Sikkim High Court
Serenity Trades Pvt. Ltd. And Anr vs Union Of India And Ors on 7 December, 2021
Author: Bhaskar Raj Pradhan
Bench: Bhaskar Raj Pradhan
THE HIGH COURT OF SIKKIM: GANGTOK
(Civil Extra Ordinary Jurisdiction)
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SINGLE BENCH: HON'BLE MR. JUSTICE BHASKAR RAJ PRADHAN, JUDGE
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W.P. (C) No. 08 of 2019
1. Serenity Trades Pvt. Ltd.
F-201, Kailash Vaibhav Complex,
Ghatkopar Powai Link Road,
Vikhroli (W), Mumbai - 400 079.
Through its Authorised Representative.
2. Mr. Jai Pratap Singh Chauhan,
Director, Serenity Trades Pvt. Ltd.
F-201, Kailash Vaibhav Complex,
Ghatkopar Powai Link Road,
Vikhroli (W) Mumbai - 400 079.
..... Petitioners
Versus
1. The Union of India,
Through the Secretary,
Ministry of Home Affairs,
North Block, Central Secretariat,
New Delhi - 110 001.
2. State of Sikkim,
Through Principal Secretary,
Finance, Revenue & Expenditure Department,
Government of Sikkim,
Gangtok, Sikkim.
3. Director of State Lotteries,
Government of Sikkim,
Deorali, Gangtok, Sikkim.
..... Respondents
An application under Article 226 of the Constitution of India.
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Appearance:
Mr. Surajit Dutta, Advocate and Ms. Rachhitta Rai,
Advocate for the Petitioners.
2
W.P. (C) No. 08 of 2019
Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors.
Mr. Karma T. Gyatso, Advocate for Respondent No.1.
Mr. Vivek Kohli, Advocate General with Mr. Hissey
Gyaltsen, Assistant Government Advocate for the
Respondents No. 2 & 3.
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Date of hearing : 09.11.2021.
Date of judgment : 07.12.2021.
JUDGMENT
Bhaskar Raj Pradhan, J.
1. The present writ petition seeks refund of payments made as draw charges by the petitioner under Rule 3(11) of the Lotteries (Regulation) Rules, 2010 (2010 Rules).
2. On 14.10.2015, this court struck down Rule 3(11) of the 2010 Rules as ultra vires the provisions of the Lotteries (Regulation) Act, 1998 (Lotteries Act) in M/s Shubh Enterprises vs. Union of India in W.P. (C) No. 41 of 2013. The Union of India preferred a Special Leave Petition (SLP) (C) CC No.11534/2016 before the Supreme Court which was dismissed vide order dated 05.09.2016. Pursuant thereto the petitioners approached the State of Sikkim (respondent no.2) vide letters dated 17.03.2017, 12.12.2018 and 23.01.2019 seeking refund of the draw charges paid by them in terms of the struck down Rule 3(11) of the 2010 Rules. The respondent no.2 did not reply and therefore, the petitioner approached this court by filing the present writ 3 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. petition. It seeks a direction upon the respondent to refund the draw charges as deposited by the petitioner.
3. The Director of State Lotteries, Government of Sikkim (respondent no.3) filed a counter affidavit on 20.07.2019. The respondent no.3 took a plea of unjust enrichment by the petitioners on the ground that the petitioners had failed to establish that the draw charges amounting to Rs.9,30,45,000/- deposited was borne by them and that the burden had not been passed on to the purchasers of lottery. It was also pleaded that as the Organising States who were liable to pay the draw charges had not been impleaded although they were necessary parties the petitioners did not have the locus standi to file the writ petition and consequently was not maintainable. Additionally, it was averred that the petitioners had approached this court after more than three years and therefore, the writ petition was barred by limitation. It was contended that the judgment of this court dated 14.10.2015 passed in M/s Shubh Enterprises (supra) could not be applied retrospectively and as such, the petitioners have no right to claim the entire amount which was paid to the respondents from 2010 to 2015.
4. On 31.07.2019, the petitioners filed the rejoinder. The petitioners contended that since the petitioner in M/s Shubh 4 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. Enterprises (supra) was also a distributor/selling agent who had raised the same issue before this court which had laid down the law, the petitioners were entitled to claim the relief. The plea of unjust enrichment was contested and it was stated that the draw charges were paid from their own pocket and the respondent no.3 had also issued receipts acknowledging the payment. It was submitted that as the petitioners were claiming the relief directly from the respondent no.3 on the basis of law it was not necessary to implead any other party and that the Organising States were not necessary parties.
