ORDER

TAMIL NADU MATTERS

Writ Petition (C) Nos. 739, 756, 982, 1019, 1054, 1057, 1204 and 1205 of 1990, SLP (C) Nos. 9238, 11611 and 11613 of 1990, TC Nos. 70, 66, 67 and 68 of 1990, WP (C) No. 1121 of 1990

1. There is an executive order No. GOMs No. 1101 dated 6-10-1989, promulgated by the State of Tamil Nadu prohibiting the sale of lottery tickets of other States. The relevant part of the said order reads thus:

"2. The lotteries mainly fall under five different categories.

(a) Lotteries organised by the Government of India.

(b) Lotteries organised by the Government of Tamil Nadu.

(c) Lotteries organised by other State Governments.

(d) Private Lotteries authorised by Government of Tamil Nadu, and

(e) Private Lotteries authorised by other Governments but not authorised by this Government.

Government have decided, in view of the reasons referred to in para above that the sale of lottery tickets of the Government of Tamil Nadu and the lotteries organised by Government of India or other State Governments alone will henceforth be permitted within the State of Tamil Nadu. Private Lotteries of any kind are not authorised to be sold within the State of Tamil Nadu."

2. The order clearly implies - if it did not, it would have required the order to be read down to mean - that prohibition does not extend to the sale of lottery tickets of lotteries organised by other States. This is the implication arising out of a proper construction of Entry 40 of List I and Entry 34 of List II of the Seventh Schedule. The said Entry 34 of List II provides "Betting and Gambling". Entry 40 of List I provides "Lotteries organised by the Government of India or the Government of a State".

3. In the present case we have examined, prima facie, whether the lottery claimed to have been organised by the State of Sikkim can be said to be a lottery organised by the State of Sikkim and not merely authorised by it authorising the so-called Agents themselves to organise the lottery. We have examined this in the context of the question whether the earlier interim order granted by this Court should continue or not till the final disposal of the main cases. Prima facie, it appears to us that the concept of a lottery organised by a State would require certain basic and essential concomitants to be satisfied as, indeed, members of the public when investing their money in such a lottery proceed on a trust and on certain assumptions as to the genuineness, bona fides, safety, security, the rectitude of administration etc. associated with governmental functioning. If some of the basic functions characterising a State-organised lottery are delegated or abdicated by the State this public trust is impaired. The first of those requirements is that the tickets which bear the imprint and logo of the State must be printed by or directly at the instance of the State Government so as to ensure their authenticity and genuineness and further to ensure that any possibility of duplication of the tickets and sale of fake tickets is provided against and rendered impossible. Secondly, the State itself must sell the tickets though, if it thinks necessary or proper so to do, through a sole distributor or selling agent or several agents or distributors under terms and conditions regulated by the agreement reached between the parties. The sale proceeds of the tickets either sold in retail or wholesale shall be credited to the funds of the Government. Thirdly, the draws for selecting the prize-winning tickets must be conducted by the State itself, irrespective of the size of the prize money. Fourthly, if any prize money is unclaimed or is otherwise not distributed by way of prize, it must revert to and become the property of the State Government. These, prima facie, appear to us to be the minimal characteristics of a lottery which can claim to be organised by the State.

4. The concept of royalty being paid by the agent would perhaps not be consistent with the idea of relationship between the principal and age