ZEE TELEFILMS LTD. V.

UNION OF INDIA (2005)

Facts of the Case

Zee Telefilms Ltd is a media and entertainment group based in India. The second respondent, the
Board of Control for Cricket in India, is a Tamil Nadu-based society that claims to be recognized
by the Ministry of Youth Affairs and Sports of the Union of India. The contract giving exclusive
television rights for a four-year term was terminated by the Board of Control of Cricket on
September 21, 2004.

A writ petition was filed under Article 32, arguing that the contract termination was arbitrary and
in violation of Article 14. On the day of the hearing, Mr. K.K Venugopal, learned Senior Counsel
appearing for the Second Respondent, raised the preliminary issue of the petition’s
maintainability, arguing that a petition against the Board is not maintainable under Article 32
because it is not a “State” within the meaning of Article 12 of the Indian Constitution. Since the
issue was treated as a critical one, it was heard right away.

Issues Raised

Is the BCCI a state or not?

Arguments of Petitioner

(a) The BCCI is responsible for all cricket-related activities, and the squad it fields is known as
the “Indian Team “, they wear uniforms with the national flag and are recognized as India’s
sporting ambassadors.

(b) Today’s players are professionals who commit their lives to the game, and players have the
right to be considered for participation in the game under Article 19(1)(g). In exercising its
disciplinary powers, the BCCI can ban players from playing cricket.

(c) It is also submitted that even domestically, all representative crickets can only be under its
aegis. At any level of cricket, no representative tournament can be held without the authorization
of the BCCI or its affiliates.
Arguments of the Respondent

(a) There is no representation of the Government or any Statutory Body. And the government has
no control over the function, finance, administration, management, or affairs, nor does it receive
any grant of assistance from the government in any form or manner in this regard.

(b) Respondent no.2 organizes cricket matches and/or tournaments between the Teams of its
Members and with the Teams of the members of the International Cricket Council (ICC) which is
also an autonomous Body dehors any Government control.

(c) Respondent No.2 has never been granted monopoly status, either by statute or by the
government. Any other organization might organize its own matches, and neither Respondent
No. 2 nor the Government could object.

Finding of the Court

The petition under Article 32 could not be sustained, according to the Majority Judges, because
they agreed with most of the points made by the respondent in this matter. It was held that just
because a non-governmental organization does something public does not make it a “State” for
the purposes of Article 12. Also, the Board’s actions do not meet the criteria outlined in Pradeep
Kumar Biswas v. Indian Institute of Chemical Biology to qualify it as a “State” under Article 12.
Minority opinion is that due to monopoly, lack of legislative origin is irrelevant and BCCI is
state.

Conclusion

The court through its interpretations has time and again tried to include more and more bodies
within the definition of state so that maximum people can enforce their fundamental rights. In
this case, it was rightly contended by respondent 2 that the Board has never been granted
monopoly status, either by statute or by the government and that there is no law prohibiting other
organizations from forming a similar organization. The court using the test laid down in Pradeep
Kumar Biswas v. Indian Institute of Chemical Biology rightly ruled that the petition under
Article 32 cannot be maintained as BCCI is not a “State”. Also, the right under Article 19(1)(g)
cannot be brought against an individual or a non-State institution. Hence, I feel that the petition
was rightly dismissed.
 ESSEL SPORTS PRIVATE LIMITED (INDIAN CRICKET LEAGUE) V. BOARD OF CONTROL FOR
CRICKET IN INDIA AND OTHERS (2011)

Facts of the Case

ESPL had filed a suit seeking declaratory and mandatory injunctive reliefs against the BCCI
before theDelhi High Court where it alleged that the BCCI used its influence on various agencies
– both domestic and foreign, to boycott the ICL. While this suit was progressing before the Delhi
High Court, the BCCI filed a suit seeking an anti-suit injunction against ESPL. The BCCI
alleged that it had received a notice from ESPL stating it intended to initiate proceedings against
it in the Courts of England and Wales. Similar notices were also sent to the ECB and the ICC,
and it was proposed that they would be made co-defendants in these proceedings.