5. On 27.08.2019, the Principal Secretary/Additional Chief Secretary, Finance Department, Government of Sikkim (respondent no.2) filed an affidavit stating that he was relying upon the counter affidavit filed by the respondent no.3 on 20.07.2019.
6. In compliance to the order dated 05.11.2019 passed by this court granting liberty to the petitioners to file better affidavit to show that the petitioners have actually paid the draw charges of Rs.2000/- per draw from their own pocket an affidavit was filed on 01.02.2020 by them stating that they had paid the draw charges from their own sources. In support thereof, the petitioners also filed bank statement of 5 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. account maintained by them in the HDFC Bank Limited reflecting payments made for the period 26.08.2010 to 31.01.2016 for a total amount of Rs.9,30,54,000/-. The petitioners also filed a certificate from the chartered accountant stating that the expenses made towards the draw charges of Rs.2000/- per draw had been reflected in the petitioners profit and loss account for the financial year 2010-2011, 2011-2012, 2012-2013, 2013-2014, 2014-2015 and 2015-2016.
7. The respondent no.2 filed its reply dated 23.03.2020 to the affidavit dated 01.02.2020 filed by the petitioners disputing the facts stated therein. It was contended that neither the bank statements nor the profit and loss account proved that the draw charges was paid by the petitioners from their own sources. According to them, it only reflected that payment had been made through this account.
8. In compliance to the order dated 29.06.2020, the petitioner no.2 filed an affidavit on 17.07.2020 in response to paragraph 5 of the reply affidavit filed on 23.03.2020 by the respondent no.2. It was contended that the petitioner had paid the draw charges from its own source of income and same had not been collected from the customer of the online lottery sold by the petitioner in the State of Sikkim. If 6 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors.
the draw charges had been recovered from any customer/retailer/agent/subagent/seller, it ought to be shown on the income side in the profit and loss account of the petitioner, which was not so, as it clear from the documents filed. An additional certificate dated 07.07.2020 issued by the auditor of the petitioner company was also filed in which it has been confirmed that the draw charges had not been recovered from any of his agents, sub-agents, seller, etc. The petitioner, thus, contended that it had been adequately established that the burden of the draw charges had not been passed on by the petitioners.
9. Pursuant to the order dated 30.03.2021, the petitioner filed yet another affidavit dated 07.04.2021 along with a copy of agreement dated 09.05.2005 executed between the State of Sikkim and M/s Summit Online Trade Solutions Pvt. Ltd.; agreement dated 09.11.2012 executed between State of Sikkim and Summit; agreement dated 29.05.2012 executed between State of Mizoram and Summit; agreement dated 15.04.2014 executed between State of Mizoram and Summit; agreement dated 06.05.2010 executed between State of Goa and M/s Sugal & Damani Enterprises Pvt. Ltd.; agreement dated 27.07.2015 executed between the State of Arunachal Pradesh and Summit; and agreement dated 7 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. 08.08.2010 executed between M/s Sugal & Damani Enterprises Pvt. Ltd. and the petitioner.
10. On 12.08.2021 the respondent no.2 filed a reply affidavit to the petitioner's affidavit dated 07.04.2021 contending that the petitioners have brought in new facts after passage of two years from the date of institution of the writ petition. It was contended that as per the agreements, while the Organising State was liable for the draw charges under Rule 3(11) of the 2010 Rules, the onus to pay the draw charges has been transferred to the distributor/marketing agent. This would mean that under the agreements, the distributor/marketing agent had agreed to pay the draw charges on behalf of the Organising State. However, this does not mean that the liability of the Organising State under Rule 3(11) of the 2010 Rules had also been shifted/transferred to the distributor/marketing agent. Consequently, the petitioners have not been empowered/authorized by the Organising State to claim refund of any tax, charge and fee paid on his behalf.
