Srinivasa Enterprises & Ors Vs.
Union of India [1980] INSC 188 (24 September 1980)
KRISHNAIYER, V.R.
KRISHNAIYER, V.R.
PATHAK, R.S.
REDDY, O. CHINNAPPA (J)
CITATION: 1981 AIR 504 1981 SCR (1) 801 1980
SCC (4) 507
CITATOR INFO :
D 1982 SC 949 (62,79) R 1987 SC1023 (29,40)
RF 1988 SC 492 (8)
ACT:
Prize Chits and Money Circulation
Schemes(Banning) Act, 1978 (43 of 1978) & Constitution of India 1950, Arts.
14, 19(1) (g) and List III Entry 7-Parliament whether competent to enact
legislation-Act whether constitutionally valid.
Constitution of India 1950, Art. 32-Petition
under- Court's function not to give advisory opinion.
HEADNOTE:
Prize Chits are one type of saving schemes.
In Prize Chits the organiser collects subscription in one lump sum or by monthly
installments spread over a specified period from the subscribers to the
schemes. Periodically, the numbers allotted to the members holding the tickets
or units are put to a draw and the member holding the lucky ticket gets the
prize either in cash or in the form of an article of utility, such as a motor
car, scooter etc. Once a person gets the prize, he is very often not required
to pay further installments and his name is deleted from further draws. In case
members do not get any prize, the schemes usually provide for the return of
subscription paid by the members with or without an additional sum by way of
bonus or premium at the end of the stipulated period.
As the flood of funds flowing through these
prize chits benefited only the organisers of such schemes, and the total number
of people victimised by these projects were considerable and injury to the
community substantial, the Central Government set up a Study Group which went
into the operation of these schemes. The Report of the Study Group demonstrated
the many sinister effects and also exposed the anti-social impact upon the
community by the operation of such schemes, and recommended to the State to
intervene and interdict.
The Central Government thereupon undertook
legislation for curbing the effect of the operation of these schemes by
enacting the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
The petitioners in their writ petitions under
Article 32 of the Constitution assailed the aforesaid statute: (1) contending
that a package of proper safeguards would adequately protect the community, a
total ban being recklessly excessive, unintelligently over-broad and,
therefore, unconstitutional, under Article 19(1)(g), (2) conventional chits and
prize chits are substantially similar and, therefore, permission to continue
'conventional chits' and prohibition of prize chits was discriminatory under
Article 14, (3) there is a discriminatory exemption from the operation of the
prohibition in regard to those categories of prize chits which fall within
section 11, and (4) the legislation being aimed at prize chits and intended to
ban lotteries, would fall within the State List, Entry 34 List II and
Parliament cannot enact such a law under Entry 7 of List III.
Dismissing the writ petitions,
HELD: (1) (i) There is a sufficient
justification for undertaking legislation restricting the freedom to fleece
through prize chits. [810E].
(ii) The legislation cannot be struck down on
the score of Art. 19(1)(g) of the Constitution. [811F] (iii) The requirements
of Art. 19(6) are, the reasonableness of the restriction upon the fundamental
right to trade, the measure of reasonableness being the compelling need to
promote the interest of the general public. [810H]
2. Conventional chits and prize chits are
different categories with different financial features and different damaging
effects. There is, therefore, no force in the plea of violation of Article 14.
