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K. Ramulu Vs. the Director of Tamil Nadu Raffle, Government Estate and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1972)2MLJ239
AppellantK. Ramulu
RespondentThe Director of Tamil Nadu Raffle, Government Estate and ors.
Cases ReferredLily White v. R. Muniswami
Excerpt:
- t. ramaprasada rao, j.1. the petitioner purchased a ticket in the raffle conducted by the state government of madras. the state raffle scheme was promulgated by the state with a view to harnessing, in an increased measure, the savings of the people for financing developmental programmes. the purport and purpose of the state raffle scheme was published in the fort st. george gazette extraordinary, dated 17th jiily; 1968. under the said project and in order to set guidelines which ought to govern the implementation of the state raffle scheme, the madras state raffle rules, 1968, were drawn up. the director of state raffle, madras, was to administer the state raffle scheme. in one of such schemes the petitioner purchased a ticket paying a sum of re. r for the draw which was held on 25th.....
Judgment:

T. Ramaprasada Rao, J.

1. The petitioner purchased a ticket in the Raffle conducted by the State Government of Madras. The State Raffle Scheme was promulgated by the State with a view to harnessing, in an increased measure, the savings of the people for financing developmental programmes. The purport and purpose of the State Raffle Scheme was published in the Fort St. George Gazette Extraordinary, dated 17th Jiily; 1968. Under the said project and in order to set guidelines which ought to govern the implementation of the State Raffle Scheme, the Madras State Raffle Rules, 1968, were drawn up. The Director of State Raffle, Madras, was to administer the State Raffle Scheme. In one of such Schemes the petitioner purchased a ticket paying a sum of Re. r for the draw which was held on 25th November, 1969. In the said draw, the ticket of the petitioner which bore the number 748623 won a prize of Rs. 1,000 The petitioner chose the agency of the 3rd respondent, The Union00 Bank of India, Guntur for presentation of the ticket to the appropriate authority and for claiming the prize. On 37th November, 1969, the petitioner so handed over the ticket to the 3rd respondent for collection.

2. The bankers informed the petitioner that they originally presented the ticket for enacashment in the Taluk Treasury on 20th February, 1970, but as certain forms had to be filled up as prescribed, they could not obtain payment and that after obtaining the forms they approached the Director of State Raffle and presented the necessary applications in due form for obtaining the prize amount. From the record it is seen that the said application to the Director of State Raffle in due form was received in the office of the Director on 18th March, 1970. The Director rejected the claim on the ground that as the request was made beyond three months from the date of draw the prize amount lapsed to the Government. The petitioner found fault with his bankers for their laches in not having dealt with the concerned subject, but ultimately approached the Director of State Raffle for payment of the said amount; but his request having been negatived he has filed this petition praying for the issue of a writ of mandamus directing the 1st respondent to pay him the prize amount as he is entitled in law to obtain the same. The petitioner's contention is that the rejection was made only on the ground that it is lapsea to the Government. But now it is sought to be. made out by respondents 1 and 2 that the amount has been forfeited to the Government under Rule 37 of the Rules referred to above and therefore the prize amount is not payable. The petitioner says that the present stand that the prize amount has been forfeited cannot be a ground in law for screening the petitioner from receiving his entitlement under the prize earning ticket. The contention of the Government is that the entire subject matter emanates from a contract and as the rules from which such a contract springs are purely administrative in nature the petitioner is not entitled to a rule under Article 226. In answer to it, it is said that as the term of the bargain relied upon is opposed to law this writ petition is maintainable and the petitioner is entitled to relief. Lastly, the 1st respondent's stand that the petitioner should have recourse against his delinquent agent, whose laches only have resulted in the present situation, is met by saying that this aspect would not prevent this Court from exercising its powers under Article 226 to issue a rule if the justice of the case requires.

3. Undoubtedly, the attitude of the Bank and the manner in which it managed the particular affair on behalf of its constituent reflects want of diligence on its part. But that would not relieve respondents 1 and 2 hereinafter referred to as the respondents from the performance of certain obvious public duties enjoined on them, since such avbidance is not only not permissible in law but also not avoidable by the State as the supreme repository of all that is good for the subject.

4. I shall presently consider the rule which is the subject-matter of discussion. Rule 37 reads as follows:

Prize amounts shall normally be claimed within four weeks from the date of the draw. Where it is not so claimed it shall after that date be claimed only by making a special application to the Director of State Raffle. Prize amounts not claimed within three months from the date of draw shall lapse and be automatically forfeited to the Government.

