TaxTMI 
TaxTMI 
1995 (4) TMI 284
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....the Licensing and Controlling of Places of Public Amusements (Bangalore City) Order, 1989 (for short "Bangalore Order") called upon the appellants to obtain licences under that Order, they challenged his power and jurisdiction on diverse grounds. The Single Judge held that video game is a game covered by Bangalore Order, the appellants are required to get licence thereunder to play the video games. It was further held that it does not violate their fundamental rights under Articles 19(1)(g) and 21 of the Constitution. The Division Bench upheld the view of the Single Judge Equally, Division Bench of the Madras High Court held that the Madras City Police Act and the Order of the Government, placed reasonable restrictions on the right to carry on video games. It does not violate Articles 19(1)(g) and 21. Video games are games requiring licence under the Act and the Orders. The survey of working of the video games by a committee of high- level police officers and a practising advocate who appeared for some of the appellants in the High Court, found the malpractices committed in conducting the games. The video game is a game covered by the Act and the Order. The ban imposed on the named....
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....used or intended to be used as a subject, or means of gaming, any document used or intended to be used as a register or record of 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 (13) defines that 'place' includes a building, a tent, a booth or other erection, whether permanent or temporary, or any area whether enclosed or open. Clause (14) defines that "place of public amusement" means any place, where music, singing, dancing, or any diversion, or game, or the means of carrying on the game is provided and to which the public are admitted and includes a race course, circus, theatre, music hall, billiards room, bagatelle room, gymnasium, fencing school, swimming pool or dancing hall. Clause (15) defines "place of public entertainment" to mean any place to which the public are admitted .... Clause (18) defines "public place" to include the foreshore, the precincts of every public building or monument, and all places accessible to the public for drawing water, washing or bathing or for the purpose of recreation 6. Section 3 of the Madras City Police Ac....
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....has been defined to mean (1) "Is a house in which a large number of persons are invited whether publicly or privately, habitually to congregate for the purpose of gaming". (2) A common gaming house is " a house kept or used for playing therein any game of chance, or any mixed game of chance and skill, in which (a) a bank is kept by one or more of the players exclusively of the others; or (b) in which any game is played the chances of which are not alike favourable to all the players, including among the players the banker or other person by whom the game is managed or against whom the other players stake, play, or bet." 'Gaming' has been defined as : to play any game, whether of skill or chance for money or money's worth; and the act is not less gaming because the game played is not in itself unlawful and whether it is involved or did not involve skill 9. In State of A.P. v. K. Satyanarayana considering whether Rummy is a game of chance or skill, this Court held that "The game of Rummy is not a game entirely of chance like the 'three- card' game .... The 'three-card' game which goes under different names such as 'flush', 'brag' etc. is ....
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....awful and whether it involved or did not involve skill 11. Where in a certain game, certain operations are to be performed to enable the gamester to play the game, the persons taking part in such operations must be deemed to be 'gaming' or actually assisting in the gaming. "To game", therefore, is to play any game, whether of skill or chance, for money or money's worth. It is playing of the game for money or money's worth whether the game be lawful or not. No game can be a game of skill alone. In any game in which even great skill is required, chance must play a certain part. Even a skilled player in a game of mere skill may be lucky or unlucky, so that even in a game of mere skill chance must play its part. But it is not necessary to decide in terms of mathematical precision the relative proportion of chance or skill when deciding whether a game is a game of mere skill. When in a game the element of chance strongly preponderates, it cannot be a game of mere skill. Therefore, it is not practicable to decide whether a particular video game is a game of skill or of mixed skill and chance. It depends upon the facts, in each case 12. The respective Acts deal with the ....
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....player presses the button without knowing the outcome i.e. the nature of cards that would be turned, it is only a game of chance for the card opened contains a numeral of either higher or lower denomination. Video gaming, therefore, is associated with stakes or money or money's worth on the result of a game, be it a game of pure chance or of mixed skill and chance 15. For a commoner or a novice, it is difficult to play video game with skill. Ordinary common people who join the game can hardly be credited with skill for success in the game. The forecast is nothing better than a shot at a hidden target. Whether a particular video game is a game of skill or a game of chance, or mixed chance or skill requires to be determined on the main element, namely, skill or chance. If it is a game of pure chance or mixed chance and skill, it is gaming. Even if the game is for amusement or diversion of a person from his usual occupation for entertainment, it would constitute 'gaming'. The object of the relevant Act, notification or orders made thereunder is to regulate running of the video games and for that licence is required from the licensing authority 16. In Madras cases, the Co....
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....places, they were installed behind partition and the players are conducted into such places with a view to ensuring that such games are not visible from outside. There is no scope for using one's skill to arrive at a desired result in the games like Royal Casino, Super Continental, Five Line, High Low, Black Jack, Poker Double Up, Skill Ball, Pac Man and Golden Derby. They were classified as games of chance. By allowing such games, the innocent children and the common public would lose hard-earned money. Machines electronically operated are adjusted in such a way that the player always lose the game since no skill is involved. Machines were tampered with, so that chances of winning by the player was almost an impossibility. The Commissioner, therefore, had prohibited such games of chance while permitting to play the games of skill 18. The question then emerges whether regulation of video games violates the fundamental right to trade or business or avocation of the appellants guaranteed under Articles 19(1)(g) and 21. It is true that they have fundamental right to trade or business or avocation but it is subject to control by Article 19(6) which empowers to impose by law reason....