[812A]
3. A bare reading of section 11 makes it
clear that the exempted categories do not possess the vices of private prize
chits. What are exempted are prize chits and money circulation schemes promoted
by or controlled by the State Governments, the Central Government, or the State
Bank of India or the Reserve Bank. Even Rural Banks and Cooperatives covered by
s. 11, are subject to public control. Charitable and educational institutions
are exempted only if they are notified by the State Government in consultation
with the Reserve Bank. There is, therefore, sufficient justification to justify
the different classification of these items and their exemption cannot be
called in question on the ground of violation of Art. 14. [812G-H; 813A]
4. In pith and substance the present
legislation is not one against lotteries. It deals with a special species of
contracts with sinister features, although one such feature is the award of
prizes to subscribers. While motives cannot validate or invalidate legislation
the core of the subject matter must govern competency. [813 C-D]
5. In matters of economics, sociology and
other specialised subjects, courts should not embark upon views of half-lit
infallibility and reject what economists or social scientists have, after
detailed studies, commanded as the correct course of action. The final word is
with the Court in constitutional matters but judges hesitate to 'rush in' where
even specialists 'fear to tread'. If experts fall out, court, perforce, must
guide itself and pronounce upon the matter from the constitutional angle, since
the final verdict, where constitutional contraventions are complained of,
belongs to the judicial arm. [811B-C]
6. When a general evil is sought to be
suppressed some martyrs may have to suffer for the legislature cannot easily
make meticulous exceptions and has to proceed on broad categorisations, not
singular individualisations. [811G]
7. Judicial validation of a social
legislation only keeps the path clear for enforcement. Spraying legislative
socio-moral pesticides cannot serve any purpose unless the target area is
relentlessly hit. This legislation enacted in 803 response to expert
recommendation and popular clamour is to be implemented by dynamic State
Action. [813E-F]
8. The possible hardship that bona fide prize
chit promoters may suffer on account of the total prohibition clamped down by
this legislation can be relieved against by the Central Government acting under
Section 12. [813F]
9. Under Article 32 the Court's function is
not to give advisory opinion but to pronounce upon transgression of fundamental
rights by State action. [813H-814A]
ORIGINAL JURISDICTION: Writ Petition Nos.
711, 138, 1152 & 1546 of 1979.
(Under Article 32 of the Constitution) K. K.
Venugopal and A. Subha Rao for the Petitioners in WP Nos. 138, 711 of 79.
M. M. Abdul Khader, M. A. Feroze, M.R.K.
Pillai and K.
R. Rajasekharan Pillai for the Petitioner in
WP No. 1152/79.
B. Kanta Rao, P. Ram Reddy and G. Narayana
Rao for the Petitioner in WP No. 1546/79.
K. Parasaram, Solicitor-Genl and Miss A.
Subhashini for the Respondent (Union of India).
P. Ram Reddy and G. N. Rao for the
Respondents in WP No. 1546/79.
K. R. Nambiar for Respondent No. 3 in WP No.
1152/79.
P. H. Parekh, C. B. Singh & Rajian
Karanjawala for the Intervener in WP No. 711/79.
The Judgment of the Court was delivered by
KRISHNA IYER, J.-Section 2(e) of the Prize Chits and Money Circulation Schemes
(Banning) Act. 1978 (Act 43 of 1978) (for short, the Act) defines a 'Prize
chit' inclusively:-
2. In this Act, unless the context otherwise
requires,- *** *** *** (e) "prize chit" includes any transaction or
arrangement by whatever name called under which a person collects whether as a
promoter, foreman, agent or in any other capacity, monies in one lump sum or in
installments by way of contributions or subscriptions or by sale of 804 units,
certificates or other instruments or in any other manner or as membership fees
or admission fees or service charges to or in respect of any savings, mutual
benefit, thrift, or any other scheme or arrangement by whatever name called,
and utilises the monies so collected or any part thereof or the income accruing
from investment or other use of such monies for all or any of the following
purposes, namely:- (i) giving or awarding periodically or otherwise to a
specified number of subscribers as determined by lot, draw or in any other
manner, prizes or gifts in cash or in kind whether or not the recipient of the
prize or gift is under a liability to make any further payment in respect of
such scheme or arrangement;
(ii) refunding to the subscribers or such of
them as have not won any prize or gift, the whole or part of the subscriptions,
contributions or other monies collected, with or without any bonus, premium,
interest or other advantage by whatever name called, on the termination of the
scheme or arrangement, or on or after the expiry of the period stipulated
therein, but does not include a conventional chit;
The quintessential aspects of a prize chit
are that the organizer collects moneys in lump sum or installments, pursuant to
a scheme or arrangement, and he utilises such moneys as he fancies primarily
for his private appetite and for (1) awarding periodically or otherwise to a
specified number of subscribers, prizes in cash or kind and (2) refunding to
the subscribers the whole or part of the money collected on the termination of
the scheme or otherwise. The apparent tenor may not fully bring out the
exploitative import lurking beneath the surface of the words which describe the
scheme. Small sums are collected from vast numbers of persons, ordinarily of
slender means, in urban and rural areas. They are reduced to believe by the
blare of glittering publicity and the dangling of astronomical amounts that
they stand a chance-in practice, negligible-of getting a huge fortune by making
petty periodical payments.
