ORDER
J.B. Koshy, J.
1. Government of Kerala by Ext. P1, G.O. (Ms) No. 4/90/TD. dated 6-1 -1990, banned sale of all lottery tickets in the State of Kerala which are not directly conducted by the State or authorised by the State or by the Administration of a Union Territory or by the Government of India. According to the above notification, violation of the same shall entail punishment under Section 294A of the Indian Penal Code. After the pronouncement of the order of the Supreme Court in State of Haryana v. Suman Enterprises (1994) 4 SCC 217, Government issued G.O. (Ms) No. 160/94/TD. dated 12-12-1994. It was very specifically mentioned that only state organised lottery tickets will be allowed for sale in Kerala. It was further stated that lottery tickets of the Government of Maharashtra, Tamil Nadu, West Bengal, Uttar Pradesh and Karnalaka which satisfy the basic and essential concomitants of lottery organised by a State as laid down by the Supreme Court will be permitted for sale within the State of Kerala. With regard to the other lottery tickets, it was stated that such Stale should make an application to the Director of Slate Lotteries. Vikas Bhavan, Thiruvananthapuram so as to verify whether those lotteries conform to the norms specified in the interlocutory order of the Supreme Court. Later, it can be seen that by Circular dated 17-5-1995 Director of State Lotteries informed that apart from the above lotteries conducted by Maharashtra, Tamil Nadu, West Bengal. Uttar Pradesh and Karnataka, Government have given permission to seven weekly lotteries of the State of Nagaland, two monthly lotteries and 24 weekly lotteries of the State of Sikkim and ‘Jai Mathurubhumi’ lottery of the Slate of Goa Government. By G.O. (Ms) No. 50/95/TD, dated 9-3-1995, Government have considered the application filed by Nagaland and Sikkim Governments. It was stated that Government will not allow single digit lotteries
owing to various complaints as single digit lotteries are purely a form of gambling and betting. While disallowing the single digit lotteries the instant lotteries conducted by the State of Nagaland was also disallowed. But, no reasons are stated why instant lotteries are disallowed. Even though Jai Mathurubhumi lottery of the Goa Government was allowed by Government Order dated 23-3-1995 no permission was granted for Jai Mathubhumi Bumber organised by the State of Goa. It may also be pointed out that the order of the Supreme Court reported in 1994 (4) SCC 217 is interlocutory and final judgment is not yet so far pronounced.
2. Section 294A of the Indian Penal Code provides as follows:
“294-A. Keeping lottery office Whoever keeps any office or place for the purpose of drawing any lottery not being a State lottery or a lottery authorised by the State Government, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine, or with both.
And whoever publishes any proposal to pay any sum, or to deliver any goods, or to do or forbear from doing anything for the benefit of any person, on any event or contingency relative or applicable to the drawing of any ticket, lot, number or figure in any such lottery shall be punished with fine which may extend to one thousand rupees.”
Therefore if the lottery organised or authorised by the State is sold, it will not be an offence under the Indian Penal Code unless such sales are prohibited by law.
3. Next question is whether sale of lottery tickets authorised or organised by other States or Union of India can be prohibited by the State Government. Entry 40, List l of’ Seventh Schedule to the Constitution of India reads as follows :
“Lotteries organised by file Government of India or the Government of a ‘State”.
Therefore, power to regulate to conduct of lotteries organised by the State Government comes in List I, that is, Union List, and state cannot prohibit a lottery which is organised by a State of Government of India. Entry 34, List II of Seventh Schedule to the Constitution of India provides as follows : .”Betting and Gambling”.
4. In H. Anraj v. State of Maharashtra, AIR 1984 SC 781 it was held by the Apex Court as follows (para 5):
“Govern ment of a State has no power to declare unlawful the lottery run by Government of another Stale. ….. Article 298 of the Constitution of
India extends the executive power of the Union and each State to the carrying on of any trade or business and to acquisition, holding and disposal of property and the making of contracts for any purpose, with the stipulation that if the trade business or purpose is not one in respect to which the Parliament may make laws the said executive power of” the Union will be subject in each State to legislation by the State and if the trade business or purpose is not one with respect to which the State Legislature may make laws, the said executive power of the State will be subject to the legislations of the Parliament. Since there is at present no legislation by the Parliament on the subject of’ Lotteries organised by the Government of India or the Government of a State’, ‘the Government of every State has the unrestricted right to organise lotteries of its own.”
In J.K. Bharati v. State of Maharashtra, AIR 1984 SC 1542 again Apex Court observed as follows :
“…… Lotteries organised by the
Government of India or the Government of a State had been taken out from the legislative field comprised by the expression betting and gambling; of Entry 34 List II in the VII Schedule and the States had the unrestricted right to organise lotteries, which was not subject to executive power of the Government of India or the executive and legislative powers of other States.”
