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State of Bombay Vs. RMD Chamarbaugwala [Appeal allowed setting aside order of Bombay HC]

Nihal Thareja ,
  06 June 2020       Share Bookmark

Court :
Supreme Court of India
Brief :
It was held that gambling or conducting the business of gambling is extra-commercium and hence not included within the meaning of ‘trade, commerce or intercourse’. Consequently, it is not protected by the fundamental right to trade and profession under Article 19(1)(g) or the freedom of trade, commerce and intercourse under Article 301 of the Constitution of India.
Citation :
The State Of Bombay V. R. M. D. Chamarbaugwala (1957) CITATION: 1957 AIR 699, 1957 SCR 874

Appeal under articles 132 (1) and 133 (I) (c) arising from Judgment by Bombay HC under Art.226 of the Indian Constitution 

(Appeal Allowed setting aside order of Bombay High Court under Art 226)

BENCH: 

Das (J) Sudhi Ranjan (Cj), Aiyyar(J), T.L. Venkatarama(J), Sinha(J), Bhuvneshwar 

P.(J), Das(J), S.K., Gajendragadkar, P.B.(J)

FACTS:

The Respondents conducted a Prize Competition called the R. M. D. C. Cross-words through  a weekly newspaper printed and published at Bangalore. This paper had a wide circulation in the State of Bombay where all collections were done and participations were invited. Through the Bombay Lotteries and Prize Competitions Control and Tax (Amendment) Act of 1952, definition of ‘Prize Competition’ was enlarged under s 2(1) of the Act. S.12 was inserted levying a tax on the promoters of such competitions for sums collected from the State. 

ISSUE: 

Whether the amended Act and rules on application to such prize competitions were ultra-vires and violated the fundamental rights under Art. 19(1)(g) and Art.301 of the Constitution.

APPELLANT’s SUBMISSIONS:

• The prize competitions conducted by the petitioners were a lottery.

• The impugned Act was not extra-territorial in its operation.

• The provisions of the impugned Act were valid and competent legislation under Entries 33, 34 and 62 of the State List.

• As the petitioners were not carrying on a trade or business, Art. 19(1)(g) or Art. 301 of the Constitution have not been violated.

RESPONDENT’s SUBMISSIONS:

• That the Respondents' prize competition was neither a lottery nor gambling as it was a competition in which skill, knowledge and judgment played.

• The impugned Act operated extra-territorially as it affected the trade or business of conducting prize competitions outside the State and was, therefore, beyond the competence of the State Legislature and invalid.

• The impugned Act offended against Art. 301 of the Constitution inasmuch as it imposed restrictions on trade, commerce and intercourse between the States 

• The restrictions imposed by the impugned Act on the trade or business were not reasonable and violated Art 19(1)(g) 

JUDGEMENT:

It was held that gambling or conducting the business of gambling is extra-commercium and hence not included within the meaning of ‘trade, commerce or intercourse’. Consequently, it is not protected by the fundamental right to trade and profession under Article 19(1)(g) or the freedom of trade, commerce and intercourse under Article 301 of the Constitution of India.

 
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