TMI Blog1957 (4) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... ng under Entry 34 and the impugned taxing section is a law with respect to tax on betting and gambling under Entry 62 and that- it was within the legislative competence of the State Legislature to have enacted it. There is sufficient territorial nexus to entitle the State Legislature to collect the tax from the petitioners who carry on the prize competitions through the medium of a newspaper printed and published outside the State of Bombay. The prize competitions being of a gambling nature, they cannot be regarded as trade or commerce and as such the petitioners cannot claim any fundamental right under Art. 19(1)(g) in respect of such competitions, nor are they entitled to the protection of Art. 301. The result, therefore, is that this appeal must be allowed and the order of the lower court set aside and the petition dismissed - Civil Appeal No. 134 of 1956 - - - Dated:- 9-4-1957 - DAS, SUDHI RANJAN (CJ), AIYYAR, T.L. VENKATARAMA, SINHA, BHUVNESHWAR P., DAS, S.K. AND GAJENDRAGADKAR, P.B., JJ. C. K. Daphtary, Solicitor-General of India, H. M. Seervai, Porus A. Mehta and R. H. Dhebar, for the appellant M. C. Setalvad, Attorney-General for India, Sir N. P. Engineer, N. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licence in Bombay, the first petitioner in or about August, 1948, shifted his activities from Bombay to the State of Mysore, where he promoted and on February 26,1949, got incorporated a company under the name of R.M.D.C. (Mysore) Limited, which was the second petitioner in the High Court and is the second respondent before us. The first petitioner, who was the promoter of the second petitioner became the Managing Director of the second petitioner. All the shareholders and Directors of the second petitioner are said to be nationals and citizens of India. The second petitioner also owns and runs a weekly newspaper called Sporting Star , which was and is still printed and published at Bangalore in a Press also owned by the second petitioner. It is through this newspaper that the second petitioner conducts and runs a Prize Competition called the R.M.D.C. Crosswords for which entries are received from various parts of India including the State of Bombay through agents and depots established in those places to collect entry forms and fees for being forwarded to the head office at Bangalore. The 1939 Act was replaced by the Bombay Lotteries and Prize Competition Control and Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new s. 12A provision was made for the levy in respect of every prize competition contained in a newspaper or a publication printed outside the State of Bombay for which a licence was obtained under the Act of a tax at such rates as might be specified not exceeding the rates specified in s. 12 or in a lump sum having regard to the circulation or distribution of the newspaper or publication in the State of Bombay. It is pointed out that the margin of net profit being only 5%, if tax has to be paid to the State of Bombay under the 1948 Act, as amended, (hereinafter referred to as the impugned Act) the second petitioner will be unable to carry on its prize competition except at a loss. Reference is also made to the rules framed by the State of Bombay called the Bombay Lotteries -and Prize Competition Control and Tax Rules, 1952 (herein-' after called the said Rules), which came into force on and from December 8, 1952. The said Rules require the petitioner to apply for and obtain a licence in Form H which imposes certain onerous conditions. The petitioners point out that it would be impossible for them, in a commercial sense and from a practical point of view, to run the priz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply was filed by the first petitioner traversing the allegations, submissions and contentions set forth in the affidavit in opposition filed on behalf of the State of Bombay. The main contentions of the present respondents before the trial Judge were:- (a)The impugned Act and particularly its taxing provisions were beyond the competence of the State Legislature and invalid inasmuch as they were not legislation with respect to betting and gambling under Entry 34 or with respect to entertainments and amusements under Entry 33 or with respect to taxation on entertainments and amusements, betting. and gambling under Entry 62 of the State List. The legislation was with respect to trade and commerce and the tax levied by the Impugned Act was a tax on the trade or calling of conducting prize competitions and fell within Entry 60 of the State List. (b) The respondents' prize competition was not a lottery and could not be regarded as gambling inasmuch as it was a competition in which skill, knowledge and judgment had real and effective play. (c) The impugned Act itself contained distinct provisions in respect of prize competitions and lotteries ,-thereby recognising that pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond petitioner being a Corporation was not a citizen and could not claim to be entitled to the fundamental right under Art. 19 (1) (g) of the Constitution. (g)In any event the restrictions on the alleged trade or business of the petitioners imposed by the Act were reasonable restrictions in the public interest within the meaning of Art. 19 (6) and Art. 304 (b) of the Constitution. The trial Judge