The court emphasized the importance of determining territorial jurisdiction before considering the merits of a case and held that the impugned rules were discriminatory, arbitrary, and beyond the rule-making power of the State under the Act.

Both these appeals are being disposed of by this common judgment as the question of law involved in both these appeals are identical. The writ appeals are filed against the common order passed by the learned Single Judge on 31.8.2001 in W.P.(C) No. 6016/2001 and order dated 30.8.2000 in W.P.(C) No. 6052/2000. Writ Petition (C) 6016/2000 was filed by the State of Arunachal Pradesh challenging the Rule 9 of the Rules framed by the respondent State of Maharashtra. The writ petitioner also/challenged the letters dated 4.9.98, 22.9.98 and 8.11.98 issued by the Ministry of Home Affairs.

2. The case of the writ petitioner is that the State of Arunachal Pradesh organises lottery under the Lotteries Regulation Act, 1998 and likewise the Maharasthra Govt. also organises lotteries in the State. The State of Maharashtra in exercise of powers under Section 12 of the Lotteries Regulation Act, 1998 for short, "the Act", framed certain Rules and Rule 9, according to the petitioner places unnecessary restrain and prevents the petitioner from selling their lottery tickets in the State of Maharashtra and is thus violative of the Constitution.

3. The writ petitioners in W.P.(C) No. 6052/2000, the State of Nagaland & Ors. has also sought similar relief against the State of Maharashtra on the same grounds.

4. Both these writ petitioners were contested by the respondent State of Maharashtra stating, inter alia, that the Rules of 2000 were framed under the Act and these were within the powers of the State and Rule 9 was necessary to protect the interest of the consumer. The respondent also raised a preliminary objection regarding the maintainability of the writ petitions on the ground of lack of territorial jurisdiction.

5. The learned Single Judge vide the impugned order decided the question of territorial jurisdiction in favour of the writ petitioners and also held that Rule 9 of the Maharashtra State Lotteries (Regulation) Rules, 2000, hereinafter referred to as "the Rules 2000" are ultra vires and accordingly those Rules were quashed. It was also held that the impugned letters dated 4.9.98, 22.9.98 and 8.11.98, that is, Annexure-H/ I, H/II and H/III in W.P.(C) No. 6016/2000 are not applicable in respect of the petitioners. Hence the present appeals.

6. Dr. A.K. Saraf, learned sr. advocate appearing for the appellant State of Maharashtra has submitted that the learned Single Judge should not have entered into the merits of the case before deciding the question of territorial jurisdiction as a preliminary issue. In support of the above submission learned counsel has relied on a decision of the Apex Court in the case of Union of India and others-Vs-Agani Exports Ltd. 2002 (1) SCC 567. The Apex Court observed that "the question of jurisdiction should be first decided before entering into the merits of the case. We found that the question of territorial jurisdiction was also decided by the learned Single Judge along with the merits of the case. We, therefore, propose to consider the question of territorial jurisdiction first before reverting to the merits of the matter.

7. The case of the writ petitioner is that in view of the impugned Rule 9 of the Rules, 2000, the rights of the petitioner States to sell their lottery tickets in the State of Maharashtra has been seriously affected and the cause of action has arisen within the territorial jurisdiction of this Court as the legal rights have been affected. During the course of argument it was further submitted that it is not a dispute between the Govt. of India and the petitioner States and even the Union of India did not contest the matter by filing written statement. It is further submitted that the petitioners have also challenged the validity of certain letters/circulars issued by the Union of India which according to the petitioners are in violation of the Act. Thus, we find that according to the petitioners the cause of action or part of the cause of action arose within the territorial