The indigent agrestics and the proletarian
urbanites, pressured by dire poverty and doped by the hazy hope of a lucky
draw, subscribe to the scheme although they can ill- afford to spare any money.
This is not promotion of thrift or wholesome small savings because the poor who
pay, are bound to continue to pay for a whole period of 805 a few years over
peril of losing what has been paid and, at the end of it, the fragile prospects
of their getting prizes are next to nil and even the hard-earned money which
they have invested hardly carries any interest. They are eligible to get back
the money they have paid in driblets, virtually without interest, the
expression 'bonus' in s. 2(a) being an euphemism for a nominal sum. What is
more, the repayable amount being small and the subscribers being scattered all
over the country, they find it difficult even to recover the money by
expensive, dilatory litigative process.
Since there are a large number of prize chits
all over the country which have almost become a pan-Indian epidemic and since
the total number of people victimised by these projects are considerable the
injury to the community is substantial, so that a welfare state dedicated to
the Directive Principles of Part IV has to awake and protect the vulnerable
sector. Another weighty factor which has alerted the State into action is that
the flood of funds flowing through prize chits benefit the organisers of such
schemes who have no social responsibility for national productivity and in
their hands is easy money with little developmental benefits or attractive
returns for the poor investors.
The noxious net cast by the prize chit
promoters was large and the State moved to stop this menace. Many a little
makes a mickle, and those small sums collected from a substantial number of
subscribers accumulated into huge resources which otherwise would ordinarily
have been available for national development. The grim picture of the luckless
many who were losing their money, appetized by gambling prospects, and the
sterilization of people's resources which were siphoned off by private
adventurists through prize chits to the detriment of national development
ignited the impugned legislation.
Such is the case of the State as
justification for enacting what is contended for as unconstitutional for three
reasons which we will presently examine. The Union of India has furnished socio-economic
data to help the court appreciate how expert opinion had been collected before
launching on the prohibitory legislation. A study group headed by Dr. J. S. Raj
made a report to the Central Government wherein pointed reference was made to
prize chits and allied schemes. The report devoted a whole chapter to prize
chits, savings schemes, and others of their ilk and exposed the modus operandi
of such schemes and their anti- social impact upon the community and
recommended to the State to intervene and interdict.
806 We may quote briefly to bring home
tersely the trauma inflicted by lucky draw schemes on the host of luckless
illiterates succumbing (perhaps astrologically) to the prize mania:
....It was observed that several companies
conducting prize chits, benefits or savings schemes or lucky draws claimed
themselves to be either mutual benefit financial companies (by enrolling
subscribers as 'associate' members under the directions as they stood prior to
January 1, 1973) or as chit fund companies and thus contended that the
subscriptions collected by them were not 'deposits' as defined in the
directions and hence not subject to any ceiling restrictions.....
