Kerala High Court
Play Games 24 X 7 Private Limited vs State Of Kerala on 27 September, 2021
W.P.(C)Nos.7785, 7851,
7853 & 8440 of 2021 1
"CR"
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE T.R.RAVI
MONDAY, THE 27TH DAY OF SEPTEMBER 2021 / 5TH ASWINA, 1943
WP(C) NO. 7785 OF 2021
PETITIONERS:
1 HEAD DIGITAL WORKS PRIVATE LIMITED
(FORMERLY KNOWN AS HEAD INFOTECH (INDIA) PVT. LTD.), REGD.
OFFICE AT OFFICE NO. 2, 1ST FLOOR, ASHI 19,
ROUSE AVENUE, INSTITUTIONAL AREA, NEW DELHI-110 002
CORP OFF. AT
8TH FLOOR, ATRIA BLOCK, THE -V, PLOT NO. 17,
SOFTWARE UNITS LAYOUT, MADHAPUR, HYDERABAD,
TELENGANA- 500 081, REPRESENTED BY ITS MANAGING DIRECTOR,
MR. DEEPAK GULLAPALLI.
2 DEEPAK GULLAPALLI,
AGED 39 YEARS,S/O. SHRI. RAM PRASAD, OCC. MANAGING
DIRECTOR, HEAD DIGITAL WORKS PRIVATE LIMITED, (FORMERLY
KNOWN AS HEAD INFOTECH (INDIA) PVT. LTD), 8TH FLOOR, ATRIA
BLOCK, THE -V, PLOT NO. 17, SOFTWARE UNITS LAYOUT,
MADHPUR, HYDERABAD, TELENGANA-500 081
BY ADVS.SRI MUKUL ROHATGI (SR.)
SRI S.SREEKUMAR (SR.)
SRI JOSEPH KODIANTHARA (SR.)
SRI THOMAS P.KURUVILLA, SRI.P.MARTIN JOSE,
SRI.P.PRIJITH, SRI DURGA GANDHAM BOSE
RESPONDENTS:
1 STATE OF KERALA
REPRESENTED BY THE CHIEF SECRETARY,
GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001
2 THE SECRETARY,
DEPARTMENT OF HOME, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695 001
3 THE SECRETARY,
DEPARTMENT OF LAW, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695 001
BY ADV SHRI.N.MANOJ KUMAR, STATE ATTORNEY
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
30.07.2021, ALONG WITH WP(C).7851/2021, 7853/2021 & 8440/2021, THE
COURT ON 27.09.2021 DELIVERED THE FOLLOWING:
W.P.(C)Nos.7785, 7851,
7853 & 8440 of 2021 2
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE T.R.RAVI
MONDAY, THE 27TH DAY OF SEPTEMBER 2021 / 5TH ASWINA, 1943
WP(C) NO. 7851 OF 2021
PETITIONERS:
1 JUNGLEE GAMES INDIA PRIVATE LIMITED
REGD OFFICE AT 5TH FLOOR, TOWER A, BUILDING 10
DLF CYBER CITY,DLF PHASE, SECTOR 24, GURUGRAM,
HARYANA 122022, REPRESENTED BY ITS AUTHORIZED,
REPRESENTATIVE MR.RAHUL NANDAKUMAR BHARDWAJ
2 RAHUL NANDKUMAR BHARDWAJ
AGED 37 YEARS
S/O. SHRI.NAND KUMAR BHARDWAJ, MANAGING DIRECTOR,
JUNGLEE GAMES INDIA PRIVATE LIMITED, HAVING OFFICE
AT 5TH FLOOR, TOWER A, BUILDING 10 DLF CYBER CITY,
DLF PHASE, SECTOR 24, GURUGRAM, HARYANA 122022,
BY ADVS.SRI.JOSEPH KODIANTHARA (SR.)
SRI.P.PRIJITH
SRI.P.MARTIN JOSE
SRI.THOMAS P.KURUVILLA
RESPONDENTS:
1 STATE OF KERALA
REPRESENTED BY THE CHIEF SECRETARY, GOVERNMENT
SECRETARIAT, THIRUVANANTHAPURAM-695001
2 THE SECRETARY,
DEPARTMENT OF HOME, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695 001
3 THE SECRETARY
DEPARTMENT OF LAW, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695 001
BY ADV SHRI.N.MANOJ KUMAR, STATE ATTORNEY
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
30.07.2021, ALONG WITH WP(C).7785/2021, 7851/2021 & 8440/2021,
THE COURT ON 27.09.2021 DELIVERED THE FOLLOWING:
W.P.(C)Nos.7785, 7851,
7853 & 8440 of 2021 3
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE T.R.RAVI
MONDAY, THE 27TH DAY OF SEPTEMBER 2021 / 5TH ASWINA, 1943
WP(C) NO. 7853 OF 2021
PETITIONER/S:
1 PLAY GAMES 24 X 7 PRIVATE LIMITED
REGD. OFFICE AT 5TH FLOOR, CENTRAL WING (B),
TOWER 4, NESCO IT PARK, NESCO CENTRE,
WESTERN EXPRESS HIGHWAY, GOREGAON (E),
MUMBAI-400 063. REPRESENTED BY ITS AUTHORIZED
REPRESENTATIVE MR.MALAY KUMAR SHUKLA.
2 BHAVIN PANDYA,
AGED ABOUT 40 YEARS
S/O.SHRI.KAUSHIK PANDYA, R/O.B 2205, OBEROI
EXQUSITE, ABA KARMAKAR ROAD, GOREGAON(E0,
MUMBAI-400 063.
BY ADVS.
SRI S.SREEKUMAR (SR.)
SRI.P.MARTIN JOSE
SRI.P.PRIJITH
SRI.THOMAS P.KURUVILLA
RESPONDENTS:
1 STATE OF KERALA
REPRESENTED BY THE CHIEF SECRETARY,
GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.
2 THE SECRETARY, DEPARTMENT OF HOME,
GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.
3 THE SECRETARY, DEPARTMENT OF LAW,
GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.
BY ADV SHRI.N.MANOJ KUMAR, STATE ATTORNEY
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
30.07.2021, ALONG WITH WP(C).7785/2021, 7851/2021 & 8440/2021,
THE COURT ON 27.09.2021 DELIVERED THE FOLLOWING:
W.P.(C)Nos.7785, 7851,
7853 & 8440 of 2021 4
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE T.R.RAVI
MONDAY, THE 27TH DAY OF SEPTEMBER 2021 / 5TH ASWINA, 1943
WP(C) NO. 8440 OF 2021
PETITIONER:
GAMESKRAFT TECHNOLOGIES PRIVATE LIMITED
1ST AND 2ND FLOOR, IBIS HOTEL, 26/1 HOSUR ROAD,
BOMMANAHALLI, BANGALORE-560068, REPRESENTED BY ITS
DIRECTOR, MR. DEEPAK SINGH.
BY ADVS.
SRI SANTHOSH MATHEW
SRI.VIJAY V. PAUL
SHRI.ANANDAPADMANABHAN UNNIKRISHNAN
SHRI.GOKUL ASOK
SHRI SUHAAN MUKERJI
SHRI VARUN MATHEW
SRI NIKHIL PARIKSHITH
RESPONDENT:
STATE OF KERALA
REPRESENTED BY ITS SECRETARY, HOME DEPARTMENT,
GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.
BY ADV SHRI.N.MANOJ KUMAR, STATE ATTORNEY
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
30.07.2021, ALONG WITH WP(C).7851/2021, 7853/2021& 7785/2021,
THE COURT ON 27.09.2021 DELIVERED THE FOLLOWING:
W.P.(C)Nos.7785, 7851,
7853 & 8440 of 2021 5
"CR"
T.R.RAVI, J.
-----------------------------
W.P.(C)Nos.7785, 7851,
7853 & 8440 of 2021
-------------------------------
Dated this the 27th day of September, 2021
JUDGMENT
The question raised in these writ petitions is regarding the
power of the Government to include the game "Online Rummy played
for stakes" within the purview of the Kerala Gaming Act, 1960
(hereinafter referred to as the Act or the Kerala Act). The petitioners
are all companies which are engaged in the business of developing
and offering online games of skill in India and they are aggrieved by
the notification issued by the Government, amending the exemption
notification issued on 30.09.1976 under Section 14A of the Act. The
reference to the exhibits is as they are produced in W.P.(C)No.7785
of 2021 which is treated as the lead case.