Issue Raised before Court

The BCCI prayed for a perpetual injunction against ESPL from initiating any action against the
BCCI in any other judicial forum in respect of the subject matter of the suit that was already
pending before the Delhi High Court.

Findings of the Court

Upon analysing the suits as well as the notice, the court observed that the main allegations in
both causes of action were made against the BCCI for orchestrating the alleged boycott of the
ICL. The court concluded that the cause of action in the two suits were substantially and
materially the same.

The high court was of the view that legal proceedings instituted by an Indian party in a foreign
court would be vexatious and oppressive, if the prayers predominantly concern another Indian
party and a suit on similar allegations and reliefs were pending in an Indian court between the
same parties. The court was also of the opinion that that since the evidence sought to be adduced
in the English court was the same as the evidence given before the India courts, the suit in the
English court would only lead to multiplicity of proceedings. Further, the court observed that
there was a possibility of conflicting verdicts, and, consequently, held that the English courts
were a forum non convenience.
The high court also relied on a decision of the Supreme Court in Modi Entertainment Network
v. W.S.G. Cricket Pte. Ltd., (2003) 4 SCC 341, where the Supreme Court had held that a court
may grant an anti-suit injunction regarding proceedings which are oppressive or vexatious or in a
forum non-convenience, and concluded that an anti-suit injunction would lie against ESPL in the
present case.

It may be noted that the Division Bench of the High Court, while upholding the decision of the
Single Judge granting an anti-suit injunction in favour of BCCI, also covered the ECB and the
ICC within the purview of the anti-suit injunction (something which the Single Judge had
avoided). The Division Bench was of the view that if the suit in India were decided in favour of
ESPL, the claims in the U.K. against the ICC and the ECB would become redundant, and in case
ESPL is able to prove anti-competitive practices on the part of the BCCI and obtain a mandatory
injunction against all such actions, all its grievances would be met by a decree in India itself. The
court therefore concluded that to prevent the mischief that may be caused by a partial stay, the
actions initiated by ESPL against ECB and ICC before the courts in England shall also be stayed.

Conclusion

In the best interests of international judicial comity, a review of the principles laid down in the
ESPL Case as well as a reduction in the scope of the Modi Entertainment Case would be the
proper course. If ESPL prefers a Special Leave Petition to the Supreme Court under Article 136,
perhaps the Supreme Court would have the opportunity to remedy this situation.
 PERCEPT D'MARK (INDIA) PVT. LTD. V. ZAHEER KHAN & ANR. (2006)

Facts of the Case

The appellant, a company engaging in the business of, inter alia, model and celebrity
endorsement, sports management and marketing, entered into a Promotion Agreement in the
nature of a contract with respondent No. 1, Zaheer Khan, a successful Indian cricketer, on
i.11.2ooo. As per a condition laid down in clause 31(b) of the contract, respondent No. i was
required to give an opportunity to the appellant to match any offer made to him by a third party.
This was to be done before respondent No. 1 could enter into an agreement with that third party.

In the event that the appellant's offer did not match that of the third party, respondent No. i would
be at liberty to enter into a contract with the third party. The contract also contained an
arbitration clause as per which disputes relating to the agreement could be referred to arbitration.
The appellant sent a letter to respondent No.1 on 29.07.2003 containing the draft terms of the
proposed extension of the Promotion Agreement. On 10.09.2003, respondent No. i replied to the
same stating that he did not wish to renew or extend the Promotion Agreement and further stating
that he did not wish to appoint any agent for the purpose of managing his media affairs.

On 28.10.2003, one day before the expiry of the initial term of the Promotion Agreement,
respondent No. i replied to another letter sent to him by the appellant, dated 27.10.2003, arguing
that clause 31(b) of the contract was void under section 27 of the Indian Contract Act, 1872 for
restraint of trade. Subsequently, after the expiry of the Promotion Agreement, respondent No. i
entered into a contract with respondent No. 2, a company incorporated under the Companies Act,
1956, thereby replacing the appellant as the manager of his media affairs.

