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TMI Blog2022 (2) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... t by what Lord Denning had humoured in TOTE INVESTORS LTD. vs. SMOKER (1968) 1 QB 509: "...The defendant has in the past occasionally had a wager on a horse-race. Today she has been taking part in another game of chance or skill - the game of litigation..." 2. All these petitions by the companies & individuals involving substantially similar questions of law & facts seek to lay a challenge to the validity of the Karnataka Act No. 28 of 2021 (hereafter 'Amendment Act') whereby the Karnataka Police Act, 1963 (hereafter 'Principal Act') has been amended; the cumulative effect of these amendments, according to them, is the criminalization of playing or facilitating online games. After service of notice, the respondents having entered appearance through the learned Advocate General have filed their common Statement of Objections and Addl. Statement of Objections resisting the challenge. II. A BRIEF DESCRIPTION AS TO WHO THE PETITIONERS ARE: 3. Petitioners in W.P. No. 18703/2021 and W.P. No. 19322/2021 are the societies registered under the Societies Registration Act. Petitioners in W.P. No. 18729/2021, W.P. No. 18732/2021, W.P. No. 18733/2021, W.P. No. 18738/2021, W.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anket ban on online games of skill. This is constitutionally unsustainable. 5. Petitioners in support of their case also press into service several other decisions of the Apex Court and of some High Courts which will be discussed in due course. IV. RESPONDENTS' OBJECTIONS TO THE PETITIONS: 6. The respondents oppose the petitions on the grounds as summarized below: (i) There was a Public Interest Litigation in W.P. No. 13714/2020 seeking a direction for legislatively banning all forms of online gambling & online betting; a Division Bench of this Court vide order dated 31.3.2021 directed the respondent-State to take a stand on the matter and accordingly, the Chief Secretary, Govt. of Karnataka had filed an affidavit to the effect that the State would come out with a legislation. The impugned Amendment Act has come on the Statute book pursuant to the assurance given to the Court. (ii) In the preceding two decades or so, because of digital revolution, there has been a proliferation of online gaming platforms which engage in 'betting & wagering' unbound by time & place unlike traditional betting, and this has proved disastrous to the public interest in general and pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Papers, and after adverting to the Rulings cited at the Bar, we are inclined to grant indulgence in the matter for the following reasons: 1. AS TO WHAT THE IMPUGNED TEXTUAL CHANGES TO THE AMENDMENT ACT DOES TO THE PRINCIPAL ACT: For ease of understanding, what the Principal Act prior to 2021 Amendment was and what it has become post Amendment, their relevant comparative texts are furnished in the following comparative tabular forms. Whatever has been added to or deleted from the Principal Act is shown in bold italics: TABLE-1 (AMENDMENT TO DEFINITION CLAUSE i.e., SECTION 2) PRE-AMENDMENT POST AMENDMENT (1) Clause 3 of Section 2: "Common Gaming House"; means a building, room, tent, enclosure, vehicle, vessel or place in which any instruments of gaming are kept or used for the profit or gain of the person owning, occupying, or keeping such building, room, tent, enclosure, vehicle, vessel or place, or of the person using such building, room, tent, enclosure, vehicle, vessel or place, whether he has a right to use the same or not, such profit or gain being either by way of a charge for the use of the instruments of gaming or of the building, room, tent, enclosure, veh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid or facilitate wagering or betting or such collection, soliciting, receipt or distribution, any act or risking money, or otherwise on the unknown result of an event including on a game of skill and any action specified above carried out directly or indirectly by the playing any game or by any third parties. (3) Clause 11 of Section 2: "Instruments of Gaming" includes any article used or intended to be used as a subject, or means of gaming, any document used for intended to be used as a register or record or evidence of any gaming, the proceeds of any gaming and any winnings or prizes in money or otherwise distributed or intended to be distributed in respect of any gaming. Clause 11 of Section 2: "Instruments of Gaming" includes any article used or intended to be used as a subject or means of gaming, including computers, computer system, mobile app or internet or cyber space, virtual communication device, electronic applications, software and accessory or means of online gaming, any document, register or record or evidence of any gaming in electronic or digital form, the proceeds of any online gaming as or any winning or prizes in money or otherwise distributed or intended to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme of wagering or betting in which the receipt or distribution of winnings or prizes in money or otherwise is made to depend on chance or [skill of other]; (vii) On any act on risking money or otherwise on the unknown result of an event including on a game of skill; or] (7) Section 