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J.N. Gupta Vs. State of West Bengal and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberMatter No. 125 of 1958
Judge
Reported inAIR1959Cal141,1959CriLJ307
ActsWest Bengal Prize Competition Act, 1957 - Section 19; ;Constitution of India; ;Prize Competition Act, 1955 - Sections 4 and 5
AppellantJ.N. Gupta
RespondentState of West Bengal and anr.
Appellant AdvocateN.K. Sen, Adv.
Respondent AdvocateM.M. Sen, Adv.
DispositionApplication dismissed
Cases ReferredBoucher v. Rowsell
Excerpt:
- .....it is stated that through the said magazine the petitioner advertises, promotes and conducts prize competitions under the name and style of 'international word competition'. in fact, a copy of the magazine is annexed to the petition and marked 'a'. it appears that the magazine is wholly devoted to these prize competitions. it is stated in the petition that the competitions are of two kinds--one is the 'square word competition' and the other is the 'pair word competition'. in the 'square word competition', the word puzzle is arranged within a large square divided into and consisting of about 100 small squares. some of these squares are dead squares and mark the end or commencement of the word arranged horizontally or vertically. some of the squares are filled in, while others are.....
Judgment:
ORDER

D.N. Sinha, J.

1. The petitioner in this case is the sole proprietor, editor printer and publisher of a monthly magazine called 'Now India', published from Calcutta. It is stated that through the said magazine the petitioner advertises, promotes and conducts prize competitions under the name and style of 'International Word Competition'. In fact, a copy of the magazine is annexed to the petition and marked 'A'. It appears that the magazine is wholly devoted to these prize competitions. It is stated in the petition that the competitions are of two kinds--one is the 'Square Word Competition' and the other is the 'Pair Word Competition'. In the 'Square Word Competition', the word puzzle is arranged within a large square divided into and consisting of about 100 small squares. Some of these squares are dead squares and mark the end or commencement of the word arranged horizontally or vertically. Some of the squares are filled in, while others are left blank to be filled in by competitors. The clue is given at the side of the square and words are set out at the bottom of the square which shows that the solution will be either a single word or one of a pair of words set out. In the 'pair word competition' about 16 pairs of words are given and the competitors are required to find out the correct word or solution out of each such pair from the clues furnished. It is further stated that with regard to each competition there is an official key solution which is prepared beforehand and kept in a sealed cover, and is published after the closing date of the competition. It is further stated that the first prize of each competition is awarded to the competitor whose solution agrees wholly with the official solution, and failing this, to the competitor whose solution comes nearest to the official solution.

2. It is obvious from this description, that very little if any skill is required to answer the puzzles. The words are there in print, and since they contain single as well as double words, the permutations and combinations which can be made from them are almost infinite. One of such combination has been decided from beforehand and is called the 'Official key solution'. In order to succeed in the competition, the particular competitor would have to hit at this solution or come very near it. There can be very little doubt that the competitions are conducted in a manner in which success depends purely on chance and not on skill. In any event, very little skill is required. I may further mention that the competitions contain lurid head lines offering large monetary prizes, one of them being Rs. 20,000/-, another Rs. 30,000/-, the third Rs. 15,000/- and so on. The rules, however, as given at the end of the magazine contain a clause that the prize money was subject to variation proportionately on ground of collection and also on 'office,publicities and other expenses and legal dues'. Thus these head lines are entirely misleading. As a matter of fact, from the balance-sheet annexed to the petition it appears that the targets are never reached. These prize competitions, so far as the State of West Bengal is concerned, is subject to the provisions of the 'West Bengal Gambling & Prize Competition Act, 1957 being West Bengal Act XXXII of 1957 (hereinafter referred to as the 'Act'). The bill was assented to by the Governor on 7-3-1958 and was published in the Calcutta Gazette on 12-3-1958. It is stated to be an Act to consolidate and amend the law relating to the prevention of gambling and to provide for the control and regulation of prize competitions. Section 1 of the Act came into operation at once, and the remaining provisions were to come into force in such areas and on such dates as the State Government might, by notification in the officialgazette, appoint for the purpose. It is stated that y diverse notifications published from time to time, the whole of the Act, except Section 10 thereof, in so far as that section relates to birds, was brought into force in the whole of West Bengal, and certain draft rules called the West Bengal Prize Competition Rules, 1958, have also been published on 24-3-1958. These rules have been framed under the rule-making power conferred by Section 37 of the said Act. The Act is roughly divided into two parts. The first part is contained in Chapter II and deals with the prevention of gambling. In this part 'gaming or gambling' includes wagering or betting except wagering or betting upon a horse race, when such wagering or betting takes place in the manner stated, but does not include a lottery. The second part of the Act is contained in Chapter III and is heeded 'Control and Regulation of Prize Competitions'. In Section 19(d), 'Prize Competition' has been defined

