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TMI Blog1957 (4) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... resented before the High Court of Judicature at Bombay on December 18, 1952. In the said petition there were two petitioners who are now the two respondents to this appeal. The first petitioner is an individual who claims to be a citizen of India and the founder and Managing Director of the second petitioner, which is a company incorporated in the State of Mysore and having its registered head office at 2, Residency Road, Bangalore in that State. That petition was further supported by an affidavit sworn by the first petitioner on the same day. 2. The allegations appearing in the said petition and affidavit may now be shortly stated. In July, 1946 the first petitioner applied for and obtained from the then Collector of Bombay a licence, being Licence No. 84 of 1946, for the period ending March 31, 1947, to conduct what was known as the Littlewood's Football Pool Competitions in India. That licence was granted to the first petitioner under the provisions of the Bombay Prize Competitions Tax Act, (Bom. XI of 1939) (hereinafter referred to as the 1939 Act), which was then in force. The said licence was renewed for a period of one year from April 1, 1947 to March 31, 1948. During ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er applied for and obtained a licence under that Act and paid the requisite licence fees and also paid and is still paying to the State of Mysore the tax at the rate of 15% (latterly reduced to 121%) of the gross receipts in respect of the R.M.D.C. Crosswords Prize Competition and continued and is still continuing the said Prize Competition through the said weekly newspaper "The Sporting Star" and to receive entry forms with fees from all parts of the territory of India including the State of Bombay. It is said, on the strength of the audited books of account, that after distribution of prizes to the extent of about 33% of the receipts and after payment of taxes in Mysore amounting to about 15% and meeting the other expenses aggregating to about 47%, the net profit of the second petitioner works out to about 5% only. 6. On November 20, 1952, the State of Bombay passed The Bombay Lotteries and Prize Competitions Control and Tax (Amendment) Act (Bom. XXX of 1952). This Act amended the provisions of the 1948 Act in several particulars. Thus, the words " but does not include a prize competition contained in a newspaper printed and published outside the Province of Bombay", which occu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utside the State of Bombay, are ultra vires void and inoperative in law. 8. Upon the presentation of the petition a Rule was issued calling upon the State of Bombay to appear and show cause, if any it had, why the writ or orders prayed for should not be issued or made. The State of Bombay filed an affidavit raising several technical legal objections to the maintainability of the petition and refuting the allegations and submissions contained therein and in the supporting affidavit. It submitted that, as the second petitioner was a corporation , and the first petitioner, who was a Managing Director thereof, had no rights independent of the second petitioner, neither of them could lay any claim to any fundamental right under Art. 19(1) (g) and no question could arise of any violation of the petitioner's alleged fundamental rights. It further submitted that, having. Regard to the fact that lotteries and prize competitions were opposed to public policy, there could be no " business " in promoting a lottery or a prize competition and the question of the violation of the petitioners' alleged rights under Art. 19(1) (g) of the Constitution did not arise. It was also contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the trade or business of conducting prize competitions ' outside the State and was, therefore, beyond the competence of the State Legislature and invalid. (g) The impugned Act offended against Art. 301 of the Constitution inasmuch as it imposed restrictions on trade, commerce and intercourse between the States and was not saved by Art. 304 (b) of the Constitution. (h) The restrictions imposed by the impugned Act on the trade or business of the petitioners were not reasonable restrictions in the interests of the general public and, therefore, contravened the fundamental right of the petitioners, who were citizens of India, to carry on their trade or business under Art. 19 (1) (g) of the Constitution. (i) That ss. 10, 12 and 12A of the said Act offended against Art. 14 of the Constitution inasmuch as they empowered discrimination between prize competitions contained in newspapers or publications printed and published within the State and those printed and published outside the State. 10. The State of Bombay, which is now the appellant before us, on the other hand, maintained that (a) The prize competitions conducted by the petitioners were a lottery. (b) The provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ementation, furtherance or pursuance of any of the provisions of the impugned Act and the 1952 Rules made thereunder and particularly from -enforcing any of the penal provisions against the petitioners, their Directors, officers, servants or agents and that the State of Bombay, its servants and agents, do allow the petitioners to carry on their trade and business of running the Prize Competition mentioned in the petition and do forbear from demanding, collecting or recovering from the petitioners any tax as provided in the impugned Act or the said Rules in respect of the said Prize Competition and that the State of Bombay do pay to the petitioners their costs of the said applications. 