79: Keeping common gaming house, etc. shall, on conviction, be punished with imprisonment which may extend to one year and with fine: Provided that,-- (a) for a first offence, such imprisonment shall not be less than three months and fine shall not be less than five hundred rupees; (b) for a second offence, such imprisonment shall not be less than six months and fine shall not be less than five hundred rupees; and (c) for a third or subsequent offence, such imprisonment shall not be less than nine months and fine shall not be less than one thousand rupees. Section 79: Keeping common gaming house, etc. shall, on conviction, be punished with imprisonment which may extend to three year and with fine up to rupees one lakh : Provided that,-- (a) for a first offence, such imprisonment shall not be less than six months and fine shall not be less than ten thousand; (b) for a second offence, such im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thoroughfare, or in any place to which the public have or permitted to have access or in any race-course shall, on conviction, be punished with imprisonment which may extend to six months or with fine which may extend to ten thousand rupees, or with both and where such gaming consists of wagering or betting, any such person so found gaming shall, on conviction, be punishable in the manner and to the extent referred to in section 80 and all moneys found on such person shall be forfeited to the Government. (10) Section 114: Penalty for entering area from which person has been directed to remove himself.--Notwithstanding anything contained in section 61, any person who, in contravention of a direction issued to him under sections 54, 55, 56 or 63 enters the area from which he was directed to remove himself, shall on conviction, be punished with imprisonment for a term which may extend to two years, but shall not, except for reasons to be recorded in writing be less than six months, and shall also be liable to fine. Section 114: Penalty for entering area from which person has been directed to remove himself.--Notwithstanding anything contained in section 61, any person who, in cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r otherwise, however, excluding horse racing subject to certain conditions. Similarly, it expansively alters the definitions of 'common gaming house' under Section 2(3), 'wagering or betting' in Explanation (i) to Section 2(7), 'instruments of gaming' under Section 2(11), 'online gaming' under Section 2(12A), 'place' under Section 2(13). Thus, the amendment encompasses in its fold games of skill too, offered to users through the online platforms/portals/applications played with monetary stakes or not. (b) Section 78(1)(vi) & (vii) post amendment proscribe the act of running online gaming platforms offering games of skill to its users. These expanded definitions are the building blocks of penal provisions such as Sections 78, 79, 80, 87, 114 & 128A. The net effect of Amendment Act is: owners of online gaming houses, providers of online gaming facilities and players of online games, all become offenders liable to be jailed & fined in terms of penal provisions. Added, amended Section 128A makes these offences both cognizable & non-bailable. As mentioned in the Comparative Tables above, the definition of 'pure game of skill' under the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ambling, if cannot be stopped in the kingdom, should be discouraged by imposing tax. Manusmriti injuncts that gambling & betting, the king shall exclude from his realm since those two vices may cause the destruction of kingdom; a wise man should not practise them even for amusement. Kautilya of arthashaastr fame treats all gamblers as cheats and therefore suggests severe punishment. A great Tamil book by Thiruvalluvar 'Tirukkural' fumes against gambling. (d) John Dunkley's 'Gambling: A social & moral problems in France', 1958 Edn. discusses about the historicity of gambling in France. In 17th - 18th centuries, French cities were attracting gamblers from all over Europe and the Resolution on Hazardous Games was passed way back in the year 1697 providing general guidelines on how to gamble and for easing the problems associated with gambling; however, French moralists were opposing the same contending: "Gambling spoils an individual's ability to reason; gambling poisons gamblers' relations with others; gambling makes a gambler neglect his religious and social duties". It is not impertinent to quote a stanza from Shakespeare's 'Merchant of Venice& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that law can completely ban its trade. Article 48 inter alia directs proscription of cow slaughter. However, there is no such prohibition expressly or impliedly suggested in respect of gambling although power to legislate concerning the same avails to the State vide Entry 34, List II, Schedule VII of the Constitution, as would be discussed infra. VIII. AS TO LEGISLATIVE COMPETENCE & WIDER INTERPREATION OF LEGISLATIVE ENTRIES: (a) The most important feature of Federal Constitutions like ours is the distribution & sharing of legislative power between the Centre and the States. Our Constitution has bodily adopted this scheme of Government of India Act, 1935 with small verbal changes, and with substantially