inder Pal Singh Chadha Vs. Government of National Capital Territory of Delhi - Court Judgment

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constitution of india, 1950 - article 298--applicability of--explained--prohibition of draw of lotteries organized by delhi government--petitioner challenged prohibition and pleaded decision of govt. is ultra virus of constitution of india and govt. of nctd act, 1991, without jurisdiction and mid ab-initio. respondent pleaded by virtue of article 298 powers to close down delhi lotteries vests in delhi government. held : union territory of delhi cannot be equated with the states. constitution had only conferred limited powers on delhi, article 298 does not apply to the union territory of delhi. impugned action is unconstitutional and ultra vires. delhi government granted six months time to approach govt. of india for appropriate directions to close down the lotteries. article 239aa (69th amendment act)--special provisions with respect to delhi--powers to make laws--powers of govt. of nctd--union territory--petitioner challenged decision of govt. of nctd to close down delhi lotteries and pleaded article 298 has no applicability in so far as the delhi government is concerned. article 298 does not apply to union territories--applicability discussed. interpretation of--explained--held : a union territory cannot be equated with a 'state'. delhi is not a state for the purpose of article 298 of the constitution. - - article 300(1), inter alia, provides that the government of india may sue or be sued by the name of the union of india and the government of a state may sue or be sued by the name of the state and may, subject to any provisions, which may be made by act of parliament or of the legislature of the such state enacted by virtue of powers conferred by this constitution, sue or be sued in relation to their respective affairs in the like cases as the dominion of india and the corresponding provinces or the corresponding indian states might have sued or been sued, if this constitution had not been enacted. in the counter-affidavit it has also been pleaded that delhi government had received several complaints as a result of the lotteries, inter alia, to the effect that a large number of people from different walks of life, people with poor means, students and employees were being attracted by the lure of lotteries and they were indulging in reckless gambling and were being ruined by losses arising out of the gambling by lotteries and also that single digit lottery had promoted addiction to betting.y.k. sabharwal, j.(1) the challenge in this petition is to the constitutional validity of the decision of the respondent - government of national capital territory of delhi ( for short-'delhi government') prohibiting draw of lotteries organized by delhi government. the delhi government with the approval of the lieutenant governor passed the order directing that delhi lotteries be closed down w.e.f. 3rd january, 1995. the impugned decision of the delhi government, it has been urged by the petitioners, is ultra virus the constitution of india and also the provisions of the government of national capital territory of delhi act 1991 ( for short the act). it has been claimed that the impugned action is without jurisdiction and void ab initio since neither the provisions of the constitution nor of the act vest any power with the delhi government or lieutenant governor to take the impugned decision. according to the petitioners the power to prohibit organising of lotteries in delhi vests only in the president of india as delhi is a union territory, which is administered by the president under part-viii of the constitution. (2) according to the respondents, power to close down delhi lotteries vests in delhi government by virtue of article 298 of the constitution. it has been urged that on insertion of article 239-aa in the constitution by 69th amendment, the provisions of article 298 have become applicable to delhi and, thereforee, the impugned decision is intra vires. (3) there is no serious dispute about facts which lie in a narrow compass. (4) it appears that by a letter dated 17th april, 1969 addressed to lieutenant governor, delhi on behalf of government of india, ministry of home affairs, the permission of the president of india was conveyed to the occasional running of lotteries by delhi development authority, subject to the following conditions: (i)tickets of the lotteries will not be sold in another state without the express consent of the state government concern. (ii)the net proceeds of lotteries will be spent only on such welfare schemes as have received the approval of government of india. (5) in view of the aforesaid, lotteries were being organized by delhi development authority. however, the chief secretary by order dated 31st march, 1992 directed that pursuant to the decision of the government of india, the administrator, union territory, of delhi is pleased to order the transfer of delhi lotteries from delhi development authority to the delhi administration w.e.f. 1st april, 1992 on 'as is where is basis' and that the finance secretary, delhi administration, delhi shall function as director, delhi lotteries and shall exercise all such powers as hitherto vested in the finance member, delhi development authority. it was ordered that the existing staff of the delhi lotteries shall continue to perform the duties and responsibilities assigned to them till further orders and their service conditions shall be decided in due course. later, as stated above, the delhi government decided to close down the lotteries w.e.f. 3rd january, 1995, which action is under challenge before us. (6) it is necessary to examine the relevant provisions of the constitution of india to appreciate the respective contentions particularly the contention about applicability of article 298 after enforcement of 69th constitutional amendment. article-1(1) of the constitution of india stipulates that india shall be a union of states. the states and the territories thereof shall be as specified in the first schedule ( article-1(2) ). the territory of india shall comprise: a) the territories of the states; b) the union territories specified in the first schedule; and c) such other territories as may be acquired (article- 1 (3) ). 