Head Digital Works Private Limited Vs State of Kerala (Kerala High Court)
Conclusion: Notification pertaining to the ban on Online Rummy was declared as arbitrary, illegal and violative of the fundamental rights guaranteed to assessee under Articles 14 and 19(1)(g) of the Constitution of India and hence not enforceable.
Held: Assessee-company was engaged in the business of developing and offering online games of skill in India and it was aggrieved by the notification issued by the Government, amending the exemption notification issued on 30.09.1976 under Section 14A. Assessee-company questioned the power of the Government to include the game “Online Rummy played for stakes” within the purview of the Kerala Gaming Act, 1960. It was held by the Court that “mere skill” contained in Section 14 and “any game the element of skill was more predominant than the element of chance” contained in Section 14A did not suggest that skill in playing a game is in any manner dependent on stakes. As such playing for stakes or playing not for stakes could never be a criterion to find out whether a game was a game of skill. It was declared that notification by the government to be arbitrary, illegal, and in violation of Articles 14 and 19(1)(g) of the Constitution of India since the notification had been issued in relation to a game that already stood exempted from the provisions of the Act under Section 14 of the Kerala Act and since the game did not come within the meaning of ‘gambling’ or ‘gaming’, providing a platform for playing the game, which was in the nature of the business could not be curtailed. Further, it was held that notification was in effect a prohibition of Online Rummy played for stakes and not a reasonable restriction under Article 19(6) of the Constitution of India. Therefore, notification was declared as arbitrary, illegal and violative of the fundamental rights guaranteed to assessee under Articles 14 and 19(1)(g) of the Constitution of India and hence not enforceable.