held: (a)The tax levied under ss. 12 and 12A of the Act was not a tax on entertainment, amusement, betting or gambling but that it was a tax on the trade or calling of the respondents and fell under Entry 60 and not under Entry 62 of the State List. (b)The prize competition conducted by the petitioners was not a lottery and it could not be said to be either betting or gambling inasmuch as it was a competition in which skill, knowledge and judgment on the part of the competitors were essential ingredients. (c)The levy of the tax under the said sections was void as offending against Art. 276 (2) of the Constitution. (d)The restrictions imposed by the impugned Act and the Rules thereunder offended against Art. 301 of the Constitution and were not saved by Art, 304(b) inasmuch as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial Judge when he found as a fact that the scheme underlying the prize competitions was not a lottery and came to the conclusion that the Act applied to the prize competitions of the respondents. It held that the challenge of the petitioners to the impugned provisions succeeded because the restrictions contained in the impugned Act controlling the business of the petitioners could not be justified as the requirements of the provisions of Art. 304 (b) had not been complied with. The High Court agreed with the learned trial Judge that the petitioners' prize competitions were their business which was entitled to the protection guaranteed under the Constitution. It took the view that although the activity of the petitioners was a lottery, it was not an activity which was against public interest and, therefore, the provisions of Part XIII of the Constitution applied to the respondents' business. Being aggrieved by the said judgment of the Court of Appeal, the appellant applied for and obtained under Arts. 132(1) and 133(1) of the Constitution a certificate of fitness for appeal to this Court and hence this appeal before us. The principal question canvassed before us relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27 and 46 of List II in the Schedule to the Government of India Act, 1935, and that, in any event, s. 12A of the impugned Act, in so far as it imposes a tax, comes under Entry 60 of List II in the Seventh Schedule to the Constitution corresponding to Entry 46 of List II in the Seventh Schedule to the Government of India Act, 1935, and not under Entry 62 of List 11 in the Seventh Schedule to the Constitution corresponding to Entry 50 of List 11 in the Seventh Schedule to the Government of India Act, 1935, and that as the tax imposed exceeds Rs. 250/- it is void under Art. 276 (2) which reproduces s. 142A of the Government of India Act, 1935. Reference will hereafter be made only to the relevant Entries of List II in the Seventh Schedule r, to the Constitution, for they are substantially in the same terms as the corresponding Entries of List 11 in the Seventh Schedule to the Government of India Act, 1935. For easy reference, the relevant Entries in List II in the Seventh Schedule to the Constitution are set out below: 26. Trade and commerce within the State subject to the provisions of Entry 33 of List III. 34. Betting and gambling. 60. Taxes on professions, trades, callings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it lawful for the Government, by general or special order, to, inter alia, prohibit the grant of licences in respect of a lottery or prize competition or class of lotteries or prize competitions throughout the State or in any area. Section II empowers the Collector to suspend or cancel a licence granted under this Act in certain circumstances therein specified. Section 12 authorises the levy of a tax on lotteries and prize competitions at the rate of 25% of the total sum received Or due in respect of such lottery or prize competition. This section directs that the tax shall be collected from the promoter of such lottery or prize competition as the case may be. Sub-section (2) of s. 12 empowers the State Government by a Notification in the official Gazette, to enhance the rate of tax up to 50% of the total sum received or due in respect of such prize competition as may be specified in the Notification. Section 12A, which is of great importance for -the purpose of this appeal, runs as follows: 12A. Notwithstanding anything contained in section 12, there shall be levied in respect of every lottery or prize competition contained in a newspaper or publication printed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o accept the correctness of the aforesaid contentions for reasons which we proceed immediately to state. As it has already been mentioned, the impugned Act replaced the 1939 Act which dealt only with prize competitions. Section 2(2) of the 1939 Act defined prize competition in the terms following:---- 2(2) Prize Competition includes- (a) crossword prize competition, missing words competition, picture prize competition, number prize competition, or any other competition, for which the solution is prepared beforehand by the promoters of the competition or for which the solution is determined by lot; (b)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 (c) any 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 or periodical printed and published outside the Province of Bombay. The 1948 Act s. 2(1)(d), as originally enacted, sub- stantially reproduced the