2021 (12) TMI 1383 - HC - Indian Laws

Refund of payments made as draw charges by the petitioner - Rule 3(11) of the Lotteries (Regulation) Rules, 2010 (2010 Rules) - HELD THAT - In the present writ petition, neither the Organising States nor the distributor/selling agents have been made parties. The claim for refund is being made by the sole stockist of the distributor/selling agent. The sole stockist of the distributor/selling agent would have, under the scheme of the Act and the Rules, no hand in the pricing structure of the cost of the lottery tickets. It is settled that refund of this nature cannot be granted if the burden of the draw charges had been passed on to a third party or the ultimate consumer. Although the petitioners have filed affidavits stating that they had not passed on the burden, when it is for the Organising State to structure the pricing of the lottery tickets, it may not be possible to determine this lis without the Organising States and the distributor/selling agent. Further, the petitioner has sought to rely upon the agreements entered between the Organising States and the distributor/selling agent on the one hand and the agreement between the distributor/selling agent and the petitioner on the other without the parties to the agreement being brought before the Court. The agreements relied upon by the petitioner has been perused for a prima facie view only. It appears that to determine whether or not the burden of draw charges paid by the petitioner on behalf of the Organising States had been passed on to the ultimate consumer it is necessary to examine the complex issue of pricing of the lottery tickets which may not be possible in a writ jurisdiction. Furthermore, the issue involved here also requires an interpretation of these agreements between parties not before this Court. The only thing certain is that the petitioner had paid the draw charges. The State respondents have also raised the issue of limitation and seriously contested it. This Court is of the view that it would not be correct to decide the issues raised in writ jurisdiction. The writ petition, is therefore, dismissed.

Summary

Issues Involved:
1. Refund of draw charges paid under Rule 3(11) of the Lotteries (Regulation) Rules, 2010.
2. Unjust enrichment.
3. Locus standi and necessary parties.
4. Limitation period for filing the writ petition.
5. Maintainability of the writ petition under Article 226 of the Constitution.

Detailed Analysis:

1. Refund of Draw Charges:
The petitioner sought a refund of draw charges paid under Rule 3(11) of the Lotteries (Regulation) Rules, 2010, which was struck down by the court as ultra vires the Lotteries (Regulation) Act, 1998. The petitioners had approached the State of Sikkim for a refund, which was not responded to, leading them to file the writ petition.

2. Unjust Enrichment:
The respondent contended that the petitioners had not borne the draw charges themselves but had passed the burden onto the purchasers of the lottery tickets, thus leading to unjust enrichment. The petitioners provided affidavits, bank statements, and a chartered accountant's certificate to establish that the draw charges were paid from their own sources and not passed on to the customers.

3. Locus Standi and Necessary Parties:
The respondents argued that the petitioners did not have the locus standi to file the writ petition as they had not impleaded the Organising States, which were necessary parties. The petitioners countered that the Organising States were not necessary parties and that they were entitled to claim the refund directly from the respondent.

4. Limitation Period:
The respondents claimed that the writ petition was barred by limitation as it was filed more than three years after the judgment in M/s Shubh Enterprises. The petitioners argued that the limitation period should commence from the date the Supreme Court dismissed the SLP, making the petition timely.

5. Maintainability of the Writ Petition:
The respondents contended that the writ petition was not maintainable under Article 226 for a refund of money and suggested that the petitioners should file a civil suit under Section 72 of the Indian Contract Act, 1872. The petitioners argued that the writ petition was maintainable as the draw charges were collected without authority of law, and cited various judgments to support their claim.

Judgment:
The court dismissed the writ petition, stating that the issues raised, including the determination of whether the burden of draw charges was passed on to the ultimate consumer and the interpretation of agreements between parties not before the court, were complex and required a detailed examination not suitable for writ jurisdiction. The court left it open for the petitioners to approach the civil court for an appropriate remedy, ensuring that the observations made would not affect the civil court's independent decision.