12. Being aggrieved by the decision of the trial Judge, the State of Bombay preferred an appeal on June 8, 1954. The Court of Appeal dismissed the appeal and confirmed the order of the trial Judge, though on somewhat different grounds. It differed from the learned trial Judge on the view that he had taken that there was no legislative competence in the Legislature to enact the legislation. It held that the topic of legislation was I gambling' and the Legislature was competent to enact it under E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erritories or any part thereof and its laws cannot, in the absence of a territorial nexus, have any extra territorial operation. If the impugned law satisfies both these tests, then finally the court has to ascertain if there is anything in any other part of the Constitution which places any fetter on the legislative powers of such Legislature. The impugned law has to pass all these three tests. 13. Taking the first test first, it will be recalled that the 1948 Act was enacted by the Provincial Legislature of Bombay when the Government of India Act, 1935, was in force. Under ss. 99 and 100 of that Act the Provincial Legislature of Bombay had power to make laws for the Province of Bombay or any part thereof with respect to any of the matters enumerated in List 11 in the Seventh Schedule to that Act. It will also be remembered that the 1948 Act was amended by Bombay Act XXX of 1952 after the Constitution of India had come into operation. Under Arts. 245 and 246, subject to the provisions of the Constitution, the Legislature of the State of Bombay has power to make laws for the whole or any part of the State of Bombay with respect to any of the matters enumerated in List II of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was enacted to control and to levy a tax not only on prize competitions but on lotteries also. It is not unreasonable to conclude that the clubbing together of lotteries and prize competitions in the 1948 Act indicates that in the view of the Legislature the two topics were, in a way, allied to each other. As already indicated, the 1948 Act was amended in 1952 by Bombay Act XXX of 1952 so as to extend its operation to prize competitions contained in newspapers printed and published outside the State of Bombay. In s. 2(1) (d) of the impugned Act will be found the definition of " prize competition " to which reference will be made hereafter in greater detail. Clause (dd) was inserted in s. 2(1) in 1952 defining "promoter". Section 3 declares that subject to the provisions of the Act, all lotteries and all prize com- petitions are unlawful. This is a clear indication that the legislature regarded lotteries and prize competitions as on the same footing and declared both of them to be unlawful, subject, of course, to the provisions of the Act. Section 4 creates certain offences in connection with lotteries and competitions punishable, as therein mentioned. We may skip over ss. 5 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ize competition of any kind to keep and maintain accounts relating to such lottery or prize competition and to submit to the Collector statements in such form and at such period as may be prescribed. It is not necessary for the purpose of this appeal to refer to the remaining sections which are designed to facilitate the main purpose of the Act and deal with procedural matters except to s. 31 which confers power on the State Government to make rules for the purpose of carrying out the provisions of the Act. In exercise of powers so conferred on it, the State Government has, by Notification in the Official Gazette, made certain rules called the Bombay Lotteries and Prize Competitions Control and Tax Rules, 1952, to which reference will be made hereafter. 16. The petitioners contend that the object of the impugned Act is to control and to tax lotteries and prize competitions. It is not the purpose of the Act to prohibit either the lotteries or the prize competitions. They urge that the impugned Act deals alike with prize competitions which may partake of the nature of gambling and also prize competitions which call for knowledge and skill for winning success and in support of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other competition success in which does not depend to a substantial degree upon the exercise of skill, but does not include a prize competition contained in a newspaper printed and published outside the Province of Bombay; " 19. The collocation of words in the first category of the definitions in both the 1939 Act and the 1948 Act as originally enacted made it quite clear that the qualifying clause "for which the solution is prepared beforehand by the promoters of the competition or for which the solution is determined by lot " applied equally to each of the five kinds of prize competitions included in that category and set out one after another in a continuous sentence. It should also be noted that the qualifying clause consisted of two parts separated from each other by the disjunctive word "or". Both parts of the qualifying clause indicated that each of the five kinds of prize competitions which they qualified were of a gambling nature. 