RMDC VS. UNION OF INDIA AIR 1957 SC 628

Case Analysis, Constitutional Law Cases

RMDC VS. UNION OF INDIA AIR 1957 SC 628

August 31, 2024

Author: Sadhvika S

Edited by: A I Sugandesh

ABSTRACT / HEADNOTE:

The R.M.D. Chamarbaugwalla vs. Union of India is a landmark judgement for the doctrine of severability under ART.13. This judgement has a basic ground related to ART.13. In this RMDC case, the wider sense of prize competition definition was interpreted that it includes only gambling activities and not skill based. Thus, the SC held that the Prize Competition Act cannot be completely upheld as unconstitutional where it can be severed. The SC held that parts of unconstitutional provisions can be severed, thus the doctrine of severability was also significantly noted in this case. It was also held that their is a delicate balance between fundamental rights and the societal norms or morality to be maintained. This was considered to be a significant legal precedent in Constitutional law.

CASE DETAILS

i) *Judgement Cause Title / Case Name*	R.M.D. CHAMARBAUGWALLA(RMDC) vs. UNION OF INDIA
*ii)* *Case Number*	AIR 1957 SC 628
*iii)* *Judgement Date*	09/04/1957
*iv)* *Court*	SUPREME COURT OF INDIA
v) *Quorum / Constitution of Bench*	FULL BENCH (4)
*vi)* *Author / Name of Judges*	JUSTICE SUDHI RAJAN DAS (CJI), JUSTICE BHUVANESHWAR P. SINHA, JUSTICE P.B. GAJENDRAGADKAR, JUSTICE T.L VENKATARAMA AIYYAR.
*vii)* *Citation*	1957 SCR 930, 1957 AIR 628
*viii)* *Legal Provisions Involved*	ARTICLE. 19(1), (6), PRIZE COMPETITION ACT, 1955.

INTRODUCTION AND BACKGROUND OF JUDGEMENT:

The R.M.D. Chamarbaugwalla vs. Union of India is a landmark judgement for the doctrine of severability under ART. 13. This judgment has a basic ground related to ART.13 and ART.19(1)(g), which guarantees the right to carry on any trade, business or profession. In this RMDC case, the petitioner was conducting prize competitions in Mysore since 1948 under the Mysore Lotteries and Prize Competition Control and Tax Act, 1951. He challenged section 2(d) of the Prize Competition Act, 1955 whether constitutionally valid in sense.

Section 2(d), which was broad enough to include competitions of a gambling nature as well as competitions involving skill was involved. The petitioners also claimed that the state’s action behind the enactment of this act constituted colorable legislation. The case was petitioner side was argued by Mr. Palkhivala and respondent side was argued by Mr. Seervai.

The SC held that the provisions of this act were severable and struck down those provisions which are related to competition not involving skill. The court also held that where after removing the invalid provisions what remains constitutes a complete code there is no necessity to declare the whole act invalid. The court held that the restrictions imposed by Sections 4 and 5 and Rules 11 and 12 of Section 20 were severable in their application to the two distinct categories of competition. Consequently, the impugned provisions could not be held void in their entirety, at least with respect to gambling competitions. The court also held that gambling does not come under the purview of fundamental rights under ART. 19(1)(g).

FACTS OF THE CASE:

Procedural Background of the Case
1. A petition was filed by the petitioner on the grounds of infringement of fundamental rights under ART. 32 challenging the constitutional validity of the provisions in the Prize Competitions Act of 1955, stating that violates the Right to trade, business, or profession under ART. 19(1)(g) of Indian Constitution.
2. Further, It was contented by the respondents that section 2(d) of the act is not wide and it is restricted only tothe view of gambling and does not include success depending upon substantial skill, which was the petitioner’s business.

Factual Background of the Case:
1. The petitioner’s fundamental rights were infringed by the enactment of new legislation. Thus the petitioners challenged the prohibition on the operation of certain games mere skill, asserting that such a prohibition would violate their fundamental rights under ART. 19(1)(g) of the Constitution. The petitioner’s interpretation of the act included the knowledge of skill and gambling while the respondent interpreted that it included the knowledge of gambling.

LEGAL ISSUES RAISED:

Whether section 2(1)(g) of the Prize competitions act, 1955 applies only to gambling or doesn’t include the knowledge of substantial skill?
Whether the sections4,5 and rules 11 and 12 of section 20 are constitutionally valid?

