High Court · 2012

By the additional affidavit filed by the respondent Nos. 1 and 2 on 27.3.2012, Bodoland Lottery Rules of 2007, for short, Lottery Rules of 2007, and the agreement dated 13.6.2011 were brought on record. Statements are also m ade in the said affidavit that the petitioner had deliberately left out the page containing Clause 1.1.9 up to Clause 1.1.15 in the agreement which was enclosed with the writ petition. It is also stated that upon superannuation of the Secre tary of the department, the Joint Secretary, BTC was entrusted with the Departme nt of Lotteries. 9. The respondent No. 3 had also filed an affidavit-in-opposition r aising a preliminary objection with regard to maintainability of the writ petiti on in view of Clause XVIII of the agreement dated 30.9.2009. In the said affidav it, plea is taken that the respondent No. 3 was appointed in accordance with the provision with the Lottery (Regulation) Act, 1998, for short, the Regulation of 1998 and the Rules made thereunder, with the objective of raising revenue colle ction of the BTC. It has also been asserted that after the appointment of the ad ditional distributor in the form of respondent No. 3, the petitioner company and the respondent No. 3 would be entitled to conduct equal number of draws as the maximum number of draws to be conducted is equally divided between the parties. It is asserted that such an arrangement with the respondent No. 3 was made in th e interest of the people inhabiting the council area as the respondent No. 3 has vast experience in the field of lottery, Paper Lottery as well as Online lotter y and had successfully operated such business in many states. It is stated that the respondent No. 3 has completed necessary formalities and laid down the infra structure for its operation as the sole selling agent of BTC and demonstration o f the lottery was conducted on 26.12.2011. 10. I have heard Mr. I Choudhury, learned counsel for the petitioner . I have also heard Mr. AK Bhattacharyya, learned senior counsel appearing for t he respondent No. 3 and Ms M Bordoloi, learned standing counsel, BTC. I have als o perused the materials on record and the records produced by the learned standi ng counsel, BTC. 11. Mr. I Choudhury, learned counsel for the petitioner submits that an unequivocal promise was made by the BTC authorities to appoint one distribut or to act as the sole/exclusive distributor and the petitioner had acted upon su ch a promise and had made investments of more than Rs. 10 crores and the BTC aut horities have now resiled from the promise by entering into an agreement with th e respondent No. 3 to the detriment and prejudice of the petitioner. Accordingly , the learned counsel submits that in this case, the doctrine of promissory esto ppel is squarely applicable and he places reliance on the following decisions: ( i) Union of India -vs-Indo-Afghan Agencies, reported in AIR 1968 SC 718, (ii) M/s Motilal Padampat Sugar Mills Co. Ltd.-vs- State of U.P.& Ors., reported in (1979) 2 SCC 409, (iii) Gujarat State Financial Corporation -vs- M/s Lotus Hotel Pvt. Ltd., reported in (1983) 3 SCC 379 and (iv) Union of India & Ors. -vs- Go dfrey Philips India Ltd., reported in (1985) 4 SCC 369. 12. He further submits that the petitioner has been subjected to unf air and discriminatory treatment and such action of the BTC authority has violat ed Article 14 and Article 19(1)(g) of the Constitution of India. The learned cou nsel further submits that on a reading of the letter dated 2.1.2012, it cannot b e construed that the petitioner had invoked the arbitration clause, so as to dis entitle the petitioner to seek discretionary remedy of this Court under Article 226 of the Constitution of India. He has submitted that in the said letter dated 2.1.2012, no claim was made and no name of arbitrator was also proposed. The cl aim of Rs. 1.44 crores was totally unjustified as the BTC authority had themselv es stopped the lottery operation. The learned counsel submits that, at any rate, in an arbitration proceeding, the petitioner would not be entitled to question/ challenge the appointment of the respondent No. 3 as the selling agent and there fore, the writ petition filed challenging the appointment of the respondent No. 3 is maintainable. The learned counsel submits that the petitioner cannot be lef t without remedy and to fortify this submission, the learned counsel places reli ance on the case of Bhagubhai Dhanabhai Khalasi & Anr , reported in (2004) 4 SCC

241. The learned counsel also lays emphasis that the letter dated 2.1.2012 did not have the sanction of the management of the Company. The learned counsel asse rts that in the facts and circumstances of this case, the draft BTC Rules of 200 7 is only applicable and therefore, the BTC had no jurisdiction to appoint selli ng agent. With regard to the applicability of the draft Rules, the learned couns el places reliance upon the cases of (i) Vimal Kumari -vs- State of Haryana & Or s., reported in (1998) 4 SCC 114, (ii) Abraham Jacob & Ors., -vs- Union of India , reported in (1998) 4 SCC 65, (iii) Union of India -vs- V. Ramakrishnan, report ed in (2005) 8 SCC 394 and (iv) High Court of Gujarat & Anr. Vs. Gujarat Kishan Mazdoor Panchayat & Anr., reported in (2003) 4 SCC 27. The learned counsel also places reliance on the decisions of the Apex Court in (i) Whirlpool Corporation -vs- Registrar of Trade Marks, Mumbai & Ors., reported in (1998) 8 SCC 1, (ii) H arbanslal Sahnia & Anr., -vs- Indian Oil Corporation & Ors., reported in (2003) 2 SCC 107 (iii) Union of India & Ors., -vs- Tantia Construction Pvt. Ltd., repor ted in (2011) 5 SCC 697 and (iv) Karnataka State Forest Industries Corporation - vs- Indian Rocks, reported in (2009) 1 SCC 150 to fortify his argument that the plea taken by the respondents that the writ petition is not maintainable is only misconceived. Reliance placed by the BTC authorities on the Rules of 1994 is al so misconceived, Mr. Choudhury submits. On the number of draws to be conducted, the learned counsel submits that in the Rules of 2010, there is only provision o f maximum number of draws per day and in the agreement dated 30.9.2009 or in the addendum agreement dated 21.2.2011, there was no stipulation with regard to the number of draws that are to be conducted by the petitioner. That apart, there w as also no communication to the petitioner to conduct any fixed number of draws and it was only on 26.8.2011 that the BTC authorities had asked the petitioner t o increase the number of draws from 6 to 12. Mr. Choudhury also contends that th e letter dated 22.12.2011, wherein certain allegations were leveled against the petitioner, was clearly an after thought, the same having been issued after the writ petition was filed on 19.12.2011 and after this Court on 22.11.2011 had pas sed an order directing the BTC authorities to maintain status quo. The learned c ounsel submits that undue favour has been bestowed on the respondent No. 3 by ex ecuting