enlarged legislative Lists enacted in Schedule VII; "Betting and gambling" was the term employed in Entry 36, List II in Schedule VII to the said Act too; the same is replicated in Entry 34 of the State List in the Constitution. This term is not defined in our Constitution nor was it defined in the Government of India Act. It does not find a place even in popular law lexicons, nor in the contemporary English dictionaries, either. However, the constituent words of the term, na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lative power is not to define or delimit the description of law that the Parliament or the State Legislatures may enact in respect of any of the subjects assigned to them. Such a power constitutionally given is plenary in its content & quality. The enumeration is made to name a subject for the purpose of assigning to that power. The names or descriptions employed in legislation are usually of the briefest kind; it is more so when it comes to the constitutions. In this regard what Gray J., of US Supreme Court more than a century ago observed in JUILLIARD vs. GREENMAN (1883) 110 US 421, becomes instructive. "The Constitution ... by apt words of designation or general description, marks the outlines of the powers granted to the National Legislature; but it does not undertake, with the precision and detail of a code of laws, to enumerate the sub-divisions of those powers, or to specify all the means by which they may be carried into execution...". (d) When a word or an expression acquires a special connotation in law, it can be safely assumed that the legislature has used such word or expression in its legal sense as distinguished from its common parlance or the dictionary meaning. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and time in which it is used...". The two words namely "Betting" and "gambling" as employed in Entry 34, List II have to be read conjunctively to mean only betting on gambling activities that fall within the legislative competence of the State. To put it in a different way, the word "betting" employed in this Entry takes its colour from the companion word "gambling". Thus, it is betting in relation to gambling as distinguished from betting that does not depend on skill that can be regulated by State legislation; the expression "gambling" by its very nature excludes skill. It is chance that pervasively animates it. This interpretation of the said Entry gains support from the six decade old CHAMARBAUGWALA jurisprudence, as discussed below: (i) In CHAMARBAUGWALA-I, supra the Apex Court inter alia was considering whether the Bombay Lotteries and Prize Competition Act, 1948, is a legislation relatable to Entry 34, List II, i.e., "Betting and gambling". To answer this question, the definition of "prize competition" in the said legislatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... success depends to a substantial degree on skill is to be answered solely on a literal construction of s. 2(d), it will be difficult to resist the contention of the petitioners that it does. The definition of 'prize competition' in s. 2(d) is wide and unqualified in its terms. There is nothing in the working of it, which limits it to competitions in which success does not depend to any substantial extent on skill but on chance...that competitions in which success depends to a substantial extent on skill and competitions in which it does not so depend, form two distinct and separate categories ... The distinction between the two classes of competitions has long been recognised in the legislative practice of both the United Kingdom and this country, and the Courts have, time and again, pointed out the characteristic features which differentiate them. And if we are now to ask ourselves the question, would Parliament have enacted the law in question if it had known that it would fail as regards competitions involving skill, there can be no doubt, having regard to the history of the legislation, as to what our answer would be ... The conclusion is therefore inescapable that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd hope of gain on the outcome of a game, a contest, or an uncertain event the result of which may be determined by chance or accident or have an unexpected result by reason of the better's miscalculations". According to Black's Law Dictionary (Sixth Edition) "gambling involves, not only chance, but a hope of gaining something beyond the amount played. Gambling consists of consideration, an element of chance and a reward... Gambling in a nut-shell is payment of a price for a chance to win a prize. Games may be of chance, or of skill or of skill and chance combined. A game of chance is determined entirely or in part by lot or mere luck. The throw of the dice, the turning of the wheel, the shuffling of the cards, are all modes of chance. In these games the result is wholly uncertain and doubtful. No human mind knows or can know what it will be until the dice is thrown, the wheel stops its revolution or the dealer has dealt with the cards. A game of skill, on the other hand-although the element of chance necessarily cannot be entirely eliminated-is one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u Gaming Act, 1930, as being ultra vires the Constitution. The observations at paragraph 125 of the judgment