Modus Operandi of Prize Chits/Benefit or
Savings Schemes or Lucky Draws 6.3. Companies conducting the above types of
Schemes are comparatively of a recent origin and of late, there has been a
mushroom growth of such companies which are doing brisk business in several
parts of the country, especially in big cities like Ahmadabad, Bangalore,
Bombay, Calcutta and Delhi. They have also established branches in various
States. These companies float schemes for collecting money from the public and
the modus operandi of such schemes is generally as described below:
The company acts as the foreman or promoter
and collects subscriptions in one lump sum or by monthly installments spread
over a specified period from the subscribers to the schemes. Periodically, the
numbers allotted to members holding the tickets or units are put to a draw and
the member holding the lucky ticket gets the prize either in cash or in the
form of an article of utility, such as a motor car, scooter etc. Once a person
gets the prize, he is very often not required to pay further installments and
his name is deleted from further draws. The schemes usually provide for the
return of subscriptions paid by the members with or without an additional sum
by way of bonus or premium at the end of the stipulated period in case they do
not get any prize. The principal items of income of these companies are
interest earned on loans given to the subscribers against the security of the
subscriptions paid or on an unsecured basis as also loans 807 to other parties,
service charges and membership fees collected from the subscribers at the time
of admission to the membership of the schemes. The major heads of expenditure
are prizes given in accordance with the rules and regulations of the schemes,
advertisements and publicity expenses and remuneration and other perquisites to
the directors.
The financial fall-outs of these schemes were
also examined by the Study Group to demonstrate how the promoter- companies
were gargantuan and were swallowing up huge surpluses from the public who lost
interest on their subscriptions, and, sometimes, even the principal amounts
paid :
.... Even if the company offers some amount
by way of bonus or premium to the subscribers at the time of refund of their
subscriptions and allowing for reasonable expenditure on publicity, commission
to agents, etc., a sizeable balance will still be left with the company. This
is exclusive of the amounts which the company might be collecting by way of
membership fees and service charges from the subscribers and also of the
amounts which it might be appropriating in respect of the subscriptions on
forfeited tickets on which there will be no future liability for refund to the
members at the end of the scheme. It will thus be obvious from the foregoing
that such schemes confer monetary benefit only on a few members and on the
promoter companies.
There is reference in the Study Group report
to other studies conducted by the Reserve Bank which also demonstrated the many
sinister effects upon the community on account of proliferous prize
chits-benefits schemes.
(a) the companies had advanced sizeable
amounts to the directors or their relatives or firms in which they were
interested as partners, directors or as commission agents and there were
practically no repayments of the loans;
(b) the books of account had not been
maintained satisfactorily;
(c) close relatives of the directors had been
employed in the companies as members of the staff or as agents on high
salaries;
808 (d) In one case, it was observed that a
scheme announced by a company in which collections had been made was withdrawn
subsequently without notice to the subscribers and no refunds of the
subscriptions already received had been made to the subscribers. Prize moneys
had not been paid to all the subscribers who had won the prizes; and (e)
subscriptions were shown to have been refunded in the books of account of a
company but doubts have been expressed by the Inspecting Officer about the
genuineness of the payments in view of certain attendant circumstances. There
have also been allegations that some companies had resorted to certain malpractices
in drawing the names of prize winners.
** ** ** ........ in the absence of any
authoritative judicial pronouncement on the subject, we are not sure whether
the activities of companies conducting price chits, etc., are clearly
prohibited by the existing legislations.
6.10. It has been reported that resources of
prize chits are used for wasteful spending and hoarding commodities and that
these schemes "enable certain persons to convert tax-evaded income into
accounted money. The persons concerned pay a premium to the promoters in return
for the facility." It has also been stated that "there are a number
of agents who go about contacting persons who are likely to face the problem of
saving their income from the tax authorities. The prize chit pass books issued
to them under different names become their passports for travelling from black
money territory to the white money area-the easiest and surest way of using ill
gotten wealth. Besides, by their misleading names and companies the prize chit
companies divert private savings into their personal drains, thus disrupting
the national economy.