'meaning any competition (whether called a cross-word prize competition, a missing-word prize competition, a picture prize competition or by any other name whatsoever, whether of a similar nature or not) in which prizes are offered for the solution of any puzzle based upon the building up, arrangement, combination or permutation, of letters, words or figures'.

By Section 21 it has been laid down that no person shall promote or conduct any prize competition in which the total value of prize or prizes (whether in cash or otherwise) to be offered in any month exceeds one thousand rupees or in which the number of entries exceeds two thousand. Section 22 lays down that subject to the provisions of Section 21, no person shall promote or conduct any prize competition in which the total value of the prize or prizes (whether in cash or otherwise) to be offered in any month does not exceed one thousand rupees unless he has obtained in this behalf a licence granted in accordance with the provisions of Chapter III of the Act and the Rules made thereunder. Section 26 lays down the penalties for promoting or conducting any prize competition in contravention of the provisions of the Act. According to the petitioner, the provisions of the Act are ultra vires and are violative of the petitioner's fundamental rights, placing unreasonable restrictions upon his right to carry on the trade or business of his choice. The Rules are also challenged as invalid for similar reasons. It is further stated that the provisions of the Act and the Rules are so rigorous that it is unremunerative for the petitioner to carry on business in terms thereof. In other words, if he is to follow the provisions of the Act and the Rules, it would no longer be lucrative for him to carry on the trade or business as he is doing now. It is for this purpose thathe has annexed his state of accounts and balance sheet showing that the margin left is not sufficient to induce the petitioner to carry on the business, if the provisions of the Act and the Rules have to be followed. The grounds on which the Act and the Rules have been challenged are shortly as follows:

3. Firstly, it is stated that the business that is being carried on by the petitioner by inviting members of the public to take part in the 'International Word Competition' as contained in the magazine 'New India', is and must be considered as a 'lottery'. A 'lottery' is expressly excluded from the definition of 'gaming or gambling' as defined in Section 2(1)(b) of the Act. Further, that it had been expressly excluded from the definition of the words 'gaming' or 'gambling' in the several repealed Acts which are mentioned in Section 18 of the said Act, namely the Howrah Offences Act, 1857, the Calcutta Police Act, 1866 and the Bengal Public Gambling Act, 1867. It is, therefore, argued that so far as lotteries are concerned, they have been expressly excluded from the scope of the said repealing Act and also of the repealed Acts. Further, lotteries organised by Government of India or the Government of a State are a legislative subject under item 40 of list I in the 7th Schedule to the Constitution of India. It is, therefore, argued that lotteries organised by citizens or other persons are not covered by the provisions of the said Act and also do not come within the scope of 'betting and gambling', being item No. 34 of List II in the 7th Schedule to the Constitution, but are a legislative subject not enumerated in the List II or in the List III and consequently the Parliament has exclusive power to make Jaws with respect to the same under Article 248 of the Constitution. It is next argued that in any event, it does not amount to gaming or gambling, because the competitions require skill for their solution and must be considered as innocent competitions.

