TEAM CODE: OLEANDER

GOVERNMENT LAW COLLEGE, TIRUNELVELI

STATE MOOT (ENGLISH) COMPETITION – 2023

BEHALF THE HON’BLE SUPREME COURT OF TIRUNEL

STATE OF THAMIRA, MALABAR, KARUNADU……………(PETITIONER)

VS

TIRUNEL’S AND ALL ONLINE GAMING COMPANY…………….(RESPONDENT)

(W.P. NO. ……./2023)

Highlights:

Feb3.2021

KARMAN GAMES TIRUNEL PVT LTD VS STATE

(High court allowed the petition)

………………………

Nov 23.2022

Onlilne gaming Company vs Govt. of Thamira, Karunadu, Malabar

(Challenging to gave liberty to petitioner to withdrawn the suit)

MEMORIAL ON BEHALF OF RESPONDENT

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 TABLE OF CONTENTS

S.L.NO. INDEX PAGE NO

1. List of Abbreviations 3

2. Legislations and sources referred 4

3. Books Referred 4

4. Authorities Cited 5

5. Statement of Jurisdiction 6

6. Statement of Facts 7

7. Issues Raised 8

8. Summary of the Arguments 9

9. Arguments in Advance 10

10. Prayer 25

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MEMORIAL ON BEHALF OF RESPONDENT
 LIST OF ABBREVATION

S.L. NO ABBREVATIONS EXPANSIONS

1. & And

2. SC Supreme Court

3. HC High Court

4. COI Constitution of India

5. Art Article

6. W.P. Writ Petition

7. Sec Section

8. u/s Under Section

9. u/a Under Article

10. MIB Ministry of Information and Broadcasting

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MEMORIAL ON BEHALF OF RESPONDENT
 LEGISLATION REFFERED

➢ Constitution Of India, 1950

➢ Information Technology Act, 2000

➢ Information Technology (Intermediary Guidelines and Digital Media Ethics

Code) Rules. 2021

➢ The Madras City Police Act,1888

➢ Tamilnadu Gaming Act, 1930

BOOKS REFFERED

➢ INDIAN CONSTITUTION – V.N.SHUKLA

➢ INDIAN CONSTITUTION LAW - M.P. JAIN

➢ CYBER CRIMES & LAW – DR. VISHWANATH PARANJAPE

➢ CYBER CRIMES & LAW – DR. AMITA VERMA

➢ INFORMATION TECHNOLOGY ACT – DR. J.N. BAROWALIA

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MEMORIAL ON BEHALF OF RESPONDENT
 AUTHORITES REFFERED

S.L. NO CASES CITATONS

01 Sheha Kalita vs Union of India W.P.(C)No.872/2017

02 Tajender vs rajeev Gulati 29 August, 2020
03 Mattel,Inc.& Ors. Vs Mr.Jayant Agarwalla & Ors. No. 2352/2008 In Cs(O S)
344/2008
04 Times Internet Ltd vs Jonathan S. & Ors. CS(OS) 1742/2007
05 Mr. Archit Narayan vs State of Karnataka 30 May,2022
Latest caswlaw 7651
06 Tukaram Patgar vs The State of Karnataka No.HCRB/CJR-1/2022
07 Amit M Nair vs State Of Gujarat C/WPPIL/146/2020
08 Arun Soman vs The State Of Madhya Prasad M.Cr.C. No.4731 of 2020
09 Rajat Agarwal & Ors vs Spartan Online Pvt.Ltd.& Ors 12 May, 2017
10 The Registrar (Judicial) vs The Secretary To W.P.(MD).No.16668 of
Government 2017
11 All India Gaming Federation vs State of karnataka WP18703/2022
12 RMD Chamarbaugwala & Anr. V union of India & anr. 1957 AIR 628, 1957
SCR930
13 Digital Works Pvt.Ltd. V State of kerala & Ors W.P.(C) No. 7785 of 2021
14 All India gaming federation v state of Tamil Nadu and W.P NO.29911 /2022
another

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MEMORIAL ON BEHALF OF RESPONDENT
 STATEMENT OF JURISDICTION:

STATE OF THAMIRA, MALABAR, KARUNADU……………………….. (PETIONER)

VS

TIRUNEL’S AND ALL ONLINE GAMING COMPANY……………… (RESPONDENT)

(W.P NO. …/2023)

The writ petition invoking the "Writ of Mandamus" under Art.32 for the violation &
enforcement of Fundamental Rights enshirned in the PART III of the Constitution of
Tirunel.

