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2009 DIGILAW 657 (KER)

Savithri B. v. Director Of State Lotteries Trivandrum

2009-07-20

V.K.MOHANAN

body2009
JUDGMENT V.K.Mohanan, J. 1. The petitioner is the first prize winner or Kerala Soubhagya lottery which was drawn on 19/11/2005. As per the above draw, the first prize gone to the ticket bearing No. SJ 133652 of 537th draw which was taken by the petitioner. Though the petitioner had surrendered the said lottery ticket for collection through Punjab National Bank, Cherthala, the first respondent directed to release only an amount of Rs.11,94,120/- instead of the prize amount of Rs.20 lakhs being the first prize. According to the petitioner, on her enquiry, she realised that the first respondent deducted a sum of Rs.2 lakhs as agent's prize from the prize amount. Thus, the grievance of the petitioner is that without any authority, the 1st respondent had deducted a sum of Rs.2 lakhs as agent's prize from the first prize amount. Therefore, she approached this Court with a prayer to declare that Rule 22(2) of the Lotteries and On-line Lotteries (Regulation) Rules, 2003, is violative of Article 14 and ultra vires to the Constitution of India to the extent that it permits the Government to deduct agent's price from the prize amount, it is also prayed for issuing a writ of mandamus or any other appropriate writ directing the respondents as Agents' prize can be paid only from Government fund and not from the prize winning lottery tickets' amount. The third prayer is to declare that 1 st respondent has no manner of right to deduct agent's prize from prize winning lottery ticket. The consequential relief sought for is for the issuance of a writ of mandamus or any other appropriate writ directing the tot respondent to disburse Rs.2,00,000/-, which was deducted from petitioner's prize amount as deduction towards agent's prize, to the petitioner, without any further delay. 2. According to the petitioner, deduction of agent's commission from the petitioner's prize amount is arbitrary and unsustainable, for which the Government has no right. The petitioner, in this writ petition challenged the constitutional validity of Rule 22(2) of the Lotteries & On-line Lotteries (Regulation) Rules, 2003. 3. The first respondent has filed a detailed counter-affidavit. In the said counter-affidavit, it is stated that, as per GO (P) No. 11/2006/TD dated 27/01/2005 published as SRO No.73/ 2005 in the Kerala Gazette extraordinary No. 169 dated 27/01/2005, the State of Kerala declared a Lottery free zone. 3. The first respondent has filed a detailed counter-affidavit. In the said counter-affidavit, it is stated that, as per GO (P) No. 11/2006/TD dated 27/01/2005 published as SRO No.73/ 2005 in the Kerala Gazette extraordinary No. 169 dated 27/01/2005, the State of Kerala declared a Lottery free zone. Accordingly, the Kerala State Lotteries and On-line lotteries (Regulation) Rules, 2003 was repealed as per GO (P) No. 12/5/TD dated 27/01/2005 published as SRO No. 74/2005 in the Kerala Gazette extraordinary dated 27/01/2005. According to the 1 st respondent, the conduct of Soubhagya 537th Lottery was based on Kerala Paper Lotteries (Regulation) Rules, 2005. As per this Rules, Government has ample power to deduct agent's prize as per Rule 9(2), of Kerala Paper Lotteries (Regulation) Rules, 2005 which states as follows: "The payment of prize money may be in the form of DD/Exchange of tickets/by cash as the case may be after deducting such amount required under any agreement or under any law." Thus, according to the 1st respondent, the respondent had deducted agent's prize @ 10% from the first prize amount of the petitioner as per the terms and conditions laid down in the prize structure of Soubhagya lottery. It is specifically stated in the counter-affidavit that as per the terms and conditions of Soubhagya lottery, agent's prize to be paid from Government Fund is applicable only to IVth to IXth prizes. Thus, according to the 1st respondent, deduction of the agent's prize is in no way arbitrary and illegal. 