The Lotteries Act, particularly Sections 4 and 5, and the embedded equitable principles, govern the legality of lottery tickets, their sale, and the conduct of draws. The Act provides for the rights and obligations of lottery agents, retailers, and purchasers, and the court's decision emphasized the Act's provisions and principles.

THE HON'BLE THE CHIEF JUSTICE

These matters emanate from the Lotteries (Regulation) Act, 1998, which is hereinafter referred to as the Lotteries Act. The Lotteries Act is a Central piece of Legislation. The Lotteries Act confers rule making powers both on the Central Government as also the State Government under Section 11 and 12 respectively. State of Tamil Nadu framed Rules in exercise of Powers under Section 12 of the Act, titled Tamil Nadu State Lotteries (Regulation) Rules, 2002. Lotteries were being conducted not only by the State of Tamil Nadu, but by other States too. Rules 3 to 19 relate to the lotteries conducted by the State of Tamil Nadu while Rule 20 pertains to the lotteries conducted by other States, Union Territory or any country having bilateral treaty with India. Rule 20 was the subject matter of writ petitions of the year 2002, on the ground that the restrictions imposed on the conducting of lotteries other than State of Tamil Nadu were not only unreasonable, but also devoid of jurisdiction. Interim orders were passed in the said writ petitions, enabling the agents to purchase the lottery tickets organised and conducted by other states subject to the condition of payment of sales tax in advance and also not indulging in single digit lotteries. Such orders were in force as on 8th January 2003. The date 08th January 2003 assumes significance as the State of Tamil Nadu issued G.O.Ms.No.20 Home (Courts II) Department dated 08.01.2003, prohibiting the sale of all lottery tickets, including the one organised and conducted by the State of Tamil Nadu. Writ petitions of the year 2003 are filed assailing the said Governmental Order. Interim Order was passed on 14th January 2003, permitting the sale of the lottery tickets, which were subjected to payment of advance sales tax under Section 7(D) of the Tamil Nadu General Sales Tax Act, giving a time of one week therefor. The matters have been finally heard on 22nd January 2003.

2. M/s. G. Masilamani, R.Krishnamurthy, V.T.Gopalan, A.L.Somayaji, R. Gandhi and Mrs. Nalini Chidambaram, the learned Senior Counsel advanced arguments on behalf of the petitioners / appellants, while Mr.N.R.Chandran, learned Advocate General appeared for the respondent State. Mr. Palani Selvaraj appeared for the impleading petitioner in support of the Governmental action.

3. While all other learned Senior Counsel appearing for the petitioners / appellants concentrated only on the issue of prospectivity of the Governmental action in banning the sale of all lottery tickets including that of the State of Tamil Nadu by G.O.Ms.No.20 dated 08.01.2003, Mrs.Nalini Chidambaram, learned Senior Counsel has advanced arguments regarding the very validity of the Governmental action.

4. Mr. G. Masilamani, the learned Senior Counsel, leading the attack on the Government Order submits that once the State organised lotteries are launched and the lottery tickets have been authorised to be sold and the sale tax collected therefor by the State of Tamil Nadu, the lottery schemes announced up to 8.1.2003 have to end by drawing the lots and paying the amounts to the successful purchasers and the sudden decision of the Government cannot annul all its actions done before the impugned Government Order. He submits that the scheme of the Lotteries Act does not permit such arbitrary action on the part of the Government. He points out that while rules have been framed by the State for conducting the lotteries, no such rules have been framed regarding the modalities to be followed in the event of imposition of ban on lotteries, but the Government cannot act arbitrarily and unreasonably while dealing with the rights of the parties, be it the sole agents, sub-agents (retailers) or the ultimate purchasers. He made an emotional depiction of the serious consequences resenting the Government's attitude in seeking to nullify the lottery tickets already authorised to be sold, which if sustained, leaves the people investing m