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A case’s facts

The Prize Competitions Act (42 of 955), Sections 4 and 5, and Regulation 11 and 12 created under Section 20 of the Act were all contested by the petitioners in this case who were promoting and operating prize tournaments in several Indian states. In reaction to Article 32 of the Indian Constitution, several petitions were submitted.

They argued that a “prize competition,” as defined in Section 2(d) of the Act, encompassed both gambling competitions and activities where success was largely dependent on skill, and that the provisions and regulations violated their (the petitioner’s) fundamental right to conduct business and, consequently, the fundamental right guaranteed to every person under Article 19.

Whereas, it was argued on behalf of the Union of India that the definition, when properly interpreted, meant and included only gambling competitions, and that even if that weren’t the case, the impugned provisions were valid as far as gambling competitions were concerned because they were severable from the Act as claimed in their application.

The Civil Appeal No. 134 of 1956, which contested the legality of the Bombay Lotteries and Prize Competitions Control and Tax Act, 1948, on grounds identical to those in the current petitions, was heard concurrently with the petitions.

Issues of the case

Whether the Act is applicable to contests that demand high levels of skill but aren’t gambling-related, based on the definition of “prize competition” in Section 2. (d).

If so, can the ex concessi invalid provisions of Sections 4 and 5 and Rules 11 and 12 relating to such competitions be applied in opposition to competitions that have a gambling-like character?

Decision:

Gambling is considered to be res extra commercium, according to the Civil Appeal No. 134 of 1956, which was heard concurrently with the petitions. It was determined that “trade and commerce,” as defined by Article 19(1)(g) and Article 301 of the Constitution, are the only activities that can be considered authorised trading activities.

According to the Court, the two competition kinds can be distinguished just as clearly as commercial contracts can be distinguished from wagering contracts.

According to the Court, based on the facts or at first glance, it may be difficult to tell whether a particular competition fits into one of the categories or not, but once the competition’s true character is discovered, it will fall into one of the categories.

By virtue of the definition in Section 2(d), it was assumed that the challenged provisions applied to all competitions and that they were severable in their application to competitions where success is not significantly reliant on skill.

Finally, the Court declared that it had been conclusively determined that both of the submitted arguments were against the petitioners. The petitions were rejected with costs because they lacked any merit.

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