# DR. K.R. LAKSHMANAN ETC. ETC v. STATE OF TAMIL NADU AND ANR

- **Citation:** [1996] 1 S.C.R. 395
- **Court:** Supreme Court of India
- **Decided:** 1996-01-12
- **Bench:** Kuldip Singh, B.L. Hansaria, S.B. Majmudar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/dr-k-r-lakshmanan-etc-etc-v-state-of-tamil-nadu-and-anr-13841
- **Pages:** 44

## Headnote

B
Tamil Nadu Horse Races (Abolition and Wagering or Betting) Act,
1974: Section 2.
Madras City Police Act, 1888 : Section 49 and 49-A.
Madras Gaming Act, 1930: Sections 3, 4 and 11.
Madras City Police and Gaming (Amendment) Act, 1949 : Sections 2
and4.
Race Club-Horse racing within premises-Held neither gaming nor
gambling-It is a game of skill where winning depends substantially and
preponderantly on skill-Held wagering or betting on horse racing does not
come under the definition of gaming.
c
D
Madras Race Club (Acquisition and Transfer of Undertakings) Act
E
1986-Valiclity of
Race club-Registration as company under Companies Act--Act acquiring under taking of the club--No investigation or inquiry held by
State--Before Acquisition Act, law was already enacted abolishing betting
p
on horse racing--Acquisition of club-Held violative of Article 14-ln case
of mismanagement of club procedural safeguards under Companies Act held
relevant-Singling out the club held discriminatory--Acquisition Act held
not protected by Article 31-C of the Constitution-Held provisions of Act had
no nexus with the objective contained in Articles 39(b) and (c) of the
G
Constitution.
Constitution of India, 1950 :
Article 14--Madras.Race Club (Acquisition and Transfer of Undertakings) Act, 1986 held unconstitutional.
H
395
396
SUPREME COURT REPORTS
[1996] l S.C.R.
A
Article 31-C-Laws giving effect to directive principles of State policy
B
c
D
Saving of-Declaration in statute-Court c::an ignolt! declaration and examine validity of law-Declaration cannot act as cloak to protect the law.
lnterpretatiun of Statute-Presumption of Constitutionality of
statute-Applicability of
Woni> & Phrases: 'Gampling' .ind Gaming'-Madras Ganiing Act,
1930.
"Mere skill"-Meaning of-Madras City Police Act, 1888.
The principal object of the Madras Race Club, an association
registered as a company with limited liability under the Companies Act,
1956, is lo carry on the business of a race club in the running of horse
races. The club is one of the five "Turf Authorities of India", the other
four being the Royal Calcutta Turf Club, the Royal Western India Turf
Club Limited, the Bangalore Turf Limited and the Hyderabad Race
Club. Race meetings are held in the club's own race course at Madras
and at Uthagamandalam for which bets are made inside the race course
premises. In 1949 the Tamil Nadu Legislature enacted law by which
horse racing was brought within the definition of "gaming". The said
E
law, however, was not enforced till 1975. By sections 2 and 4 of the
Madras City Police and Gaming (Amendment) Act, 1949 the defmition of
'gaming' was amended. Although no notification enforcing Sections 2
and 4 of the 1949 Act was ever issued by the State Government, hut the
said provisions were brought into existence and enforced by an Act of
F
Legislature called the Tamil Nadu Horse Races (Abolition and Wagering
or Betting) Act, 1974. The 1974 Act was unsuccessfully challenged before
the High Court on the grounds that (i) the betting on the horse races not
being gambling the State Legislature under entry 34 of list II of the
Seventh Schedule to the Constitution, had no legislative competence le
G
legislate the 1974 Act; and (ii) the horse
racing being a game of
substantial skill, the provisions of the two Acts were not applicable to
horse races. On leave granted by the High Court the club preferred
appeal before this Court. Under the interim orders of this Court, issued
from time to time, the club is functioning and the horse races are being
H
conducted. During the pendency of the appeal the .Tamil Nadu Legisla-
K.R. LAKSHMANAN (DR.)" STATE
-397
lure enacted the Madras Race Club (Acquisition and Transfer of UnderA
takings) Act, 1986 for a public purpose i.e. to acquire the undertaking of
the club • The Committee members of the club, horse owners and other
interested persons filed writ petitions before this Court challenging the
validity of the Act. The questions involved in these cases are

## Text

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DR. K.R. LAKSHMANAN ETC. ETC.
A
v.
STATE OF TAMIL NADU AND ANR.
JANUARY 12, 1996
[KULDIP SINGH, B.L. HANSARIA AND S.B. MAJMUDAR, JJ.]
B
Tamil Nadu Horse Races (Abolition and Wagering or Betting) Act,
1974: Section 2.
Madras City Police Act, 1888 : Section 49 and 49-A.
Madras Gaming Act, 1930: Sections 3, 4 and 11.
Madras City Police and Gaming (Amendment) Act, 1949 : Sections 2
and4.
