P. Muraleedharan v. State of Kerala Rep. by the Secretary to Government, Department of Lottery
2019-06-26
SHAJI P.CHALY
body2019
DigiLaw.ai
JUDGMENT : SHAJI P. CHALY, J. 1. This writ petition is filed by a lottery agent at Kannur seeking to quash Ext.P2 demand notice dated 18.3.2005 issued by the District Lottery Officer, whereby a demand was raised against the petitioner to return the excess commission paid and also Ext.P6 order dated 15.11.2008 passed by the Director of State Lotteries affirming Ext.P2 demand notice. Brief material facts for the disposal of the writ petition are as follows. 2. Petitioner is a registered agent for sale of lottery tickets in the State. The rate of commission payable to agents varies according to the volume of tickets purchased by them for each draw. Various slabs under which commission payable is printed on the reverse side of each lottery ticket like Ext.P1. Till the culmination of sales/distribution from the respondents' office, registered agents can purchase tickets from any district centres of the 2nd respondent under a code number allotted by the respondents to the agent. As there are weekly and monthly draws, the commission is calculated on the culmination of each draw. But the usual practice was that, agent's turnover of the entire sales of each draw is taken together as one sale under the 2nd respondent i.e. the Director of Lotteries, Thiruvananthapuram, for determining the slab under which an agent falls, and commission was paid accordingly. 3. Matters being so, respondents as per Ext.P2 demanded refund of excess commission of 0.5% already paid to the petitioner. According to the petitioner, the demand is made wrongly interpreting rule 13(1) of the Kerala State Lotteries and Online Lotteries (Regulation) Rules, 2003 by holding that, the different district purchases made from different districts centres of the 2nd respondent are to be treated as different sale. The case put forth by the petitioner is that, rule 13(1) does not deal with calculation of commission nor does it refer to the sale at different sub offices of the 2nd respondent and the said rule is wrongly interpreted. Ext.P2 in fact was challenged in an earlier writ petition and the petitioner was relegated for hearing by the 2nd respondent and 2nd respondent as per Ext.P6 affirmed Ext.P2 demand raised.
Ext.P2 in fact was challenged in an earlier writ petition and the petitioner was relegated for hearing by the 2nd respondent and 2nd respondent as per Ext.P6 affirmed Ext.P2 demand raised. The case of the petitioner is that, none of the aspects put forth by the petitioner was taken into account by the 2nd respondent and therefore, the order passed by the 2nd respondent is arbitrary and illegal, liable to be interfered by this court. 4. Second respondent has filed a detailed counter affidavit refuting the claims and demands raised by the petitioner. According to the 2nd respondent, as per rule 13(1) of Rules, 2003, the lottery tickets shall be sold to agents/sole agents appointed by the authority against full payment after adjusting a discount allowed at source of sales. That apart it is pointed out that, prior to the introduction of the above provision, the commission was paid on the basis of total sales of a particular weekly/monthly tickets taking the State as a whole unit. But after introduction of the Rules, 2003, the source of sale is taken unit wise in determining the percentage of commission payable. The source of sale is, therefore, is the district from which the lottery tickets are purchased by the agent concerned. The amount paid by the agent concerned is after deducting the commission payable for the quantity purchased by the agent for a particular lottery, whether weekly or monthly and the percentage of commission is determined by taking the total ticket purchased by the agent concerned before the draw from the source of sale. Which thus means, the commission is payable at source and it is paid in accordance with Rules. Consequent to introduction of Rules, 2003, the erstwhile practice of consolidating the sales taking the State as a single unit is given a go by and source of district sale was taken as a unit to consider the commission payable. Therefore, the case projected by the petitioner that, the tickets required for his purpose was not available from the District Lottery Officer, Kannur is absolutely incorrect and there is nothing on record to establish such a case. It is also stated that, at no point of time, any request of the petitioner for any particular quantity of tickets was denied by the respondents.
