The division bench of SC presided by Justice S.K. Kaul and Justice M. M. Sundresh ruled that the Lotteries (Regulation) Act regulates the business of lottery; however, if there is any anti-competition aspect in the process of lottery tendering, which warrants investigation by the commission, the same can be permitted under the belief that the business of the lottery is res extra commercium. The bench overruled the order of the Guwahati HC staying the investigation by the CCI and observed that a straightforward case involving anti-competitive behaviour and cartelization has gone on for over a decade due to what appears to be a mistaken interpretation by the HC of how the two Acts—the Competition Act (the Act) and the Regulation Act—interplay. The bench noted that there is no contradiction between both the acts and hence, prevention of either one is not needed as the limited powers of investigation have been given to examining the scope of Sec.3 of the Act and states that, Lotteries may be considered a restricted item or even a “res extra commercium.” That would not eliminate the component of anything that is anti-competitive in the lottery industry. Hence, observing the definition of ‘service’ as per sec.2(u) of the Act, the bench noted that it means ‘service of any description’, which has to be readily available for the potential consumers, thus, the buyer of a lottery ticket becomes the potential consumer, the bench clarified that through agents the tickets are sold and service is made available for the users as per the Act. The bench upheld the claim raised by CCI that the concern of the commission was not with regard to the conduct, regulation or prevention of the business as the same was regulated by the regulation act but had limited scope as prescribed under the Act in order to investigate and scrutinize any rigging or anti-competitive practice being undertaken in the tendering process for appointing the agents and distributors of lottery tickets. Hence, the bench highlighted that ending the actions initiated by the govt. and allowing the private parties to appeal the CCI’s judgement would have been the proper course of action, especially after the CCI’s statement was released. Further, if the parties are not satisfied with CCI’s order they can approach the appellate authority as per sec.53B of the Act. The bench finally observed that though it has been a long time, however, with regard to the aspect of investigation the CCI has to comply with the law and proceed in accordance with it.