11. Heard Mr. Surajit Dutta, learned counsel for the petitioner and Mr. Vivek Kohli, learned Advocate General for the State-respondents. Mr. Surajit Dutta submitted that in view of Rule 3(11) of the 2010 Rules and Notification dated 8 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. 06.08.2010 having been struck down in M/s Shubh Enterprises (supra), the collection of draw charges is ex-facie illegal and without jurisdiction and petitioner being similarly situated is entitled to get the refund of the amount claimed. The learned Advocate General submitted that the writ petition was not maintainable on the ground of undue enrichment. He contended that it was also barred by limitation and cited the constitutional bench judgment of the Supreme Court in Mafatlal Industries Ltd. & Ors. Vs. Union of India & Ors.1 to buttress his argument. It was submitted that since the Lotteries Act did not provide any procedure for refund, the general law would be applicable and therefore, the proper remedy would be to prefer a civil suit under Section 72 of the Indian Contract Act, 1872 for refund. As an efficacious remedy is available to the petitioner in a civil suit, the remedy of writ petition under Article 226 is not available to the petitioner in the facts of the case. He further contended that although the agreements reflected that the distributors/selling agent had taken on the burden of paying the draw charges on behalf of the Organising State, the contract did not give the petitioner the liberty to withdraw 1 (1997) 5 SCC 536 9 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. the draw charges paid by them on behalf of the Organising State which was not even made a party.
12. Mr. Surajit Dutta replied to the three contentions of the learned Advocate General. On the issue of unjust enrichment, he submitted that the pricing of lottery ticket is done by the Organising State in terms of Rule 3(3) of the 2010 Rules. This would be evident from various agreements executed between different Organising States and stockist/marketing agent/distributor. The petitioner had no hand on the pricing of lottery tickets. Since price of tickets before and after publication of the notification remained the same, there has been no occasion of the burden being passed on to the purchaser of tickets. As per the agreements, it was the responsibility of the marketing agent/distributors to pay the draw charges. The petitioner under an agreement with the marketing agent/distributor was therefore liable to pay the draw charges and accordingly paid the same from its own pocket. The payment of taxes, levies, duties, etc., as a matter of general practice, is borne by the marketing agent/distributor, is evident from the agreements executed by the State of Sikkim with its marketing agents/distributors. The contention of the State respondents is, therefore, not sustainable. On the issue of 10 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. limitation, Mr. Surajit Dutta contended that the judgment of Mafatlal (supra) was not applicable as it dealt with excise refund payable under excise laws which postulates assessment orders becoming final after certain length of time and that such assessment orders could not be reopened thereafter. It was because of such statutory prescription that the emphasis was made on the time limit of three years. Mafatlal (supra) does not deal with the situation where the charging provision itself has been declared unconstitutional and has not laid down any inflexible rule of law that a case of refund claimed, such as the present one, would be bound by a period of limitation. More so because Article 226 also confers an equitable jurisdiction on this court and for good reasons this court would not shut its door against genuine grievance of a party. He contended that as held in Air India Cabin Crew Association vs. Union of India2, it is well settled that the judgment is an authority for what it actually decides and not what follows from it. Relying upon the judgment of the Supreme Court in Ramchandra Shankar Deodhar and Ors. Vs. The State of Maharashtra & Ors.3, it was argued that the rule which says that the court may not inquire into belated claims is not a 2 (2012) 1 SCC 619 3 (1974) 1 SCC 317 11 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. rule of law but a rule of practice based on sound and proper exercise of discretion, and there is no inviolable rule that whenever there is delay, the court must necessarily refuse to entertain the petition. The judgment of the Supreme Court in Collector, Land Acquisition, Anantnag and Anr. Vs. Mst. Katiji and Ors.4 was pressed to submit that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice is to be preferred. In the present case, the State respondent has realized money in the form of draw charges from the petitioners without any authority of law and therefore, it was refundable. Mr. Surajit Dutta further contended that the judgment rendered by this court in M/s Shubh Enterprises (supra) attained finality after the SLP preferred was dismissed and therefore, even if the principle of limitation is invoked it would commence to run only after 05.09.2016 and consequently, there was no delay. With regard to the issue of the entitlement of the petitioner to claim refund, Mr. Surajit Dutta contended that a claim of refund requires two things to be proved. That he had paid some money to the State and the State was not legally authorized to collect it. If the argument of the State respondent is to be accepted the 4 (1987) 2 SCC 107 12 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. petitioner would become all the more entitled to claim refund as notwithstanding the invalidity of Rule 3(11) of the 2010 Rules, the State respondents were in the first place not legally entitled to take the draw charges from the petitioners. Further, the State respondents, while accepting the draw charges from the petitioners and issuing the acknowledgments to them, has recognized the petitioner's authority as agents of the Organising State and as such stopped from questioning the petitioner's locus to seek refund. More so when they have already refunded the draw charges to the petitioner in M/s Shubh Enterprises (supra). The State respondents had all along issued receipts in the name of the petitioners and not in the name of the Organising States and therefore, precluded from raising this contention as they had accepted the draw charges from the petitioners without any demur or raising any question.