are profitably reproduced below: "It is in such light that "Betting and gambling" in Entry 34 of the State List has to be seen, where betting cannot be divorced from gambling and treated as an additional field for the State to legislate on, apart from the betting involved in gambling. Since gambling is judicially defined, the betting that the State can legislate on has to be the betting pertaining to gambling; ergo, betting only on games of chance. At any rate, even otherwise, the judgments in the two Chamarbaugwala cases and in K.R. Lakshmanan also instruct that the concept of betting in the Entry cannot cover games of skill..." (iv) Following the Apex Court Rulings and the above Madras decision, a learned Single Judge of Hon'ble Kerala High Court in HEAD DIGITAL WORKS PRIVATE LIMITED vs. STATE OF KERALA quashed a statutory notification that was issued under Section 14A of the Kerala Gaming Act, 1960 which had proscribed online rummy played for stakes. The Court at paragraph 36 of its judgment observed: ".... As such playing for stakes or playing not for stakes can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w York, tossed out the conviction and vacated the indictment of Mr. Lawrence who ran the warehouse wherein the poker game Texas Hold' Em was played. He was taking 5 % of each nights earning to cover the cost of his staff & profit for himself. In this game, the pot went not to the luckiest among the participants, but to the most deft i.e., the player who could guess his opponents' intentions and disguise his own, make calculated decisions on when to hold & fold, and quickly decide how much to wager. A waitress floated around with food & drinks and play lasted until breakfast. Judge Jack B. Weinstein held that poker is more a game of skill than a game of chance and therefore, game operators cannot be prosecuted under vague federal law that prohibits running an illegal gambling business. Although this decision was reversed in appeal, the finding that poker is a game of skill, is left undisturbed. (ii) 'The Gambling Law Review: Israel by Liran Barak (Herzog Fox & Neeman) dated 07.06.2021 states that: The Israeli Penal Law 5737-1977 places a general ban on gambling activity, including all forms of lotteries, betting and games of chance. Further restrictions under the Penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achines that was demonstrated by the reports of a committee of senior police officers; this report specifically stated about the tampering of video game machines for eliminating the chance of winning. This decision cannot be construed repugnant to Chamarbaugwala jurisprudence as explained in K.R. LAKSHMANAN. We are of a considered view that the games of skill do not metamorphise into games of chance merely because they are played online, ceteris paribus. Thus, SIVANI is not the best vehicle for drawing a distinction between actual games and virtual games. What heavily weighed with the Court in the said decision was the adverse police report. It is pertinent to recall Lord Halsbury's observation in QUINN vs. LEATHAM (1901) A.C. 495: that a case is only authority for what it actually decides in a given fact matrix and not for a proposition that may seem to flow logically from what is decided. This observation received its imprimatur in STATE OF ORISSA vs. SUDHANSU SEKHAR MISRA AIR 1968 SC 647. XIII. AS TO ENTRY 1 (Public Order), ENTRY 2 (Police) & ENTRY 26 (Trade and commerce) IN THE STATE LIST BEING THE FIELDS OF LEGISLATIVE POWER. (a) The learned Advocate General appearing f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'public order', it must affect the community or the public at large." Added, the cases registered by the police are for the games that have eventually become offences after the amendment which is put in challenge and therefore, much cannot be derived from the factum of such registration. It is also relevant to quote the observations of the Apex Court in SUPT. CENTRAL PRISON vs. RAM MANOHAR LOHIA (1960) 2 SCR 821: "... The distinction does not ignore the necessity for intimate connection between the Act and the public order sought to be maintained by the Act. The restriction made 'in the interest of public order' must also have reasonable relation to the object sought to be achieved i.e., the public order. If the restriction has no proximate relationship to the achievement of public order, it cannot be said that the restriction is a reasonable restriction within the meaning of the said clause..." XIV. AS TO ENTRY 6 (Public health and sanitation) IN STATE LIST: (a) Learned Advocate General and Mr. Sridhar Prabhu next contended that: the World Health Organization (WHO) is the United Nations Specialized Agency for health. Being an intergovernmental agency, it work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerning International Conferences, Treaties and Agreements is exclusively vested in the Parliament vide Article 253 read with Entry 97 of the Union List. Entry 14 of this List confers on the Union Parliament exclusive power to make laws with respect to "entering into treaties and agreements with foreign countries and implementing of treaties, agreements and conventions with foreign countries". Also Entry 10 of that List provides for 'Foreign affairs; all matters which bring the Union into