an agreement with it to conduct lottery operations without following any transparent process and such action had been taken in colourable exercise of po wer, on the basis of an application of the respondent No. 3 addressed to an unkn own authority in the hierarchy of BTC administration. That the interest of the r espondent No. 3 is sought to be sub served is also highlighted by the fact that the very basis on which the agreement was executed is fallacious inasmuch as, if the petitioner and the respondent No. 3 are to conduct equal number of draws, A nnexure-A of the agreement dated 13.6.2011 could not have depicted a picture of the revenue payable by respondent No. 3 as Rs. 8,76,00,000/-, which figure was a rrived at basing on 24 numbers of draws assured per day at the rate of Rs. 10,00 0/- per draw per day. He concludes his submissions by submitting that the agreem ent with the respondent No. 3 having been executed by the Joint Secretary, BTC, the same cannot withstand the scrutiny of law in view of Rule 3(13 )of the Rules of 2010. In this connection, the learned counsel places reliance upon Director General, ESI & Anr. vs T. Abdul Razak, reported in (1996) 4 SCC 708 and Anirudhs inhji Karansinh Jadeja & Anr. vs the State of Gujarat, reported in (1995) 5 SCC 302. 13. Ms Bordoloi, learned counsel for the respondent Nos. 1 and 2 sub mits that though letter dated 1.10.2011 was issued to the petitioner informing h im the decision of the authorities to postpone the operation of the Bodoland Lot tery within the BTDA area, the petitioner had not challenged the said action at any point of time. With reference to the letter dated 22.12.2011 issued by the r espondent No. 2, the learned counsel submits that no revenue was paid by the pet itioner on and from 1.10.2011 and as non payment of Rs. 1.44 crores had been vie wed very seriously, by the said letter, the petitioner was directed to deposit t he amount immediately without fail. It is also submitted by her that the decisio n to postpone the online lottery was prompted by the law and order situation cre ated because of the dispute of the petitioner with the customers in the last wee k of September, 2011. Though letter dated 26.8.2011 was issued increasing the nu mber of draws from 6 to 12 numbers of draws, the petitioner never conducted 12 d raws. The learned counsel submits that both the petitioner and the respondent No . 3 were conducting lottery and the petitioner had chosen to approach this Court at a belated stage and, therefore, this Court may not invoke its extra-ordinary jurisdiction. She submits that there is no distinction between the distributor and the selling agent in terms of Rules of 2010 and Rule 5 of the Lottery Rules of 2007 provides that the council may appoint one distributor or more on such te rms and conditions as may be agreed upon between the distributor and the council . It is submitted by her that the word (cid:28)sole distributor (cid:29) appearing in the agree ment dated 30.9.2009 was not preceded with the word (cid:28)only (cid:29) and therefore, it is permissible to have many distributors. She is emphatic in her submission that if the authority wants to have only one seller/distributor, then the agreement mus t indicate the appointment of distributor as (cid:28)only sole distributor (cid:29) and this be ing not the case in the instant case, the petitioner cannot question the BTC aut hority for appointing the respondent No. 3 as no legal right of the writ petitio ner has been infringed. The learned counsel, in support of her submissions, reli es on the decision rendered by this Court in the case of Limraj Lottery & Tradin g Company (P) Ltd. -vs- N.V. Marketing Pvt. Ltd., reported in 2004 (2) GLT 188. It is also submitted by her that there is no such Rule called Online Bodoland Lo ttery Rules, 2006 as appearing in the agreement dated 30.9.2009 and the same was incorporated due to bonafide inadvertence. Referring to the stand taken in the affidavits, the learned counsel submits that Joint Secretary is competent to exe cute the agreement with the respondent No. 3. 14. Mr. AK Bhattacharyya, learned senior counsel for the respondent No. 3 submits that the pleading is completely bereft in the writ petition to inv oke the extra-ordinary jurisdiction under Article 226 of the Constitution of Ind ia. There is no pleading whatsoever with regard to the foundational facts requir ed for invoking the doctrine of promissory estoppel. He has contended that in ex ercise of powers under Article 226 of the Constitution, the High Court examines the decision making process and not the decision. There is no challenge in the w rit petition to the decision making process culminating in issuance of an order and what is challenged in the writ petition is an agreement which can be set asi de only if the same is vitiated under Section 23 of the Contract Act, 1872. The learned senior counsel submits that there being efficacious alternative remedy a vailable to the writ petitioner and the petitioner having expressed the intentio n to invoke arbitration, this court ought to decline to invoke the extra-ordinar y jurisdiction. It is also submitted by him that the submissions of the learned counsel for the petitioner that the impugned action of the BTC authorities has infringed Article 19(1)(g) of the Constitution of India is not tenable because Article 19(1)(g) i s not applicable to a company. Though the learned senior counsel had tried to in voke the doctrine of proportionality in his initial stage of argument, he had ul timately given up contending that the doctrine is not attracted in the facts of the case. It is submitted by him that letter dated 1.10.2011 postponing all kind s of drawing of lotteries was issued by the Joint Secretary, BTC and at no time, the petitioner had raised any issue contending that he had no jurisdiction to i ssue such letter and therefore, argument advanced that Joint Secretary, BTC was not competent to execute the agreement with the respondent No. 3 is without any merit. The learned senior counsel places reliance on the judgments of the Apex C ourt in (i) M/s Radhakrishna Agarwal & Ors. Vs. State of Bihar & Ors., reported in (1977) 3 SCC 457 (ii) Kerala State Electricity Board & Anr. Vs. Kurien E. Kal athil & ors. reported in (2000) 6 SCC 293 (iii) Divisional Forest Officer Vs. Bi shwanath Tea Co. Ltd., reported in (1981) 3 SCC 238 (iv) New Era Fabrics Private Limited, Bombay & Anr. Vs. Assam Industrial Development Corporation, Gauhati, A ssam & Ors., reported in (1986) 2 GLR 392 (v) M/s Motilal Padampat Sugar Mills C o. Ltd Vs. State of Uttar Pradesh & Ors., reported in (1979) 2 SCC 409 (vi) Stat e of Arunachal Pradesh Vs. Nezone Law House, Assam, reported in 2008-Scale-6-28, also reported in (2008) 5 SCC 609 and (vii) Limras Lottery & Trading Company (P ) Ltd. Vs. N.V. Marketing Pvt. Ltd. & ors., reported in 2004 (2) GLT 188. 