Under Section 12(4) of the Cinematograph Act, 1952 and various stategovernment legislative acts, the showing of scientific films, films intendedfor educational purposes, films dealing with news and current events,documentary films or indigenous films are bound to be shown by exhibitors asa condition of their licence to show entertainment films.

In the Union Territories the maximum period for which they can be requiredto be shown is 15 minutes in every show of the entertainment film. Theexhibitors challenged this as an unconstitutional restriction on theirfundamental right of free speech and expression and also on theirfundamental right to carry on the business of exhibiting films. The Delhihigh court simply did not hear them on the one first part. But it upheldtheir contention on the second score.

The Supreme Court combined two factors in examining the challenge to thecharge of the rental on the ground of violation of the fundamental right offree speech. Firstly, it laid down the test of the nature of the speech. Theapex court held that these "must carry" films were meant to further freespeech and expression by enabling citizens to be informed. These were notfilms of propaganda or films conveying views to which the exhibitorobjected. Hence given the nature of the films there was no need to examinewhether they placed any restriction on any of the specific grounds mentionedin Article 19(2) of the Constitution. With this the apex court rejected thecontention of the exhibitors that the "must carry" provision of theCinematograph Act could not be justified on any one of the grounds whichenable the implementation of reasonable restrictions on free speech. Thesegrounds are: sovereignty or integrity of India; security of the state;friendly relations with foreign states; public order, decency or morality;contempt of court, defamation or incitement to an offence.

But a future window of litigation has been opened by the apex court evenwhile upholding the "must carry" provisions of the Cinematograph Act. Theserelate to the exhibitor objecting to the Films Division films on the groundthat these are propaganda or contain something that is objectionable to him.This would be a way out for the exhibitors from the economic burden of the"must carry" provisions.

The second factor used by the apex court was the social context to justifythe economic burden if any on the exhibitors of the "must carry" provisions.The court held that when a substantially significant population body isilliterate or does not have easy access to ideas or information, it isimportant that all available means of communication, particularly audiovisual communication, are utilised not just for entertainment but also foreducation, information, propagation of scientific ideas and the like.

The best way by which ideas can reach this large body of uneducated peopleis through the entertainment channel. To earmark a short portion of time ofthe cinema for the purpose of showing scientific, educational, documentaryor news films, has to be looked at in the context of enabling the masses tohave informed debate on public issues.

In short, the exhibitor must carry the economic burden of mass education andthe exhibitors had not put any facts before the court to show that thisburden was onerous. But the court showed another way of short-circuiting theeconomic burden ... a protest by the uneducated viewers against thecurtailment of their entertainment time.

The apex court then used this public purpose of such "must carry" films toreject the argument of the exhibitors that the 1 per cent rental charge wasunbearable in view of the little custom for the cinema with the advent oftelevision, video and the Internet. Faced with this the exhibitors pointedout that a "must carry" compulsion for which a rental is charged in thecontract entered into with the Films Division amounts to the levy of a tax.This tax is without the authorisation of any law and so is unconstitutionaland illegal. The apex court agreed that the Cinematograph Act, the rules,the notification and the licence do not carry any provision for the 1 percent rental. The court pointed out that the Films Division produces, packsand delivers these films. Hence there is an element of quid pro quo and sothe rental is a fee for the service given by the Films Division. For thefirst time the apex court has held that a compulsory act required by thestate and the money charged in a contract for doing that act amounts to afee even though that is not levied by the state. The court's mix up ofstatutory law and contracts becomes visible if the contract is with aprivate organisation for the supply of must carry films, since there is norequirement that the exhibitors procure the must carry films only from theFilms Division.