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J.K Bharati v. State Of Maharashtra And Others
Factual and Procedural Background
The order concerns writ petitions challenging the State of Maharashtra’s ban (within Maharashtra) on the sale of lottery tickets for lotteries that were authorised by governments of other States but organised by non-governmental entities. The specific instance discussed is the sale in 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.
The order is described as a postscript to the Court’s earlier judgment in H. Anraj v. State of Maharashtra (1984) 2 SCC 292, where the Court dealt with a Maharashtra ban on the sale of tickets of lotteries conducted by governments of other States.
Legal Issues Presented
- Whether Maharashtra is legislatively competent (under Entry 34, List II, Schedule VII) to regulate or ban the sale/distribution in Maharashtra of tickets of lotteries authorised by other State governments but organised by non-government agencies, given the constitutional allocation of lottery-related legislative fields discussed in Anraj.
- Whether Section 32(c) of the Bombay Lotteries (Control and Tax) and Prize Competition (Tax) Act, 1958—exempting only lotteries “specially authorised by the State Government” (i.e., Maharashtra)—is discriminatory under Article 14 for not extending the exemption to lotteries authorised by governments of other States.
Arguments of the Parties
Petitioners' Arguments
- The petitioners (through Dr Chitale) contended that the exemption in Section 32(c) for lotteries “specially authorised by the State Government” (Government of Maharashtra) is discriminatory.
- They argued the exemption should be extended to lotteries authorised by the Government of any State, invoking Article 14 of the Constitution.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| H. Anraj v. State of Maharashtra (1984) 2 SCC 292 |
(i) “Lotteries organised by the Government of India or the Government of a State” are reserved for Parliament under Entry 40, List I (and taken out of Entry 34, List II). (ii) Under Article 298, in the absence of Parliamentary legislation, State governments have an unrestricted right to organise lotteries; other States cannot ban the sale/distribution of such State-organised lottery tickets within their territory. |
The Court distinguished the present case from Anraj: the dispute here concerned lotteries authorised by other governments but organised by non-government agencies, which the Court treated as falling within State legislative competence under Entry 34, List II (“Betting and Gambling” including lotteries), unlike lotteries organised by governments covered by Entry 40, List I. |
Court's Reasoning and Analysis
The Court first differentiated between (a) lotteries organised by the Government of India or a State, and (b) lotteries organised by non-government agencies though authorised by a State government. Recalling Anraj, it noted that government-organised lotteries are constitutionally carved out from Entry 34, List II and fall within Entry 40, List I; hence Maharashtra could not ban the sale of tickets of lotteries organised by other State governments.
In contrast, for lotteries authorised by State governments but organised by entities other than governments, the Court held the relevant legislative source to be Entry 34, List II (“Betting and Gambling”), historically understood to include lotteries. Since Entry 40, List I only removes from Entry 34 those lotteries organised by the Government of India or a State, the Court held there was “no question” about Maharashtra’s competence to legislate regarding the sale or distribution within Maharashtra of tickets of lotteries organised by any agency other than the Government of India or a State.
Turning to the Article 14 challenge to Section 32(c) of the Bombay Lotteries (Control and Tax) and Prize Competition (Tax) Act, 1958 (which exempts a lottery “specially authorised by the State Government”), the Court found a rational basis for differentiating between lotteries authorised by Maharashtra and lotteries authorised by other States. It reasoned that when Maharashtra authorises lotteries, it can retain necessary regulatory and control powers to prevent misuse of funds and exploitation of the public. For lotteries authorised by other governments but organised by non-government agencies, the Court considered it difficult or even impossible for Maharashtra to take adequate regulatory steps to prevent abuse, and equally difficult for other governments to prevent abuse within Maharashtra. On this basis, the Court concluded there was no hostile discrimination in limiting the exemption to lotteries specially authorised by Maharashtra.
Holding and Implications
DISMISSED: The writ petitions were dismissed with costs.
The direct effect is that Maharashtra’s regulatory scheme and differential exemption under the 1958 Act, as applied to lotteries authorised (but not organised) by other governments and organised by non-government agencies, was upheld; the petitioners did not obtain relief under Article 14. The opinion distinguished the earlier Anraj holding as inapplicable to non-government-organised lotteries and does not state any broader implications beyond the dismissal of these petitions.
O. Chinnappa Reddy, J.— This order is virtually a postscript to our judgment in H. Anraj v. State of Maharashtra (1984) 2 SCC 292. What was in question in Anraj v. State of Maharashtra (1984) 2 SCC 292 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 organised 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 v. State of Maharashtra we held that the subject “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, Article 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 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.
2. 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 Section 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 “specially authorised by the State Government”, that is, by the 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.
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