Sikkim High Court
Serenity Trades Pvt. Ltd. And Anr vs Union Of India And Ors on 7 December, 2021
Bench: Bhaskar Raj Pradhan
THE HIGH COURT OF SIKKIM: GANGTOK
(Civil Extra Ordinary Jurisdiction)
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SINGLE BENCH: HON'BLE MR. JUSTICE BHASKAR RAJ PRADHAN, JUDGE
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W.P. (C) No. 08 of 2019
1. Serenity Trades Pvt. Ltd.
F-201, Kailash Vaibhav Complex,
Ghatkopar Powai Link Road,
Vikhroli (W), Mumbai - 400 079.
Through its Authorised Representative.
2. Mr. Jai Pratap Singh Chauhan,
Director, Serenity Trades Pvt. Ltd.
F-201, Kailash Vaibhav Complex,
Ghatkopar Powai Link Road,
Vikhroli (W) Mumbai - 400 079.
..... Petitioners
Versus
1. The Union of India,
Through the Secretary,
Ministry of Home Affairs,
North Block, Central Secretariat,
New Delhi - 110 001.
2. State of Sikkim,
Through Principal Secretary,
Finance, Revenue & Expenditure Department,
Government of Sikkim,
Gangtok, Sikkim.
3. Director of State Lotteries,
Government of Sikkim,
Deorali, Gangtok, Sikkim.
..... Respondents
An application under Article 226 of the Constitution of India.
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Appearance:
Mr. Surajit Dutta, Advocate and Ms. Rachhitta Rai,
Advocate for the Petitioners.
2
W.P. (C) No. 08 of 2019
Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors.
Mr. Karma T. Gyatso, Advocate for Respondent No.1.
Mr. Vivek Kohli, Advocate General with Mr. Hissey
Gyaltsen, Assistant Government Advocate for the
Respondents No. 2 & 3.
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Date of hearing : 09.11.2021.
Date of judgment : 07.12.2021.
JUDGMENT
Bhaskar Raj Pradhan, J.
1. The present writ petition seeks refund of payments
made as draw charges by the petitioner under Rule 3(11) of
the Lotteries (Regulation) Rules, 2010 (2010 Rules).
2. On 14.10.2015, this court struck down Rule 3(11) of
the 2010 Rules as ultra vires the provisions of the Lotteries
(Regulation) Act, 1998 (Lotteries Act) in M/s Shubh Enterprises
vs. Union of India in W.P. (C) No. 41 of 2013. The Union of
India preferred a Special Leave Petition (SLP) (C) CC
No.11534/2016 before the Supreme Court which was
dismissed vide order dated 05.09.2016. Pursuant thereto
the petitioners approached the State of Sikkim (respondent
no.2) vide letters dated 17.03.2017, 12.12.2018 and
23.01.2019 seeking refund of the draw charges paid by them
in terms of the struck down Rule 3(11) of the 2010 Rules.
The respondent no.2 did not reply and therefore, the
petitioner approached this court by filing the present writ
W.P. (C) No. 08 of 2019
Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors.
petition. It seeks a direction upon the respondent to refund
the draw charges as deposited by the petitioner.
3. The Director of State Lotteries, Government of Sikkim
(respondent no.3) filed a counter affidavit on 20.07.2019.
The respondent no.3 took a plea of unjust enrichment by the
petitioners on the ground that the petitioners had failed to
establish that the draw charges amounting to
Rs.9,30,45,000/- deposited was borne by them and that the
burden had not been passed on to the purchasers of lottery.
It was also pleaded that as the Organising States who were
liable to pay the draw charges had not been impleaded
although they were necessary parties the petitioners did not
have the locus standi to file the writ petition and
consequently was not maintainable. Additionally, it was
averred that the petitioners had approached this court after
more than three years and therefore, the writ petition was
barred by limitation. It was contended that the judgment of
this court dated 14.10.2015 passed in M/s Shubh Enterprises
(supra) could not be applied retrospectively and as such, the
petitioners have no right to claim the entire amount which
was paid to the respondents from 2010 to 2015.