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MEMORIAL ON BEHALF OF RESPONDENT
 STATEMENTS OF THE FACT

1. Tirunels online gaming Industry is one of the exponential growth of Tirunels

economy. In recent times the Tirunels law makers decided to crub the growth of
online gaming. Like online gaming Esports also emerged globally but there is no
specific set of regulations that govern Esports but the Ministry of Youth and Affairs
stated that Esports are different from gaming and gambling.
2. Afterwards Ministry of Information and broad casting issued another set advisories on
advertisement of online betting platforms to publishers to refrain from advertising
these platforms over the Internet and stating that betting and gambling is illegal in
most of the parts of Tirunel and may lead to the threat of penal action .
3. G-one Gaming Technology Pvt.Ltd has multiple shell companies receives tax demand
& they had cash turnover ,which was routed through shell companies. The aforesaid
company company approched the HC & here the HC allowed the petition.
4. Afterwards, the State of Thamira amended their gaming act so the Karman Games
Tirunel Private Limited Filed a petition before the HC & here also the HC allowed
the petition.
5. The State of Thamira promulgated the Thamira Online Games Ordinance,2022.
Opposing th aforesaid Ordinance ,All Tirunel Gaming Federation & other online
Gaming Companies filed petition.
6. The State of Malabar amended their gaming Act 1960. Opposing the aforesaid
amendment all companies who are engaged in the business filed writ petitions, here
also the HC allowed the petition.
7. Unlike other states, The State of Karunadu amemded Gaming Act. Opposing this
amendment individual gamers filed writ petition before the HC & here also the HC
allowed the petition.
8. on the aforesaid writ petitions the State of Thamira, Malabar & Karunadu filed an
appeal before the SC. Ergo, the SC Clubbed together and listed for hearing.

Finally SC collected all the petitions, joined & listed for hearing.

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MEMORIAL ON BEHALF OF RESPONDENT
 ISSUES RAISED

(I)

1. WHETHER STATE GOVERNMENT HAS THE POWER TO MAKE AN

AMENDMENT ON ONLINE GAMING BUSINESS?

(II)

2. WHETHER RESTRICTION ON ONLINE GAMING VIOLATES THE

FUNDAMENTAL RIGHT?

(III)

3. WHETHER ONLINE GAMING COMPLY WITH INTERNET INTERMEDIARY

COMPLIANCES AND CYBER LAW WITH DUE DILIGENCE REQUIREMENTS
UNDER INFORMATION TECHNOLOGY ACT 2000?

(IV)

4. WHETHER SHELL COMPANIES ARE USING AN ONLINE GAMING

PLATFORM AS A TOOL FOR ILLEGAL TRANSACTIONS?

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MEMORIAL ON BEHALF OF RESPONDENT
 SUMMARY OF ARGUMENTS

1. WHETHER STATE GOVERNMENT HAS THE POWER TO MAKE AN

AMENDMENT ON ONLINE GAMING BUSINESS?

It is humbly submitted before the honourable supreme court of Tirunel that the
state government does not have the power to make an amendment on online gaming
business, because online gaming is regulated by IT ministry which was an under the Union
List of Schedule VII of Constitution of Tirunel.

2. WHETHER RESTRICTION ON ONLINE GAMING VIOLATES THE

FUNDAMENTAL RIGHT?

It is humbly submitted before the honourable Supreme Court of Tirunel that the
restriction on online gaming violates the Fundamental right, because is violates of
Art.19(1)(g).

3. WHETHER ONLINE GAMING COMPLY WITH INTERNET INTERMEDIARY

COMPLIANCES AND CYBER LAW WITH DUE DILIGENCE REQUIREMENTS
UNDER INFORMATION TECHNOLOGY ACT 2000?

It is humbly submitted before the honourable Supreme court of Tirunel that online
gaming comply with internet intermediary compliances and also with due diligence
requirements of cyber law under Information Technology Act,2000.

4. WHETHER SHELL COMPANIES ARE USING AN ONLINE GAMING

PLATFORM AS A TOOL FOR ILLEGAL TRANSACTIONS?

It is humbly submitted before the honourable Supreme court of Tirunel that the
shell companies aren't using online gaming platform as a tool for illegal transactions.