It is also stated that, at no point of time, any request of the petitioner for any particular quantity of tickets was denied by the respondents. That apart it is stated that, petitioner is not having a consistent case since the petitioner on the one hand claims that rule 13(1) is misread in giving lesser percentage of commission and on the other hand petitioner as per prayer Nos. 2 & 3 claims that, rule 13(1) cannot be resorted to by the respondents in calculating the final commission payable. 5. I have heard learned counsel for petitioner, learned Government Pleader appearing for respondents and perused the pleadings and documents on record. 6. The necessary facts discussed above would make it clear that, the issue revolves around rule 13 of Rules, 2003, which read thus: “13. Sale of Lottery Tickets (Other than On Line Lottery) to Lottery Agent:- (1) Lottery tickets shall be sold to agents/sole selling agent appointed by the authority against full payment after adjusting a discount allowed at sources sales. (2) The Government will be at liberty to change the rate of discount and commission etc. to agents if found necessary. (3) The agents/sole selling agents should keep the full details of the tickets purchased by him and also the details of tickets issued to his sub agents. The sole selling agents shall be held personally responsible for any violation of rules by himself and by subagents. (4) The sole selling agents should intimate the authority sufficiently in advance, the number of tickets they intend to buy. If they fail to purchase the intended number, the difference amount between the intended number and the actual purchase will be recovered from their purchase advance or security amount. (5) The sale of Kerala State Lottery tickets shall be done through the District Lottery Offices and through other state section in the Directorate of State Lotteries, following the terms and conditions meant for sale. (6) The tickets to sole selling agents shall be arranged through the Regional Deputy Directorate, Ernakulam by Exchange of tickets/payment in cash. (7) The sale proceeds of Kerala State Lotteries shall be credited to the general revenue of the State. The tickets once sold shall not be taken back at any cost. (8) The sole selling agents shall lift a specified number of tickets as agreed upon.
(7) The sale proceeds of Kerala State Lotteries shall be credited to the general revenue of the State. The tickets once sold shall not be taken back at any cost. (8) The sole selling agents shall lift a specified number of tickets as agreed upon. If any lapse occur in the lifting of specified number of tickets, the loss thereon shall be made good from such sole selling agents. (9) The sole selling agents shall furnish a security deposit or bank guarantee, as may be specified by the authority.” 7. The prime contention advanced by learned counsel for petitioner is relying upon rule 13(1) of the Rules, 2003 by contending that the provision stipulate that the discount shall be allowed at “sources sales” which according to the learned counsel for petitioner, means all sources will have to be taken together for the purpose of calculating the commission. The said rule is constituted under the provisions of Kerala Lotteries (Regulation) Act, 1998, hereinafter called, “the Act.” Likewise in exercise of the powers conferred under section 12(3) of Act, 1998 in super-session of all previous rules, the Kerala State Lottery Rules, 1988 was brought into force. Rule 6 deals with distribution of lottery tickets. Sub-rule (1)(ii) deals with distribution of lottery tickets within the District, which stipulates that “tickets from one district shall not be issued to an agent, who is registered as an agent in another district, unless he takes up agency in the former district also. But an agent who has bought ticket worth maximum retail price of Rs. 1 lakh or more from his District of registration can purchase tickets from other districts as well for that and the immediate next lottery on getting authorisation to this effect from the office of registration.” 8. Therefore, on a reading of the said Rule, 1998, it is explicit that, the ticket sales are carried out District-wise basis. Necessarily Rules, 1998 has to be read along with Rules, 2003 to have a clear understanding of sale of lottery tickets and the commission paid to agents. Accordingly on a harmonious reading of the provisions discussed above, the interpretation made by learned counsel for petitioner, for calculating commission “at sources sales” the entire sale of the tickets purchased from various sources has to be taken into account, has no legal sustenance.