4. On 31.07.2019, the petitioners filed the rejoinder. The
petitioners contended that since the petitioner in M/s Shubh
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Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors.
Enterprises (supra) was also a distributor/selling agent who
had raised the same issue before this court which had laid
down the law, the petitioners were entitled to claim the
relief. The plea of unjust enrichment was contested and it
was stated that the draw charges were paid from their own
pocket and the respondent no.3 had also issued receipts
acknowledging the payment. It was submitted that as the
petitioners were claiming the relief directly from the
respondent no.3 on the basis of law it was not necessary to
implead any other party and that the Organising States were
not necessary parties.
5. On 27.08.2019, the Principal Secretary/Additional
Chief Secretary, Finance Department, Government of Sikkim
(respondent no.2) filed an affidavit stating that he was
relying upon the counter affidavit filed by the respondent
no.3 on 20.07.2019.
6. In compliance to the order dated 05.11.2019 passed by
this court granting liberty to the petitioners to file better
affidavit to show that the petitioners have actually paid the
draw charges of Rs.2000/- per draw from their own pocket
an affidavit was filed on 01.02.2020 by them stating that
they had paid the draw charges from their own sources. In
support thereof, the petitioners also filed bank statement of
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account maintained by them in the HDFC Bank Limited
reflecting payments made for the period 26.08.2010 to
31.01.2016 for a total amount of Rs.9,30,54,000/-. The
petitioners also filed a certificate from the chartered
accountant stating that the expenses made towards the
draw charges of Rs.2000/- per draw had been reflected in
the petitioners profit and loss account for the financial year
2010-2011, 2011-2012, 2012-2013, 2013-2014, 2014-2015
and 2015-2016.
7. The respondent no.2 filed its reply dated 23.03.2020 to
the affidavit dated 01.02.2020 filed by the petitioners
disputing the facts stated therein. It was contended that
neither the bank statements nor the profit and loss account
proved that the draw charges was paid by the petitioners
from their own sources. According to them, it only reflected
that payment had been made through this account.
8. In compliance to the order dated 29.06.2020, the
petitioner no.2 filed an affidavit on 17.07.2020 in response
to paragraph 5 of the reply affidavit filed on 23.03.2020 by
the respondent no.2. It was contended that the petitioner
had paid the draw charges from its own source of income
and same had not been collected from the customer of the
online lottery sold by the petitioner in the State of Sikkim. If
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the draw charges had been recovered from any
customer/retailer/agent/subagent/seller, it ought to be
shown on the income side in the profit and loss account of
the petitioner, which was not so, as it clear from the
documents filed. An additional certificate dated 07.07.2020
issued by the auditor of the petitioner company was also
filed in which it has been confirmed that the draw charges
had not been recovered from any of his agents, sub-agents,
seller, etc. The petitioner, thus, contended that it had been
adequately established that the burden of the draw charges
had not been passed on by the petitioners.
9. Pursuant to the order dated 30.03.2021, the petitioner
filed yet another affidavit dated 07.04.2021 along with a
copy of agreement dated 09.05.2005 executed between the
State of Sikkim and M/s Summit Online Trade Solutions
Pvt. Ltd.; agreement dated 09.11.2012 executed between
State of Sikkim and Summit; agreement dated 29.05.2012
executed between State of Mizoram and Summit; agreement
dated 15.04.2014 executed between State of Mizoram and
Summit; agreement dated 06.05.2010 executed between
State of Goa and M/s Sugal & Damani Enterprises Pvt. Ltd.;
agreement dated 27.07.2015 executed between the State of
Arunachal Pradesh and Summit; and agreement dated
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08.08.2010 executed between M/s Sugal & Damani
Enterprises Pvt. Ltd. and the petitioner.