Race Club-Horse racing within premises-Held neither gaming nor
gambling-It is a game of skill where winning depends substantially and
preponderantly on skill-Held wagering or betting on horse racing does not
come under the definition of gaming.
c
D
Madras Race Club (Acquisition and Transfer of Undertakings) Act
E
1986-Valiclity of
Race club-Registration as company under Companies Act--Act acquiring under taking of the club--No investigation or inquiry held by
State--Before Acquisition Act, law was already enacted abolishing betting
p
on horse racing--Acquisition of club-Held violative of Article 14-ln case
of mismanagement of club procedural safeguards under Companies Act held
relevant-Singling out the club held discriminatory--Acquisition Act held
not protected by Article 31-C of the Constitution-Held provisions of Act had
no nexus with the objective contained in Articles 39(b) and (c) of the
G
Constitution.
Constitution of India, 1950 :
Article 14--Madras.Race Club (Acquisition and Transfer of Undertakings) Act, 1986 held unconstitutional.
H
395
396
SUPREME COURT REPORTS
[1996] l S.C.R.
A
Article 31-C-Laws giving effect to directive principles of State policy
B
c
D
Saving of-Declaration in statute-Court c::an ignolt! declaration and examine validity of law-Declaration cannot act as cloak to protect the law.
lnterpretatiun of Statute-Presumption of Constitutionality of
statute-Applicability of
Woni> & Phrases: 'Gampling' .ind Gaming'-Madras Ganiing Act,
1930.
"Mere skill"-Meaning of-Madras City Police Act, 1888.
The principal object of the Madras Race Club, an association
registered as a company with limited liability under the Companies Act,
1956, is lo carry on the business of a race club in the running of horse
races. The club is one of the five "Turf Authorities of India", the other
four being the Royal Calcutta Turf Club, the Royal Western India Turf
Club Limited, the Bangalore Turf Limited and the Hyderabad Race
Club. Race meetings are held in the club's own race course at Madras
and at Uthagamandalam for which bets are made inside the race course
premises. In 1949 the Tamil Nadu Legislature enacted law by which
horse racing was brought within the definition of "gaming". The said
E
law, however, was not enforced till 1975. By sections 2 and 4 of the
Madras City Police and Gaming (Amendment) Act, 1949 the defmition of
'gaming' was amended. Although no notification enforcing Sections 2
and 4 of the 1949 Act was ever issued by the State Government, hut the
said provisions were brought into existence and enforced by an Act of
F
Legislature called the Tamil Nadu Horse Races (Abolition and Wagering
or Betting) Act, 1974. The 1974 Act was unsuccessfully challenged before
the High Court on the grounds that (i) the betting on the horse races not
being gambling the State Legislature under entry 34 of list II of the
Seventh Schedule to the Constitution, had no legislative competence le
G
legislate the 1974 Act; and (ii) the horse
racing being a game of
substantial skill, the provisions of the two Acts were not applicable to
horse races. On leave granted by the High Court the club preferred
appeal before this Court. Under the interim orders of this Court, issued
from time to time, the club is functioning and the horse races are being
H
conducted. During the pendency of the appeal the .Tamil Nadu Legisla-
K.R. LAKSHMANAN (DR.)" STATE
-397
lure enacted the Madras Race Club (Acquisition and Transfer of UnderA
takings) Act, 1986 for a public purpose i.e. to acquire the undertaking of
the club • The Committee members of the club, horse owners and other
interested persons filed writ petitions before this Court challenging the
validity of the Act. The questions involved in these cases are :
(1) What is 'gambling' ?
(2) What is the meaning of expression "mere skill" in terms of
Section 49-A of the Madras City Police Act, 1888 and Section 11 of the
Madras Gaming Act, 1930 ?
(3) Whether the running of horse-races by the club is a game of
11chance
11 or a game of "mere skill".
(4) Whether 'wagering' or 'betting' on horse-races is 'gaming' as
delined by the Police Act and the Gaming Act ?
(5) Whether the horse-racing - even if it is a game of 'mere sill'
- is still prohibited under Section 49-A of the Police Act and Section 4 of
the Gaming Act ?
(6) Whether the Madras Race Club (Acquisition and Transfer
of Undertaking) Act, 1986 gives effect to the policy under Article 39(b)
and (c) of the Constitution of India and as such is protected under
Article 31{c) or the Constitution. If not, whether the 1986 Act is liable to
be struck down as violative of Articles 14 and 19(l)(g) of the Constitution ?
Allowing the petitions and the appeal and setting aside the impugned judgment of the High Court, this Court
HELD : 1. Horse racing is a game of mere skill within the meaning
of Section 49 of the Police Act and Section 11 of the Gaming Act. Horse
racing is neither "gaming" nor "gambling" as delined and envisaged
under the two Acts read with the 1974 Act and the penal provisions of
these Acts arc not applicable to the horse racing which is a game of
skill. [ 438-E-F]
B
c
D
E
F
G
2. Gambling in a nut-shell is payment of a price for a chance to win
H
398
SUPREME COURT REPORTS
[1996] l S.C.R.
