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IN THE HIGH COURT OF GAUHATI
Prasanta Kumar Deka, J.
Future Gaming And Hotel Services Pvt. Ltd. - Appellant
Versus
State Of Arunachal Pradesh And Ors - Respondent
Writ Petition (Civil) No. 80 of 2020, 95 of 2020
Decided On : 17-02-2021
LOTTERY - CHANGE OF SCHEME - APPROVAL - ARBITRARY - ARTICLE 14 - VIOLATION - ARBITRATION CLAUSE - MAINTAINABILITY OF WRIT PETITION - PROMISSORY ESTOPPEL - SECTION 23 OF CONTRACT ACT, 1872 - APPLICABILITY.
Fact of the Case:
The petitioner was appointed as the sole distributor of 8 number of daily draws of paper lottery. The respondent No. 3/4 was appointed as sole distributor for 2 sets of online lottery. The respondent No. 3/4 vide its representation dated 29.08.2018 addressed to the Hon'ble Chief Minister, Govt. of Arunachal Pradesh requested to allow it to market all kinds of lottery tickets of Arunachal Pradesh under the terms of the existing agreements facilitating it to market paper lotteries of Government of Arunachal Pradesh. The Hon'ble Chief Minister forwarded the said letter to the respondent No. 2 with the noting "please examine & process". Vide the impugned order dated 12.09.2018 issued by the respondent No. 2 the said proposal was approved within the total 16 nos. of draws (2 sets of online lotteries) as per the agreement executed on 27.07.2015 for the remaining period.
Finding of the Court:
The impugned order is ultra vires and void-ab-initio owing to abdication of the authority of the designated officer, respondent No. 2 in favour of the Government and accordingly the consideration of the supplementary agreement proposed in the impugned order is void ab initio and hit by Section 23 of the Contract Act, 1872.
Issues: 1. Whether the approval granted by the Government for change of scheme from online lottery to paper lottery is arbitrary and violative of Article 14 of the Constitution of India? 2. Whether the writ petitions are maintainable in view of the arbitration clause contained in the agreement? 3. Whether the principle of promissory estoppel and Section 23 of the Contract Act, 1872 are applicable in the present case?
Ratio Decidendi: 1. The impugned order is ultra vires and void-ab-initio owing to abdication of the authority of the designated officer, respondent No. 2 in favour of the Government and accordingly the consideration of the supplementary agreement proposed in the impugned order is void ab initio and hit by Section 23 of the Contract Act, 1872. 2. The writ petitions are maintainable as the allegations in the writ petitions can very well be examined applying the discretion under Article 226 of the Constitution of India and to give a finding to that effect. 3. The principle of promissory estoppel is not applicable in the present case as the impugned order clearly mentioned that the approval was to be confined within the 16 draws already allotted to the respondent No. 3/4.
Final Decision: The writ petitions are allowed. Interim order passed stands vacated. No costs. Records be sent back.
JUDGMENT
Prasanta Kumar Deka, J. - Heard Mr. K N Choudhury, learned senior counsel assisted by Mr. R M Deka, the learned counsel for the petitioner. Also heard Mr. S Dutta, the learned counsel for the respondent No. 3/4 and Mr. B D Goswami, the learned Additional Advocate General, Arunachal Pradesh assisted by Mr. Chandran, the learned Government counsel, Arunachal Pradesh. The respondent No. 3 in WP(C) 95/2020 [WP(C) 446(AP)/2018] is impleaded as respondent No. 4 in WP(C) 80/2018 [WP(C) 469(AP)/2018] who is represented by Mr. S Dutta, the learned counsel in both the writ petitions.
2. The Government of Arunachal Pradesh issued Request for Proposal (RFP) on 01.11.2013 from parties interested to be selected as Distributor or Selling Agents for Arunachal Pradesh State Lottery tickets through conventional paper and online system. The RFP was for three sets of weekly lottery schemes and Bumper lottery (each set comprising of 56 weekly lottery schemes i.e. 8 draws daily and 2 Bumper draws in a year. The writ petitioner submitted proposal for 1 (one) set of conventional paper lottery and the respondent No. 3 submitted proposal for 2 (two) sets of online lottery.
3. Petitioner was appointed on 23.06.2014 as the Distributor to market Arunachal Pradesh Paper Lottery i.e. 1 (one) set of weekly lottery scheme consisting of 56 weekly lottery draws i.e. 8 draws daily and 2 Bumper draws in a year.
4. The respondent No. 3/4 was appointed on 23.06.2014 as the Distributor for 2 (two) sets of weekly lottery schemes consisting 16 online draws per day. Each set consisting of 56 weekly lottery draws i.e. 8 draws daily and 2 Bumper draws a year.
5. On 27.07.2015 in terms of the offer and acceptance, an Agreement was executed between the Secretary, Department of State Lottery and the writ petitioner. Similar Agreements were also executed with the respondent No. 3/4. For each set of lottery schemes separate Agreements were executed. The petitioner executed one agreement in respect of the distributorship of conventional paper lottery. The respondent No. 3/4 executed two separate agreements each indicating the distributorship of online lottery for 1 (one) set of the said scheme. For each set of lottery be it conventional paper lottery or online lottery the distributorship was indicated as sole distributorship.
6. The Government of Arunachal Pradesh on 27.08.2018 constituted a committee to examine various complains it received in respect of lottery operation of the distributors.
7. The respondent No. 3 submitted a representation to the respondent authorities requesting to allow it to sell/ market paper lottery alongwith online lotteries including in the State of West Bengal and Kerala. The said representation was made on 29.08.2018 by the respondent No. 3/4 addressed to the Hon'ble Chief Minister, Arunachal Pradesh. It was stated in the representation that owing to imposition of GST on sale of lottery tickets on MRP the sale had gone down. Further the Government of West Bengal and Kerala banned sale of online lottery tickets in the respective States. This resulted in a difficult situation to the respondent No. 3/4 in marketing and selling online lotteries. The petitioner who is marketing only 1 or 2 draws of paper lotteries rest of the draws remain idle. Accordingly, respondent No. 3/4 made the request as aforesaid.
8. The Deputy Secretary, Department of State Lotteries, Arunachal Pradesh vide letter No. Lot-338/2018/259 dated 12.09.2018 approved the proposal of respondent No. 3/4 to market the paper lottery scheme within the total 16 (sixteen) number of draws as per the agreements dated 27.07.2015 for the remaining period i.e. up to 26.07.2020.
9. The petitioner on 13.09.2018 filed WP(C) 446 (AP)/2018 [renumbered as WP(C) 95/2020] alleging that the petitioner came to learn that the respondent authorities were proceeding with undue haste for accepting the prayer made by the respondent No. 3/ 4 for conversion of its distributorship from online lottery scheme to c
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