JUDGMENT
N.K. Sodhi, C.J.
1. By notification dated 24-7-2004 issued in exercise of powers conferred by Section 5 of the Lotteries (Regulation) Act, 1998 (for short, ‘the Act’) the Government of Karnataka declared the State to be a free zone from online and internet lotteries and prohibited the sale of all computerized and online lottery tickets marketed and operated through vending machines, terminals, electronic machines and tickets sold through internet in the State of Karnataka with effect from the date of the notification. This notification was challenged by the State of Sikkim along with the three appellants herein before the learned Single Judge on the ground that the notification was arbitrary, discriminatory, illegal and without legislative competence and therefore unconstitutional. It was contended on behalf of the writ petitioners that the said notification was in violation of the law laid down by the Supreme Court in B.R. Enterprises v. State of Uttar Pradesh and Ors. , in which challenge had been made, amongst others, to the constitutional validity of Section 5 of the Act and the same was upheld by reading down the provision holding that it entitles only such of the States to ban lotteries in their State as a policy which did not permit their own lotteries to run. The respondents in the writ petition raised an objection that the dispute therein was primarily between the State of Sikkim on the one hand and the State of Karnataka on the other and therefore the bar contained in Article 131 of the Constitution was attracted and the writ petition was not maintainable. It was further contended that the three appellants herein were only the agents of the State of Sikkim and therefore they had no independent right to file the writ petition because it was the State of Sikkim alone which could feel aggrieved by the impugned notification prohibiting the sale of its online lottery tickets in the State of Karnataka.
2. In view of the submissions made before the learned Single Judge, he noticed that the following two questions arose for consideration:
“1. Whether this Court can entertain the writ petitions in view of Article 131 of the Constitution of India?
2. Whether the notification dated 24-7-2004 is in violation of Section 5 of the Act and contrary to the law laid down by the Hon’ble Supreme Court in B.R. Enterprises case?”
On a consideration of the submissions made by the learned Counsel for the parties, the learned Single Judge upheld the objection raised by the respondents that the writ petition was not maintainable and that the same was barred by Article 131 of the Constitution. It was observed that it was within the exclusive domain of the State Government or the Union of India to organise lotteries and that no individual could organise or promote the same and that lotteries could be organised only in accordance with the provisions of the Act. The learned Single Judge also held that it was the State Government alone which could prohibit the sale of lottery tickets in a State under Section 5 of the Act and when the sale is so prohibited as has been done by the State of Karnataka by the impugned notification, it was only the State of Sikkim or other State Governments which could feel aggrieved by the said prohibition and not any individual. It was further held that the appellants who are marketing agents/distributors/sub-agents of the State of Sikkim could claim their right only through the State of Sikkim as its agents and that they have no individual right to challenge the impugned notification. In this view of the matter, the learned Single Judge did not examine the other contention raised before him regarding the constitutional validity of the impugned notification and dismissed the writ petition. It is against this order of the learned Single Judge that the appellants have jointly filed this writ appeal. The State of Sikkim which was petitioner 1 in the writ petition has not filed any appeal and it appears that it (State of Sikkim) has accepted the order of the learned Single Judge.
3. In order to appreciate the contentions advanced before us, brief facts insofar as they are necessary for the disposal of this appeal may first be noticed.
4. The State of Sikkim with a view to generate/raise revenue/funds for the State organised a computerised network lottery by selling lottery tickets to a variety of users through a process of Online Computerised System and after issuing a tender notice appointed the first appellant as its marketing agent for the said computerised network lottery as it was the successful bidder. The State of Sikkim executed an agreement with the first appellant appointing the latter as its marketing agent for the sale of online computerised network lottery tickets at the retail sites. In terms of the agreement the marketing agent is required to pay the Minimum Assured Revenue to the Government and it (marketing agent) is directly and solely responsible for the appointment of distributors/sub-agents/retailers. Appellant 2 is the distributor/sub-agent/retailer of appellant 1 and is engaged in the business of selling lottery tickets of online lotteries of the States of Sikkim, Meghalaya and obtains the same from the marketing agents of the said State namely, appellant 1 and others. Appellant 1 has been selling the said lottery tickets through appellant 2 in the State of Karnataka since March 2002. Appellant 2 has also been selling the tickets of online lottery of the State of Karnataka after obtaining the same from its marketing agents. Appellant 3 is the Director/Shareholder of appellant 2 and is a citizen of India. With the issuance of the impugned notification the appellants had to stop their business of selling online tickets of the lotteries run by the State of Sikkim and others in the State of Karnataka and it was then that they along with the State of Sikkim filed the writ petition out of which this appeal has arisen.