definition of prize competition as given in s. 2(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... competitions included in the first category to each of which the qualifying clause applied was of a gambling nature. Nor has it been questioned that the third category, which comprised any other competition success in which does not depend to a 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 scintilla 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 given 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 stigma of gambling must depend to a substantial degree upon the exercise of 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. From the above discussion it follows that according to the definition of prize competiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m. The qualifying clause has been amended by inserting the words or is not after the word is and before the word prepared and by adding the words or chain ce after the word lot . The qualifying clause appears, as before, after the fifth item in the first category. It will be noticed that there is a comma after each of the five items including the fifth item. The mere assigning a separate number to the five items of prize competitions included in the first category does not, in our judgment, affect or alter the meaning, scope and effect of this part of the definition. The numbering of the five items has not dissociated any of them from the qualifying clause. If the qualifying clause were intended to apply only to the fifth item, then there would have been no comma after the fifth item. In our opinion, therefore, the qualifying clause continues to apply to each of the five items as before the amendment. There is grammatically no difficulty in reading the qualifying clause as lending colour to each of those items. Accepting that the qualifying clause applies to each of the five kinds of prize competitions included in the first category, it is urged that the qualifying clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... competitions in the first category, one would have expected the Legislature to have made separate provisions for the legitimate prize competitions imposing less rigorous regulations than what had been imposed on illegitimate prize competitions. It will become difficult to apply the same taxing sections to legitimate as well as to illegitimate competitions. Tax on legitimate competitions may well be a tax under Entry 60 on the trader who carries on the trade of innocent and legitimate competition. It may be and indeed it has been the subject of serious controversy whether an illegitimate competition can be regarded A a trade at all and in one view of the matter the tax may have to be justified as a tax on betting and gambling under Entry 62. Considering the nature, scope and effect of the impugned Act we entertain no doubt whatever that the first category of prizecompetitions does not include any innocent prize competition. Such is what we conceive to be the clear intention of the Legislature as expressed in the impugned Act read as a whole and to give effect to this obvious intention, as we are bound to do, we have perforce to read the word or appearing in the qualifying clause a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) any competition in which prizes are offered for forecasts of the result either of a future event, or of a past event the result of which is not yet ascertained or not yet generally known; (b) any other competition success in which does not depend to a substantial degree upon the exercise of skill. It will be noticed that this section is not a definition section at all but is a penal section which makes certain competitions mentioned in the two clauses unlawful. Clause (a) of that section which corresponds to our second category is not sandwiched between two categories of gambling prize competitions. In Elderton v. Totalisator Co. Ltd. ((1945) 2 A.E.R. 624) on which the petitioners rely the question was whether the football pool advertised in newspapers by the appellant company came within the wide language of cl. (a) of that section which was in Part II of the Act. Whether the appellant company's football pool called for any skill on the part of the investors or whether it was of a gambling nature was not directly relevant to the discussion whether it fell within cl. (a). The penal provisions of the English Act and the decision of the Court of Appeal throw no light o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n trade under Entry 60. Once it is held that the impugned Act is on the topic of betting and gambling under Entry 34, the tax imposed 'by such a statute, one would think, would be a tax on betting and gambling under Entry 62. The Appeal Court has expressed the view that s. 12A does not fall within Entry 62, for it does not impose a tax on the gambler but imposes a tax on the petitioners who do not themselves gamble but who only promote the prize competitions. So far as the promoters are concerned, the tax -levied from them can only be regarded as tax on the trade of prize competitions carried on by them. This.' with respect, is taking a very narrow view of the matter. Entry 62 talks of taxes on betting and gambling and not of taxes on the men who bet or gamble. It is necessary,, therefore, to bear in mind the real nature of the tax. The tax imposed by s. 12A is, in terms, a