ORDER : 1. In Civil Appeal No. 1715 (N) of 1975 the operation of the Madras Act 44 of 1974 abolishing wagering and betting on bourse races had been stayed till the disposal of appeal. After the stay order was made by this Court, horse races were resumed within the State of Tamil Nadu. Thereafter, the Madras Race Club (Acquisition and Transfer of Undertaking) Act, 1986 (Madras Act 26 of 1986) was enacted and it received the assent of the President and came into force on 9th April 1986. On the enactment of this Acquisition Act, a number of writ petitions under Article 32 of the Constitution were filed before this Court challenging the vires of that Act. On April 30, 1986, this Court directed that pending hearing and disposal of these writ petitions, the Custodian will remain in charge of running of the Club but would be subject to the supervision of a Committee of Management consisting of 12 persons, six of whom were to be nominated by the State Government and the other six by the Club. For some inexplicable reason, perhaps on account of some misunderstanding, the appellants in Civil Appeal No. 1715 (N) of 1975 withdrew on May 6, 1986, that appeal with the result that the stay Order which had been granted by this Court came to an end and the Abolition Act became operative. The State Government accordingly announced on the floor of the Legislature on 7th May 1986 that they had decided to abolish racing and betting forthwith. The Madras Race Club thereupon filed a writ petition in this Court challenging the constitutional validity of the Abolition Act and though this writ petition was admitted, no stay order was granted by this Court. 2. On 6th August 1986, various applications for interim relief came up before this Court and after hearing the parties a direction was given by this Court that though there would be no order of stay of operation of the Abolition Act, that Act "will not stand in the way of Committee of Management of the Club holding inter-venue betting as was being done before. The clear intention behind giving this interim direction was that until the disposal of the writ petition intervenue betting may be permitted to be held.
The clear intention behind giving this interim direction was that until the disposal of the writ petition intervenue betting may be permitted to be held. This Court also by the same Order directed that pending the disposal of the writ petition, the horse owners should continue to enjoy the same facilities which they were enjoying from the Club by way of stabling, etc., on the same terms which were being charged by the Club. 3. The Committee of Management thereafter met on 8th August 1986 to decide whether inter-venue betting should be continued or not but at this meeting diverse views were expressed and ultimately it was decided to seek the clarification of the Order dated 6th August 1986. An application was accordingly filed in this Court for clarification of the Order dated 6th August 1986 and on this application an order was made by this Court on 14th August 1986 pointing out that the nominees of the State Government who participated in the meeting dated 8th .August 1986, to decide whether inter-venue betting should be permitted or not, did not exercise their independent judgment since according to the affidavit of Shri Venkataraman who is also a Member of the Committee of Management, the nominees had to adhere to the declared policy of the State Government that betting on horses is an offence and they could not, therefore, take any other view except that inter-venue betting should not be held. It was pointed out by this Court in the Order dated 14th August 1986 that this view taken by the nominees of the State Government was erroneous since it had been made clear by this Court in its earlier Order that the Abolition Act should not stand in the way of the Committee of Management taking a decision whether or not to permit inter-venue betting and since there was effectively an interim order staying the operation of the Abolition Act in so far as inter-venue betting is concerned, the Committee of Management had to come to its decision "without being obsessed by and without taking into account the provisions of the Abolition Act".
This Court, therefore, directed the Committee of Management to hold another meeting on/or before 18th August 1986 and to "take a decision in regard to the question whether inter-venue betting should be permitted or not without in any manner being obsessed or influenced by the policy of the State Government...... because to that extent the Abolition Act had been stayed by us." It was clearly stated in the Order that all the Members of the Committee of Management will exercise their independent judgment in regard to this question solely from the point of view as to what is in the interest of the Institution and the public. 4. The Committee of Management accordingly met again on 18th August 1986 and after various Members had expressed their views Mr. Justice Ismail who is the Chairman of the Committee of Management, observed that "the majority of Members are not against the holding of inter-venue betting and they are for it and consequently the view that inter-venue betting should be held will be the view of the majority of the members also." The minutes of the meeting recorded these observations of Mr. Justice Ismail and at the end of it stated that "the Custodian is requested to take necessary steps to implement the decision. " 5. The State Government thereupon filed an application in this Court seeking annulment of the minutes of the Committee of Management dated 18th August 1986 on the ground that the minutes did not correctly record the ultimate view taken by the majority of the members present at the meeting and that the net effect of the statements made by the members at the meeting was not to permit inter-venue betting. Shri K.R. Sadayappan, a nominee of the State Government of the Committee of Management, filed an affidavit in support of the application and in this affidavit he alleged that seven members were against and five in support of the view that inter-venue betting should be resumed and that inter-venue betting should not, therefore, be permitted. The Madras Race Club, on the other hand filed an application for initiating contempt proceedings against the State Government as also the Custodian for not obeying the Orders of this Court dated 14th August 1986.
