are liable for the same, in accordance
with law. Such levy of tax shall also be in
accordance with the procedure laid down under
Sections 95 to 97 of the Act."
3.6. Relying on Kiran Chitra Mandira's case, she
submits that in the said decision, this Court
examined the scope of Section 256(4) of the
Karnataka Municipalities Act, 1964 and drew a
clear distinction between a regulatory licence
fee and a tax. It was held that:
3.6.1. The power conferred under Section
256(4) is regulatory in nature and
cannot be exercised as a revenue-
generating measure.
3.6.2. A licence fee must bear reasonable
correlation to the cost of issuing the
licence and the expenses incurred
towards inspection and supervision.
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3.6.3. The Municipal Council is not competent
to impose what is, in substance, a tax
under the guise of a regulatory fee.
3.6.4. Any levy amounting to a tax must
strictly comply with the procedure
prescribed under Sections 95 to 97 of
the Act.
3.6.5. The activity of running a cinema theatre
is regulated under the Karnataka
Cinemas (Regulation) Act, 1964 and not
by the Municipalities under Section 256
of the Act.
3.7. Placing strong reliance on the aforesaid
judgment, learned counsel submits that the
exhibition of cinematographs is governed
exclusively by the provisions of the Karnataka
Cinemas (Regulation) Act, 1964. Under the said
enactment, it is the Deputy Commissioner who
is the competent authority to grant licence and
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regulate the exhibition of cinematographic
films.
3.8. It is therefore contended that once a licence is
granted by the Deputy Commissioner under the
special enactment governing cinema regulation,
no further trade licence under Section 256 of
the Karnataka Municipalities Act is either
contemplated or required for the purpose of
exhibition.
3.9. The activity of exhibiting cinematographs is not
a "trade" subject to municipal regulation under
Section 256. The regulatory field is fully
occupied by the Karnataka Cinemas
(Regulation) Act, 1964. The insistence upon a
trade licence amounts either to duplication of
regulatory control or to an indirect levy in the
nature of a tax. Such demand is contrary to the
ratio laid down in Kiran Chitra Mandira's
case (surpra).
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3.10. On the above basis, it is submitted that the
impugned Notice dated 09.12.2024, insofar as
it directs the petitioners to obtain a trade
licence under Section 256 of the Act, is
unsustainable in law and liable to be quashed.
4. Sri. Manjunath B.R., learned counsel appearing for
Respondent No.1-Municipal Corporation, justifies the
issuance of the impugned Notice and opposes the
writ petition by submitting that:
4.1. Under Item Nos. 2 and 3 of Part I of Schedule
III to the Karnataka Municipalities Act, 1964,
the Municipal Corporation is expressly
empowered to regulate and require licensing for
activities relating to cinematographic films.
4.2. According to him, the entries in the Schedule
are wide in amplitude and are not confined
merely to ancillary activities, but extend to
establishments where cinematographic films
are exhibited. Therefore, the petitioners, who
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are admittedly engaged in exhibiting
cinematographic films to the public, squarely
fall within the ambit of the Schedule and are
consequently liable to obtain a trade licence
under Section 256 of the Act.
4.3. Learned counsel submits that the petitioners
cannot artificially narrow the scope of the
statutory entries by contending that they are
merely "exhibitors." The nature of the activity,
public exhibition of cinematographic films for
consideration, constitutes a commercial activity
conducted within municipal limits and,
therefore, attracts regulatory oversight under
the Act.
4.4. Secondly, it is contended that the activity
carried on in the premises is not confined to the
mere exhibition of cinematographic films.
According to the Corporation, the petitioners'
premises also house ancillary commercial
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establishments, including food vending units
and similar businesses catering to patrons.
Such activities, it is submitted, independently
require licences and regulatory permissions
from the Municipal Corporation as well as other
statutory authorities. The impugned Notice
must therefore be viewed in the broader
context of composite commercial operations
conducted within the premises.
4.5. Learned counsel further submits that municipal
regulation under Section 256 is not rendered
otiose merely because the Deputy
Commissioner grants a licence under the
Karnataka Cinemas (Regulation) Act, 1964. The
two enactments operate in distinct fields: the
Cinemas (Regulation) Act governs aspects
relating to public safety, structural standards,
and exhibition of films, whereas the
Municipalities Act confers authority upon the
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local body to regulate trades and commercial
establishments within its territorial jurisdiction,
including compliance with civic norms.
4.6. Lastly, it is submitted that the petitioners are in
arrears of property tax in respect of the
premises in question. In the absence of
payment of property tax, the Corporation is
empowered to initiate appropriate statutory
action. The issuance of the impugned Notice is
therefore also referable to the broader
regulatory and fiscal compliance framework
applicable to commercial establishments
operating within municipal limits.