A
a prize. Games may be of chance, or of skill or of skill and chance
combined. A game of chance is determined entirely or in part by lot or
mere luck. The throw of the dice, the turning of the wheel, the shuffiing
of the cards, are all modes of chance. In these games the result is wholly
uncertain and doubtful. No human mind knows or can know what it will
B
be until the dice is thrown, the wheel stops its revolution or the dealer
had dealt with the cards. A game of skill, on the other hand - although
the element of chance necessarily cannot be entirely eliminated - is one
in which success depends principally upon the superior knowledge,
training, attention, experience and adroitness of the player. Golf, chess
C
and even rummy are considered to be game of skill. The courts have
reasoned that there are few games, if any, which consist purely of chance
or skill, and as such a game of chance is one in which the element of
chance predominates over the element of skill, and a game of skill is one
in which the element of skill predominates over the element of chance. It
D
is the dominant element "skill" or "chance" - which determines the
character of the game. [404-F-H; 405-A-B]
New Encyclopaedia Britannica 15th Edn. Vol .. 5 page 105; Black's
I.Aw Dictionary (Sixth Edn.), referred to.
E
3. Gaming is the act or practice of gambling on a game of chance.
It is staking on chance where chance is the controlling factor. 'Gaming'
in the two Acts i.e. Police Act and Gaming Act would, therefore, mean
wagering or betting on games of chance. It would not include games of
skill like horse-racing. In any case, Section 49 of the Police Act and
F
Section 11 of the Gaming Act specifically save the games of mere skill
from the penal provisions of the two Acts. Wagering or betting on horseracing - a game of skill - does not come within the definition of 'gaming'
under the two Acts. (427-F-G]
G
4. It is settled that (i) the competitions where success depends on
substantial degree of skill are not 'gambling' and (ii) despite there being
an element of chance if a game is preponderantly a game of skiUit would
nevertheless be a game of "mere skill". Therefore, the expression "mere
skill" would mean substantial degree or preponderance of skill. (418-G]
H
State of Andhra Pradesh v. K. Satyanarayana & Ors., (1968] 2 SCR
...
K.R. LAKSHMANAN (DR.) v. STATE
399
387, State of Bombav v. R.M.D. Chamarbaugwala, AIR (1957) SC 699 and
A
R.M.D. Chamarbaugwala & A11r. v. U11io11 of India & A11r., AIR 1957 SC
628; referred to.
5. Horse racing is a sport which primarily depends on the special
ability acquired by training. It is the speed and stamina of the horse,
acquired by training which matters. Jockeys are experts in the art of
riding. Between two equally fast horses, a better trained jockey can
touch the \Vinning-post. Thus horse-racing is a game where the winning
depends substantially and preponderantly on skill. (427-A-B]
B
6. Horse-racing is a game of skill and as such protected under
C
Section 49 of the Police Act and Section 11 of the Gaming Act. Horseracing is not a game of chance and as such is not gambling. That being
the situation, horse racing which is conducted at the race course of the
club is not "gaming" under the two Acts and as such cannot be made
penal. Section 49-A of the Gaming Act is not applicable to wagering or
D
betting on a horse-race when such wagering or betting takes place within
the club premises and on the date on which such race is actually run on
the turf of the club. These sections are applicable to the bucket-shops or
any house room, tent, enclosure, vehicle, etc. which are run in the streets,
bazaars or any other place away from the club. (429-G-H; 430-A-B]
People (){Monroe 85 ALR 605; Edward J. Rohan et al. v. Detroit
Racing Associatio11 el al., 166 ALR 1246; Harless v. United States, (1843)
Morris (Iowa) 169; Engle v. State, (1939) 53 Ariz 458 and Earl of
Ellesmere v. Wallace, 1929 (2) CID, referred to.
King v. Co1111ara, (1939) 61 C.L.R. 596(M); Coles v. Odhamm Press
Ltd., 1936 (I) K.B. 416(A); Commonwealth v. Ke11rycky Jockey Club, 238
Ky 739: 38 SW2d 987; Utah Stale Fair Ass'n v. Green 68 Utah 251, 249
p. 1016; Panas v. Texas Breeders & Racing Ass '11 Inc. Tex, Civ App.80
SW2d 1020; State v. Thompson, 160 Mo 333, 60 SW 1077; 54 LRA 950,
83 Am St Rep 468; E11file v. State ()f Arizona, 53 Ariz 458, 90 P2d 988;
Stoddart v. Sagar 64 LJ (MC) 234 : 2 QB 474; Cami11ada v. Hulton 60 LJ
(MC) 116: 64 LT 572; Attorney General v. lu11cheo11 and Sports Club Ltd.,
1929 AC 400 and Tote Investors ltd. v. Smoker, (1967) 3 A.E.R. 242, cited.
E
F
G
7. It is no doubt correct that in a handicap race the competitors are H
400
SUPREME COURT REPORTS
[1996] l S.C.R.