STATUTORY PROVISIONS:-
2. The State of Kerala which was formed by including areas
which were under the erstwhile Governments of Travancore, Cochin
and Malabar Presidency, was governed with respect to Gambling, by
the Travancore Public Gambling Act, III of 1071ME (corresponding to
W.P.(C)Nos.7785, 7851,
1896), The Cochin Public Gambling Act, IV of 1082 ME
(corresponding to 1907) and the Madras Gaming Act, 1930 (III of
1930). After the formation of the State of Kerala, the Kerala Gaming
Act, 1960 was enacted and the aforesaid enactments were repealed
(to the extent it applied to the Malabar District, in the case of the
Madras Act). The Kerala Gaming Act, 1960 was enacted to make
better provision for the punishment of gaming and the keeping of
common gaming houses in the State of Kerala. As per Section
2(1), "common gaming house" means any house, room, tent,
enclosure, vehicle, vessel or any place whatsoever in which cards,
dice, tables or other instruments of gaming are kept or used for the
profit or gain of the person owning, occupying, using or keeping such
house, room, tent enclosure, vehicle, vessel or place whether by way
of charge for the use of instruments of gaming or of the house,
room, tent, enclosure, vehicle, vessel or place or otherwise
howsoever; and include 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. Section 2(2) defines "gaming" to
include wagering or betting. Section 2(2) says that wagering or
betting shall be deemed to comprise the collection or soliciting of
bets, the receipt or distribution of winnings or prizes in money or
W.P.(C)Nos.7785, 7851,
otherwise, in respect of any wager or bet, or any act which is
intended to aid or facilitate wagering or betting or such collection,
soliciting, receipt or distribution.
3. The relevant portions of Section 3, and Sections 14 and
14A of the Act, which have a bearing on the issue to be decided read
as follows;
"Section 3: Whoever-
(a) being the owner or occupier or having the use of
any house, room, tent, enclosure, vehicle, vessel or place,
opens, keeps or uses the same for the purpose of
gaming-
(i) on a horse-race, or
(ii) on the market price of cotton, bullion or other
commodity on the digits of the number used in stating the
amount of such variation, or
(iii) on the amount or variation in the market price of
any such commodity or in the digits of the number used
in stating the amount of such variation, or
(iv) on the market price of any stock or share or on the
digits of the number used in stating such price, or
(v) on the number of registration or on the digits of
the number of registration of any motor vehicle using a
public place, or
(vi) on any transaction or scheme of wagering or
betting in which the receipt or distribution of winnings or
prizes in money or otherwise is made to depend on
chance, or
W.P.(C)Nos.7785, 7851,
(b) xxxxxxxxx xxxxxxxxx xxxxxxxxx
(c) xxxxxxxxx xxxxxxxxx xxxxxxxxx
(d) xxxxxxxxx xxxxxxxxx xxxxxxxxx
shall be punishable with imprisonment which may
extend to one year, or with fine which may extend to
one thousand rupees, or both.
Provided xxxxxxxx xxxxxxxxxxx "
Section 14. Act not to apply to certain games.-
Nothing in the foregoing provisions of this Act shall be
held to apply to any game of mere skill wherever played.
Section 14A. Exemptions.-The Government may, if
they are satisfied that in any game the element of skill is
more predominant than the element of chance, by
notification in the Gazette, exempt such game from all or
any of the provisions of this Act, subject to such
restrictions and conditions as may be specified in the
notification".
4. Section 14A was introduced by Act 24 of 1973 by way of
amendment. Subsequent to the introduction of Section 14A, the
Government of Kerala issued Ext.P7 notification dated 30.09.1976,
which reads thus:
"The Government of Kerala being satisfied that the
element of skill is more predominant than the element of
chance in the following games, hereby exempt those
games from all the provisions of the said Act subject to
the condition that no side betting shall be allowed in
such games.
W.P.(C)Nos.7785, 7851,
1. Rummy
2. Card games - 28, 56, 112
3. dart throw
4. ball throw
5. cup and coin; and
6. shooting contests"
GRIEVANCE OF THE PETITIONERS
5. As per Ext.P7 notification, the game of rummy was taken
out of the purview of the Act. The notification does not speak about
stakes and does not distinguish between Rummy played with stakes
and without stakes. The only restriction in the notification is that no
side betting shall be allowed. The Legislature, either at the time of
introducing the Act or when Ext.P7 was issued, was not
contemplating the growth of technology which would create
possibilities of several games in the online platform other than games
played in gaming house. Confronted with the games that were
introduced in the online platform, the Government of Kerala issued
Ext.P6 notification on 23.02.2021 whereby Ext.P7 notification was
sought to be amended by inserting the words "except "Online
Rummy" when played for stakes" after the words "rummy" shown
under Sl.No.(1) in Ext.P7. It is aggrieved by this notification that the
petitioners have approached this Court.
W.P.(C)Nos.7785, 7851,
ARGUMENTS IN SUPPORT OF PETITIONERS' CAUSE
6. Sri Mukul Rohatgi, learned Senior Advocate appearing on
instructions from Sri P.Martin Jose, contends that Section 14A of the
Gaming Act is made to grant exemption and not to take away an
exemption which is already granted. He submits that Ext.P7
notification, while exempting rummy from the provisions of the
Gaming Act, only prohibited side betting and did not say anything
about playing for stakes. The Senior Counsel points out that while
rummy played with stakes would be valid going by the contents of
the notification, "Online Rummy" which is in no way different from
the game rummy when played for stakes, would come within the
purview of the Gaming Act as per Ext.P6 notification. This according
to the learned Senior Counsel is without any rationale and arbitrary.
The learned Senior Counsel referred to the contentions of the State
in the counter affidavit and submitted that what is stated is more in
the nature of a moral lecture than a legal contention. It is submitted
that the contention that an "Online Rummy" game is addictive does
not by itself make it a game of chance so as to come under the
purview of the Gaming Act. In that context, it is submitted that even
lotteries are very addictive, but it is promoted by the State itself. It
is further submitted that the apprehensions regarding the children
W.P.(C)Nos.7785, 7851,
playing the game is more of a parental problem rather than a legal
issue. Referring to paragraph 21 of the counter affidavit, it is
submitted that the statement that rummy played for stakes is
punishable is without any basis whatsoever, and is without any
statutory backing.
7. The learned Senior Counsel submitted that Section 14 of
the Act specifically excludes games of skill. It is submitted that 'skill'
means 'predominant skill' since every game involves an element of
chance. According to him, the game can become a gamble only if
the chance is predominant and based on that bets are made. It is
submitted that rummy played in club on a table is a permitted
activity and "Online Rummy" played using the platform provided by
the petitioners is only in the nature of a virtual court and does not in
any manner differ from the game rummy which is played in a club
house. Reference is made to Section 11 of the Act which says that it
shall not be necessary, in order to convict any person of keeping a
common gaming house, or of being concerned in the management of
any common gaming house, to prove that any person found playing
at any game was playing for any money, wager or stake; and it is
contended that as far as games which come within the purview of the
Act are concerned, stakes or no stakes is immaterial. According to
W.P.(C)Nos.7785, 7851,
him, rummy which is a game of skill, is taken out of the purview of
the Act by operation of Section 14 of the Act. The fallacy of the
notification Ext.P6 according to the learned Senior Counsel is that by
mere inclusion of stakes, the game of Online rummy is converted into
a game of chance. The learned Senior Counsel submits that stake
has nothing to do with either chance or skill. The Senior Counsel
drew support from the decisions of the Hon'ble Supreme Court in
Dr.K.R.Lakshmanan v. State of Tamil Nadu & Anr. reported in
[(1996) 2 SCC 226], and State of Andhra Pradesh v.
K.Satyanarayana reported in [AIR 1968 SC 825] which will be
considered later in the judgment.
8. Sri Joseph Kodianthara, Senior Advocate, instructed by
Sri Sharad Joseph Kodianthara, appearing for the petitioners in the
connected writ petition submits that Merriam Webster's dictionary
(Web Version) defines "side betting", but the same does not include
playing for stakes. Reference is made to the judgments of the
Madhya Pradesh High Court in Harbanslal Premnath v. State of
M.P & Ors. reported in MANU/MP/0278/1980 at para.11,
Superintendent and Remembrancer of Legal Affairs v.
L.E.Renny & Ors. reported in [AIR 1936 Calcutta 184] and
H.S.Online Marketing Pvt. Ltd. v. State of Gujarat & Ors.