percentage of the sums specified in the declaration made under a. 15 by the promoter or a lump sum having regard to the circulation and distribution of the newspaper, or publication in the State. Under s. 15 the promoter of a prize competition carried on in a newspaper or publication printed and publishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of the tax, for it does not affect the general tendency of the tax which remains. If taxation on betting and gambling is to be regarded as a means of controlling betting and gambling activities, then the easiest and surest way of doing so is to get at the promoters who encourage and promote the unsocial activities and who hold the gamblers' money in their - hands. To collect the tax from the promoters is not to tax the promoters but is a convenient way of imposing the tax on betting and gambling and indirectly taxing the gamblers themselves. It is to be noted that the tax here is not on the profits made by the petitioners but it is a percentage of the total sum received by them from the State of Bombay as entrance fees without the deduction of any expense. This circumstance also indicates that it is not a tax on a trade. According to the general understanding of men, as stated by Lord Warrington of Clyffe in Rex v. Caledonian Collieries Ltd. (L.R. (1928) A.C. 358), there are marked distinctions between a tax on gross collection and a tax on income which for taxation purposes means gains and profits. Similar considerations may apply to tax on trade. There is yet another c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y sought to be imposed must be pertinent to that connection. It is conceded that it is of no importance on the question of validity that the liability imposed is or may be altogether disproportionate to the territorial connection. In other words, if the connection is sufficient in the sense mentioned above, the extent of such connection affects merely the policy and not the validity of the legislation. Keeping these principles in mind we have to ascertain if in the case before us there was sufficient territorial nexus to entitle the Bombay. Legislature to make the impugned law. The question whether in a given case there is sufficient territorial nexus is essentially one of fact. The trial court took the' view that the territorial nexus was not sufficient to uphold the validity of the law under debate. The Court of Appeal took a different view of the facts and upheld the law. We find ourselves in agreement with the Court of Appeal. The newspaper Sporting Star printed and published in Bangalore is widely circulated in the State of Bombay. The petitioners have set up collection depots within the State to receive entry forms and the fees. They have appointed local collectors. Bes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by them is not confined within the limits of the State of Mysore but extends across the State boundaries into other States within the territories of India and even into lands beyond the Union of India and they urge that in view of the inter-State nature of their trade or business the restrictions imposed by the impugned Act offend against Art. 301 which declares that, subject to the other provisions of Part XIII of the Constitution, trade, commerce and intercourse throughout the territory of India shall be free and cannot be supported under Art. 304(b), for the restrictions cannot be said to be reasonable or required in the public interest and because the procedural requirements of the proviso thereto had not been complied with. The State of Bombay repudiates these contentions and submits that as prize competitions are opposed to public policy there can be no trade or business in promoting a prize competition and the question of infraction of the petitioner's fundamental right to carry on trade or business guaranteed by Art. 19(1)(g) or of the violation of the freedom of trade, commerce or intercourse declared by Art. 301 does not arise at all and that in any event if Art. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms guarantees to all citizens the right to carry on any occupation, trade or business and el. (6) of Art. 19 protects legislation which may, in the interest of the general public, impose reasonable restrictions on the exercise of the right conferred by Art. 19(1) (g). Likewise Art. 301 declares that trade, commerce and intercourse throughout the territory of India shall be free but makes such declaration subject to the other provisions of Part XIII of the Constitution. Arts. 302305, which are in that Part, lay down certain restrictions subject to which the declaration contained in Art. 301 is to operate. Article 302 empowers Parliament by law to impose restrictions on the freedom of trade, -commerce or intercourse not only between one State and another but also within the State, provided in either case such restrictions are required in the public interest. Article 304 (b) authorises the State Legislatures to impose reasonable restrictions on the freedom of trade, commerce or intercourse with or within the States as may be required in the public interest, provided the formalities of procedure are complied with Arts. 19(1) (g) and 301, it is pointed out are two facets -of the same t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to trade with each other and to pass to and fro from one State to another without any