A
given advantages or disadvantages of weight, distance, time etc. in an
attempt to equalize their chances of winning, but that is not the classic
concept of horse-racing, according to which the best horse should win.
The very concept of handicap race goes to show that there is no element
of chance in the Regular horse-racing. It is a game of skill. Even in a
B
handicap race - despite the assignment of imposts - the skill dominates.
c
D
E
In any case an.occasional handicap race in a race-club cannot change the
natural horse-racing from a game of skill to that of chance. [427-C-F] ·
8. Accepting the respondents' contention that Section 49-A of the
Police Act and Section 4 of the Gaming Act prohibit the holding of the
horse-races would tantamount to hold that two contradictory provisions
had been operating in the two Acts from 1955 till 1975. One set of
provisions prohibit the horse-races by making it an offence and the other
set of provisions permitted the horse-races. The Legislature could have
never intended such a situation. The only reasonable interpretation
which can be given to the two sets of provisions in the two Acts is that
they apply to two different situations. Section 49-A of the Police Act
and Section 4 of the Gaming Act do not apply to wagering or betting in
the club premises and on the horse-races conducted within the enclosure
of the club. These Sections are applicable to the bucket-shops run in
the city street or bazaars purely for gambling purposes. It would be
useful to have a look at the Statement of Objects and Reasons of the 1955
Act. [428-E-G]
9. The provisions of the Madras Race Club (Acquisition & Transfer
F
of Undertakings Act, 1986) are discriminatory and arbitrary and as such
violate and infract the right to equality enshrined under Article 14 of the
Constitution. Accordingly the said Act is struck down. [ 438-C-D]
10. The Policy of the State Government as projected in all the
G
enactments on the subject prior to 1986 shows that the State Government considered horse-racing as gambling and as such prohibited under
the law. The 1986 Act on the other hand declares horse racing as a public
purpose and in the interest of the general public. There is apparent
contradiction in the two stands. It cannot be said that the 1986 Act is a
H
colourable piece of legislation. However, no public purpose is being
r-....
K.R. LAKSHMANAN (DR.) v. STATE
401
served by acquisition and transfer of the undertaking of the club by the
A
Government. One fails to understand how the State Government can
acquire and take over the functioning of the race club when it has
already enacted the 1974 Act with the avowed object of declaring horse
racing as gambling? Having enacted a law to abolish betting on horse
racing and stoutly defending the same before this Court in the name of
B
public good and public morality, it is not open to the State Government
to acquire the undertaking of liorse racing again in the name of public
good and public purpose. It is ex-fade irrational to invoke "public good
and public purpose" for declaring horse racing as gambling and as such
prohibited under law, and at the same time speak of "public purpose and
C
public good" for acquiring the race club and conducting the horse racing
by the Government itself. Arbitrariness is writ large on the face of the
provisions of the Act. [437-G-H, 438-A-C]
11. There is no material on the record to show that any inquiry or
investigation was held by the State Government in the affairs of the club,
revealing that the management have so mis-behaved and mismanaged
D
-'
that they are no longer fit and proper persons to be permitted to
manage the affairs of the club. Even if the mismanagement on the part
,
of the club is assumed, it is not open to single out a club of the type for
discriminatory treatment. May be that a race-club of national importance or of considerable importance in the State can be taken over in the
interest of the State, but the club is an ordinary race-club which has no
impact whatsoever on the material resources of the community or the
economic system of the State. There are no special circumstances or
reasons to single out the club as a class for the purpose of the impugned
Act. Even if the recitation is accepted in the objects and reasons that
E
F
the company was being mismanaged, the Companies Act provide for
ample machinery to deal with the mismanagement in the companies
registered under the Companies Act. It is true that the presumption is in
favour of the constitutionality of a legislative enactment and it is to be
G
presumed that a legislature understands and appreciates the needs of its
own people, but when on the face of the Statute there is no classification
and no attempt has been made to select an individual with reference to
any differentiation attributes peculiar to that individual and not possessed by others, the presumption is of no assistance to the State. There H
402
SUPREME COURT REPORTS
[1996) 1 S.C.R.
A
is no reasonable basis for classifying the race-club for the purposes of
acquiring and transfer of its undertaking on the ground of mismanagement. [436-F-H; 437-A-D)
12. It is settled proposition of law that notwithstanding the declaB
ration by the Legislature that an Act has been made to implement the
Directive Principles specified in Article 39, it is open to the Court to
ignore such a declaration in a given case and examine. the constitutional
validity of the Act. The declaration cannot act as a cloak to protect the
law bearing no relationship with the objectives contained in Article 39 of
c
D
E
F
G
the Constitntion._[432-H; 433-A)
Assam Sillimanite Ltd. and Anr. v. Union of India and Ors., [1992]
Su11p. 1 SCC 692, relied on.
