http://JUDIS.NIC.IN

SUPREME COURT OF INDIA

Page 1 of 12

CASE NO.:

Appeal (civil) 7308-7309 of 2005

PETITIONER:

M/s Tashi Delek Gaming Solutions Ltd. & Anr.

RESPONDENT:

State of Karnataka & Ors.

DATE OF JUDGMENT: 08/12/2005

BENCH:

S.B. Sinha & P.P. Naolekar

JUDGMENT:

J U D G M E N T

[Arising out of S.L.P. (Civil) Nos.6898-6899 of 2005]

W I T H

CIVIL APPEAL NOS. 7310-7312 OF 2005

[Arising out of S.L.P. (Civil) Nos.7744-7746 of 2005]

S.B. SINHA , J :

Leave granted.

Introduction :

Scope and ambit of Article 131 of the Constitution of India is in

question in these appeals, which arise out of a common judgment and order

dated 16.03.2005 passed by a Division Bench of the Karnataka High Court

in Writ Appeal Nos.5516-5117 of 2004 and Writ Appeal Nos.29-31 of 2005,

whereby and whereunder the appeals preferred by the Appellants herein

were dismissed.

Background facts

It is not in dispute that the States of Sikkim and Meghalaya

commenced online lotteries, inter alia, in the State of Karnataka. It is,

however, otherwise a lottery playing State. In exercise of its power

conferred upon it under Section 5 of the Lotteries (Regulation) Act, 1998

(for short, ’the Act’) a declaration was made that the State of Karnataka

shall be free zone from online and internet lotteries. By reason of the said

notification sale of all computerized and online lottery tickets marketed and

operated through vending machines, terminals, electronic machines and

through internet in the State of Karnataka became prohibited with immediate

effect.

Writ Proceedings :

The States of Sikkim and Meghalaya together with its agents filed

writ petitions before the Karnataka High Court, challenging the legality

and/or validity of the said notification, inter alia, on the ground that the State

of Karnataka, having itself been organizing lotteries, could not have imposed

the said ban having regard to the decision of this Court in M/s B.R.

Enterprises etc. v. State of U.P. & Ors. etc. [(1999) 9 SCC 700].

The contention of the State of Karnataka, on the other hand, was that

online lotteries had nothing to do with the conventional lotteries and as the

State of Karnataka has put an embargo on online lotteries without any

discrimination, B.R. Enterprises (supra) cannot be said to have any

application.

A preliminary objection was taken on behalf of the State that as the

http://JUDIS.NIC.IN

SUPREME COURT OF INDIA

Page 2 of 12

dispute involved in the writ petitions related to two State Governments, the

writ petitions were not maintainable, in view of the constitutional bar under

Article 131 of the Constitution of India. The said contention was upheld by

a learned Single Judge of the High Court holding, inter alia, that the agents

of the State of Sikkim and State of Meghalaya had no locus standi to

maintain the writ petitions in view of the fact that they did not have any

independent right in that behalf. The agents of the State of Sikkim preferred

an intra-court appeal thereagainst The State of Meghalaya and its agents

thereafter also preferred writ appeals.

Contentions of the writ petitioners :

The contention of the Appellants herein being agents and distributors

of the State of Sikkim is as under :

Section 4(c) of the Act permits the State Governments to sell tickets

either itself or through distributors or selling agents and in terms thereof the

First Appellant M/s Tashi Delek Gaming Solutions Ltd, was appointed by

the State of Sikkim as an agent for sale of online lotteries. The Second

Appellant, Pan India Network Infravest Pvt. Ltd., is a distributor of the First

Appellant.

It was contended that the Appellants herein have invested a huge

amount of 300 crores for setting up the online lotteries network

infrastructure and 861 retail outlets therefor. They have been paying sales

tax and other taxes running into crores of rupees to the Respondent-State and

have entered into diverse th