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MEMORIAL ON BEHALF OF RESPONDENT
 ARGUMENT IN ADVANCE

1. WHETHER STATE GOVERNMENT HAS THE POWER TO MAKE AN

AMENDMENT ON ONLINE GAMING BUSINESS?

It is humbly submitted before the honourable supreme court of tirunel that the
state government does not have the power to make an amendment on online gaming
business, because online gaming is regulated by IT ministry which was an under the Union
List of Schedule VII of Constitution of Tirunel.

IT MINISTRY:

Online gaming to now be regulated by IT ministry, states not divested of their power

The centre amended the Allocation of Business Rules to make the ministry the nodal ministry
for online gaming.

ByAditi Agrawal27 Dec, 2022 bookmark_add

Online gaming to now be regulated by IT ministry, states not divested of their power.

The ministry of electronics and information technology is now formally in charge of making
rules related to online gaming while the ministry of youth affairs and sports is in charge of e-
sports.

The central government notified these changes to the Allocation of Business Rules. This is in
line with a recommendation made by an inter-ministerial task force in its report. The changes
were also recommended by the committee of secretaries, headed by cabinet secretary Rajiv
Gauba, in a meeting

Additionally, the committee said the ministry of information and broadcasting would, if
required, “continue” regulating online gaming conduct, advertisements and the code of ethics,
among others.

Meanwhile, the IT ministry would work on “drafting a legislative framework to regulate

online gaming”. This framework “may not make any distinction between games of ‘skill’ and
games of ‘chance’”.

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“These amendments do not impede the states’ power to regulate online gaming".It means
that, at the centre, the nodal ministries for online gaming and e-sports will be the IT ministry
and the sports ministry, respectively.

Hence it is humbly submitted before the honourable Supreme Court of Tirunel that the IT
Ministry have the power to regulate online gaming which was under the union list of the
seventh schedule of Constiution of Tirunel. Ergo, it was stated that the state Government does
not have the power to make an amendment on online gaming business.

JURISDICTION OF IT MINISTRY:

The Supreme Court for seeking a ban on online real money games, added, “This clarifies that
the IT ministry has jurisdiction over online gaming, something they had refused in their
affidavit before the Delhi High Court.”

Jay Sayta, a gaming and technology lawyer, told that the amendment would “pave the way
for the IT ministry to immediately issue some broad guidelines or rules to govern the online
gaming sector without necessarily divesting the states of the power to legislate”.

NEED FOR CENTRAL LAW:

Online gaming includes casual games like Candy Crush, games involving real money like
Teen Patti, fantasy sports that may or may not involve real money, and games of skill. The
task force does not consider games of chance, like online betting or gambling, within online
gaming.

E-sports is a “measurable format of sports, where players compete on their own skills with
live audiences, just like a physical sports event”, like a virtual version of physical sports.

LAW COMMISSION REPORT:

The Law Commission had recommended a central law in July 2018 in its report titled Legal
Framework: Gambling and Sports Betting including in Cricket in India. The report argued
that Parliament had the remit to enact laws related to online betting and gambling because
they take place over the internet, and entry 31 of the Constitution’s union list covers
telephones, wireless, broadcasting and other similar forms of communication.

NITI AAYOG:

Similarly, in December 2020, Niti Aayog had released a draft report for public discussion on
the regulation of online fantasy sports. After consultation, the government’s think tank had
proposed creating a “uniform national level safe harbour framework” for fantasy sports that
would also specify how to determine which of these games were games of skill.

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But instead of centralised regulation, Niti Aayog had proposed that the central government
recognise a single self-regulatory organisation for fantasy sports.

The inter-ministerial task force was formed on May 6, 2022. It included the secretaries of the
ministries of home affairs, information and broadcasting, electronics and IT, and youth affairs
and sports; and secretaries of the departments of revenue, promotion of industry and internal
trade, and legal affairs; and the CEO of Niti Aayog.

In its consultation with the task force on June 7, the gaming industry had asked for a central
legislation on online gaming. According to the task force’s report, this was supported by 13
states and union territories that had also participated in a consultation with the task force.

The task force’s report also talked about the need to “introduce a uniform law to determine
what forms of online gaming are legally allowed, and eliminate the existing inconsistencies
between the laws of different states”. The report emphasised the need to have a “single body
– whether a nodal ministry or separate regulatory body – that will address all issues
pertaining to online gambling, especially to address user grievances”.