W.P.(C)Nos.7785, 7851,
reported in MANU/GJ/0601/2013 to buttress the argument
regarding side betting. The learned Senior Counsel also contended
that Ext.P6 amounts to a violation of the fundamental right to do
business and is liable to be struck down as arbitrary and
unreasonable. It is the contention that what is stated in the
notification is not a restriction, but a total prohibition of the business.
The Senior Counsel also pointed out the manner in which the Online
Rummy game was played which has been detailed in the writ petition
and contended that for all practical purposes, the manner of playing
the game is the same as in playing rummy across a table. It is
submitted that the factors like considerable skill in holding and
discarding cards, memorising the fall of cards, skill involved in
building up of Rummy are as much present in playing Online Rummy
as in the case of Rummy played over a table, which are factors that
were taken into account by the Hon'ble Supreme Court in the
judgment in Satyanarayana (supra).
9. Sri S.Sreekumar, Senior Advocate adopted the arguments
of the learned Senior Counsel Sri Rohatgi and Sri Joseph Kodianthara
and submitted that in paragraphs 18 and 19 of the judgment in
K.R.Lakshmanan (supra) it has specifically been laid down that
rummy is a game of skill. The learned Senior Counsel referred to
W.P.(C)Nos.7785, 7851,
Ext.P7 and submitted that many of the games included there are
actually games of skill and not of chance.
10. Sri Santhosh Mathew appearing for the petitioner in W.P.
(C)No.8440/2021 submitted that Act itself will not apply to the game
of rummy, since rummy is a game of skill. According to him, no
notification itself was required under Section 14A for the purpose of
excluding rummy from the purview of the Act, since the game is
covered by Section 14 of the Act. Reference is made to the judgment
in Satyanarayana (supra) at paragraphs 3, 5 and 12 to say that
the game of rummy is not a game of chance.
11. The counsel referred to Ext.P3 judgment of a Division
Bench of this Court in W.P.(C)No.2096/2021, which was filed in
public interest. In paragraph 8 of the judgment this Court observed
that from the statement made on behalf of the Government it is
revealed that the existing law, does not bring online gambling or
online betting, within the purview of the Kerala Gaming Act, 1960,
and inclusion of the same in the existing enactment is a legislative
function. After placing on record the submission on behalf of the
respondents, this Court directed to take appropriate decision on the
aspect of inclusion of online gambling and online betting, within the
W.P.(C)Nos.7785, 7851,
purview of the Kerala Gaming Act, 1960, within a period of two
weeks. According to the counsel, this judgment was the reason why
the notification Ext.P6 was issued by the Government. A contention
has been taken that even though it was conceded that what was
required was a legislative function, what is done now is an executive
function. The counsel further points out that the judgments of the
Hon'ble Supreme Court in K.R.Lakshmanan (supra), M/s
Executive Club v. State of A.P. reported in [1998 SCC OnLine AP
415], D.Krishnakumar & another v. State of A.P. reported in
[2002 SCC OnLine AP 810] and Ramachandran K. v. Circle
Inspector of Police, Perinthalmanna reported in [2019 SCC
OnLine Kerala 6788] also support the contention that "Online
Rummy" cannot be treated as a game of chance and brought within
the purview of the Act. To contend that executive instructions cannot
take the place of law, reference is made to the decisions in
Bhishambar Dayal Chandra Mohan & Ors v. State of U.P. &
Ors. reported in [(1982) 1 SCC 39] at paragraph 41, Bijoe
Emmanuel & Ors. v. State of Kerala & Ors reported in [1986 3
SCC 615] at paragraphs 16 and 17 and K.S.Puttaswamy & Anr.
(Aadhaar) v. Union of India & Anr. reported in [(2019) 1 SCC
1].
W.P.(C)Nos.7785, 7851,
12. Sri N.Manoj Kumar, State Attorney appearing on behalf of
the Government submitted that gambling and betting come under
Entry 34 in List II and the State is empowered to legislate on the
same. According to him, "Online Rummy" is not a game
predominantly of skill and there is an element of cheating involved
and even the deal of cards is manipulated. Referring to the decision
in Ramesh Chandra Kachardas Porwal v. State of Maharashtra,
[(1981) 2 SCC 722], it is submitted that a prayer for a writ of
certiorari will not lie against a subordinate legislation and only a
declaration can be sought for. Reference is made to State of
Bombay v. R.M.D. Chamarbaugwala reported in [AIR 1957 SC
699], R.M.D. Chamarbaugwala v. Union of India reported in
[AIR 1957 SC 628], Satyanarayana (supra) and M.J.Sivani &
Ors. v. State of Karnataka & Ors. reported in [(1995) 6 SCC
289]. It is submitted that the notification does not violate either the
Parent Act or the plenary legislation nor is it against the Constitution
and hence there are no grounds available to challenge the same. It
is submitted that the Act came into force in 1960 and only Section 14
was then available. On 22.11.1967, the judgment in Satyanarayana
(supra) was delivered. The said decision was under the Andhra Act
where, only Section 14 was available and there was no provision like
W.P.(C)Nos.7785, 7851,
Section 14A at that point of time. It was in 1973 that Section 14A
was introduced. A contention is hence raised that the judgment in
Satyanarayana (supra) cannot be applied on all fours, since the
Hon'ble Supreme Court was not considering a case wherein the
enactment contained a provision in the lines of Section 14A.
Reference is also made to the decision in Shree Bhagwati Steel
Rolling Mills v. Commissioner of Central Excise & Anr. reported
in [(2016) 3 SCC 643].
ISSUES TO BE DECIDED
13. On the basis of the submissions made by the counsel on
either side, the following questions arise for consideration;
a) Is Rummy is a game of mere skill, so as to
take it out of the purview of the Act, as provided in
Section 14 of the Act ?
b) Is Rummy a game in which the element of
skill is more predominant than the element of chance,
and can be exempted from the provisions of the Act
only by means of a notification ?
c) Whether Rummy when played for stakes,
becomes a game neither covered by Section 14 nor
by a notification issued under Section 14A ?
W.P.(C)Nos.7785, 7851,
d) If Rummy is a game of skill under Section
14, can Online Rummy also be stated to be a game of
skill and not of chance ?
e) Does inclusion of stakes for playing Online
Rummy, make any difference to the nature of the
game as a game of skill ?
f) Does the power available to the State to issue
a notification under Section 14A to exempt a game,
clothe it with a power to notify a game which is a
game of mere skill under Section 14 ?
g) Whether a writ of certiorari to quash Ext.P6
notification is maintainable ?
h) Whether the petitioners are entitled to a
declaration that Ext.P6 notification is arbitrary, illegal
and in violation of Articles 14 and 19(1)(g) of the
Constitution of India ?
CONSIDERATION
14. A game of rummy with a difference. The Counsel have
placed all their cards on the table. My effort is to arrange them in
sets and to declare. If I arrange the cards skillfully and declare, then
"Rummy is a game of MERE skill". If I arrange the cards without any
W.P.(C)Nos.7785, 7851,
skill and still manage to declare, then "Rummy is a game of chance".
Since much water has flown below the bridge, the only skill possibly
required is to understand the precedents having a binding force. And
since the cards were placed before me online, this could possibly be
named Online Rummy.
15. In the two Chamarbaugwala cases (supra) decided in
the year 1957, the Apex Court was considering whether the declining
the renewal of licence to conduct a prize competition, which is
contended to be a business, would amount to violation of the rights
under Article 19(1)(g) of the Constitution. The Court held that a
competition in order to avoid the stigma of gambling must depend to
a substantial degree upon the exercise of skill. The Court held that
Article 19(1)(g) only protects those activities which can be regarded
as lawful trading activities and that gambling is not a trade but res
extra commercium. It was held that the enactment by which the
control and regulation of the prize competition can only have
application with regard to competitions in which success does
not depend on any substantial degree of skill.
16. Ten years later, the question whether the game 'Rummy' is
a game of chance or of skill, came to be considered by the Hon'ble
Supreme Court, in Satyanarayana (supra). The question that was
W.P.(C)Nos.7785, 7851,
considered was whether the premises of a club known as the
"Crescent Recreation Club" situated in Secunderabad was being used
as a common gambling house and whether the persons who were
found to be playing the game Rummy for stakes, at the time of a raid
by the police could be said to be gambling therein. The Magistrate
convicted the accused. On a revision petition filed by the accused,
the Sessions Court referred the issue to the High Court under Section
438 of the Code of Criminal Procedure, recommending the quashing
of the conviction and the setting aside of the sentences. A learned
Single Judge of the High Court accepted the recommendation,
against which the State had approached the Hon'ble Supreme Court.