Accordingly on a harmonious reading of the provisions discussed above, the interpretation made by learned counsel for petitioner, for calculating commission “at sources sales” the entire sale of the tickets purchased from various sources has to be taken into account, has no legal sustenance. In that regard, definition of Agency Commission provided under rule 2(4) of Rules, 2003 is relevant, which reads as follows:- “Agency Commission means any amounts or percentage agreed to be paid as agency commission to an agent appointed under the Rules.” Which thus means the terms and conditions of the agreement executed bind the parties and the petitioner has no case that there is any term in the agreement enabling the petitioner to claim commission from all sources together, or over and above the commission fixed under the Rules. These are all significant indicators to show that the agency commission is to be calculated at each source, on sale of tickets. To put it otherwise, any interpretation provided to rule 13(1) other than that, it will only be doing violence to the said provision, since commission is to be paid at each source of sale when the tickets are sold, and the final commission is adjusted after the sales are complete in respect of a particular lottery in each district. Therefore, it was by mistake, calculating the tickets purchased by the petitioner from different sources, commission was paid at higher rates. It was thereupon that, Ext.P2 demand was raised. It was also pointed out, pursuant to the direction issued by this court, the application was considered by the 2nd respondent after providing an opportunity of hearing to the petitioner and the decision was taken, taking into account the rule governing payment of commission to the agents and found that, the demand raised is in accordance with law. Though petitioner has a case that there is no enabling provision under the Act and Rules to recover any commission paid even by mistake, I am of the considered view, the said issue is guided by section 72 of the Indian Contract Act, 1972, which read thus:- “Liability of person to whom money is paid, or thing delivered, by mistake or under coercion - A person to whom money has been paid, or anything delivered, by mistake, or under coercion must repay or return it.” 9.
Even though learned counsel for the petitioner has a case that, consequent to introduction of Kerala Paper Lotteries(Regulation) Rules 2005, Rules 2003 is repealed, the demand raised for a period prior to the introduction of the Rules cannot be sustained, in my considered view Rules, 2005 has only prospective operation. Explanatory note thereunder is relevant, which read thus: “Explanatory Note (This does not form part of the notification, but is intended to indicate its general purport.) Government of Kerala by notification issued as G.O. (P) No. 11/2005/TE dated 27th January, 2005 and published as SRO No. 73 in the Kerala Gazette Extraordinary No. 169 dated 27th January, 2005 has prohibited the sale of lottery tickets organised, conducted or promoted by every other State Government including Lottery tickets organized, conducted or promoted by the Government of Kerala. Accordingly the Kerala State Lotteries (Regulation) Rules, 2003 has to be repealed. This notification is intended to achieve the above objects.” 10. Therefore, I am of the considered opinion that, there is no legal inhibition disabling the authorities from proceeding in accordance with Rules, 2003 and raising the demand, for an amount due from a preceding date. Moreover, it is an admitted fact that, the due is a Government due, thereby having a limitation period of 30 years in accordance with Article 112 of the Limitation Act, 1963 and general remedy is available under law to recover any dues in accordance with law. That apart power is vested to recover the dues as per rule 10(5)(H) of Rules, 2003, which read thus: “10. Appointment of Lottery Agents other than Online Lottery:- (1) xxx xxx xxx xxx xxx (2) xxx xxx xxx xxx xxx (3) xxx xxx xxx xxx xxx (4) xxx xxx xxx xxx xxx (5) The agency agreement executed between the Government and or authority and the sole selling agent shall, inter alia, provide for the following conditions:- (a) xxx xxx xxx xxx xxx (b) xxx xxx xxx xxx xxx (c) xxx xxx xxx xxx xxx (d) xxx xxx xxx xxx xxx (e) xxx xxx xxx xxx xxx (f) xxx xxx xxx xxx xxx (h) the authority shall have the power to recover any sum due to the Government from the agent or the Sole Selling Agent, by forfeiting security deposit and by collecting it as arrears of Land Revenue or by filing suit or by any other method.
Therefore, the contention advanced against the rule position has no sustenance at all. So much so there is no dispute with respect to the amount quantified as excess payment. 11. In that view of the matter, no justifiable circumstances are made out by the petitioner against Ext.P2 demand and Ext.P6 order passed by the 2nd respondent and there is no arbitrariness or illegality justifying judicial review under Article 226 of the Constitution of India. 12. Writ petition fails, accordingly it is dismissed.