13. The petitioner in M/s Shubh Enterprises (supra) was the distributor of lottery tickets organised by the State of Mizoram and contractually liable to pay taxes and other charges levied by various States on lotteries. The petitioner therein had challenged the validity of Rule 3(11) of the 2010 Rules which provided that a State, where lotteries are conducted by another State is entitled to charge an amount 13 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. of Rs.2000/- per draw from the Organising State as being ultra vires the Lotteries Act. The Organising State was the State of Mizoram who was impleaded as proforma respondent no.4 therein. This court held that Rule 3(11) of the 2010 Rules is ultra vires the provisions of the Lotteries Act and struck it down. This Court also quashed Notification no.380/FIN/DSSL/431 dated 06.08.2010 (Notification) issued by the respondent no.2 therein as being ultra vires the Lotteries Act. Further, a writ of prohibition was issued upon the respondents therein from giving effect to Rule 3(11) of the 2010 Rules and the Notification. The State respondents were directed to refund all amounts payable by the petitioner therein thus far under Rule 3(11) of the 2010 Rules and the Notification as a consequential relief. In M/s Shubh Enterprises (supra), on a reading of the judgment, it was neither contended by any of the parties thereto nor examined by this court that the draw charges payable by the Organising State was not refundable to the distributor/selling agent who took on the burden of the Organising State to pay the draw charges under a contract. In the present case, it is the specific contention of the respondent no.2 and 3 that firstly, the Organising States which were necessary parties had not been impleaded by the 14 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. petitioner and secondly, that the petitioner had no authority to seek refund of the draw charges paid by them on behalf of the Organising States.
14. The record reveals that although the respondents no.2 and 3 had taken the plea of dismissal of the writ petition on the ground that the Organising State, which was a necessary party, had not been impleaded, the petitioner in its rejoinder contended that the Organising State was not a necessary party and was not required to be impleaded.
15. In the writ petition, the petitioners contend that they are engaged in the business of, inter alia, marketing and sale of lottery tickets organized/conducted by various State Governments. It is their case that they are the sole stockist for marketing and selling of Goa, Mizoram, Arunachal Pradesh and Sikkim State online lotteries and was selling the tickets of these States in the State of Sikkim. As per the additional affidavit filed on 07.04.2021 by the petitioner, the State of Arunachal Pradesh, Goa, Mizoram and Sikkim had appointed Summit as their marketing agent, distributor/selling agent for marketing the lottery tickets on their behalf.
16. The agreement dated 09.05.2005 is between the Government of Sikkim and M/s Sugal & Damani appointing 15 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. M/s Sugal & Damani as marketing agents for the State of Sikkim. In this agreement, clause 11 thereof provides that the liability of any tax levied by other State Governments shall be the responsibility of the marketing agent. However, the liability of payment of Sales tax/VAT or any other taxes on lotteries within the State of Sikkim shall be borne by the Director of State Lotteries. Prima facie, the agreement dated 09.11.2012 between the Government of Sikkim and Summit extending the period of Summit operative as a marketing agent for the State of Sikkim did not also contain a specific provision for payment of draw charges by the marketing agent.
17. The agreement signed between the State Government of Mizoram and Summit dated 29.05.2012 reflects that Summit had taken the liability to pay all statutory taxes, duties and charges imposed by the State Government under whose jurisdiction the Mizoram State Lottery tickets are being sold and to pay those charges under Rule 3(11) of the 2010 Rules "on behalf of the Government".
18. The agreement dated 06.05.2010 between the Government of Goa and M/s Sugal & Damani Enterprises Pvt. Ltd. provides in clause 11(ii) that all statutory taxes, levies, duties, etc., in respect of sale of Goa brand lotteries 16 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. outside the State of Goa shall be borne by the marketing agent/distributor.
19. The agreement dated 27.07.2015 between the Government of Arunachal Pradesh and Summit, in clause 15.2 provides that all charges as may be made by other State Governments under whose jurisdiction the Arunachal Pradesh State lotteries tickets will be sold or marketed by the sole distributor shall be paid by him/her to such States as provided in sub-rule (11) of Rule 3 of the 2010 Rules.
20. The agreement dated 08.08.2010 between M/s Sugal & Damani Enterprises Pvt. Ltd. and the petitioner no. 1 herein appointed the petitioner no. 1 as their sole stockist. Clause 4(g) provides that the Petitioners shall bear, inter alia, draw charges as levied by the State Governments, i.e., Sikkim, Goa and other States. It also provided in clause 6(iii) that the petitioner is not authorised to claim reimbursement of any taxes, charges and duties paid with regard to the sale of lottery tickets from M/s Sugal & Damani.