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, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready stated the 1948 Act was amended in 1952 by Bombay Act XXX of 1952. Section 2(1)(d) as amended runs as follows: Prize competition " includes- (i) (1) cross-word prize competition, (2) missing word prize competition, (3) picture prize competition, (4) number prize competition, or (5) any other prize competition, for which the solution is or is not prepared beforehand by the promoters or for which the solution is determined by lot or chance; (ii) any competition in which prizes are offered for forecasts of the results either of a future event or of a past event the result of which is not yet ascertained or not yet generally known; and (iii) any other competition success in which does not depend to a substantial degree upon the exercise of skill; 21. It will be noticed that the concluding sentence " but does not include a prize competition contained in a newspaper printed and published outside the Province of Bombay" has been deleted. This deletion has very far reaching effect, for it has done away with the exclusion of prize competitions contained in a newspaper printed and published outside the State of Bombay from the scope of the definition. In the next place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oters and (3) for which the solution is determined by lot or chance. The first and the third parts of the qualifying clause, it is conceded, will, when applied to the preceding five kinds of prize competitions, make each of them gambling a ventures; gut it is contended that prize competitions to which the second part of the qualifying clause may apply, that is to say prize competitions for which the solution is not prepared beforehand, need not be of a gambling nature at all and at any rate many of them may well be of an innocent type. This argument hangs on the frail peg of unskilful draftsmanship. It has been seen that in the old -definitions all the five kinds of prize competitions included in the first categorv were of a gambling nature. We find no cogent reason-and none has been suggested-why the Legislature_which treated lotteries and prize competitions on the same footing should suddenly enlarge the first category so as to include innocent prize competitions. To hold that the first category of prize competitions include innocent prize competitions will go against the obvious tenor of the impugned Act. The 1939 Act dealt with prize competitions only and the first category i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... result of which is not yet ascertained or not yet generally known. It is said that forecasts of such events as are specified in the section need not necessarily depend on chance, for it may be accurately done by the exercise of knowledge and skill derived from a close study of the statistics of similar events of the past. It may be that expert statisticians may form some idea of the result of an uncertain future event but it is difficult to treat the invitation to the general public to participate in these competitions as an invitation to a game of skill. The ordinary common people who usually join in these competitions can hardly be credited with such abundance of statistical skill as will enable them, by the application of their skill, to attain success. For most, if not all, of them the forecast is nothing better than a shot at a hidden target. Apart from the unlikelihood that the Legislature in enacting a statute tarring both lotteries and prize competitions with the same brush as indicated by s' 3 would squeeze in innocent prize competitions in between two categories of purely gambling varieties of them, all the considerations and difficulties we have adverted to in con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act read as a whole comprises only prize competitions which are of the nature of a lottery in the wider sense, that is to say, of the nature of gambling. The Court of Appeal took the view that although as a matter of construction the definition did include innocent prize competitions, yet by the application of another principle, namely, that a literal construction will make the law invalid because of its overstepping the limits- of Entry 26, which comprises only trade and commerce within the State, the definition should be read as limited only to gambling prize competitions so as to make it a law with respect to betting and gambling under Entry 34. It is not necessary for us in this case to consider whether the principle laid down by Sir Maurice Gwyer C. J. in the Hindu Women's Right to Property Act case (1941) F.C.R. 12) can be called in aid to cut down the scope of a section by omitting one of two things when the section on a proper construction includes two things, for we are unable, with great respect, to agree with the Court of Appeal that on a proper construction the definition covers both gambling and innocent competitions. In our view, the section, on a true ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of the entry fees received from the State of Bombay. On ultimate analysis it is a tax on each entry fee received from each individual competitor who remits it from the State of