Supreme Court of India
M.J. SIVANI AND ORS.versusSTATE OF KARNATAKA AND ORS.
- Citation
- 1995 INSC 265
- Decided
- 17 April 1995
- Disposal
- Dismissed
- Bench
- K RAMASWAMY
Holding
Video games are covered by the definition of "gaming" and the licensing authorities may impose reasonable restrictions under the relevant statutes without violating Articles 19(1)(g) and 21.
Summary
The petitioners, operators of video game parlours, were directed by the Commissioner of Police in Bangalore and the Commissioner in Madras to obtain licences under the respective licensing orders and police acts. They challenged the requirement, arguing that video games are not "gaming" within the meaning of the Tamil Nadu Gaming Act, 1930, the Mysore Police Act, 1963 or the Madras City Police Act, and that the licensing regime violated their fundamental rights under Articles 19(1)(g) and 21. The Supreme Court held that video games constitute "gaming" because they involve playing for money or its worth, and that the licensing authorities' discretion to impose reasonable restrictions in the public interest is valid under Article 19(6). The Court examined the reasonableness of the restrictions, the applicability of the licensing orders irrespective of the size of the premises, and the procedural safeguards required under natural justice. It concluded that the licensing requirements and conditions, including restrictions on students and parking, are neither arbitrary nor ultra vires. Consequently, the Court dismissed the appeals and the writ petitions, upholding the lower courts' decisions.
Issues considered
- The definition of "gaming" under the Tamil Nadu Gaming Act, Mysore Police Act and Madras City Police Act as applied to video games.
- Whether the licensing requirements under the Bangalore Order and Madras City Police Act constitute an unreasonable restriction on the petitioners' fundamental rights under Articles 19(1)(g) and 21.
- Whether the size of the premises (seating capacity) exempts the operators from licensing under the Bangalore Order and Madras City Police Act.
- Whether the refusal to grant licences without a personal hearing violates principles of natural justice.
- The validity of specific licence conditions, such as the prohibition on students in uniform and parking restrictions.
Legislation cited
Subjects
video games regulationlicensingpublic amusementfundamental rightsArticle 19(1)(g)Article 19(6)Article 21gaming lawdelegated legislationnatural justice
Judgment
. - )
M.J. SIVANI AND ORS.
v.
STATE OF KARNATAKA AND ORS.
A
APRIL 17, 1995
[K. RAMASWAMY AND B.L. HANSARIA, JJ.J B
~I
Constitution of India-Arts 19 ( l)(g), 19(6) and 21-Right to trade or
~
business or avocation-l'ower to impose reasonable restrictions-Test of
reasonab/enesr-Nature of business and its indelible effect on public interest
are importallt elements-Trade or business attended with danger to com- c
munity-May be totally prohibited-Whether regulation of video games vio-
fates fundamental right to trade or business or avocation or right to
livelihood-Held, No-Discretion confemd on licensing authority under the
Licencing and Controlling of Places of Public Amusemellts (Bangalore City)
Order, 1989-Not arbitrary, uncanalised or without any guidelines.
D
_I Tamil Nadu Gaming Act, 193o-Madras City Police Act-<Jaming-
Definition of-Whether video game is a game within definition of 'gamin~
Whether video games require to be regulated.
Licensing and Controlling of Places of Public Amusemems (Bangalore
E
City) Order, 198'>-f'ara +-Refusal to gram licence-Requirement to record
reasons-Personal hearing to be granted when.
Delegated Legislation-l'artly good and partly bad legislatiotr-Cannot
be struck down as a whole unless invalid part is inextricably interconnected
J
with the valid. F
The Commissioner of Police, Bangalore, exercising the power under .
the Licencing and Controlling of places of Public Amusements (Bangalore
City) Order, 1989, called upon the appellants to obtain licences under that
order. The appellants challenged his power audjurisdiction by filing writ
petitions. Dismissing the petitions, the single Judge of the High Court G
-
held that video games is a game covered by Bangalore Order, the appel·
i lants were required to get licence thereunder to play the video games and
It did not violate their fundamental right under Arts. 19(l)(g) and 21 of
the Constitution. The Division Bench while upholding the view of the single
I Judge held that the Madras City Police Act, 1988 and the orders of the H
329
330 SUPREME COURT REPORTS [1995) 3 S.C.R.
A Tamil Nadu Government is GOMS No. 166·0 dated 18·1-1993 and the
allied, placed reasonable restrictions on the right lo carry on video games ..
and II did not violate Arts. !9(1)(g) and 21; that video games are games
requiring licence under the Act and the Orders; that the survey of working
or the video games by a comittee of high level police officer and a practicing
advocate found the mal·practices committed In conducting the games; that
B the ban imposed on the named games as games of chance and permitting
the rest of the games lo be games of skill was In public Interest; that the
conditions or licence are not arbitrary or unreasonable and therefore, the
action or the Commissioner was within the power under the Act or the
, ,
order. These appeals by special leave bad been filed against the Division
c Bench judgment of the High Court.
The point raised In these appeals was whether the video games
attract the relevant orders and Is a game within the definition of 'gaming'
defined under the Tamil Nadu Gaming Act, 1930 or the Madras City Police
Act or or the Mysore Act Etc.
D
The appellants contended that It does not lntolve collection, solicit· \,
Ing, receiving or distribution or winning of prl:ies nor does it Involve
wagering, there Is no element of betting or wagering In the business
conducted by the appellants while operating video games, the definition of
E gaming, .therefore did not get attracted to video gaming; that the space
occupied by the machines used for video gaming being very small, It was
neither like a theatre nor a public place, therefore, It Is not a common
gaming house defined under the respective Acts; that the games conducted
In the respective shops of the appellants did not involve of any money
•,,
F transaction except collection of non refundable charges for tokens for
playing game, the player was rewarded on winning as many number of
tokens as be could obtain by skill and such token be so gained gave him
another chance to play and the tokens were not exchangeable for any cash
or money, the games were conducted only for amusement and to pass off
the time, the essential requirement to bring any game within Uie definition
G of gaming was completely lacking, the video games were, therefore, neither
Illegal nor unjustlfted, the appellants were not required to obtain any
licence from the concerned llcenclng authority; that the Commission lacks
In power u/s 31 to make the regulation; that the notification was made
'-
applicable to an area or specified seating capacity and since the places In
H which the video games were played were of-a small dimension which did
,., I
M.J. SIVAN! v. STATE 331
not have minimum or maximum seating capacity envisaged in para 3(2) A
I
of the Bangalore Order 1989, it had no application to video games; that
the Commissioner had no power to levy licence fee since the place had no
required number of seating capacity; that the appellants from Tamil Nadu
were running video games within a space of 46·1/2 sq., mt., therefore, they
were not required to obtain any licence u/s 34 of the Madras City Police B
Act; that the condition regarding parking and prevention of the students
from attending the video games was arbitrary; that the High Court having
served para 3(2) of the order being inapplicable to the video games, the
whole order must be struck down as being inseparable; that the applica·
, I lions for licence being rejected without hearing the appellants, it was
n-- I
violative of the principles of natu.ral justice and that the authorities were C
refusing to grant licence enblock and the action, thetefore, was arbitrary.
