On Tuesday, the Karnataka High Court gave Bangalore Turf Club (BTC) a temporary permit to start holding horse racing and betting both on and off the track. [State of Karnataka and Ors. v. Bangalore Turf Club Limites]
Judge SR Krishna Kumar noted that the State government’s directives, which denied the Club licenses to race and wager, violated the fundamentals of natural justice.
“The impugned orders are violative of principles of natural justice and the same deserve to be stayed not only on account of lack of sufficient and reasonable opportunity being granted to the BTC but also on account of the show cause notice lacking material particulars and being inadequate which amounts to denial of principles of natural justice warranting interference by this Court.”
A number of writ petitions opposing the Home Department’s and the Finance Department’s decisions to deny BTC a racing license and a betting license were being heard by the court. On June 6, both orders were approved.
The petitioners emphasized that there had been no restrictions on racing or betting for more than a century. Additionally, they cited earlier High Court cases in which BTC had been granted favor.
It was contended that horse racing supports over 20,000 people both directly and indirectly and generates over ₹1 million in taxes every day.
However, the State contended that BTC was solely to blame for the unlawful betting that was conducted, which resulted in the license being denied. It submitted that BTC lacked a vested right to be granted a license.
The State additionally claimed that tax avoidance had cost it ₹296 crore.
The petitioners had shown a prima facie case, the court decided, and the balance of convenience supported their position. It thus stated that the petitioners would suffer irreversible harm if the orders were not stayed.
According to the Supreme Court’s ruling in Dr. KR Lakshmanan v. State Of Tamil Nadu And Anr, the State was not permitted to deny a license on the grounds that the petitioners were engaging in unlawful racing and betting activities because horse racing is a game in which winning depends largely and predominantly on skill.
The Court stated that the licenses were denied because of the unlawful conduct that bookmakers, who are currently being prosecuted, were engaged in. But according to the Licensing Act and Rules, these kinds of situations could not have served as justification for not granting or issuing a license.
“A perusal of the impugned orders passed by the respondents – State will clearly indicate that the same are neither relevant, material or germane for the purpose of grant of license and the said reasons are untenable and without any basis,” the Court stated.
It further noted that the government’s order disregarded the fact that BTC was not charged in the criminal proceedings and that, thus, the proceedings could not have served as the foundation for license denials.
“Though the impugned orders allege violation of the provisions of the Licensing Act and Rules, necessary material particulars and details in this regard are conspicuously absent in the impugned orders; it follows therefrom that the bald, vague, cryptic, laconic, unreasoned and non-speaking allegations made in the impugned orders in the regard is yet another circumstance that would vitiate the impugned orders,” it continued.
The Court explained that these were all preliminary findings that led it to conclude that people and horses involved in the sector would suffer irreversible loss and hardship in the absence of interim injunction.
As a result, the Court granted BTC permission to conduct racing and betting operations subject to the terms and conditions of a previously issued license and the requirements of the Mysore Race Course Licensing Rules and Act. The Court also stayed the orders that were being challenged until further notice. Additionally, it granted the State the right to take appropriate action in order to keep an eye on, oversee, and control the petitioners’ racing and betting activities.
Senior Advocates SS Naganand, KN Phaneendra, Ravi B. Naik, and DR Ravishankar represented the petitioners.
Advocate General K Shashi Kiran Shetty spoke for the State.
Case Name – Bangalore Turf Club Limited v. State of Karnataka and Ors
NAME – KARUBAKI MOHANTY, B.A.LLB, COLLEGE – SOA NATIONAL INSTITUTE OF LAW, BHUBANESWAR, INTER UNDER LEGAL VIDHIYA
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