The Madras Race Club, on the other hand filed an application for initiating contempt proceedings against the State Government as also the Custodian for not obeying the Orders of this Court dated 14th August 1986. Now one thing is clear that the minutes of the meeting of the Committee of Management dated 18th August 1986 must be taken as representing correctly what happened at the meeting. Mr. Justice Ismail, Chairman of the Committee of Management has clearly recorded in the minutes that the majority of the members were not against the holding of inter-venue betting and consequently the view of the majority of the members must be taken to be that inter-venue betting should be held. This conclusion recorded in the minutes by Mr. Justice Ismail is challenged on behalf of the State Government and it is stated that according to the minutes as recorded 7 members expressed themselves against the holding of inter-venue betting while only 5 members expressed themselves in favour of it and that Mr. Justice Ismail was therefore in error in taking the view that the majority of the members were in favour of holding inter-venue betting. 6. Now before we consider this contention of the State Government it may be pointed out that it was common ground between the parties and it was also the unanimous opinion of all the members that the Madras Race Club was making more money only out of inter-venue betting and with regard to running of races on certain days, the Race Club was the loser and the loss was made up only by profits of inter-venue betting. It is thus clear that the income arising from inter-venue betting constituted the main source of income of the Madras Race Club and that without it the Madras Race Club would be running at a loss. It is also clear and it could not be disputed by any of the parties that maintaining the status quo in regard to the Madras Race Club admittedly involved huge expenditure in the shape of payment of salary to the employees which on a conservative estimate ran into a sum of over Rs. 4 lakhs and incurring of expenditure on provision of facilities and subsidies to the race horse owners under our earlier interim Order.
4 lakhs and incurring of expenditure on provision of facilities and subsidies to the race horse owners under our earlier interim Order. It is obvious that all this huge expenditure would have to be borne by the public exchequer without any corresponding income until the writ petition and the appeal are disposed of by this Court. It may be noted that if the Madras Race Club succeeds in the writ petition and the appeal this large expenditure would ordinarily go out of the assets of the Madras Race Club unless the Court directs that it may be reimbursed by the State Government, but even if the Court gives such direction, it will be the public exchequer which will have to bear this expenditure. If on the other hand the Madras Race Club loses in the writ petition and the appeal all this large expenditure would have been incurred in vain and it will go out of the assets of the Madras Race Club or the Public exchequer. Of course, it must be conceded that if inter-venue betting were permitted it would encourage gambling on the part of the people with consequent loss of money to may of the persons who indulge in inter-venue betting, but as against this it was pointed out that for period of over 10 years there was a stay order operating against the Abolition Act and both horse racing and inter-venue betting were being carried on and if Civil Appeal No. 1715 (N) of 1975 had not been withdrawn, that state of affairs would have continued. It is in the context of this situation that the question has to be considered whether inter-venue betting should be permitted or not. 7. Now it is true that as record in the minutes of the meeting of the Committee of Management dated 18th August 1986, 7 members expressed themselves against inter-venue betting being permitted, but if we look closely at the minutes we find that out of these 7 members, 6 were nominees of the State Government while only I namely Sh. Dhansekar was the nominee of the Madras Race Club and most of these members barring Sh.
Dhansekar was the nominee of the Madras Race Club and most of these members barring Sh. M.A. Chitambaram and Shri K.R. Sadayappan did not gave any reasons why they thought that permitting inter-venue betting for the short period during which the writ petition and the appeal would be pending in this Court would be against the interest of the Madras Race Club and the public. It may be possible to hold the point of view that inter-venue betting is against the interest of the public but it is very difficult for us to see how it could be said to be against the interest of the Madras Race Club. Ultimately, it would be a question of weighing the interest of the Public against the interest of the Madras Race Club and this exercise does not seem to have been carried out by the members present at the meeting of the Committee of Management. We would therefore prefer not to go by the views expressed by the members of the Committee of Management one way or the other and instead, we would leave it to Mr. Justice Ismail as Chairman of Committee of Management to come to a decision on the basis of the material before him and taking into account the views expressed by the various members of the Committee of Management whether pending the bearing of the writ petition and the appeal in this Court, inter-venue betting should be held by the Custodian of the Madras Race Club or not. We are leaving it to Mr. Justice Ismail to take its decision in his capacity as Chairman of the Committee of Management constituted by us. Mr. Justice Ismail will come to his decision within one week from today at the latest. 8. We are making this order purely as an interim order particularly since we are fixing the hearing of the writ petition and the appeal at a very early date. The writ petition and the appeal will be placed on board for hearing and final disposal on 28th October 1986 subject to an over-night part heard and in the meanwhile the parties will complete their respective pleadings.