Case: M/S.Tashi Delek Gaming Solutions Ltd&amp;Anr Vs. State Of Karnataka

dispute must fall within one or the other category specified in clauses (a), (b) and (c). 49. In State of Karnataka vs. Union of India (1977) 4 SCC 608 ), this Court observed: "It has to be remembered that Article 131 is traceable to Section 204 of the Government of India Act. The jurisdiction conferred by it thus originated in what was part of the federal structure set up by the Government of India Act, 1935. It is a remnant of the federalims found in that Act. It should, therefore, be widely and generously interpreted for that reason too so as to the advance the intended remedy. It can be invoked, in my opinion, whenever a State and other States or the Union differ on a question of interpretation of the Constitution so that a decision of it will affect the scope or exercise of governmental powers which are attributes of a State. If makes no difference to the maintainability of the action if the powers of the State, which are Executive Legislative, and Judicial are exercised through particular individuals as they necessarily must be. It is true that a criminal act committed by a Minister is no part of his official duties. But, if any of the organs of the State claim exclusive power to take cognizance of it, the State, as such, becomes interested in the dispute about the legal competence or extent of powers of one of its organs which may emerge". 50. Yet again in Union of India vs. State of Rajasthan (1984) 4 SCC 238 ), it was observed: "On a careful consideration of the whole matter in the light of the decisions of this Court referred to above, we feel that Article 131 of the Constitution is attracted only when a dispute arises between or amongst the States and the Union in the context of the constitutional relationship that exists between them and the powers, rights, duties, immunities, liabilities, disabilities etc. flowing therefrom. Any dispute which may arise between a State in the capacity of an employer in a factory, a manufacturer of goods subject to excise duty, a holder of a permit to run a stage carriage, a trader or businessman carrying on business not incidental to the ordinary functions of Government a consumer of railway services etc. like any other private party on the one hand and the Union of India on the other cannot be construed as a dispute arising between the State and the Union in discharge of their respective executive powers attracting Article 131 of the Constitution. It could never have been the intention of the framers of the Constitution that any ordinary dispute of this nature would have to be decided exclusively by the Supreme Court. It is well to remember that the constitutional proposals of the Sapru Committee advocated the strengthening of the position of the Federal Court in India and widening its jurisdiction on the original side so that the Federal Court could act as an interpreter and guardian of the Constitution and as a tribunal for the determination of the disputes between the constituent units of the Federation. The Joint Committee on Indian Constitutional Reforms was also of opinion that the object of the conferring exclusive original jurisdiction on the Federation Court was that the disputes of the kind specified between the Federation and the Provinces as the constituent units of the Federation should not be left to be decided by courts of law of a particular unit but be adjudicated upon only by the highest tribunal in the land which would be beyond the influence of any one constituent unit. The Special Committee consisting of Sriyuts S. Varadachariar, Alladi Krishnaswami Ayyar, B.L. Mitter, K.M. Munshi and B.N. Rau appointed by the Constituent Assembly to consider and report on the constitution and powers of the Supreme Court suggested "that the Supreme Court, like the Federal Court under the 1935 Constitution, would be the best available forum for the adjudication of all disputes between the Union and a unit and between one unit and another and proposed that the court should have an exclusive original jurisdiction in such disputes". (Vide The Framing of Indias Constitution - A study by Shri B. Shiva Rao at p.483). Considered in the light of the foregoing the conclusion becomes inevitable that disputes of the nature involved in this case could not have been in the contemplation of the framers of the Constitution when they adopted Article 131 of the Constitution." Conclusion: 51. The Division Bench of the High Court accepted the position that the Appellants herein are statutory agents but it evidently failed to take into consideration the status of the Appellants vis-a-vis their contractual rights and obligations with their principal coupled with their individual rights to maintainable their writ petitions in proper perspective. It is no doubt true that had the State of Sikkim or the State of Meghalaya intended to sue the State of Karnataka independently; in terms of Article 131 of the Constitution of India the only forum where the dispute between them could have been resolved is this Court alone but when such a lis is brought by the State jointly with their who had also independent cause of action and had a legal right to maintain writ application questioning the legality and/ or validity of the said notification issued by the State, a suit in terms of Article 131 of the Constitution of India would not have been maintainable. 52. The Appellants herein were not busy bodies. They had an interest in the subject-matter of the writ petition. They were, thus, not merely strangers having no right whatsoever in the matter. 53. It has not been contended, nor could it be contended that the Appellants are mere smoke screens of the States of Sikkim and Meghalaya. In absence of such a plea and in view of the fact that the Appellants here not been held to be mere strangers without having any legal right, we

