13 Dec 2020

SC Dismisses all Appeals filed against Dream11

Dream11

A division bench of the Supreme Court comprising Justices Rohinton Nariman and S. Ravindra Bhat today dismissed Special Leave Petitions filed by lawyer Gurdeep Singh Sachar, Department of Revenue, Union of India and State of Maharashtra against a Bombay High Court order dated 30th April, 2019 in Gurdeep Singh Sachar v. Union of India & Others.

The Supreme Court bench, while hearing the appeals of Sachar and Union of India and connected intervention applications, declined to admit the matter or interfere with the order of the Bombay High Court, which had in its order, relying on the earlier Punjab and Haryana High Court and Supreme Court precedents, held Dream11 to be a game of skill and approved the company’s manner of payment of Goods and Services Tax (GST).

The court was hearing the appeals filed by Sachar, who claimed that fantasy sports was a game of chance and that the 1996 KR Lakhsmanan judgment which held horse racing and betting thereof to be a game of skill should be reviewed.

The Union of India, Department of Revenue, while assailing the order of the High Court had, in its petition, stated that Dream11 had evaded GST to the tune of Rs. 2173 crores and 28% GST on the face value of bets was applicable to them.

It had further alleged that the Bombay High Court had not given it an opportunity to present its views and had passed an order within a span of 2 working days from the matter being registered, without issuing any notice.

Social activist Avinash Mehrotra, who had recently filed a PIL against online poker and betting websites in the Delhi High Court, had also filed an intervention application claiming that he wanted to assist the court in proving that fantasy sports and other similar games amounted to gambling and there was no skill involved in it.

In the hearing today, Justice Nariman orally observed that there cannot be any doubt that fantasy sports is a game of skill the person who enters the contests needs to apply his mind and judgment on choosing one cricketer over the other. He further noted that if rummy is deemed to be a game of skill, then so would fantasy sports.

The bench while dismissing the petitions, however allowed the Union of India to approach the Bombay High Court and file a review petition in the High Court itself to get its averements on the alleged massive GST evasion of Rs. 2173 crores by Dream11 heard afresh.

A bench headed by Justice Nariman had on 4th October, 2019 also dismissed advocate Varun Gumber’s appeal against the Bombay High Court order in Gurdeep Singh Sachar.

In today’s high stakes hearing, activist Avinash Mehrotra was represented by Barrister Nakul Dewan and advocates Siddhartha Iyer and Prashant Kumar; Dream11 was represented by senior advocate and former Attorney General of India, Mukul Rohatgi and Advocate on Record EC Agrawala.

Union of India was represented by its AOR B. Krishna Prasad and Senior Advocate K. Radhakrishnan.

Today’s Supreme Court order is seemingly the last word as far as the legality of fantasy sports in India and the element of skill required in it is concerned.