Dismissing the appeals and the writ petitions, this Court
HELD : 1.1. Where in a certain game, certain operations are to be D
perforemal enable the gamester to play the game, the persons taking part
in such operations must be deemed to be 'gaming' or actually assisting in
the gaming. 'To game', therefore, Is to play any game, whether of skill or
chance, for money or money's worth. It is playing of game for money or
money's worth whether the game be lawful or not. No game can be game E
of skill alone. In any game in which even great skill is required, chance
must play a certain part. Even a skilled player in a game of mere skill may
be lucky or unlucky, so that even in a game of mere skill chance must play
Its part. But it is not necessary to decide in terms of mathematical
precision the relative proportion of chance or skill when deciding whether
a game is a game of mere skill. When in a game the element of chance F
vi strongly preponderates, it Is not practicable to decide whether particular
video game is a game of skill or of mixed skill and chance. It depends upon
the facts, in each case. (340-H, 341-A to CJ
State of Andhra Pradesh v. K. Satyanarayana, AIR (1968) SC 825, G
relied on.
Black's Law Dictionary 6th Ed. and Stroud's Judicial Dictionary, 5th
·, Ed., Vol. 1, referred to.
---- f
1.2. The appellants had fundamental right to trade or business or H
332 SUPREME COURT REPORTS [1995] 3 S.C.R.
A avocation but it is subject to control by Art. 19(6) of the Constitution of
India which empowers to impose by law reasonable restrictions on the
exercise of the right in general public interest. In applying the test or
reasonableness, the broad criterion Is whether the law strikes a proper
balance between social control on the one hand and the right of the
individual on the other hand. The court must take into account factors
B like nature of the right enshrined, underlying purpose of the restriction
Imposed, evil sought to be remedied by the law, its extent and urgency,
how far the restriction is or Is not proportionate to the evil and the
prevailing conditions at that time. The court can not proceed on general
motion or what Is reasonable In the abstract or even on a consideration
I ,
~ or what Is reasonable from the point or view of the person or a class of \
- persons on whom the restrictions are imposed. In order to determine
reasonableness of the restriction, regard must be had to the nature or the
business and the prevailing conditions in that trade or business which
would differ from trade to trade. No hard and fast rules concerning all
trades etc. could be laid. The State, with a view to prohibit illegal or
D immoral trade or business injurious to the public health or welfare, Is
empowered to regulate the trade or business appropriate to the conditions
prevailing In the trade/business. The nature or the business and its
indelible effect on public interest etc., therefore, are important elements
in deciding the reasonableness or the restriction. No one has inherent \.
right to carry on a business which Is Injurious to public Interest. Trade
E or business attended with danger to the community may be totally
prohibited or be permitted subject to such conditions or restrictions as
would prevent the evils to the utmost. [344·B to Fl
1.3. The licencing authority, is conferred with discretion to Impose
p such restriction or Order having statutory force or conditions emanating
therefrom as part thereof as are deemed appropriate to the trade or
business or avocation by a licence or permit, as the case may be. Unregu.
.._,
lated Video game operations not only pose danger to public peace and
order and safety, but the public fall a prey to gaming where they always
stand to lose in playing the games or chance. Unless one resorts to gaming
G regularly, one can hardly be reckoned to possess skill to play the Video
game. Therefore, when it Is a game of pure chance or manipulated by
tampering with the machines to make it a game of chance, even acquired
skills hardly assist a player to get extra tokens. Therefore, even when It Is
a game or mixed skill and chance, It would be a gaming prohibited under
H the statute except by regulation. The restriction Imposed, therefore, cannot
M.J. SNANJv. STATE 333
~.1 be said to be arbitrary, unbridled or uncanallsed. The guidance for exer- A
cising the discretion need not ex facie be found in the notification or
orders. It could be gathered from the provisions of the Act or Rules and
a total consideration of the relevant provisions in the notification or order
or conditions of the licence. The discretion conferred on the licencing
authority, the Commissioner or the District Magistrate, cannot be said to
be arbitrary, uncanalised or without any guidelines. The regulations, there-
B
fore, are imposed in the public interest and the right under Art. 19(1)(g)
.') is not violat.ed. (344-G, H, 345-A to CJ
1.4. No one has right to play with the credulity of the general public
or the career of the young and impressive age school or college going
children by operating unregulated video games. If its exhibition is found
c
obnoxious or injurious to public welfare, it would be permissible to impose
total prohibition under Article 19(6) of Constitution. Right to life under
Art. 21 does protect livelihood, but its deprivation can not be extended too
far or projected or stretched to the avocation, business or trade injurious
to public interest or has insideous effect on public morale or publlc order. D
I
Therefore, regulation of video games or prohibition ofsome of video games
of pure chance or mixed chance and skill are not violative of Article 21 nor
is the procedure unreasonable, unfair nor unjust. (345-D to Fl
1.S. The power u/s 31 of the Madras City Pollce Act conferred on the
E
Commissioner and the District Magistrate in the area under their respec·
live charge are of wide amplltude to meet diverse situations by making,
altering or rescinding the orders in accordance with the Act. (346-D]
..... 1.6. The Licensing and ControIIlng of Places of Public Amusement
(Bangalore City) Order, 1989, regulates the running of the video games in F
·public places. The dimensions of the place where video games are run are
not relevant for the applicability of the Order to the video games. (347-B]
1.7. The exercise of the power u/s 39 of the Madras City Police Act
is to ensure order and decency and for publlc safety at all places of the
public entertainment or resort including the places referred to in s.34 and G
~-, s.35, Therefore, any person intends to use any premises for publlc enter-
tainment or resort though may use the premises below 46-1/2 sq. meters
is required to obtain licence under rules made under s.39 for decency or
public safety. Therefore, any person using any building or enclosed place
with a dimension of below 46-1/2 sq.meters Is required to obtain Ilcence H
I;
334 ''
i.
SUPREME COURT REPORTS (1995] 3 S.C.R.
A under the rules made under s.39 and another relevant law el~""here.
[348-C, D]
1.8. The conditions or the licence clearly mention H1:2}h~ students
I
_\__
in uniforms shall not be allowed to play video games be1"·::t1·;1 1ll.00 a.n1. to
3.00 p.m. In other words, during school ~r college hours," 'I'• licencee is
. - li: ..
prohibited to admit students in uniform to the video games. ~- ,trlction Is
imposed in public interest o( education o( the students. I< •S. therefore,
neither arbitrary nor capricious. [348·E, Fl
1.9. The Order and the condition or licence regulate diverse games
in g~neral played ~t different places and not with reference to a particular
C individual game o~ place. On that ground, the condition regarding parking
·cannot be· declared to be ultra vires or arbitrary. \Vith · reference to a
particular case, it may be dealt with according. to (act-situation. (348-G]
., ~ ~ -. '.. . .. ' '
~ . - . - - - . .