The statutory provision which was considered by the Apex Court was
Section 14 of the Public Gambling Act, 1867, which is similar to
Section 14 of the Kerala Act. In paragraph 12 of the judgment, the
Hon'ble Supreme Court held as follows:
"12. We are also not satisfied that the protection of Section 14
is not available in this case. The game of rummy is not a game
entirely of chance like the "three-card" game mentioned in the
Madras case to which we were referred. The "three card" game
which goes under different names such as "flush", "brag" etc. is
a game of pure chance. Rummy, on the other hand, requires
certain amount of skill because the fall of the cards has to be
memorised and the building up of Rummy requires considerable
W.P.(C)Nos.7785, 7851,
skill in holding and discarding cards. We cannot, therefore, say
that the game of rummy is a game of entire chance. 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. In fact in all games in which cards are shuffled
and dealt out, there is an element of chance, because the
distribution of the cards is not according to any set pattern but
is dependent upon how the cards find their place in the shuffled
pack. From this alone it cannot be said that Rummy is a game
of chance and there is no skill involved in it. Of course, if there
is evidence of gambling in some other way or that the owner of
the house or the club is making a profit or gain from the game
of rummy or any other game played for stakes, the offence
may be brought home. In this case, these elements are missing
and therefore we think that the High Court was right in
accepting the reference it did."
The Hon'ble Supreme Court in categoric terms stated that the Court
is not satisfied that the protection of Section 14 is not available in the
case. The use of the double negative can only mean that the
protection of Section 14 is available in the case of a game of Rummy.
17. The Hon'ble Supreme Court had occasion to consider the
issue once again in the year 1996, while dealing with a case of horse-
racing, in K.R.Lakshmanan (supra). The Hon'ble Supreme Court
was considering the question from the point of view of horse-racing
within the premises of the Madras Race Club. In paragraph 3 of the
judgment, the Hon'ble Supreme Court took note of the definition of
W.P.(C)Nos.7785, 7851,
the word "gambling" contained in the The New Encyclopaedia
Britannica, as "the betting or staking of something of value, with
consciousness of risk and hope of gain on the outcome of a game, a
contest, or an uncertain event the result of which may be determined
by chance or accident or have an unexpected result by reason of the
better's miscalculations" and the definition in Black's Law Dictionary
which says "Gambling involves, not only chance, but a hope of
gaining something beyond the amount played. Gambling consists of
consideration, an element of chance and a reward". The Hon'ble
Court held that Gambling in a nutshell is payment of a price for
a chance to win a prize.(emphasis supplied). After comparing
with a game of skill, the Court held that a game of chance is one in
which the element of chance predominates over the element of skill,
and a game of skill is one in which the element of skill predominates
over the element of chance and that it is the dominant element --
'skill' or 'chance' -- which determines the character of the game.
18. In paragraphs 8 and 9 of the judgment, on the question
whether the games which depend to a substantial degree upon the
exercise of skill come within the stigma of "gambling", the Apex
Court referred to the two Chamarbaugwala cases (supra), and
held that a competition, success wherein does not depend to a
W.P.(C)Nos.7785, 7851,
substantial degree upon the exercise of skill, is now recognised to be
of a gambling nature. The Apex Court held that gambling is not trade
and as such is not protected by Article 19(1)(g) of the Constitution. It
has further been authoritatively held that the competitions which
involve substantial skill are not gambling activities. Such
competitions are business activities, the protection of which is
guaranteed by Article 19(1)(g) of the Constitution. Paragraphs 19
and 20 of the judgment in K.R.Lakshmanan(supra), which are very
relevant for deciding the issue in these cases are extracted below:
"19. We may now take up the second question for
consideration. Section 49 of the Police Act and Section 11 of
the Gaming Act specifically provide that the penal provisions of
the two Acts shall not apply to the games of "mere skill
wherever played". The expression "game of mere skill" has
been interpreted by this Court to mean "mainly and
preponderantly a game of skill". InState of A.P. v. K.
Satyanarayana [(1968) 2 SCR 387 : AIR 1968 SC 825 : 1968
Cri LJ 1009] , the question before this Court was whether the
game of rummy was a game of mere skill or a game of chance.
The said question was to be answered on the interpretation of
Section 14 of the Hyderabad Gambling Act (2 of 1305-F) which
was pari materia to Section 49 of the Police Act and Section 11
of the Gaming Act. This Court referred to the proceedings
before the courts below in the following words:
"The learned Magistrate who tried the case was of
the opinion that the offence was proved, because of
W.P.(C)Nos.7785, 7851,
the presumption since it was not successfully repelled
on behalf of the present respondents. In the order
making the reference the learned Sessions Judge
made two points: He first referred to Section 14 of
the Act which provides that nothing done under the
Act shall apply to any game of mere skill wherever
played and he was of opinion on the authority of two
cases decided by the Madras High Court and one of
the Andhra High Court that the game of rummy was
a game of skill and therefore the Act did not apply to
the case." (emphasis added)
This Court held the game of rummy to be a game of mere
skill (emphasis supplied) on the following reasoning:
"We are also not satisfied that the protection of
Section 14 is not available in this case. The game of
rummy is not a game entirely of chance like the
'three-card' game mentioned in the Madras case
[Somasundaram Chettiar, In re, AIR 1948 Mad 264 :
49 Cri LJ 434] to which we were referred. The 'three-
card' game which goes under different names such as
'flush', 'brag' etc. is a game of pure chance. Rummy,
on the other 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. We cannot,
therefore, say that the game of rummy is a game of
entire chance. 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.
In fact in all games in which cards are shuffled and
W.P.(C)Nos.7785, 7851,
dealt out, there is an element of chance, because the
distribution of the cards is not according to any set
pattern but is dependent upon how the cards find
their place in the shuffled pack. From this alone it
cannot be said that rummy is a game of chance and
there is no skill involved in it."
20. The judgments of this Court in the two Chamarbaugwalla
cases and in the Satyanarayana case [(1968) 2 SCR 387 : AIR
1968 SC 825 : 1968 Cri LJ 1009] clearly lay down that (i) the
competitions where success depends on substantial degree of
skill are not 'gambling' and (ii) despite there being an element
of chance if a game is preponderantly a game of skill it would
nevertheless be a game of "mere skill". We, therefore, hold
that the expression "mere skill" would mean substantial
degree or preponderance of skill."
Later, in paragraph 33, the Apex Court observed that "Gaming is
the act or practice of gambling on a game of chance" (emphasis
supplied).
DIVISION BENCH DECISION IN RAMACHANDRAN (SUPRA)
19. A question came up before a Division Bench of this Court
in Ramachandran (supra), whether playing rummy by members of
a club in the club premises would be a kind of gambling punishable
under Sections 7 and 8 of the Kerala Act. The Bench considered two
unreported judgments of this Court in Crl.M.C.No.4077 of 2018 and
Crl.M.C.No.8949 of 2017, wherein the learned Single Judge had
W.P.(C)Nos.7785, 7851,
quashed the First Information reports submitted by the Police officer
before the Judicial Magistrate, relying on Satyanarayana (supra).
The Court settled the issues to be decided in paragraph 10 of the
judgment as under:
10. The primary questions that emerge are,
(1) Whether the game of rummy is a game of skill or chance
liable to be regulated under the Kerala Act or rules framed
thereunder?
(2) Whether the premises of a club known as 'Sopanam Arts
and Sports Club' situated at Angadipuram were being used as a
common gaming house?
(3) Whether the petitioner, who was the office bearer of the
club, at the time of raid by the Police could be said to be
instrumental in conducting common gaming house?
(4) Whether playing rummy at the club is gambling as defined
under the Kerala Act?
(5) Whether the game of rummy even if it is a game of mere
skill is still prohibited under Sections 7 and 8 of the Kerala Act?
(6) Whether Sections 7 and 8 of the Kerala Act either expressly
or impliedly exclude the game of rummy as a game of skill?
(7) Whether the Police is competent to set the criminal law in
motion in accordance with the Kerala Act, if a case is registered
by the Police under Sections 7 and 8 of the Kerala Act based on
credible information or reasonable doubt that the activities
carried on by the club or its members are not in accordance
with law and thereby indulging in unlawful activities or
nuisance?
