| Citation | 1957 AIR 628 SCR 930 |
| Date of Judgment | 04TH April 1957 |
| Court | Supreme Court of India |
| Case Type | Civil Appeal No. 134 of 1956 |
| Appellant | R. M. D. Chamarbaugwalla |
| Respondent | The Union of India |
| Bench | T.L. Venkatarama Aiyyar, Sudhi Ranjan Das(CJ), Bhuvneshwar P. Sinha, S.K. Das, P.B. Gajendragadkar |
| Referred | Indian Constitution Articles- 252(1), 32The Prize Competitions Act, 1955 |
FACTS OF THE CASE
A petition challenging the breach of Article 19(6) as a restriction is placed on the applicant’s ability to conduct business by the respondents has been submitted by the applicant on the basis of their violation of the fundamental rights under Article 32 of the constitution. The petitioners were of the opinion that the definition of prize competition under Section 2(d) of the Act is very broad and not only covers the competitions of a gambling nature but also those in which success depended to a significant degree on skill, which was a paternalistic view. The respondents further argued that Section 2(d) of the Prize Competition Act, 1955 doesn’t cover the competitions related to gambling. Additionally, the respondents argued that the definition, when properly interpreted, meant and included only competitions of a gambling nature, and even if that weren’t the case, the provisions in question were still valid as far as competitions involving gambling because they were severable in their application. This was disputed on behalf of the Union of India. The Prize Competitions Act (42 of 1955) was adopted by the Parliament in response to motions made by the legislative bodies of various States under Article 252(1) of the Indian Constitution. On April 1, 1956, the Central Government implemented the Prize Competitions Act, 42 of 1955. The petitioners are involved in promoting and holding prize competitions in different Indian States. The legitimacy of a few elements of the aforementioned Act and the rule made thereunder are being contested in the current writ petitions, which were filed in light of Article 32 of the Indian Constitution. Along with Civil Appeal No. 134 of 1956, which challenged the legality of the Bombay Lotteries and Prize Competitions Control and Tax Act, 1948 on some of the same grounds as the present petitions, the petitions were heard.
ISSUES
Whether, considering the definition of “prize competition” in section 2(d), the Act applies to competitions that require a high degree of ability but are not gambling-related.
And if it does, whether the ex concessi invalid provisions of Sections 4 and 5 and Rules 11 and 12 can be applied to competitions that have a gambling-like nature under the severability principle.
BACKGROUND
From 1948, the petitioners, have operated prize tournaments in Mysore. The Mysore Lotteries and Prize CompetitionsControl and Tax Act, 1951 set the rules for their operation. In this instance, the Prize Competition Act’s Section 2(d) was essentially contested. Following an appeal from the various states of the nation, the Prize Competition Act, 1955, was passed at the federal level. Other states, like the State of Mysore, embraced this Act. The State did consent to the Union’s sole authority over the management of prize competitions, though. However, what actually occurred afterwards was that the State itself issued an ordinance altering certain clauses of the act to consider the power to tax themselves. R.M.D.C. (petitioners) questioned the State’s action and believed it to be outside the scope of its legislative authority. Additionally, it was argued that the idea of colorable legislation applied because the State of Mysore was attempting to indirectly regulate prize competitions through the use of their taxing authority. The constitutional validity of Article 19(6) of the Indian Constitution was at issue in the case R.M.D.C. v. Union of India1. Strong arguments were made by the respondents in response to this petitioner’s claim that there was no infringement of a basic right under Part III of the Constitution since the lottery and gaming businesses that the petitioners were operating did not fall under the definition of trade.
Mr. Palkhivala and Mr. Seervai both made appearances on behalf of the petitioner’s and respondent’s sides, respectively. Before the Supreme Court, both sides presented their justifications and disagreements over their claims. The case is founded on the law of severability, which determines whether or not a portion of the Act of Prize Competition is considered to be legal.
ARGUMENTS
The petitioner said that The Prize Competition Act of 1955 had a broad section 2(d) that applied to all competitions, even those of a gambling nature and those where winning depended heavily on skill. The respondents maintained that gambling activities are not a trade or business and that “prize competition” as defined in Section 2(d) of the Act, properly drafted, only refers to and encompasses competitions in which success does not depend to a significant degree on talent.
The petitioners’ fundamental rights, guaranteed by Article 19(6) of the constitution, are being violated by the respondents’ limits on them. Since there has not been a violation of Art. 19(1)(g), the petitioners are not eligible to invoke the protection provided by Art. 19(6) and are therefore unable to file the petition under Article 32.
The petitioners argued that because they are intertwined, it is impossible to separate the lawful from the invalid portions of the Prize Competition Act, 1955. The respondents agreed that even if some portions of the Prize Competition Act are illegal, those portions should be eliminated while maintaining the validity of the remaining portions, keeping the Act from being completely invalid.
JUDGEMENT
In the Civil Appeal No. 134 of 1956, which was heard concurrently with the petitions, it was determined that “trade and commerce” as defined by Article 19(1)(g) and Article 301 of the Constitution are the only activities that can be regarded as legal trading activities. Gambling, on the other hand, does not fall under the definition of trade but is instead res extra commercium, and it is not covered by those Articles.
Similar to the distinction between commercial and wagering contracts, the two categories of competitions are easily distinguished from one another.
On the basis of the facts, it can be difficult to decide if a particular competition belongs in one group or another, but once its actual nature is discovered, it must fall into one of the two categories.
The contested sections are severable in their applicability to competitions where success does not depend to a significant degree on skill, assuming that they apply by virtue of the definition in section 2(d) to all types of competitions. The petitions must be dismissed with costs since both arguments must be determined to be against the petitioners. There will only be one set of legal fees for counsel.
The petitions were subsequently dismissed because they lacked any merit.
REFERENCES
This Article is written by Ayush singh of Dr. Ram Manohar Lohia Avadh University, Intern at Legal Vidhiya.
![7- Week Certificate Course on IPR Law by Legal Vidhiya [Register by 13 June 2025]](https://legalvidhiya.com/wp-content/uploads/2025/04/WhatsApp-Image-2025-05-15-at-11.27.16_1cf2afeb.jpg){kind=small}
0 Comments