15. Before the contentions of the learned counsel for the parties ar e considered, it is appropriate to refer to the relevant provisions of the agree ments as well as the Rules and Regulations, which have been referred to by the l earned counsel for the parties during the course of the proceedings. Section I of the agreement dated 30.9.2009 is the definition section and Clauses 3, 13 and 14, appearing thereunder, are quoted below: (cid:28)3. (cid:28)Sub Distributor/Sub-Agent/Retailer (cid:29) shall mean, the entity (a person, propr ietary firm, a partnership firm or company) appointed by the Distributor for sel ling, distributing and marketing of lottery tickets and online games through ne twork of retail agents. 13. (cid:28)Rules (cid:29) means the Lottery Regulation Act, 1998 regulated by central gov t. and the Council’s rules pertaining to lottery as amended from time to time an d also rules pertaining to online games, if any. 14. (cid:28)Distributor (cid:29) in this agreement, means a company (ies) or firm(s) or per son(s) or the consortium of any/all of the entities mentioned earlier represente d by its lead member appointed by the Council as Distributor to market the lotte ries and chance based games on behalf of the Council with whom the Council has e ntered into an agency agreement. (cid:29) Section II under the heading (cid:28)Appointment (cid:29) provides that the BTC had appointed t he consortium represented by the lead consortium member i.e. the petitioner, as its exclusive and sole distributor. Section IV deals with termination of agreeme nt and, amongst others, it provides that if there is any breach of agreement by the Distributor or there are any complaints of serious irregularities of bringin g disrepute to the council, it shall be deemed as a breach of agreement by the D istributor and if the breach has not been rectified within 150 days of the counc il bringing the breach to the notice of the distributor in writing, the council may proceed for termination of the agreement. Section IX under the heading ’Tickets (cid:29), amongst others, provides that lottery ti ckets shall be printed in accordance with the provisions of Rule 9 of the BTC Lo ttery Rules. Section XIII under the heading (cid:28)Responsibilities of the Distributor (cid:29) provides th at the distributor shall be responsible for marketing of online lotteries of the Council under the provisions of the Lotteries (Regulation) Act, 1998 and BTC Ru les. Section XVI under the heading (cid:28)Relationship between the Distributor and the Coun cil (cid:29) provides that the relationship between the Distributor and the Council wil l be one of (cid:28)Buyer (cid:29) and (cid:28)Seller (cid:29) as defined in the Indian Contract Act, 1872 as amended and shall be governed by the Lottery (Regulation) Act, 1998 and Bodoland Online Lottery Rules, 2006. Section XVIII is the section relating to arbitration and same is reproduced here in below: (cid:28)All the disputes and differences arising between the parties hereto, including any dispute or difference in regard to the interpretation of any provision or te rm or the meaning thereof, or in regard to the rights and obligations of any par ties hereto under this Agreement or otherwise, howsoever, which cannot be resolv ed mutually shall be referred to arbitration. One arbitrator each be nominated by the Council and Big Star and the third arbitrator shall be appointed by the t wo Arbitrators. Such arbitration shall be governed by the provisions of the Arbi tration and Conciliation Act, 1996 for the time being in force. The venue of the Arbitration shall be at Guwahati and the language of arbitration shall be in En glish. The decision of the said Arbitrators shall be final and binding on both t he parties (cid:29). 16. 6.2011 entered into between the BTC authorities and the respondent No. 3. Section 1 is relating to (cid:28)Definitions and Interpretations (cid:29) and Clause 1.1.14 the reto stipulates that (cid:28)Rules (cid:29) shall mean the Lottery (Regulation) Rules, 2010. (cid:28)S ole Selling Agent (cid:29) at Clause 1.1.15 provides that the same shall mean the natura l or juristic person/company and in the case in hand, the respondent No. 3, who was appointed for the purposes of purchasing lottery tickets etc. Clause 2.1 in Section 2 under the heading (cid:28)Appointment and Term of Sole-Distribu tor/Selling Agent (cid:29), the respondent No. 3 was appointed as the Sole Selling Agent It will be also relevant to take note of the agreement dated 13. for the distribution and sale of lottery tickets. Clause 10.1 under Section 10 relating to (cid:28)Termination (cid:29) provides that the agreement, unless renewed, is to sta nd automatically terminated by efflux of time at the end of 10 years from the da te of signing the agreement. Annexure-A in terms of Clause 4.4, providing for mi nimum Guaranteed Revenue, reads as follows: (cid:28)The minimum Guaranteed Revenue payable by CAIRS to the Government in terms of c lause 3(10) of the Rules is as under: Number of Draws Assured per day = Up to a max of 24 numbers Amount assured per Draw per Day = INR 10,000/- Total Revenue Assured per year on 24 Draws per day basis = INR 8,76,00,00,000/- (Rupees eight crores and seventy six lakhs only) (cid:29) The said agreement was executed for and on behalf of the BTC by the Joint Secret ary, Lottery, BTC. 17. It will be also relevant to notice some of the provisions of the Lottery (Regulation) Act, 1998 : Under the Lottery (Regulation) Rules, 2010, distributor or selli The State Government shall sell the tickets either itself or through dis Save as otherwise provided in section 4, no State Government shall organ

3. ize, conduct or promote any lottery. 4. Conditions subject to which lotteries may be organized, etc.- A State Governm ent may organize, conduct or promote a lottery, subject to the following conditi ons, namely:- & & & & & & & & & & & & & & & & & & & & & & & &. (c). tributors or selling agents; Rules 11 and 12 enable the Central Govt. and the State Govt, respectively, to ma ke Rules by notification in the Official Gazette to carry out the provisions of the Act. 18. ng agent has been defined in Rule 2(c) and the same reads as under: 2(c)- (cid:28)distributor or selling agent (cid:29) means an individual or a firm or a body corp orate or other legal entity under law so appointed by the Organising State throu gh an agreement to market and sell lotteries on behalf of the Organising State; Rule 3(6) thereto provides that number of draws except bumper draw by an organiz ing state, from all the lottery schemes put together, shall not be more than 24 per day. Rule 3(13) provides that the organizing State shall designate an officer, not be low the rank of the Secretary, as the designated authority, who shall be respons ible for organizing the lottery in the State. Organising State in terms of Rule 2(f) means the State Government which conducts the lottery either in its home te rritory or sells its tickets in the territory of any other State. Rule 3(15) provides that in cases where an Organising