Bombay. In gigantic prize competitions which the prize competitions run by the petitioners undoubtedly are, it is extremely difficult and indeed well nigh impossible for the State to get at each individual competitor and the provision for collecting the tax from the promoters after the entry fees come into their hands is nothing but a convenient method of collecting the tax. In other words, the taxing authority finds it convenient in the course of administration to collect the duty in respect of the gambling activities represented by each of the entries when the same reaches the hands of the promoters. The tax on gambling is a well recognised group of indirect taxes as stated by Findlay Shirras in his Science of Public Finance, vol. II p. 680. It is a kind of tax which, in the language of J. S. Mill quoted by Lord Hobhouse in Bank of Toronto v. Lambe (L.R. (1887) 12 A.C. 575), is demanded from the promoter in the expectation and intention that he shall indemnify himself at the expense of the gamblers wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 276 which reproduced s. 142A of the Government of India Act, 1935, they could not impose a tax exceeding the sum of Rs. 250 on any trade or calling under Entry 60. If the tax can be referable either to Entry 60 or to Entry 62, -then in view of the fact that s. 12A will become at least partially, if not wholly, invalid as a tax on trade or calling under Entry 60 by reason of Art. 276(2), the court must, in order to uphold the section, follow the well established principle of construction laid down by the Federal Court of India and hold that the Legislature must have been contemplating to make a law with respect to betting and gambling under Entry 62, for there is no constitutional limit to the quantum of tax which can be imposed by a law made under that Entry. For reasons stated above, we are satisfied that s. 12A is supportable as a valid piece of legislation under Entry 62. 27. The next point urged by the petitioners is that under Arts. 245 and 246 the Legislature of a State can only make a law for the State or any part thereof and, consequently, the Legislature overstepped the limits of its legislative field when by the impugned Act it purported to affect men residing and car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... euphemistically called, the competitors, fill up the entry forms and either leave it along with the entry fees at the collection depots set up in the State of Bombay or- send the same by poet from Bombay. All the activities that the gambler is ordinarily expected to undertake take place, mostly if not entirely, in the State of Bombay and after sending the entry forms and the fees the gamblers hold their soul in patience in great expectations that fortune may smile on them. In our judgment the standing invitations, the filling up of the forms and the payment of money take place within the State which is seeking to tax only the amount received by the petitioners from the State of Bombay. The tax is on gambling although it is collected from the promoters. All these, we think, constitute sufficient territorial nexus which entitles the State of Bombay to impose a tax on the gambling that takes place within its boundaries and the law cannot be struck down on the ground of extra territoriality. 28. Assuming that the impugned Act is well within the legislative competence of the Bombay Legislature and that it is not invalid on the ground of extra territorial operation, we have next to ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complied with but it is submitted, we think correctly, that the defect was cured, under Art. 255, by the assent given subsequently by the President to the impugned Act. It is, however, admitted by learned counsel appearing for the appellant State that under Art. 255 the subsequent assent of the President will save the Act if the other condition embodied in Art. 304(b) as to the restrictions imposed by it being reasonable in the public interest is held to be satisfied but it will not save the rules framed under a. 31 of the impugned Act which had never been placed before the President or assented to or approved by him. We now proceed to examine and deal with these rival, contentions. 29. The first branch of the argument on this part of the appeal raises a question of a very far reaching nature. The question posed before us is: Can the promotion of prize competitions, which are opposed to public policy, be characterised as a " trade or business " within the meaning of Art. 19(1)(g) or "trade, commerce and intercourse" within Art. 301? The learned trial Judge has expressed the view that if he were able to hold that the prize competitions conducted by the petitioners were of a gamblin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by our Constitution. We have been referred to a large number of -decisions bearing on the Australian and American Constitutions in aid of the construction of the relevant articles of our Constitution. 