On o4.12.200, the appellant filed an Arbitration Petition before a single judge of the Bombay
High Court under section 9 of the 1996 Act, praying, inter alia, for an interim order to restrain
respondent No. i from entering into any agreement or continuing to act upon any agreement that
he had entered into with the respondent No. 2, or any third party, without performing his
obligations under clause 31(b) of the Promotion Agreement between the appellant and
respondent No. i.
The Single Judge granted an injunction for the period pending the commencement and
completion of the arbitration proceedings. Subsequently, both respondents appealed separately to
a Division Bench of the Bombay High Court. On 19.12.2003, the Division Bench passed an
order holding clause 31(b) of the contract between the appellant and the Respondent No. i to be
void under section 27 of the Indian Contract Act, 1872. It allowed both the appeals and dismissed
the arbitration petition.

The appellant then filed two Special Leave Petitions before the Supreme Court. The apex court
upheld the decision of the Division Bench on the nullity of clause 31(b) on the ground that it was
in restraint of trade under section 27 of the Indian Contract Act, 1872 insofar as it operated after
the expiry of the Promotion Agreement.

On the issue of interim relief under section 9 of the 1996 Act, it was held that granting the
injunction sought would be in contravention of the Specific Relief Act, 1963 and contrary to the
balance of convenience which was favour of respondent No. i.

Issues Raised

1. The granting of an injunction to the appellant in this case would be violative of the Specific
Relief Act, 1963. Further, since the balance of convenience in this case was in favour of
respondent No. i, granting of injunction would be inequitable.
2. Whether interim relief could be granted in an arbitration petition, wherein there has been
inordinate delay in initiating the arbitration proceedings on the part of the party seeking the
interim relief.
3. Whether interim relief could be granted against a third party, who is not party to the
arbitration agreement.
4. Whether an arbitration petition under section 9 of the 1996 Act would be maintainable
against respondent No. 2, who is not party to the arbitration agreement, was raised.
5. Whether clause 31(b) of the contract between the appellant and respondent No. 1 was in
restraint of trade within the meaning contemplated by section 27 of the Indian Contract Act,
1872.
Findings of the Court

Delay in Commencing Arbitration - The facts of the case reveal that the appellant filed an
arbitration petition on 04.12.2003 seeking interim relief under section 9 of the 1996 Act for the
arbitration to be initiated against respondent No. 1. However, even in 2o06, it had made no
attempt to commence arbitration proceedings. The Court rejected the argument of the appellant
that it had acted expeditiously in filing an arbitration petition as soon as it learned of the contract
between Respondents No. i and 2 and had then been following up on the matter through the
continued proceedings before the Division Bench and this case in the Supreme Court. The Court
also noted that since no injunction had been granted, the contract between the Respondents No. i
and 2 had continued to subsist and would soon be completed. To grant an injunction two years
into its operation would be inequitable, especially when the appellant could simply be
compensated monetarily.

Basis for Interim Injunction - Before granting an injunction under section 9 (ii), the Court must
look into whether the specific form of relief sought is permissible. This is an enquiry wholly
independent of the Arbitration and Conciliation Act, 1996. In the instant case, the Court looked
into the legality of the injunction under sections 14 and 41(e) of the Specific Relief Act, 1963."
Additionally, the Court noted that precedent on the point had consistently refused to specifically
enforce a contract for personal services12 where the relationship between the parties was one of
trust and confidence. The injunction would have the unjust effect of compelling respondent No. 1
to enter into a management contract with the appellant thereby specifically enforcing clause
32(g) of the Promotion Agreement. Furthermore, the appellant was practically claiming the
whole relief that could be claimed at arbitration and the interim nature of the injunction was,
therefore, rendered illusory. This amounted to pre-empting the decision of the arbitral tribunal.

Interim Relief Against Third Party - Although the Court noted the submissions of both counsels
on the third issue mentioned above, it is not subsequently addressed in the course of rendering
the decision.

