Almost a week after the Chalakkudy Municipality issued an order to shut down D Cinemas - a theatre owned by actor Dileep in Thrissur's Chalakkudy - the Kerala HC quashed the order on Wednesday.

The court was hearing a petition filed by Dileep's brother Anoop, who is also D Cinemas’ manager, after the municipality issued the order on August 3 asking to shut down the theatre. The Municipality issued the order canceling the free hold rights and licence of the theatre, after it reportedly probed into allegations of land encroachment. The decision to cancel both the documents was taken after it was found that both the documents were procured illegally. It had reportedly found that a motor of a generator was being used without procuring licence.

However, quashing the said order, the HC said that the Municipality had no power to cancel the licence of a business establishment, since the right solely lies with the secretary.

The HC set aside the Municipality order citing lack of jurisdiction and arbitarary excersice of power by the Municipality. 

The HC observed that D Cinemas had procured all necessary documents to run the establishment and that canceling it on the basis of a motor not having a licence was not appropriate.

Observing that the Municipality order to shut down D Cinemas was issued without strong reasons, the HC has now given nod for D Cinemas to operate without any hindrance.

The allegations of land encroachment - one on D Cinemas land and another near the Periyar river - came up after the actor was arrested in connection with the abduction and alleged sexual assault of a woman actor. Dileep continues to be in judicial custody in the case, after he was made the eleventh accused in the case.