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]22. The Appellants herein were appointed as agents of the State, which were governed by contract, in terms whereof, they had invested a huge amount. If the statements made in the writ petitions to which we have adverted to hereinbefore are correct, in the event the impugned notification is implemented the Appellants would not only loose a huge amount of money which they have invested but also would 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. The Act also postulates that in the event an agent violates the notification issued by the State, he would face the penal consequences laid down therein. The notification has the force of law. In the aforementioned backdrop, the question which arises for consideration is as to whether the Appellants herein had any independent right to question the validity of the said notification.23. The learned Single Judge, as noticed hereinbefore, held that they did not have any such right. On the other hand, the Division Bench was of the opinion :"....May be, the appellants also got adversely affected with the prohibition imposed by the State of Karnataka but it is only incidental because they are the agents of the State of Sikkim and can have their rights only through their principal....."24. We cannot subscribe to the said view.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. We have noticed hereinbefore that Section 4(c) of the Act envisages appointment of agents, which empowers the State Government to sell the tickets either itself or through distributors or selling agents. Such distributors or selling agents may also be companies or body corporates. Section 7(3) of the Act, as noticed hereinbefore, provides for a penal consequence. If any person acts as an agent or promoter or trader in any lottery, he may be subjected to punishment if he sells, distributes or purchases tickets of such lottery in contravention of the provisions of the said Act, which may include any notification issued under Section 5 of the Act.If by a statutory provision the right of an agent to carry on his business is affected, he may, in our considered opinion, in his own right maintain an action.40. The High Court, therefore, was not correct in holding that they had no personal right to enforce despite of the fact that they would suffer injuries or would otherwise be prejudiced by the notification issued by the State of Karnataka. It would, therefore, not be correct to contend that they could enforce their rights only through their principal and not independently. The Appellants had a legal right to carry on business. Such a right having been impugned by reason of the impugned notification, a writ petition at their instance was maintainable.If the Appellants herein had a legal right, they could seek redressal for violation thereof before an appropriate forum. The locus standi to maintain a writ application even otherwise has received liberal interpretation.For determining the question as regard maintainability of the suit before this Court, it is necessary to consider as to whether the appellants herein whether independently or together with their principals could maintain a suit. In view of a large number of decisions of this Court, evidently, they could not.45. Even the States of Sikkim and Meghalaya filed suits against the State of Karnataka in this Court, the independent right of the Appellants herein to maintain independent action before the appropriate forum could not have been taken away.Agent has been defined in Section 182 of the Indian Contract Act, 1872, to mean a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the principal. Section 185 of the Contract Act postulates that no consideration is necessary to create an agency. The authority of an agent may be express or implied in terms of Section 186 thereof. Section 202 of the Contract Act 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 its own name, is governed by Section 230 of the Contract Act, which reads as under :"230. Agent cannot personally enforce, nor be bound by, contracts on behalf of principle.- In the absence of any contract to that effect an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them.An agent coupled with interest has a right to sue. He may in certain situations be sued as regard his own liabilities independent of his principal.Once it is held, in view of the aforementioned pronouncement 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.If the agent was to be prosecuted for violation of the term of the notification, he could challenge the validity thereof. A fortiori, a quia timet application would also be maintainable. A person must be held to have access to justice if his right in any manner whether to carry on business or threat to his liberty in infringed. Access to justice is a human right.