Judgment :- 1. Petitioner is a soap manufacturer who was permitted by the first respondent State to conduct a Lucky Draw Prize Scheme as part of the promotion of sales of soap. The approval was granted under Ext. P2 order on the basis of an application Ext. P1 dated 4-2-1981. Petitioner applied once again under Ext. P3 for permission to conduct the scheme during the period between 15-12-1981 to 15-3-1982 and this application has been rejected under Ext. P4 dated 2-12-1981. The second respondent is a public sector soap manufacturing unit. The second respondent applied on 18-6-1981 for permission to conduct a similar scheme during the period between 1-8-1981 to 31-10-1981. There was delay in processing the application and on 30-11-1981 permission was granted to the second respondent to conduct the scheme during the period 15-12-1981 to 15-3-1982. The petitioner has filed this O P. for quashing Ext. P4 and restraining the second respondent from conducting the scheme as per the order in favour of it. 2. In a way the O P. has become infructuous The permission sought by the petitioner was for the period of three months ending 15-3-1982. The permission denied to the petitioner and the permission granted to the second respondent is for the identical period. We are now practically at the end of the period. Therefore, no useful purpose will be served by quashing Ext. P4 or granting any direction with reference to the permission granted to the second respondent. 3. However, learned counsel for the petitioner is apprehensive that in future also applications which the petitioner may file would meet with the same fate as in the present case and he requested the court to expound the power vesting in the Government to grant approval or permission in the light of S.294 A of Indian Penal Code. S.294 A is one of the sections in Chapter XIV relating to "offences affecting the Public Health, Safety, Convenience, Decency and. Morals". The section reads: "Keeping lottery office.- Whoever keeps any office or place for the purpose of drawing any lottery not being a State lottery or a lottery authorised by the State Government, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine, or with both. xx x" We are not concerned with the latter part of the section.
xx x" We are not concerned with the latter part of the section. The section contemplates authorisation being given by the State Government to any person to draw lottery. In substance and in effect the Lucky Draw Prize Scheme which the petitioner and the second respondent have been organising will attract the operation of S.294A That is why both parties approached the Government to grant authorisation. 4. S.294 A does not specifically give any guidelines to indicate in what manner the discretion vested in the Government is to be exercised. But this does not mean that the discretion to be exorcised is an unguided discretion. The provision itself read in the light of the other provisions in the Chapter would certainly provide necessary guidelines and limitations. But for the authorisation granted by the State Government, the drawing of a lottery would amount to a penal offence, punishable with imprisonment or with fine or with both. This indicates the seriousness with which the legislature looked at the particular act which is rendered punishable Evidently, the offence involved is an offence which falls under the general category of offences which have been brought under Chapter XIV. namely offences affecting Public Health, Safety, Convenience, Decency and Morals. One or more of these aspects would certainly be relevant in deciding whether in a given case authorisation is to be granted or rejected. Drawing a lottery may affect public health, public safety or public convenience etc. A businessman may try to dupe the public by drawing a lottery. Another may try to flood market with cheap goods and stifle healthy competition. A scheme may be loaded heavily against the public. A manufacturer may try to popularise sub-standard goods by attracting the customers in the guise of a Lucky Draw Prize Scheme. Certainly this will be injurious to public health, public safety and public convenience, as the case may be, depending on the nature of the manufacturing product, and terms and conditions of the scheme, state of the market and a host of other considerations. Allowing too many prize schemes to be conducted at the same time in the same locality or area may also not be conducive to public interest as it may lead to unhealthy competition. Co-operative sector or small scale industry and. the like may require to be assisted by such promotion schemes.
Allowing too many prize schemes to be conducted at the same time in the same locality or area may also not be conducive to public interest as it may lead to unhealthy competition. Co-operative sector or small scale industry and. the like may require to be assisted by such promotion schemes. At times even a large-scale manufacturer may genuinely desire to run a lottery to help sales-promotion. Individual requirements in the light of public interest must guide the Government in authorising or declining to authorise a scheme. In the case of multiplicity of applications Government has certainly the power of regulation, which includes the power of making a choice between applicants, unless it be that all the applications could be granted. 5. Learned counsel for the petitioner suggested that denial of permission to a private manufacturer like the petitioner only to encourage a public sector undertaking like the first respondent would amount to discrimination. He also sought to place reliance on the decision of the Supreme Court in Mannalal Jain v. State of Assam (AIR. 1962 SC. 386) and the decision of this Court in O.P. 1005 of 1979 and connected cases. What the Supreme Court has held against in the above case is the creation of monopoly in the guise of encouraging a co-operative society. In the reported decision itself, the Supreme Court has stated that granting of preference in any reasonable manner short of conferring monopoly to a co-operative society would be permissible and will not amount to discrimination. In the latter case a notification issued by the State Government exempting certain public sector undertakings from the liability for paying for timber produce at a revised rate has been struck down on the ground that it is discriminatory. None of the principles laid down in the above decisions would operate in the instant case, as this is not a case of discrimination or creation of monopoly. If both manufacturers have not been allowed to conduct a scheme during the identical period, it cannot be said to be an attempt to create monopoly. It is only an attempt to regulate the conduct of scheme;, keeping in mind the interest of manufacturers as well as public interest.
If both manufacturers have not been allowed to conduct a scheme during the identical period, it cannot be said to be an attempt to create monopoly. It is only an attempt to regulate the conduct of scheme;, keeping in mind the interest of manufacturers as well as public interest. If the State Government is of opinion that it will not be conducive in public interest to allow both manufacturers to conduct the same scheme during the identical period, the decisions cannot be said to be either discriminatory or creative of monopoly. This is a case where State Government is bound to select one of two or more of the applicants who seek authorisation of the State Government, and the State Government will have to choose one or the other on relevant grounds. 6. It is seen that the petitioner conducted a scheme during the year 1981 while the conduct of the scheme between December, 1981 and March, 1982 was the first attempt of the second respondent to conduct such a scheme. The petitioner is a large scale private manufacturer and the second respondent is said to be a public sector undertaking manufacturing soap on a smaller scale. If under these circumstances, the State Government decided to grant permission to the second respondent to conduct the scheme during the period and denied that privilege to the petitioner, it cannot be said to be a discriminatory or unreasonable act. If and when the petitioner applies afresh for permission to conduct schemes in the future, the application will have to be disposed of by the State Government on the basis of reasons and grounds which are relevant, keeping in view the object and purpose of the legislation. It is made clear that it will not be within the competence of the State Government to reject applications for permission on the part of private manufacturers on the sole ground that a public sector undertaking is a rival claimant. That, however, maybe one of the circumstances which in the light of the other circumstances existing in a given case, may help the Government to arrive at a proper decision. In view of what has already been stated, the O. P. has become practically infructuous; it has only to be dismissed and I do so but without costs. Issue carbon copy on usual terms.