R. M. D. Chamarbaugwalla Vs. The Union of India

Petitioner- R. M. D. Chamarbaugwalla

Respondent- The Union of India

Decided On: 09.04.1957

Equivalent Citation:

1. 1957 AIR 628
2. 1957 SCR 930

Bench:

1. T.L. Venkatarama Aiyyar
2. Sudhi Ranjan Das (CJ)
3. Bhuvneshwar P. Sinha
4. S.K. Das
5. P.B. Gajendragadkar

Cases Referred:

1. The Bengal Immunity Company Limited v. The State of Bihar and others
2. Commonwealth of Australia v. Colonial Sugar Refining Company Limited
3. Attorney- General for Alberta v. Attorney-General for Canada
4. The State of Bombay and Another v. F. N. Balsara
5. The State of Bombay v. The United Motors (India) Ltd., and others
6. Punjab Province v. Daulat Singh and others
7. Romesh Thappar v. State of Madras
8. Chintaman Rao v. State of Madhya Pradesh
9. Macleod v. Attorney-General for New, South Wales
10. Presser v. Illinois
11. Dorchy v. State of Kansas
12. Bowman v. Continental Co.

Facts:

1. Pursuant to resolutions passed by the legislature of various States under Article 252(1) of the Constitution of India, the Prize Competitions Act, (42 of 1955) was enacted by the Parliament.
2. The Prize Competitions Act, (42 of 1955) was brought into force by the Central Government on April 1, 1956.
3. The petitioners are engaged in the activities of promoting and conducting Prize Competitions in the various States of India.
4. The present writ petitions have been filed in view of Article 32 of the Constitution of India, questioning the validity of certain provisions of the aforementioned Act and rule framed thereunder.
5. The petitions were heard along with Civil Appeal No. 134 of 1956, wherein the validity of the Bombay Lotteries and Prize Competitions Control and Tax Act, 1948 was impugned on grounds some of which are raised in the present petitions.

Issues:

1. Whether, on the definition of ‘prize competition’ in s.2 (d), the Act applies to competitions which involve substantial skill and are not in the nature of gambling.
2. And if it does, whether the provisions of ss. 4 and 5 and rr. II and 12 which are, ex concessi void, as regards such competitions, can on the principle of severability be enforced against competitions which are in the nature of gambling.

Ratio Decidendi:

1. If and when a part of a statute may be found to be void, it may still be enforced as regards the rest of the statute that is valid, if it is severable from what is invalid. It is immaterial, for the purpose of this rule, whether the invalidity of such statute arises by reason of its subject matter being outside the competence of legislature or by reason of its provisions contravening constitutional prohibition.
2. In order to determine whether the impugned provisions are severable in their application to competitions of a gambling character, assuming of course that the definition of 1 prize competition’ in s. 2(d) is wide enough to include also competitions involving skill to a substantial degree, it would be useful to refer to the rules of construction laid down by the American Courts summarized hereunder:

• The intention of the Legislature is the determining factor when it comes to determining whether the valid parts of a statute are separable from the invalid parts thereof. The test being, whether the Legislature would have enacted the valid part if it had knowledge of the fact that the rest of the statute was invalid.
• If the invalid part of a statute is mixed up with the valid part to an extent so as to make it inextricable, the invalidity of such part of the statute shall result in the invalidity of the entire Act. On the other hand, if the valid and invalid parts are so distinct and separate that striking out the invalid part makes the remainder in itself a valid code independent of the rest, then it will be upheld notwithstanding that the rest has become unenforceable.
• Even when a clear distinction exists between the provisions that are valid and the provisions that are invalid, if all the provisions form a part of a single scheme that is intended to operate as a whole, the invalidity of a single part shall amount to the invalidity of the Act as a whole.
• Likewise, when the valid and invalid parts of a statute are distinct and independent and do not form part of a scheme but what remains once the invalidity has been omitted is so thin and truncated as to be in substance different from what it was when it emerged out of the legislature, then also it will be rejected in its entirety.
• The separability of the valid and invalid provisions of a statute does not depend on whether the law is enacted in the same section or different sections; it is not the form, but the substance of the matter that is material, and that has to be ascertained on an examination of the Act as a whole and of the setting of the relevant provisions therein.
• If what remains after striking out the invalid provisions of a statute cannot be enforced without making any alterations and modifications therein, the whole of the Act must be struck down as void, as otherwise, it will result in judicial legislation.
• In the process of determining the legislative intent on the question of separability, it will be legitimate to take into account the history of the legislation, its object, the title and the preamble to it.

Judgment:

1. In the Civil Appeal No. 134 of 1956 heard along with the petitions, it was held that “trade and commerce” as protected by Article 19(1) (g) and Article 301 of the Constitution are only such activities that can be regarded as lawful trading activities, and gambling does not fall within the purview of trade, but is res extra commercium, and that it does not fall within the purview of those Articles.
2. The difference between the two classes of competitions is as clear-cut as that between commercial and wagering contracts.
3. On the facts, there might be some difficulty when deciding if a given competition should fall within one category or not, but when its true character is determined, it shall fall under one or the other.
4. The impugned provisions, assuming that they apply by virtue -of the definition in s. 2(d) to all kinds of competitions, are severable in their application to competitions in which success does not depend to any substantial extent on skill. In the result, both the contentions must be found against the petitioners, and these petitions must be dismissed with costs. There will be only one set of counsel’s fee.
5. The petitions, not amounting to any merit, were thereby dismissed.

Conclusion:

Upon a considerable amount of deliberation of relevant cases and a thorough interpretation of the statute, it was appropriately concluded by the Supreme Court that the provisions so impugned to be invalid by the petitioners, were indeed valid following the application of the doctrine of severability, and that competitions that had skill as the main deciding factor of the outcome of the competition would not come within the ambit of the Prize Competition Act, 1955.