W.P.(C)Nos.7785, 7851,
20. The contentions before the Court were to the effect that
playing the game of Rummy with stakes amounted to gambling and
Sections 7 and 8 of the Kerala Act will be attracted. In paragraph 19
of the judgment the Division Bench observed that going by the
decisions considered, it is clear that if the club is used as a gaming
house for the purpose of playing rummy for stakes and all persons
physically present there are found playing rummy, then they are
certainly accused in the eye of law, provided the detecting officer has
complied with Section 5 of the Kerala Act before making such a raid
or inspection in the club. In paragraph 20, the Division Bench
specifically held that Section 2(a) of the Kerala Act is not in pari
materia with the Hyderabad Gambling Act, which arose for
consideration before the Apex Court in Satyanarayana (supra). In
paragraph 21, the Division Bench observed that even though Section
14A of the Kerala Act provides for issuance of a notification
exempting any game, the playing of which depends predominantly on
skill, from all or any of the provisions of the Act subject to such
restrictions and conditions as may be specified in the notification,
admittedly (emphasis supplied), no such notification was issued by
the Government exempting the game of Rummy played for stakes.
W.P.(C)Nos.7785, 7851,
There appears to be some confusion regarding the above
observation. Exhibit P7 is a notification issued exempting Rummy
from the provisions of the Act without any qualification as to whether
it is played for stakes or not. The only condition in the notification is
that side betting is not allowed. Side betting and stakes are different
from each other and as such it may not be correct to say that there is
no notification issued by the Government. It would appear from the
judgment that Exhibit P7 was not placed before the Court for
consideration. In paragraph 26, the Division Bench observed that the
definition contemplated under the Kerala Act with regard to common
gaming house does not exclude Rummy for stakes played within the
club, even if the club is not making profit from the business. This
observation also may not be fully correct because Section 14 clearly
says that a game of mere skill is exempted from the provisions of the
Act and the Hon'ble Supreme Court has specifically held that the
game Rummy is a game of mere skill. Hence, there is no requirement
for any exclusion of a common gaming house where rummy is played
for stakes since such an exclusion is already available under Section
14. In paragraph 28 of the judgment, the Division Bench observed
that there cannot be any doubt that playing rummy for stakes within
the club premises is an offence, provided the Police conducted search
W.P.(C)Nos.7785, 7851,
in accordance with Section 5 of the Kerala Act. The Court further held
that playing rummy for innocent pastime is not an offence and is
certainly a game of skill, as held on Satyanarayana (supra). The
Division Bench noticed the two Judge Bench decision of the Hon'ble
Supreme Court in M.J.Sivani (supra), wherein the Court had
observed that gaming is 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. The later decision in
K.R.Lakshmanan (supra) was rendered by a Three-Judge Bench in
which Justice B.L.Hansaria who was a member of the Bench which
decided M.J.Sivani (supra) was also a member. The observations in
M.J.Sivani (supra) was considerably tempered down in the decision
in K.R.Lakshmanan (supra). It is worthwhile to note that in
Satyanarayana (supra), the Hon'ble Supreme Court did not hold
that rummy played for innocent pastime alone is a game of skill and
that if it is played for stakes, it becomes a game of chance.
21. In paragraph 30, the Division Bench has observed that it
cannot agree that playing rummy for stakes within club premises by
professional gamblers is a game of skill and that the issue has to be
looked at from the social perspective as well. One of the petitioners
W.P.(C)Nos.7785, 7851,
herein had filed an application seeking review of the above said
judgment of the Division Bench. By order dated 11.10.2019, another
Division Bench of this Court dismissed the review petition. While
dismissing the review petition, the Bench considered Section 14A of
the Act and the judgment in Satyanarayana (supra) and
Dr.K.R.Lakshmanan (supra). In paragraph 7 of the order, it was
held that there is no dispute about the fact that in view of Ext.P7
notification, playing rummy is excluded from the provisions of the Act
and that the Hon'ble Supreme Court has held that element of skill is
predominant than the element of chance in the game of rummy.
Regarding the question whether rummy played for stakes will amount
to a violation of the provisions in the Act or not, the Bench expressed
the view that it is a matter that has to be decided on a case to case
basis. It further stated that if it is just playing rummy without any
side betting, the notification protects the parties involved in it. But, in
a case where rummy is played for stakes, the issue might be
different which has to be dealt with on a case to case basis.
THE DECISION IN RAMACHANDRAN (SUPRA) - WHETHER
RENDERED PER INCURIAM AND HENCE NOT A BINDING
PRECEDENT
22. The legal proposition that a decision which is rendered per
incuriam and sub silentio cannot be treated as a binding precedent is
W.P.(C)Nos.7785, 7851,
no longer res integra. 'Per incuriam' are those decisions given in
ignorance or forgetful-ness of some inconsistent (sic) statutory
provision or of some authority binding on the court concerned, so
that in such cases some part of the decision or some step in the
reasoning on which it is based, is found, on that account to be
demonstrably wrong. (See A.R. Antulay v. R.S. Nayak [(1988) 2
SCC 602], observations of Lord Goddard in Moore v. Hewitt
[(1947) 2 All ER 270 (KBD)] and Penny v. Nicholas [(1950) 2
All ER 89 (KBD]) and Fuerst Day Lawson Ltd. v. Jindal Exports
Ltd. [(2001) 6 SCC 356] . 'Incuria' literally means 'carelessness'.
In practice per incuriam appears to mean per ignoratium. English
courts have developed this principle in relaxation of the rule of stare
decisis. The 'quotable in law' is avoided and ignored if it is rendered,
'in ignoratium of a statute or other binding authority'.(See Young v.
Briol Aeroplane Co.Ltd. [1944) 2 All.ER 293] and State of U.P.
v. Synthetics & Chemicals Ltd. [(1991) 4 SCC 139]
23. In paragraph 14 of the judgment in N.Bhargavan Pillai
v. State of Kerala, reported in [(2004) 13 SCC 217], the Hon'ble
Supreme Court held that the view, if any, expressed without
analysing the statutory provision cannot in our view be
treated as a binding precedent and at the most is to be
W.P.(C)Nos.7785, 7851,
considered as having been rendered per incuriam.
24. While considering the principle of per incuriam, the
Hon'ble Supreme Court in the decision in Indore Development
Authority v. Shailendra reported in [(2018) 3 SCC 412], in
paragraphs 206, 210 and 211 held as follows:
"206. The concept of "per incuriam" signifies those decisions
rendered in ignorance or forgetfulness of some inconsistent
statutory provisions, or of some authority binding on the
court concerned. In other words, the concept means that a
given decision is in disregard of the previous decisions of the
court itself, or that it was rendered in ignorance of the terms
of an applicable statute or of a rule having the force of law.
xxxx xxxx xxxx
210. In MCD v. Gurnam Kaur [MCD v. Gurnam Kaur,
(1989) 1 SCC 101] , it was held that decision of ignorance
of rule is per incuriam, the Court has observed:
"11. ... A decision should be treated as given per
incuriam when it is given in ignorance of the terms
of a statute or of a rule having the force of a
statute."
211. In State of M.P. v. Narmada Bachao Andolan [State of
M.P. v. Narmada Bachao Andolan, (2011) 7 SCC 639 :
(2011) 3 SCC (Civ) 875 : AIR 2011 SC 1989] , this Court
has observed:
"67. Thus, "per incuriam" are those decisions
given in ignorance or forgetfulness of some
statutory provision or authority binding on the
W.P.(C)Nos.7785, 7851,
court concerned, or a statement of law caused by
inadvertence or conclusion that has been arrived
at without application of mind or proceeded
without any reason so that in such a case some
part of the decision or some step in the reasoning
on which it is based, is found, on that account to
be demonstrably wrong."