let or hindrance, or without any burden or restriction based merely on the fact that they were not members of the same State (James v. Commonwealth of Australia. One cannot but be struck by the sweeping generality of language used in the section. Such a wide enunciation of the freedom of inter-State trade, commerce and intercourse was bound to lead to difficulties. The full import and true meaning of the general words had to be considered, as years went past, in relation to the vicissitudes of altering facts and circumstances which from time to time emerged. The changing circumstances and the necessities compelled the court to reach the conclusion that the conception of freedom of trade, commerce and intercourse in a community regulated by law presupposed some degree of restriction on the individual. Cases arose out of statutes enacted for restricting competition of privately owned motor vehicles with publicly owned railways, or to compel users of motor to contribute to the upkeep of the roads e.g. Willard v. Rawson ((1933) 48 C.L.R.316); R. v. Vizzard (1933) 50 C.L.R. 30) and O. Gilpin Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om might be impaired (p. 308). Learned counsel for the State has strongly relied on two decisions of the Australian High Court in both of which the validity of a New South Wales Statute called the Lotteries and Art Unions Act 1901-1929 was called in question. Section 21 of that Act provided: Whoever sells or offers for sale or accepts any money in respect of the purchase of any ticket or share in a foreign lottery shall be liable to a penalty. In the first of those two cases-The King v. Connare (1939) 51 C.L.R.596)-the appellant offered for sale in Sydney a ticket in a lottery lawfully conducted in Tasmania and was convicted of an offence under s. 21. He challenged the validity of the law on the ground that it interfered with the freedom of trade, commerce and intercourse among the States and consequently violated the provisions of s. 92. It was held by Starke, Dixon, Evatt and McTiernan JJ. (Latham C.J. and Rich J. dissenting) that the provisions of s. 21 did not contravene s. 92 and the appellant was properly convicted. Starke J. discussed the question as to whether the sale in -question was an 'inter-State or intra- state transaction but did not think it necessary to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant arguments were to prevail led the learned Judge to think (at p. 620) that in the interpretation of s. 92 it was permissible to accept some postulates or axioms demanded alike by the dictates of common sense and by some knowledge of what was being attempted by the founders of the Australian Commonwealth. Making these assumptions and concessions Evatt J. opined (at p. 621) that the guarantee contained in s. 92 had nothing whatever,/ to say on the topic of inter- State lotteries and could not be invoked to prevent either the suppression or the restriction in the public interest of the practice of gambling or investing in such lotteries. The learned Judge did not think that lottery tickets could be regarded as goods or commodities which were entitled to the protection of s. 92 and concluded thus at p. 628: If they are goods or commodities they belong to a very special category, so special that in the interests of its citizens the State may legitimately exile them from the realm of trade, commerce or business. The indiscriminate sale of such tickets may be regarded as causing business disturbance and loss which, on general grounds of policy, the State is entitled to prevent or at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operation is the aleatory description of the acts which it forbids. There is no prohibition or restraint placed upon any act in connection with a lottery because either the act or the lottery is or involves commerce or trade or intercourse or movement into or out of New South Wales or communication between that State and another State................................. To say that inter- State trade, commerce and intercourse shall be free, means,, I think, that no restraint or burden shall be placed upon an act falling under that description because it is trade or commerce or intercourse or involves inter-State movement or communication. In this view of the matter Dixon J. now upheld s. 21 of the impugned Act on the ground that the criterion of its application was the specific gambling nature of the transactions which it penalised and not anything which brought the transactions under the description of trade, commerce or intercourse or made them interState in their nature. Then came the case of Commonwealth of Australia v. Bank of New South Wales (L.R. (1950) A.C. 235) commonly called the Bank case where it was held that s. 46 of the Banking Act, 1947, was invalid as offendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rade, commerce and intercourse among the States was compatible with absolute freedom and (2) that s. 92 was violated only when a legislative or executive act operated to restrict trade, commerce and intercourse directly and immediately as distinct from creating some indirect or consequential impediment which might fairly be regarded as remote. The problem whether an enactment was regulatory or something more or whether a restriction was direct or only remote or only incidental involved, his Lordship pointed out, not so much legal