10. On 12.08.2021 the respondent no.2 filed a reply
affidavit to the petitioner's affidavit dated 07.04.2021
contending that the petitioners have brought in new facts
after passage of two years from the date of institution of the
writ petition. It was contended that as per the agreements,
while the Organising State was liable for the draw charges
under Rule 3(11) of the 2010 Rules, the onus to pay the
draw charges has been transferred to the
distributor/marketing agent. This would mean that under
the agreements, the distributor/marketing agent had agreed
to pay the draw charges on behalf of the Organising State.
However, this does not mean that the liability of the
Organising State under Rule 3(11) of the 2010 Rules had
also been shifted/transferred to the distributor/marketing
agent. Consequently, the petitioners have not been
empowered/authorized by the Organising State to claim
refund of any tax, charge and fee paid on his behalf.
11. Heard Mr. Surajit Dutta, learned counsel for the
petitioner and Mr. Vivek Kohli, learned Advocate General for
the State-respondents. Mr. Surajit Dutta submitted that in
view of Rule 3(11) of the 2010 Rules and Notification dated
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Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors.
06.08.2010 having been struck down in M/s Shubh
Enterprises (supra), the collection of draw charges is ex-facie
illegal and without jurisdiction and petitioner being similarly
situated is entitled to get the refund of the amount claimed.
The learned Advocate General submitted that the writ
petition was not maintainable on the ground of undue
enrichment. He contended that it was also barred by
limitation and cited the constitutional bench judgment of
the Supreme Court in Mafatlal Industries Ltd. & Ors. Vs. Union
of India & Ors.1 to buttress his argument. It was submitted
that since the Lotteries Act did not provide any procedure for
refund, the general law would be applicable and therefore,
the proper remedy would be to prefer a civil suit under
Section 72 of the Indian Contract Act, 1872 for refund. As
an efficacious remedy is available to the petitioner in a civil
suit, the remedy of writ petition under Article 226 is not
available to the petitioner in the facts of the case. He further
contended that although the agreements reflected that the
distributors/selling agent had taken on the burden of paying
the draw charges on behalf of the Organising State, the
contract did not give the petitioner the liberty to withdraw
1 (1997) 5 SCC 536
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the draw charges paid by them on behalf of the Organising
State which was not even made a party.
12. Mr. Surajit Dutta replied to the three contentions of the
learned Advocate General. On the issue of unjust
enrichment, he submitted that the pricing of lottery ticket is
done by the Organising State in terms of Rule 3(3) of the
2010 Rules. This would be evident from various agreements
executed between different Organising States and
stockist/marketing agent/distributor. The petitioner had no
hand on the pricing of lottery tickets. Since price of tickets
before and after publication of the notification remained the
same, there has been no occasion of the burden being
passed on to the purchaser of tickets. As per the
agreements, it was the responsibility of the marketing
agent/distributors to pay the draw charges. The petitioner
under an agreement with the marketing agent/distributor
was therefore liable to pay the draw charges and accordingly
paid the same from its own pocket. The payment of taxes,
levies, duties, etc., as a matter of general practice, is borne
by the marketing agent/distributor, is evident from the
agreements executed by the State of Sikkim with its
marketing agents/distributors. The contention of the State
respondents is, therefore, not sustainable. On the issue of
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limitation, Mr. Surajit Dutta contended that the judgment of
Mafatlal (supra) was not applicable as it dealt with excise
refund payable under excise laws which postulates
assessment orders becoming final after certain length of
time and that such assessment orders could not be
reopened thereafter. It was because of such statutory
prescription that the emphasis was made on the time limit
of three years. Mafatlal (supra) does not deal with the
situation where the charging provision itself has been
declared unconstitutional and has not laid down any
inflexible rule of law that a case of refund claimed, such as
the present one, would be bound by a period of limitation.
More so because Article 226 also confers an equitable
jurisdiction on this court and for good reasons this court
would not shut its door against genuine grievance of a party.