2. Though the delegated authority under the Act made general order,
D it inay well that a part thereof is "not applicable, ~r _Is bad, in. relation to a.
partieular trade or business. Partly good and partly bad leglslat_ion cannot
be struck down as a whole. To the extent It becomes applicable to a
particular trade or business, it would be valid and operative and the.
balance remains either Inapplicable or invalid. Diverse situations may
E arise in a particular trade or business •. For that reason the delegated
legislation cannot be c~ndemned as a whole unless the Invalid part ,is.
"inextricably interconnected with the valid. The Court Is, therefore, entitled
to consider whether 'the rul~ as a whole or In part ·Is valid or becomes
'· invalid or Inapplicable. On ltS finding that to the extent the rule ls not
·- , . relevant, Court is entitled to set aside or direct to disregard the Irrelevant ·
F '- or' inapplicabie
- . part leaving the
. .
.rest Intact
.
and operative. (349-B, CJ c • ,
~
·-
3:1. Every action or the State or an Instrumentality or the State must
be informed by reason. Actions uniformed by reason may amount to being
' arbitrary and liable to be questioned under Article 226 or Article 32 or
G the Constitution. The action must be just, fair and reasonable. Rejection
_; o( the licence must be founded upon relevant grounds o( public Interest.
-
.. Fair play and natural justice are part or (air public administration, non
arbitrariness. and absence or "discrimination are hall marks (or good '
governance under rule or law. Therefore, when tho State, Its delegated,
authority or an instrumentality o( the State or any person acts under a
H statutory rule. or by administrative
' . ..
discretion, when. Its actions or
- --orders
.
M.J. SIVAN! v. STATE 335
visit the citizen "1th civil consequences, fairness and justness require that A
in an appropriate case, the affected citizens must have an opportunity to
.. !
meet the case. Audi alteram partem is part or the principles or natural
justice. However, this requirement or natural justice cannot be put in a
rigid mould. [350-D to F, GI
3.2. Order need not contain detailed reasons like court order. Ad- B
mlnistrative order itself may contain reasons or the tile may disclose
reasons to arrive at the decision sho"1ng application of mind to the fact
in Issue. It would be discernible from the reasons stated in the order or
the contemporaneous record. Reasons are the link between the order and
the mind of Its maker. When rules direct to record reasons, It Is a sine
qua non and condition precedent for valid order. Appropriate brief C
reasons, though not like a judgment, are necessary concomitant for a
valid order in support of the action or decision taken by the authority or
its instrumentality or the State. Normally it must be communicated to the
affected party so that he may have an opportunity to have it tested In an
appropriate forum. [351-C, DJ D
3.3. The Commissioner or the District Magistrate is required to
record reasons while refusing to grant the licence. This assures compliance
"1th principles of natural justice. It Is not mandatory that hearing should
be extended before rejecting licence. A caveat is, however, necessary. When
the licencing authority seeks to place reliance on any adverse material E
gathered behind the back of the applicant to which he had no prior
opportunity to meet or explain such adverse material, principles of natural
justice do require that before taking a decision to reject the licence such
material or the gist thereof must be brought to the notice of the applicant
and an opportunity given to meet the grounds or such material. It would F
>' be open to the party to make a representation In that behalf or he may
place any other material in support of his contention to persuade the
licenclng authority to come to a different conclusion or to disabuse any
prejudice against the appellant. If the facts are In acute dispute the request
for personal bearing may be extended. The licencing authority, then, is
required to consider the objections or grounds putforth in support of the G
claim of the applicant or relevance or other"1se of the adverse material.
The licencing authority is entitled to grant or reject the licence as is
enjoined by snb-para (7) of para 4. The licencing authority bas to record
I
reasons in support of its decision of rejecting the application for licence
which includes the renewal and should communicate the same to the H
336 SUPREME COURT REPORTS [1995) 3 S.C.R.
A applicant. [351-G, H, 352-A to CJ
Mahabir Auto Stores and Ors. v. Indian Oil Corporation and Ors.,
[1990] 3 SCC 752; C.B. Gautam v. Union of India, [1993] 1 SCC 78 and
S.L. Kapoor v. Jagmohan, [1981] 1 SCR 746, relied on.
B CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4564 of
1995 Etc. Etc.
From the Judgment and Order dated 17.9.1990 of the Karnataka
High Court in W.A.No. 1303 of 1990.
\
C M.L. Verma, S.B. Sanyal, K.N. Bhat, Ajit Kr. Sink, S. Srinivasan,
K.K. Mani, Girish Ananthamurthy, Shantha Kr. Mahale, Rajesh Mahale,
P. Mahale, Ms. Kiram Suri, T. Raja, Veerappa, K.H. Nobin Singh, A.
Mariarputham, Ms. Aruna Mathur, Ajay Kapur, KR. Nagaraja and R.
Santhanan Krishnan, Advs. for the appearing parties.
D The Judgment of the Court was delivered by
K. RAMASWAMY, J. Leave granted in SLP Nos. 11012/91, 10065-
78/94, 18271-75/94, 18617-18630, 18316, 22759-22763/94, 22865-70/94,
675/95, 2347-53/95, 6437-6440/95, SLP ...... ./95 (CC 1306).
E These appeals by special leave arise from the Division Bench judg-
ment of Karnataka High Court in Writ Appeal Nos. 1303-23/90 dated
September 17, 1990 and of the Madras High Court in Writ Petition No.
404/86 and batch dated December 28, 1993. Since common questions of
law arise in these cases, they are disposed of by common judgment.
F
The primary question is whether video games require to be regulated
under the respective Mysore Police Act, 1963 and the notifications issued
thereunder and the Madras City Police Act, 1888 and the orders of the
Tamil Nadu Government in GOMS No. 166- 0 dated January 18, 1993 and
the allied. When the Commissioner of Police, Bangalore, exercising the
G power under the Licencing and Controlling of Places of Public Amuse-
ments (Bangalore City) Order, 1989, (for short 'Bangalore Order') called
upon the appellants to obtain licences under that order, they challenged
his power and jurisdiction on diverse grounds. The single Judge held that
video game is a game covered by Bangalore Order, the appellants are
H required to get licence thereunder to play the video games. It was further
MJ.SIVAN!v. STATE[K.RAMASWAY,J.) 337
held that it does not violate their fundamental right under Articles 19(1)(g) A
and 21 of the Constitution. The Division Bench upheld the view of the
signal Judge. Equally, Division Bench of the Madras High Court held that
the Madras City Police Act and the order of the Government, placed
reasonable restrictions on the right to carry on video game~. It does not
violate Articles 19(1)(g) and 21. Video games are games requiring licence B
under the Act and the orders. The survey of working of the video games
by a committee of high level police officers and a practicing advocate who
appeare\I for some of the appellants in the High Court, found the mal-
.