Under the existing Allocation of Business Rules at the time, the report noted that all matters
related to “cyber laws” and their administration fell within the purview of the IT ministry.
Hence, a central law would fall under the IT ministry too, which could act as a nodal ministry
for online gaming (except e-sports and games of chance) because, as per the rules, the IT
ministry “governs all policy matters relating to information technology and the internet” and
“online gaming is part of the internet ecosystem”.

CONTRADICTIONS:

When the committee of secretaries met in October, IT ministry secretary Alkesh Kumar
Sharma said his ministry was already drafting a set of rules or regulations to regulate online
gaming pending the enactment of a separate central legislation on the subject.

Tarun Kapoor, advisor to prime minister Narendra Modi, suggested that online gaming “may
be considered as one activity/service” with no distinction made between “skill” and “chance”
as is “the global practice”.

Revenue secretary Tarun Bajaj submitted to the same committee that the distinction between
games of skill and chance was “difficult to make and may be avoided”. I&B ministry
secretary Apurva Chandra had also argued against making such a distinction since it wasn’t
done internationally and online gaming was considered “one indivisible activity”.

This is at odds with the task force, where most members said the differences between games
of skill and chance must be made clear since games of chance – gambling – are a state
subject. Representatives from the revenue department, Niti Aayog, and promotion of industry
and internal trade department said such definitions would have implications on other issues
such as taxation.

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Hence based on aforesaid contention it was humbly contended that the IT ministry has the
power to regulate online gaming.Ergo, It is humbly submitted before the Honourable
Supreme Court of Tirunel that the State Government does not have the power to make an
amendment on online gaming business.

2. WHETHER RESTRICTION ON ONLINE GAMING VIOLATES THE

FUNDAMENTAL RIGHT?

It is humbly submitted before the honourable Supreme Court of Tirunel that the
restiction on online gaming violates the Fundamental right, because is violative of
Art.19(1)(g).

The Apex Court agreed, in the case of RMD Chamarbaugwala & Anr v Union of India & An,
that games of skill are well within the purview of Article 19(1)(g) of the Constitution,
ambiguity still persists in respect of the laws applicable to skill-based gaming. For instance,
states like Telangana, Andhra Pradesh, Kerala, and Karnataka have been working towards
prohibiting skill-based gaming. However, the High Courts in these states have set aside such
amendments to legislation, given that they have ascertained that while states are not entitled
to ban skilled gaming, yet they have sanctioned the implementation of certain controls on the
gaming activities.

Several debates, ranging from financial losses to addiction and even suicides, have cited valid
grounds for banning cash-based gaming activities by concerned state governments. However,
these have, time and again, been challenged as being unconstitutional. The earliest move in
this direction was by the High Court of Madras, relying upon the case of KR Lakshmanan v
State of Tamil Nadu & Anr. In this case, the Hon'ble Supreme Court had recognized that
games of skill were distinct from games of chance and were business activities protected
under Article 19(1)(g).

The Court held that skilled players had the right to exploit their skills and make a living off
their skills, and only reasonable restrictions should be imposed on such right. The ban
introduced in the State completely prohibited any opportunity to exercise such skills in
respect of online games eing manifestly arbitrary, especially in the background of the
Supreme Court's pronouncements, and fell afoul of Section 19(1)(g) of the Constitution.

This categorical legal standpoint is in stark contradiction to the disparate rules governing
gaming activities from one state to another where portal operators of enforcement agencies
across the country carry regulation books that vary in their individual directives.

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While we agree with the proposition for certain controls for reasons discussed hereafter, the
question that arises is: how do such limited rights promote ease-of-doing business in India if
‘Gaming’ as an industry is to be considered one of the most aggressively growing sectors
globally?

Another aspect that needs to be examined is the applicability of laws constituted by

Parliament in respect of Indian citizens questioning the governance and relevance of offshore
individuals and operators in the gaming domain.While it would sound obvious that a unified
law is what the Indian gaming industry needs, it is necessary to delve deeper to understand
the factors that prove this to be the best option.

Of course, these factors and evaluations should consider that a one-sizefits-all approach is not
viable for all skill gaming formats. It would be more feasible to have variations to the
standard set of regulations and guidelines, depending on the particlar format of gaming that is
being legislated.

While states can and must exercise their legislative powers in respect of any aspect of gaming
other than complete prohibition, several precautionary measures, such as awareness
campaigns and necessary disclaimers, need to be in place to ensure the credentials of skill-
based gaming as against gambling or betting or wagering on games of chance, which runs
foul of lawful sanctions.