6.11. From the foregoing discussion, it would
be obvious that prize chits or benefit schemes benefit primarily the promoters
and do not serve any social purpose. On the contrary, they are prejudicial to
the public interest and also adversely affect the efficacy of fiscal and
monetary policy. There has also been a public clamour for banning of such
schemes; this stems largely from the malpractices indulged in by the promoters
and also the possible exploitation of such schemes by unscrupulous elements to
their own advantage. We 809 are, therefore, of the view that the conduct of
prize chits or benefit schemes by whatever name called should be totally banned
in the larger interests of the public and that suitable legislative measures
should be taken for the purpose if the provisions of the existing enactments
are considered inadequate. Companies conducting prize chits, benefit schemes,
etc., may be allowed a period of three years which may be extended by one more
year to wind up their business in respect of such schemes and/or switch over to
any other type of business permissible under the law.
(emphasis added) The learned Solicitor
General drew our attention to cases where the notorious abuses by prize
promoters had attracted judicial notice. In particular, he cited a decision of
the Gujarat High Court in Navjivan Trading Financing Pvt. Ltd. Thakkar, J.
while dealing with the social anguish at the exploitative spectacle, said :
The facts speak for themselves so eloquently
that no further discussion is called for and it is unnecessary to demonstrate
any further that the company is in such a precarious condition and the
financial condition is so very ugly that there is no possibility whatsoever of
the company ever being in a position to pay its debts. It is not in a position
to-day and, even in future, it is not likely to be in a position to discharge
the debt burden. In fact, the deficit will go on increasing and for aught we
know, more innocent persons would be trapped meanwhile. The contributors from
whom collections are made are persons with extremely limited financial means
and are petty subscribers who cannot possibly afford to take recourse to legal
proceedings. It would be cheaper for them to abandon their claims than to make
recourse to legal proceedings and incur expenses for court-fees and advocates'
fees, apart from the inconvenience involved therein.
With special reference to malpractices of
prize chits promoters the learned Judge drove home the point;
Where the company is not producing or
manufacturing any goods and is not rendering any service useful to the society,
where the whole purpose of its existence appears to be to provide the directors
with an opportunity to enrich themselves at the cost of petty subscribers who
in the hope of getting some prizes or rewards and better returns on their hard
earned 810 savings (sometimes they may even resort to borrowing in the hope of
getting rich quickly) become contributories to various schemes floated by the
company, the matter stands on a different footing. In a case like the present
where the main activity of the company consists in tempting and roping in
innocent persons in the scheme by publishing tantalizing advertisements,
greater harm would ensue by refusing to pass an order of winding up than by
passing an order of winding up.
In fact, to wind up such company would be an
act of social service, for, thereby, several innocent persons would be saved
from being trapped by a company of this nature. Alas, as discussed earlier, the
time taken in affording reasonable opportunity to the company in obeisance to
the principles of natural justice has been utilised by the company to collect
lakhs of rupees from the innocent subscribers merely in order to enrich the
directors in an unjust fashion. Under the circumstances, there is no scope for
hesitation or reluctance in winding up the company which the court ordinarily
feels when dealing with some manufacturing unit.
(emphasis added) There is sufficient
justification for undertaking legislation restricting the freedom to fleece
through prize chits. Indeed, Shri Venugopal did not seriously contest this
position. The thrust of his argument was that his client was a well-behaved
prize chit organizer, above board in all respects, and so, a package of proper
safeguards would adequately protect the community and a total ban was
recklessly excessive, unintelligently over-broad and, therefore,
unconstitutional.
Surely, Art. 19(6) permits reasonable
restrictions in the interest of the general public on the exercise of the right
conferred by Art. 19(1)(g). It is a constitutional truism restrictions, in
extreme cases, may be pushed to the point of prohibition if any lesser strategy
will not achieve the purpose. Fundamental rights are fundamental, and so, no
ban can be glibly imposed unless effective alternatives are unavailable.