State appoints or authoriz es distributors or selling agents, it shall be the responsibility of the Organis ing State to ensure that the said distributors or selling agents act in conformi ty with the provisions of the Act and these rules. As the learned counsel for the petitioner had referred to BTC Ru 19. les of 2007, it is also considered appropriate to take note of the relevant prov isions: Rule 2(k) defines distributor to mean a party, person, firm or company with whom an agreement for distribution of lottery tickets is executed. The term selling agent is defined in Rule 2(m) to mean a firm, a company or any person(s) with wh om the distributor, sole distributor or stockists entered into an agreement for retail sale of lottery ticket to the public or people. Rule 4 provides for appointment of distributor(s) and the same reads as follows: (cid:28)4. The Council may, by floating tenders or by way of direct settlement appoint person or persons, Company, firm having at least ten years experience in running lotteries for a specified period as determined by the Council in accordance wit h the terms and conditions as determined by the Council (cid:29). Rule 5 provides for appointment of stockist or selling agent and the same reads as follows: (cid:28)5. The Distributor(s) so appointed under the aforesaid clause may appoint Stock ists, Selling Agents to sell Lottery tickets to the Public. The list of such sto ckists or Selling Agents with necessary particulars, address etc. shall be submi tted to the Director along with the scheme (cid:29). Rule 20 of the said Rules provides for arbitration in case of any difficulties o r disputes between the distributor and the council or between the council and th e selling agent on any matter or arising out of an agreement relating to the con duct of lotteries of the BTC. 20. The reference to the Rules will not be complete unless provision s relevant for the purpose of this case, as it find place in the Assam State Lot tery Rules, 1994, are not taken note of. The definition of agreement, distributor, lottery as defined in Section 2(a), (c ) and (e) are reproduced herein below: 2(a) (cid:28)Agreement (cid:29) means an agreement signed between the Government of Assam th rough the Director of State Lotteries of Government of Assam with any other pers on, firm, company etc., for selling or printing the tickets of Assam State Lotte ry: 2(c) (cid:28)Distributor’ means a person or firm or company which is engaged by an a greement for selling tickets, under definite terms and conditions approved by th e Government; 2(e) Rule 5 that provides for appointment of distributor is also relevant and the sam e is quoted herein below: (cid:28) 5(1) The Government may appoint one Distributor or more under such terms and (cid:28)Lotteries (cid:29) means Assam State Lotteries; conditions as may be agreed upon between the Distributor and the Government whi ch shall be in the procedure of payment of sale proceeds of tickets. The State L ottery tickets shall normally be made available to the public/subscribers throug h the Distributor or through such other channel as may be decided from time to t ime by the Government. The Government also reserves the right to sell tickets di rect to the public through departmental arrangement. 5(2) Whenever any fresh appointment of any distributor is required to be made , the Government may make the selection by inviting the tender. Past experience and performance as a distributor in State lotteries of any Government and financ ial standing of the tenderer shall be taken into consideration by the Government in making the selection. (cid:29) Relevant provisions of one more Rule, namely, Bodoland Lottery R

21. ules, 2007 are also required to be taken note of. Distributor under the said Rules is defined in Rule 2(c) to mean a person, firm or company which is engaged by an agreement for selling tickets under definite t erms and conditions approved by the council. Rule 5 provides for appointment of distributor and the same is quoted herein bel ow: (cid:28)5(1) The Council may appoint one Distributor or more under such terms and condi tions as may be agreed upon between the Distributor and the council, which shall be in the procedure of payment of sale proceeds of tickets. The Lottery tickets shall normally be made available to the public/subscribers through the Distribu tor or through such other channel as may be decided from time to time by the Cou ncil. The Council also reserves the right to sell tickets direct to the public t hrough departmental arrangement. Whenever any fresh appointment of any distributor is required to be made 5 (2) , the Council may make selection by inviting the tender. Past experience and per formance as a Distributor in State lotteries of any Government and financial sta nding of the tenderer shall be taken into consideration by the Council in making the selection. (cid:29) Rule 14 and 17(ii) of the said Rules are also relevant and the same are quoted h erein below: (cid:28)14. There shall be an arbitration clause in the Agreement. 17(ii) The Distributor may appoint stockiest (s)/selling agent(s) in any State, where the sale of ticket is permissible but he shall furnish the details of such stockiest (s) and selling agent(s) to the Director. (cid:29)

22. As the learned counsel for the respondents have raised the quest ion of maintainability of the writ petition on the ground of alternative remedy being available and also in view of the provision of arbitration in the agreemen t dated 30.09.2009, it will be appropriate, at the outset, to consider the quest ion of maintainability of the writ petition. 23. In Dwarka Nath -Vs- Income-tax Officer, Special Circle, D Ward, Kanpur and Anr, reported in AIR 1966 SC 81, the Supreme Court, while examining t he nature and scope of Article 226 of the Constitution of India, at paragraph 4 laid down as follows: (cid:28) & &.This article is couched in comprehensive phraseology and it ex facie confers a wide power on the High Courts to reach injustice wherever it is found. The Co nstitution designedly used a wide language in describing the nature of the power , the purpose for which and the person or authority against whom it can be exerc ised. It can issue writs in the nature of prerogative writs as understood in En gland; but the scope of those writs also is widened by the use of the expressio n \nature\, for the said expression does not equate the writs that can be issued in India with those in England, but only draws an analogy from them. That apart , High Courts can also issue directions, orders or writs other than the prerogat ive writs. It enables the High Courts to mould the reliefs to meet the peculiar and complicated requirements of this county. Any attempt to equate the scope of the power of the High Court under Art. 226 of the constitution with that of the English Courts to issue prerogative writs is to introduce the Unnecessary pr ocedural restrictions grown over the years in a