as political, social or economic considerations. Referring to the case of Australian National Airways Proprietory Ltd. v. The Commonwealth (1945) 71 C.L.R. 29) his Lordship expressed his agreement with the view that simple prohibition was not regulation. A little further down, however, his Lordship made a reservation that he did not intend to lay down that in no circumstances could the exclusion of competition so as to create a monopoly, either in a State or Commonwealth agency, or in some body, be justified and that every case must be judged on its own facts and in its own setting of time and circumstances, and that it might be that in regard to some econ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not consider it necessary to express any final opinion on the question whether there could be inter- State commerce in respect of lottery tickets. He took the view that ss. 20 and 21 of the New South Wales Act were on their face concerned and concerned only with intra-State transactions and that their provisions did not directly hinder, burden or delay any inter-State trade, commerce or intercourse. His Lordship observed that there was nothing in the reasoning in the judgment in the Bank case or in subsequent decisions to indicate that the King v. Connare((193) 61 C.L.R. 596) and' King v. Martin ((1939) 62 C.L.R. 457) were not rightly decided. He quoted, with approval, the observations of Dixon J. in Martin's case. Fullagar J. also took the view that the previous decisions of the High Court in Connare's case (1) and Martin's case(2) were rightly decided for the reasons given by Dixon J. Kitto J. dissented from the majority view. Taylor J. who was also in favour of the validity of the impugned law, observed: No simple legislative expedient purporting to transmute trade and commerce into something else will remove it from the ambit of s. 92. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Article 1, s. 8, sub-s. (3) of the Constitution of the United States compendiously called the commerce clause gives power to the Congress to regulate commerce with foreign nations and among the several States and with the Indian tribes. Congress having made law regulating gambling activities which extended across the State borders, the question arose whether the making of the law was within the legislative competence of the Congress, that is to say whether it could be brought within the commerce clause. The question depended for its answer on the further question whether the gambling activities could be said to be commerce amongst the States. If it could, then it was open to Congress to make the law in exercise of its legislative powers under the commerce clause. More often than not gambling activities extend from State to State and, in view of the commerce clause, no State Legislature can make a law for regulating inter-State activities in the nature of trade. If betting and gambling does not fall within the ambit of the commerce clause, then neither the Congress nor the State Legislature can in any way control the same. In such circumstances, the Supreme Court of America though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o such provision as we have in Art. 19(6) or Arts. 302-304 of our Constitution. The provision of s. 92 of the Australian Constitution being in terms unlimited and unqualified the judicial authorities interpreting the same had to import certain restrictions and limitations dictated by common sense and the exigencies of modern society. This they did, in some cases, by holding that certain activities did not amount to trade, commerce or intercourse and, in other cases, by applying the doctrine of pith and substance and holding that the impugned law was not a law with respect to trade, commerce or intercourse. The difficulty which faced the judicial authorities interpreting s. 92 of the Australian Constitution cannot arise under our Constitution, for our Constitution did not stop at declaring by Art. 19(1) (g) a fundamental right to carry on trade or business or at declaring by Art. 301 the freedom of trade, commerce and inter. course but proceeded to make provision by Art. 19(6) and Arts. 302-305 for imposing in the interest of the general public reasonable restrictions on the exercise of the rights guaranteed and declared by Art. 19 (1) (g) and Art. 301. As one of us said in P. P. Ku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity which is undertaken or carried on with a view to earning profit. There is nothing in those two Arts. 19(1)(g) and 301, which, he says, may qualify or cut down the meaning of the critical words. He contends that there is no justification for excluding from the meaning of those words activities which may be looked upon with disfavour by the State or the Court as injurious to public morality or public interest. The argument is that if the trade or business is of the last mentioned character, then the appropriate Legislature may impose restrictions which will be justiciable by the courts and this restriction may, in appropriate cases, even extend to total prohibition. Our attention has been drawn to Art. 25 where the limiting words subject to public order, morality and health are used and it is pointed out that no such limiting words are to be found in Art. 19(1)(g) or Art. 301. In short the argument is that Art. 19(1) (g) and Art. 301 guarantee and declare the freedom of all