(1) The licensing authority shall not grant a licence under this Act unless it is satisfied that-
(a) the rules made under this Act have been substantially complied with ; and
(b) adequate precautions have been taken in the place, in respect of which the licence is to be given, to provide for the safety of persons attending exhibition therein.
(2) Subject to the provisions of sub-section (1), the licensing authority may [with the previous sanction of the State Government] grant licences under this Act to such persons as that authority thinks fit [on payment of such fees,] and on such terms and conditions and subject to such restrictions as may be prescribed [or may, after recording in writing its reasons therefore, refuse to grant any such licence.]
(3) The State Government may, from time to time, issue directions to licensees generally or 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 be additional conditions and restrictions subject to which the licence has been granted.