Casino-style amusement machines illegal in Daman: Bombay High Court rejects Delta Corp's plea

The Bombay High Court on Wednesday dismissed gaming company Delta Corp’s plea seeking a licence to run electronic amusement/ slot machines at its five-star property 'The Deltin' in Daman [Delta Corp Ltd & Anr v. UT Administration of Daman and Diu]

A bench of Justices Sarang V Kotwal and Sandesh D Patil held that there is no legal regime in force that permits such activity in the Union Territory of Daman.

Thus, the Court rejected Delta Corp’s plea which sought directions to Daman and Diu administration to grant a licence to install 140 electronic amusement/slot machines at its The Deltin hotel in Nani Daman. 

“As of today, the operation of slot machines 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 Delta Corp’s five-star hotel,” the bench said while dismissing the petition. 

The petition assailed a 2014 notification withdrawing earlier rules authorising such games. The plea also challenged a 2018 communication rejecting all casino-related applications.

Delta contended that Section 13A of the Goa Public Gambling (Amendment) Act, 1992 permits electronic amusement and slot machines within five-star hotels. 

Further, they argued that this provision was extended to the then-Union Territory of Daman and Diu via a Central notification in 1998, a notification which the local administration subsequently acted upon. 

The company said it invested over ₹450 crore to build the five-star property after a no objection certificate (NOC) of 2007 and a 2008 notification laying down rules for grant of licences. Hence, the company invoked promissory estoppel and doctrine of legitimate expectation.

The Court accepted the administration’s stand that although the 1992 Goa amendment was extended to Daman and Diu in 1998, it was expressly made subject to a further step - that it would “come into force on such date as the Central Government may, by notification in the Official Gazette, appoint” No such date was ever notified, the Union Territory administration pointed out.

In the absence of that notification, Section 13A never became operative in Daman and Diu and the statutory ban on gambling and gaming machines under the 1976 Public Gambling Act continued, the Court held.

Based on the Supreme Court’s decision in Viraj Impex, the High Court reiterated that where a statute prescribes a particular mode of bringing a law into force, that mode must be strictly followed and delegated legislation such as rules cannot give life to a parent provision that has not commenced. 

The 2008 rules authorising slot machines, published with a preamble stating Section 13A was in force in the Union Territory, were therefore described as having no legal foundation and incapable of creating rights in favour of Delta.

The Court also dismissed the argument of promissory estoppel, reasoning that any assurance given in the 2007 NOC was limited to a three-year period. 

The Court held that such an assurance could not supersede statutory law or compel authorities to allow an activity that is now classified as an offence under the Dadra and Nagar Haveli and Daman and Diu Public Gambling Act, 1976.

Senior advocates Janak Dwarkadas, Nikhil Sakhardande, and Cyrus Ardeshir with advocates Rohan Rajadhyaksha, Nooruddin Dhilla, Rajendra Barot, Anusha Jacob, Deepti Prabhu and Himanshu Kalwani briefed by AZB Partners appeared for Delta Corp. 

Senior advocate Anil Anturkar with advocates Sanjay Jain, Aayush Kedia, Jugal Haria, Kashish Chelani, Atharva Date, Harshavardhan Suryawanshi and Deepam Upadhyay appeared for the Union Territory of Daman & Diu.

[Read Judgment]