relation with any Foreign Country'. Article 253 is intended to make it clear that the power to enter into treaties conferred on Parliament, carries with it, as incidental thereto, a power to invade the State List to enable the Union to implement the treaty. Thus a law passed by Parliament to give effect to an international convention shall not be invalidated on the ground that it contained provisions relating to the State subjects. In view of all this, the meaning and scope of the Entry in question cannot be widened, when the contours of law in this regard have already been earmarked in a catena of decisions of the Apex Court. XV. AS TO RIGHT TO SPEECH & EXPRESSION UNDER ARTICLE 19(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en broadening from precedent to precedent, needs no elaboration. The right to speech & expression has expanded to include even a right to vote vide UNION OF INDIA vs. THE ASSOCIATION FOR DEMOCRATIC REFORMS (2002) 5 SCC 294. Similarly, the march of law from A.K. GOPALAN vs. STATE OF MADRAS (AIR 1950 SC 27) to K.S. PUTTASWAMY, supra has broadened the contours of right to life & personal liberty, exponentially. Several rights guaranteed in Part III of the Constitution are no longer treated as water tight compartments, since they have correlative content and each illuminates the penumbra of other by interplay. Political, social & economic changes have entailed the recognition of new rights such as right to privacy. The following observations in K.S. PUTTASWAMY, expounding on freedom & liberty are worth reproducing: "The notion that liberty only consists of freedom from restraint does not complete the universe of its discourse. Broader notions of liberty are cognizant of the fact that individuals must be enabled to pursue their capacities to the fullest degree. This approach to understand the content of freedom construes the ability to lead a dignified existence as essential to the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection to 'abstract painting, avant-garde music and nonsensical poetry'. Therefore, the games of skill fall within the protective contours of Article 19(1)(a) & Article 21, of course subject to reasonable restriction by law. (d) Judge Antonin Scalia of US Supreme Court had famously remarked, "If you had to pick...one freedom...that is the most essential to the functioning of a democracy, it has to be the freedom of speech." In SECRETARY, MINISTRY OF INFORMATION AND BROADCASTING, GOVERNMENT OF INDIA AND OTHERS vs. CRICKET ASSOCIATION OF BENGAL AND OTHERS (1995) 2 SCC 161, the Apex Court considered the question of right to telecast sports event, inter alia referring to Article 10 of the European Convention on Human Rights which reads: "Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers." Thereafter, the Court summarised the law on the freedom of speech & expression under Article 19(1)(a) as restricted by Article 19(2) thus:-"The freedom of speech and expression includes right to acquire information and to di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board of Censors before they could be presented for the public view. The Court had held that motion pictures were not a form of expression eligible for constitutional protection under the First Amendment. However, after 37 years, this view was laid to rest in JOSEPH BURSTYN, INC vs. WILSON 343 US 495 (1952) wherein it has been observed that the motion pictures do not fall outside the category of 'unprotected expression' in terms of First and Fourteenth Amendments. (c) Till 2001 i.e., AMERICAN AMUSEMENT MACHINE ASSOCIATION vs. KENDRICK 244 F.3d 572, Courts had denied constitutional protection to video-games. Cases of this kind arose from Municipal Ordinances restricting access to arcades. However, in INTERACTIVE DIGITAL SOFTWARE ASSOCIATION vs. ST. LOUIS COUNTY 329 F.3d 954 (8th Cir 2003) Courts held that they too constitute a form of expression presumptively entitled to constitutional protection and that they do not fall into any 'categories of unprotected speech'. (d) The US Supreme Court in BROWN vs. ENTERTAINMENT MERCHANTS ASSOCIATION 564 US 786 (2011) was considering the challenge to a California law that restricted the sale or rental of violent video-games ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relativistic philosophy or moral nihilism than it does any other point of view. The Constitution exists precisely so that opinions and judgments, including esthetic and moral judgments about art and literature, can be formed, tested, and expressed. What the Constitution says is that these judgments are for the individual to make, not for the Government to decree, even with the mandate or approval of a majority. Technology expands the capacity to choose; and it denies the potential of this revolution if we assume the Government is best positioned to make these choices for us." The Hon'ble Supreme Court in SHREYA SINGHAL vs. UNION OF INDIA (2015) 5 SCC 1 supra at paragraph 11 observed: "11. This last judgment is important in that it refers to the "market place of ideas" concept that has permeated American Law. This was put in the felicitous words of Justice Holmes in his famous dissent in Abrams v. United States, 250 US 616 (1919), thus: "But when men have realized that time has upset many fighting faiths, they may come to believe