Maintainability of Arbitration Proceedings Against Third Party - As regards the fourth issue it
was argued that the cause of action in the arbitration petition, which was constituted by the
contyact between respondent No.1 and respondent No.2 (with the latter being a third party who
was outside the scope of the arbitration agreement) could not fall within the arbitration clause
and section 9 could not be invoked. This issue, too, is left unaddressed by the Court.

Conclusion

In conclusion, although, in the instant case, the Supreme Court missed an excellent opportunity
to enunciate the law on granting interim relief prior to the commencement of arbitration, the
decision serves as a useful pointer to the need for the legislative reform indicated above.
 VARUN GUMBER V. UNION TERRITORY OF CHANDIGARH (2017)

Facts of the Case

The petitioner in this case enrolled himself on the respondent's gaming website with his email id.
The petitioner as per the requirement of the game took part in the group games or the league'
game as mentioned in the case, designed by the respondent's website. The format of the game
was online playing where payments were also to be done using a credit card, so the petitioner
credited to his account Rs. 50,000/-, After doing the required formality to play online, he had to
make two virtual teams play cricket. As per the format he had to form a team of 11 players each.
The petitioners used around Rs.24,000/- for this cricket game, ultimately in the end he lost. Once
again, the petitioner in the same way ventured Rs.26,000/- in the virtual football team and this
time as well he lost the entire sum of money.

After losing the game twice the petitioner noticed the game did not require any special capability
but was just based on contingency. To say the game was wholly based on some random device.
The petitioner claims the task provided by the website are not based on skill but based on the
pure game of chance. The petitioner sent a legal notice to the respondent to stop the illicit
activities carried on by the respondent. He contended that he should get the money back that he
lost in the virtual games were being played by him.

The respondent in their reply denied the allegations made by the petitioner, stating they do not
carry any such illicit activities that are punishable under the gambling act. The respondent has
described elaboratively how Dream 11 Fantasy game works. The respondent company is
registered under the Registrar of Companies, they are also holding PAN No. issued by the
income tax authorities. The company is an outstanding fantasy sports game that offers different
games like cricket, football, kabaddi, etc. from the year 2012 along with their other well-known
business partners that other websites and social media platforms.

Further, they explained what fantasy sports game is and how it is to be played. A fantasy game is
played over the internet where players make virtual teams choosing real-life players. The win or
loss in the fantasy game is dependent upon the real performance of the player you have chosen in
your team, so if X is on your side and hits a century, you earn points. Then you can get rewards
directly in your bank account or wallet. But initially, you need to pay a nominal fee. To play
online one requires a fair amount of skill in drafting a virtual team and playing a fantasy sports
game. The requirement of the game is also that the user needs to frame in the virtual game, all
sportsperson's skills are to be taken into consideration. The user examines the rules and identifies
the strengths and weaknesses based on the rules. The respondent has brought to the notice of the
court; the petitioner fulfilled the conditions of the online games that are provided by the
respondent company.

The petitioner had taken part in fantasy cricket games South Africa Domestic T20 cricket match
between the Dolphins and Warriors. The amount was refunded back to the petitioner when he left
the game halfway. There are records of the invoice with the respondent. Dream 11 allows
participates to take part in the platform, it also allows participates to compete with other uses for
certain prize money.

Issues Raised

1. Whether the competition where success depends on the substantial degree of skills are
gambling or not?
2. Whether, despite there being an element of chance, a game is preponderantly a game of
skill, would it nevertheless be a game of mere skill?

Finding of the Court

The judge is of the view that if any participant has participated in the virtual game reasonable
amount of skill, judgment and discretion is involved. The participant has to consider every
sportsperson's ability and worthwhile choosing a team in the virtual game. The user has to learn
the guidelines and instructions of the virtual game. As per the requirement of the dream 11
instructions, the petitioner formed a cricket team between two countries and choose 11 players in
each team, he played in different group games that were being offered by the respondent virtual
game. He joined and registered on different leagues selected by himself where there was a
possibility of either winning or losing the game. The success of the respondent company is
entirely based on the participates, user, and their knowledge.

