VERY IMPORTANT POINT
Horse racing is a game of skill. It is neither "gaming" nor "gambling" as defined and envisaged under Madras City Police Act, 18888 and Madras Gaming Act, 1930 read with Tamil Nadu Horse Races (Abolition and Wagering or Betting) Act, 1974 and the penal provisions of these Acts are not applicable to horse racing the Madras Race Club (Acquisition and Transfer of Undertaking) Act, 19986 is ultra vires Art. 14 of the Constitution of India and is struck down.

Headnote:(i) Tamil Nadu Horse Races (Abolition and Wagering or Betting) Act, 1974-Section 2-By which horse racing was brought within the definition of "gaming" (gambling)-What is "gambling"? Wagering or betting on games of chance. (Paras 10 and 30)
(ii) Madras City Police Act, 1888-Section 49-A-Madras Gaming Act, 1930-Section 11-What is the meaning of expression "Mere skill" in terms of said sections of the two Acts-Held that the expression "mere skill" would mean substential degree or preponderance of skill. (Para 17)
(iii) Horse racing-Nature and scope-Whetheer running of the horse races by the Madras Race Club is a game of "Chance" or a game of "mere skill", (the later) "Handicap horse race" whether introduces an element of chance? (No).
Held : In view of the discussion and the authorities referred to by us, we hold that the horse-racing is a game where the winning depends substantially and preponderantly on skill. (Para 28)
Held further : Mr. Ashok Desai, learned counsel for the State of Tamil Nadu, has contended that the "handicap horse races" introduce an element of chance and as such horse racing is not a game of skill. We do not agree. (Para 29
(iv) Madras City Police Act, 1888-Section 3-Madras Gaming Act, 1930-Section 3-Definitionof "gaming"-Whether "wagering" or "betting"on horse-races is gaming as deprived by said Police Act and Gaming Act ? (No). (Para 30)
(v) Madras Police Act, 1888-Section 49-A-Madras Gaming Act, 1930-Section 4-Whether the horse racing-Even if it is a game of "mere skill"-Is still prohibited u/s. 49A of the Police Act and Section 4 of the Gaming Act? No.
Held : We have, therefore, no hesitation in holding that Section 49A of the Police Act and Section 4 of the Gaming act are not applicable to wagering or betting on a horse-race when such wagering or betting takes place within the club premises and on the date on which such race is actually run on the truf of the club. These Sections are applicable to the bucket-shops or any house, house room, tent, enclosure, vehicle, etc. which are run in the streets, bazaars or any other place away from the club. (Para 34)
(vi) Constitution of India-Constitutional validity of 1986 Act-Whether the Madras Race Club (Acquisition and transfer of Undertaking) Act, 1986 gives effect to policy under Article 39(b) and (c) of the Constitution of India and as such protected under art. 31(c) of the Constitution? (No) (Para 39)- Whether the 1986 Act is liable to be struck down as violative of Articles 14 and 19(1)(g) of the Constitution?
Held : It is violative of Art. 14 as acquisition and transfer of the undertaking of the club is arbitrary. (Paras 43 and 44) In view of this it is not necessary to section whether the Act violates Article 19(1)(g). (Para 45)
Result : Writ Petition and Civil Appeals allowed. High Court s Judgment set aside.
Held : We hold and declare that horse racing is a game of mere skill within the meaning of Section 49 of the Police Act and Section 11 of the Gaming Act. Horse racing is neither "gaming" nor "gambling" as defined andd envisaged under the two Acts read with the 1974 Act and the penal provisions of these Acts are not applicable to the horse racing which is a game of skill. The 1985 Act is ultra vires Article 14 of the Constitution and as such is struck down. (Para 46)

JUDGMENT

Kuldip Singh, J.-The Madras Race Club (the Club) is an Association registered as a company with limited liability under the Companies Act, 1956. The club was formed in the year 1896 by taking over the assets and liabilities of the erstwhile unincorporated club known as Madras Race Club. According tto its Memorandum and Articles of Association, the principal object of the club in the running of horse races. The club is one of the five "Turf Authorities of India", the other four being the Royal Calcutta Turf Club, the Royal Western India turf Club Limited, the Bangalore Turf Club Limited and the Hyderabad Race Club. Race meetings are held in the club s own race course at Madras and at Uthagamandalam (Ooty) for which bets are made inside the race course premises. While horse races are continuing in the rest of the country, the Tamil Nadu Legislature, as back as 1949, enacted law by which horse racing was brought within the definition of "gaming". The said law, however, was not enforced till 1975, when it was challenged by the club by way of a writ petition before the Madras High Court. The writ petition was dismissed by the High Court. These proceedings before us are sequel to the chequered history of litigation, between the parties, over a period of two decades.

2. From the pleadings of the parties and the arguments addressed before us by the learned counsel the following questions arise for our consideration :-

1. What is gambling ?

2. What is the meaning of expression "mere skill" in terms of Section 49-A of the Madras City Police Act, 1888 (The Police Act) and Section 11 of the Madras Gaming Act, 1930 (the Gaming Act)?

3. Whether the running of horse-races by the club is a game of "chance" or a game of "mere skill"?

4. Whether wagering or betting on horse-races is gaming as defined by the Police Act and the Gaming Act.

5. Whether the horse-racing-even if it is a game of mere skill - is still prohibited under Section 49-A of the Police Act and Section 4 of the Gaming Act?

6. Whether the Madras Race Club (Acquisition and Transfer of Undertaking) Act, 1986 (the 1986 Act) gives effect to the policy under Article 39(b) and (c) of the Constitution of India (the Constitution) and as such is protected under article 31(c) of the Constitution. If not, whether the 1986 Act is liable to be struck down as violative of Articles 14 and 19(1)(g) of the Constitution.

3. The New Encyclopaedia Britannica defines gambling as "The betting or staking of something of value, with consciousness of risk and hope of gain on the outcome of a game, a contest, or an uncertain event the result of which may be determined by chance or accident or have an unexpected result by reason of the better s miscalculations". According to Black s Law Dictionary (Sixth Edition) "Gambling involves, not only chance, but a hope of gaining something beyond the amount played. Gambling consists of consideration, an element of chance and a reward" ........ Gambling in a nut-shell is payment of a price for a chance to win prize. Games may be of chance, or of skill or of skill and chance combined. A game of chance is determined entirely or in part by lot or mere luck. The throw of the dice, the turning of the wheel, the shuffling of the cards, are all modes of chance. In these games the result is wholly uncertain and doubtful. No human mind knows or can know what it will be until the dice is thrown, the wheel stops its revolution or the dealer has dealt with the cards. A game of skill, on the other hand-although the element of chance necessarily cannot be entirely eliminated-is one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player. Golf, chess and even Rummy are considered to be games of skill. The courts have reasoned that there are few games, if any, which consist purely of chance

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1996 Supreme(SC) 91

Cases Referred (4)