' ;) . practices committed in conducting the games. The video game is a game
covered by the Act and the Order. The ban imposed on the named games
as games of chance ad permitting the rest of the games to be of games of C
skill was in public interest. The conditions of licence are not arbitrary or
unreasonable. Therefore, the action of the Commissioner was within the
power under the Act or the Order.
The main thrust in these appeals is whether the video games attract D
the relevant orders and is a game within the definition of 'gaming' _defined
under the Tamil Nadu Gaming Act, 1930 or the Madras City Police Act
or of the Mysore Act etc. The contention of the appellants is that it does
not involve collection, soliciting, receiving or distribution of winning of
prizes nor does it involve wagering. There is no element of betting or E
wagering in the business conducted by the appellants while operating video
games. The definition of gaming, therefore, does not get attracted to video
gaming. The space occupied by the machines used for video gaming is very
small. It is neither like a theater nor a public place. Therefore, it does not
a 'common gaming house' defined under the respective Acts. The games F
conducted in the respective shops of the appellants do not involve of any
money transaction except collection of non-refundable charges for tokens
for playing game. The player is rewarded on winning as many number of
tokens as he can obtain by skill and such token he so gains gives him
another chance to play. The tokens are not exchangeable for any cash or
money. That apart, the games are conducted only for amusement and to G
pass off the time. The essential requirement to bring any game within the
- )
definition of gaming as defined under the Act, is completely lacking. The
customers are entertained purely for amusement. The video games are,
therefore, neither illegal nor unjustified. Therefore, the appellants are not
required to obtain any licence from the concerned licensing authority. H
338 SUPREME COURT REPORTS (1995] 3 S.C.R.
A Section 2(7) of Mysore Act defines "gaming" to mean that it does not
include a lottery but all forms of wagering or betting in connection with
any game of chance, except wagering or betting on a horse-race, when such
wagering or betting takes place. Explanation (ii) says : 'game of chance'
includes a game of chance and skill combined and a pretended game of
chance or of chance and skill combined, but does not include any athletic
B game or sport. "Instruments of gaming'', as defined in Clause (11), includes
any article used or intended to be sued as a subject, or means of gaming,
any document used or intended to be used as a register or record of
evidence of any gaming, the proceeds of any gaming and any winnings of
prizes in money or otherwise distributed or intended to be distributed in
C respect of any gaming. Clause (13) defines that "place" includes a building,
a tent, a booth or other erection, whether permanent or temporary, or any
area whether enclosed or open. Clause (14) defines that "place of public
amusement" means any place, where music, singing, dancing, or any diver-
sion, or game, or the means of carrying on the game is provided and to
D which the public are admitted and includes a race course, circus, theatre,
music hall, billiard room, beagattelle room, gymnasium, fencing school,
swimming pool or dancing hall. Clause (15) defines 'place of public enter-
tainment" to mean any place to which the public are admitted ..... Clause
(18) defines "public place" to include the foreshore, the precincts of every
public building or monument, and all places accessible to the public for
E drawing water, washing or bathing or for the purpose of recreation.
Section 3 of the Madras City Police Act defines "common gaming
house" to mean any house, room tent, enclosure, vehicle, vessel or any place
whatsoever in which cards, dice, tables or other instruments of gaming are
F kept or used for the profit or gain of the person owing, occupying, using, \
or keeping such house, room, tent, enclosure, vehicle, vessel or place,
whether by way of charge, room tent, enclosure, vehicle, vessel or place, or
otherwise howsoever and includes any house, room, tent, enclosure,
vehicle, vessel or place opened, kept or used or permitted to be opened,
kept or used for the purpose of gaming. "Instruments of gaming" has been
G defined to include any article used or intended to be used as a subject or.
means of gaming, any document used or intended to be used as a register
or record or evidence of any gaming, the proceeds of any gaming, and any
winning or prizes in money or otherwise distributed or intended to be
distributed in respect of any gaming. "Public Place" has been defined to
H mean a place including a road, street or way, whether a thoroughfare or
I
MJ.SNANlv. STATE[K.RAMASWAY,J.] 339
not and a landing place to which the public are granted access or have a A
>--- I
right to resort, or over which they have a right to pass.
Black's Law Dictionary, 6th Ed., defines "gaming" at page 679 thus :
"The practice or act of gambling. An agreement between two or more
persons to play together at a game of chance for a stake or wager which B
is to become the property of the winner, and to which all contribute. The
element of gaming are the presence of price or consideration, chance and
prize or reward." "Gaming place" means any place, room building, vehicles,
vessel, tent or location which is used for any of the following : making and
settling bets' receiving, holding, recording or forwarding bets or offers to
bet; conducting lotteries or policy games; playing games of chance for C
money or other property; or playing gambling devices. "Game" includes a
contrivance which has for its object to furnish sport, recreation, or amuse-
• ment. "Public" has been defined at page 1227 as "open to all; ..... common
to all or many; general; open to common use. Belonging to the people at
large." "Amusement" has been defined at page 84 "pastime; diversion, D
enjoyment. A pleasurable occupation of the senses, or that which furnished
-1 it.!t
In Stroud's Judicial Dictionary, 5th Ed., Vol.I, "common gaming
house" has been defined to mean (1) "Is a house in which a large number
of persons are invited whether publicly or privately, habitually to con- E
gregate for the purpose of gaming". (2) A common gaming house is a house
kept or used for playing therein any game of chance, or any mixed game
of chance and skill, in which (a) bank if kept by one or more of the players,
exclusively of the others; or (b) in which any game is played, the chances
of which are not alike favourable to all the players, including among the F
player the banker or other person by whom the game is managed, or
against whom the other players stake, play, or bet." "Gaming" has been
defined as to play at any game, whether of skill or chance for money or
money's worth; and the act is not less gaming because the game played is
not in itself unlawful and whether it is involved or did not involve skill.
G
- )
In State of Andhra Pradesh v. K. Satyanarayana, AIR (1968) SC 825,
considering whether Rummy is a a game of chance or skill, this Court held
that "the game of Rummy is not a game entirely of chance like the
'three-card' game. The three-card game which goes under different names
such a 'flush', 'brag' etc. is a game of pure chance. Rummy on the other H
340 SUPREME COURT REPORTS [1995] 3 S.C.R.
A hand, requires certain amount of skill because the fall of the cards has to
be memorised and the building up of Rummy requires considerable skill
in holding and discarding cards. It is mainly and preponderantly a game of
skill. The chance in Rummy is of the same character as the chance in a
deal at a game of bridge".