4. In my opinion, the points that have been taken are without substance, and the matter is covered by authority. The first case to be considered is a Supreme Court decision State of Bombay v. R.M.D. Chamarbaugwala, : [1957]1SCR874 (A). That case arose under the Bombay Lotteries and Prize Competitions Control and Tax (Amendment) Act, 1952. The facts were shortly as follows: In 1946, the petitioner obtained a licence from the Collector of Bombay under the provisions of the Bombay Prize Competition Tax Act (Bombay Act XI of 1939) to conduct what was described as the 'Littlewood's Football Pool Competitions'. After 1948, the Bombay Provincial Government declined to renew the licence and there were litigations in respect thereof. In view of the delay and difficulty in obtaining a renewal of the licence in Bombay, one of the promoters shifted his activities to the State of Mysore, where he promoted a Company under the name or R.M.D.C. (Mysore) Ltd. This Company ran a weekly newspaper called the 'Sporting Star', printed and published at Bangalore, which conducted and ran a prize competition called the R.M.D.C. cross-words, for which entries were received from various parts of India including the State of Bombay. The 1939 Act in Bombay was replaced by the 'Bombay Lotteries & Prize Competition Control and Tax Act' (Bombay Act LIV of 1948). The 1939 Act as well as the 1948 Act, as originally enacted, did not apply to prize competitions contained in a newspaper printed and published outside the province of Bombay. So the prize competition called the R.M.D.C. Cross-words was not affected by either of the two Acts. In 1951, the State of Mysore enacted the Mysore Lotteries and Prize Competition Control and Tax Act, 1951. The Company thereupon applied for and obtained licences under that Act. Although the competitions were published from Bangalore in Mysore, a great deal of business was done within the State of Bombay. In November, 1952, the State of Bombay passed the 'Bombay Lotteries and Prize Competition Control and Tax (Amendment) Act', being Bombay Act XXX of 1952. This Act amended the provisions of the 1948 Act in several particulars, and enabled the Act to cover prize competitions contained in newspapers printed and published outside the State of Bombay. The Company found that if it had to pay taxes both in Mysore and at Bombay, then it would be unremunerative to run the prize competitions. It made an application before the Bombay High Court challenging the provisions of the Act. It was stated that the impugned Act was beyond the competence of the State Legislature and was not a legislation with respect to betting and gambling in Entry 34 of List II or with respect to entertainments and amusements under Entry 33 of List II or with respect to taxation on entertainments and amusements, betting and gambling under Entry 62 of the State List. It was stated that the legislation was with respect to trade and commerce and the tax levied by the impugned Act was a tax on-the trade or calling of conducting prize competitions and fell within Entry 60 of the State List. It was further stated that a Prize Competition was not a lottery and could not be regarded as gambling inasmuch as it involved an operation in which skill, knowledge and judgment had real and effective play. Also it was stated that in contravened Article 276(2) of the Constitution and was beyond the legislative competence of the Bombay Legislature^ and that the Act attempted to enforce extra-territorial jurisdiction and was consequently invalid. The-trial Judge held that the tax levied was not a tax on entertainments, amusements, betting or gambling but that it was a tax on the trade or calling of the respondents and fell under Entry 60 of the State List. He further held that the prize competition was not a lottery and could not be said to be either betting or gambling inasmuch as it was a competition in which skill, knowledge and judgment on the part of the competitors were essential ingredients. It was further held that the levy was void as offending under Arts. 19(1)(g), 276(2) and 301 of the Constitution. Thereupon, the State of Bombay preferred an appeal. The Court of Appeal upheld the decision of the trial Judge on grounds, somewhat different to that held by the learned trial Judge. It held that the topic of legislation was-gambling, and the Legislature of Bombay was competent to enact the Act under Entry 34 of the State List. It, however, held that the tax levied was not in fact a tax on gambling but it was a tax, which fell under Entry 60. The State of Bombay thereupon appealed to the Supreme Court and the-Supreme Court allowed the appeal and the matter was dealt with in an exhaustive judgment delivered by Das C.J. The learned Chief Justice held that such competitions may consist of legitimate prize competitions in winch individual skill is the major requirement, but there may be illegitimate prize-competitions, and the definition of 'prize competition' as given in the Bombay Act, comprised of prize competitions which are of the nature of a lottery in a wider sense, that is to say, of the nature of gambling and that the legislation came properly under Entry 34 in List II in the seventh schedule of the Constitution. It was further held that the prize competitions being of a gambling nature, they could not be regarded as trade or commerce and no relief could be claimed under Article 19(1)(g) of the Constitution, nor was it protected by Article 301 of the Constitution, because trade and commerce which are mentioned in and protected by,the Constitution, are activities which could be regarded as lawful trading activities. The learned Chief Justice, inter alia, said as follows:

'The newspaper 'Sporting Star' printed and published in Bangalore is widely circulated in the State of Bombay. The petitioners have set up collection depots within the State to receive entry forms and the fees. They have appointed local collectors. Besides the circulation of the copies of the 'Sporting Star', the petitioners print over 40,000 extra coupons for distribution which no doubt are available from their local collectors. The most important circumstance in these competitions is the alluring invitation to participate in the competition where very large prizes amounting to thousands of rupees and sometimes running into a lakh of rupees may be won at and for a paltry entrance fee of say 4 annas per entry. These advertisements reach a large number of people resident within the State. The gamblers, euphemistically called the competitors, fill up the entry forms and either leave it along with the entry fees at the collection depots set up in the State of Bombay or send the same by post from Bombay. All the activities that the gambler is ordinarily expected to undertake take place, mostly if not entirely, in the State of Bombay and after sending the entry forms and the fees the gamblers hold their soul in patience in great expectations that fortune may smile on them.'