25. Applying the above legal principles, with all due respects
to the Division Bench at my command, the conclusions drawn in the
judgment do not appear to be in accordance with the statutory
provisions and the law laid down by the Hon'ble Supreme Court in
the decisions on Satyanarayana and K.R.Lakshmanan (supra). In
my humble opinion, the judgment of the Division Bench, does not
consider the following aspects:
a) Section 14 of the Act is in pari materia with
Section 11 of the Madras Gaming Act, 1930, Section
49A of the Madras City Police Act, 1888 and Section 14
of the Hyderabad Gambling Act (Act 2 of 1305 F) 1867,
and the words "game of mere skill" has been interpreted
to mean "mainly and preponderantly a game of skill" by
the Hon'ble Supreme Court in Satyanarayana and
K.R.Lakshmanan (supra).(See paragraph 18 supra)
b) The Hon'ble Supreme Court has rendered a specific
W.P.(C)Nos.7785, 7851,
finding that Gaming is the act or practice of gambling on
a game of chance. (See paragraph 33 of
K.R.Lakshmanan supra) It can be seen that the
Hon'ble Supreme Court has clearly laid down that in
order to come within the meaning of gaming, there
should be gambling on a game of chance. Gambling on
game of skill will not come within the purview of gaming
going by the judgment, wherein the Hon'ble Supreme
Court was considering the game of horse-racing.
c) The Division Bench has extracted paragraph 20 of
the judgment in K.R.Lakshmanan (supra) (noted as
paragraph 18 in 1996 KHC 691). The Supreme Court
has laid down the law in detail in paragraphs 19, 20 and
33 of the judgment (extracted in paragraph 18 supra)
but the same appears to have been lost sight of.
d) What follows from the judgments in
Satyanarayana and K.R.Lakshmanan (supra) is that
Rummy is a game of mere skill, falling within the ambit
of Section 14 of the Act and is necessarily out of the
purview of the Act. Once the game comes within Section
14, none of the provisions of the Act will apply to the
W.P.(C)Nos.7785, 7851,
game of Rummy. The Division Bench has not considered
the effect of Section 14, read with the above said
judgments of the Hon'ble Supreme Court.
e) The observation of the Division Bench in
paragraph 21 of the judgment that no notification has
been issued under Section 14A of the Act, notifying
Rummy played with stakes as exempted, is apparently
without noticing Ext.P7 notification.
f) Since Rummy already comes within the purview
of Section 14, there is no requirement of any
notification under Section 14A exempting it from the
provisions of the Act. However, Ext.P7 notification
cannot be said to be without any purpose, since it
ensures that Rummy if played, accompanied by side
betting, comes within the purview of the Act. The
above statutory provisions and their impact on the
issue has not been considered by the Division Bench.
g) The Division Bench has in paragraph 7 identified
7 questions that emerge. Questions 1,4,5 and 6 alone
are relevant for the purpose of this case. The question
No.1 posed does not require any detailed
W.P.(C)Nos.7785, 7851,
consideration in the light of the binding decision of the
Apex Court in Satyanarayana and K.R.Lakshmanan
(supra). Question No.4 appears to be a mistake since
the word 'gambling' is not defined under the Kerala
Act and only the word 'gaming' is defined. Regarding
Question No.5, application of Sections 7 and 8 itself
will depend on the question whether Rummy is
covered by Section 14 or not. The Division Bench has
not considered Section 14 of the Act at all. Question
No.6 also appears to be a mistake since exclusion of a
game of skill from the Kerala Act is under Section 14
and not under Sections 7 and 8. Sections 7 and 8 only
provide for penalty in case gaming is carried on in a
common gaming house.
h) Paragraph 14 of the judgment extracts the
statutory provisions that needed to be looked into for
deciding the issue, according to the Division Bench. A
reading of the paragraph shows that the most
relevant statutory provisions contained in Sections 3
and 14 have not even been considered.
I) Section 3(a) deals with 6 kinds of gaming,
W.P.(C)Nos.7785, 7851,
which are covered by the Act. Section 3(a)(i) to (v)
deal with certain particular activities identified as
gaming. Section 3(a)(vi) is more general in nature
but covers only transaction or scheme of wagering or
betting in which the receipt or distribution of winnings
or prizes in money or otherwise is made to depend
on chance.(emphasis supplied). The above statutory
provision is very much in tune with the law laid down
by the Apex Court that Gaming is the act or practice
of gambling on a game of chance.
j) The conclusion of the Division Bench in
paragraph 28 that "in view of the various decisions of
the Apex Court, there cannot be any doubt that
playing rummy for stakes within the club premises is
an offence" appears in my humble
opinion to be not factually correct since the Apex
Court in the judgments in Satyanarayana and
K.R.Lakshmanan (supra) did not hold that Rummy
played for stakes is an offence.
With all respects to the Division Bench, I have to conclude that the
decision in Ramachandran (supra) is per incuriam the statutory
W.P.(C)Nos.7785, 7851,
provisions contained in Section 3 and 14 of the Kerala Gaming Act
and the law laid down by the Hon'ble Supreme Court in paragraph 12
of Satyanarayana (supra) and paragraphs 19 and 20 of
K.R.Lakshmanan (supra).
RECENT DECISIONS ON ONLINE GAMES
26. In the decision in Varun Gumba vs Union Territory of
Chandigarh & Ors. reported in [2017 SCC Online P&H 5372], a
learned Single Judge of the High Court of Punjab & Haryana held that
an online game Dream fantasy 11 is a game of skill, applying the
principles laid down by the Hon'ble Supreme Court in
Satyanarayana and K.R.Lakshmanan (supra). A Division Bench
of the Bombay High Court considered the very same issue of Dream
11 fantasy sports in the judgment in Gurdeep Singh Sachar v.
Union of India reported in [2019 SCC OnLine Bom 13059] and
agreed with the decision of the Punjab and Haryana High Court. A
Division Bench of the High Court of Rajasthan had also considered
the very same game Dream 11 in its decision in Chandresh
Sankhla vs State of Rajasthan & Ors. reported in [2020 SCC
Online Raj 264] and held that there is no element of betting or
gambling involved and that it is a game of skill and not a game of
chance. SLP (Civil) Diary No.18478/2020 filed by one Avinash
W.P.(C)Nos.7785, 7851,
Mehrotra against the judgment of the Rajasthan High Court was
dismissed by the Hon'ble Supreme Court by its order dated
30.07.2021, wherein it is observed that Special Leave Petitions filed
against the judgments of the Punjab and Haryana High Court and the
Bombay High Court were dismissed on 15.06.2017 and 04.10.2019 &
13.12.2019 respectively.
27. A Division Bench of the High Court of Madras in a batch of
writ petitions considered the validity of the amendment introduced by
the Tamil Nadu Government to the Tamil Nadu Gaming Act, whereby
all forms of games being conducted in cyberspace, irrespective of the
game involved being a game of mere skill, if such game is played for
a wager, bet, money or other stakes was prohibited and struck down
the amendment. In the judgment in Junglee Games India Private
Limited & Anr. v. The State of Tamil Nadu & Ors. reported in
[2021 SCC OnLine Mad. 2767], the Division Bench found that
when it comes to card games or board games such as Chess etc.
when played in the physical form or in the virtual mode, there is no
distinction on the basis of the skill involved. The Bench found that
rummy is a game of skill. The Court found that by expanding the field
of legislation by widening the scope of gambling, the legislature has
erred and the legislation cannot be referable to the field of "betting
W.P.(C)Nos.7785, 7851,
and gambling" in Entry 34 of the State List. The judgment also
noticed that the judgment in M.J.Sivani (supra) has been tempered
down by the subsequent decision of a Three-Judge Bench in K.R.
Lakshmanan (supra).
28. In Executive Club v. State of A.P., reported in [1998
SCC OnLine AP 415], it was held that Rummy is a game of skill. In
D.Krishnakumar v. State of A.P., reported in [2002 SCC OnLine
AP 810], it was held that playing Rummy for stakes is not an
offence. The Court held further that unless the statute is amended so
as to include playing rummy for stakes within the definition of
Gaming, no action can be taken.
CONTENTION ON BEHALF OF THE STATE
29. Now, let me consider the contentions raised by
Sri N.Manoj Kumar, State Attorney, on behalf of the Government. The
Counsel referred to certain observations made by the Apex Court in
Chamarbaugwala (supra) [AIR 1957 SC 699] which read "We
find it difficult to accept the contention that those activities which
encourage a spirit of reckless propensity for making easy gain by lot
or chance, which lead to the loss of the hard earned money of the
undiscerning and improvident common man and thereby lower his
standard of living and drive him into a chronic state of indebtedness
W.P.(C)Nos.7785, 7851,
and eventually disrupt the peace and happiness of his humble home
could possibly have been intended by our Constitution makers to be
raised to the status of trade, commerce or intercourse and to be
made the subject matter of a fundamental right guaranteed by Article
19(1)(g). We find it difficult to persuade ourselves that gambling was
ever intended to form any part of this ancient country's trade,
commerce or intercourse to be declared as free under Article 301".