31. In the Commonwealth of Australia Constitution Act (63 and 64 Vic. c. 12) there is s. 92 from which our Art. 301 appears to have been taken. The material part of a. 92 -runs thus: On the imposition of uniform duties of customs, trade, commerce and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free. 32. It has been held in James v. Commonwealth of Australia (L.R. (1936) A.C. 578, 627) that the word"' absolutely " adds nothing but emphasis to the width of the section. In the same case it has also been stated and decided that the section imposes a fetter on the legislative power not only of the Commonwealth Parliament but also of the Parliament of the States. It has been equally authoritatively held that the words " whether by means of internal carriage or ocean navigation " occurring in the section do not restrict its operation to such things and persons as are carried by land or sea but that the section extend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trade, commerce and intercourse. In Tasmania v. Victoria (1935) 52 C.L.R. 157). the absolute prohibition of imports of potatoes from Tasmania to Victoria could not on facts be supported as a health measure and consequently was struck down as a violation of s. 92. In James v. Commonwealth of Australia(L.R. (1936) A.C. 578) came up for consideration the Dried Fruits Act 1928-35 which prohibited the carrying of any dried fruit from one State to another except under a licence and which provided for penalty for its contravention. The regulations authorised the Minister to direct the licensee to export a certain percentage of dried fruits from Australia. The Minister by an order determined that it would be a condition of the licence. that the licensee should export a percentage of the dried fruits as therein mentioned. The appellant having refused to apply for a licence, his consignments of dried fruits shipped from Aide for delivery at Sydney in performance of contracts for sale were seized. The appellant brought an action for damages for what he alleged to be a wrongful seizure. After holding that the section bound the Parliament of Commonwealth equally with those of the States the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venting what he graphically described as "illegitimate methods of trading", if sales of lottery tickets were regarded as trading. The learned Judge took note of the fact that New South Wales law allowed State lotteries and concluded that the true character of the impugned Act was to suppress gambling in foreign lottery tickets and examined from the historical point of view, from, the character of the Act, its function and its effect upon the flow of commerce, the Act did not, in his view, restrict or hinder the freedom of any trade across the frontier of the States. Dixon J., as he then was, gave two reasons for his opinion, namely that the transaction was not in itself a transaction of inter-State trade' commerce or intercourse but was a sale in New South Wales of a ticket then in New South Wales and that, apart from the State lottery and permitted charitable raffles, the Act suppressed uniformly the sale of all lottery tickets in New South Wales. Adverting to the argument which, in substance, asked the Court to declare that s. 92 had created an overriding constitutional right to traffic or invest in lotteries so long as the trafficker or investor could succeed in placing so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." A little further down the learned Judge observed: "It is not a commercial arrangement to sell a lottery ticket; for it is merely the acceptance of money or the promise of money for a chance. In this case the purchase of a lottery ticket merely founds a hope that something will happen in Tasmania to benefit the purchaser." Naturally enough learned counsel for the appellant State seeks to fasten upon the observations quoted or referred to above in support of his thesis that gambling is not trade, commerce or intercourse within the meaning alike of s. 92 of the Australian Constitution and our Art. 19(1)(g) and Art. 301. 37. In the second case-The King v. Martin ((1939) 62 C.L.R. 457)-the same question came up for reconsideration. The only difference in fact was that there was no actual sale by delivery of a lottery ticket in New South Wales but money was received by the agent of the Tasmania promoter in New South Wales and transmitted to Tasmania from where the lottery ticket was to be sent. The S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seven. Sub-section (4) authorised that the Treasurer might, by notice published in the gazette and given in writing to a private bank, require that private bank to cease, upon a date specified in the notice, carrying on business in Australia. Sub-section (8) provided that upon and after the date specified in a notice under sub-s. (4) the private bank to which that notice was given should not carry on banking business in Australia. It also provided a penalty of pound 10,000 for each day on which the contravention occurred. The question was: Whether this section interfered with the freedom of trade, commerce or intercourse among the States declared by s. 92 of the Australian Constitution ? It was held that the business of banking which consisted of the creation and transfer of credit, the making of loans, the purchase and disposal of investments and other kindred transactions was included among those activities described as trade, commerce and intercourse in s. 92 and, accordingly, the impugned s. 46 which while leaving untouched the Commonwealth and State Banks,, prohibited the carrying on in Australia of the business of banking by private banks, was invalid as contravening s. 92. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a State creatures or things calculated to injure its citizens. Referring to the doctrine of "pith and substance" his Lordship observed that it, no doubt, raised in convenient form an appropriate question in cases where the real issue was one of subject matter as when the point was whether a particular piece of legislation was a law in respect of some subject within the permitted field, but it might also serve a useful purpose in the process of deciding whether an enactment which worked some interference with trade, commerce and intercourse among the States was, nevertheless, untouched by s. 92 as being essentially regulatory in character. 39. The last Australian case on the point cited before us is Mansell v. Beck (Australian Law journal, Vol. 3o. No. 7 P. 346)). In this case also the provisions of the Lotteries and Art Unions Act of New South Wales came up for consideration and the decisions in the King v. Connare (11) and the King v. Martin(1). were considered and approved. Dixon C.J. and Webb J. observed that the true content of the State law must be ascertained to see whether the law that resulted from the whole impaired the freedom which s. 92 protected. Their Lordships poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rade and commerce as generally understood is to be found in the subject of the transaction; there is no difference in the means adopted for carrying it out. Yet it may be said that in essence such a transaction constitutes no part of trade and commerce as that expression is generally understood. Numerous examples of other transactions may be given, such as the sale of a forged passport, or, the sale of counterfeit money, which provoke the same comment and, although legislation prohibiting such transactions may, possibly, be thought to be legally justifiable pursuant to what has, on occasions, been referred to as a "Police power", I prefer to think that the subjects of such transactions are not, on any view, the subjects of trade and commerce as that expression is used in s. 92 and that the protection afforded by that section has nothing to do with such transactions even though they may require, for their consummation, the employment of instruments, whereby inter-State trade and commerce is commonly carried on." After referring to the history of lotteries in England the learned Judge concluded: "The foregoing observations give some indication of the attitude of the law for over t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portation of adulterated food was upheld as an exercise of the power of the Congress to regulate commerce. The prohibition of transportation of women for immoral purposes from one State to another or to a foreign, land has also been held to be within the commerce clause (see Hoke v. United States ([1913] 227 U.S. 308 ; 57 L. Ed. 523). SO has the prohibition of obscene literature and articles for immoral use. Reference has also been made to the cases of United States v. Kahriger ([1953] 345 U.S. 22 ; 97 L. Ed. 754) and Lewis V. United States ([1955] 348 U.S. 419; 99 L. Ed. 475) to support the contention of the appellant State that the Supreme Court of the United States looked with great disfavour on gambling activities. In the last mentioned case it was roundly stated at p. 480 that "there is no constitutional right to gamble ". 42. In construing the provisions of our Constitution the decisions of the American Supreme Court on the commerce clause and the decisions of the Australian High Court and of the Privy Council on s. 92 of the Australian Constitution should, for reasons pointed out by this Court in State of Travancore-Cochin 1. The Bombay Co. Ltd. (1952) S.C.R. 1112 at p. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eaning of Art. 19(1) (g) or "trade, commerce and intercourse " within the meaning of Art. 301 of our Constitution. 43. The scheme of our Constitution, as already indicated, is to protect the freedom of each individual citizen to carry on his trade or business. This it does by Art. 19(1)(g). This guaranteed right is, however, subject to Art. 19(6) which protects a law which imposes, in the interest of the general public, reasonable restrictions on the exercise of the fundamental right guaranteed by Art. 19(1) (g). Our Constitution also proclaims by Art. 301 the freedom of trade, commerce and intercourse throughout the territory of India' subject to the provisions of Arts. 302-305 which permit the imposition of reasonable restriction by Parliament and the State Legislatures. The 'underlying idea in making trade, commerce and intercourse with, as well as within, the States free undoubtedly was to emphasise the unity of India and to ensure that no barriers might be set up to break up the national unity. One important point to note is that the language used in Art. 19(1) (g) and Art. 301 is quite general and that the provisions for restricting the exercise of the fundamental r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trafficking in women and so on until the law curbs or stops such activities. This appears to us to be completely unrealistic and incongruous. We have no doubt that there are certainactivities which can under no circumstance be regarded as trade or business or commerce although the usual forms and instruments are employed therein. To exclude those activities from the meaning of those words is not to cut down their meaning at all but to say only that they are not within the true meaning of those words. Learned counsel has to concede that there can be no "trade" or "business" in crime but submits that this principle should not be extended and that in any event there is no reason to hold that gambling does not fall within the words "trade" or "business" or "commerce" as used in the Articles under consideration. The question arises whether our Constitution makers ever intended that gambling should be a fundamental right within the meaning of Art. 19(1)(g) or within the protected freedom declared by Art. 301. 