13. The club does not own or control any material resources of the
community which are to be distributed in terms of Article 39(b) of the
Constitutio;. of India. There are two aspects of the functioning of the club.
One is the betting by the punters at the totalisator and with the bookies.
The club does not earn any income from the betting-money except 5%
commission. There is no question whatsoever of the club owning or
controlling the material resources of the community or in any manner
contributing towards the operation of the economic system resulting in
the concentration of wealth and means of production to the common
detriment. The second aspect is the conduct of horse-races by the club.
Horse-racing is a game of skill, the horse which wins the race is given
prize by the club. It is a simple game of horse racing where the winning
horses are given prizes. Neither the "material resources of the commu.
nity" nor "to subserve the con1mon good" has any relevance to the twin
functioning of the club. Similarly, the operation of the club has no
relation or effect on the "operation' of the economic system." There is
no question whatsoever of attracting the Directive Principles contained
in Article 39(b) and (c) of the Constitntion. Reference to Article 39(b)
and (c) in the aims and objects and in Section 2 of the Act is nothing
but a mechanical reproduction of constitutional provisions in a totally
inappropriate context. There is no nexus so far as the provisions of the
1986 Act are concerned with the objectives contained in article 39(b)
H
and (c) of the Constitution. Therefore, the protection under Article 3l(c)
,l.
I
,.... __
KR. LAKSHMANAN (DR.) v. STATE [KULDIP SINGH, J.]
403
of the Constitution cannot be extended to the 1986 Act.
A
[434-D-H; 435-C]
CIVIL ORIOINAL JURISDICTION
Writ Petition (C) No. 665 of
1986 Etc. Etc.
(Under Article 32 of the Constitution of India.)
Vineet Kumar, Mukul Mudgal, Ajit Kumar Sinha, P.R. Seethararnan,
B
R.P. Wadhwani, S. Srinivasan, W.C. Chopra, K. Swami, Ms. Asha jain
Madan, P.N. Ramalingam, Mrs. M. Karanjawala, K.R. Nambiar,
V.Balachandran, J.B. Dadachanji, S. Sukumaran, A.T.M. Sarnpath and R.
C
Venkatararnani for the appearing parties.
The Judgment of the Court was delivered by
KULDIP SINGH, J. The Madras Race Club (the club) is an Association registered as a company with limited liability under the Companies Act,
1956. The club was formed in the year 1896 by taking over the assets and
liabilities of the erstwhile unincorporated club known as Madras Race Club.
According to its Memorandum and Articles of Association, the principal
object of the club is to carry on the business of a race club in the running
of horse races. The club is one of the five "Turf Authorities of India", the
other four being the Royal Calcutta Turf Club, the Royal Western India Turf
Club Limited, the Bangalore Turf Club Limited and the Hyderabad Race
Club. Race meetings are held in the club's own race course at Madras and
at Uthagarnandalam (Ooty) for which bets are made inside the race course
premises. While horse races are continuing in the rest of the country, the
Tamil Nadu Legislature, as back as 1949, enacted law by which horse racing
was brou~ht within the definition of "gaming". The said law, however, was
not.enforced till 1975, when it was challenged by the club by way of a writ
petition before the Madras High Court. The writ petition was dismissed by
D
E
F
the High Court. These proceedings before us are sequel to the chequered
G
history of litigation, between the parties, over a period of two decades.
From the pleadings of the parties and the arguments addressed
before us by the learned counsel the following questions arises for our
consideration :
H
404
SUPREME COURT REPORTS
[1996) l S.C.R.
A
I. What is 'gambling'?
B
c
2. What is the meaning of expression "mere skill" in terms of Section
49-A of the Madras City Police Act, 1888 (The Police Act) and Section 11
of the Madras Gaming Act, 1930 (the Gaming Act)"?
3. Whether the running of horse-races by the club is a game of
"chance" or a game of "mere skill"?
4. Whether 'wagering' or 'betting' on horse-races is 'gaming' as
defined by the Police Act and the Gaming Act?
5. Whether the horse-racing - even if it is a game of 'mere skill' - is
still prohibited under Section 49-A of the Police Act and Section 4 of the
Gaming Act?
6. Whether the Madras Race Club (Acquisition and Transfer of
D
Undertaking) Act, 1986 (the 1986 Act) gives effect to the policy under
Article 39(b) and (c) of the Constitution of India (the Constitution) and as
such is protected under Article 3l(c) of the Constitution. If not, whether the
1986 Act is liable to be struck down as violative of Articles 14 and 19(l)(g)
of the Constitution.
