SC rejects Centre’s maintainability challenge over Meghalaya suit challenging regulation of lotteries

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A Supreme Court bench comprising Justice Dinesh Maheshwari and Justice Sanjay Kumar rejected centre’s challenge on the maintainability of State of Meghalaya’s suit challenging Section 5 of the Lotteries (Regulation) Act 1998.

“We are not inclined to accept the contentions urged by the Union of India and some States, including the State of Kerala that this suit is not maintainable under Article 131 of the Constitution,” the bench observed.

“The State of Meghalaya seeks to assert its right to do business in lotteries under Article 298B and its executive powers to do so is subject to Parliamentary legislation, i.e., Act of 1998. The grievances raised in that context would constitute disputes falling squarely within the four corners of Article 131,” the bench described in explanation of the scope of dispute.

Back in January 2023, Attorney General of India, R Venkataramani challenged the maintainability and was joined by counsels from few other states. Governments of Meghalaya and Sikkim filed a petition opposing the decision to ban lotteries in their respective states.

The petition said that the state governments have the authority to forbid the sale of tickets of a lottery that is organized or promoted by any other state under the Section 5 of the Act. Venkataramani then informed that SC has issued two contradicting judgements regarding the maintainability of the suit.

The case was then referred to a larger Bench the decision for which is awaited. The bench then agreed to hear both of the parties on the issue. The Division Bench remarked that even if the larger Bench’s ruling must be awaited, it cannot let the suit be stayed in its entirety.

For this, Section 10 of the Code of Civil Procedure, 1908 (stay of suit), was used by the Bench as a reference point in this regard. The Bench came to the conclusion that the outcome of the reference before the bigger Bench does not have to be a prerequisite for interim solution, such as an order of injunction.

“Even if final determination of the question of maintainability in case the constitutional validity of the provisions is to be decided may depend upon decision of the larger bench, the supplemental proceedings in the present suit especially the ones relating to interim relief cannot be put on hold,” the bench noted.