Holding

The exemption for lotteries specially authorised by the Maharashtra Government is constitutionally valid and does not constitute hostile discrimination, so the ban on sale of tickets of lotteries authorised by other States is upheld.

Summary

The petitioners challenged Maharashtra's ban on selling tickets of lotteries organized by the Indian Red Cross Society (Dadra and Nagar Haveli branch) that were authorized by that Union Territory's administration. They argued that the Bombay Lotteries (Control and Tax) and Prize Competition (Tax) Act, 1958, which exempts only "lotteries specially authorised by the State Government," discriminated against lotteries authorised by other states, violating Article 14 of the Constitution. The Court examined the legislative competence of Maharashtra under Entry 34 of List II of the Seventh Schedule and noted that lotteries organised by the Government of India or a State are excluded from that entry by Entry 40 of List I. It held that the exemption for Maharashtra‑authorised lotteries is justified because the State can effectively regulate and prevent misuse, whereas it cannot adequately control lotteries authorised by other states. Consequently, no hostile discrimination was found, and the writ petitions were dismissed.

Issues considered

Whether the ban on sale of tickets of lotteries authorised but not organised by other States violates Article 14 of the Constitution.
Whether the Maharashtra legislature is competent to prohibit such sales under Entry 34 of List II of the Seventh Schedule.
Whether the exemption in Section 32(c) of the Bombay Lotteries (Control and Tax) and Prize Competition (Tax) Act, 1958, for lotteries "specially authorised by the State Government" is discriminatory.

Legislation cited

Bombay Lotteries (Control and Tax) and Prize Competition (Tax) Act, 1958s. 3, s. 32(c)
Constitution of Indias. Article 14, s. Article 298, s. Entry 34 of List II, Schedule VII, s. Entry 40 of List I, Schedule VII

Subjects

LotteryArticle 14DiscriminationState legislationGamblingBombay Lotteries ActConstitutional lawLegislative competence

Judgment

201

-
J. K. BHARAT! A

v.
.
' STATE OF MAHARASHTRA AND ORS .
B
July 23, 1984

-l
[0. CHINNAPPA REDDY, A.P. SEN AND E.S. VENKATARAMIAH, JJ.]

Constitution of India 1950, Article 14, Entry 40 of List 1 of Schedule
VJJ and Entry 34 of List 11 of Schedule Vil and The Bo1nbay Lol/eries c
(Control and Tax) and Prize Competition (Tax) Act 1958, Section 32 (c).

Lotteries-r/otteries autho1ised but not organised by the govcrn1nent of
other states'-Ban on sale of such lottery tickets-Whether competent-Whether
any discrimination involved.
D
The petitioner in their writ petitions to this Court contested the b.ao
on sale within the St"ate of Maharashtra, of tickets of lotteries organised
by the Indian Red~Cross Society. Dadra and Nagar Have!i 1 branch and
authorised by the ad1ninistration of Dadra and Nagar Haveli.

Dismissing the wtit petitions, E

- HELD : ( l) (i) The Bombay Lotteries (Control and tax) and Prize
Competition (Tax) Act, 1958 is an Act to control and tax lotteries and
prize competition in the State of Maharashtra. The Act contains detailed
provisions for the licensing, regulation and control of lottery within the
State of Maharashtra. Section 32(c), provides that nothing in the Act shall F
apply to "a lottery specially authorised by the State Government." [2030-H]

(ii) Io the case of lotteries authorised by the GoYeromeot of
Maharashtra, the Government of Maharashtra may retain to itself all neces•
sary powers for the regulation and control and the prevention of misuse of
G
funds and e-xploitation of guileless members of the public. In the case Of
lotteries authorised by the Government of other States it may be difficult
and even impossible for the Government of Mahara sbtra to takeadequate
regulatory steps to prevent abuse of the authority given by Governments
of other States to non·Governmental agencies to organnise lotteries. It
may be equally difficult for the Governments of other States to take
ff
202 SUPREME COURT REPORTS (1985) l s.c R.

A
'
adequ.1te measures for prevention of abuse of such authority within the
State of Maharashtra. [204C-D]

2. No hostile discrimination whatever is involved in not extending
the exemption from the applicability of the Bombay Lotteries (Control and
Tax) and Prize Competition (Tax) Act, 1958 'to lotteries ~uthorised but
B not org=tnised by the Go~ernment of other States'. [2040]

. 3. Lotteries organised by the Government of India or the Govern· )....
meat of the State have been taken out .from Entry 34 of List II of Schedule
VJ[ by Entry 40 of List 1.- There !s, the.refore no question about the
co~petence of the Legislature of Afaharashtra to legislate in respect of the
c sail! or distribution, in tha State of M1harashtra, of tickets of all lotteries
organised by any agency whatsoever other than the Government of India
or the Government of a State. [203E-F]

H. Anraj and others v. State of Maharashtra, explained.

D ORIGINAL JURISDICTION: Writ Petition (Civil) Nos. 12820,
1
12592, 12714, 12736, 12747, 12821, 1'035and13022of1984.
(Under Article 32 of the Constitution of India).