Counsel on both sides cited rulings for the two sides of the proposition but it
is an act of supererogation to load judgments with or profusion precedential
erudition to make out what is plain, profound.
The twin requirements of Art. 19(6) are (a)
the reasonableness of the restriction upon the fundamental right to trade, and
(b) the measure of the reasonableness being the compelling need to promote the
interest of the general public. Public interest, of course, there is.
811 But the controversy rages round the
compulsive necessity to extinguish the prize chit enterprises altogether as
distinguished from hand-cuffing them with severe conditions geared to
protection of public interest. We have already indicated that the Raj Report
does recommend a total ban on prize chits. In matters of economics, sociology
and other specialised subjects, courts should not embark upon views of halflit
infallibility and reject what economists or social scientists have, after
detailed studies, commended as the correct course of action. True, the final
word is with the court in constitutional matters but judges hesitate to 'rush in'
where even specialists 'fear to tread'. If experts fall out, court, perforce,
must guide itself and pronounce upon the matter from the constitutional angle,
since the final verdict, where constitutional contraventions are complained of,
belongs to the judicial arm. The alternative proposals to save the public from
prize chit rackets attractively presented by Shri Venugopal do not impress us.
In many situations, the poor and unwary have to be saved from the seducing
processes resorted by unscrupulous racketeers who glamourize and prey upon the
gambling instinct to get rich quick through prizes. So long as there is the
resistless spell of a chance though small, of securing a prize, though on
paper, people chase the prospect by subscribing to the speculative scheme only
to lose what they had. Can you save moths from the fire except by putting out
the fatal glow ? Once this prize facet of the chit scheme is given up, it
becomes substantially a 'conventional chit' and the ban of the law ceases to
operate. We are unable to persuade ourselves that the State is wrong in its
assertion, based upon expert opinions that a complete ban of prize chits is an
over-kill or excessive blow. Therefore, we decline to strike down the
legislation on the score of Art. 19(1)(f) and (g) of the Constitution.
We may not be taken to mean that every prize
chit promoter is a blood-sucker. Indeed, Shri Venugopal persuasively presented
the case of his client to make us feel that responsible business was being done
by the petitioner. May be But when a general evil is sought to be suppressed
some martyrs may have to suffer for the legislature cannot easily make
meticulous exceptions and has to proceed on broad categorisations, not singular
individualisations.
We give short shrift to the next contention
based upon Art. 14. Broadly presented, the argument is that conventional chits
and prize chits are substantially similar and, therefore, permission to
continue 'conventional chits' and prohibition of prize chits altogether may be
discriminatory. We do not agree. Not only do the definitions show the
differentiation between the two schemes, but the Raj Report 812 also brings out
the fact that 'conventional chits' and 'prize chits' are different categories
with different financial features and different damaging effects. We see no
force in the plea of violation of Art. 14.
Equally untenable is the contention that
there is a discriminatory exemption from the operation of the prohibition in
regard to those categories of prize chits which fall within s. 11. It runs
thus:
11. Nothing contained in this Act shall apply
to any prize chit or money circulation scheme promoted by- (a) a State
Government or any officer or authority on its behalf; or (b) a company wholly
owned by a State Government which does not carry on any business other than the
conducting of a prize chit or money circulation scheme whether it is in the
nature of a conventional chit or otherwise; or (c) a banking company as defined
in clause (c) of section 5 of the Banking Regulation Act, 1949, or a banking
institution notified by the Central Government under section 51 of that Act or
the State Bank of India constituted under section 3 of the State Bank of India
Act, 1955, or a subsidiary bank constituted under section 3 of the State Bank
of India (Subsidiary Banks) Act, 1959, or a corresponding new bank constituted
under Section 3 of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970, or a Regional Rural Bank established under section 3
of the Regional Rural Banks Act, 1976 or a co- operative bank as defined in
clause (bii) of section 2 of the Reserve Bank of India Act, 1934;
or (d) any charitable or educational
institution notified in this behalf by the State Government, in consultation
with the Reserve Bank.
