Bombay High Court Holds Slot Machine Gaming Illegal In Daman And Diu, Rejects Delta Corp Plea

The Bombay High Court on Wednesday held that in the absence of a notified commencement, the Goa Public Gambling (Amendment) Act, 1992 never came into force in Daman and Diu, and therefore no enforceable right could arise to seek a licence for operating slot machines in the Union Territory.

A Division Bench of Justices Sarang V. Kotwal and Sandesh D. Patil rejected Delta Corp Ltd's plea seeking a licence to operate electronic amusement slot machines at its five-star Deltin hotel in Daman, holding that such activity remains prohibited and no writ can be issued to compel grant of licence. They observed:

“Even otherwise, as discussed above, the 1992 Goa Amendment Act was not brought into force. Consequently, Section 13A referred to hereinabove was not in operation and, therefore, the then Administrator had no authority to make that promise. Even otherwise, such promise had its life only for three years within which the Petitioners had to abide by the conditions. The Application for grant of license was made much later in the year 2014 which was beyond the period of three years from 2007 when the so called promise was made by the Administrator.”

The dispute traces back to a 1998 Notification by which the amendment was extended to Daman and Diu. In 2007, the Administrator issued a no-objection certificate to Delta Corp, on the basis of which the company proceeded with its project.

Delta Corp subsequently invested over Rs. 450 crore in constructing its five-star hotel, asserting that the venture was commercially viable only if gaming operations were permitted. However, it applied for grant of licence only in 2014.

The authorities did not grant the licence, leading Delta Corp to approach the High Court, relying on the 1998 notification and the 2007 no-objection certificate to claim entitlement.

The High Court held that mere extension of the amendment without notifying its commencement meant that it never became operational in the Union Territory, and therefore no right could accrue on that basis.

The Bench further held that operation of slot machines is prohibited and would constitute an offence, and thus no mandamus can be issued directing authorities to grant such a licence. The judges held:

“As mentioned earlier, as of today, the operation of slot machines as per the 1992 Act is strictly prohibited and in fact would be an offence and therefore it is not possible to issue directions or writ of mandamus to the authorities directing them to grant license to operate those electronic amusement/slot machines in the Petitioners' five-star hotel.”

Rejecting the plea of promissory estoppel and legitimate expectation, the Court held that the denial of licence was based on public policy considerations falling within the domain of the Legislature and the Administrator, and courts cannot interfere with such policy decisions. It observed:

“From the above observations of the Hon'ble Supreme Court, we find that, in the present case, the Petitioners cannot take recourse to the doctrine of promissory estoppel or legitimate expectation because rejection of the application for license is based on public policy. It was within the domain of the Legislature and the Administrator to consider what is the policy that serves the best interest of the people in the UT of Daman and Diu. It was their policy decision and in this case, the Court cannot interfere in the policy decision.”

Accordingly, the Court dismissed the petition and declined to direct grant of licence to Delta Corp Ltd.

For Petitioner: Mr. Janak Dwarkadas, Senior Counsel a/w. Nikhil Sakhardande, Senior Counsel, Cyrus Ardeshir, Senior Counsel, Rohan Rajadhyaksha, Nooruddin Dhilla, Rajendra Barot, Ms. Anusha Jacob, Ms. Deepti Prabhu and Himanshu Kalwani i/b. AZB Partners

For Respondent: Mr. Anil Anturkar, Senior Counsel a/w. Dr. Sanjay Jain, Aayush Kedia, Jugal Haria, Ms. Kashish Chelani, Atharva Date, Harshavardhan Suryawanshi, Deepam Upadhyay