- 1 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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 (BY SMT. A. ANUSHA, ADVOCATE) AND: 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, ® Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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: - 3 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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. - 4 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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 - 5 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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 - 6 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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, - 7 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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. - 8 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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 - 9 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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). - 10 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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 - 11 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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 - 12 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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 - 13 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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. - 14 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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 - 15 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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?” - 16 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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 - 17 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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. - 18 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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 - 19 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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, - 20 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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 - 21 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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. - 22 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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. - 23 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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. - 24 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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 - 25 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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 - 26 - HC-KAR NC: 2026:KHC:6930 WP No. 33841 of 2024 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