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TMI Blog2021 (12) TMI 1383X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.03.2017, 12.12.2018 and 23.01.2019 seeking refund of the draw charges paid by them in terms of the struck down Rule 3(11) of the 2010 Rules. The respondent no.2 did not reply and therefore, the petitioner approached this court by filing the present writ petition. It seeks a direction upon the respondent to refund the draw charges as deposited by the petitioner. 3. The Director of State Lotteries, Government of Sikkim (respondent no.3) filed a counter affidavit on 20.07.2019. The respondent no.3 took a plea of unjust enrichment by the petitioners on the ground that the petitioners had failed to establish that the draw charges amounting to Rs.9,30,45,000/- deposited was borne by them and that the burden had not been passed on to the purchasers of lottery. It was also pleaded that as the Organising States who were liable to pay the draw charges had not been impleaded although they were necessary parties the petitioners did not have the locus standi to file the writ petition and consequently was not maintainable. Additionally, it was averred that the petitioners had approached this court after more than three years and therefore, the writ petition was barred by limitation. It was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om their own sources. According to them, it only reflected that payment had been made through this account. 8. In compliance to the order dated 29.06.2020, the petitioner no.2 filed an affidavit on 17.07.2020 in response to paragraph 5 of the reply affidavit filed on 23.03.2020 by the respondent no.2. It was contended that the petitioner had paid the draw charges from its own source of income and same had not been collected from the customer of the online lottery sold by the petitioner in the State of Sikkim. If the draw charges had been recovered from any customer/retailer/agent/subagent/seller, it ought to be shown on the income side in the profit and loss account of the petitioner, which was not so, as it clear from the documents filed. An additional certificate dated 07.07.2020 issued by the auditor of the petitioner company was also filed in which it has been confirmed that the draw charges had not been recovered from any of his agents, sub-agents, seller, etc. The petitioner, thus, contended that it had been adequately established that the burden of the draw charges had not been passed on by the petitioners. 9. Pursuant to the order dated 30.03.2021, the petitioner filed ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. [(1997) 5 SCC 536] to buttress his argument. It was submitted that since the Lotteries Act did not provide any procedure for refund, the general law would be applicable and therefore, the proper remedy would be to prefer a civil suit under Section 72 of the Indian Contract Act, 1872 for refund. As an efficacious remedy is available to the petitioner in a civil suit, the remedy of writ petition under Article 226 is not available to the petitioner in the facts of the case. He further contended that although the agreements reflected that the distributors/selling agent had taken on the burden of paying the draw charges on behalf of the Organising State, the contract did not give the petitioner the liberty to withdraw the draw charges paid by them on behalf of the Organising State which was not even made a party. 12. Mr. Surajit Dutta replied to the three contentions of the learned Advocate General. On the issue of unjust enrichment, he submitted that the pricing of lottery ticket is done by the Organising State in terms of Rule 3(3) of the 2010 Rules. This would be evident from various agreements executed between different Organising States and stockist/marketing agent/distributor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition, Anantnag and Anr. Vs. Mst. Katiji and Ors. [(1987) 2 SCC 107] was pressed to submit that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice is to be preferred. In the present case, the State respondent has realized money in the form of draw charges from the petitioners without any authority of law and therefore, it was refundable. Mr. Surajit Dutta further contended that the judgment rendered by this court in M/s Shubh Enterprises (supra) attained finality after the SLP preferred was dismissed and therefore, even if the principle of limitation is invoked it would commence to run only after 05.09.2016 and consequently, there was no delay. With regard to the issue of the entitlement of the petitioner to claim refund, Mr. Surajit Dutta contended that a claim of refund requires two things to be proved. That he had paid some money to the State and the State was not legally authorized to collect it. If the argument of the State respondent is to be accepted the petitioner would become all the more entitled to claim refund as notwithstanding the invalidity of Rule 3(11) of the 2010 Rules, the State respondents were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t firstly, the Organising States which were necessary parties had not been impleaded by the petitioner and secondly, that the petitioner had no authority to seek refund of the draw charges paid by them on behalf of the Organising States. 