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PETITIONER: J. K. BHARATI

       Vs.

RESPONDENT: STATE OF MAHARASHTRA AND ORS.

DATE OF JUDGMENT23/07/1984

BENCH: REDDY, O. CHINNAPPA (J) BENCH: REDDY, O. CHINNAPPA (J) SEN, A.P. (J) VENKATARAMIAH, E.S. (J)

CITATION:  1984 AIR 1542            1985 SCR  (1) 201  1984 SCC  (3) 704        1984 SCALE  (2)53

ACT:      Constitution of  India 1950,  Article 14,  Entry 40  of List 1  of Schedule  VII and Entry 34 of List 11 of Schedule VII and  The Bombay  Lotteries (Control  and Tax)  and Prize Competition (Tax) Act 1958, Section 32 (c).      Lotteries-’lotteries authorised  but not  organised  by the government  of other  states-Ban on sale of such lottery tickets-Whether   competent-Whether    any    discrimination involved.

HEADNOTE:      The petitioner  in their  writ petitions  to this Court contested the  ban on  sale within the State of Maharashtra, of tickets  of lottories  organised by  the Indian Red-Cross Society, Dadra and Nagar Haveli branch and authorised by the administration of Dadra and Nagar Haveli.      Dismissing the writ petitions, ^      HELD: (1)  (i) The  Bombay Lotteries  (Control and tax) and Prize  Competition (Tax)  Act, 1958 is an Act to control and tax  lotteries and  prize competition  in the  State  of Maharashtra. The  Act contains  detailed provisions  for the licensing, regulation  and control  of  lottery  within  the State of  Maharashtra. Section  32(c), provides that nothing in the Act shall apply to "a lottery specially authorised by the State Government." [203G-H]      (ii)  In  the  case  of  lotteries  authorised  by  the Government of Maharashtra, the Government of Maharashtra may retain to itself all necessary powers for the regulation and control  and   the  prevention   of  misuse   of  fund   and exploitation of guileless members of the public. In the case of lotteries authorised by the Government of other States it may be  difficult and  even impossible for the Government of Maharashtra to  take adequate  regulatory steps  to  prevent abuse of  the authority given by Governments of other States to non-Governmental  agencies to  organize lotteries. It may be equally  difficult for the Governments of other States to take 202 adequate measures  for prevention of abuse of such authority within the State of Maharashtra. [204C-D]

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    2. No  hostile discrimination  whatever is  involved in not extending  the exemption  from the  applicability of the Bombay Lotteries  (Control and  Tax) and  Prize  Competition (Tax) Act,  1958 ’to  lotteries authorised but not organized by the Government of other States’. [204D]      3. Lotteries  organised by  the Government  of India or the Government  of the  State have been taken out from Entry 34 of  List II  of Schedule VII by Entry 40 of List 1. There is, therefore  no  question  about  the  competence  of  the Legislature of  Maharashtra to  legislate in  respect of the sale or  distribution,  in  the  State  of  Maharashtra,  of tickets of  all lotteries organized by any agency whatsoever other than  the Government  of India  or the Government of a State. [203E-F]      H. Anraj and others v. State of Maharashtra, explained.