4. As the petitioner was unaware of Exts. R1(a) Rule and R1(b) proceedings which came to her knowledge only on filing of the counter-affidavit and therefore she preferred IA No. 8875/2009 to amend the writ petition. In the affidavit filed in support of the amendment petition, the petitioner sought to incorporate certain grounds and two more prayers in the writ petition. Accordingly, the 6th prayer is to declare that clause 11 of Annexure III of Ext. R1 (b) issued by the 1st respondent is illegal and violative of Article 14 of the constitution of India. The 7th prayer is to call for the records leading to the issuance of Ext. P4 and issue a writ of certiorari quashing Ext. P4, to the extent as it directed the deduction of agent's prize from the first prize amount of the petitioner. The 7th prayer is to call for the records leading to the issuance of Ext. P4 and issue a writ of certiorari quashing Ext. P4, to the extent as it directed the deduction of agent's prize from the first prize amount of the petitioner. The above amendment petition is allowed, but the petitioner is exempted from filing amended writ petition. 5. I have heard the learned counsel appearing for the petitioner as well as the learned Government Pleader. 6. The learned counsel for the petitioner vehemently argued that Rule 9(2) of the Kerala Paper Lotteries (Regulation) Rules, 2005 is ultra vires of the constitution of India. It is pointed out that Rule 9(2) of the Kerala Paper Lotteries (Regulation) Rules, 2003 is another form of the repealed Rules, namely, Kerala State Lotteries and On-line Lotteries (Regulation) Rules, 2003 as Rule No. 22(2). It is pointed out that in that Rule, the Government was empowered to deduct agent's prize from the prize winning tickets, in the present Rules, namely, Rule 22(2) of the Regulations of 2005, there is no such provision. It is pointed out that clause 11 of Annexure III in Ext. R1(b) is proclaimed by the Director and not by the Government and therefore, the Director has no authority to deduct the amount of Rs.2 lakhs from the first prize amount of Rs.20 lakhs and the petitioner is entitled to get reimbursed the same. On the other hand, the learned Government Pleader submitted that in Ext. P3(a), the conditions are specifically incorporated and the petitioner has taken the ticket fully knowing the above conditions and therefore, now the petitioner cannot wriggle out from the above conditions. Therefore, the respondents are entitled to deduct 10% of the total prize amount towards the agent's prize and the same was done in accordance with the rules and such action of the respondents are legally sanctioned by the provisions of the Rules. 7. I have carefully considered the contentions advanced by both the counsel for the petitioner as well as the Government Pleader. Of course, the business of Lottery is a contract. The present petitioner who took the lottery ticket is duly bound to abide by the terms and conditions of the concerned lottery. Nobody had compelled her to take the lottery ticket, but she voluntarily took the ticket and, fortunately, she won the first prize. The 1 st respondent has produced Ext. Of course, the business of Lottery is a contract. The present petitioner who took the lottery ticket is duly bound to abide by the terms and conditions of the concerned lottery. Nobody had compelled her to take the lottery ticket, but she voluntarily took the ticket and, fortunately, she won the first prize. The 1 st respondent has produced Ext. R1 (a) Rules. Rule 3 of the said Rules deals with the Printing of Lottery Tickets. As per Rule 3(1), the Director, the 1 st respondent herein, shall obtain the model and design of the paper lottery tickets for each draw and get the same approved by Government before it is sent for printing. Sub-rule 2 of Rule 3 says that the tickets shall bear the facsimile signature of the Secretary to Government of Kerala, Taxes Department and shall contain name of lottery, draw number, date of draw, series and ticket number, cost of ticket and other important details on the front side of the ticket sub-rule 4 of Rule 3 reads as follows: "On the reverse side of the ticket there shall be printed in English and/or in Malayalam the prize pattern, terms and conditions and such other essential details which the Director considers necessary for the information of the purchaser." On a perusal of the Ext. P3 and P3(a), it can be seen that there are endorsements in terms of the above sub-rules to Rule 3. Rule 9(1) and (2) are quoted below for convenience: "Rule 9. Prize and Prize Claims. (1) The Government guarantees the payment of the prizes end prizes amount offered on the lotteries. (2) The payment of prize money may be in the form of demand Draft/Exchange of Tickets/ by Cash as the case may be after deducting such amounts required under any agreement or under any law." (emphsis supplied). On a joint reading of Rule 9 and Rule 3, it