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....lated by tampering with the machines to make it a game of chance, even acquired skills hardly assist a player to get extra tokens. Therefore, even when it is a game of mixed skill and chance, it would be a gaming prohibited under the statute except by regulation. The restriction imposed, therefore, cannot be said to be arbitrary, unbridled or uncanalised. The guidance for exercising the discretion need not ex facie be found in the notification or orders. It could be gathered from the provisions of the Act or Rules and a total consideration of the relevant provisions in the notification or order or conditions of the licence. The discretion conferred on the licensing authority, the Commissioner or the District Magistrate, cannot be said to be arbitrary, uncanalised or without any guidelines. The regulations, therefore, are imposed in the public interest and the right under Article 19(1) (g) is not violated 20. It is true that the owner or person in charge of the video game earn livelihood assured under Article 21 of the Constitution but no one has the right to play with the credulity of the general public or the career of the young and impressionable age school or college-going chil....
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....f wide amplitude to meet diverse situations by making, altering or rescinding the orders in accordance with the Act 22. It is seen that the draft notification was published, admittedly on 8-6-1989 inviting objections and suggestions to make the licensing and controlling the places of public amusement by Bangalore order applicable to Bangalore City. They were required to file objection on or before 7-7-1989. No objections were received by the Commissioner of Bangalore City. He had obtained necessary approval from the State Government of Karnataka and final notification was published in the Gazette on 15-9-1989. Thus, the notification is a statutory notification. Similar is the order of the Commissioner of Police, Madras City who initially issued regulations and thereafter they became the order. Therefore, they have a statutory force 23. It is contended for the appellants from Karnataka that the notification was made applicable to an area of specified seating capacity and since the places in which the video games are played are of a small dimension which do not have minimum or maximum seating capacity envisaged in para 3(2) of the Bangalore Order 1989, it has no application to vide....
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.... appellants from Tamil Nadu that they are running video games within a space of 46-l/2 sq. m. and that, therefore, they are not required to obtain any licence under Section 34 of the Madras City Police Act, which says that no enclosure or place of playing having an area of 46-l/2 sq. m. or upward shall be used for public entertainment or resort without a licence from the Commissioner. Since they are using video games in a place less than 46-1/2 sq. m., they require no licence. The contention is wholly misconceived. Under Section 39 of that Act, the Commissioner may make rules for ensuring order and decency and for public safety at all places of public entertainment or resort and for regulating the times during which the places referred to in Sections 34 and 35 are used. Section 34(1) prohibits user of an enclosed place or a building having an area of 46-1/2 sq. m. or upward for public entertainment or resort without a licence from the Commissioner. In other words the licence is for user of the building up to and upwards of 46-1/2 sq. m. whereas Section 39 gives power to the Commissioner to make rules for ensuring order and decency and for public safety at all places of public enter....
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.... partly bad legislation cannot be struck down as a whole. To the extent it becomes applicable to a particular trade or business, it would be valid and operative and the balance remains either inapplicable or invalid. Diverse situations may arise in a particular trade or business. For that reason, the delegated legislation cannot be, condemned as a whole unless the invalid part is inextricably interconnected with the valid. The Court is, therefore, entitled to consider whether the rule as a whole or in part is valid or becomes invalid or inapplicable. On its finding that to the extent the rule is not relevant, the Court is entitled to set aside or direct to disregard the irrelevant or inapplicable part leaving the rest intact and operative. Our attention has been invited by the learned counsel for the respondents is what has been stated in this regard in Wade's Administrative Law at pp. 874-75 of the 6th Edn. under the heading "Partial invalidity". The learned author has cited many cases according to which it is possible for delegated legislation to be partially good and partially bad - the general rule being : "Unless the invalid part is inextricably interco....
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....f the principles of natural justice. Decided cases have not extended doctrine of hearing in every case. It depends upon facts in a given case. What has been stated in Mahabir Auto Stores v. Indian Oil Corpn. 2 which has been pressed into service by the appellants' counsel to contend that opportunity of hearing was required to be given in every case. This requirement of natural justice cannot be put in a rigid mould, at which stating that before an adverse decision is taken, the affected person should be taken into confidence, it was observed in paragraph 18 that whether and in what circumstances that confidence should be taken into consideration cannot be laid down on any strait-jacket basis. When constitutionality of the statute or the statutory rules was impugned, with a view to sustain the statute or statutory rules, this Court read down the law consistent with rule of natural justice including personal hearing. See C. B. Gautam v. Union of India referred by learned counsel for the appellants. In some cases like Maneka Gandhi, post-decisional hearing was regarded as sufficient 32. It is also settled law that the order need not contain detailed reasons like a court order. Ad....
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....he licensing authority to come to a different conclusion or to disabuse any prejudice against the appellant. If the facts are in acute dispute the request for personal hearing may be extended. The licensing authority, then, is required to consider the objections or grounds put forth in support of the claim of the applicant or relevance or otherwise of the adverse material. The licensing authority is entitled to grant or reject the licence as is enjoined by sub-para (7) of para 4. The licensing authority has to record reasons in support of its decision of rejecting the application for licence which includes the renewal and should communicate the same to the applicant 35. It is seen that the Karnataka High Court, on an application made by the appellants, directed the Commissioner to consider the objections and to pass appropriate orders within 15 days from the date of the receipt of the High Court order. Counsel for the respondents placed before us a sample of the order passed by the Commissioner on the application of Bhagwan Das Wadwani and for reasons recorded therein, he rejected the application on 25-1-1994, namely, pending appeal in this Court. The order shows that it was commu....