E
F
G
The New Encyclopaedia Britannica defines gambling as "The betting
or staking of something of value, with consciousness of risk and hope of gain
on the outcome of a game, a contest, or an uncertain event the result of which
may be determined by chance or accident or have an unexpected result by
reason of the better's miscalculations''. According to Black's Law Dictionary
(Sixth Edition) "Gambling involves, not only chance, but a hope of gaining
something beyond the amount played. Gambling consists of consideration, an
element of chance and a reward" .......... Gambling in a nut-shell is payment
of a price for a chance to win a prize. Games may be of chance, or of skill
or of skill and chance combined. A game of chance is determined entirely or
in part by lot or mere luck. The throw of the dice, the turning of the wheel,
the shufOing of the cards, are all modes of chance. In these games the result
is wholly uncertain and doubtful. No human mind knows or can know what
it will be until the dice is thrown, the wheel stops its revolution or the dealer
has dealt with the cards. A game of skill, on the other hand - although the
H
element of chance necessarily cannot be entirely eliminated - is one in which
,
//;'-
-
•
K.R. LAKSHMANAN (DR.) v. STATE [KULDIP SINGH, J.]
405
success depends principally upon the superior knowledge, training, attention,
A
experience and adroitness of the player. Golf, chess and even Rummy are
considered to be games of skill. The courts have reasoned that there are few
games, if any, which consist purely of chance or skill, and as such a game
of chance is one in which the element of chance predominates over the
element of skill, and a game of skill is one in which the element of skill
B
predominates over the element of chance. It is the dominant element- "skill"
or "chance" - which determines the character of the game.
The Public Gambling Act, 1867 provided punishment for public
gambling and for keeping of "common gaming house". The Act did not bring
within its scope the betting on horse races. The Bengal Public Gaming Act,
1867 provided punishment for public gambling and the keeping of common
gaming house. Gaming was defined in the Bengal Act to include wagering
or betting except wagering or betting on horse races. The next legislation was
the Bombay Prevention of gambling Act, 1887 which defines "gaming" in
similar terms as the Bengal Act.
Before we deal with the Madras legislations on the subject, it would be
useful to refer to the judgments of this Court where in the question whether
trade or business which is of 'gambling' nature can be a fundamental right
c
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within the meaning of Article 19 ( l)(g), of the Constitution.
E
This Court in State ~f Bombay v. R.M.D. Chamarbaugwala, A.LR.,
1957 S.C. 699 speaking through S.R. Das, C.J. Observed as under :
"(38) From ancient times seers and law-givers of India looked upon
gambling as a sinful and pernicious vice and deprecated its practice.
Hymn. XXXIV of the Rigveda proclaims the. demerit of gambling.
Verses 7, 10 and 13 :
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"7. Dice verily are armed with goads and driving hooks,
deceiving and tormenting, causing grievous woe. They give frail
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gifts and then destroy the man who wins, thickly anointed with the
player's fairest good.
10. The gambler's wife is left forlorn and wretched : the mother
mourns the son who wanders homeless. In constant fear, in debt, and
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seeking riches, he goes by night unto the home of others.
11. Play not with dice; no, cultivate thy cornland. Enjoy the
gain, and deem that wealth sufficient. There are thy cattle, there
thy wife, 0 gambler, so this good Savitar himself hath told me." The
Mahabharata deprecates gambling by depicting the woeful conditions of the Pandavas who had gambled away their kingdom."
"While Manu condemned gambling outright, Yajnavalkya sought to.
bring it under State control but he too in verse 202 (2) provided that
persons gambling with false dice or other instruments should be
branded and punished by the king. Kautilya also advocated State
control of gambling and, as a practical person that he was, was not
averse to the State earning some revenue therefrom.
Vrihaspati dealing with gambling in chap. XXVI, verse 199, recognises that gambling had been totally prohibited by Manu because it
destroyed truth, honesty and wealth, while other !aw-givers permitted it when conducted under the control of the State so as to allow
the king a share of every stake. Such was the notion of Hindu lawgivers regarding the vice of gambling. Hamilton in his Hedaya vol.
IV, Book XLIV, includes gambling as a kiraheeat or abomination"
The learned Chief Justice then referred to various statutes in India
prohibiting public gambling and also referred to case-law on the subject in
other countries. He quoted the following observations of McTiernan, J. of the
Australian High Court in King v. Cmmara, (1939) 61 C.L.R. 596 (M) :
"Some trades are more adventurous or speculative than others, but
trade or commerce as a branch of human activity belongs to an order
entirely different from gaming or gambling. Whether a particular
activity falls within the one or the other ord~r is a matter of social
opinion rather than jurisprudence ............. It is gambling to buy a
ticket or share in a lottery. Such a transaction does not belong to the
commercial business of the country. The purchaser stakes money in
a scheme for distributing prizes by chance. He is a gamester."
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On the question whether gambling is protected either by Article
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K.R. LAKSHMANAN (DR.) v. STATE [KULDIP SINGH, J.]
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!9(l)(g) or Article 30! of the Constitution, this Court held as under :
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"(42) It will be abundantly clear from the foregoing observations
that the activities which have been condemned in this country from
ancient times appear to have been equally discouraged and looked
upon with disfavour in England, Scotland, the United States of
America and in Australia in the cases referred to above.