He contended that as held in Air India Cabin Crew Association
vs. Union of India2, it is well settled that the judgment is an
authority for what it actually decides and not what follows
from it. Relying upon the judgment of the Supreme Court in
Ramchandra Shankar Deodhar and Ors. Vs. The State of
Maharashtra & Ors.3, it was argued that the rule which says
that the court may not inquire into belated claims is not a
2 (2012) 1 SCC 619
3 (1974) 1 SCC 317
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rule of law but a rule of practice based on sound and proper
exercise of discretion, and there is no inviolable rule that
whenever there is delay, the court must necessarily refuse to
entertain the petition. The judgment of the Supreme Court
in Collector, Land Acquisition, Anantnag and Anr. Vs. Mst.
Katiji and Ors.4 was pressed to submit that when
substantial justice and technical considerations are pitted
against each other, the cause of substantial justice is to be
preferred. In the present case, the State respondent has
realized money in the form of draw charges from the
petitioners without any authority of law and therefore, it was
refundable. Mr. Surajit Dutta further contended that the
judgment rendered by this court in M/s Shubh Enterprises
(supra) attained finality after the SLP preferred was dismissed
and therefore, even if the principle of limitation is invoked it
would commence to run only after 05.09.2016 and
consequently, there was no delay. With regard to the issue of
the entitlement of the petitioner to claim refund, Mr. Surajit
Dutta contended that a claim of refund requires two things
to be proved. That he had paid some money to the State and
the State was not legally authorized to collect it. If the
argument of the State respondent is to be accepted the
4 (1987) 2 SCC 107
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petitioner would become all the more entitled to claim
refund as notwithstanding the invalidity of Rule 3(11) of the
2010 Rules, the State respondents were in the first place not
legally entitled to take the draw charges from the petitioners.
Further, the State respondents, while accepting the draw
charges from the petitioners and issuing the
acknowledgments to them, has recognized the petitioner's
authority as agents of the Organising State and as such
stopped from questioning the petitioner's locus to seek
refund. More so when they have already refunded the draw
charges to the petitioner in M/s Shubh Enterprises (supra). The
State respondents had all along issued receipts in the name
of the petitioners and not in the name of the Organising
States and therefore, precluded from raising this contention
as they had accepted the draw charges from the petitioners
without any demur or raising any question.
13. The petitioner in M/s Shubh Enterprises (supra) was the
distributor of lottery tickets organised by the State of
Mizoram and contractually liable to pay taxes and other
charges levied by various States on lotteries. The petitioner
therein had challenged the validity of Rule 3(11) of the 2010
Rules which provided that a State, where lotteries are
conducted by another State is entitled to charge an amount
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of Rs.2000/- per draw from the Organising State as being
ultra vires the Lotteries Act. The Organising State was the
State of Mizoram who was impleaded as proforma
respondent no.4 therein. This court held that Rule 3(11) of
the 2010 Rules is ultra vires the provisions of the Lotteries
Act and struck it down. This Court also quashed Notification
no.380/FIN/DSSL/431 dated 06.08.2010 (Notification)
issued by the respondent no.2 therein as being ultra vires
the Lotteries Act. Further, a writ of prohibition was issued
upon the respondents therein from giving effect to Rule 3(11)
of the 2010 Rules and the Notification. The State
respondents were directed to refund all amounts payable by
the petitioner therein thus far under Rule 3(11) of the 2010
Rules and the Notification as a consequential relief. In M/s
Shubh Enterprises (supra), on a reading of the judgment, it
was neither contended by any of the parties thereto nor
examined by this court that the draw charges payable by the
Organising State was not refundable to the
distributor/selling agent who took on the burden of the
Organising State to pay the draw charges under a contract.
In the present case, it is the specific contention of the
respondent no.2 and 3 that firstly, the Organising States
which were necessary parties had not been impleaded by the
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petitioner and secondly, that the petitioner had no authority
to seek refund of the draw charges paid by them on behalf of
the Organising States.
14. The record reveals that although the respondents no.2
and 3 had taken the plea of dismissal of the writ petition on
the ground that the Organising State, which was a
necessary party, had not been impleaded, the petitioner in
its rejoinder contended that the Organising State was not a
necessary party and was not required to be impleaded.