There fore, it is clear that a State cannot prohibit sale of lottery tickets ‘organised’ by other States, but, can prohibit such sale of lotteries ‘authorised’ by other States. This is the implication arising out of a proper construction of Entry 40 of List X and Entry 34 of List II of seventh Schedule. The ‘ Supreme Court of India in the interlocutory order passed in State of Haryana v. Suman Enterprises (1994) 4 SCC 217,’gave parameters to decide whether a lottery is organised by the State. The Supreme’ Court held as follows :
“….,.. .Prima facie i, it uppers to us that the concept of a lottery ‘organised’ by a State would require certain basic and essential concomitants
to be satisfied as, indeed, members of the public when investing their money in such a lottery proceed on a trust and on certain assumptions as to the genineness, bona fides, safety, security, the rectitude of administration etc. associated with Governmental functioning. If some of the basic functions characterising a State organised lottery are delegated or abdicated by the State this public trust is impaired. The first of those requirements is that the tickets which bear the imprint and logo of the State must be printed by or directly at the instance of the State Government so as to ensure their authenticity and genuineness and further to ensure that any possibility of duplication of the tickets and sale of fake tickets is provided against and rendered impossible. Secondly, the State itself must sell the tickets though, if it thinks necessary or proper so to do, through a sole distributor or selling agent or several agents or distributors under terms and conditions regulated by the agreement reached between the parties. The sale proceeds of the tickets either sold in retail or wholesale shall be credited to the funds of the Government. Thirdly, the draws for selecting the prize winning tickets must be conducted by the State itself, irrespective of the size of the prize money. Fourthly, if any prize money is unclaimed or is otherwise not distributed by way of prize, it must revert to and become the property of the State Government. These, prima facie, appear to us to be the minimal characteristics of a lottery which can claim to be ‘organised’ by the State.”
Therefore, if the lotteries are organised by the Stated, Kerala State cannot prohibit its sale in Kerala. Only Union can prohibit the same. .
5. O.P. Nos. 19112 of 1996 is filed by the Director of State Lotteries, Government of Goa. O.P.N. 2122 of 1997 is filed by the State of Nagaland. Other writ petitions are filed by Agents who are selling lottery tickets of the States by Nagaland, Goa,’ Mizora,, Manipur “and Meghalaya. ”
6. Even though Jai Mathrubhumi’ lottery organised by the State of. Goa was allowed,, it is not stated why permission was not given to Jai Mathurubhumi Bumber. Affidavits filed on behalf of Goa Government shows that prima facie this is also organised by the Goa Government. Merely because it is a Bumber, I am of opinion that permission cannot be denied.
7. With regard to instani lotteries organised by the Nagaland Government, affidavits were filed on behalf of Nagaland Government. It was also organised by the State of Nagaland. Tickets bear imprint and logo of the State. Tickets are printed at the instance of the State Government Sales of the ticket either in retail or in wholesale will be credited to the Government. It is sold through the terms and conditions regulated by the agreement reached with the State. Draws for selecting the prize winning tickets must be conducted by the State Government irrespective of the size of the prize money. If the price is unclaimed or otherwise not distributed it will revert and becomes the property of the State Government. Draws are also held at public place presided by two Senior Government officers. Distributors have to deposit all the sale proceeds within 30 days after the draw. According to me reasons for disallowing various tickets are because they are instant lotteries.
8. Next question to be considered is whether
instant lottery tickets can be prohibited by the
State. In the orders earlier mentioned, Government
gave reasons why single digit lottery is prohibited.
But, no reason is given by the Government why
instant lottery tickets are prohibited by the State.
If it will come within the meaning of ‘lottery’
organised by the State, it cannot be prohibited by ‘
the State Government. Government has not taken
a contention that instant lottery is not a lottery ai
all. If it is a lottery organised by State ‘it will come
under List I and it can be prohibited only by the
Union. While all lotteries may be a form of
betting and gambling, if looked at in the common
sense point of View, in as much as Entry 40in List
I of the Seventh Schedule speak about lottery
organised by State, instant lottery can be
prohibited by the State only if it is proved that it
is not a lottery, at all. If it is a lottery organised by
the Union Government or a State Government it
would not fall within, Entry 34 List II Hence, the,
State Government has no power, to regulate such
lotteries’.
9. Next question to be considered is whether instant lottery is a lottery. The word ‘lottery’ is not defied either in the Code of Criminal Procedure or in any other Statute. The word ; ‘tottery’ denotes a distribution of prizes by lot or chance without the use of skill. The Law Lexicon defines ‘lottery’ on the basis of the decision of
the High Court of Lahore in Emperor v. Gurbaksh Singh, AIR 1934 Lahore 840 thus :
“The word ‘lottery’ is nowhere defined in the Criminal Procedure Code, or in any other Statute. Its common meaning, as disclosed by the dictionary is ‘a scheme for the distribution of prizes by lot or chance’.