We fipd it difficult to accept the contention that those activities
which encourage a spirit of reckless propensity for making easy
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gain by lot or chance, which lead to the loss of the hard earned
money of the un?iscerning and improvident common man and
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thereby lower his standard of living and drive him into a chronic
state or indebtedness and eventually disrupt the peace and happiness
of his humble home could possibly have been intended
by our
Constitution makers to be raised to the status of trade, commerce or
intercourse and to be made the subject matter of a fundamental right
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guaranteed by Art 19(1 )(g).
We find it difficult to persuade ourselves that gambling was ever
intended to form any part of this ancient country's trade, commerce
or intercourse to be declared as free under Art. 301. It is not our
purpose nor is it necessary for us in deciding this case to attempt an
exhaustive definition of the word "trade", "business" or "intercourse." We are, however, clearly of opinion that whatever else may
or may not be regarded as falling within the meaning of these
words, gambling cannot certainly be taken as one of them. We are
convinced and satisfied that the real purpose of Arts., 19(1 )(g) and
301 could not possibly have been to guarantee or
declare the
freedom of gambling. Gambling activities from their very nature and
in essence are extracommercium although the external forms,
formalities and instruments of trade may be employed and they are
not protected either by Art. 19 (I) (g) or Art. 301 of our Constitution.
On the crucial question whether the games which depend lo a substantial degree upon the exercise of skill come within the stigma of "gambling",
S.R. Das, Chief Justice in Cha1narbauglvala's case held as under :
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"Thus a prize competition for which a solution was prepared
beforehand was clearly a gambling prize competition, for the
competitors were only invited to guess what the solution prepared
beforehand by the promoters might be, or in other words, as Lord
Hewart. C.J. observed in Coles v. Odhams Press Ltd., (1936) I K.B.
416 (A) "the competitors are invited to pay certain number of pence
to have the opportunity of taking blind shots at a hidden target".
Prize competitions to which the second part of the qualifying
clause applied, that is to say, the prize competitions for which the
solution was determined by lot, was necessarily a gambling adventure.
Nor has it been questioned that the third category, which
comprised "any other competition success in which does not depend
to substantial degree upon the exercise of skill", constituted a
gambling competition. At one time the notion was that in order to
be branded as gambling the competition must be one success in
which depended entirely on chance. If even a scintills of skill was
required for success the competition could not be regarded as of a
gambling nature.
The Court of Appeal in the Judgment under appeal has shown
how opinions have changed since the earlier decisions were givell
and it is not necessary for us to discuss the matter again. It will
suffice to say that we agree with the Court of Appeal that a
competition in order to avoid the sigma of gambling must depend to
a substantial degree upon the exercise o.f skill. Therefore, a
competition success wherein does not depend to a substantial degree
upon the exercise of skill is now recognised to be of a gambling
nature."
On the same day when this Court decided Chamarbaugwalas' case, the
same four-judge Bench presided over by S.R. Das, Chief Justice, delivered
judgment in another case between the same parties titled R.M.d.
Chamarbaugawala & Anr. v. Union of India & Anr., AIR ( 1957) SC 628. The
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validity of some of the provisions of the Prize Competitions Act ( 42 of
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KR. LAKSHMANAN (DR.) 1•. STATE [KULDIP SINGH, J.]
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1955) was challenged before this Court by way of petitions under Article
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32 of the Constitution. Venkatarama Ayyar J. speaking for the Court
noticed the contentions of the learned counsel for the parties in the following
words :
"Now, the contention of Mr. Palkhiwala, who addressed the main
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argument in support of the petitions, is that prize competition as
defined in S.2(d) would include not only competitions in which
success depends on chance but also those in which it would depend
to a substantial degree on skill; ....... that even if the provisions
could be regarded as reasonable restrictions as regards competitions
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which are in the nature of gambling, they could not be supported as
regards competitions wherein success depended to a substantial
extent on skill, and that as the impugned law constituted a single
inseverable enactment, it must fail in its entirety in respect of both
classes of competitions. Mr. Seervai who appeared for the respondD
ent, disputes the correctness of these contentions. He argues that
prize competition' as defined in S.2 (d) of the Act, properly
construed, means and includes only competitions in which success
does not depend to any substantial degree on skill and are essentially
gambling in their character; that gambling activities are not trade or
business within the meaning of that expression in Art. 19(l)(g), and
that accordingly the petitioners are not entitled to invoke the
protection of Art. 19 (6) ; and that even if the definition of "prize
competition' in S. 2( d) is wide enough to include competitions in
which success depends to a substantial degree on skill and Ss. 4 and
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5 of the Act and Br. 11 and 12 are to be struck down in respect of
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such competitions as unreasonable resrtrictions not protected by Art.
19(6) that would not affect the validity of the enactment as regards
the competitions which are in the nature of gambling, the Act being
severable in its application to such competitions."