15. In the writ petition, the petitioners contend that they
are engaged in the business of, inter alia, marketing and sale
of lottery tickets organized/conducted by various State
Governments. It is their case that they are the sole stockist
for marketing and selling of Goa, Mizoram, Arunachal
Pradesh and Sikkim State online lotteries and was selling
the tickets of these States in the State of Sikkim. As per the
additional affidavit filed on 07.04.2021 by the petitioner, the
State of Arunachal Pradesh, Goa, Mizoram and Sikkim had
appointed Summit as their marketing agent,
distributor/selling agent for marketing the lottery tickets on
their behalf.
16. The agreement dated 09.05.2005 is between the
Government of Sikkim and M/s Sugal & Damani appointing
W.P. (C) No. 08 of 2019
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M/s Sugal & Damani as marketing agents for the State of
Sikkim. In this agreement, clause 11 thereof provides that
the liability of any tax levied by other State Governments
shall be the responsibility of the marketing agent. However,
the liability of payment of Sales tax/VAT or any other taxes
on lotteries within the State of Sikkim shall be borne by the
Director of State Lotteries. Prima facie, the agreement dated
09.11.2012 between the Government of Sikkim and Summit
extending the period of Summit operative as a marketing
agent for the State of Sikkim did not also contain a specific
provision for payment of draw charges by the marketing
agent.
17. The agreement signed between the State Government
of Mizoram and Summit dated 29.05.2012 reflects that
Summit had taken the liability to pay all statutory taxes,
duties and charges imposed by the State Government under
whose jurisdiction the Mizoram State Lottery tickets are
being sold and to pay those charges under Rule 3(11) of the
2010 Rules "on behalf of the Government".
18. The agreement dated 06.05.2010 between the
Government of Goa and M/s Sugal & Damani Enterprises
Pvt. Ltd. provides in clause 11(ii) that all statutory taxes,
levies, duties, etc., in respect of sale of Goa brand lotteries
W.P. (C) No. 08 of 2019
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outside the State of Goa shall be borne by the marketing
agent/distributor.
19. The agreement dated 27.07.2015 between the
Government of Arunachal Pradesh and Summit, in clause
15.2 provides that all charges as may be made by other
State Governments under whose jurisdiction the Arunachal
Pradesh State lotteries tickets will be sold or marketed by
the sole distributor shall be paid by him/her to such States
as provided in sub-rule (11) of Rule 3 of the 2010 Rules.
20. The agreement dated 08.08.2010 between M/s Sugal &
Damani Enterprises Pvt. Ltd. and the petitioner no. 1 herein
appointed the petitioner no. 1 as their sole stockist. Clause
4(g) provides that the Petitioners shall bear, inter alia, draw
charges as levied by the State Governments, i.e., Sikkim,
Goa and other States. It also provided in clause 6(iii) that
the petitioner is not authorised to claim reimbursement of
any taxes, charges and duties paid with regard to the sale of
lottery tickets from M/s Sugal & Damani.
21. This is a writ petition filed by the petitioner for seeking
refund of the draw charges payable by the Organising States
but paid by them under an agreement with M/s Sugal &
Damani, the distributor/selling agent of the Organising
States. The agreement reflects that the petitioners had taken
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the responsibility of paying the draw charges liable to be
paid by the Organising States in terms of Rule 3(11) of the
2010 Rules which has now been struck down by this Court.
The fact that the petitioners had in fact paid the draw
charges is reflected clearly in the receipts issued by the
respondent no. 3. However, in a claim for refund of this
nature it is important to ascertain whether the burden has
been passed on. When this Court struck down the provision
of Rule 3(11) of the 2010 Rules in M/s Subh Enterprises
(supra) it also granted the consequential relief of refund to
the petitioner therein who was the distributor/selling agent.
Further, the Organising State was also impleaded as a party
respondent. It is not so in the present case. In the present
case, the petitioner who are stockist under the
distributor/selling agent seeks refund of the money paid by
them to the respondent no. 3 as draw charges payable by
the Organising States in terms of Rule 3(11) under an
agreement with M/s Sugal & Damani, which is also not
before this Court. Furthermore, the Organising States have
also not been made parties. Although various agreements
between the Organising States and the distributor/selling
agents and between the distributor/selling agents and the
petitioner as stockist has been filed, the parties to those
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agreements are not before this Court except the State of
Sikkim.