4.7. On the aforesaid grounds, learned counsel
contends that the impugned Notice is well
within statutory competence, does not suffer
from lack of jurisdiction, and does not warrant
interference under Articles 226 and 227 of the
Constitution.
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5. Sri. V. Vinod Reddy, learned counsel appearing for
Respondent Nos. 3 to 6, submits that;
5.1. The petitioners are lessees in respect of the
premises in question who have committed
default in payment of agreed rentals to
Respondent Nos. 3 to 6, who are the lawful
owners of the property. According to him,
substantial arrears of rent have accrued and
remain unpaid.
5.2. In view of the alleged default, Respondent Nos.
3 to 6 have instituted a civil suit seeking
eviction of the petitioners from the premises.
The said proceedings are stated to be pending
consideration before the competent civil court.
5.3. Learned counsel therefore submits that the
petitioners, being defaulting lessees and facing
eviction proceedings, cannot seek equitable
relief under writ jurisdiction while being in
breach of their contractual and statutory
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obligations. He submits that the present writ
petition is liable to be dismissed on this ground
as well.
6. Heard Ms.A.Anusha, learned counsel for the
petitioners, Sri.Manjunath, learned counsel for
respondent No.1 and Sri.V.Vinod Reddy, learned
counsel for respondent Nos.3 to 6 and perused the
papers.
7. The short point that arises for consideration is;
"Whether the exhibition of
cinematographic films by the petitioners,
having been licensed under the Karnataka
Cinemas (Regulation) Act, 1964, is
nevertheless subject to the requirement of
obtaining a trade licence under Section 256
of the Karnataka Municipalities Act, 1964,
and whether the impugned notice
represents a valid exercise of municipal
regulatory power or an impermissible
encroachment into a field occupied by a
special statute?"
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8. The Karnataka Cinemas (Regulation) Act, 1964 is a
special legislation enacted to regulate the exhibition
of cinematographic films. It provides a complete
statutory mechanism governing:
8.1. Grant of licence for cinema theatres,
8.2. Structural and infrastructural compliance,
8.3. Fire safety and public safety measures,
8.4. Conditions for exhibition and supervisory
control by the Deputy Commissioner.
9. The Karnataka Municipalities Act, 1964, on the other
hand, is a general municipal enactment conferring
powers upon local authorities in matters of civic
administration, regulation of trades, sanitation,
public health, municipal taxation and governance of
commercial establishments within municipal limits.
10. There is no dispute that both statutes operate within
their respective legislative spheres. The mere
existence of a licence under the Cinemas Act does
not automatically grant immunity from compliance
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with municipal regulations. Equally, municipal
authority cannot transgress the limits imposed by the
statutory language of the Municipalities Act.
11. The issue therefore is not one of exclusion of
municipal power per se, but whether Section 256 of
the Municipalities Act extends to the activity of
exhibition of cinematographic films.
12. Section 256 is not a general provision authorising
licensing of all commercial activities. It is a specific,
premise-oriented regulatory provision. The
prohibition contained in sub-section (1) is attracted
only when premises are used for:
12.1. Purposes specified in Part I of Schedule XIII;
12.2. Purposes deemed dangerous to life, health or
property or likely to cause nuisance;
12.3. Keeping of animals for specified purposes;
12.4. Storage of articles specified in Part II of
Schedule XIII.
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13. Therefore, the applicability of Section 256 is
dependent upon whether the activity in question falls
within the enumerated purposes. The provision must
receive strict construction, being regulatory in
character and penal in consequence.
14. Item Nos. 2 and 3 of Part I of Schedule XIII read as
follows:
14.1. Cinematograph films - Shooting of
14.2. Cinematograph films by any process
whatsoever - Treating of
15. The qualifying expressions "Shooting of" and
"Treating of" are integral components of the entries.
They define the precise nature of the regulated
activity. "Shooting" refers to the production stage of
cinematographic films. "Treating" refers to
processing or technical handling of films by any
method.
16. Conspicuously, the Schedule does not include the
"Exhibition of cinematographic films." The
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Legislature, having specifically referred to shooting
and treating, but having omitted exhibition, must be
presumed to have consciously limited the scope of
regulation under Section 256 to those stages. Courts
cannot expand the ambit of the Schedule by
interpretative addition.
17. Exhibition of cinematographic films is a distinct
commercial and regulatory stage. It commences
after completion of production and processing. It is
this stage which is expressly governed by the
Cinemas (Regulation) Act.
18. The doctrine of harmonious construction requires
that both enactments be interpreted in a manner
that allows each to operate within its intended field
without rendering the other nugatory.
19. The Cinemas Act governs:
19.1. Permission to exhibit films,
19.2. Safety and structural compliance of cinema
theatres,
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19.3. Conditions of public exhibition.
