Akkshadha Srivastav
Published on: 17th August, 2022 at 15:40 IST
The Supreme Court bench comprising of Justices KM Joseph and Hrishikesh Roy, in State of Nagaland and Ors. v. State of Kerala and Ors. Diary No. 21222/2022, heard the challenge against the judgment delivered by the High Court on May 17, 2021, which upheld the amendments brought to the Kerala Paper Lotteries (Regulation) Rules in 2018 (Rules), to modulate marketing and ancillary sale of lotteries organised by states on their own.
Tushar Mehta, the Solicitor General of India, appearing for Nagaland, highlighted that the issue broadly pertained to the interpretation of the Lotteries (Regulation) Act, 1998 (the Act).
He averred that Section 5 of the Act provides that states can prohibit the sale of tickets for a lottery organised, conducted, or promoted by other states. In this, he relied upon the judgement of B.R. Enterprises v. State of U.P. (1999).
The bench asseverated that the only justification for a state to organise and sell lotteries was to effectuate revenue generated from the same and to provide employment to the agents that sell them.
In this context, the bench remarked, that if a state avers that it would only allow lottery tickets of its own under Section 4 of the Act, and proscribe tickets from all other states, the result would be that the lottery tickets will generate maximum revenue for itself with no other state being able to.
The SG submitted that in the case of any violations, the remedy lay under Rule 5, and states could not do something indirectly which was, in turn, prohibited directly.
The bench remarked that the states could not become “mute spectators” and that it was “immoral” for the state to proclaim that they had no duty.
It noted, keeping in mind, the executive power under Article 162, the state had to issue guidelines in place of the (Kerala Paper Lotteries (Regulation)) Rules and figure out how it would discharge its duties under Rule 5 of the Central Rules, i.e., the Lotteries (Regulation) Rules, 2010.
The SG expounded that the aforesaid could not be done by the state and only by the Centre. Further, he stated that the violation of the same could result in suspension from the Centre.
Court, in the end, directed the respondents to file a counter affidavit in 3 weeks and issued notice for the 29th of September whilst recording that the concern was an important matter which required examination.