comparatively small cou ntry like England with a unitary form of government into a vast country like In dia functioning under a federal structure. Such a construction defeats the purp ose of the article itself. To say this is not to say that the High Courts can fu nction arbitrarily under this article. Some limitations are implicit in the arti cle and others may be evolved to direct the article through defined channels. & &.. (cid:29) 24. In the context of contentions advanced that the State, acting in its executive capacity through its Government or its officers, even in the cont ractual field, cannot escape the obligations imposed upon by Article 14 of the C onstitution, in Radhakrishna Agarwal (supra), the Supreme Court held that at the very threshold or at the time of entry into the field of consideration of perso ns with whom the Govt. would contract at all, the State acts in its executive ca pacity and is bound by the obligations which dealings of the State with the indi vidual citizens import into every transaction entered into in exercise of this C onstitutional powers. It is also held that if the State or its agents have enter ed into ordinary contract, the relations are no longer governed by the constitut ional provisions but by the legally valid contract which determines the rights a nd obligations of the parties inter se and in such situation, no violation of Ar ticle 14 or any other constitutional provisions arises when the State and its ag ents perform any act within this field. The Supreme Court also held that for the adjudication of a question where Article 14 of the Constitution can possibly be said to have been violated as between persons governed by some similar contract s, they must be properly put in issue and established. In the facts of the case, the Apex Court held that the allegations are of such a nature that the issues c ould not be decided without a detailed adduction of evidence, which is only poss ible in ordinary civil suits, to establish that the State, acting in its executi ve capacity through its officers, has discriminated between parties identically situated. 25. In Whirlpool (supra), the Supreme Court pointed out that the pow er to issue prerogative writs under Article 226 of the Constitution is plenary i n nature and is not limited by any other provision of the Constitution and this power can be exercised by the High Court not only for issuing writ in the nature of habeas corpus, mandamus, prohibition, quo warranto and Certiorari for the en forcement of any of the fundamental rights but also for any other purpose. It ha s also been laid down that under Article 226 of the Constitution, the High Court , having regard to the facts of the case, has the discretion to entertain or not to entertain a writ petition. However, there are certain restrictions in the ex ercise of such powers and one of such restrictions is that if an effective and e fficacious remedy is available, the High Court would not normally exercise its j urisdiction. It has also been pointed out that availability of alternative remed y will not operate as a bar in cases where the writ petition has been filed for the enforcement of any of the fundamental rights or where there has been a viola tion of the principles of natural justice or where an order or proceeding is who lly without jurisdiction or where the virus of the Act is challenged. In Harbanslal (supra), the Apex Court had observed that rule of 26. exclusion of writ jurisdiction in view of availability of alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of availability of alternative remedy, the High Court may still exercise its wr it jurisdiction in the contingencies as indicated in Whirlpool (supra). 27. In Indian Rocks (supra), the Apex Court had laid down that altho ugh ordinarily a superior court in exercise of its writ jurisdiction would not e nforce the terms of a contract qua contract, it is trite that when an action of the State is arbitrary or discriminatory and, thus, violative of Article 14 of t he Constitution of India, a writ petition would be maintainable. 28. In Tantia Construction (supra), the Supreme Court reiterated the proposition that alternative remedy is not an absolute bar to the invocation of the writ jurisdiction of the High Court and that without exhausting of such alt ernative remedy, a writ petition would be maintainable. The Apex Court also laid down that the constitutional powers vested in the High Court or the Supreme Cou rt cannot be fettered by any alternative remedy available to the authorities and injustice, whenever and wherever it takes place, has to be struck down as anath In Kerala State Electricity Board (supra) the Supreme Court sta ema to the rule of law and the provisions of the Constitution. 29. ted as follows: (cid:28)11. A statute may expressly or impliedly confer power on a statutory body to en ter into contracts in order to enable it to discharge its functions. Dispute ari sing out of the terms of such contracts or alleged breaches have to be settled b y the ordinary principles of law of contract. The fact that one of the parties t o the agreement is a statutory or public body will not by itself affect the prin ciples to be applied. The disputes about the meaning of a covenant in a contrac t or its enforceability have to be determined according to the usual princ iples of the Contract Act. Every act of a statutory body need not necessarily i nvolve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. In the present case, it has not been shown how the c ontract is statutory. The contract between the parties is in the realm of priva te law. It is not a statutory contract. The disputes relating to interpretat ion of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matt er for adjudication by a civil court or in arbitration if provided for in t he contract. Whether any amount is due and if so, how much and refusal of the a ppellant to pay it is justified or not, are not the matters which could have be en agitated and decided in a writ petition. The contractor should have been rele gated to other remedies. (cid:29) 30. The agreement dated 30.9.2009 recites, amongst others, that the council has decided to appoint the consortium as its sole and exclusive distribu tor for marketing, selling and distributing the council’s lotteries within the B odoland as well as in other States in India. The agreement was for a period of f ive years which may be extended for another term of five years based on a writte n letter. The decision to appoint the consortium as the sole and exclusive distr ibutor was accepted by the consortium. After accepting the offer, consortium inv ested in the infrastructure required for marketing and distributing of the counc il’s lottery tickets and online games in Bodoland as well as in rest of the coun try. By the letter dated 22.12.2011, which was a letter issued in res 31. ponse to a letter issued by the petitioner asking explanation for the postponeme nt of Bodoland Lotteries, it was informed to the petitioner that the BTC had not received required revenue and share of BTC’s revenue since 1.10.2010 amounting to Rs.1.44 crores had not been paid. It was also indicated that dispute of the p etitioner with the customers led to a law and order situation which forced the B TC to postpone Online Bodoland Lotteries until further orders. Letter dated 2.1. 