JUDGMENT:      ORIGINAL  JURISDICTION:   Writ  Petition  (Civil)  Nos. 12820, 12592,12714,  12736, 12747,12821,13035  and 13022  of 1984.       (Under Article 32 of the Constitution of India).      Dr. Y.  S. Chitale, Vimal Dave, Randhir Singh O. Swamy, Vineet Kumar,  N. K. Sharma, Ms. Deepika Saxena. S. M. Ashri and M. Veerappa for the Petitioners.      N. H. Gursahani and M. N. Shroff for the Respondent.      The Judgment of the Court was delivered by      CHINNAPPA  REDDY,   J.  This   order  is   virtually  a postscript to our judgment in H. Anraj and Ors. v.  State of Maharashtra What  was in  question in  H. Anraj  and Ors. v. State of  Maharashtra was  the ban imposed by the Government of Maharashtra on the sale of tickets of lotteries conducted by  the   Government  of   other  States  in  the  State  of Maharashtra. What  is presently  in  question  in  the  writ petitions before  us is  the ban  on the  sale of tickets of lotteries authorised but not organized by the Governments of other States. Specifically, we are concerned with the ban on sale,  within  the  State  of  Maharashtra,  of  tickets  of lotteries organised  by the  Indian Red Cross Society, Dadra and Nagar Haveli branch and authorised by the administration of Dadra  and Nagar  Haveli. In  Anraj and  Ors. v. State of Maharashtra we held that the subject" 203 "Lotteries organised  by the  Government  of  India  or  the Government  of   a  State"  had  been  taken  out  from  the legislative field,  comprised by the expression "Betting and Gambling" in  Entry 34  of List  II of  Schedule VII and was reserved to  be dealt  with by  Parliament under Entry 40 of List I  of Schedule  VII. Even  so, we held, Art. 298 of the Constitution left the Government of a State free to carry on any trade  or business  in respect  of which it may not have the power  to make laws, but that the power to carry on such trade  or  business  shall  be  subject  to  legislation  by Parliament.  Therefore,   we  said,   in  the   absence   of Parliamentary legislation, the Government of every State had the unrestricted  right to organise lotteries and this right was not  subject to the executive power of the Government of India or  the executive  and  legislative  powers  of  other States.  Consequently,   we  held  that  the  Government  of Maharashtra did  not have  the right  to impose a ban on the sale and  distribution of  tickets of lotteries organised by other States  in the  State of  Maharashtra. In  the instant cases, we  are concerned  not  with  the  ban  on  lotteries organised by  the Governments  of other  States but with the

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ban  on   lotteries  authorised   by  such  Governments  and organised  by   institutions  and  persons  other  than  the Governments. The  source of  power is not in question. It is to be  found in  Entry 34  of List  II of Schedule VII which empowers the  State legislature  to make  laws in respect of "Betting and  Gambling", which  expression has  always  been held to  include the  conduct of  lotteries. While lotteries organised by  the Government of India or the Government of a State have been taken out of Entry 34 of List II of Schedule VII by  Entry 40  of List  I, there is no question about the competence of the Legislature of Maharashtra to legislate in respect of  the  sale  or  distribution,  in  the  State  of Maharashtra, of  tickets of  all lotteries  organised by any agency whatsoever  other than the Government of India or the Government of a State.      The  Bombay  Lotteries  (Control  and  Tax)  and  Prize Competition (Tax)  Act, 1958  is an  Act to  control and tax lotteries and prize competition in the State of Maharashtra. Section 3 of the Act declares: "Save as provided by the Act, all lotteries  are  unlawful."  The  Act  contains  detailed provisions for  the licensing,  regulation  and  control  of lotteries within State of Maharashtra. By Sec. 32 (c), it is provided that  nothing in  the Act shall apply to "a lottery specially  authorised   by  the   State   Government."   The submission  of   Dr.  Chitale,   learned  counsel   for  the petitioners, was  that the  exemption from the applicability of the  Act granted  to lotteries  "especially authorised by the State Government", that is, by the 204 Government of Maharashtra, was discriminatory; the exemption should be  extended  to  all  lotteries  authorised  by  the Government of  any  State  whatsoever.  Article  14  of  the Constitution is invoked in aid of the submission; the reason for exempting  lotteries authorised  by  the  Government  of Maharashtra from  the  applicability  of  the  Act  and  not lotteries authorised  by the  Governments of other States is patent.  In   the  case   of  lotteries  authorised  by  the Government of Maharashtra, the Government of Maharashtra may retain to itself all necessary powers for the regulation and control  and   the  prevention   of  misuse   of  funds  and exploitation of guileless members of the public. In the case of lotteries  authorised by  the Governments of other States it may  be difficult  and even impossible for the Government of Maharashtra  to take adequate regulatory steps to prevent abuse of  the authority given by Governments of other States to non-Governmental  agencies to  organise lotteries. It may be equally  difficult for the Governments of other States to take adequate  measures for  prevention  of  abuse  of  such authority  within   the  State   of  Maharashtra.   We  are, therefore, satisfied that no hostile discrimination whatever is  involved   in  not  extending  the  exemption  from  the applicability of  the Act  to lotteries  authorised but  not organised by  the Governments  of  other  States.  The  Writ Petitions are accordingly, dismissed with costs. N.V.K.                                   Petition dismissed. 205