activities undertaken and carried on with a view to earning profit and the safeguard is provided in Art. 19(6) and Arts. 302-305. The proper approach to the task of construction of these provisions of ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ife and full enjoyment of leisure and social and cultural opportunities, to protect the weaker sections of the people from social injustice and all forms of exploitation, to raise the standard of living of its people and the improvement of public health. The question canvassed before us is whether the Constitution makers who set up such an ideal of a welfare State could possibly have intended to elevate betting and gambling on the level of country's trade or business or commerce and to guarantee to its citizens, the right to carry on the same. There can be only one answer to the question. 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 say: 7 Dice verily are armed with goads and driving hooks, deceiving and tormenting, causing grievous woe. They give frail 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 seeking r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Privy Council as not repugnant to the English Common Law were subsequently prohibited by Act XXI of 1948 which was enacted on the suggestion of Lord Campbell made in that case and introduced in India provisions similar to those of the English Gaming Act (8 9 Vict. c. 109). Bengal Gambling Act (Ben. II of 1867) provided for the punishment of public gambling and the keeping of common gaming house in the territories subject to the Lieutenant Governor of Bengal. Lottery has been, since 1870, made an offence, under s. 294A of the Indian Penal Code. Gambling agreements have been declared to be void under the Indian Contract Act, 1872 (s. 30). This in short is how gambling is viewed in India. Before the Legislature intervened, gambling and wagering were not prohibited by the English Common Law although the English courts looked upon it with disfavour and discouraged it on grounds of public policy by denying procedural facilities which were granted to other litigants. The Scottish courts, however, have always refused to recognise the validity of wagering contracts and have held that sponsiones ludicroe, as they style such contracts, are void by the Common Law of Scotland. Gamblin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icult to accept the contention that those activities which encourage a spirit of reckless propensity for making easy gain by lot or chance, which lead to the loss of the hard earned money of the undiscerning and improvident common man and thereby lower his standard of living and drive him into a chronic state of 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 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 neces- sary 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trade, commerce or intercourse as such or whether it is a law with respect to some other subject which incidentally trenches upon trade, commerce and intercourse. Reference has already been made to the observations of Dixon J., as he then was, in King v. Martin (1). Adapt- ing his language, we may say that when Art. 19(1)(g) guarantees or Art. 301 declares the freedom of trade they describe human activities in a specific aspect. They single out attributes which the act or transaction may wear and make the freedom, which they confer, depend upon those attributes. The freedom secured by the two Articles, we think, implies that no unreasonable restraint or burden shall be placed upon an act falling under that description because it is trade or commerce or intercourse. We have analysed the provisions of the impugned Act and it is quite clear that the Act does not purport directly to interfere with trade, commerce or intercourse as such, for the criterion of its application is the specific gambling nature of the transaction which it restricts. The purpose of the Act is not to restrict anything which brings the transactions under the description of trade, commerce or intercourse. In o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a school examination but then in a school examination, the students are told which are the nine compulsory questions and they can take particular care with regard to those; but in this scheme there is no knowing which nine will be selected and those competitors whose answers do not accord with the official solution are debarred from being considered for the first prize. A competitor may have given correct answers to eight of the nine selected clues and may have given correct answers to the remaining eight so that he has sent in sixteen correct answers but he will, nevertheless, not be considered for the first prize because his answers to the nine selected questions did not agree with the official solutions of those nine clues. This is a chance element to start with. We have then seen that the competing words out of which one is to be selected are in some cases equally apt. We are not satisfied that the word selected by the Board is the more apt word in many. cases. The reasons given by them appear to us to be laboured and artificial and even arbitrary in some cases. On the whole, we have come to the conclusion that the Court of Appeal was right in its conclusion that in point of fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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