B Gaming, therefore, is an inclusive definition which includes a game
of chance and skill combined or a pretended game of chance or of chance
and skill combined. Gaming house would mean any house, room, tent etc.
whether enclosed or open or any place whatsoever in which the instruments
of gaming are kept or used for profits or gain by the person occupying,
C using or keeping such house, room, tent etc. whether by way of charge or
otherwise. The instrument of gaming would include any article used or
intended to be used as a subject of means of gaming, any document used
or intended to be used as a register or record or evidence of gaming, the
profits of any gaming or any winnings or prizes in money or otherwise
D distributed or intended to be distributed or money's worth in gaming. Place
would include a building or a tent etc. whether permanent or temporary
1-
or any area miether enclosed or open. Place of public amusement means
any place where any gain or means of carrying on the gain is provided in
which the public are admitted includes a road or a street or a way whether
a thorough fare or not a landing place in which the public are granted
E access or have a right to resort or over which they have a right to pass. The
element of gaming are the presence of prizes or consideration, chance and
prizes are reward and games includes a contrivance which has for its object
to furnish sport, recreation or amusement. Amusement would mean diver-
sion, pastime or enjoyment or a pleasurable occupation of the senses, or
F that which furnished it. A common gaming house is a place or public place
kept or used for playing therein any game or chance, or any mixed game
of chance and skill, in which the organiser keeps one or more of the
players. It is also a place in which any game is played, th~ chances of which
are not alike favourable to all the players. Gaming is to play any game
whether of skill or chance for money or money's worth and the act is not
G less gaming because the game played is not in itself unlawful and whether
it involved or did not involve skill.
Where in a certain game, certain operations are to be performed to
enable the gamester to play the game, the persons taking part in such
H operations must be deemed to be 'gaming' or actually assisting in the
M.J.SIVANlv. STATE[K.RAMASWAY,J.] 341
gaming. "To game", therefore, is to play any game, whether of skill or A
chance, for money or money's worth. It is playing of the game for money~
or money's worth whether the game be lawful or not. No game can be a
~-1
game of skill alone. In any game in which even great skill is required,
chance must play a certain part. Even a skilled player in a game of mere
skill may be lucky or unlucky, so that even in a game of mere skill chance
must play its part. But it is not necessary to decide in terms of mathematical B
precision the relative proportion of chance or skill when deciding whether
a game is a game of mere skill. When in a game the element of chance
strongly preponderate, it cannot be game of mere skill. Therefore, it is not
practicable to decide whether particular video game is a game of skill or
of mixed skill and chance. It depends upon the facts, in each case. C
The respective Acts deal with the regulation of the gaming or running
of the common gaming house with penal consequences enumerated in the
appropriate Act or the Rules or Regulations operating in that behalf. The
licencing authority, the Commissioner/Dist. Magistrate having a charge D
over the place or public place, by virtue of office, exercises his powers
regulating the gaming or common gaming house by issuance of licence for
running the same subject to such conditions or restrictions imposed therein
to maintain peace, order and security, morality prevention· of offences,
detection of the crime, apprehension or detention of offenders and have
the offenders tried for violation of law in accordance with law. E
The primary questions that emerge are whether video game is a game
and whether it is a game of skill or chance and liable to be regulated under
the relevant Act, notification or regulations or orders issued thereunder.
The word "gaming" defined under the Acts is an inclusive definition to F
bring within its ambit diverse games as held earlier.
Some of the video games are operated with two way or four way
joy-sticks, push buttons, a volume control with a stearing wheel and ac-
celator, gun trigger control or potentiometer etc. etc. Every video game is'
operated by an electronic machine. In all the games, tokens are actually G
used by the player by inserting into the machine before the play actually
begins. The tokens are required to be purchased for cash at the counter
and are exchangeable for cash. In the Tamil Nadu cases, in the counter
.... !
affidavit filed by the Commissioner, it was stated and accepted by the High
Court that Super Continental game has four vertical pathways on the H
342 SUPREME COURT REPORTS [1995] 3 S.C.R.
A screen. The first containing figures of apples, second contains grapes, third
contains bells and fourth contains stars. On pressing the button, these
stripes move fast and after some time come to stop. The points are given
in the figures appearing in groups for example three apples or three grapes
or the order as indicated in the machine. The player can either lose the
B amount or win if he makes more points than the bet. Similarly, Five Line
game is the same as that of Super Continental except that this game has
got only three stripes. Other games lie High-low, Black Jack, Packer
Double UP, Skill Ball, Pac Man, Golden Derby, have been explained, the
details of play are not material for decision. If the player presses the button
without knowing the outcome i.e. the nature of cards that would be turned,
C it is only a game of chance for the card opened contains a numerical of
either higher or lower demonimation. Video gaming, therefore, is as-
sociated with stakes or money or money's worth on the result of a game,
be it a game of pure chance or of mixed skill or chance.
For a commoner or a novice, it is difficult to play video game with
D skill. Ordinary common people who join the game can hardly·be credited
with skill for success in the game. The forecast is nothing better than a
short at a hidden target. Whether a particular video game is a game of skill
or a game of chance, or mixed chance or skilled requires to be determined
on the main element, namely, skill or chance. If it is a game of pure chance
E or mixed chance and skill, it is a gaming. Even if the game is for amusement
or diversion of a person from his usual occupation for entertainment, it
would constitute "gaming." The object of the relevant Act, notification or
Orders made thereunder is to regulate running of the video games and for
that licence is required from the licensing authority.
F
In Madras cases, the Commissioner prohibited afore-enumerated
games as pure games of chance and permitted certain other games as game
of skill. That conclusion was based upon consideration of the findings,
submitted by a committee of senior oolice officers arrived at on sample
survey. The High Court accepted the finding by the committee thus :
G
"From the file, it is seen that when one enters the video games
parlours, he is able in the first instance, only to see these machines
exhibited, which appears to be providing games of entertainment
or amusement or games involving skill on the part of the player.
H Several instances have been given in the survey report. It is seen
MJ. SIVAN!v. STATE[K. RAMASWAY,J.] 343
from the report; that on a closer look, one could perceive A
electronic machines installed wherein the game or games provided
are purely games of chance. As an instance, in one of these games,
five closed cards are exhibited on the screen. The player is allowed
to press some of the buttons provided in the machine on which
the closed cards are reversed and jacks, aces, kings, Queens, etc. B
appear. If the player succeeds in getting two jacks and three aces,
he gains certain points and these points are recorded electronical-
ly. The players is permitted to repeat the play as a result of which
' I
/ he might also lose the initial points gained by him. Although this
game is clai.med to be one which depends upon the skill with which
the buttons are pressed in, actually operating these buttons one C
could easily see that there is absolutely no skill at all involved in
the game and the chances of a player maintaining the game
depends purely upon his luck and not upon his skill. Further, on
opening one such machine, it is notice by the Technical Officer,
Controi Room, that there is a provision for making adjustments in. D
such a way that a player can never succeed in winning the points
_j required for a success at the time. The player appears to have
absolutely no idea as to how the cards got reversed or re-arranged.
