2021 (8) TMI 1377 - HC - Indian Laws

Constitutional Validity of Part II of the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021 (Act 1 of 2021) - card game of rummy on the virtual platform - offering poker in cyberspace - private body which seeks to regulate diverse forms of games offered to be played on the internet in the country in which the other petitioners, who provide platforms for playing the games, are members - primary ground urged to assail the impugned legislation is in it apparently prohibiting games of skill, if played for any prize or stakes; which, according to the petitioners, is in flagrant disregard of the law laid down by the Supreme Court that competitions in games of skill are business activities and, thus, protected under Article 19(1)(g) of the Constitution of India. The substance of the State's submission is that the legislature as the rightful representative of the people in the State perceives betting in cyberspace to be pernicious and since the State has exclusive authority under the Constitution to legislate in the field of betting, the amending statute passes muster as the object of the legislation is to arrest the addiction of gambling and ensure that citizens do not rush to their doom by falling prey to such addiction. HELD THAT - At the end of the day, a balance has to be struck between the extent to which the State can impose restrictions to protect a class or certain classes of persons and the reasonableness of such restrictions qua the ordinary individual who may resist the same, whether or not the statutory measure is intended to protect such individual - Oftentimes, when the State takes a paternalistic attitude, it seeks to legally regulate private life. This brings about a conflict between both the authority and the desirability on the part of the State to legislate in areas where it perceives that the individual in general or certain classes of individuals require protection and the private rights of the individual and every citizen's freedom of choice. State paternalism, by and large, is understood to mean the phenomenon in which the State acts as the guardian and protector of its citizens or a class or classes of citizens who are perceived to be vulnerable in certain situations or are thought to be generally weak and incapable of protecting themselves. When a statute is attacked on the ground of overbearing paternalism, a cost-benefit analysis is called for, not in mathematical terms, but only to assess whether by and large the benefit in the form of public good outweighs the cost of the individual being deprived of his choice. State paternalism through legislation can span the ordinary areas of protecting children or women or the elderly or persons with disabilities by enacting remedial statutes to undo the historical or longstanding neglect or oppression or exploitation of certain classes of persons and even to protect persons performing certain duties, as in the workspace. Paternalistic legislation may regulate the conduct of an activity depending on where, as a result of the limitation of resources involved in such activity, regulation is deemed imperative; or, it may seek to regulate the perceived undesirability of the over-indulgence in certain activities - Like a parent seeking to protect her child and assuming that the child is incapable of deciding what is good for her and what is not, the State considers the individual or class of individuals sought to be protected as defenceless and incapable of making the correct choice. The more natural the activity that is sought to be controlled, the greater is the degree of authoritarianism in the elimination of the exercise of choice by the individual or the class of individuals sought to be protected as vulnerable by legislation born out of State paternalism. Every game or like activity depends on an element of chance. One team at a cricket match may bat in perfect sunshine on a flat wicket, but the other may bat on a sticky wicket upon rain intervening in the interregnum. However, ordinarily, it is expected that the more skillful would take the unexpected-the chance element-in its stride and the greatest upsets remain etched in our memories because the expected dexterity of the acknowledged skillful was felled by the less-gifted - Gambling and gaming have developed secondary meanings in judicial parlance. Indeed, such words had attained such connotations in the pre-constitutional era that the nomen juris cannot be shrugged off to understand such words to mean or imply anything other than how they have been judicially interpreted. Irrespective of what meanings are ascribed to these words in dictionaries, gambling is equated with gaming and the activity involves chance to such a predominant extent that the element of skill that may also be involved cannot control the outcome. A game of skill on the other hand, may not necessarily be such an activity where skill must always prevail; however, it would suffice for an activity to be regarded as a game of skill if, ordinarily, the exercise of skill can control the chance element involved in the activity such that the better skilled would prevail more often than not. Since the discussion here has to be confined to the validity of the impugned Amending Act, the several tests enunciated in the authoritative judicial pronouncements brought to bear on the subject by the parties need to be understood and applied. For a start, K.R. Lakshmanan instructs that when a game of skill is distinct from a game of chance, on the preponderance of the skill element involved, the activity would be protected by Article 19(1)(g) of the Constitution and competitions involving games of skill have to be regarded as business activities. The amended Act encompasses within its sweep all sporting activities, if played for a prize, whether between two class teams in a school or between two schools in an inter-school competition, if there is a trophy to be won; leave alone the ATP prize-money or ranking tournaments organised in the city. Goodbye to IPL and Test matches, too, from Tamil Nadu since cash rewards are offered therein - The wording of the amending Act is so crass and overbearing that it smacks of unreasonableness in its every clause and can be seen to be manifestly arbitrary. Whatever may have been the pious intention of the legislature, the reading of the impugned statute and how it may operate amounts to a baby being thrown out with the bathwater and more. And, irrespective of the noblest of intentions, the effect of the provisions of the impugned statute is the primary consideration for assessing the validity thereof. There is little doubt that the State has the authority by virtue of the Constitution to enact a law pertaining to betting and gambling; just as the State has due authority in such regard, inter alia, in respect of public order; sports, entertainments and amusements; and, offences against laws with respect to any of the matters in the State List. The petitioners here have not challenged the legislative competence in such sense that the State lacks the power to enact any law pertaining to betting and gambling - There is no doubt that the activity of gambling and the inextricable element of betting involved therewith has a deleterious impact on certain individuals and can even be ruinous. So much is accepted. The immediate question that arises is whether it was necessary to go the distance that the Amending Act has charted out to completely stultify and negate skill altogether. If, prima facie, the impugned legislation is seen to impose restrictions or altogether curb the exercise of skill in a particular domain, the onus is on the State to justify not only the need therefor but also the extent thereof. No attempt has been made in such regard apart from the anecdotal reference to some suicides and the subjective perception of the evil of addiction. There appears to be a little doubt that both rummy and poker are games of skill as they involve considerable memory, working out of percentages, the ability to follow the cards on the table and constantly adjust to the changing possibilities of the unseen cards. Poker may not have been recognised in any previous judgment in this country to be a game of skill, but the evidence in such regard as apparent from the American case even convinced the Law Commission to accept the poker as a game of skill in its 276th Report. The legislation assailed herein has to be regarded as something done by the legislature capriciously, irrationally and without adequate determining principle such that it is excessive and disproportionate, to borrow the words of Shayara Bano 2017 (9) TMI 1302 - SUPREME COURT . The doctrine of severability would also not apply in the present case as the concept of the expanded meaning of gaming runs through the entirety of the Amending Act; so much so that it cannot be gauged with any element of certainty as to which part of the amendments the legislature would have intended to be retained as valid even if the legislature was aware that some parts thereof were invalid. In fine, it must be said that the Amending Act in its application to the Act of 1930 is so disproportionate to the objects that it sets out to achieve that no meaningful part of it-even a sliver-can be reasonably allowed to be retained or upheld as valid. The impugned Part II of the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021 (Act 1 of 2021), which amends the Tamil Nadu Gaming Act, 1930, is declared to be ultra vires the Constitution in its entirety and struck down as a consequence. Nothing herein will prevent an appropriate legislation conforming to the constitutional sense of propriety being brought in the field of betting and gambling by the State. Petition allowed.