5. The question that we need to answer is whether the appellants herein have an independent right to challenge the impugned notification which “declares that the Karnataka State shall be the free zone from online and internet lotteries and prohibits the sale of all computerized and online lottery tickets marketed and operated through vending machines, terminals, electronic machines and tickets sold through internet in Karnataka”. There is no gainsaying the fact that it is the State of Sikkim that had organised a computerised network lottery by selling lottery tickets amongst others in the State of Karnataka through its marketing agent which is appellant 1 and the latter was running the online lottery on behalf of the State of Sikkim. It is a State organised lottery and if the State of Karnataka has prohibited the sale of such lottery tickets in its State, it is the State of Sikkim alone which could feel aggrieved by such prohibition because it is the legal right of the State of Sikkim to sell its online lotteries in the State of Karnataka which is adversely affected by the impugned notification and the writ petition seeks to enforce this right. It is not a lottery which is being run by the appellants on the authority of the State of Sikkim. In other words, with the issuance of the impugned notification the sale of online lottery tickets run by the State of Sikkim has been prohibited in the State of Karnataka and therefore the dispute, if any, in regard to the issuance of such a notification is essentially and primarily between the State of Sikkim which was running the online lottery and the State of Karnataka which has prohibited the same. The dispute cannot by any process of reasoning be said to be one between the appellants who are the agents and sub-agents of the State of Sikkim and the State of Karnataka. May be, the appellants also got adversely affected with the prohibition imposed by the State of Karnataka but that is only incidental because they are the agents of the State of Sikkim and can have their rights only through their principal. Since the dispute is between the State of Sikkim the sale of whose online lottery tickets has been prohibited and the State of Karnataka who has prohibited the same, we are clearly of the view that the provisions of Article 131 of the Constitution are attracted which provides that the Supreme Court shall to the exclusion of any other Court have original jurisdiction in any dispute between two or more States. The argument that the appellants feel aggrieved by the impugned notification independently of the State of Sikkim cannot be accepted because, as already observed they are the agents and sub-agents of the State of Sikkim and must claim their rights through their principal. It was strenuously urged by the learned Senior Counsel appearing for the appellants that since they were the aggrieved parties the provisions of Article 131 were not attracted. We cannot accept this contention either. The dispute, as already observed, is between the State of Sikkim on the one hand and the State of Karnataka on the other and the provisions of Article 131 of the Constitution cannot be allowed to be bypassed merely because the State of Sikkim had joined its agents and sub-agents as petitioners in the petition. Similarly the dispute will not be said to fall outside the purview of Article 131 merely because the appellants who are the agents/sub-agents of the State of Sikkim joined the said State in filing the writ petition under Article 226 of the Constitution. When we look at the nature and character of the dispute it is in substance a dispute between the State of Sikkim and the State of Karnataka which can be settled only by the Supreme Court in the exercise of its original jurisdiction to the exclusion of all other Courts including the High Court under Article 226 of the Constitution. In this view of the matter, the learned Single Judge was right in holding that the writ petition filed by the appellants along with the State of Sikkim was not maintainable and therefore the present appeal is also not maintainable.
6. We may now refer to the judgment of the Supreme Court in State of Rajasthan and Ors. v. Union of India, on which reliance was placed by the learned Senior Counsel for the appellants to contend that the writ petition filed by them along with the State of Sikkim was maintainable. We have carefully gone through this judgment and find that it supports the view that we have taken. Their Lordships of the Apex Court have observed in paragraph 133 that there are two limitations in regard to the nature of the dispute which could be entertained by the Supreme Court. One is in regard to the parties and the other is in regard to the subject-matter. We have already found that the subject-matter of the dispute in the case before us is essentially the legal right of the State of Sikkim and that there is no involvement of any private party in the subject-matter of the lis and it was not necessary for the appellants to join the State of Sikkim as petitioners in the writ petition. It appears that the State of Sikkim joined its own agents and sub-agents only to take the case out of the purview of Article 131 of the Constitution which in our opinion is not permissible.
7. Since we have held that the writ petition was not maintainable, it is not necessary for us to examine the other contention raised by the learned Senior Counsel for the appellants that the impugned notification dated 24-7-2004 is violative of Section 5 of the Act and contrary to the law laid down by the Supreme Court in B.R. Enterprises case. This contention deals with the merits of the case and we refrain from deciding the same.
8. After arguments in this case had been heard and order reserved, Writ Appeal Nos. 29-31 of 2005 came to be filed by the State of Meghalaya along with its agents against the same judgment of the learned Single Judge by which their Writ Petition Nos. 31393 to 31395 of 2004 were dismissed (Government of Meghalaya and Ors. v. Under Secretary to Government of Karnataka, Department of Finance (Administration and Advances), Bangalore and Ors.). The only difference in the two writ appeals is that in the case of the State of Sikkim it did not file the appeal and the same was filed only by its agents/sub-agents whereas the State of Meghalaya itself has joined its agents/sub-agents in filing the writ appeal. This makes no difference. The question of maintainability involved in both the writ appeals is the same and for the reasons stated herein above these appeals are also not maintainable.
9. In the result the writ appeals fail and the same stand dismissed with no order as to costs.