For instance, the Kerala High Court, in the case of Head Digital Works Pvt. Ltd. v State of
Kerala & Ors, struck down a notification that intended to include online rummy in the ambit
of games of chance or betting per se. The Court clarified that rummy is, indeed, a game of
skill, as is online rummy.

Further clarification in this regard has been offered in the several citations that enjoin states
not to legislate on skill-based games, not even in respect of 'public order', given that skill-
based games are business activities protected under Article 19(1)(g) of the Constitution.
However, states may continue to believe and regulate such business activities under 'trade
and commerce' as a legislative head. Skill-based games have been further insured by the
Right to Freedom of Speech and Expression and even the Right to Life & Personal Liberty
under Articles 19 (1) (a) and 21 of the Constitution, respectively.

Courts have also stressed the intent of the Constitution with regard to prohibition or a
complete ban on harmful activities. The Directive of Principles of State Policy of the
Constitution have unquestionable mention of the prohibition of liquor, dangerous drugs, etc.,
and even cow slaughter. However, in the absence of any mention of prohibiting gaming
activities, it is advisable to consider the ramifications of implementing a blanket ban.

No doubt, certain 'reasonable restrictions', such as public order and morality, should remain
in check but these are the only limited grounds that states can probably legislate upon. Only
then can the gaming sector flourish within the ambit of the applicable rules and laws.

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Hence, now more than ever, India is waking up to an all-encompassing Central Law on
Gaming. From constitutional tools to business imperatives and fundamental rights, the need
of the hour is a think tank on this subject, devoted to identifying, evaluating, and
brainstorming on the common threads of regulatory know-how across the entire gaming
sector in India. Unfortunately, even the Information Technology Act 2000, which may have
some connect with the tech and gaming domains as such, does not have any clarity on what
the regulatory charter for gaming entities should be to operate, serve, and be controlled

An improbable provision could be Section 69 and 79 of the Information Technology Act

2000, which again is limited to aspects such as national security and copyright infringement,
and seeks a court order or similar summons from related Government authorities.

Towards keeping the excitement that the Government should actively work towards
regulating the gaming sector is at odds with the nation’s democratic principles. At the same
time, the menace looming around the gaming sector, whether it be the related illegal activities
or incidental public disorders, has no other control body. Skill-based gaming will never see a
complete ban such as that imposed on gambling, as has been repeatedly established by the
Courts.

However, parliamentarians have several constitutional provisions to knit together a vital legal
act at the Central level. This will not only streamline the regulatory mechanisms for states to
follow but will also unleash the true potential of the online gaming sector to the fullest.
Traditional on-ground gaming activities such as casinos can continue to be regulated, as has
been the practice.

Hence It is humbly submitted before the honourable supreme court of tirunel that the
Restriction on online gaming violates the fundamental right.

Hence ,1 In the present case on 13 , September 2022 - The state of Thamira promulgated the
Thamira Online Games Ordinance,2022 .In the said Ordinance it was contended that the
Ordinance put a complete ban on the online games, which was against the Constituition of
Tirunel under Art.19 (1) (g). Hence the aforesaid Ordinance is unconstitutional and it also
violates the Fundamental Right.

Ergo, It is humbly submitted before the honourable supreme court of tirunel that the
Restriction on online gaming violates the fundamental right.

1
Junglee Games India Pvt. Ltd.& Anr. Vs The state of Tamil nadu & Ors.

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3. WHETHER ONLINE GAMING COMPLY WITH INTERNET INTERMEDIARY
COMPLIANCES AND CYBER LAW WITH DUE DILIGENCE REQUIREMENTS
UNDER INFORMATION TECHNOLOGY ACT 2000?

It is humbly submitted before the honourable Supreme court of Tirunel that

online gaming comply with internet intermediary compliances and also with due diligence
requirements of cyber law under Information Technology Act,2000.

INTERMEDIARY UNDER IT ACT:

Intermediaries under the IT Act Generally speaking, an intermediary is a person or a third

party that acts as a link between two parties and facilitates communication between the two.
We can also say that an intermediary is someone who facilitates the use of the internet.

The term ‘Intermediary’ is defined in broad terms in the Information Technology Act, 2000.
Section 2(1)(w) of the Information Technology Act 2000 defines an intermediary as a person
who receives, stores or transmits any electronic record and provides any service relating to
such record on behalf of the another person. Intermediary includes network service
providers, telecom service providers, internet service providers, search engines, web-hosting
service providers, online-auction sites, online payment sites, online-marketplaces and cyber
cafes.

Intermediaries perform functions such as hosting content, collecting information and

evaluating information, facilitating communication and information exchange, facilitating the
use of the internet etc. Examples of intermediaries include social media platforms such as
WhatsApp, Twitter, Instagram, Facebook, e-commerce,search engines, cloud service
providers etc.

Section 79: Exemption from liability of intermediary in certain cases

(1) Notwithstanding anything contained in any law for the time being in force but subject to
the provisions of sub-sections (2) and (3), an intermediary shall not be liable for any third
party information, data, or communication link made hosted by him.

(2) The provisions of sub-section (1) shall apply if –

(a) the function of the intermediary is limited to providing access to a communication system
over which information made available by third parties is transmitted or temporarily stored;
or

(b) the intermediary does not –

(i) initiate the transmission,

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(ii) select the receiver of the transmission, and

(iii) select or modify the information contained in the transmission

(c) the intermediary observes due diligence while discharging his duties under this Act and
also observes such other guidelines as the Central Government may prescribe in this behalf

(3) The provisions of sub-section (1) shall not apply if-

(a) the intermediary has conspired or abetted or aided or induced whether by threats or
promise or otherwise in the commission of the unlawful act.

(b) upon receiving actual knowledge, or on being notified by the appropriate Government or
its agency that any information, data or communication link residing in or connected to a
computer resource controlled by the intermediary is being used to commit the unlawful act,
the intermediary fails to expeditiously remove or disable access to that material on that
resource without vitiating the evidence in any manner.

Explanation:- For the purpose of this section, the expression “third party information” means
any information dealt with by an intermediary in his capacity as an intermediary.

Online gaming intermediaries and legal consulting firms expressed concerns over increase in
the compliance burden and stringent know-your-customer (KYC) norms with the
implementation of the new rules, which are being framed by the ministry of electronics and
IT, for online gaming.

As part of the consultation process with the government, some industry stakeholders said
mandatory requirements for companies to appoint a compliance officer, nodal officer and
grievance officer will unnecessarily increase cost burden on online gaming companies,
especially startups. Besides, mandatory requirement to follow the Reserve Bank of India
(RBI) directions for identification and verification of a customer at the commencement of
user account, will in a way make it difficult to onboard the users on the gaming platforms.

While the government’s approach with a complete KYC requirement is driven with the aim
to keep track of the financial transactions of any nature and spending of users, the gaming
intermediaries believe that there should be a graded KYC approach for them to onboard user.

Collection of KYC may be burdensome for gaming operators and users. It is already
collected by banks during account set-up. Instead, a simplified approach for tracking
spendings and winnings can be adopted, like introducing spending limits

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The government can introduce a weekly/monthly cap on transactions for users. Other
industry stakeholders proposed that the gaming companies should be allowed to onboard the
users through a one-time password (OTP) only.

In a bid to put a blanket ban on betting in online gaming, the ministry of electronics and
information technology (MeitY) notified draft amendments to the IT rules, which once
enacted will enable self regulatory framework and additional due diligence by online gaming
companies.

In the meeting, the industry also sought clarity on the framework and governing body of
SROs (Self-Regulatory Organisations), concerns on conflict between the state law and
regulations of IT Act on online gaming rules, differentiation between video games and online
games, among other things.

The online gaming companies want the government to include members from the judiciary in
the SRO governing body as these will work as adjudicating organisations.

Besides, currently several states have different regulations related to online gaming such as
fantasy sports with elements of monetary risk. “The government has not clarified what will
happen in case a state government challenges compliance under the IT rules of an industry

Through the amendments to the IT rules, that online gaming companies comply with the
laws and that the users of such games be safeguarded against potential harm largely from
betting or gambling related outcomes in the games.

So, it is humbly submitted before the Hon'ble Supreme court of Tirunel that online gaming
comply with internet intermediary compliances and cyber law with due diligence
requirements under Information Technology Act 2000.

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4. WHETHER SHELL COMPANIES ARE USING AN ONLINE GAMING
PLATFORM AS A TOOL FOR ILLEGAL TRANSACTIONS?

It is humbly submitted before the honourable Supreme court of Tirunel that

Shell companies aren't using online gaming platform as a tool for illegal transactions.