Summary

Issues Involved:
1. Over-paternalistic stance by the State infringing fundamental rights.
2. Challenge to Part II of the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021.
3. Legislative competence and scope of the Amending Act.
4. Prohibition of games of skill played for stakes in cyberspace.
5. Reasonableness and proportionality of the restrictions imposed.

Issue-wise Detailed Analysis:

1. Over-paternalistic stance by the State infringing fundamental rights:
The petitioners argued that the State's amendments to the Tamil Nadu Gaming Act, 1930, were excessively paternalistic, infringing upon their fundamental rights and being manifestly arbitrary. They contended that the amendments, particularly the prohibition of games of skill played for stakes, disregarded the law laid down by the Supreme Court, which protected competitions in games of skill under Article 19(1)(g) of the Constitution of India.

2. Challenge to Part II of the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021:
The challenge focused on Part II of the Amending Act, which prohibited all forms of games conducted in cyberspace for stakes. The petitioners argued that the amendments expanded the definition of "gaming" and introduced Section 3-A, which prohibited wagering or betting in cyberspace, including games of mere skill if played for stakes. They contended that this was contrary to judicial pronouncements that distinguished games of skill from games of chance.

3. Legislative competence and scope of the Amending Act:
The petitioners did not challenge the State's legislative competence to enact laws on betting and gambling but argued that the Amending Act's scope was excessively broadened. They contended that the expanded definition of "gaming" and the prohibition of games of skill played for stakes went beyond the intended legislative field of Entry 34 in the State List, which pertains to betting and gambling on games of chance.

4. Prohibition of games of skill played for stakes in cyberspace:
The petitioners argued that games of skill, such as rummy and poker, had been judicially recognized as distinct from games of chance and were protected under Article 19(1)(g) of the Constitution. They contended that the Amending Act's blanket prohibition of these games in cyberspace, if played for stakes, was unreasonable, arbitrary, and disproportionate. They emphasized that the legislative changes failed to consider the distinction between games of skill and games of chance.

5. Reasonableness and proportionality of the restrictions imposed:
The petitioners argued that the Amending Act's restrictions were unreasonable and disproportionate, failing the doctrine of proportionality. They contended that the State had not demonstrated the necessity of such sweeping changes or considered less intrusive measures. The court agreed, noting that the Amending Act's provisions were excessively broad, unreasonably restrictive, and manifestly arbitrary. The court emphasized that the restrictions imposed by the Amending Act failed to balance the fundamental right to carry on occupation under Article 19(1)(g) with the public interest.

Conclusion:
The court declared the impugned Part II of the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021, to be ultra vires the Constitution and struck it down in its entirety. The court held that the Amending Act was excessively paternalistic, unreasonable, and disproportionate, failing to meet the constitutional standards of reasonableness and proportionality. The court emphasized that while the State had the authority to legislate on betting and gambling, the Amending Act's provisions went beyond the intended legislative field and infringed upon the fundamental rights of individuals.