Supreme Court Directs Goa Casino Operators to Deposit 75% of Pending ARF For the COVID-19 Lockdown Period

In a major setback for Goa’s casino operators, the Supreme Court has ordered them to deposit 75% of their outstanding annual recurring fee (ARF) pending for the COVID-19 lockdown period with the state government. This decision follows the Bombay High Court’s dismissal of the casino operators’ petition earlier this month, which sought a waiver of the outstanding ARF. The operators subsequently challenged the decision in the Supreme Court, leading to the directive.

According to a report on G2G.news, a two-judge bench of the Supreme Court, comprising Justices Sanjiv Khanna and Aravind Kumar, heard the matter on April 25. The bench directed the casino operators to deposit 75% of the outstanding ARF with the state government, following the orders of the Bombay High Court. The case will next be heard after October 2023.

The bench, in its order, said, “Our attention has been drawn to the interim orders passed by this Court. It appears that some of the petitioners did not deposit 50% of the arrears/demand amount of the Annual Recurring License Fees (ARF). Our attention has also been drawn to the last portion of the impugned judgment. For the present, we are inclined to direct that the petitioners will deposit 75% of the demanded principal amount with the authorities concerned.”

The order continued, “The petitioners are also given liberty to deposit 100% of the demanded amount, in which case even if the special leave petitions are dismissed, in view of the statement made on behalf of the State of Goa, the petitioners would not be burdened with any interest. In case the petitioners deposit 75% of the demanded principal amount and the special leave petitions are dismissed, the petitioners would be liable to pay interest as per law.”

The petitioners include all the major casino operators like Delta Corp for Delta Pleasure Cruises Company Pvt Ltd, Delta Corp Limited, Golden Peace Infrastructure Pvt Ltd, Golden Peace Hotels and Resorts Pvt Ltd, Goldfinch Resorts Pvt Ltd, Highstreet Cruises and Entertainment Pvt. Ltd.

Their legal representation comprised a team of experienced attorneys such as Dr. Abhishek Manu Singhvi, Mukul Rohtagi, Nikhil Sakhardande, and Vivek Nankani.

The attorneys argued that the COVID-19 pandemic forced the casinos to close, resulting in substantial losses. They contended that charging the ARF for this period was arbitrary and unreasonable. Despite these arguments, the Supreme Court sided with the state government and ordered the petitioners to deposit 75% of the outstanding dues.

The court directed that the said deposit should be made within six weeks from April 25, i.e., by May 6, 2023. Counsels for the petitioners have been asked to submit on record a copy of the audited accounts filed with the Income Tax and the Registrar of Companies for the period from 2018 to 2022.

The casino operators must now comply with the court’s orders and deposit 75% of the ₹321.66 Crore pending ARF with the Goa government. Most operators have reportedly already deposited 50% of the pending ARF, so they have less than six weeks to deposit the remaining 25%.

Heeding to the Supreme Court’s latest order, if they pay the total amount, i.e., the remaining 50% now, they can avoid additional interest if they are unsuccessful in the final hearing. However, if their appeals are dismissed, they would be required to pay the remaining 25% with interest.

The Bombay High Court Ruling

On April 6, the Bombay High Court in Goa dismissed the petitions filed by the casino operators against a government directive asking them to pay outstanding license fees for the COVID-19 lockdown period, standing to the tune of ₹321.66 Crores.

The bench of Justices M S Sonak and Valmiki Sa Menezes dismissed the plea for temporary relief by casino operators, emphasizing that similar relief was not granted to bars and restaurants in Goa regarding the payment of license fees during the pandemic.

The bench noted that seeking concessions is neither reasonable nor legitimate, citing the lack of precedent for such relief during the lockdown period.

This development comes at a time when the casino industry in Goa is facing scrutiny, with the state government recently removing casino hoardings and branding ahead of the G20 meetings.

Additionally, the Goa Public Gambling Act (Amendment) 2012, set to be notified soon, will establish a Gaming Commissioner and facilitate the onshore relocation of casinos in Mopa. Goa Chief Minister Pramod Sawant reiterated his government’s plans to notify the Goa Public Gambling Act (Amendment) 2012 and to cater for the onshore relocation of the casinos in Mopa in his budget speech on March 29.

While the casino business has returned to its feet after the lockdown, the operators stand to book a significant loss should they lose the appeal.

This is a developing story. Keep following PokerGuru for the latest updates!