The Legality of Shell Companies

The Guwahati High Court in case of Assam Company India Ltd. and Ors v.2 Union of India
explained the working of shell companies by stating that “A shell company is artificially
identified with suspicious activities which include serious offences like tax evasion, Benami
transactions, and conversion of black money to white, money laundering along with other
associated offences”. A shell company is not always made for illegal purposes. Incorporating
shell companies is completely legal while carrying out general business activities, such as a
subsidiary to facilitate business takeovers along with estate acquisitions1, or to protect assets
from lawsuits, to hide dealings with another company or to avoid target of criminals, or to
gain access to foreign markets.

It is essential to note that it is a misconception that these shell companies are only created for
some illegal objectives as there may be a situation when such company is set up for a
legitimate reason. Some of these legitimate purposes are as follows:

➢ to hold money temporary when the parent company is going to start a new
company
➢ to hide while dealing with another corporation which has a bad reputation in the
market
➢ to secure assets from lawsuits, to access to foreign markets
➢ -to hide from being a target for the criminals
➢ to create a stage for a hostile takeover

In the given case they have stated that the G-one Gaming Technology Pvt.Ltd has multiple
shell companies but it is not needed to be illegal. On that purpose only the High court of
Karunadu allowed the petition in favour of the company

While shell companies are frequently used for illicit purposes, big corporations and
individuals use them legally. Some of the uses are:

2
Assam case 1st paragraph -W. P. (C) No. 1163 of 200

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A Special-Purpose Acquisition Company (SPAC) is utilised to finance an existing private
firm by raising funds through a public stock offering. SPACs are referred to as shell
companies because they may not have any company operations or employees.To stage a
hostile takeover, a shell company could be established. This occurs when a company buys
another company without the consent of the target company’s management. If a company
wants to keep its dealings with another disreputable company, it can set up a shell company
specifically for that purpose.When the main firm/owner of the shell company plans to launch
a new company, the money is temporarily held or stored.People may construct shell
corporations to hide money in order to avoid becoming a target for criminals and thieves, if a
company is working in a risky country like Afghanistan, where terrorist activities are
common.

Shell corporations can also be established in order to get access to international markets.To
safeguard assets from lawsuits.There are numerous reasons that legitimate companies would
use a shell company and they very commonly do.If a company wants to do business or invest
in a foreign market, they may set up a shell company in that country so transactions take
place within one regulatory space and are not complicated by going between borders and
regulatory laws. In this case legitimate business would be done by individuals in the home
country but it would be as if they operated out of the shell company in the second
country.Shell companies may be set up as a precursor to them becoming a fully operational
business and may hold assets whilst they are being set up.

Companies operating in volatile economies can use shell companies to store money in more
stable economies.An extremely popular use for shell companies by legitimate enterprises is
tax and regulatory avoidance.

For example, you may want to set up shell organizations for the purpose of holding the title to
a property. In this case, the shell company would technically own the property and would
have the legal title. However, it wouldn't have any active business operations. It would be
completely inactive. It would simply be a legal holding company.

Business owners and individuals can benefit from shell companies in many ways. For
example, a new startup can use a shell corporation to store the money it’s raising before it
officially launches. A company that’s preparing to go through a merger or an acquisition can
save its assets in a shell company to simplify matters.

Corporations can also use shell companies for security reasons. For instance, a company
might create a shell company if it’s operating in an unsafe region or working with an
unpopular company that it doesn’t want to be associated with.

Based on the aforesaid contentions, it is humbly submitted before the Hon'ble Supreme court
of Tirunel that Shell companies aren't using online gaming platform as a tool for illegal
transactions.

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MEMORIAL ON BEHALF OF RESPONDENT
 PRAYER

Wherefore in the light of the facts stated, issues raised, arguments advanced and authorities
cited, it is humbly prayed before the Hon'ble Supreme Court of Tirunel that,

TO DECLARE, that State Government has the power to make an amendment on online
gaming business.

TO DECLARE that restriction on online gaming does not violate Fundamental Rights.

TO DECLARE that online gaming doesn't comply with internet intermediary compliances
and also with due diligence requirements of cyber law under Information Technology Act 2000

AND TO DECLARE that shell companies are using online gaming platform as a tool for
illegal transactions.

&/Or

Pass any order, direction or relief that this Hon’ble Supreme Court may deems fit in the intertest
of JUSTICE, EQUITY & GOOD CONSCIENCE

All of which is humbly prayed,

Counsels of the respondent

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MEMORIAL ON BEHALF OF RESPONDENT