PETITIONER / APPELLANT’S ARGUMENTS:

The counsels for Petitioner / Appellant submitted that the interpretation of section 2(d) of the Prize Competitions Act,1955 is not only restricted to the act of gambling but also includes the substantial degree of skill.
The counsel also argued by stating their infringement of fundamental rights, notably the petitioner was also involved in the conduct of prize competitions across a few states. They argued that their right to conduct business was infringed as per ART. 19(1)(g) of Indian Constitution.

The petitioner’s counsel further stated that the provisions formed a single inseverable enactment, thus leading to the invalidation of the entire act.

RESPONDENT’S ARGUMENTS:

The counsels for Respondent submitted that the definition under section 2(d) of the Prize Competition Act, 1955 is properly constructed and only includes the gambling nature and does not include a substantial degree of skill.
Thus, also interpreted that gambling is not considered a trade or business under the Constitution of India. As per ART. 19(1)(g) guarantees that all citizens shall have the right to practice any profession trade or business. However, under ART. 19(6)(a) of the Constitution the right shall be considered with restrictions by the authority of law. The state can make any law imposing reasonable restrictions on this right in the interest of the public.
The respondents also contended that some parts of the prize competitions act as invalid and should be removed while valid part should stand valid and the whole act should not be considered as unconstitutional.

RELATED LEGAL PROVISIONS:

Section 2(d)– “prize competition” means any competition (whether called a cross-word prize competition, a missing-word prize competition, a picture prize competition or by any other name) in which prizes are offered for the solution of any puzzle based upon the building up, arrangement, combination or permutation, of letters, words, or figures.”

Section 4– “No person shall promote or conduct any prize competition or competitions in which the total value of the prize or prizes (whether in cash or otherwise) to be offered in any month exceeds one thousand rupees; and in every prize competition, the number of entries shall not exceed two thousand.”

Section 5– “Subject to the provisions of section 4, no person shall promote or conduct any prize competition or competitions in which the total value of the prize or prizes (whether in cash or otherwise) to be offered in any month does not exceed one thousand rupees unless he has obtained in this behalf a licence granted in accordance with the provisions of this Act and the rules made thereunder.”

ART. 19(1)(g)– “to practice any profession, or to carry on any occupation, trade or business.”

ART.13(2)– “The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void.”

ART.32(1)– “The right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred by this Part is guaranteed.”

ART. 19(6)(a)– “Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular, nothing in the said sub-clause shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to,-

The professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, or
The carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.”

JUDGEMENT:

RATIO DECIDENDI:
1. In this case RMDC UOI, the ratio decidendi is that the Supreme Court held that section 2(d) of the prize competitions Act clearly defines the term ‘prize competitions’ as an act including gambling and no other category.
2. The SC also validated that section 4,5 and rule 11,12 of the act concerning gambling could no longer be considered under the ambit of ART. 19(6) of the constitution.

The court also highlighted that gambling is no longer considered under the ambit of ART.19(6) from the precedent judgment as “gambling or conducting the business of gambling is extra-commercium and hence not included and hence not included within the meaning of trade, commerce or intercourse.”

OBITER DICTA:
1. The case of RMDC has made a significant judgment regarding to the doctrine of severability as follows:
  - “The impugned Act minus this section can remain unaffected. The omission of the section will not change the nature or the structure of the subject of the legislation.
  - “It was held that the provisions which have been declared as void do not affect the entire statue, therefore, there is no necessity for declaring the statue invalid.”
  - “The court also upheld that the test to be applied is whether the legislature would enact the valid part if it had known that the rest of the statute was invalid. But if what remains on the statute book cannot be enforced without altering the whole act should be declared as void. Severability is the question of substance and not of form. The determination of the intention of the legislation is necessary.”

CONCLUSION & COMMENTS

In this case of RMDC, the appellants challenged the constitutional validity of the provisions of the Prize Competition Act, of 1955 related to gambling. The SC held that gambling is not under the purview of the ART. 19(1)(g) and it was also upheld in the case of the State of Bombay vs. R.M.D. Chamarbaugwalla.

Thus, the court also held that the interpretation of the Act specifically applies to gambling competitions and ruled that it does not include skill-based competitions, the violation provisions were severable, valid only for gambling competitions, and not wholly void.

REFERENCES:

Important reference Referred: