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Cites 8 docs - [View All]
Section 30 in The Indian Contract Act, 1872
The Lotteries (Regulation) Act, 1998
Kedar Nath Motani And Ors. vs Prahlad Rai And Ors. on 25 September, 1959
Sir Dorabji Jamsetji Tata, vs Edward F. Lance And Ors. on 3 July, 1917
Article 19(1)(g) in The Constitution Of India 1949
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Jyothish Chandran vs Zee Tele Films Pvt. Ltd. on 5 July, 2016

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Madhya Pradesh High Court
Subhash Kumar Manwani vs State Of M.P. And Ors. on 22 July, 1999
Equivalent citations: AIR 2000 MP 109
Author: D Dharmadhikari
Bench: D Dharmadhikari, U Shukla

JUDGMENT D.M. Dharmadhikari, J.

1. This appeal under Section 96 of the Code of Civil Procedure has been preferred against the judgment dated 18th June, 1993 passed by the Court of III Addl. District Judge, Bilaspur whereby the suit filed by the plaintiff (appellant herein) for recovery of prize declared on his lottery ticket has been dismissed. According to the learned trial Judge, promise to pay prize in a lottery is in the nature of an agreement by way of wager which is void and cannot be enforced by civil suit due to prohibition contained in Section 30 of the Contract Act. The learned trial Judge has placed reliance on a decision of Division Bench of this Court in the case of Shekhar Chand Jain v. Ramnarayan Gend (F.A. No. 10 of 1975 decided on 3-2-1977 and shortnoted in 1977 (2) M.P. W.N. 118). The Division Bench in the said case upheld dismissal of a similar suit based on a lottery ticket by relying on a decision of Bombay High Court in the case of Sir Dorabji Jamsetji Tata Ltd. v. Edward F. Lance, (1918) ILR 42 Bombay 676 : (AIR 1917 Bom 138).

2. Learned counsel Shri G.C. Bhatia, appearing for the plaintiff-appellant, submits that the lottery was organised by respondent No. 3 Valbhavshali Raffle Committee. Indore for raising fund for respondent No. 2 Indore Table Tennis Trust and there was due permission obtained from the Lottery department of the State of M.P. The respondent No. 4 Chandra Agencies, New Delhi acted as agent of respondent No. 3 in organising the lottery and in selling the tickets. It is contended on behalf, of the plaintiff that as the lottery was held with due permission of the State Government, the same was not illegal and there was no Illegal contract which could be refused to be enforced by the Civil Court.

3. We have also heard Shri Naman Nagrath, G.A., for the State and Shri Kishore Shrivastava, learned counsel appearing for respondents 2 and 3. The respondent No. 4 who acted as agent for organising the lottery and selling tickets remained ex-parte and has not appeared in this Court.

4. The relevant part of Section 30 of the Contract Act reads as under:-

"30. Agreements by way of wager, void.- Agreements byway of wager are void; and no suit shall be brought for recovering anything alleged to be won on any wager; or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made."

In the case of Shekharchand Jain (1977 (2) MPWN 118) (supra) it was a State lottery and the suit founded on a ticket sold in the lottery was dismissed holding that even though a State lottery is not illegal, it is nonetheless "in the nature of wager" and, therefore, a person who wins a lottery cannot sue for recovery of the prize money. Learned counsel for the appellant submits that the Division Bench in the case of Shekharchand (supra) relied on an old decision of the High Court of Bombay of the year 1917. It is submitted that now the lotteries are organised by the State and private parties with permission of the State under State and Central enactment and refusal to decree such suits for recovery of prize money on a lottery ticket was not justified in law. Reference is made to M.P. Lottery (Niyantran Tatha Kar) Adhiniyam, 1973.

5. We have looked into the provisions of the above Adhiniyam of 1973 in which we find that the lottery has been defined in Sec. 2(a) thus:

" 'lottery' means a scheme for distribution of prizes by lot or chance to those persons participating in the chances of a prize by purchasing tickets."

Section 3 of the Adhiniyam provides that except as provided by the Act, all lotteries other than those organised by Central and State Government would be unlawful. The other provisions of the Adhiniyam lay down procedure for obtaining licence for holding private lotteries and levy of tax on such lotteries. We are also made aware of a central legislation on the subject of lottery i.e. Lotteries (Regulation) Act, 1998.

6. In our considered opinion, neither the provisions of the State nor the Central Act would take out the nature of the agreement for payment of prize money on a lottery ticket from the category of it being a "wagering contract" which the civil Court has to declare as void under the provisions of Section 30 of the Contract Act. The power of the State Government under the Central enactment mentioned above of banning of lotteries of other State by one State came up for consideration before the Supreme Court in cases from all the States, heard Jointly, reported in, (1999) (3) JT (SC) 431 : (AIR 1999 SC 1867) (M/s. B.R. Enterprises v. State of U.P.) Occasion arose before the Supreme Court to consider whether the lotteries is a trade or business constitutionally recognised and protected under Article 19'(1)(g) or it is a pure gambling or a game of chance. The Supreme Court held that even the State sponsored lotteries have the same element of chance with no skill involved in it. It is observed that the measures provided in the State and Central legislations are only to inculcate faith to the participants of the State Lotteries that it is being conducted fairly with no possibility of fraud, misappropriation or deceit and assure the hopeful recipients of high prizes that all is fair and safe. The Supreme Court, however, refused to recognise it as a trade or profession and observed:

The lotteries authorised by the State also has a sanction in law. As we have said, a gambling may be taxed and may be authorised for a specified purpose, but it would not attain the status of trade like other trades or becomes res commerclum."

The principle and purpose behind Section 30 of the Contract Act to treat an agreement by way of wager as void Is that the law discourages people to enter into games of chance and make earning by trying their luck instead of spending their time, energy and labour for more fruitful and useful work for themselves, their family and the society. As laid down by the Supreme Court in the case of Kedar Nath Motani v. Prahlad Rai, AIR 1960 SC 213 - "the principle of public policy is this : ex dolo malo non oritur actio. No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted."

7. The Supreme Court in the case of B.R. Enterprises (AIR 1999 SC 1867) (supra) while considering the validity of ban imposed by one State over lotteries of another State examined the nature of the so called lottery trade, or business and it was not only found to be not recognizable as a fundamental right but also found to be immoral with pernicious effect on the society. The Supreme Court observes the object of legislation on the subject of lotteries as permitted in the State and Central List as under (Para 35 of AIR):

"What is the reason for gambling to be legitimized, if in a given situation it has to be for a wider and purposeful objectives which leads to imposing conditions to reduce its evil consequences as suggested by this Court through Suman Enterprises (1994 (4) SCC 217) (supra), adopted through Section 4 of the impugned Act, does it lose its original character of being pernicious. Even if it could be said to have diluted it, could it still be classified as commercium and equated with every other form of trade and commerce? Its effect on its citizens has been cause of concern which had drawn attention of the kings and his subject since ancient time, the Government and the Courts of various countries Including ours."

From the above observations and the other discussion made by the learned Judges in the Supreme Court case of M/s. B.R. Enterprises (supra), it is clear that the nature of the agreement for payment of a prize won on a lottery ticket continues to be in the nature of a wager to which the provisions of Section 30 of the Contract Act would be applicable irrespective of the fact that in order to check, reduce or control the evil of such gambling both Centre and the State have been permitted legislative powers in the Constitution.

8. For the aforesaid reasons, we find that the learned trial Judge was fully justified in refusing to grant any relief to the plaintiff on the basis of his claim for recovery of prize money on the lottery ticket sold to him. Consequently, the appeal is dismissed, but without any order as to costs.