This rule consists of four parts. Firstly, the prize amount shall normally be claimed within four weeks. The word 'normally' is significant. It does not prescribe a period of limitation, but a rule of guidance. It is therefore capable of ela ticity and ought not to be understood as a rigid prescription as to time. Secondly, if the prize amount is not claimed within the four weeks, then a special application for payment has to be made to the Director of State Raffle. Thirdly, if the prize amount is not claimed within three months from the date of draw, it shall lapse to the Government. Fourthly, such lapsed amount shall be automatically forfeited to the Government. The third aspect of this rule projects a negative situation whereunder if no claim is made within three months from the date of draw the prize amount shall lapse to the Government. This is an ordinary feature which appears in very many transactions, particularly in relation to affairs of Court and State. For example, if the dividend issued by the Official Assignee is not encashed within a particular time, or if the interest payable by the Administrator General or the Official Trustee is not received or paid as prescribed to the beneficiary, then all such dividends and amounts shall lapse to the Government. The procedure of lapse apparently subserves administrative convenience and is solely intended to close the affair connected closely with financial matters so that it need not be kept open for any length of time for being dealt with in the normal way. Similarly, as raffles are drawn month after month and as the prize-winning tickets are innumerable, a time-limit is prescribed for making a claim theretrunder or for making a special application to the Director of State Raffle in case it is beyond the four weeks from the date of draw and in any event after the period of three months, if no such special application is received, the prize amount shall lapse to the Government. This lapsing of the prize amount to the Government is only to close the subject administratively and to avoid the prize amount being kept for being disbursed to the prize-winner if he approaches for such payment at any time without sufficient cause. But by such lapsing, does it automatically follow that the State can forfeit the prize amount on the foot that the claim has not been made within three months from the date of draw? It is in this light that the contentions of parties have to be appreciated and answered.

5. The main ground of avoidance of the duty to pay the prize amount under a prize winning ticket, is based upon the illusory doctrine that no writ will lie under Article 226 of the rights and duties conferred do emanate from a contract. The purposing proposition broadly stated has gained acceptance on the well-known theory that no such rule can issue if there is an adequate, alternative efficacious remedy available to the aggrieved party to obtain redress.

6. The learned Government Pleader furthers the argument by stating that; as the Madras State Raffle Rules, 1968, are purely in the nature of administrative instructions resulting in a contract or the setting forth of the terms of a bargain between the citizen and the State, a violation of any of the terms of such a bargain cannot be the subject-matter of a writ petition. Learned Counsel for the petitioner referred to the decision in D.F.O., South Kheri v. Ram Saneshi Singh (1970) 1 S.C.W.R. 194. That was a case where a dispute arose out of the terms of a contract with the Forest Department. Rejecting the argument that as the origin of the dispute was a contract, the remedy of the aggrieved person was only to institute an action in the civil Court, the Supreme Court said that as the order was passed by a public authority and as by that order the citizen was deprived of a valuable right, it was not possible to hold that merely because the source of the right which the citizen claimed was initially in a contract, for obtaining relief against any arbitrary or unlawful action on the part of the public authority he must resort to a suit and not to a petition by way of a writ. The Supreme Court, in such circumstances, held that the petition was maintainable, but added that where the action challenged was that of a public authority invested with statutory power a fortiori rules under Article 226 can issue even if the right to relief arose out of an alleged breach of contract. The learned Government Pleader distinguishes this case and says that what weighed with the Supreme Court in accepting a writ petition under Article 226 in that case was that the action challenged was that of a public authority invested with statutory power. As the Madras State Raffle Rules are not framed under any statute, the 1st respondent, though a public authority, cannot be said to be invested with statutory power, while implementing the same and therefore no writ should issue.

7. In a case where the State has undertaken certain projects for advancement of the general interests of its subjects and particularly to harness the savings of the people for financing developmental programme, it cannot while implementing the same, unjustly enrich itself to the detriment of the subject and circumvent, certain salient features of the law of contracts and therefore a rule of law. It would be undoubtedly harsh and indeed illegal to do so. If therefore, circumstances exist in a given situation that under the garb of implementing a contract, the State intends to transgress the ordinary limits of public policy and patently desires to unduly enrich itself, then courts are not helpless to extend its arms and act and avoid such a result by issuing rules under Article 226 of the Constitution. In a case where executive instructions were issued in matters which are governed by law, the Supreme Court laid a note of caution in such matters and said in Mannalal Jain v. State of Assam : [1962]3SCR936 .

We doubt the wisdom of issuing executive instructions in matters which are governed by provisions of law; even if it be considered necessary to issue instructions in such matter, the instructions cannot be so framed or utilised as to override the provisions of law. Such a method will destroy the very basis of the rule of law arid strike at the very root of orderly administration of law.

While adopting this ratio as well as the observations of the Supreme Court in D.F.O., South Kohcri v. Ram Saneshi Singh (1970) 1 S.C.W.R. 194 I may add that the rule of law or the provisions of law referred to in both the Supreme Court decisions, undoubtedly take into its fold not only constitutional law but also common law. Therefore, if by implementing the Raffle Rules any provisions of the Contract Act are infringed, even then is it open to the respondents to raise the plea that the writ is not maintainable? I am of the view, they cannot.