The above observations are not in any way challenged since they
apply in all cases where the element of gambling is involved over a
game of chance. The observations will not however be of any help in
cases where the statute excludes games where mere skill or
predominant skill is involved. The Counsel referred to paragraph 12
in Satyanarayana (supra) which has been extracted above to
submit that the observation "if there is evidence of gambling in some
other way or that the owner of the house or the club is making a
profit or gain from the game of Rummy or any other game played for
stakes, the offence may be brought home" clearly shows that Rummy
played for stakes is an offence. I am unable to accept the above
proposition. The above said observation has necessarily to be read
with the first sentence in paragraph 12 of the judgment which says
that protection of Section 14 is available in the case. Section 14 deals
W.P.(C)Nos.7785, 7851,
with games of mere skill. The observation referred to by the State
Attorney can hence only take in situations like "side betting" during a
game of Rummy, which has been taken care of by Ext.P7 notification
and to profit or gain made by the owner of the house or club from
the game of rummy or any other game played for stakes. What
matters is not the stakes but the profit or gain made by the owner of
the house. "Side betting" is not a term that the law is not aware of.
In the decision in Legal Remembrancer v. L.E.Renny reported in
[AIR 1936 Cal. 184] and In re Mannyla Naidu reported in [AIR
1944 Mad.447], it was held that the game of dart is a game of skill.
It was further observed in the judgments that the person who is
actually playing the dart game, is playing a game of skill, but for the
persons who are side-betting for them, the game will not be a game
of skill but will be a game of chance. The State of Kerala should be
presumed to be aware of the law when it issued Ext.P7 notification,
specifically excluding the game of Rummy, with a rider that side
betting shall not be allowed.
30. Reference is then made to the observations of the Hon'ble
Supreme Court in paragraphs 11 and 18 of M.J.Sivani (supra), that
"To game" is to play any game, whether of skill or chance, for money
or money's worth. A game no doubt, can be one of skill or of chance,
W.P.(C)Nos.7785, 7851,
or predominantly of skill or predominantly of chance. However,
Section 14 excludes games of mere skill and the judgments of the
Apex Court have interpreted "mere skill" to mean "predominantly of
skill". The effect of the observation in M.J.Sivani (supra) has to be
understood along with the law laid down by the Three-Judge Bench in
K.R.Lakshmanan (supra) later, which has been dealt with in detail
in earlier paragraphs. In paragraph 18 in M.J.Sivani, the Apex Court
observed that no one has inherent right to carry on a business which
is injurious to public interest and that trade and 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. However, what is sought to be done in the
case on hand is not a prohibition of Online Rummy as a trade of
business which is dangerous to the community. Instead, the game
Online Rummy is sought to be exempted from the provisions of the
Kerala Act, to a limited extent when it is not played for stakes, as a
game predominantly of skill. Such a notification is totally ill-conceived
in my opinion since, the moment online rummy is recognised as a
game predominantly involving skill, it will come within the purview of
Section 14 of the Kerala Act and nothing more is required to take it
out of the purview of the other provisions of the Kerala Act, which
W.P.(C)Nos.7785, 7851,
speak of penalty for gaming. So also, stakes cannot be the criterion
for assessing whether a game is one involving skill or chance.
31. Yet another contention advanced by the State Attorney is
that Section 14A was brought in to remove the substratum of the
decision of the Hon'ble Supreme Court in Satyanarayana (supra).
It is contended that once the notification was issued under Section
14A, the process was complete. It is contended that the State has
ample powers to take away the effect of the judgment by a
legislative process. It is further contended that since power to grant
exemption vide issuance of a notification includes the power to
modify, Ext.P6 notification cannot be found fault with. It is also
contended that the issuance of a notification under Section 14A is a
legislative exercise and not a mere executive order capable of being
set aside by the issuance of a certiorari. The question regarding the
power to issue a writ of certiorari is no longer relevant since the
petitioner has sought amendment of the writ petition by addition of a
prayer for declaration. The contention that Section 14A takes away
the substratum of the decision in Satyanarayana (supra) is not
legally sustainable. The judgments of the Apex Court in
Satyanarayana and K.R.Lakshmanan (supra) are rendered
interpreting the scope of the words "mere skill" which are the very
W.P.(C)Nos.7785, 7851,
same words contained in Section 14 of the Kerala Act. As long as
Section 14 remains in the Statute Book, Section 14A will not have the
effect of removing the substratum as contended by the State
Attorney. So also, with Section 14 in the Statute Book, Section 14A is
rendered superfluous to a great extent, particularly with regard to
games like Rummy, which has been declared by the Hon'ble Supreme
Court as a game of "mere skill".
32. Even though reliance was placed on paragraph 22 of the
decision of the Apex Court in Sri Bhagwati (supra) to submit that
the legislature is presumed to know the law when it enacted Section
14A, I am of the opinion that the said knowledge of the legislature
does not take away the power of the Court to consider the
constitutionality of a legislation. Moreover, the said argument is
actually double-edged, since it can be said that the legislature
knowing fully well of the judgment in Satyanarayana (supra) chose
to retain Section 14 in the Kerala Act. The contentions of the State
Attorney regarding the effect of Ramachandran (supra) has
already been considered in the preceding paragraphs and are not
being repeated. As far as Entry 34 in List II of Schedule 7 of the
Constitution of India is concerned, the article takes in "betting and
gambling". It has already been held by the Hon'ble Supreme Court
W.P.(C)Nos.7785, 7851,
that the game Rummy will not come under "gambling" since
"gambling" can only be on a game of chance. The legislature was
also aware of this legal position when it specifically included Section
14 in the Act. Ext.P6 notification which is contended to be legislative
in nature, cannot stand the test of constitutionality since under the
guise of legislating on "betting and gambling", there cannot be any
legislation on something which is not betting or gambling. Ext.P7 to a
certain extent be justified, if it is to be read as prohibiting side-
betting in a game of skill.
CONCLUSIONS
33. On the basis of the considerations above, I go back to the
issues identified in para.13 of this judgment. On the first issue
whether Rummy is a game of mere skill, I hold on the basis of the
binding judgments of the Apex Court in Satyanarayana and
K.R.Lakshmanan (supra) and the statutory provisions contained in
Sections 3 and 14 of the Kerala Act that Rummy is a game of mere
skill. On the question whether Rummy is a game in which 'element
of skill' is more predominant than the 'element of chance', and can
be exempted from the provisions of the Act only by means of a
notification, I hold that even without a notification being issued under
Section 14A, Rummy remains to be a 'game of mere skill' as the
W.P.(C)Nos.7785, 7851,
word has been interpreted by the Hon'ble Supreme Court in
Satyanarayana and K.R.Lakshmanan (supra). On the question
whether Rummy when played for stakes becomes a game neither
covered by Section 14 nor by a notification issued under Section 14A,
I hold that the "mere skill" contained in Section 14 and "any game
the element of skill is more predominant than the element of chance"
contained in Section 14A do not suggest that skill in playing a game
is in any manner dependent on stakes. As such playing for stakes or
playing not for stakes can never be a criterion to find out whether a
game is a game of skill. On the question whether Online Rummy is a
'game of skill' and 'not of chance', I hold that on the very same
reasoning adopted by the Hon'ble Supreme Court to find the game of
Rummy as a 'game of skill', the game of Online Rummy will also have
to be held to be a 'game of skill'. On the question whether inclusion
of stakes for playing Online Rummy would make any difference to the
nature of the game as a game of skill, I hold in the negative and
declare that Online Rummy played either with stakes or without
stakes remains to be a 'game of skill'. On the question whether the
power available to the State to issue a notification under Section 14A
to exempt a game, clothe it with a power to notify a game which is a
game of mere skill under Section 14, I hold that once a game comes
W.P.(C)Nos.7785, 7851,
within the purview of Section 14, any notification under Section 14A
exempting it further as a game involving skill predominantly is only a
superfluous, and even without such a notification, the game stands
exempted. The question whether a prayer for a writ of certiorari to
quash Ext.P6 notification is maintainable does not really arise for
consideration, since one of the writ petitions already had a prayer
seeking declaration and the other writ petitions have been amended
including a prayer for declaration. On the question whether the
petitioners are entitled to a declaration that Ext.P6 notification is
arbitrary, illegal and in violation of Articles 14 and 19 (1) (g) of the
Constitution of India, I hold in the affirmative. It is hereby declared
that Ext.P6 notification is arbitrary, illegal and in violation of Articles
14 and 19(1)(g) of the Constitution of India, since the notification
has been issued in relation to a game which already stands exempted
from the provisions of the Act under Section 14 of the Kerala Act and
since the game does not come within the meaning of 'gambling' or
'gaming', providing a platform for playing the game, which is in the
nature of business cannot be curtailed. I hold that Ext.P6 notification
is in effect a prohibition of Online Rummy played for stakes and not a
reasonable restriction under Article 19(6) of the Constitution of India.