21. This is a writ petition filed by the petitioner for seeking refund of the draw charges payable by the Organising States but paid by them under an agreement with M/s Sugal & Damani, the distributor/selling agent of the Organising States. The agreement reflects that the petitioners had taken 17 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. the responsibility of paying the draw charges liable to be paid by the Organising States in terms of Rule 3(11) of the 2010 Rules which has now been struck down by this Court. The fact that the petitioners had in fact paid the draw charges is reflected clearly in the receipts issued by the respondent no. 3. However, in a claim for refund of this nature it is important to ascertain whether the burden has been passed on. When this Court struck down the provision of Rule 3(11) of the 2010 Rules in M/s Subh Enterprises (supra) it also granted the consequential relief of refund to the petitioner therein who was the distributor/selling agent. Further, the Organising State was also impleaded as a party respondent. It is not so in the present case. In the present case, the petitioner who are stockist under the distributor/selling agent seeks refund of the money paid by them to the respondent no. 3 as draw charges payable by the Organising States in terms of Rule 3(11) under an agreement with M/s Sugal & Damani, which is also not before this Court. Furthermore, the Organising States have also not been made parties. Although various agreements between the Organising States and the distributor/selling agents and between the distributor/selling agents and the petitioner as stockist has been filed, the parties to those 18 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. agreements are not before this Court except the State of Sikkim.
22. Under the scheme of the Lotteries (Regulations) Rules, 2010, Rule 2(f) defines "Organising State" to mean the State Government which conducts the lottery either in its own territory or sells its tickets in the territory of any other State. Section 2(c) defines "distributor or selling agent" to mean an individual or a firm or a body corporate or other legal entity under law so appointed by the Organising State through an agreement to market and sell lotteries on behalf of the Organising State.
23. Rule 3 deals with the organisation of lottery and provides that a State Government may organise a paper lottery or online lottery or both subject to the conditions specified in the Act and the Rules. Rule 3(3) (b) provides that the Organising State shall announce in advance, by way of a Notification in the Official Gazette, the price of lottery tickets amongst others enumerated in sub-clauses (a) to (j). Rule 3(11) which has now been struck down by this Court provided that the State Government under whose jurisdiction the lottery tickets are being sold shall be entitled to charge a minimum amount of two thousand rupees per draw from the Organising State but the maximum amount 19 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. chargeable shall not be more than what is being charged by the State Government from its own lotteries. Rule 3(15) provides that in cases where an Organising State appoints or authorizes distributors or selling agents, it shall be the responsibility of the Organising State to ensure that the said distributors or selling agents act in conformity with the provisions of the Act and the Rules. Rule 3(16) provides that the Organising State shall keep records of the tickets printed, tickets issued for sale, tickets sold, tickets which remain unsold at the time of the draw, and the prize winning tickets along with amount of prize or prizes in respect of each draw, in the manner prescribed by the Organising State. Rule 3(17) provides that the Organising State shall ensure that proceeds of the sale of lottery tickets, as received from the distributors or selling agents or any other source, are deposited in the public ledger account or in the consolidated fund of the Organising State.
24. Rule 4 deals with appointment of distributor or selling agent. Rule 4(3) provides that the distributors or selling agents shall maintain the records of the ticket obtained from the Organising States and tickets sold and those which remain unsold up to the date at the time of draw along with other details as may be specified by the Organising State. 20 W.P. (C) No. 08 of 2019
Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors.
25. It is thus seen that under the scheme Lotteries (Regulation) Act, 1998 and the Lotteries (Regulation) Rules, 2010, it is for the Organising State to determine the price of the lottery ticket and the distributor and the selling agent is appointed by the Organising State through an agreement for the sole purpose of marketing and selling lotteries on behalf of the Organising State.