20. The Municipalities Act governs:
20.1. Civic administration,
20.2. Regulation of specified trades,
20.3. Municipal sanitation and local oversight.
21. There is no conflict between the two enactments.
However, harmonious construction does not justify
reading into Section 256 an activity not expressly
covered by Schedule XIII. Accordingly:
21.1. The Municipal Corporation retains regulatory
authority in respect of activities falling within
Schedule XIII.
21.2. The Cinemas Act governs the activity of
exhibition.
21.3. Since exhibition is not enumerated in Schedule
XIII, Section 256 cannot be invoked solely for
that purpose.
22. In Kiran Chitra Mandira's case, this Court
emphasised that licence fees under Section 256 must
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be regulatory and cannot amount to taxation in
disguise. It further observed that the regulation of
cinema theatres is governed by the Cinemas Act.
While that decision does not declare total exclusion
of municipal power, it reinforces two important
principles:
22.1. Municipal action must be traceable to statutory
authority;
22.2. Levy under Section 256 cannot assume the
character of a tax.
23. In the present case, since exhibition is not covered
under Item Nos. 2 and 3, the impugned insistence on
obtaining a trade licence for exhibition lacks
statutory foundation.
24. The position, however, stands on a different footing
with respect to ancillary activities such as food
vending businesses, storage activities, or any other
commercial enterprise carried on within the
premises.
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25. If such activities independently fall within Part I or
Part II of Schedule XIII, or otherwise attract clause
(b) of Section 256(1), the petitioners would be
required to obtain appropriate licences. A cinema
licence under the Cinemas Act does not operate as a
blanket exemption from municipal regulation of
separate commercial ventures. The position differs
regarding:
25.1. Food vending units,
25.2. Commercial kiosks,
25.3. Storage activities,
25.4. Any trade independently covered by Part I or
Part II of Schedule XIII.
26. For such activities, Section 256 squarely applies. The
petitioners cannot rely upon their cinema licence to
bypass municipal regulation of independent
commercial operations conducted within the
premises.
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27. The issue relating to non-payment of property tax is
governed by separate provisions of the Municipalities
Act. Recovery mechanisms are independently
provided. Section 256 cannot be used as an indirect
method for enforcement of property tax liability.
28. Similarly, disputes regarding rental arrears and
eviction proceedings between the petitioners and
Respondent Nos. 3 to 6 pertain to contractual rights
and are matters for adjudication before the
competent civil court. They do not bear upon the
statutory validity of the impugned notice.
29. In light of the above discussion, this Court holds:
29.1. The Karnataka Cinemas (Regulation) Act, 1964
and the Karnataka Municipalities Act, 1964
operate in distinct though complementary
fields.
29.2. Municipal regulatory competence under Section
256 is not wholly excluded by the Cinemas Act.
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29.3. However, Section 256 can be invoked only in
respect of activities expressly enumerated in
Schedule XIII or falling within clauses (b), (c),
or (d) of sub-section (1).
29.4. Exhibition of cinematographic films is not
included within Item Nos. 2 and 3 of Part I of
Schedule XIII.
29.5. Consequently, a trade licence under Section
256 cannot be insisted upon solely for the
purpose of exhibition of cinematographic films.
29.6. The Municipal Corporation is at liberty to
regulate ancillary commercial activities and to
recover property tax dues in accordance with
law.
30. In view of the foregoing discussion and the findings
recorded the following order is passed:
ORDER
i. The writ petition is allowed in part.
ii. The Notice dated 09.12.2024 issued by
Respondent No.1, insofar as it calls upon the
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petitioners to obtain a trade licence under
Section 256 of the Karnataka Municipalities Act,
1964 for the purpose of exhibition of
cinematographic films, is hereby quashed.
iii. It is declared that the activity of exhibition of
cinematographic films, being regulated under
the Karnataka Cinemas (Regulation) Act, 1964,
does not fall within Item Nos. 2 and 3 of Part I
of Schedule XIII to the Karnataka Municipalities
Act, 1964 and therefore does not attract the
requirement of a trade licence under Section
256 solely on that ground.
iv. It is clarified that if the petitioners are carrying
on any ancillary commercial activities within the
premises, including but not limited to food
vending businesses or any other trade falling
within Part I or Part II of Schedule XIII, it shall
be incumbent upon the petitioners to obtain
appropriate licences in accordance with law
before carrying on such activities, either
directly or through vendors, contractors or third
parties.
v. Liberty is reserved to Respondent No.1-
Municipal Corporation to initiate appropriate
proceedings for recovery of property tax
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arrears, if any, strictly in accordance with the
procedure prescribed under the Act.
vi. The contentions raised by Respondent Nos. 3 to
6 regarding arrears of rent and eviction
proceedings are left open to be agitated before
the competent civil court, and this order shall
not prejudice the rights of the parties in those
proceedings.
Sd/-
(SURAJ GOVINDARAJ)
JUDGE
TL
List No.: 2 Sl No.: 18