even more than they believe the very foundations of their own conduct that the ultimate good desired is better reached by free trade in ideas-that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age thought, hope and imagination; that fear breeds repression; that repression breeds hate; that hate menaces stable government; that the path of safety lies in the opportunity to discuss freely supposed grievances and proposed remedies..." XVIII. AS TO 'SCARE ARGUMENT' OF THE STATE VS. RESEARCH STUDIES AND EMPIRICAL DATA: (a) The vehement contention of learned Advocate General appearing for the State that the Amendment Act has been brought in to curb the menace of online gaming which, has deleterious effect on the societal interest, has to be examined on the touchstone of the provisions of Articles 19 & 21. The freedoms enumerated inter alia in these Articles are those great in basic rights which are recognized as the natural rights inherent in the status of any individual. But none of these rights is absolute; although being inalienable rights, they are liable to suffer reasonable restrictions that may be imposed by law. The 'scare argument' of deleterious effect is not supported by the empirical data loaded to the record of the case and by the research material available in the public domain. What the experts have opined is briefly stated below: (i) The Dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me studies have claimed an association between increased gambling exposure and increased incidence of problem gambling. In addition, commentators have suggested that the increased accessibility inherent in online gambling magnifies such risks. However, more recent studies specific to online gambling, most conducted since the advent of legal and regulated online gambling, have indicated that online gambling does not inherently encourage excessive gambling. Most gamblers placed fewer than four bets per day, and sports gamblers tended to moderate their play based on their wins and losses; i.e., they played less often when they lost money and more often when they won money. Also, a large-scale British study in 2007 found no increase in the rate of problem gambling in the United Kingdom since 1999 despite a large increase in the number of new gambling opportunities... We believe that regulators should be able to design sufficient protections to prevent any significant growth in problem gambling that results from legalization. Moreover, a proportion of the tax revenues and licensing fees derived from the U.S.-based industry could be used to substantially bolster the level of support for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal gaming, largely not considering the recent emergence of internet modes. It is important to revisit these conceptual models to verify if they account for pathological gambling among internet users and whether any new variables or interactions should be included to explain the emergence of problems associated with online gaming. This is necessary to structure a more comprehensive & scientific understanding of how people develop gambling problems. (c) It is relevant to state that before going for a statutory embargo on online gaming, the State had not constituted any Expert Committee to undertake a scientific study & empirical research as to the arguable ill effects of online games specific to socio-economic & cultural conditions in the State. We hasten to add that for the exercise of plenary power of legislation, our Constitution does not prescribe any such study or research as a sine qua non. However, when the policy content of a statute is sought to be defended on the ground of its intrinsic merits and technological advancement, it is but ideal for the State to place on record the necessary material for substantiating its stand. This view is consistent with CHINTAMAN RAO, sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to include technological solutions in the field, in order to better enable a safe and responsible gaming behavior & environment. The integration of data science & governance, corporate social responsibility and individualized responsible gaming programs and/or other regulations may allow legal development to keep pace with technological advancement. XIX. AS TO ARTICLE 19(1)(g) AND ENTRY 26 (TRADE AND COMMERCE) IN STATE LIST: (a) The Apex Court while considering CHAMARBAUGWALA-II, supra opined that "...we find it difficult to accept the contention that those activities which encourage a spirit of reckless propensity for making easy gain by lot or chance, which lead to the loss of the hard earned money of the undiscerning and improvident common man and thereby lower his standard of living and drive him into a chronic state of indebtedness and eventually disrupt the peace and happiness of his humble home could possibly have been intended by our Constitution makers to be raised to the status of trade, commerce or intercourse and to be made the subject matter of a fundamental right guaranteed by the Article 19(1)(g)." It also reproduced the observation of the US Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invalidation of impugned legislative measure. (d) The online gaming activities played with stake or not do not fall within the ambit of Entry 34 of the State List i.e., 'Betting and