A short primer on Prize Competition Act, 1955

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The Prize Competition Act, 1955 (“1955 Act“), a central legislation regulates prize competition(s) in which (a) the total value of the prize or prizes (whether in cash or otherwise) offered in any month exceeds INR 1,000, and (b) prize competition(s) where the value of entries exceeds INR 2,000.

The subject matter of the this legislation falls within entry 34 (betting and gambling) in List II of the Schedule VII to the Constitution (State List). However, the then State Legislatures of Bombay, Andhra, and Patiala and East Punjab States Union have passed resolutions under article 252 empowering Parliament to make a law on the subject. In this background, the 1955 Act was enacted by the Parliament.

Additionally, some states have also enacted separate laws for regulating prize competitions in their respective states. For example, West Bengal and Tamil Nadu have enacted The West Bengal Gambling and Prize Competitions Act, 1957 and The Tamil Nadu Prize Schemes (Prohibition) Act, 1979, respectively.

The law regulating or prohibiting the prize competitions as on date is applicable to the states of Andhra Pradesh, Maharashtra, Tamil Nadu, Orissa, Uttar Pradesh, Madhya Pradesh, Punjab and Gujarat.

The intention of this 1955 Act is stated in the ‘Statement and Objects’ as follows:

“Crossword puzzles and similar competitions have of late been increasing at an alarming rate. Though they purport to be games of skill. they really provide a form of gambling to the public. These competitions have a deleterious effect on large sections of the people. The object of this Bill is to remove this evil, permitting at the same time reasonable scope for competitions which are mainly games of skill and intelligence, and which provide innocent amusement without encouraging the gambling spirit.”

Under the 1955 Act, any person intending on conducting such prize competitions has to obtain a license to engage in such activities, and the details for obtaining such licenses are provided in the rules framed thereunder. Any person conducting competitions falling within the purview of the Prize Competition Act, that does not obtain a license, is punishable with imprisonment for a term up to 3 months, or with a fine which may extend to INR 1,000, or with both. The laws enacted by states also have similar provisions.

Judicial Precedents on Prize Competitions

In the case of RMD Chamarbaugwala & Anr.v Union of India & Anr., a constitution bench of the Supreme Court of India had an occasion to consider the scope of definition of the word “Prize Competition” as defined under the said 1955 Act and held that any game which requires substantial degree of skill would not fall within the definition of the said word.

A public interest litigation (Bimalendu De v. Union of India (UOI) and Ors.) was filed before the Calcutta High Court challenging the legality of popular television game show Kaun Banega Crorepati under the 1955 Act. The High Court held that game shows on TV are not covered within the definition of a prize competition and that the 1955 Act had a narrow and limited meaning. The Court held as follows:

…A perusal of Section 19(d) clearly shows that prize competition includes the puzzle based upon the building up, arrangement, combination or permutation of letters, words or figure, that is not here in this game. Here question is put with four options, out of which one is correct answer which has to be picked up by the participant, therefore this cannot be said to be a prize competition…The Prize Competitions Act, 1955 only defines the prize distribution which is analogous to Section 19(d) of West Bengal Gambling and Prize Competitions Act, 1957. As already mentioned above that the present programme does not fall in this definition therefore no useful purpose will be served by referring to the provisions of Prize Competitions Act, 1955…

Similarly, the Bombay High Court in the case of News Television India Ltd. and Others v. Ashok D. Waghmare and Anr, relying on RMD Chamarbaugwala case had held that the programme “Kaun Banega Crorepati” would not fall within the definition of the word “Prize Competition.” So it can be said that the games of skill are outside the ambit of the 1955 Act.