There can, therefore, be no doubt, that this game is purely a game
of chance wholly unrelated to the skill of the player. In respect of
this particular game, the minimum amount fixed for a play is Rs. E
20." •
The report further disclosed that one player by name Ramesh lost
rupees one lakh in video games who was also examined by the committee.
------ -J The machines are not freely accessible or easily visible to a casual visitor. F
At some places, they were installed behind partition and the players are
• conducted into such places with a view to ensuring that such games are not
visible from outside. There is no scope for using one's skill to arrive at a
desired result in the games like Royal Casino, Super Continenta~ Five
Line, High Low, Black Jack, Poker Double Up, Skill Ball, Pac Man and
Golden Derby. They were classified as games of chance. By allowing such G
games, the innocent children and the common public would Jose hard
f earned money. Machines electronically operated are adjusted in such a way
that the player always lose the game since no skill is involved. Machines
were tampered with, so that chances of winning by the player was almost
an impossibility. The Commissioner, therefore, had prohibited such games H
344 SUPREME COURT REPORTS [1995) 3 S.C.R.
A of chance while permitting to play the games of skill.
The question then emerges whether regulation of video games vio-
lates the fundamental right to trade or business or avocation of the appel-
lants guaranteed under Articles 19(1)(g) and 21. It is true that they have
B fundamental right to trade or business or avocation but it is subject to
control by Article 19(6} which empowers to impose by law reasonable
restrictions on the exercise of the right in general public interest. In
applying the test of reasonableness, the broad criterion is whether the law
strikes a proper balance between social control on the one hand and the
right of the individual on the other hand. The court must take into account
C factors like nature of the right enshrined, underlying purpose of the restric-
tion imposed, evil sought to be remedied by the law, its extent and urgency,
how for the restriction is or is not proportionate to the evil and the
prevailing conditions at that time. The court cannot proceed on general
notion of what is reasonable in the abstract or even on a consideration of
D what is reasonable from the point of view of the person or a class of persons
on whom the restrictions are imposed. In order to determine reasonable-
ness of the restriction, regard must be had, as stated earlier, to the nature
\ -
of the business and the prevailing conditions in that trade or business which
would differ from trade to trade. No ha•d and fast rules concerning all
trades etc. could be laid. The State, with a view to prohibit illegal or
E immoral trade or business or injurious to the public health or welfare, is
empowered to regulate the trade or business appropriate to the conditions
prevailing in the trade/business. The nature of the business and its indelible
effect on public interest etc., therefore, are important elements in deciding
the reasonableness of the restriction. No one has inherent right to carry on
F a business which is injurious to public interest. Trade or business attended ,...
with danger to the con:munity may be totally prohibited or be permitted
subject to such conditions or restrictions as would prevent the evils to the
utmost.
The licencing authority, therefore, is conferred with discretion to
G impose such restrictions by notification or Order having statutory force or
conditions emanating therefrom as part thereof as are deemed appropriate
to the trade or business or avocation by a licence or permit, as the case
may be. Unregulated video game operations not only pose danger to public
peace and order and safety; but the public fall a prey to gaming where they
H always stand to lose in playing in the games of chance. Unless one resorts
MJ.SNAN!v. STATE(K.RAMASWAY,J.] 345
to gaming regularly, one can hardly be reckoned to possess skill to play the A
__ , video game. Therefore, when it is a game of pure chance or manipulated
by tampering with the machines to make it a game of chance, even acquired
skills hardly assist a player to get extra tokens. Therefore, even when it is
a game of mixed skill and chance, it would be a gaming prohibited under
the statute except by regulation. The restriction imposed, therefore, cannot B
be said to be arbitrary, unbridied or uncanalised. The guidance for exer-
cising the discretion need not ex facie ,be found in the notification or
orders. It. could be gathered from the provisions of the Act or Rules and
a total consideration of the relevant provisions in the notification or order
.- ~j
, or conditions of the licence. The discretion conferred on the licencing
authority, the Commissioner or the District Magistrate, cannot be said to C
be arbitrary, uncanalised or without any gnidelines. The regulations, there-
fore, are imposed in the public interest and the right under Article 19(1)(g)
is not violated.
It is true that the owner or person in charge of the video game, earn D
livelihood assured under Article 21 of the Constitution but no one has right
to play with the credulity of the general public or the career of the' young
·-, and impressive age school or college going children by operating unregu-
lated video games. If its exhibition is found obnoxious or injuries to public
welfare, it would be permissible to impose total prohibition under Article
19(6) of Constitution. Right to life under Art. 21 does protect livelihood, E
. but its deprivation cannot be extended too far or projected or stretched to
the avocation, business or trade injurious to public interest or has insideous
effect on public morale or public order. Therefore, regulation of video
games or prohibition of some of video games of pure chance or mixed
chance and skill are not violative of Article 21 nor is the procedure
F
unreasonable, unfair nor unjust.
It is next contended in the appeals arising from Karnataka that they
are not required to obtain licence under the notification. In support
thereof, it is contended that the Commissioner lacks power under s.31 to
make the regulation. We find no force in the contention. It is seen that s.31 G
empowers' the Commissioner or the District Magistrate in the area under
their respective charge to niake, alter or rexind orders not inconsistent with
_, f
/
the Mysore Act. They are empowered to licence persons doing any trade
or business, or to control places of public amusement or entertainment.
They are also empowered to prohibit keeping all public places or places H
r
346 SUPREME COURT REPORTS [1995] 3 S.C.R.
A of public amusement or entertainment to prevent obstruction etc. They are
entitled to regulate the means of entrance or exit at places of public
amusement or assembly and providing for the maintenance of public safety
1-
and the prevention of distrurbance thereat. Under clause (x), Commis-
sioner or the District Magistrate is empowered to regulate by licencing or
B controlling, with such exceptions specified therein, the musical, dancing,
mimetic or theatrical or other performances for public amusement includ-
ing melas and tamashas. In the interest of public order or decency or
morality or in the interest of general public, they are entitled to regulate
the conduct of even the artists or the audience. They are also entitled to
\ ,
prescribe procedure in accordance with which any licence or permission
C required to be obtained under the Act should be applied for and to fix the
fee to be charged for such licence as provided under Clause ( z) etc.
Therefore, the power conferred on the Commissioner and the District
Magistrate in the area under their respective charge are of wide amlitude
to meet diverse situations by making, altering or rescinding the orders in
D accordance with the Act.
It is seen that the draft notification was published, admittedly on June
8, 1989, inviting objections and suggetions to make the licencing and
I· -
controlling the places of public amusement by Bangalore order applicable '
to Bangalore city. They were required to file objection on or before July
E 7, 1989. No objections were received by the Commissioner of Bangalore
City. He had obtained necessary approval from the State Government of
Karnataka and final notification was published in the Gazette on Septem-
ber 15, 1989. Thus, the notificalton is a statutory notification. Similar is the
order of the Commissioner of Police, Madras city who initially issued
regulations and thereafter they became the order. Therefore, they have a
F
statutory force.