gambling', if they predominantly involve skill, judgment or knowledge. They partake the character of business activities and therefore, they have protection under Article 19(1)(g)(SIC). Apparently, the games of skill played online or offline with or without stakes, are susceptible to reasonable restrictions under Article 19(6). The Amendment Act brings in a blanket prohibition with regard to playing games of skill. The version & counter version as to the nature & reasonableness of the restrictions need to be examined in the light of norms laid down by the Apex Court. In a challenge laid to the validity of any legislation on the ground of violation of Fundamental Rights inter alia guaranteed under Article 19(1), on a prima facie case of such violation being made out, the onus would shift to the State to demonstrate that the legislation in question comes within the permissible limits of the most relevant out of clauses (2) to (6). When exercise of Fundamental Right is absolutely prohibited, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete prohibition of crypto currency by the Reserve Bank of India, the Apex Court observed: "The parameters laid down in Md. Faruk are unimpeachable. While testing the validity of a law imposing a restriction on the carrying on of a business or a profession, the Court must, as formulated in Md. Faruk, attempt an evaluation of (i) its direct and immediate impact upon of the fundamental rights of the citizens affected thereby (ii) the larger public interest sought to be ensured in the light of the object sought to be achieved (iii) the necessity to restrict the citizens' freedom (iv) the inherent pernicious nature of the act prohibited or its capacity or tendency to be harmful to the general public and (v) the possibility of achieving the same object by imposing a less drastic restraint...But nevertheless, the measure taken by RBI should pass the test of proportionality, since the impugned Circular has almost wiped the VC exchanges out of the industrial map of the country, thereby infringing Article 19(1)(g). On the question of proportionality, the learned Counsel for the petitioners relies upon the four-pronged test summed up in the opinion of the majority in Modern Dental Colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their recognition as business. There are competing interests of State and the individual, which need to be balanced by employing known principles such as doctrine of proportionality, least restrictive test & the like. A line has to be drawn to mark the boundary between the appropriate field of individual liberty and the State action for the larger good ensuring the least sacrifice from the competing claimants. As already mentioned above, the Amendment Act puts an absolute embargo on the games of skill involving money or stakes. Learned Advocate General contended that the State was not in a position to apply the 'least restrictive test' and that the prohibition being the objective of the Amendment Act, there is no scope for invoking the said test at all. This amounts to throwing the baby with bath water. (h) In a progressive society like ours, imposing an absolute embargo, by any yardstick appears to be too excessive a restriction. In such cases, a heavy burden rests on the State to justify such an extreme measure, as rightly contended by the petitioners. There is no material placed on record to demonstrate that State whilst enacting such an extreme measure, has considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... freedom of speech and expression guaranteed under Article 19(1)(a) and the freedom to engage in any profession, occupation, trade, industry or business guaranteed under Article 19(1)(g) of the Constitution, the first because it is concerned with the field of expression and communication and the second because communication has become an occupation or profession and because there is on invasion of trade, business and industry into that field where freedom of expression is being exercised..." The games of skill as we have reasoned out above involve elements of expression and therefore enjoy regulatable protection under Article 19(1)(a); it has long been settled that these games apparently having business characteristics are protected under Article 19(1)(g). Therefore the above observations in Indian Express equally apply to the case of petitioners. However, the Amendment Act does not critically adjust the boundaries of existing category of protected activities i.e., games of skill with the unprotected acts of gambling. Instead, State has created a wholly new category of medium-based-regulation when change of medium per se does not alter the true nature & content of the games. