The Hindu : Kerala News : Court upholds Government order on sale of lotteries

Online edition of India's National Newspaper
Thursday, Apr 29, 2004

Kerala

Kerala

Court upholds Government order on sale of lotteries

By Our Staff Reporter

KOCHI, APRIL 28. A Division Bench of the Kerala High Court today upheld the Government order imposing restrictions on the sale of lotteries, including online lotteries, of other States in the State.

The Bench, comprising Justice Cyriac Joseph and Justice K. Padmanabhan Nair, held valid Rule 24(3) and Rules 3(3) of the Kerala State Lotteries and Online lotteries (Regulation) Rules, 2003.

The Court was dismissing appeals by the Meghalaya Government and the Indian Federation of Lottery Traders and Allied Industries against a single judge's verdict dismissing their petition against the Government restrictions imposed under these rules.

The Court, at a special sitting today, held that the action of the Director of State Lotteries in issuing public notice to the lottery organisers to comply with the provisions was not wrong or illegal. It observed that the appellants were bound to comply with all the provisions of the Rules while marketing and selling their lotteries in Kerala.

The Court pointed out that they had not considered the correctness or legality of any decision taken by the Taxes Secretary under 24(2) of the Rules as it was beyond the scope of the appeals. It was open for them to challenge the decision/order of the Taxes Secretary in appropriate proceedings.

The Court observed that it was necessary in public interest that unless and until the authority was satisfied that the schemes of the other State lotteries met all the requirements of the Act, marketing of lotteries should not be permitted within the State.

The court felt that the question whether the lotteries marketed by the appellants were actually those organised or promoted by the State Governments, and whether the schemes satisfied all the provisions of the Act, required proper security and serious consideration by the authorities. The appellants could "not shy away from an inquiry" into the above aspects. They were " bound to cooperate with the inquiry" if the authorities concerned deserved to market their lotteries in the State.

The Bench said that in view of the allegations that the lotteries of other States were not organised or conducted by the State Government concerned but by private companies, it was all the more necessary that there must be an authority and a procedure as contemplated in the Rules to decide whether the conduct of these lotteries satisfied the provisions of the Lotteries Regulation Act.

The Court referred to the submission of the Advocate General, M. Ratna Singh, that as per the Act, the lottery tickets should have an imprint and logo of the Government's which organised the lotteries. The sale proceeds should be credited with the funds of the State Government concerned. Besides, if any prize money remained unclaimed or not disbursed, it must revert to the Government. These justified the need for provisions in the Rules.

The Bench vacated its interim order restraining the State Government from enforcing the rules and suspending the sale of online and other lotteries of other States.

The Meghalaya Government and others had contended that the Government had no power to issue such rules as it had been only vested with the Central Government under the Lotteries Regulation Act. Rule 24(3) required the organisers of the lotteries to obtain permission from the Government while Rule 3(3) was an enabling provision to ensure that only approved lotteries were sold in the State.

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