5. Mr. Sen, appearing on behalf of the petitioner, has argued that the present case should be distinguished from the Bombay case, because there is a substantial difference in the wordings of the relative Acts. For example, he says that Section 3 of the Bombay Act declares that, subject to the provisions of the Act, all lotteries and prize competitions were unlawful. Thus, there is a clear indication that the Legislature regarded lotteries and prize competitions to be on the same footing and declared both of them to be unlawful, subject, of course, to the provisions of the Act. He says that in the West Bengal Act there is no such provision; on the contrary, lotteries have been expressly excluded from the definition of gaming or gambling. Therefore, according to him, the position is entirely different under the West Bengal Act.

6. This brings us to the consideration of the second case which has been cited, being also a decision of the Supreme Court, R.M.D. Chamarbaugwala v. Union of India, : [1957]1SCR930 (B). As a matter of fact, this case was heard along with the Bombay case cited above and the decision may be said to be almost contemporaneous. In this case, what was considered was a Central Act, called the 'Prize Competitions Act (Act 42 of 1955)'. Pursuant to resolutions passed by the Legislatures of several States under Article 252(1) of the Constitution, Parliament enacted this Act. The State of West Bengal could, by passing a proper resolution, adopt the Central Act. But instead of doing so, it has enacted its own Act. The Prize Competitions Act of 1955, in so far as prize competitions are concerned, is practically in identical terms with the West Bengal Act. It, however, does not contain a part corresponding to the first part of the West Bengal Gambling, and Prize Competitions Act of 1957, but is confined to regulating prize competition. The definition of 'prize competitions' is the same as in the West Bengal Act. As I have said above, the other provisions regulating prize competitions are similar to, if not identical with, the West Bengal Act. It was this Central Act which was challenged in the Supreme Court case mentioned above. The view adumbrated in the first case cited above under the Bombay Act was repeated in this decision. In fact, it was not seriously contended that prize competitions werenot gambling, but what was argued was that in the definition of 'prize competitions', as given in the Central Act, even innocent prize competitions, that is to say, competitions in which a substantial degree of skill was required, were also included. It was held that the competitions which were sought to be controlled and regulated by the Act were only those competitions in which success did not depend on any substantial degree of skill. But assuming that the definition of 'prize competitions' was wide enough to include also competitions involving skill to a substantial degree, Sections 4 and 5 of the Act and Rules 11 and 12 framed under it were severable and did not render those provisions invalid altogether. Thus, in the case of an Act containing provisions identical with the West Bengal Act, it has been held by the Supreme Court that prize competitions which do not require a substantial amount of skill, were to be considered as gambling transactions and may be struck down and come within the regulating powers assumed by the State under the relative Acts.

7. Mr. Sen has referred to an English case, Coles v. Oldhams Press Ltd.. (1936) 1KB 416 (C). In that case, a newspaper published an advertisement of a crossword puzzle competition, with a money prize, for which a competitor entered by posting his solution along with a specified fee to the office of the newspaper. The puzzle was so constructed that in a number of instances a clue could be satisfied by only one word having no alternative, while in other instances the clue suggested two or more alternative words which might not at all be equally appropriate. The competition editor had prepared beforehand a test solution of the puzzle, and the prize was to be awarded to the competitor whose solution happened to correspond most closely to that of the competition editor. It was held that the proprietors and the printer of the newspaper were guilty of the offence of printing and publishing an advertisement of a 'lottery' under the Betting and Lotteries Act, 1934. Lort Hewart C. J. said as follows:

'That being the scheme as advertised in the newspaper, the first summons charges the advertisement of a certain lottery. What is a lottery? A lottery is a distribution of prizes by lot or chance. The charge here is that the defendants on the day in question advertised a distribution of prizes by chance. What else was it? I have read the scheme again and again and there is nothing in it to suggest, much less to undertake, that the solution adjudged to be correct, will be intrinsically, or will even be thought to be, the best solution. There is nothing to suggest, much less to undertake, that the competition editor will seek to find or to prescribe the best solution. There is no clue at all to the qualifications of the editor, or to the frame of mind in which he will act, or has already acted at the material time. There is no clue to the criterion, if any, by reference to which the standard has been fixed. The solution which is to be adjudged to be correct is not to be picked out of the efforts of the competitors in competition with each other. It is to be the solution that is found, on examination, to coincide most nearly with a set of words chosen beforehand by somebody not known, by a method, if any, not stated, that person being perfectly at liberty to act in an arbitrary, capricious or even mischievous spirit. In other words, the competitors are invited to pay a certain number of pence to have the opportunity of taking blind shots at a hidden target.'