Dr. Y. S. Clzitale, Vtmal Dave, Randhlr Singh, 0. Swamy,
E . Vineet Kumar, N. K. Sharma, Ms. Deepika Saxena. S. M. Ashri
and M. Vee;appa for the Petitioners.

-N. H. Gursahani and M. N. S!zro.lf for the Respondent.

The Judgment of the Court was deHvered by

~-' C11INNAPPA REDDY, J. This order is virtually a postscript to
'our judgment in H. · Anraj and Ors. v. State of Malwrasflim
What -Vas in questiol) in H. Anraj and Ors. v. State of Maharashtra
-was the ban imposed by the Government of Maharashtra on the
sale of tickets of lotteries conductc~ by the Government of other
G
States in the State of Maharashtra. What is presently in question
in the writ petitions before us is the ban on the sale of tickets of
lotteries authorised but not organised by the Governments of other
States. Specifically, we are concerned with the ban on sale, within
the State of l\faharashtra, of tickets of lotteries organised by the
Indian Red Cross Society, Dadra and Nagar Haveli branch and
authorised by the adminsitration of Dadra and Nagar Haveli. In
H Anraj and Ors. v. SIPte of Maharashtra we held th.'.lt the subject"
J. K. BHARTI v. MAHARASHTRA (Chi1111appa Reddy, J.) 203

"Lotteries organised by the Government of India or the Government A
of a State" had been taken out from the lcg1stative field, comprised
by the expression "Betting and Gambling" in Entry 34 of List II
of Schedule VII and was reserved to be dealt with by Parliament
under Entry 40 of List I of Schedule VII. Even so, we held, Art.
298 of the Constitution left the Government of a State free to carry
on any trade or business in respect of which it may not have the B
power to make laws, but that the power to carry on such trade or
business shall be subject to legislation by Parliament, Therefore,
we said, in the absence of Parliamentary legislation, the Government
of every State had the unrestricted right to organise lotteries and
this right was not subject to the executive power of the Government
of India or the execu\ive and legislative powers of other States.
c
Consequently, we held that the Government of Maharashtra did
not have the right to impose a ban on the sale and distribution of
tickets of lotteries organised by other States in the State of Maha-
rashtra. In the instant cases, we are co·ncerned not with the ban
on lotteries organise~ by the Governments of other States but with D
the ban on lotteries authorised by such Governments and organised
by institutions and persons other than the Governments. The
source of power is not in question. It is to be found in Entry 34
of List ll of Schedule VII which empowers the State legislature to
make laws in respect of "Betting and Gambling", which expression
has always been held to include the conduct 'of lotteries. While E
lotteries organised by the Government of India or the Government
of a State have been taken out of Entry 34 of List 11 of Schedule
VII by Entry 40 of List I; there is no question about the competence
of the Legislature of Maharashtra to legislate in respect of the sale
or distribution, in the State of Maharashtra, of tickets of all lotteries
organised by any agency wbatsover other than the Government of F
India or the Government of a State.

The Bombay Lotteries (Control and Tax) and Prize Competi-
tion (Tax) Act, 1958 is an Act to control and tax lotteries and prize
competition in the State of Maharashtra. Section 3 of the Act
declares : "Save as provided by the Act, all lotteries are unlawful." G
The Act contains detailed provisions for the licencing, regulation
and control of lotteries within State of Maharashtra. By Sec. 32
(c), it is provided that nothing in the Act shall apply to "a lottery
specially authorised by the State Government." The submission of
Dr. Chitale, learned counsel for the petitioners, was that the
exemption from the applicability of the Act granted to lotteries
"sepecially authorised by the State Government", that is, by the H
204 SUPREME COURT REi'ORTS [1985) ) S.C.R.

A Government of Maharashtra, was discriminatory; the exemption
should be extended to all lotteries authorised by the Government of
any State whatsoever. Article 14 of the Col]stitution is invoked
in aid of the submission; the reason for exempting lotteries autho·
riscd by the Government of Maharashtra from the applicability of
the Act and not lotteries authorised by the Governments of other
B States is patent. In the case of lotteries authorised by the Govern·
ment of Maharashtra, the Government of Maharashtra may retain
to itself all necessary powers for the regulation and control and the
prevention of misuse of funds and exploitation of gwleless members
of the public. In the case of lotteries authorised by the Governments
of other States it may be d1fficult and eyen impossible for theGovern·
c ment of Maharashtra to take adequate regulatory steps to prevent
abuse of the auth crity given by Governments of other States to non·
Governmental agencies to organise lotteries. It may be equally
difficult for the Governments of other States to take adequate
measures for prevention of abuse of such authority within the State
of Maharashtra. We are, therefore, satisfied that no hostile discri·
D mi nation' whatever is involved in not extending the exemption from
the applicability of the Act to lotteries authorised but not organised
by the Governments of other States. The Writ Petitions are accor·
,
dingly, dismissed with costs.

E
N.V.K. f'etition dismissed.