44. The avowed purpose of our Constitution is to create a welfare State. The directive principles of State policy set forth in Part IV of our Constitution enjoin upon the State t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces. Verse 224 enjoins upon the king the duty to corporally punish all those persons who either gamble or bet or provide an opportunity for it. Verse 225 calls upon the king to instantly banish all gamblers from his town. In verse 226 the gamblers are described as secret thieves who constantly harass the good subjects by their forbidden practices. Verse 227 calls gambling a vice causing great enmity and advises wise men not to practise it even for amusement. The concluding verse 228 provides that on every man who addicts himself to that vice either secretly or openly the king may inflict punishment according to his discretion. 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 chapter XXVI, verse 199, recognises that gambling had been totally prohibited by Manu because it destroyed truth, honesty and -wealth, while other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cloak- of a mercantile document which purported to be a contract of insurance. Then came the Gaming Act of 1845 (8 and 9 Vict. c. 109) which for the first time declared all contracts made by way of gaming or wagering void irrespective of their form or subject-matter. The provisions of this Act were adopted by our Act XXI of 1948 as here in before mentioned. The Gaming Act of 1892 (55 and 56 Viet. c. 9) further tightened up the law. 48. As far back as 1850 the Supreme Court of America in Phalen v. Virginia ([1850] 49 U.S. 163; 12 L. Ed. 1030,1033) observed: "Experience has shown that the common forms of gambling are comparatively innocuous when placed in contrast with widespread pestilence of lotteries. The former are confined to a few persons and places, but the latter infests the whole community; it enters every dwelling; it reaches every class; it preys upon the hard earnings of the poor; it plunders the ignorant and the simple. 49. The observations were quoted, with approval, in Douglas v. Kentucky ([1897] 168 U.S. 488). After quoting the passage from Phalen v. Virginia (42 L. Ed. 553, 555) the judgment proceeded: "Is the state forbidden by the supreme law 'of the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying a tax, to contend at the same time that it was illegal or was not a "trade" at all. But as pointed out in United States v. Kahrigar (345 U.S. 22; 97 L. Ed. 754), the fact of issuing a licence or imposing a tax means nothing except that the licensee shall be subject to no penalties under the law if he pays it. Lewis v. United States of America (348 U.S. 49 ; 99 L. Ed- 475) also recognises that the Federal Government may tax what it also forbids and that nobody has a constitutional right to gamble but that if he elects to do, so, though it be unlawful, he must pay the tax. In this connection reference may be made to the observation of Rowlatt J. in Mann v. Nash (L. R.(1932) 1 K.B.D. 752 at P. 757) : "The revenue authorities, representing the State, are merely looking at an accomplished fact. It is not condoning it or taking part in it. Further down he said: "It is merely taxing the individual with reference to certain facts. It is not a partner or a sharer in the illegality." That crime is not a business is also recognised in F. A. Lindsay, A. E. Woodward and W. Hiscox v. The Commissioners of Inland Revenue (18 T.C. 43) (per Lord President Clyde and per Lord Sands) and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04. The appeal against the stringency and harshness, if any, of the law does not lie to a court of law. 53. In the view we have taken, it is not necessary for us to consider or express any opinion on this occasion as to the vexed question whether restriction, as con. templated in Arts. 19(6) and 304(b), may extend to total prohibition and this is so because we cannot persuade ourselves to hold that Art. 19(1)(g) or Art. 301 comprises all activities undertaken with a view to profit as "trade" within the meaning of those Articles. Nor is it necessary for us on this occasion to consider whether a company is a citizen within the meaning of Art' 19 and indeed the point has not been argued before us. 54. The last point urged by the petitioners is that assuming that the impugned Act deals only with gambling and that gambling is not "trade" or "business" or "commerce" and is, therefore, not entitled to the protection of our Constitution, the prize competitions run by them are in fact not of a gambling nature. The trial court accepted this contention while the Court of Appeal rejected it. We have examined the scheme and the rules and the official solutions and the explanations in sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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