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that the absolute embargo on videogames has been upheld by the Apex Court, despite CHAMARBAUGWALAS. He also refers to a Public Interest Litigation in W.P. No. 13714/2020 between SHARADA D.R. vs. STATE OF KARNATAKA In W.P. No. 13714/2020 disposed off on 26.10.2021 in which a direction was sought for banning of all forms of online gambling and betting disposed off on 26.10.2021 by this Court, and that the Amendment Act has been enacted keeping in view the same. (b) We do appreciate the above submissions of the learned Advocate General. However, that does not much come to the rescue of respondents. True it is: Constitution is intended to enure for ages to come and consequently, to be adapted to the various crises of human affairs. It is unwise to insist that what the provisions of the constitution meant to the vision of its makers must mean to the vision of our time. They should be interpreted to meet and cover changing conditions of social and economic life. A Constitution states not rules for the passing hour but the principles for an expanding future. At the same time, the meaning of the Constitution does not change with every ebb and flow of economic events. A constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt observed: "... The basic principle which therefore informs both Articles 14 and 16 is equality and inhibition against discrimination. Now, what is the content and reach of this great equalising principle? It is a founding faith, to use the words of Bose J., "a way of fife", and it must not be subjected to a narrow pedantic or lexicographic approach. We cannot countenance any attempt to truncate its all-embracing scope and meaning, for to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be "cribbed cabined and confined" within traditional and doctrinaire limits. From a positivistic point of view, equality is antithetic to arbitrariness. In fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Art. 14, and if it affects any matter relating to public employment, it is also violative of Article 16. Articles 14 and 16 strike at arbitrariness in Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... publication through traditional media, such layers may not exist in the case of publication of information through online media, as information in the case of latter "travels like lightning". It hardly needs to be stated that the cases at hand are not one of unregulated information travelling at the speed of lightening. We are at loss to know how the observations made in the decision would advance the case of respondents, when its contextual substratum is miles away from that of these petitions. The ratio in this decision being relevant albeit for different reasons is discussed below. XXII. AS TO MANIFEST ARBITRARINESS AND VOIDING OF PLENARY LEGISLATIONS: (a) The expression "pure game of skill" as employed in legislations of the kind i.e., Section 176 of the Principal Act has been judicially construed to be "mere skill" and that the games mainly & preponderantly involving skill, fall into this class. The expanded meaning of 'gaming' under Section 2(7) as amended, broods through the entirety of the Amendment Act, which paints 'games of skill' and 'games of chance' with the same brush. However, Section 176 of the Principal Act even post amendment continues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no rational distinction between the two types of legislation when it comes to this ground of challenge under Article 14. The test of manifest arbitrariness, therefore, as laid down in the aforesaid judgments would apply to invalidate legislation as well as subordinate legislation under Article 14. Manifest arbitrariness, therefore, must be something done by the legislature capriciously, irrationally and/or without adequate determining principle. Also, when something is done which is excessive and disproportionate, such legislation would be manifestly arbitrary. We are, therefore, of the view that arbitrariness in the sense of manifest arbitrariness as pointed out by us above would apply to negate legislation as well under Article 14". In the considered view of this Court, the impugned legislative action that has clamped an absolute embargo on all games of skill defies the principle of proportionality and is far excessive in nature and therefore violates Article 14 of the Constitution on the ground of 'manifest arbitrariness' (c) The rule of law is recognized by the Apex Court as a 'basic feature' of our Constitution vide KESAVANANDA BHARTI vs. STATE OF KERALA, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C PERSONS: (a) The vehement contention of learned Advocate General that whether a game predominantly involves skill or not, is a question of fact and therefore, without there being a criminal case in this regard, the challenge to the legislation is premature, cannot be agreed to. In our Constitutional Jurisprudence, for laying a challenge to legislation, registration of a crime thereunder is not a sine qua non. Even otherwise, such criminal cases have already been registered by the police and that a Coordinate Bench of this Court in W.P. No. 19287/2021 between BHAVIT SHETH vs. STATE OF KARNATAKA has granted stay of all further proceedings. This apart, Court non-suiting the petitioners on this ground as urged by the respondents is tantamount to a physician turning away a potential patient stating that the gangrene is yet to develop, when, pathological conditions galore. Anticipatory relief against the legislative action is not unfamiliar to constitutional adjudication. An argument to the contrary could risk the liberty of citizens. (b) The contention of the learned Advocate General that the Fundamental Rights under Article 19 do not avail to the non-citizens and therefore, petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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