2012 was written by the petitioner in response to the said letter. A perusal of the said letter indicates that the petitioner was hearing news of BTC exploring ways of appointing a new distributor and that appointment of the new distributor had caused loss of business and embarrassment and in the context of the loss su ffered, a question was posed as to how BTC expected settlement of amount as clai med by it and in the said backdrop, it is stated that the petitioner would like to invoke arbitration as per Clause XVII of the agreement dated 30.09.2009. The stand taken in this proceeding by the petitioner is that the petitioner had requ ested the postal authorities and the courier not to deliver the letter, but the courier had, apparently, delivered the letter to the BTC. A letter dated 3.1.201 2 was issued as a reply to the letter dated 22.12.2011. In this letter, apart fr om other aspects, it is contended that based on the representation that the BTC would be strictly abiding by the sole distributor agreement, the petitioner was persuaded to invest heavily to set up and develop the infrastructure. Both the l etters dated 2.1.2012 and 3.1.2012 were issued subsequent to the filing of the w rit petition on 20.12.2011. Even assuming that the letter dated 2.1.2012 having reached the addressee, the petitioner is bound by the statements made in the sai d letter, it appears that forum of arbitration was referred to in connection with the amount claimed by the BTC, which is not the subject matter of dispute in this writ petition. There is another dimension in the matter i.e. appointme nt of the respondent No. 3 as sole distributor/selling agent by the agreement dated 13.6.2011, which is under challenge in this writ petition. Respondent No. 3 is not a party to the agreement dated 30.9.2009 and therefore, considering t he nature of the controversy, this court is of the considered opinion that arbit ration proceeding as envisaged in the agreement dated 30.9.2009 cannot be constr ued to be an equally efficacious alternative remedy available to the petitioner. It may be correct, as contended by the learned senior counsel for the responden t No. 3 that the cause of action has arisen out of a contract. It is on this pr emise that the learned senior counsel has also submitted that this court may no t invoke its writ jurisdiction. The activity of distribution, marketing and se lling of lottery tickets of the State organized lottery is permissible only in t erms of the Lotteries (Regulation) Act, 1998 and the Rules framed thereunder, if any, and therefore, the impugned action, relatable to the agreement, is tr aceable to the provisions of the Lottery (Regulation) Act, 1998. In view of the judgments of the Apex Court noted above, it is difficult to hold that the impugned action is a matter purely in the realm of contract and therefore, I am of the opinion that the impugned action is amenable to judicial review of t his court under Article 226 of the Constitution of India. This court is of the c onsidered opinion that it cannot be said by reason of the issuance of the letter dated 2.1.2012 and because of provision of arbitration provided for in the agre ement dated 30.9.2009, that this writ petition is not maintainable in law and ac cordingly, the contention that the writ petition is not maintainable is found to be without merit.

32. In the agreement dated 30.9.2009, reference was made to BTC Rule s, 2007 in Section IV and Section XIII and to the Bodoland Online Lotteries Rule s, 2006. There was no reference to Lottery Rules of 2007 in the agreement. In th e additional affidavit filed on 27.3.2012 it has been stated that BTC Rules, 200 7 was not passed by the Council Assembly and the Lottery Rules of 2007, though p assed by the BTC Legislative Assembly, was awaiting assent of the Governor. In t he said affidavit, reliance has been placed on Rule 5 of the said Lottery Rules of 2007. In the affidavit filed on 9.1.2012 by the respondent Nos. 1 and 2, reli ance on Rule 5 of Lotteries Rules, 1994 was placed to justify that the Governmen t may appoint one or more distributors and therefore, there is no illegality in appointing a second distributor for the purpose of maximizing revenue collection . In the last affidavit dated 27.3.2012, no reference has been made to the Lotte ries Rules, 1994 and to advance the very same proposition, reliance on Rule 5 of the Lottery Rules of 2007 was placed. In spite of filing three affidavits, the BTC authorities did not spell out clearly which Rule it was following. It surely reflects very poorly on the administration. It would appear that the respondent Nos. 1 and 2 had abandoned reliance on Lotteries Rules, 1994, after the writ pe titioner had, in its affidavit-in-reply dated 24.1.2012, questioned the applicat ion of Lotteries Rules, 1994, which was an enactment of the State of Assam prior to coming into force of Lotteries (Regulation) Act, 1998. During the course of hearing also, Ms. Bordoloi had only referred to Lottery Rules of 2007. The writ petitioner, on the other hand, had placed reliance on BTC Rules, 2007 as the dra ft Rule which had been acted upon, in order to buttress the contention that it i s the distributor under Rule 5 of the said Rules who can appoint stockists, sell ing agents. In Rule 17 of the Lottery Rules of 2007 it is also provided that dis tributor may appoint stockists/selling agents. Rule 5 of the Lotteries Rules, 19 94 and Lottery Rules of 2007 is pari materia with the word ’Government’ in the f ormer Rule being replaced by the word ’Council’ in the latter Rules as well as t he word ’The State Lottery Tickets’ in the former being replaced by ’The Lotte ry Tickets’. 33. In Bimal Kumari (supra) the Supreme Court had laid down that dra ft rules cannot be treated to be rules made under Article 309 of the Constitutio n of India and cannot legally exclude the operation of any executive or administ rative instruction on the subjects covered by the draft rules nor can such draft rules exclude the jurisdiction of the government or for that matter, any other authority, including the appointing authority, from issuing executive instructio n for regulating the conditions of service of the employees working under them. It is also held that its is always open to the government to regulate the servic e conditions of the employees for whom the rules are made even in their draft st age provided there is clear instruction on the part of the government to enforce those rules in near future and recourse to such draft rules is permissible only for the interregnum to meet any emergent situation.