26. In State of Madhya Pradesh Vs. Bhailal Bhai & Ors.5 the Supreme Court examined 31 appeals by the State of Madhya Pradesh made by the High Court of Madhya Pradesh under Article 226 of the Constitution of India. The assessee under the Sales Tax had contended that the taxing provisions under which the tax was assessed and collected was unconstitutional. They prayed for refund of the taxes that had been collected. The High Court allowed the prayer for refund in some cases and rejected in some other. The Supreme Court answered the question whether the relief of repayment has to be sought by the tax payer by an action in a Civil Court or whether such an order can be made by the High Court in exercise of its jurisdiction under Article 226 of the Constitution. The Supreme Court held that the High Court has the power for the purpose of enforcement of 5 AIR 1964 SC 1006 21 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. fundamental rights and statutory rights to give consequential relief by ordering repayment of money realised by the Government without the authority of law. It further held that at the same time one could not lose sight of the fact that the special remedy provided in Article 226 is not intended to supersede completely the modes of such actions. The power to give relief under Article 226 is a discretionary power. This is especially true in the case of power to issue writs in the nature of mandamus. Among the several matters which the High Courts rightly take into consideration in the exercise of that discretion, is the delay made by the aggrieved party in seeking this special remedy and what excuse there is for it. Another is the nature of controversy of facts and law that may have to be decided as regards that availability of consequential relief. Thus, where, as in these cases, a person comes to the court for relief under Article 226 on the allegation that he has been assessed to tax under a void legislation and having it paid it under a mistake is entitled to get it back, the court, if it finds that the assessment was void, being made under a void provision of law, and the payment was made by mistake, is still not bound to exercise its discretion directing repayment. Whether repayment should be ordered in the 22 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. exercise of this discretion will depend on each case on its own facts and circumstance. It is not easy nor is it desirable to lay down any rule for universal application. It may however be stated as a general rule that if there has been unreasonable delay the court ought not ordinarily to lend its aid to a party by this extraordinary remedy of mandamus. Again, where even if there is no such delay, the Government or the statutory authority against whom the consequential relief is prayed for raises a prima facie triable issue as regards the availability of such reliefs on the merits on the grounds like limitation, the court should ordinarily refuse to issue the writ of mandamus for such payment. In both these kinds of cases it will be sound use of discretion to leave the party to seek his remedy by the ordinary mode of action in a civil court and to refuse to exercise in his favour the extraordinary remedy under Article 226 of the Constitution.
27. In Suganmal vs. State of Madhya Pradesh6, the Supreme Court examined the question whether a petition under Article 226 of the Constitution praying solely for the refund of the money alleged to have been illegally collected by the State as tax, is maintainable under Article 226. It was held that though the High Courts have power to pass any 6 AIR 1965 SC 1740 23 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. appropriate order in the exercise of powers conferred under Article 226 of the Constitution, such a petition solely praying for the issue of writ of mandamus directing the State to refund the money is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit against the authority which has illegally collected the money as a tax. While holding so, the Supreme Court also referred to its earlier decision in Bhailal Bhai (supra).
28. In the present writ petition, neither the Organising States nor the distributor/selling agents have been made parties. The claim for refund is being made by the sole stockist of the distributor/selling agent. The sole stockist of the distributor/selling agent would have, under the scheme of the Act and the Rules, no hand in the pricing structure of the cost of the lottery tickets. It is settled that refund of this nature cannot be granted if the burden of the draw charges had been passed on to a third party or the ultimate consumer. Although the petitioners have filed affidavits stating that they had not passed on the burden, when it is for the Organising State to structure the pricing of the lottery tickets, it may not be possible to determine this lis without the Organising States and the distributor/selling 24 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. agent. Further, the petitioner has sought to rely upon the agreements entered between the Organising States and the distributor/selling agent on the one hand and the agreement between the distributor/selling agent and the petitioner on the other without the parties to the agreement being brought before the Court. The agreements relied upon by the petitioner has been perused for a prima facie view only. It appears that to determine whether or not the burden of draw charges paid by the petitioner on behalf of the Organising States had been passed on to the ultimate consumer it is necessary to examine the complex issue of pricing of the lottery tickets which may not be possible in a writ jurisdiction. Furthermore, the issue involved here also requires an interpretation of these agreements between parties not before this Court. The only thing certain is that the petitioner had paid the draw charges. The State respondents have also raised the issue of limitation and seriously contested it.
29. In the circumstances, this Court is of the view that it would not be correct to decide the issues raised in writ jurisdiction. The writ petition, is therefore, dismissed. However, it is left open to the petitioner to approach the civil court for appropriate remedy if they so desire. In the event, 25 W.P. (C) No. 08 of 2019 Serenity Trades Pvt. Ltd. & Anr. vs. Union of India & Ors. the petitioner approaches the civil court, needless to say, the parties may plead and raise all necessary issues before the civil court. The observations made herein shall not come on the way of the civil court to decide the issues independently. The parties shall bear their respective costs.
( Bhaskar Raj Pradhan )
Judge
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