8. Another English case was cited, Boucher v. Rowsell, 1947-1 All ER 870 (D). That was a case of a football pool, and it was held that the scheme was a lottery and came within the Betting andLotteries Act, 1934. The facts were, of course, slightly different, inasmuch as, in that case, people were invited to forecast as to which of any combination of any three football teams would score the highest number of goals in a week.

9. There might be some substance in Mr. Sen's argument that a prize competition in which no skill was required could be described as a lottery. As a matter of fact, in the first Supreme Court case, mentioned above, dealing with the Bombay Act, it was stated that the Legislature had regarded lotteries and prize competitions as on the .same footing. I do not see what difference it makes, even if that were so. It is true that in the West Bengal Act we have two distinct parts, one dealing with the control of gambling, and the other with the control and regulation of prize competitions. It is also correct that, so far as gaining and gambling are concerned, under the first part of the statute, lotteries are excepted. But I do not see why a prize competition, even if it be in the nature of a lottery, cannot be dealt with in a separate part of the Act. All that the definition in Section 2 states is that the words 'gaming or gambling', as used in Chapter II would be interpreted in a certain manner. But that does not control the provisions of Chapter III. In fact, Section 2 commences by expressly stating that the definitions contained therein were to be confined to Chapter II. Those definitions therefore, do not control the definitions contained in Chapter III, and certainly not the definition of 'prize competition'. The whole question is, whether 'prize competition', as a definition in Section 19(d) and as contained in Chapter III, can be said to come within item 34 in list 2 of the 7th schedule of the Constitution. That item deals with 'betting and gambling.' As I pointed out above, it has now been conclusively held by the two Supreme Court decisions, cited above, that prize competitions which do not require substantial skill ought to be considered as gambling transactions, and therefore they come within the purview of item 34 in list II of the 7th schedule of the Constitution. Any doubt that might have existed if the matter rested only on the Bombay Act, has been dispelled by the second decision, which is based on the Central Act, which, as I have said above, is identical with the West Bengal Act, so far as prize competitions are concerned.

9A. It remains, therefore, to consider the actual competitions with which we are concerned in the present case. I have already indicated the nature of the prize competitions, and how the matter stands, and how the clue words and alternative words are set out. The solutions of the clues are contained in the fixed words and alternative words. Thus, in order to solve the clues, it would not be necessary to expend any skill at all. Where there are alternative words, it is obvious that there is no question of expending skill in choosing one or the other, because both words answer the clue and are correct solutions. But the whole matter stands on the permutation and combination of these words which are to be entered in the entry form and the squares contained therein. These words have almost an infinite number of permutations and combinations. In any event, the possible combinations would be a very high figure. Out of all these combinations, only one has been selected arbitrarily as the official key solution. It is, therefore, entirely a matter of chance, to hit upon a solution which would 'be identical with the official key solution, or come anywhere near it. I do not think that a more illustrative example can be cited of the state of affairs mentioned by Lord Hewart, C. J., namely, the opportunity of taking blind shots at a hidden target.

10. In my opinion, regard being had to the tests laid down and the principles adumbrated in the Supreme Court decisions cited above, it is obvious that the prize competitions carried on by the petitioner in his magazine 'New India' are of a nature which has been characterised as 'gambling', and come within the mischief of the West Bengal Act, and the rules thereunder, which are perfectly valid, the local Legislature having power under item 34 of list II of the 7th schedule of the Constitution, to promulgate such a law. The law being valid, the rules are unexceptionable.

11. That being so, the provisions of the Act and the rules apply to the petitioner, and if he wishes to carry on his business, he must conform to the provisions thereof. No grounds have been shown for interference by this Court.

12. The application must be dismissed. Therule is discharged. Interim orders, if any, are vacated. There will be no order as to costs.


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