Further, the judge is of the view that the respondent's company does not come under the ambit of
the provisions of the gambling activities and is exempted from the penal provision. Gambling is
not a trade and the respondent company is safeguarded under Article 1 9 (1)(g) of the
constitution as the company is duly registered under the Registrar of companies, they are also
paying service tax and income tax. The judgment is in favour of the respondent company and
hence the writ petition is dismissed.
 GREIG V. INSOLE (1978)

Facts of the Case

The ICC controlled test cricket and had the exclusive power to regulate the qualification rules for
cricketers to play in test matches. A private promoter engaged 34 test cricketers to play in an
autumn and winter series in Australia. The ICC then changed the qualification rules for test
cricketers so that no player could play in a match disapproved of by the ICC without the ICC’s
express permission. The ICC then passed a resolution disapproving of matches organised by the
private promoter. The TCCB (the body that regulates county cricket) followed suit: players
subject to the test match ban would also be disqualified from county cricket. 3 cricketers brought
proceedings against TCCB and ICC seeking a declaration that the rules were in restraint of trade.
The promoter also sued the Defendants for unlawful inducement to breach of contract. The
claims were heard together.

Issues Raised

1. Whether the relevant contracts were void or voidable; or

2. Whether the defendants were immune under s. 14 of the Trade Union and Labour Relations
Act 1974 as ’employer’s associations; and, if not,
3. Whether the Claimants were entitled to declarations that the rule changes were (a) in restraint
of trade and (b) amounted to an unlawful inducement to breach of contract.

Finding of the Court

The contracts between the promoter and the Claimants were to be treated as valid and
enforceable. Although the Defendants had acted in good faith, they had committed a tortious act
inducing a breach of contract, and had done so having full knowledge of the contracts. Neither
the ICC nor the TCCB had shown that the bans were reasonable and the Claimants were entitled
to declarations that the rules were ultra vires and void.

The defendants were not protected from liability in tort by section 14 of the TULRA 1974. The
ICC did not consist “wholly or mainly” of employers and was not an ’employers’ association’
within the meaning of s. 28(2)(a) the Act. Nor was the TCCB.
It was ‘not constituted for the purpose of regulating relations between the employers and
employees and, under its rules, it was not responsible to its members but to the Cricket Council.’

Conclusion

A ground-breaking decision of its time, and another step on the road towards much greater player
power in sports than had customarily been the case in previous decades.
 ASBL V. BOSMAN (1995) – ECJ

Facts of the Case

The case of Union Royale Belge des Societes de Football Association (ASBL) v Bosman [1995]
was heard in the European Court of Justice (ECJ). Jean-Marc Bosman, a Belgian professional
footballer was prevented from transferring to France due to a transfer fee dispute. His Belgian
club, RFC Liege demanded an inflated transfer fee from his prospective French club, which they
refused to pay. Hence, Bosman was left contract-less and unable to transfer.

Issues Raised

The key issue pivoted on whether such a transfer system following expiration of the player’s
contract violated EU law. Specifically, it centred on whether the system inhibited freedom of
movement for workers as per Article 39 of the EC Treaty.

Finding of the Court

The ECJ held that the transfer system in place, which demanded a fee even after the expiration of
a contract, violated EU law. Accordingly, it was declared that such a system impedes Article 39
of the EC Treaty (McArdle, 2000). The transfer rules indeed placed a restriction on a player’s
freedom of movement due to the unduly financial implications effectuated by the inflated fees.
This judgement subsequently revolutionized the functioning of the European football transfer
market.