can be seen that by purchasing Ext. P1 like ticket, the petitioner herself had agreed that the payment of prize money will be subject to the terms and conditions contained in the lottery ticket which provides for the deduction of amount towards the agent's prize. From Ext. P3(a), it can be seen that the total amount of the first prize is Rs.20 lakhs and agent's prize is Rs.2 lakhs. On the reverse side of Ext. From Ext. P3(a), it can be seen that the total amount of the first prize is Rs.20 lakhs and agent's prize is Rs.2 lakhs. On the reverse side of Ext. P3 ticket, one can see the terms and conditions. Of course, from the documents produced along with this writ petition, the same is not legible and readable. Government Pleader submitted that the conditions contained in Ext. R1 (b) are fully printed on the reverse side of Ext. P1 lottery ticket. On the basis of Ext. R1 (b), especially clause 11; an amount equivalent to 10% of the prize money will be deducted from the first, second and third prizes and will be paid to the respective agents. An amount equivalent to 10% of the fourth, fifth, sixth, seventh and consolation prizes will be paid to the concerned agents from Government fund. Further, agents will be paid Rs.10/-each on eighth anj ninth prizes also from Government Fund. So, according to the learned Government Pleader, clause 11 of Annexure III of Ext. R1 (b) enables the first respondent and the Government to realise an amount equivalent to 10% of the first prize towards agent's prize. The petitioner being a party to the contract is bound by such terms and conditions. 8. On the other hand, the learned counsel for the petitioner submitted that in the case of agent's prize, other than the first, second and third prizes, the amounts are being paid from the Government fund. If that be so, there is no rationality and no nexus in making such classification and therefore, clause 11 to Annexure III of Ext. R1(b) is unconstitutional and ultra vires. According to me, the above contention is untenable. As pointed out earlier, the petitioner, being the first prize winner of the Soubhagya lottery, the prize amount will be subject to the terms and conditions, which provides for the deduction of 10% of the total prize amount towards agent's prize. She was not compelled to enter into this contract and she had voluntarily taken Ext. P1 ticket and therefore, now she cannot wriggle out from the terms and conditions and challenge such conditions. It is also relevant to note that the Government conducts various lotteries and the income derived from such lotteries are one of the sources of income of the Government for its functioning. P1 ticket and therefore, now she cannot wriggle out from the terms and conditions and challenge such conditions. It is also relevant to note that the Government conducts various lotteries and the income derived from such lotteries are one of the sources of income of the Government for its functioning. It is for the Government to decide the source of money for the agent's prize and the commission of the agents etc. While deciding, such question, the Government has to consider several inputs including the average assessment of the sates of the lottery tickets number of agencies, other lotteries conducted by the Government and also other on-line lotteries conducted by other agencies. On the basis of the above criterion, which are not exhaustive, it is for the Government to consider, as I pointed out earlier, what should be the prize amounts, how much amount to be paid as agent's prize, and from where such amount be given. Thus, from the conditions and terms contained in Ext. P3 and P3(a), it can be seen that the same are reasonable and the same were done within the competence of the Government. Thus, the Government, on the strength of its authority under the provisions of the Rules, especially as per Government order No. S1/4866/2004/DSL dt.24/03/2004 authorised the 1 st Respondent to fix the terms and conditions which were approved by the Government as evidenced by Ext. P1 lottery ticket itself. Ext. P1 lottery ticket was printed with details envisaged by Rule 3 of the Rules. In the light of the above facts, clause 11 of Annexure 3 of Ext. R1(b) cannot be treated as arbitrary and discriminatory or ultra vires of the constitution of India. Therefore, the contention of the petitioner under that count is untenable and liable to be rejected. In the result, there is no merit in the writ petition and accordingly, the same is dismissed.