34. In Abraham Jacob (supra), the Supreme Court laid down that it is too well settled that the service conditions of employees in the absence of sta tutory rules could be governed by administrative instructions. In V Ramakrishnan (supra), the Apex Court laid down that draft r 35. ules can be acted upon to meet urgent situation when no rule is operating. In Gu jarat Kisan Mazdoor Panchayat (supra), the Apex Court stated that draft Rules wh ich are made to lie in nascent state for a long time cannot be the basis for mak ing appointment or recommendation and that Rules even in their draft stage can b e acted upon provided there is clear intention on the part of the government to enforce those rules in near future. 36. The records produced by BTC leave a lot to be desired. The recor ds are not found to be systematically arranged and pages are also not found in u niform chronological order. In the record produced by the BTC in File No. BTC/Lo ttery/27-2010, in the context of the proposal submitted by the respondent No. 3 addressed to ’The Chief’, BTC, for appointment as an exclusive and sole distribu tor of lotteries organized and promoted by the BTC, reliance has been placed in the note sheet, on Lottery Rules of 2007. It is also indicated there that the ag reement entered into with the consortium was subject to the provisions of Lotter y Rules of 2007 though the Rules was not assented to by the Governor. As the BTC Rules, 2007 was not even passed by the BTC, it cannot be said that the same was a draft rule of BTC. As such, contention of Mr. Choudhury that Rule 5 of BTC Ru les provides for appointment of selling agent only to the distributor and as suc h, the appointment of respondent No.3 is illegal, has no substance. May be, beca use of reference to BTC Rules, 2007 in the agreement dated 30.9.2009, Mr. Choudh ury had assumed that BTC Rules, 2007 was the draft Rule instead of Lottery Rules of 2007, which had been passed by the Council. In the aforesaid background, it appears to this Court that a conscious decision was taken by the BTC authorities to follow the Lottery Rules of 2007. In the note addressed to the Chief, EM in-charge, P. Secretary, 37. prepared by the Secretary on 29.10.2010, it was indicated that on the basis of t he papers submitted by the respondent No. 3, its present status of conducting th e Nagaland State Online Lotteries as sole distributor could not be established. It was noted that respondent No. 3 had assured the maximum revenue of Rs. 8.76 c rores per annum. It is also indicated that the writ petitioner was appointed as the sole and exclusive distributor for marketing, selling and distributing the c ouncil’s lotteries within the Bodoland territory as well as other States of Indi a for a period of five years. Referring to Rule 5 of the Lottery Rules of 2007, it was indicated that whenever any fresh appointment of distributor is required to be made, the council may make selection by inviting tenders. There is also a note dated 16.3.2011 of the Secretary to invite the respondent No. 3 for discus sion with reference to the application submitted by it for appointment as exclus ive sole distributor of the lotteries organized and promoted by the BTC. From th e note dated 28.3.2011 of the Executive Member, in-charge Lottery, it appears th at a meeting was held with some representatives of the respondent No. 3 and a pr oposal was placed before the (cid:28)Chief (cid:29) for appointment of respondent No. 3 as sole , exclusive distributor of BTC Lotteries and the same was approved on 29.3.2011 itself. Thereafter also, the Secretary had put a note to the Chief, EM in-Charge , Lottery and P. Secretary drawing attention of Rule 5 of the Lottery Rules of 2 007 which provided for floating of tenders whenever any fresh appointment of dis tributorship is made. The tenor of the said note indicates that the matter shoul d be reconsidered. It would appear that the P. Secretary had also agreed with th e view of the Secretary, Lottery that bid/open tender for running of lotteries w as required to be issued. However, approval dated 14.6.2011 was given to the eff ect that both the petitioner and the respondent No. 3 may be allowed to run the Bodoland lotteries. The agreement made between the respondent No. 3 and the BTC was approved by the (cid:28)Chief (cid:29) on 14.6.2011. 38. It appears that before the agreement was approved on 14.6.2011, it was executed on 13.6.2011. There is, of course, an overwriting in the date of approval of the agreement. At this juncture, the objection of Mr. Choudhury that the propos 39. al of respondent No.3 was submitted before an unknown authority may be disposed of. The proposal was submitted to ’The Chief’, BTC and the records indicate that the Chief Executive Member, BTC is addressed as ’The Chief’ in the note sheets and therefore, the submission lacks substance. 40. The agreement dated 13.6.2011 was signed by Sri Ranjit Kalita, J oint Secretary, BTC for and on behalf BTC. In the body of the agreement it is in dicated that the agreement was executed between BTC, through Mr. Ranjit Kalita, Secretary, Lotteries. The learned counsel for the petitioner had submitted that in view of Rule 3(13) of the Lotteries (Regulation) Rules, which required that t here shall be an officer not below the rank of Secretary to be designated by the Organising State as the designated authority, who shall be responsible for orga nizing the lottery in the State, the execution of the agreement on behalf of the BTC by the Joint Secretary is illegal and without jurisdiction. In Director General, ESI & Anr. -Vs- T. Abdul Razak, reported

41. in (1996) 4 SCC 708, the Apex Court laid down as follows: (cid:28)14. The law is well settled that in accordance with the maxim delegatus non pot est delegare, a statutory power must be exercised only by the body or officer in whom it has been confided, unless sub-delegation of the power is authorised b y express words or necessary implication (cid:29) 42. rat, reported in (1995) 5 SCC 302, the Supreme Court stated as follows: (cid:28)13. It has w, 7th Edn. at pp. 358-359 under the heading (cid:28)Surrender, Abdication, Dictation (cid:29) and sub-heading \Power in the wrong hands\ as below: In Anirudhsinhji Karansinhji Jadeja & Anr. -Vs- State of Guja stated by Wade and Forsyth in Administrative La \Closely akin to delegation, and scarcely distinguishable from it in some cases , is any arrangement by which a power conferred upon one authority is in substa nce exercised by another. The proper authority may share its power with some one else, or may allow someone else to dictate to it by declining to act w ithout their consent or by submitting to their wishes or instructions. The effect then is that the discretion conferred by Parliament is exercised, at least in part, by the wrong authority, and the resulting decision is ultr a vires and void. So strict are the courts in applying this principle that th ey condemn some administrative arrangements which must seem quite natural and pr oper to those who make them.....\. Ministers and their departments have several times fallen fou l of the same rule, no doubt equally to their surprise....\. 43. The letter dated 7.6.2011 issued by the Secretary, BTC indicates that on superannuation of one A.K. Boruah, ACS, Secretary, BTC, Ranjit Kalita, Joint Secretary, BTC, was entrusted with the Department of, amongst others, Lott ery for smooth functioning of departmental works. There is no averment in the pl eadings of the writ petitioner that he has been designated as designated authori ty. There is also no allegation that there is no designated authority or that th e designated authority had abdicated his power and therefore, the cases cited by the learned counsel for the petitioner are not found applicable in the facts of this case. The records reveal that the agreement was approved at the highest le vel of BTC and therefore, this Court is unable to accept the contention of the l earned counsel for the petitioner that the agreement is liable to be invalidated by reason of the Joint Secretary, BTC executing the agreement.

