The main legal point established in the judgment is the authority of the State to monitor and regulate lotteries to ensure compliance with the law, transparency, and prevention of fraud and deceit.

The Government of Meghalaya and an Association of Lottery Traders, petitioners in this W.P., are challenging the constitutional validity of Rule 3(3) and Rule 24(3) of the Kerala State Lotteries and Online Lotteries (Regulation) Rules, 2003, hereinafter called the “Rules” and Ext.P4 notice issued there under by the third respondent. Substantially the very same issues came up in this Court in W.P.C.Nos.35368 of 2003 and connected cases and this Court upheld the validity of Rule 24(3) of the Rules and the very same notice impugned in this W.P. However, the petitioners have raised some additional points questioning the correctness of the earlier decision and virtually sought review of the said judgment and therefore this W.P. was admitted and petitioners and respondents were heard on the various issues raised and reliefs sought.

2. I have heard senior counsel, Sri. Dushyant Dave, appearing for the petitioners and Sri. V.K. Beeran, Addl. Advocate General appearing for the respondents.

3. The first contention raised by the petitioner is that Rules 3(3) and 24(3) of the Rules are unconstitutional and are also against the Lotteries (Regulation) Act, 1998. As already stated, the validity of Rule 24(3) of the Rules was upheld by this Court in the batch cases and the only question to be considered is whether the argument of the petitioners would necessitate review of the findings in that judgment. Rule 3(3), the validity of which was not separately considered in the earlier judgment is as follows:

3. Conduct of State Lottery: -

(1) ……

(2) …..

(3) The authority shall also be vested with the powers to monitor the sale of lotteries of other States/Union Territories or any country having bilateral agreements or treaty with the Government of India, in accordance with the provisions of the Act and the Rules made there under.

The petitioners contended that requirement of approval under Rule 24(3) by the State Government for sale of lottery tickets of other States in Kerala and the authority vested in the Enforcing Agencies under Rule 3(3) to monitor the lottery business of other State Governments are unconstitutional and against the federal principle visualized in the Constitution as no State Government has authority to oversee and supervise the transactions of another Government. It is further contended that it is in recognition of this federal principle that the authority to ban a lottery is vested under the Lotteries Regulation Act only in the Central Government under Section 6. In support of this contention the Senior counsel has also cited the decision of the Gauhati High Court in a case filed by the Nagaland Government against ban of their lotteries by the Maharashtra Government. The Addl. Advocate General appearing for the State on the other hand contended that the respondents do not want to exercise any control or authority over the first petitioner and for that matter any other state Government and what is contemplated under the Rules is to ensure that lottery conducted by other State Governments in Kerala conform to the provisions of the Lotteries Regulation Act. He further submitted that there is nothing inconsistent in the Kerala Rules against any provision of the Act and so long as the petitioners do not question the constitutional validity of the Act which is law made by the Parliament, what the Court has to see is whether the Rules are consistent with the provisions of the Act. According to him, the Rules do not give authority to any officer of the State Government to interfere with the financial matters of other State Government, as projected by the petitioners. The Additional Advocate General submitted that Rules are only regulatory and in support of the justification and the objects sought to be achieved by the Rules, he has relied on the findings of the Supreme Court in B.R. Enterprises V. State of U.P., (1999) 9 S.C.C. 700, which are as follows:

64. For this, we revert to scrutinize as to what made lotteries gambling an