It is contended for the appellants from Karnataka that the notifica-
tion was made applicable to an area of specified seating capacity and since
the places in which the video games are played are of a small dimension
G which do not have minimum or maximum seating capacity envisaged in
para 3(2) of the Bangalore Order 1989, it has no application to video games
and the learned single Judge having directed not to apply the above clause,
the entire order does not apply to them. Another argument stemmed
therefrom is that being a delegated legislation, when part of it was served
H by single Judge, the whole order became inapplicable. It is also equally
MJ.SIVAN!v. STATE[K.RAMASWAY,J.] 347
coniended that Commission has no power to levy licence fee since the A
place has no required number of seating capacity.
.>-- '.
We find no force in either of the contentions. It is already seen that
the order regulates the running of the video games in public places. The
dimensions of the place where video games are run are not relevant fur the B
applicability of the order to the video games. Sub-para (2) of para 3 of the
Bangalore Order divides public places into four categories according to
which the person is required to pay licence fee by a treasury challan i.e.
permanent, semi-permanent,temporary or other places of public amuse-
ment. It also prescribes the maximum and minimum rates of licence fee.
Clause (d) becomes applicable to any of other place not covered by clauses C
(a). to (c). What sub-para (2) of para 3 contemplates of is payment of fee
up to 200 seat capacity, namely, 1 to 200, if it is a permanent place,
minimum fee is Rs. 50 etc. Public amusement would be permitted to be
conducted at any of the places for which licence was obtained from the
Commissioner/Dist. Magistrate. When CL(d) is applicable, the licence fee D
is Rs. 20. We are informed that Rs. 20 is being charges for obtaining the
licence to control the video games by the Commissioner. Relying upon the
statement in this clause about its applicability in those cases where. admis-
sion to the place in question is payment of money, it has been contended
by the counsel for the appellants that this clause too is not attracted, as in
the position qua other clauses which have prescribed payment as per E
seating capacity - there being no arrangement for seating at all in the places
in question. However, the provision is not tailor made for video games only,
but is quite general in nature. We have not been persuaded to hold that
the notification was not meant to apply to places where video games are
being played. According to us, clause ( d) is in the nature of a residuary F
provisioi;, and it is because of this that licence fee of Rs. 20 i~ being charged
in cases at hand.
It is next contended by the appellants from Tamil Nadu that they are
running video games within a space of 46-1!2 sq. mt. and that, therefore,
they are not required to obtain any licence under s.34 of the Madras City G
Police Act,. which says that no enclosure or place of playing having an area
of46-1!2 Sq. mt. or upward shall be sued for public entertainment or resort
without a licence from the Commissioner. Since they are using video games
at a place less then '46-1/2 sq.mt., they require no licence. The contention
is wholly misconceived. Under. s.39 of that Act, the Commissioner may H
348 SUPREME COURT REPORTS (1995) 3 S.C.R.
A make rules for ensuring order and decency and for public safety at all
places of public entertainment or resort and for regulating the times during ,~
which the places referred to in ss.34 and 35 are used. Section 34(1)
prohibits user of an enclcsed place or a building having an area of 46-1/2
sq. meters or upward for public entertainment or resort without a licence
from the Commissioner. In other words the licence is for user of the
B building upto the upwards of 46-1/2 sq. meters whereas s.39 gives power
to the Commissioner to make rules for ensuring order and decency and for
public safety at all places of public entertainment or resort, and for regulat-
ing the times during which the places referred to in ss.34 and 35 shall be '' ,-.
allowed to be open or used. The exercise of the power under s.39, there-
c fore, is to ensure order and decency and for public safety at all places of
public entertainment or resort including the place referred to in s.34 and
s.35. Therefore, any person intends to use any premises for public enter-
tainment or resort though may use the premises below 46-1/2 sq. meters is
requireJ to obtain licence under rules made under s.39 for decency or
public safety. Therefore any person using any building or enclosed place
D
with a dimension of 1.Jelow 46-1/2 sq. meters is required to obtain licence
under the rules made under s.39 of Madras City Police Act and other
I-
relevant kw elsewhere.
Next contention is that prevention of the students from attending the
E video games is arbitrary and, therefore, violates Articles 14 & 21. We find
no force in the contention. The conditions of the licence clearly mention
that the students in unifor '11.S shall not be allowed to play video games
between 10.00 a.m. to 3.00 p.m. In other words, during school or college
hours, the licencee is prohibited to admit students in uniform to the video
games. Restriction is imposed in public interest of education of the stu-
F \::'"
dents. It is, therefore, neither arbitrary nor capricious.
The submission that condition regarding parking·is arbitrary, since
video games are played in the 3rd floor or 2nd floor of the multi-storeyed
building, is also devoid of force. The order and the condition of licence
G regulate diverse games in general played at different places and not with
reference to a particular individual game or place. On that ground, the
' -
condition cannot be declared to be ultra vires or arbitrary. With reference
to a particular case, it may be dealt with according to fact-situation.
H The Karnataka appellants urge that the High Court having severed
- MJ. SIVAN! v. STATE [K. RAMASWAY, J.]
para 3(2) of the Order being inapplicable to the video games, the whole A
order must be struck down as being inseparable. We find no force in the
349
contention. It has already been held that the orders are statutory in
character. Though the delegated authority under the Act made general
order, it may well that a part thereof is not applicable, or is bad, in relation
to a particular trade or business. Partly gooci and partly bad legislation B
cannot be struck down as a whole. To the extent it becomes applicable to
a particular trade or business, it would be valid and operative and the
balance remains either inapplicable or invalid. Diverse situations may arise
·-/ in a particular trade or business. For that reason, the delegated legislation
cannot he condemned as a whole unless the invalid part is inextricably C
interconnected with the valid. The Court is, therefore, entitled to consider
whether the rule as a whole or in part is valid or becomes invalid or
inapplicable. On its finding that to the extent the rule is not relevant, Court
is entitled to set aside or direct to disregard the irrelevant or inapplicable
part leaving the rest intact and operative. Our attention has been invited
by the leaned coun5el for the respondents is what has been stated in this D
regard in Wade's Administrative Law at pp.874.5 of the 6th Edn. iinder the
-1 heading 'Partial invalidity". The learned author has cited many cases ac-
cording to whiGh it is possible for delegated legislation to be partially good
and partially bad - the general rule being :- "Unless the invalid part is
inextricably interconnected with the valid, a court is entitled to set aside or E
disregard the invalid part, leaving the rest intact."
It is next contended that the applications for licence were rejected
without hearing the appellants and, therefore, it is violative of the principles
of natural justice. We find no force in the contention. The condition in para
4 of the Bangalore order envisages thus : · F
'(5) The licencing authority shall in deciding whether to grant or
refuse licence for conducting public amusements have regard to
the following matters, namely :-
G
(a) the interest of public in general; and
(b) the status and antecedent of the applicant.