8. If the terms of a contract are so unconscionable and if one of the terms is in terrorem and without any consideration known to law and is therefore against public policy, then the party affected can approach this Court under Article 226 for relief without exhausting the long drawn civil process for enforcement of his rights. The sine qua non however, in such cases is that the term in the bargain should be unreasonable and against public policy. No doubt, the term 'public policy' is always an unsafe and treacherous ground for legal decision. But that would not affect the application of the doctrine of public policy to cases within its recognised bounds - see Pollock and Mulla's Indian Contract and Specific Relief Acts, Eighth Edition, page 17^. In such cases it for the Court, to find out whether the terms of the bargain which spring from a contract are fair and reasonable and the invariable test is 'whether its implementation would be prejudicial or not to the public interest, for it is on grounds of public policy alone that such contracts are either supported or avoided.

9. In the instant case the petitioner can have no quarrel with the first three limbs of Rule 37 of the Madras State Raffle Rules. As I have already indicated, the Government ensures quicker, speedier and effective administration and to achieve that object and to close certain affairs as expeditiously as possible, unclaimed prize amounts which are not sought for within three months from the date of draw are allowed to lapse. But the point is whether by such lapse provision could be made for the prize amount to be automatically forfeited to the Government. This clause is unconscionable as it is in the nature of a penalty and therefore in terrorem. Again, it is against public policy, because the person who was lucky to win the raffle and who was accalamed as the winner is deprived of his claim only because he was not diligent in seeking for his amount, in the hands of the State Government, held by them in a fiduciary capacity, within the time prescribed by the State. It is here public policy comes into play. The last limb or Rule 37 is highly unreasonable. In our country where illiteracy is still rampant, it is easy to expect an illiterate man to be lucky sometimes and if he is blessed with a prizeticket and if he is unable to process the same within the prescribed time, is it within the rule of law to prescribe a term in terrorem that his amount will not be paid to him because he came to the doors of the Director of State Raffle a few days later than what is prescribed under the rules? It is at that point that the rule of caution set out by the Supreme Court in Mannalal Jain v. State of Assam : [1962]3SCR936 that such a method will destroy the very basis of the rule of law and strike at the very root of orderly administration of law comes into play. Anantanarayanan, Officiating C.J., as he then was, in Lily White v. R. Muniswami (1965) 2 M.L.J. 7 : A.I.R. 1966 Mad. 16 said:

A term which is prima face opposed both to public policy and to the fundamental principles of the law of contract cannot be enforced by a Court merely because it is printed on the reverse of a bill and there is a tacit acceptance of the term when the bill was received by the customer.

Again, it cannot be pretended that the respondents have suffered damage by reason of the laches on the part of the petitioner. When no legal injury has resulted by reason of the delayed presentation of the prize ticket and when no loss or damage naturally arose as a result of the conduct of the petitioner, the forfeiture of the prize amount as stipulated in the fourth limb of Rule 37 is a inst the law of contracts and is there fore opposed to public policy.

10. Having regard to the fact that the forfeiture clause works undue hardship besides offending the salient feature of the law of contracts, namely, public policy, I am of the view that this writ petition is maintainable.

11. I tried in vain during the course of my hearing to see whether the parties could adjust and see that the prize amount is disbursed without a decision from this Court. As that was not possible I had to necessarily express my view that the attitude of the respondents in negativing the claim of the petitioner to receive his money in the hands of the State by virtue of his having won a prize in the raffle by placing reliance upon the fourth limb of Rule 37 is an unreasonable attitude and against public interest. Even on the facts I feel that I should exercise my discretion notwithstanding the availability of the alternative remedy and issue the writ. The petitioner sought the services of the 3rd respondent in time, but it was due to the banker's default that he could not secure the money. The petitioner cannot be blamed. He was following up the prescribed procedure, but unfortunately it was the 3rd respondent who was not diligent. This is also one of the circumstances which ought to have been taken into consideration by the respondents in dealing with the matter. I do not find in the order that the amount has been forfeited. But the present stand is such. This is where public interest has to be resorted to and citizen's rights protected. Matters would be quite different if a prize winner himself is in default and comes at a stage when he cannot enforce his right even in a civil Court against the State Government and where there has been an extinguishment of his right by his inaction. In such a case, no doubt, discretion which is vested in Courts to issue a writ under Article 226 should not be lightly exercised. But that is not the case here. It therefore follows that a public duty which is enjoined upon the respondents has not 'been performed, Rules in the nature of mandamus are issued if such public duties are avoided. The rule is therefore made absolute and the writ petition is allowed. But there will be no order as to costs.


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