22. Under the scheme of the Lotteries (Regulations) Rules,
2010, Rule 2(f) defines "Organising State" to mean the State
Government which conducts the lottery either in its own
territory or sells its tickets in the territory of any other State.
Section 2(c) defines "distributor or selling agent" to mean an
individual or a firm or a body corporate or other legal entity
under law so appointed by the Organising State through an
agreement to market and sell lotteries on behalf of the
Organising State.
23. Rule 3 deals with the organisation of lottery and
provides that a State Government may organise a paper
lottery or online lottery or both subject to the conditions
specified in the Act and the Rules. Rule 3(3) (b) provides that
the Organising State shall announce in advance, by way of a
Notification in the Official Gazette, the price of lottery tickets
amongst others enumerated in sub-clauses (a) to (j). Rule
3(11) which has now been struck down by this Court
provided that the State Government under whose
jurisdiction the lottery tickets are being sold shall be entitled
to charge a minimum amount of two thousand rupees per
draw from the Organising State but the maximum amount
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chargeable shall not be more than what is being charged by
the State Government from its own lotteries. Rule 3(15)
provides that in cases where an Organising State appoints
or authorizes distributors or selling agents, it shall be the
responsibility of the Organising State to ensure that the said
distributors or selling agents act in conformity with the
provisions of the Act and the Rules. Rule 3(16) provides that
the Organising State shall keep records of the tickets
printed, tickets issued for sale, tickets sold, tickets which
remain unsold at the time of the draw, and the prize winning
tickets along with amount of prize or prizes in respect of
each draw, in the manner prescribed by the Organising
State. Rule 3(17) provides that the Organising State shall
ensure that proceeds of the sale of lottery tickets, as
received from the distributors or selling agents or any other
source, are deposited in the public ledger account or in the
consolidated fund of the Organising State.
24. Rule 4 deals with appointment of distributor or selling
agent. Rule 4(3) provides that the distributors or selling
agents shall maintain the records of the ticket obtained from
the Organising States and tickets sold and those which
remain unsold up to the date at the time of draw along with
other details as may be specified by the Organising State.
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25. It is thus seen that under the scheme Lotteries
(Regulation) Act, 1998 and the Lotteries (Regulation) Rules,
2010, it is for the Organising State to determine the price of
the lottery ticket and the distributor and the selling agent is
appointed by the Organising State through an agreement for
the sole purpose of marketing and selling lotteries on behalf
of the Organising State.
26. In State of Madhya Pradesh Vs. Bhailal Bhai & Ors.5 the
Supreme Court examined 31 appeals by the State of Madhya
Pradesh made by the High Court of Madhya Pradesh under
Article 226 of the Constitution of India. The assessee under
the Sales Tax had contended that the taxing provisions
under which the tax was assessed and collected was
unconstitutional. They prayed for refund of the taxes that
had been collected. The High Court allowed the prayer for
refund in some cases and rejected in some other. The
Supreme Court answered the question whether the relief of
repayment has to be sought by the tax payer by an action in
a Civil Court or whether such an order can be made by the
High Court in exercise of its jurisdiction under Article 226 of
the Constitution. The Supreme Court held that the High
Court has the power for the purpose of enforcement of
5 AIR 1964 SC 1006
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fundamental rights and statutory rights to give
consequential relief by ordering repayment of money realised
by the Government without the authority of law. It further
held that at the same time one could not lose sight of the
fact that the special remedy provided in Article 226 is not
intended to supersede completely the modes of such actions.
