THE STATE OF BOMBAY versus R. M. D. CHAMARBAUGWALA

Citation: [1957] 1 S.C.R. 874 · Decided: 09-04-1957 · Supreme Court of India · Bench: SUDHI RANJAN DAS · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

1957 
April 9. 
874 
SUPREME COURT REPORTS 
[1957] 
THE STATE OF BOMBAY 
i'. 
R. M. D. CHAMARBAUGWALA 
(S. R. DAS C. J., VENKATARAMA AYYAR, B. P. SINHA, 
S. K. DAs and P. B. GAJENDRAGAOKAR JJ.) 
Lottery-Prize competitions, if and 
when 
of a ga1nbling 
nature-Legislation taxing promoters of such competition carried on 
through 
newspaper 
printed and published 
Ot4tside 
the State-
Validity-Test-Territorial nexus-Gambling, if trade and commerce 
tvithin the rneaning of the Constitution--Constitutionality of enact~ 
rnent-Bombay Lotteries and Prize Competition Control and Tax 
Act (Bom. LIV of 1948), as amended by the Bombay Lotteries and 
Prize Competition Control and Tax (Amendment) Act (Born. XXX 
of 1952), ss. 2(1) (d), 12A-Constitution of India, Arts. 19 (1) (g), 
301. 
The first respondent was the founder and Managing Director 
of a company, the second 
respondent in the appeal, which was 
incorporated 
in 
the 
State of Mysore and 
conducted a Prize 
Competition called the R. M. D. C. Cross-words through a weekly 
newspaper printed and published at Bangalore. 
This paper had 
a wide circulation in the State of Bombay, where the respondent' 
set up collection depots to receive entry forms and fees, appointed 
local collectors and invited the people by advertisements in the 
paper to participate in the competitions. On November 20, 1952, 
the Bombay Legislature passed the Bombay Lotteries and Prize 
Competitions Control and Tax (Amendment) Act of 1952, and 
widened 
the 
scope 
of 
the 
definition 
of 
'prize 
competition' 
contained in 
s. 2(l)(d) of the Bombay 
Lotteries and Prize 
Competition Control and Tax Act of 1948, so as to include prize 
competitions carried on through newspapers printed and published 
outside the State and inserted a new section, s. 12A, levying a 
tax on the promoters of such competitions 
for sums 
collected 
from the State. Thereupon, on December I 8, 1952, the respond-
ents moved the High Court of Bombay under Art. 226 of the 
Constitution and contended that the Act as amended and the 
Rules framed thereunder in so far as they applied to such prize 
competitions were ultra vires the State 
Legislature and violated 
their fundamental rights under Art. 19(i)(g) and freedom of 
inter-State 
trade under Art. 301 of the Constitution. 
The single 
Judge who heard the matter in 
the first instance as also the 
court of appeal found in favour of the respondents, 
though 
on 
son1ewhat different grounds, and the State of Bombay preferred 
the appeal. 
The principal question canvassed 
in 
this 
Court 
related to the validity or otherwise of the impugned Act. It was 
contended on behalf of the appellant that the impugned Act "':ts 
a law relating to betting and gambling and as such was covered 
S.C.R. 
SUPREME COURT REPORTS 
875 
by Entries 34 and 62 of List II in the Seventh Schedule to the 
Constitution, whereas the contention of the respondents was that 
the Act was with respect to trade and commerce and came under 
Entries 26 and 60 of that List. 
Held, that in testing the validity of an Act it was necessary, 
in the first place, to decide whether it was with respect to a topic 
11.ssigned to the legislature :ind, secondly, where it was so and the 
legislature was a State Legislature and the Act 
purported to 
operate beyond the State, whether there was sufficient territorial 
nexus to validate such operation and, lastly, whether the powers 
of the legislature were in any other way fettered by the Consti-
tution. 
So judged, the impugned 
Act was a 
perfectly 
valid 
legislation and its constitutionality was beyond question. 
Regard being had to the purpose and scope of the Act read 
11.s a whole there could be no doubt that all the categories of prize 
competitions included in the definition contained in s. 2(1) (d) of 
the Act were of a gambling 
nature. 
The 
qualifying 
clause 
11.ppearing at the end of cl. (i) must apply to each of the five 
kinds enumerated therein, and the word 'or' appearing after the 
word 'promoters' and before the word 'for' in the clause must 
be, read as 
'and'. 
Similarly, cl. (ii), properly construed, could 
not include any prize competitions other than those of a gambling 
nature. 
Elderton v. Tota/isator Co. Ltd., (1945) 2 All E. R. 624, held 
inapplicable. 
The impugned Act was, therefore, a legislation with respect 
to betting and gambling and fell under Entry 34 of List TI of the 
Seventh 
Schedule 
to the Constitution 
and 
was 
within 
the 
competen

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