'delhi' is one of the union territories mentioned in the first schedule to the constitution of india. the union territory of delhi had neither an assembly nor power to legislate prior to the enforcement of 69th amendment of the constitution. article 239aa was inserted in the constitution by the constitution (69th amendment) act 1991. article 239aa makes special provisions with respect to delhi. article 239aa(1) provides that as from the date of the commencement of the constitution (69th amendment) act, 1991, union territory of delhi shall be called the national capital territory of delhi and the administrator thereof appointed under the article 239 shall be designated as the lieutenant governor. article 239(1) provides that save as otherwise provided by parliament by law, every union territory shall be administered by the president acting, to such extent as thinks fit, through an administrator to be appointed by him with such designation as he may specify. article 239aa(2)(a) stipulates that there shall be a legislative assembly for the national capital territory and the seats in such assembly shall be filled by members chosen by direct election from territorial constituencies in the national capital territory. article 239aa(3)(a) stipulates that subject to the provisions of this constitution, the legislative assembly shall have power to make. laws for the whole or any part of the national capital territory with respect to any of the matters enumerated in the state list or in the concurrent list insofar as any such matter is applicable to union territories except matters with respect to entries 1,2 and 18 of the state list and entries 64, 65 and 66 of that list insofar as they relate to the said entries 1,2 and 18. article 239-aa3(b) stipulates that nothing in sub-clause (a) shall derogate from the powers of the parliament under the constitution to make laws with respect to any matter for a union territory or any part thereof. the distribution of legislative powers between union and states is dealt with in part-xi of the constitution. article 246(1) provides that notwithstanding anything in clauses (2) and (3), parliament has exclusive power to make laws with respect to any of the matters enumerated in list-1 in the seventh schedule (referred to as the 'union list'). article 246(3) states that subject to clauses (1) and (2), the legislature of any state has exclusive' power to make laws for such state or any part thereof with respect to any of the matters enumerated in list-11 in the seventh schedule (referred to as the 'state list'). entry-40 in the union list relates to lotteries organized by the government of india or the government of a state. entry-34 in the state list relates to betting and gambling. (7) the contention of mr.nigam, learned counsel appearing for the delhi government is that in view of the provisions of article 298, the delhi government has power and jurisdiction to make orders in respect of lotteries organized by the government of delhi. the said article reads as under: article 298 power to carry on trade, etc the executive power of the union and of each state shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose: - provided that- (a)the said executive power of the union shall, in so far as such trade or business or such purpose is not one with respect to which parliament may make laws, be subject in each state to legislation by the state; and (b)'the said executive power of each state shall, in so far as such trade or business or such purpose is not one with respect to which the state legislature may make laws, be subject to legislation by l'arliament.' (8) on the other hand, the submission of mr.aman lekhi, learned counsel appearing for the petitioner is that article 298 has no applicability insofar as the delhi government is concerned. he contends that the said article does not apply to the union territories. the main aspect to be considered, thereforee, is whether article 298 is applicable to union territories or not. (9) it is undisputed that parliament has not made any law respecting the matter governed by entry-40 of the union list. thus, if we come to the conclusion that article 298 applies to union territories in that event the action impunged in the writ petition will have to be held to be intra vires. on the other hand, if we come to the conclusion that article 298 applies only to the states enumerated in the first schedule and not to the union territories enumerated in the said schedule, the impugned action will have to be held to be ultra virus the constitution. (10) it was contended for the delhi government that on insertion of article 239aa in the constitution and conferment of legislative power on the delhi assembly in terms of article 239aa(3)(a) the provision of article 298 apply to the delhi government. it may be noted that original article 298 was substituted by the constitution (seventh amendment) act 1956 and the words 'the states in .part a and b of the first schedule' were substituted and the word 'state' was inserted in article 298. in this regard reference may also be made to article 73 in which the words and letters 'specified in part a or part b of the first schedule' were omitted by the seventh amendment. article 73 deals with extent of executive power of the union. articles 73 and 298 are to be read together to determine the extent of executive power of the state to. carry on a trade or business. article 73 is subject to the provisions of the constitution including article 298. proviso (b) of article 298 says that the executive power of a state may extend to a trade or business with respect to which the state legislature has no power to make laws subject to the condition that such executive power of a state shall be subject to legislation by parliament. is delhi a state for purpose of article 298? (11) apart from aforesaid constitutional provisions, amendments were also made in article 162, which deals with the extent of the executive power of the state. reference may also be made to article 80 of the constitution. article 80 deals with composition of the council of states. article 80(2) stipulates that the allocation of seats in the council of states to be .filled by representatives of the states and the union territories