It is also further stated therein that,
“In law, the word embraces all schemes for the distribution of prizes by chance, such as policy playing gift exhibitions, prize concerts, raffles at fairs etc. and includes various form of gambling. The essential elements are :
(1) consideration;
(2) prize; and
(3) chance.
All three of these elements must be present to make a lottery.”
(Ballentine’s Law Dictionary, 1948 Ed. P. 776)
The essential feature of a lottery is that the prizes are determined solely by chance, Even though in every lottery there is a chance of gambling, whether it is instant or other lottery involving an element of gambling as long as it is the one organised by the State Government sale of such lotteries cannot be banned by other State in the purported exercise of power on the ground that it is gambling. Therefore, falls under Entry 34 of List II of Seventh Schedule and cannot be prohibited by other State. Therefore, State Government, cannot in the purported exercise of executive power prohibit sale of lottery tickets organised by other States. Under the instant lottery scheme, at the time of printing of the tickets, number of the prized ticket is announced. However, when the tickets are printed the number of prized ticket is covered and if a person purchases a ticket by scratiching on’ the face of the ticket where the number is printed, the number will become visible. In this manner, person who purchases the lottery ticket is in a position to find out’ immediately whether he has won any prize. This type of lottery is known as instant lottery because the purchaser of the ticket is instantly known whether he has won any prize. Therefore, even if it is an instant lottery, if it satisfy all the basic and essential feature of the lottery organised by the State Government as stipulated in the order
of the Supreme Court, it cannot be prohibited by the State. In the case of instant lottery also, all the elements of a lottery are available, that is, consideration, prize and chance. Of course, the result of an instant lottery is not known immediately after the tickets are purchased and the substance which covers the numbers are erased. Considering the contentions of the State Governments of Mizoram. Manipur and Nagaland, it was held by a Division Bench of the Madras High Court in Writ Appeal No. 631/96 Maruthi Agencies v. State of Tamil Nadu. All instant lottery tickets are basically lottery tickets and if it is organised by State, it cannot be prohibited by any other State. Therefore, merely because the lotteries organised by another State are instant lotteries, Kerala Government cannot prohibit the same on the ground that it is instant.
10. Shri M.R. Rajendran Nair appearing for various petitioners produeced a copy of the order of the Supreme Court of India in S.L. Nos. 3190-3193/97 which shows that special leave to appeal filed against the Division Bench decision of the Madras High Court referred to earlier was dismissed. No grounds arc urged to differ from the decision of the Madras High Court where it was held that instant lottery is also a lottery and if it is organised by a State Government another State Government cannot prohibit the same as regulations of a lottery organised by the State can be done only by the Union Government, as it is covered by List I of the Seventh Schedule.
11. Learned Government Pleader Shri Reghu Raj argues that with regard to single digit lottery, Government has taken a stand as can be seen from G.O.(Ms.) Nos. 50/95/TD dated 9-3-1995 that it is actually not a lottery. But, it is only a gambling. It is the contention of the learned Government Pleader that single digit lottery is pure gambling and it makes people addict to single digit lottery
: which ruins many of the families. It was the harmful effect of the single digit lottery was
explained in detail. Therefore, it is the contention of the State Government that single digit lottery is pure gambling and even though it is called lottery it is only gambling. In any event, what is questioned in these writ petitions is the banning of instant lottery and not single digit lottery. Therefore, I am not interfering with the decision of the State Government regarding banning of single digit lottery. Whether single digit lottery will amount
to mere gambling and will come under List II it can be decided only after final disposal of the Civil Appeals Nos. 2349-51 of 1994 (State of Haryana v. Suman Enterprises and others). Since none of the petitioners herein have pressed, I am not going into the details of the same.
12. With regard to the instant lotteries and other lotteries conducted or organised by the State Governments. Kerala Stale cannot make a prohibition if the lotteries are organised by the State. Whether it is instant or bumber, it cannot be prohibited in the Kerala State. Many of the lotteries organised by the other States were allowed by the Kerala Government as can be seen from the Government orders referred to earlier. Various lotteries organised by the State Governments were being operated in the State in view of the interim orders passed by this Court. With regard to the lotteries which were not allowed by the State Government, the Governments which are organising the same may apply to the Secretary, Finance Department, Government of Kerala before 31-3-1997 and the authority shall dispose of the representation within four weeks from the dates they are made. Till then the lottery tickets organised by the States which were a] lowed to be sold as per the interim orders of the Court can be sold and its sale shall not be obstructed by the State Government until specific orders are passed in this regard by the Government showing reasons why such lotteries are not organised by the Government according to the parameters laid down by the Supreme Court in the order in 1994 (4) SCC 217, referred to earlier.
13. With regard to the lottery organised by the Bhutan Government, since it is a foreign Government it cannot be sold in the State of Kerala without permission from the State.
14. New lotteries to be started for which no interim orders were obtained as well as single digit lotteries can be sold in the State of Kerala only after getting prior permission from the State.
With the above directions, all the Original Petitions are disposed of.