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TMI Blog1995 (4) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... trade or business. For that reason, the delegated legislation cannot be, condemned as a whole unless the invalid part is inextricably interconnected with the valid. The Court is, therefore, entitled to consider whether the rule as a whole or in part is valid or becomes invalid or inapplicable. On its finding that to the extent the rule is not relevant, the Court is entitled to set aside or direct to disregard the irrelevant or inapplicable part leaving the rest intact and operative. The condition in para 4 of the Bangalore order envisages thus "(5) The licensing authority shall in deciding whether to grant or refuse licence for conducting public amusements does not provide for a right of hearing. Appeal dismissed. - C.A. 4564 OF 1995 - - - Dated:- 17-4-1995 - K. Ramaswamy, B.L. Hansaria, JJ. JUDGMENT Leave granted in SLPs Nos. 11012 of 1991, 10065-78, 18271-75, 18617-18630, 18316, 22759-22763 and 22865-70 of 1994, 675, 2347-53 and 6437-6440 of 1995 and SLP No. ... of 1995 (CC No. 1306) 2. These appeals by special leave arise from the Division Bench judgment of the Karnataka High Court in Writ Appeals Nos. 1303-23 of 1990 dated 17-9-1990 and of the Madras High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no element of betting or wagering in the business conducted by the appellants while operating video games. The definition of gaming, therefore, does not get attracted to video gaming. The space occupied by the machines used for video gaming is very small. It is neither like a theatre nor a public place. Therefore, it is not a common gaming house as defined under the respective Acts. The games conducted in the respective shops of the appellants do not involve any money transaction except collection of non-refundable charges for tokens for playing games. The player is rewarded on winning as many number of tokens as he can obtain by skill and such token he so gains gives him another chance to play. The tokens are not exchangeable for any cash or money. That apart, the games are conducted only for amusement and to pass the time. The essential requirement to bring any game within the definition of gaming as defined under the Act is completely lacking. The customers are entertained purely for amusement. The video games are, therefore, neither illegal nor unjustified. Therefore, the appellants are not required to obtain any licence from the licensing authority concerned 5. Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a subject or means of gaming, any document used or intended to be used as a register or record or evidence of any gaming, the proceeds of any gaming, and any winning or prizes in money or otherwise distributed or intended to be distributed in respect of any gaming. Public place has been defined to mean a place including a road, street or way, whether a thoroughfare or not and a landing place to which the public are granted access or have a right to resort, or over which they have a right to pass 7. Black's Law Dictionary, 6th Edn., defines 'gaming' at p. 679 thus The practice or act of gambling. An agreement between two or more persons to play together at a game of chance for a stake or wager which is to become the property of the winner, and to which all contribute. The element of gaming are the presence of price or consideration, chance and prize or reward. Gaming place means any place, room, building, vehicle, vessel, tent or location which is used for any of the following : Making and settling bets; receiving, holding, recording or forwarding bets or offers to bet; conducting lotteries or policy games; playing games of chance for money or other p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing are kept or used for profits or gain by the person occupying, using or keeping such house, room, tent etc. whether by way of charge or otherwise. The instrument of gaming would include any article used or intended to be used as a subject of means of gaming, any document used or intended to be used as a register or record or evidence of gaming, the profits of any gaming or any winnings or prizes in money or otherwise distributed or intended to be distributed or money's worth in gaming. Place would include a building or a tent etc. whether permanent or temporary or any area whether enclosed or open. Place of public amusement means any place where any gain or means of carrying on the gain is provided in which the public are admitted and includes a road or a street or a way whether a thoroughfare or not and a landing place in which the public are granted access or have a right to resort or over which they have a right to pass. The elements of gaming are the presence of prizes or consideration, chance and prizes are reward and games includes a contrivance which has for its object to furnish sport, recreation or amusement. Amusement would mean diversion, pastime or enjoyment or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw in accordance with law 13. The primary questions that emerge are whether video game is a game and whether it is a game of skill or chance and liable to be regulated under the relevant Act, notification or regulations or orders issued thereunder. The word 'gaming' defined under the Acts is an inclusive definition to bring within its ambit diverse games as held earlier 14. Some of the video games are operated with two-way or four-way joysticks, push buttons, a volume control with a steering wheel and accelerator, gun-trigger control or potentiometer etc.etc. Every video game is operated by an electronic machine. In all the games, tokens are actually used by the player by inserting into the machine before the play actually begins. The tokens are required to be purchased for cash at the counter and are exchangeable for cash. In the Tamil Nadu cases, in the counter- affidavit filed by the Commissioner, it was stated and accepted by the High Court that Super Continental game has four vertical pathways on the screen. The first containing figures of apples, second contains grapes, third contains bells and fourth contains stars. On pressing the button, these stripes move fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is seen from the report; that on a closer look, one could perceive electronic machines installed wherein the game or games provided are purely games of chance. As an instance, in one of these games, five closed cards are exhibited on the screen. The player is allowed to press some of the buttons provided in the machine on which the closed cards are reversed and jacks, aces, kings, queens, etc., appear. If the player succeeds in getting two jacks and three aces, he gains certain points and these points are recorded electronically. The player is permitted to repeat the play as a result of which he might also lose the initial points gained by him. Although this game is claimed to be one which depends upon the skill with which the buttons are pressed, in actually operating these buttons one could easily see that there is absolutely no skill at all involved in the game and the chances of a player maintaining the game depends purely upon his luck and not upon his skill. Further, on opening one such machine, it is noticed by the Technical Officer, Control Room, that there is a provision for making adjustments in such a way that a player can never succeed in winning the points required for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct or even on a consideration of what is reasonable from the point of view of the person or a class of persons on whom the restrictions are imposed. In order to determine reasonableness of the restriction, regard must be had, as stated earlier, to the nature of the business and the prevailing conditions in that trade or business which would differ from trade to trade. No hard and fast rules concerning all trades etc. could be laid. The State, with a view to prohibit illegal or immoral trade or business injurious to the public health or welfare, is empowered to regulate the trade or business appropriate to the conditions prevailing in the trade/business. The nature of the business and its indelible effect on public interest etc. therefore, are important elements in deciding the reasonableness of the restriction. No one has inherent right to carry on a business which is injurious to public interest. Trade or business attended with danger to the community may be totally prohibited or be permitted subject to such conditions or restrictions as would prevent the evils to the utmost 19. The licensing authority, therefore, is conferred with discretion to impose such restrictions by noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unfair or unjust 21. It is next contended in the appeals arising from Karnataka that they are not required to obtain licence under the notification. In support thereof, it is contended that the Commissioner lacks power under Section 31 to make the regulation. We find no force in the contention. It is seen that Section 31 empowers the Commissioner or the District Magistrate in the area under their respective charge to make, alter or rescind orders not inconsistent with the Mysore Act. They are empowered to license persons doing any trade or business, or to control places of public amusement or entertainment. They are also empowered to prohibit keeping all public places or places of public amusement or entertainment, to prevent obstruction etc. They are entitled to regulate the means of entrance or exit at places of public amusement or assembly and providing for the maintenance of public safety and the prevention of disturbance thereat. Under clause (x), the Commissioner or the District Magistrate is empowered to regulate by licensing or controlling, with such exceptions specified therein, the musical, dancing, mimetic or theatrical or other performances for public amusement inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not relevant for the applicability of the order to the video games. Sub-para (2) of para 3 of the Bangalore Order divides public places into four categories according to which the person is required to pay licence fee by a treasury challan i.e. permanent, semi-permanent, temporary or other places of public amusement. It also prescribes the maximum and minimum rates of licence fee. Clause (d) becomes applicable to any other place not covered by clauses (a) to (c). What sub-para (2) of para 3 contemplates is payment of fee up to 200-seat capacity, namely, 1 to 200, if it is a permanent place, a minimum fee is ₹ 50 etc. Public amusement would be permitted to be conducted at any of the places for which licence was obtained from the Commissioner/District Magistrate. When clause (d) is applicable, the licence fee is ₹ 20. We are informed that ₹ 20 is being charged for obtaining the licence to control the video games by the Commissioner. Relying upon the statement in this clause about its applicability in those cases where admission to the place in question is on payment of money, it has been contended by the counsel for the appellants that this clause too is not attra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... using any building or enclosed place with a dimension of below 46-1/2 sq. m. is required to obtain licence under the rules made under Section 39 of Madras City Police Act and other relevant law elsewhere 26. Next contention is that prevention of the students from attending the video games is arbitrary and, therefore, violates Articles 14 and 21. We find no force in the contention. The conditions of the licence clearly mention that the students in uniforms shall not be allowed to play video games between 10.00 a.m. to 3.00 p.m. In other words, during school or college hours, the licensee is prohibited to admit students in uniform to the video games. Restriction is imposed in public interest of education of the students. It is, therefore, neither arbitrary nor capricious 27. The submission that condition regarding parking is arbitrary, since video games are played in the 3rd floor or 2nd floor of the multistoreyed building, is also devoid of force. The order and the condition of licence regulate diverse games in general played at different places and not with reference to a particular individual game or place. On that ground, the condition cannot be declared to be ultra vires ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntecedent of the applicant (6) The licensing authority shall not grant a licence under this order unless he is satisfied (a) that the provisions of this order have been substantially complied with; and (b) in the case of an application for the grant of a licence for conducting public amusements, all adequate precautions have been taken in the place, in respect of which the licence is to be granted, to provide for the safety, convenience and comfort of the persons attending exhibition therein. 30. A reading of these rules expressly does not provide for a right of hearing before rejecting licence to permit public amusements. In sub-para (7) of para 4, it is made clear that where the licensing authority refuses to grant a licence, it shall do so and the order be communicated to the applicant giving reasons in writing for such refusal 31. It is settled law that every action of the State or an instrumentality of the State must be informed by reason. Actions uninformed by reason may amount to being arbitrary and liable to be questioned under Article 226 or Article 32 of the Constitution. The action must be just, fair and reasonable. Rejection of the licence must be founded u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State. Normally it must be communicated to the affected party so that he may have an opportunity to have it tested in an appropriate forum 33. In S. L. Kapoor v. Jagmohan it was contended that before supersession of the Municipal Committee, no opportunity of hearing was given and, therefore, it was violative of the principles of natural justice. While considering the question, the Court noted the submission of the Attorney General that Section 238 of the Punjab Municipal Act requires to meet emergent situation with swift action and necessarily it would imply exclusion of the natural justice. This Court negated the contention of hearing and natural justice may always be moulded to the situation. The party acting under the Act need not extend oral hearing and it is not necessary to put every detail of a case to the affected person. Broad grounds are sufficient to be given to indicate the decision 34. It is seen that the Commissioner or the District Magistrate is required to record reasons while refusing to grant the licence. This assures compliance with principles of natural justice. It is not mandatory that hearing should be extended before rejecting licence. A caveat is, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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