44. By the notice inviting bids dated 16.06.2009, the BTC invited bi ds to act as sole distributor of BTC for the BTC Lottery. The said notice was pu blished, according to the petitioner, on 21.06.2009 and accordingly, on being se lected on a bidding process, an agreement styled as (cid:28)agreement for appointment o f sole distributor (cid:29) was executed by the BTC authorities with the petitioner on 3 0.9.2009. A perusal of the said agreement shows that the petitioner was appointe d as BTC’s sole and exclusive distributor for marketing, selling and distributin g the Council’s Lotteries within the Bodoland territories as well as the other s tates in India for a period of 5 years. The petitioner had also accepted to inve st in infrastructure required for marketing and distribution of the Council’s Lo ttery tickets and Online games in Bodoland as well as the rest of India. The agr eement also recites that as the agreement envisaged substantial investment, the agreement shall be exclusive for appointment of distributors for the selling and distribution of the lottery tickets and Online games for a period of 5 years.

45. In Cambridge dictionary the meaning of sole is described as (cid:28)bei ng one only; single (cid:29). Sole also means that only one person or organization is in volved in an activity. In Oxford dictionary, sole means: 1) sole amongst other m eans solitary, lonely; secluded, 2) being, or consisting of, one person only, 3) in predicative or quasi-advb. use : With no other person or persons; without par ticipation, etc., in something, 4) one and only, singular, unique, unrivalled, 5 ) of things, rights, duties, etc.: Pertaining or due to, possessed or exercised by, vested in, etc., one person or corporate body to the exclusion of all others ; exclusive, 6) Uniform or unvaried, 7) of things, qualities, etc.: Standing alo ne. In Limras Lotteries (supra) a Division Bench of this court had o 46. ccasion to consider the meaning of the expressions (cid:28)sole distributor (cid:29) and (cid:28)sole distributors (cid:29) as appearing in the Arunachal Pradesh State Lotteries Rules, 2001. The appeal was preferred against a judgment and order of a learned Single Judge whereby the agreement dated 25.02.2002 entered into between the State responden ts and the appellant appointing the latter as a distributor had been set aside. 47. The State of Arunachal Pradesh had entered into an agreement wit h M/s N.V. Marketing (P) Ltd., the petitioner, as its distributor by an agreemen t dated 10.10.1997 for a period of 5 years and in Clause (4) of the said agreeme nt, it was mentioned that all the lotteries of the Government of Arunachal Prade sh covering the period of the agreement are to be distributed through the writ p etitioner only. The case of the petitioner was that the writ petitioner was appo inted as the sole distributor and it had created a nationwide infrastructure inv esting huge amount of money. In the meantime, Lotteries (Regulation) Act, 1998, had come into force w.e.f. 2.10.1997. In exercise of powers conferred by Section 12 of the Lotteries (Regulation) Act, 1998, Arunachal Pradesh State Lotteries R ules, 2001 was framed and that came into effect with immediate effect. The terms of the agreement with the petitioner was extended by appointing the writ petiti oner as the sole distributor. The observations of this Court in paragraphs 32, 34 and 37 are

48. relevant and the same are quoted herein below : (cid:28)32. It is note worthy that on the body of the Rules both the expressions (cid:28)Sole Distributor (cid:29) and (cid:28)Sole Distributors (cid:29) appear. Does the expression (cid:28)Sole Distribut or (cid:29) connote a lone or only Distributor for the purpose of Arunachal Pradesh Stat e Lotteries in terms of the Rules? The answer according to us lies in the correc t interpretation of the word (cid:28)Distributor (cid:29) appearing in Section 4(c) of the Act and the expression (cid:28)Sole Distributor (cid:29) used in the Rules. (cid:29) & & & & & & & & & & & & & & & & & & & & & & & & &. (cid:28)34. The Rules as noticed hereinabove have been framed in exercise of the powers under Section 12 of the Act and have been framed for carrying out the purpose o f the Act. It is in the form of a subordinate legislation and, therefore, cannot supplement any provision of the Act. Rather it has to be subservient to the Act and in tune with it. The legislature in its wisdom has used the word (cid:28)Distribut ors (cid:29) (emphasis supplied), in Section 4 (c) of the Act. Under the said clause, St ate Government has been mandated to sell tickets of a State organized lottery ei ther by itself or through Distributors or Selling Agents. The word (cid:28)Distributors (cid:29) has been used evidently in the plural number. Section 13 of the General Clause Act, 1987, lays down that all the Central Acts and Regulations unless their is anything repugnant in the subject or context the words in singular shall include the plural and vice versa. On reading of the provisions as a whole, we do not f ind any repugnancy in the subject or context in construing the word (cid:28)Distributor s: used in the Section 4(c) to include the word (cid:28)Distributor (cid:29) in singular. In ot her words, we are of the view that the word (cid:28)Distributors (cid:29) used in Section 4(c) of the Act envisages (cid:28)Distributor (cid:29) as well. As noticed hereinabove, the expressi on (cid:28)Sole Distributor (cid:29) defined in Section 2(i) means the firm or party with whom the agreement for distribution of lottery tickets is executed. Rule 4 deals with the appointment of (cid:28)Sole Distributor (cid:29) requiring that the Government may appoint a person or persons or firm having at least three years of experience in runnin g lotteries as the (cid:28)Sole Distributor (cid:29). A combined reading of the definition o