The power to give relief under Article 226 is a discretionary
power. This is especially true in the case of power to issue
writs in the nature of mandamus. Among the several
matters which the High Courts rightly take into
consideration in the exercise of that discretion, is the delay
made by the aggrieved party in seeking this special remedy
and what excuse there is for it. Another is the nature of
controversy of facts and law that may have to be decided as
regards that availability of consequential relief. Thus, where,
as in these cases, a person comes to the court for relief
under Article 226 on the allegation that he has been
assessed to tax under a void legislation and having it paid it
under a mistake is entitled to get it back, the court, if it
finds that the assessment was void, being made under a
void provision of law, and the payment was made by
mistake, is still not bound to exercise its discretion directing
repayment. Whether repayment should be ordered in the
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exercise of this discretion will depend on each case on its
own facts and circumstance. It is not easy nor is it desirable
to lay down any rule for universal application. It may
however be stated as a general rule that if there has been
unreasonable delay the court ought not ordinarily to lend its
aid to a party by this extraordinary remedy of mandamus.
Again, where even if there is no such delay, the Government
or the statutory authority against whom the consequential
relief is prayed for raises a prima facie triable issue as
regards the availability of such reliefs on the merits on the
grounds like limitation, the court should ordinarily refuse to
issue the writ of mandamus for such payment. In both these
kinds of cases it will be sound use of discretion to leave the
party to seek his remedy by the ordinary mode of action in a
civil court and to refuse to exercise in his favour the
extraordinary remedy under Article 226 of the Constitution.
27. In Suganmal vs. State of Madhya Pradesh6, the Supreme
Court examined the question whether a petition under
Article 226 of the Constitution praying solely for the refund
of the money alleged to have been illegally collected by the
State as tax, is maintainable under Article 226. It was held
that though the High Courts have power to pass any
6 AIR 1965 SC 1740
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Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors.
appropriate order in the exercise of powers conferred under
Article 226 of the Constitution, such a petition solely
praying for the issue of writ of mandamus directing the
State to refund the money is not ordinarily maintainable for
the simple reason that a claim for such a refund can always
be made in a suit against the authority which has illegally
collected the money as a tax. While holding so, the Supreme
Court also referred to its earlier decision in Bhailal Bhai
(supra).
28. In the present writ petition, neither the Organising
States nor the distributor/selling agents have been made
parties. The claim for refund is being made by the sole
stockist of the distributor/selling agent. The sole stockist of
the distributor/selling agent would have, under the scheme
of the Act and the Rules, no hand in the pricing structure of
the cost of the lottery tickets. It is settled that refund of this
nature cannot be granted if the burden of the draw charges
had been passed on to a third party or the ultimate
consumer. Although the petitioners have filed affidavits
stating that they had not passed on the burden, when it is
for the Organising State to structure the pricing of the
lottery tickets, it may not be possible to determine this lis
without the Organising States and the distributor/selling
W.P. (C) No. 08 of 2019
Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors.
agent. Further, the petitioner has sought to rely upon the
agreements entered between the Organising States and the
distributor/selling agent on the one hand and the agreement
between the distributor/selling agent and the petitioner on
the other without the parties to the agreement being brought
before the Court. The agreements relied upon by the
petitioner has been perused for a prima facie view only. It
appears that to determine whether or not the burden of
draw charges paid by the petitioner on behalf of the
Organising States had been passed on to the ultimate
consumer it is necessary to examine the complex issue of
pricing of the lottery tickets which may not be possible in a
writ jurisdiction. Furthermore, the issue involved here also
requires an interpretation of these agreements between
parties not before this Court. The only thing certain is that
the petitioner had paid the draw charges. The State
respondents have also raised the issue of limitation and
seriously contested it.
29. In the circumstances, this Court is of the view that it
would not be correct to decide the issues raised in writ
jurisdiction. The writ petition, is therefore, dismissed.
However, it is left open to the petitioner to approach the civil
court for appropriate remedy if they so desire. In the event,
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the petitioner approaches the civil court, needless to say, the
parties may plead and raise all necessary issues before the
civil court. The observations made herein shall not come on
the way of the civil court to decide the issues independently.
The parties shall bear their respective costs.
( Bhaskar Raj Pradhan )
Judge
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