(6) The licencing authority shall not granc a licence under this
order unless he is satisfied :- H
350 SUPREME COURT REPORTS (1995] 3 S.C.R.
A (a) that the provisions of this order have been substantially com-
plied with; and
(b) in the case of an application for the grant of a licence for
conducting public amusements, all adequate precautions have been
taken in the place, in respect of which the licence is to be granted,
B to provide for the safety, convenieuce and comfort of the persons
attending exhibition therein."
A reading of these rules expressly does not provide for a right of
hearing before rejecting licence to permit public amusements. In sub-para
C (7) of para 4, it is made clear that where the licencing authority refuses to
grant a licence, it shall do so and the order be communicated to the
applicant giving reasons in \\Tiling for such refusal.
It is settled law that every action of the State or an instrumentality
D of the State must be informed by reason. Actions uninformed by reason
may amount to being arbitrary and liable to be questioned under Article
226 or Article 32 of the Constitution. The action must be just, fair and
reasonable. Rejection of the licence must be founded upon relevant
grounds of public interest. Pair play and natural justice are part of fair
E public administration; non-arbitrariness and absence of discrimination are
hall marks for good governance under rule of law. Therefore, when the
State, its delegated authority or an instrumentality of the State or any
person acts under a statutory rule or by administrative discretion, when its
actions or orders visit the citizen with civil consequences, fairness and
justness require that in an appropriate case,the affected citizens must have
F an opportunity to meet the case. Audi alteram partem is part of the
principles of natural justice. Decided cases have not extended doctrine of
hearing in every case. It depends upon facts in a given case. What has been
stated in Mahabir Auto Stores and Ors. v. Indian Oil Corporation and Ors.,
(1990] 3 sec 752, which has been pressed into service by the appellants'
G counsel to contend that opportunity of hearing was required to be given in
every case. This requirement of natural justice cannot be put in a rigid
mould, at which staling that before an adverse decision is taken, the \
affected person should be taken into confidence, it was observed in para-
5.aph 18 that whether and in what circumstances that confidence should
H be taken into consideration cannot be laid down on any strait-jacket.'
MJ.SIVAN!v. STATE[K.RAMASWAY,J.] 351
)>-- j. When constitutionality of the statute or the statutory rules was impugned, A
/
with a view to sustain the statute or statutory rules, this Court read down
the law consistent with rule of natural justice including personal hearing.
See C.B. Gautam v. Union of India, (1993] 1 SCC 78 at 103, referred by
learned counsel for the appellants. In some cases like Maneka Gandhi, post
- decisional hearing was regarded as sufficient. B
--- "J
It is also settled law that the order need not contain detailed reasons
like court order. Administrative order itself may r,ontain reasons or the file
may disciose reasons to arrive at the decision showing application of mind
to the facts in issue. It would be discernible from the reasons stated in the
order or the contemporaneous record. Reasons are the link between the C
order and the mind of its maker. When rules direct to record reasons, it
is a sine qua non artd condition precedent for valid order. Appropriate
brief reasons, though not like a judgment, are necessary concomitant for a
valid order in support of the action or decision taken by the authority or
its instrumentality or the State. Normally it must be communicated to the D
~I affected party so that he may have an opportunity to have it tested in an
appropriate forum.
InS.L. Kapoor v.Jagmohan, (1981] 1 SCR 746, it was contended that
before supersession of the Municipal Committee, no opportunity of hearing E
was given and, therefore, it was violative of the principles of natural justice.
While considering the question, the court noted the submission of the
Attorney General that s.238 of the Punjab Municipal Act requires to meet
emergent situation with swift action and necessarily it would imply ex-
clusion of the natural justice. This Court negated the contention of hearing F
and natural justice may always be moulded to the situation. The party
acting under the Act need not extend oral hearing and it is not necessary
to put every detail of a case to the affected person. Broad grounds are
sufficient to be given to· indicate the decision.
It is seen that the Commissioner or the Dist. Magistrate is required G
- -\ I to record reasons while refusing. to grant the licence. This assures com-
pliance with principles of natural justice. It is not mandatory that hearing
should be extended before rejecting licence. A caveat is, however, neces-
sary. When the licencing authority seeks to place reliance on any adverse ·
material gathered behind the back of the applicant to which he had no H
r
352 SUPREME COURT REPORTS [1995] 3 S.C.R.
A prior opportunity to meet or explain such adverse material, principles of
natural justice do require that before taking a decision to reject the licenc.e 1. -
such material or the gist thereof must be brought to the notice of the
applicant and an opportunity given to meet the grounds or such material.
It would be open to the party to make a representation in that behalf or
B he may place any other material in support of his contention to persuade
the licencing authority to come to a different conclusion or to disabuse any
prejudice against the appellant. If the facts are in acute dispute the request
for personal hearing may be extended. The licencing authority, then, is \ ,
required to consider the objections or grounds putforth in support of the
claim of the applicant or relevance or otherwise of the adverse material.
C The licencing authority is entitled to grant or reject the licence as is
enjoined by sub-para (7) of para 4. The licencing authority has to record
reasons in support of its decision of rejecting the application for licence
which includes the renewal and should communicate the same to the
applicant.
D
It is ;een that the Karnataka High Court, on an application made by
the appellants, directed tt.e Commissioner to consider the objections and
to pass appropriate orders within 15 days from the dak of the receipt of
the High Court order. Counsel for the respondents placed before us a
E sample of the order passed by the Commissioner on the application of
Bhagwan Das Wadwani and for reasons recorded therein, he rejected the
application on January 25, 1994, namely, pending appeal in this court. The
orde• shows that it was communicated to the address at No. 93, Wonder:
land Avenue Road, Bangalore. Counsel for the appellants stated the order
has not yet been received. We have no material before us to accept the
F contention. We may put on record the stand of State counsel - the same
being that the Commissioner would consider representation, if an}, reason
given is non-existent or is deemed not germane, whereafter fresh order
containing reasons would be pasced.
G It is contended for the appellants from Tamil Nadu that the
authorities are refusing to grant licence enblock and the action, therefore,
is arbitrary. It is seen that the Commissioner has banned exhibiting of only
those video games specified in the body of the judgment and noted by the
High Court and permitted exhibition of games of skill in an appropriate
H case. If the Commissioner rejects any application on irrelevant grounds, it
MJ. SIVAN! v. STATE [K RAMASWAY, J.] 353
may be open to the aggrieved party to have its legality impugned in an A
appropriate proceedings.
Thus considered, we are of the view that no case has been made out
warranting our interference in these appeals and the writ petitions. They
are accordingly dismissed but in the circumstances, without costs.
B
The contempt petition Nos. 38-51/95 in SLP 10065-78/94 are also
dismissed.
j
R.A. Appeals dismissed.
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