A bare reading of that provision makes it
clear that the exempted categories do not possess the vices of private prize
chits. For one thing, what are exempted are prize chits and money circulation
schemes promoted by or controlled by the State Governments, the Central
Government or the State Bank of India or the Reserve Bank. Even Rural Banks and
Co-operatives covered by s. 11, are subject to public control. Likewise,
charitable and educational institutions are exempted only if they are notified
by the State Government in consultation with the Reserve Bank.
There are enough arguments to justify the
different classification of these items 813 and their exemption cannot be
called in question on the ground of violation of Art. 14. Reasonable
classification wins absolution from the charge of discrimination if the
differentia has a nexus with the statutory object.
The final submission of Shri Venugopal was
regarding legislative competency. He urged that legislation regarding lottery
falls within the State List (Entry 34, List II) and Parliament cannot enact
such a law under Entry 7 of List III. Relying upon State of Bombay v. R.M.D.
Chamarbugwala counsel contended that the present legislation was aimed at prize
chits and intended to ban lotteries. Such an anti- lottery law could not be
sustained under Entry 7 of the List III. We are not persuaded that in pith and
substance the present legislation is one against lotteries. It deals with a
special species of contracts with sinister features, although one such feature
is the award of prizes to subscribers. While motives cannot validate or invalidate
a legislation the core of the subject matter must govern competency. So viewed,
it is easy to accept the submission of the Union of India that Parliament
wanted to restrict and prohibit certain types of contracts because of the
noxious element of gambling and lottery implicit therein and apt to entice the
credulous and uncautious. We do not think it necessary to expand on the subject
and the incidental impact on lotteries does not affect the vires of the Act.
Judicial validation of a social legislation only
keeps the path clear for enforcement. Spraying legislative socio- moral
pesticides cannot serve any purpose unless the target area is relentlessly hit.
We hope that this legislation enacted in response to expert recommendation and
popular clamour will be implemented by dynamic State action.
We wish to make it clear that the possible
hardship that bona fide prize chit promoters may suffer on account of the total
prohibition clamped down by this legislation can be relieved against by the
Central Government acting under s. 12. The learned Solicitor General assured
the court that the Union of India would take ameliorative measure to avoid
unjust hardship, especially because it had power to do so under s. 12.
Mr. M. M. Abdul Khader appearing in Writ
Petition No. 1152 of 1979 argued that in his case ornaments and vessels were
given as prizes and if strictly construed, his client's scheme did not fall
within the scope of the Act. He wanted the court to declare so but we decline
to do so, since under Art. 32 this Court's function 814 is not to give advisory
opinion to petitioners but to pronounce upon transgression of fundamental
rights by State action. While there is no merit in his submission of procedural
unreasonableness in the provisions of the Act, it is perfectly open to the writ
petitioner to urge his plea that the Act does not apply to his scheme if he
were prosecuted. We leave the matter at that. Shri Parekh, as intervener, Shri
Kanta Rao, appearing in Writ Petition No. 1546/79, Shri Subba Rao pressing Writ
Petition No. 138/79 and Shri K.R.R. Pillai in W.P. No. 1152/79 have adopted the
leading arguments of Shri Venugopal which we have rejected.
All of them must share the same fate.
State lotteries escalating year after year
and enticing proletarian sections of the people across the States are dubious
in morality and ruinous in impact. Moreover, a detailed study may disclose the
diminishing returns and increasing establishment expenses, menace to peaceful
life and a traffic and dubious consequences. So much so, a second look at the
propriety of these State-run schemes and reversion to the old stance of the
State setting an anti- lottery example, is worthwhile from many angles.
For the reasons given above, we dismiss all
the Writ Petitions, leaving the parties to bear their own costs.
N.V.K. Petitions dismissed.
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