14. The record reveals that although the respondents no.2 and 3 had taken the plea of dismissal of the writ petition on the ground that the Organising State, which was a necessary party, had not been impleaded, the petitioner in its rejoinder contended that the Organising State was not a necessary party and was not required to be impleaded. 15. In the writ petition, the petitioners contend that they are engaged in the business of, inter alia, marketing and sale of lottery tickets organized/conducted by various State Governments. It is their case that they are the sole stockist for marketing and selling of Goa, Mizoram, Arunachal Pradesh and Sikkim State online lotteries and was selling the tickets of these States in the State of Sikkim. As per the additional affidavit filed on 07.04.2021 by the petitioner, the State of Arunachal Pradesh, Goa, Mizoram and Sikkim had appointed Summit as their marketing agent, distributor/selling agent for marketing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 21. This is a writ petition filed by the petitioner for seeking refund of the draw charges payable by the Organising States but paid by them under an agreement with M/s Sugal & Damani, the distributor/selling agent of the Organising States. The agreement reflects that the petitioners had taken the responsibility of paying the draw charges liable to be paid by the Organising States in terms of Rule 3(11) of the 2010 Rules which has now been struck down by this Court. The fact that the petitioners had in fact paid the draw charges is reflected clearly in the receipts issued by the respondent no. 3. However, in a claim for refund of this nature it is important to ascertain whether the burden has been passed on. When this Court struck down the provision of Rule 3(11) of the 2010 Rules in M/s Subh Enterprises (supra) it also granted the consequential relief of refund to the petitioner therein who was the distributor/selling agent. Further, the Organising State was also impleaded as a party respondent. It is not so in the present case. In the present case, the petitioner who are stockist under the distributor/selling agent seeks refund of the money paid by them to the respondent no. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 3(17) provides that the Organising State shall ensure that proceeds of the sale of lottery tickets, as received from the distributors or selling agents or any other source, are deposited in the public ledger account or in the consolidated fund of the Organising State. 24. Rule 4 deals with appointment of distributor or selling agent. Rule 4(3) provides that the distributors or selling agents shall maintain the records of the ticket obtained from the Organising States and tickets sold and those which remain unsold up to the date at the time of draw along with other details as may be specified by the Organising State. 25. It is thus seen that under the scheme Lotteries (Regulation) Act, 1998 and the Lotteries (Regulation) Rules, 2010, it is for the Organising State to determine the price of the lottery ticket and the distributor and the selling agent is appointed by the Organising State through an agreement for the sole purpose of marketing and selling lotteries on behalf of the Organising State. 26. In State of Madhya Pradesh Vs. Bhailal Bhai & Ors. [AIR 1964 SC 1006] the Supreme Court examined 31 appeals by the State of Madhya Pradesh made by the High Court of Madhya Prades ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if there is no such delay, the Government or the statutory authority against whom the consequential relief is prayed for raises a prima facie triable issue as regards the availability of such reliefs on the merits on the grounds like limitation, the court should ordinarily refuse to issue the writ of mandamus for such payment. In both these kinds of cases it will be sound use of discretion to leave the party to seek his remedy by the ordinary mode of action in a civil court and to refuse to exercise in his favour the extraordinary remedy under Article 226 of the Constitution. 27. In Suganmal vs. State of Madhya Pradesh [AIR 1965 SC 1740], the Supreme Court examined the question whether a petition under Article 226 of the Constitution praying solely for the refund of the money alleged to have been illegally collected by the State as tax, is maintainable under Article 226. It was held that though the High Courts have power to pass any appropriate order in the exercise of powers conferred under Article 226 of the Constitution, such a petition solely praying for the issue of writ of mandamus directing the State to refund the money is not ordinarily maintainable for the simple reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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