shall be in accordance with the provisions in that behalf contained in the fourth schedule. the words 'and of the union territories' were added by the seventh amendment. it seems that wherever it was intended that a particular provision shall be applied to a union territories, it was so specified. in this regard, reference can also be made to article 268 and article 269 of the constitution of india. (12) the provisions of article 299 and article 300 read with section 52 of the act also throws light on the point in issue. article 299(1) inter alias provides that all contracts made in the exercise of the executive power of the union or of a state shall be expressed to be made by the president, or by the governor of the state, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the president or the governor by such persons and in such manner as he may direct or authorise. article 300(1), inter alia, provides that the government of india may sue or be sued by the name of the union of india and the government of a state may sue or be sued by the name of the state and may, subject to any provisions, which may be made by act of parliament or of the legislature of the such state enacted by virtue of powers conferred by this constitution, sue or be sued in relation to their respective affairs in the like cases as the dominion of india and the corresponding provinces or the corresponding indian states might have sued or been sued, if this constitution had not been enacted. section 52 of the act, inter alia, declares that all contracts in connection with the administration of the capital are contracts made in the exercise of the executive power of the union; and also suits and proceedings in connection with the administration of the capital shall be instituted by or against the government of india. all the aforesaid provisions show that delhi, a union territory cannot be equated with a 'state' and thus it is not possible for this court to accept the contention put forth on behalf of the delhi government that article 298 would be applicable to the present case. delhi is not a state for the purposes of article 298 of the constitution. (13) reference may also be made to section 41 of the act which sets out matters in which lt.governor can act in his discretion. the said section, inter alia, authorise the lt.governor to act in his discretion in a matter which falls outside the purview of the powers conferred on the legislative assembly of delhi but in respect of which powers or functions are entrusted or delegated to him by the president. admittedly, there is no delegation in respect of the matters in question in favor of the lt.governor. (14) mr.nigam, however, contended that the lotteries being part of betting and gambling, the delhi government in exercise of power under article 239aa(3)(a) has the power to deal with the matter. the said article is, however, subject to the provisions of other parts of the constitution and only deals with the matters on which the legislative assembly shall have power to make laws for the whole or any part of national capital territory of delhi. there is no dispute that the lotteries are part of betting and gambling but that by itself does not clothe the power on delhi government under article 298 of the constitution since it is not a state as understood by constitution of india. reliance was placed by mr.nigam on decision of supreme court in the case of h.anraj and others etc. vs . state of maharashtra : [1984]2scr440 in support of the proposition that the state government has unfettered right to conduct the lotteries. in our view this decision has no applicability to the point in issue before us. in the said decision the supreme court was considering the right of a state to conduct lotteries subject matter of entry no.40 of the union list in absence of any law having been enacted under the said entry by the union. the court held that the lotteries are part of betting and gambling and, thereforee, in view of entry 34 of the state list in absence of legislation by the union, the state of maharashtra had the power to conduct lotteries. the position of union territory of delhi, in view of constitutional provisions noticed above, cannot be equated with the states. the constitution even after creation of legislative assembly for delhi have only conferred limited powers on delhi as enumerated in part-vhi of the constitution dealing with union territories. we are unable to accept the argument that the executive power under article 298 is co-terminus with the limited legislative power conferred by article 239aa(3)(a). (15) in view of aforesaid discussion, to our mind article 298 does not apply to the union territory of delhi. as a consequence of non-applicability of article 298 and respondents not having placed reliance on any other provision, it has to be held that the impugned action of the respondents is unconstitutional and ultra vires. (16) before concluding we may consider another aspect. in the counter-affidavit it has also been pleaded that delhi government had received several complaints as a result of the lotteries, inter alia, to the effect that a large number of people from different walks of life, people with poor means, students and employees were being attracted by the lure of lotteries and they were indulging in reckless gambling and were being ruined by losses arising out of the gambling by lotteries and also that single digit lottery had promoted addiction to betting. if on account of these reasons or any other administrative reason, the delhi government had taken a decision to close down its lotteries, the proper course for it was to approach government of india for appropriate directions. we, however, make it clear that from the aforesaid conclusion in respect of article 298, it should not be understood that delhi government shall at once re-start the lotteries. having regard to the facts and circumstances of the case, we grant to delhi government six months time to approach government of india for appropriate directions to close down the lotteries. the necessary consequences of this decision will follow after lapse of six months. (17) accordingly, the rule is made absolute in above terms. in the facts and circumstances of the case, parties are left to bear their own costs.