SIKKIM SUBBA ASSOCIATES Vs. UNION OF INDIA

JUDGEMENT

(1.) .The petitioner, M/s Sikkim Subba Associates, a partnership firm, entered into an agreement with respondent No.2, the State of Sikkim through its Secretary (Finance), on 22 January 1991, for organising and running its Weekly Lotteries. The agreement was to be valid for a period of three years, commencing from the date of 1st draw i.e. 1 April 1991, which could be extended for such period and upon such terms and conditions, as may, at the relevant time, be mutually agreed upon.after giving to the other party a notice in writing of not less than three months. Respondent No. 2 could also rescind or modify the agreement on the detection of default or fraudulant conduct in lotteries or of any act of malfeasance or misfeasance on the part of the petitioner, after giving an opportunity of being heard.

(2.) .The petitioner was to maintain offices at its own expenses. Printing of tickets at the expense of the petitioner upto a gross total face value of Rs. 360 crores was to be arranged by respondent No. 2.

(3.) Under the terms of the agreement the petitioner was authorised to run for and on behalf of respondent No.2, 24 Weekly Lotteries including bumper draws for which the guarantee agency fees payable to respondent No.2 was fixed at a minimum of Rs. 756 lakhs per annum, payable in 12 equal monthly instalments, for a minimum turn over of Rs. 15 crores in each lottery including its bumper draws. For every one lakh of rupees turn-over or part thereof in excess of the said turn-over for each lottery, the petitioner was to pay additional agency fee on prorata basis.In the event of failure to pay any istalment by the agreed time the petitioner was liable to pay interest at the rate of 12% per annum for each day's default subject to a maximum of 90 days and thereafter interest at the rate of 18% per annum for each day's default was to be paid. In addition thereto, the petitioner was also to pay to respondent No. 2 a sum of Rs. 75,000.00 per lottery per annum towards draw expenses.