LexM/S. TASHI DELEK GAMING SOLUTIONS LTD. AND ANR. versus STATE OF KARNATAKA AND ORS.
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A MIS. TASHI DELEK GAMING SOLUTIONS LTD. AND ANR. B V. STA TE OF KARNATAKA AND ORS. DECEMBER 8, 2005 [S.B. SINHA AND P.P. NAOLEKAR, JJ.] Constitution of India, 1950-Artic/e 226-Appellants, lottery agents of the State of Sikkim, had invested in online lottery networks in Karnataka- C State of Karnataka banned online lotteries by a notification-Writ petition filed by appellants together with State of Sikkim challenging validity of the said notification-Maintainability of-Locus standi of appellants-Held: Appellants would suffer huge losses if the notification is implemented and face prosecution/or violation thereof-They are agents coupled with interest whose right to carry on business was affected-Hence, had an independent D right to question validity of the notification by filing writ petition-Lotteries (Regulation) Act, 1988-Section 5-Contract Act, 1872-Sections 202 & 230. Constitution of India, 19 50-Artic/e 131-Jnapplicability of-To suits where citizens or private bodies are parties, either jointly or in the alternative E with a State or the Union Government-Enlarged definition of "State" under Art.12 does not extend to Art.131-Even a statutory corporation is not a State within meaning of the said provision. Contract Act, 1872___..:.sections 202 and 230-Right of agent to sue or be sued-Held: An agent coupled with interest has a right to sue-He may F in certain situations be sued as regards his own liabilities independent of his principal. The States of Sikkim and Meghalaya commenced on line lotteries in the State ofKarnataka. Appellants- lottery agents of the State of Sikkim, invested G huge amounts for setting up on line lottery networks in the State of Karnataka. But, subsequently by a notification issued under Section 5 of the Lotteries Act, online lottery came to be prohibited in the State of Karnataka. The said Act postulated that in the event an agent violated any notification issued by the State, it would face penal consequences. States of Sikkim and Meghalaya together with the Appellant-agents filed writ petitions challenging validity of H 670 TASH! DELEK GAMING SOLUTIONS LTD. v. STATE OF KARNA TAKA 67 J the said notification in High Court. High Court held that as the dispute involved A in the writ petitions related to two State Governments, the writ petitions were not maintainable in view of the constitutional bar under Article 131 of the Constitution, and also that the appellant age1_1ts had no locus standi to maintain the writ petitions since they did not have any independent right in that behalf. Hence the present appeals. Allowing the appeals, the Court HELD: 1.1. The Appellants were appointed as agents of the State, which were governed by contract, in terms whereof, they had invested a huge amount In the event the impugned notification is implemented, the Appellants would B not only lose a huge amount of money which they have invested but also would C be liable to pay compensation to a large number of work force appointed by them in view of the fact that they would have to close their business. The Appellants are the agents coupled with interest. Such agencies are contemplated under the laws of contract [678-F, G) 1.2. An agent coupled with interest has a right to sue. He may in certain D situations be sued as regard his own liabilities independent of his principal. Section 202 of the Contract Act, 1872 provides that where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest. The right of an agent to sue or be sued in E its own name, is governed by Section 230 of the Contract Act but the second part of the said provision does not envisage a situation where the right of an agent is protected in terms of Section 202 of the Contract Act. [679-D-E; 680-B) 1.3. If by a statutory provision the right of an agent to carry on his F business is affected, he may, in his own right maintain an action. Once it is held, that the Appellants had legal rights to challenge the validity or otherwise of the said notification issued by the State of Karnataka, there cannot be any doubt whatsoever that they would have independent rights to maintain the writ application. [680-B; 683-C) Subrahmania Pattar v. Narayanan Nayar, ILR 24 Mad 130; Mallhu v. G Megh Raj, AIR (1920) Lah. 196; Coor/a Spinning & Weaving Mil
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