Conclusion

The court ordered an immediate rectification of the system as it was in violation of the prescribed
EU laws on labour mobility. The outcome of the case marked a seismic shift in the football
transfer market, quashing the existing malpractices and providing athletes with greater
contractual freedom.
 NARINDER BATRA V. UNION OF INDIA (2005)

While upholding the autonomy of the Indian Hockey Federation (now ‘Hockey India’), it was
expressly put forward by the Hon’ble Delhi High Court that:

1. There is no dispute on Indian Hockey Federation representing the nation at the international
level in matters relating to hockey. Just as the BCCI controls the game of cricket in India, the
Indian Hockey Federation controls the game of hockey at all levels whether it is sub-junior,
junior, senior or the state, zonal, national, or international tournaments.
2. The Hockey Federation has been recognised as a National Sports Federation. Like the control
of BCCI over cricket players, the Indian Hockey Federation exercises complete control over
team selection and appointment of referees and umpires of the hockey events.
 SUSHIL KUMAR V. UNION OF INDIA (2016)

While concurring with the selection criteria adopted by the Wrestling Federation of India, the
Hon’ble Delhi High Court put forward and postulated as follows:

1. The National Sports Federations are autonomous organizations and the Sports Ministry
cannot interfere with the selection process of players.
2. A Sports Federation cannot be held responsible for the performance of its athletes if it does
not have power to select them in accordance with a procedure that is fair, transparent,
reasonable, and consistent.
3. A writ Court cannot interfere in the exercise of discretion of National Sports Federation and
substitute its own judgment except where the discretion is shown to be exercised in an
arbitrary and perverse manner or contrary to settled principles and practices.
4. The National Sports Code does not impinge upon the autonomy or discretion of the National
Sports Federations to select athletes/wrestlers for representing India in international sporting
events.
5. The National Sports Code does not make it mandatory for the Wrestling Federation to
conduct Olympic selection trials two or three months prior to the event. The Sports Code
only casts obligation on the National Sports Federations to judiciously select players to
represent India on merit for major international events with the objective of enhancing
national prestige and bringing glory to the country.
6. The National Sports Code gives full flexibility and autonomy to the Wrestling Federation to
decide on selection process and the dates and timings for holding a trial. It only directs that if
at all selection trials are required, they should be held two months in advance.
7. There is always more than one good method of selection and since the selection process
adopted by Wresting Federation of India is not arbitrary or perverse, the Court cannot
substitute its own judgment in place of that of the experts.
8. The experts have often criticised in the past that athletes for international events are neither
selected nor trained well in advance and this is a fact which we cannot lose the sight of. In
international arena of sports, medals are won not only by "brawn" but also by "brain". The
last-minute challenge to selection can disturb the mental preparation of the selected
sportsperson.
 JUNGLEE GAMES INDIA PVT. LTD. V. STATE OF TAMIL NADU (2021)

Facts of the Case

the petitioners challenged the constitutional validity of the Amendment Act, which substantially
revamped the Tamil Nadu Gaming Act, 1930 (“1930 Act”).

The Amendment Act revamped the 1930 Act in three significant ways:

(i) Definition of “gaming” – Section 3(b) was amended to provide that ““gaming” does not
include a lottery, but includes any game involving wagering or betting in person or in cyber
space”. The Explanation to Section 3(b) expanded the ambit of the expression “wagering or
betting”, and provided that – “wagering or betting shall be deemed to comprise the collection or
soliciting of bets, the receipt or distribution of winnings or prizes, in money or otherwise,
including through electronic transfer of funds, in respect of any wager or bet, or any act which is
intended to aid, induce, solicit or facilitate wagering or betting or such collection, soliciting,
receipt, or distribution”.

(ii) Prohibition of gaming in “cyberspace” – Section 3A was inserted, which provided that no
person shall wager or bet in cyberspace (by using a computer resource, communication device, )
for playing rummy, poker or any other game. Violation of Section 3A was made a punishable
offence.

(iii) Inclusion of games of “mere skill” – Section 11 was amended to state that the absolute
prohibition on gaming shall also apply to “games of mere skill”, if played for wager, bet, money
or other stakes.