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The learned Judge thereafter, observed as under :
"We must hold that as regards gambling competitions, the petitioners
before us cannot seek the protection of Art. 19(l)(g) ............... (5)
As regards competitions which involve substantial skill however,
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different considerations arise. They are business activities, the
protection of which is guaranteed by Art. (l9)(l)(g) .......................... "
Finally, Venkatarama Ayyar, J. speaking for the Court held as under :
"(23) Applying these principles to the present Act, it will not be
questioned that competitions in which success depends to substantial
extent on skill and competitions in which .it does not so depend,
form two distinct and separate c~tegories. The difference between
the two classes of competitions is as clear-cut as that between
commercial and wagering contracts. On the facts there might be
difficulty in deciding whether a given competition falls within one
category or not; but when its true character is determined, it must
fall either under the one or the other. The distinction between the
two classes of competitions has long been recognised in the legislative practice of both the United Kingdom and this country, and the
Courts have, time and again, pointed out the characteristic features
which differentiate them. And if we are now to ask ourselves the
question would parliament have enacted the law in question if it had
known that it would fail as regards competitions involving skill,
there can be no doubt, having regard to the history of the legislation,
as to what our answer would be. The conclusion is therefore
inescapable that the impugned provisions, assuming that they apply
by virtue of the definition in S.2(d) to all kinds of competitions, are
severable in their application to competitions in which success does
not depend to any substantial exteqt on skill."
This Court, therefore, in the two Chamarbaugwala-cases, has held that
gambling is not trade and as such is not protected by Article 19( l )(g) of the
Constitution. It has further been authoritatively held that the competitions
which involve substantial skill are not gambling activities. Such competitions
are business activities, the protection of which is guaranteed by Article
19(1 )(g) of the Constitution. It is in this background that we have to examine
the question whether horse-racing is a game of chance or a game involving
substantial skill:
The Police Act extends to the whole of the city of Madras, as defined
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in Section 3 of the said Act. Section 3 of the Police Act defines "cvnunon
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K.R":LAKSHMANAN (DR.) v. STATE [KULD!P SINGH, J.]
411
gaming house" "gaming" and "instru1nents of gaming" in lhe following
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words :
""Common gaming~house" means any house, room, tent. enclosure,
vehicle, vessel or any place whatsoever in which cards, dice, tables
or other instruments of gaming are kept or used for the profit or gain
of the person owning, occupying, using, or keeping such house,
room, ten~ enclosure, vehicle, vessel or place, whether by way of
charge for the use of instruments of gaming or of the house, room,
tent, enclosure, vehicle, vessel or place, or otherwise howsoever ;
and includes any house, room, lent, enclosure, vehicle, vessel or
place opened, kept or used or permitted to be opened, kept or used
for the purpose of gami11g;
"Gaming" 'Gaming does not include a lottery .but includes wagering,
or betting, except wagering or betting on a horse~race when such
wagering or betting takes place
(i) on the date on which such race is to be run; and
(ii) in a place or places within the race enclosure which the
authority controlling such race has with the sanction of the
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~late Government set apart for the purpose.
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For the purposes of this definition, wagering or betting shall be
deemed to comprise the collection or soliciting of bets, the receipt
or distribution of winnings or prizes, in money or otherwise, in
respect of any wager or bet, or any act which is intended to aid or
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facilitate wagering or betting or such collection, soliciting, receipt or
distribution.
Instruments of gaming - "Instruments of gaming" include any
article used or intended to be used as a subject or means of gaming,
any document used or intended to be used as a register or records
or evidence of any gaming, the proceeds of any gaming, and any
winnings or prizes in money or otherwise distributed or intended to
be distributed in respect of any gaming."
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Seection 42 of the Police Act gives power to the Commissioner to grant
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warrant to enter any place Which is used as a common gan1ing house and the
arrest of persons found therein and to seize all instruments of gaming etc.
Section 43 provides that any cards, dice, gaming table or cloth, board or
other instruments of gaming found in any place entered or searched under
Section 42 shall be evidence that such place is used as a common gaming
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house. Section 44 states that in order to convict any person of keeping
common gaming house, the proof of playing for stakes shall not be
necessary. Section 45 provides for penalty for opening, keeping or use of a
gaming house. Section 46 lays down penalty for being found in a common
gaming house for the purpose of gaming. Section 47 permits destruction of
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the instruments of gaming on conviction and Section 48 relates to indemnification of witnesses. Section 49 and 49-A (to the extent relevant) of the
Police Act are. reproduced hereunder :
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"49. Nothing in sections 42 to 48 of this Act shall be held to
apply to games of mere skill wherever played. 49-A, (1) whoever -
(a) being the owner or occupier or having the use of any house,
room, tent, enclosure, vehicle, vessel or place, opens keeps or uses
the same for the purpose of gaming -
(i) on a horse-race, or
(ii) ......................................... .
(iii) ......................................... .
(iv) ......................................... .
(v) ......................................... .
(vi) ......................................... .
(b) ................................................. .
(c) .................................................. .
(d) ................................................. ..
shall be punishable with imprisonment for a term which may extend
to two yeas and with fine which may extend to five thousand rupees,
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K.R. LAKSHMANAN (DR.) v.