W.P.(C)Nos.7785, 7851,
34. In the result, Ext.P6 notification is declared as arbitrary,
illegal and violative of the fundamental rights guaranteed to the
petitioners under Articles 14 and 19(1)(g) of the Constitution of India
and hence not enforceable. The writ petitions are allowed.
Sd/-
T.R.RAVI
JUDGE
dsn
W.P.(C)Nos.7785, 7851,
APPENDIX OF WP(C) 7785/2021
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF BOARD RESOLUTION DATED 24.02.2021
PASSED BY THE PETITIONER NO.1.
EXHIBIT P2 TRUE COPY OF CERTIFICATE OF INCORPORATION OF
PETITIONER NO.1.
EXHIBIT P3 TRUE COPY OF CERTIFICATE OF THE MEMORANDUM OF
ASSOCIATION OF PETITIONER NO.1.
EXHIBIT P4 TRUE COPY OF 'ONLINE BUSINESS MODEL' OF THE
PETITIONER NO.1 TO BETTER EXPLAIN THE NATURE OF
THE GAME.
EXHIBIT P5 TRUE COPY OF THE KERALA GAMING ACT, 1960 (ACT 20
OF 1960)
EXHIBIT P6 TRUE COPY OF IMPUGNED NOTIFICATION G.O(P) NO.
26/2021/HOME AND PUBLISHED AS S.R.O NO. 234/2021
IN THE KERALA GAZETTE ON FEBRUARY 23, 2021.
EXHIBIT P7 TRUE COPY OF NOTIFICATION G.O(P) NO. 129/76/HOME
DATED SEPTEMBER 30, 1976.
EXHIBIT P8 TRUE COPY OF RNG CERTIFICATE.
EXHIBIT P9 TRUE COPY OF CODE OF CONDUCT FOR ONLINE RUMMY
OPERATORS ISSUED BY THE ONLINE RUMMY FEDERATION.
EXHIBIT P10 TRUE COPY OF NEWS REPORT IN TIMES OF INDIA DATED
14.08.2020.
ANNEXURE A TRUE COPY OF SIKKIM ONLINE GAMING (REGULATION)
ACT, 2008
ANNEXURE-B TRUE COPY OF NAGALAND PROHIBITION OF GAMBLING AND
REGULATION OF ONLINE GAMES OF SKILL ACT, 2015
ANNEXURE-C TRUE COPY OF MEGHALAYA REGULATION OF GAMING
ORDINANCE, 2021
ANNEXURE-D TRUE COPY OF FINAL REPORT UNDER SECTION 173 OF
THE CR.P.C.
RESPONDENTS' EXTS: NIL
W.P.(C)Nos.7785, 7851,
APPENDIX OF WP(C) 7851/2021
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF BOARD RESOLUTION DATED
25.03.2019 PASSED BY THE PETITIONER NO.1
EXHIBIT P2 TRUE COPY OF CERTIFICATE OF INCORPORATION
OF PETITIONER NO.1
EXHIBIT P3 TRUE COPY OF CERTIFICATE OF THE MEMORANDUM
OF ASSOCIATION OF PETITIONER NO.1
DT.20.9.2012
EXHIBIT P4 TRUE COPY OF THE ONLINE BUSINESS MODEL OF
THE PETITIONER NO.1 TO BETTER EXPLAIN THE
NATURE OF THE GAME
EXHIBIT P5 TRUE COPY OF THE KERALA GAMING ACT, 1960
(ACT 20 OF 1960)
EXHIBIT P6 TRUE COPY OF IMPUGNED NOTIFICATION G.O(P)
NO.26/2021/HOME AND PUBLISHED AS
S.R.O.NO.234.2021 IN THE KERALA GAZETTE ON
FEBRUARY 24, 2021
EXHIBIT P7 TRUE COPY OF NOTIFICATION G.O(P)
NO.129/76/HOME DATED SEPTEMBER 30,1976
EXHIBIT P8 TRUE COPY OF RNG CERTIFICATE DT.30.5.2019
EXHIBIT P9 TRUE COPY OF CODE OF CONDUCT FOR ONLINE
RUMMY OPERATORS ISSUED BY THE ONLINE RUMMY
FEDERATION
EXHIBIT P10 TRUE COPY OF NEWS REPORT IN TIME OF INDIA
14.08.2020
ANNEXURE A TRUE COPY OF SIKKIM ONLINE GAMING
(REGULATION) ACT, 2008
ANNEXURE-B TRUE COPY OF NAGALAND PROHIBITION OF
GAMBLING AND REGULATION OF ONLINE GAMES OF
SKILL ACT, 2015
ANNEXURE-C TRUE COPY OF MEGHALAYA REGULATION OF
GAMING ORDINANCE, 2021
W.P.(C)Nos.7785, 7851,
APPENDIX OF WP(C) 7853/2021
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF BOARD RESOLUTION DATED
03.03.2021 PASSED BY THE PETITIONER NO.1.
EXHIBIT P2 TRUE COPY OF CERTIFICATE OF INCORPORATION
OF PETITIONER NO.1.
EXHIBIT P3 TRUE COPY OF CERTIFICATE OF THE MEMORANDUM
OF ASSOCIATION OF PETITIONER NO.1.
EXHIBIT P4 UE COPY OF ONLINE BUSINESS MODEL OF THE
PETITIONER NO.1 TO BETTER EXPLAIN THE
NATURE OF THE GAME.
EXHIBIT P5 TRUE COPY OF THE KERALA GAMING ACT 1960
(ACT 20 OF 1960).
EXHIBIT P6 TRUE COPY OF IMPUGNED NOTIFICATION GO(P)
NO.26/2021/HOME AND PUBLISHED AS SRO
NO.234/2021 IN THE KERALA GAZETTE ON
FEBRUARY 23, 2021.
EXHIBIT P7 TRUE COPY OF NOTIFICATION GO(P)
NO.129/76/HOME DATED SEPTEMBER 30.1976.
EXHIBIT P8 TRUE COPY OF RNG CERTIFICATE (RANDOM
NUMBER GENERATOR CERTIFICATE
EXHIBIT P9 TRUE COPY OF CODE OF CONDUCT FOR ONLINE
RUMMY OPERATORS ISSUED BY THE ONLINE RUMMY
FEDERATION.
EXHIBIT P10 TRUE COPY OF NEWS REPORT IN TIMES OF INDIA
DATED 14.08.2020.
ANNEXURE A TRUE COPY OF SIKKIM ONLINE GAMING
(REGULATION) ACT, 2008
ANNEXURE-B TRUE COPY OF NAGALAND PROHIBITION OF
GAMBLING AND REGULATION OF ONLINE GAMES OF
SKILL ACT, 2015
ANNEXURE-C TRUE COPY OF MEGHALAYA REGULATION OF
GAMING ORDINANCE, 2021
W.P.(C)Nos.7785, 7851,
APPENDIX OF WP(C) 8440/2021
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF NOTIFICATION ISSUED UNDER
G.O.(P) NO.129/76/HOME DATED 30.9.1976
PUBLISHED AS S.R.O.NO.1045/76 IN THE
KERALA GAZETTE NO.41 DATED 19.10.1976 BY
THE RESPONDENT.
EXHIBIT P2 TRUE COPY OF THE IMPUGNED NOTIFICATION
ISSUED UNDER G.O.(P)NO.26/2021/HOME DATED
23.2.2021 AND PUBLISHED AS
S.R.O.NO.234/2021 IN THE KERALA GAZETTE
(E) NO.927 DATED 24.2.2021 BY THE
RESPONDENT.
EXHIBIT P3 TRUE COPY OF THE JUDGMENT DATED 10.2.2021
PASSED BY THIS HON'BLE COURT IN PAULY
VADAKKAN V. STATE OF KERALA AND ORS, W.P.
(C) NO.2096 OF 2021.
EXHIBIT P4 TRUE COPY OF THE CHARTER OF ONLINE GAMES
OF SKILL ISSUED BY THE ALL INDIA GAMING
FEDERATION.
EXHIBIT P5 TRUE COPY OF THE PETITIONER'S "TERMS OF
SERVICE".
EXHIBIT P6 TRUE COPY OF THE PETITIONER'S "RESPONSIBLE
GAMING POLICY".