Contentions of the Petitioner

The petitioners referred to the principle laid down in RMD Chamarbaugwala v. Union of India
(“RMDC”), where the Supreme Court (“SC”) held that ‘gambling’ is not a ‘trade’, and does not
fall within the purview of ‘freedom of trade and business’ guaranteed by Article 19(1)(g) of the
Constitution. On the other hand, competitions involving ‘substantial skill’ form a distinct
category, and are business activities protected by Article 19(1)(g).
Reference was also made to K.R. Lakshmanan v. State of Tamil Nadu (“Lakshmanan”), where
the SC relied on the RMDC decision to conclude that competitions involving substantial skill are
not ‘gambling activities’. The SC also held that while a ‘game of chance’ is determined entirely
or in part by pure luck (like shuffling cards or throwing a dice), a ‘game of skill’ is one where
success principally depends on superior knowledge, training and adroitness of the player. While a
‘game of skill’ may not completely omit possible elements of chance, the element of skill should
predominate the element of chance – which is the case with games such as chess or rummy.

Relying on the above, the petitioners made two primary arguments. First, it was argued that the
Amendment Act obliterates the distinction between ‘games of skill’ and ‘games of chance’, and
state governments do not have the legislative competence to regulate ‘games of skill’. Reference
was made to Entry 34 of List II of the Seventh Schedule of the Constitution – which confers the
states with the legislative power to regulate “betting and gambling”. It was argued that Entry 34
of List II only confers State Legislatures with the power to regulate games which are
predominantly based on chance, and this does not cover games that are predominantly based on
‘skill’ of the participant. Second, it was argued that imposing a blanket prohibition on skill-based
games is manifestly arbitrary, and fails to satisfy the test of proportionality.

Contentions of the State

The State referred to the Statement of Objects and Reasons of the Amendment Act, which
provided that playing online games is addictive in nature, and has resulted in incidents of
suicides, along with cheating of innocent participants. In order to prevent such incidents, it was
decided to ban wagering or betting in cyberspace. Reliance was also placed on the 276 th Report
of the Law Commission, which stated that vulnerable individuals should be protected from the
ill-effects of betting and gambling. Relying on the above, it was argued that the Amendment Act
struck a proper balance between social control and individual rights, and was proportionate to the
evil sought to be remedied.

Finding of the Court

The HC held that as games based on a ‘preponderance of skill’ are protected under Article 19(1)
(g) of the Constitution, the restrictions imposed by the State on conducting or playing such
games should satisfy the tests of reasonableness and proportionality.
It noted that although Section 3-A of the amended statute only applies to gaming in cyberspace,
Section 11 effectively makes this prohibition applicable to even physical games based on skill —
if such games fall within the expanded definition of “wagering or betting”, which was deemed to
include “any receipt or distribution of winnings or prizes”, or “any electronic transfer of
funds”. The HC agreed with the petitioners’ contention that the Amendment Act failed to
distinguish between a ‘game of chance’ and a ‘game of skill’, and incorrectly equated skill-based
games with wagering or betting.

Pursuant to the all-encompassing ambit of the legal fiction created by the statute, even a football
tournament that awards any cash prize/ trophy would be prohibited by the statute. Hence, while
the objective of the Amendment Act was to prohibit online gaming, it effectively prohibited even
physical skill-based games. For this reason, it was held that the Amendment Act was manifestly
arbitrary, and the objective of the amendments did not have any nexus with the ultimate effect of
the same.

Further, as the Amendment Act imposed a blanket ban on all forms of gaming, irrespective of
whether the game is based on skill or chance, the State failed to adopt the ‘least-intrusive’
measure for infringing the ‘fundamental right of trade and business’ guaranteed by Article 19(1)
(g) of the Constitution. Hence, the Amendment Act did not satisfy the proportionality test laid
down in landmark decisions such as K.S. Puttuswamy v. Union of India.

One interesting aspect of the HC’s reasoning is in relation to Entry 34 of List II of the Seventh
Schedule, where the HC held that the State’s power to legislate on “betting and gambling”
should be interpreted in accordance with the SC decisions in RMDC and Lakshmanan – which
held that the activity of ‘betting’ does not include games of skill. Hence, according to the HC,
Entry 34 of List II only confers state legislatures with the power to regulate games of chance,
and does not envisage regulation of games of skill.