BOMBAY SCOOTERSCHHINDWARA Vs. COLLECTORCHHINDWARA DISTRICTCHHINDWARA

JUDGEMENT

(1.) The petitioner is a partnership firm. The petitioner promoted a scheme styled as "Ramona Scooterette Sale Promotion Scheme." The petitioner applied for and obtained licence No. 1-P.L. CWA, dated 1-12-1981, from the Collector, Chhindwara, under Sections 6 and 7 of the Madhya Pradesh Lottery (Niyantran Tatha Kar) Adhiniyam, 1973. The Collector, Chhindwara, by order dated 24th August, 1982 (Annexure-D) cancelled the licence with immediate effect on the ground that as directed by the Director of State Lotteries, the scheme run by the petitioner was not a lottery and, that it was a prize chit coming within the ban of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. Another order was issued by the Collector in October 1982 (Annexure-E) directing the petitioner to refund the amounts collected by it from the members of the scheme. The petitioner challenges these orders (Annexures-D and E) by this petition under Article 226 of the Constitution.

(2.) The scheme which the petitioner promotes has the following features. A person to become member of the scheme has: to pay Rs, 5/- as membership fee. A group in the scheme consists of 100 members. Each member in the group has to contribute Rs. 180/- per month. After a group is formed a lucky number is drawn in the presence of the mem-bers every month. The member whose number becomes the lucky number gets a Ramona scooterette. Such a member has not to make any monthly payment nor is he entitled to participate in the monthly draw of the lucky number thereafter. The scheme runs for a period of thirty months. Members who do not win in any draw and continue to make monthly payments during this period get a Ramona scooterette thereafter. It will be seen that the promoter of the scheme i.e. the petitioner, at the start of the scheme, is able to collect Rupees 18,500/- from members in a group and thereafter he it able to recover Rupees 180/- per month from each member for thirty months excepting these members who in the monthly draws become lucky winners. The member whose number becomes the lucky number in. the first draw gets the scooterette for about Rupees 185/-. The member who gets the scooterette in the second draw gets it for RS. 365/- and so on. The retail price of a scooterette is about Rupees 4,918/-.

(3.) Section 2 (1) (a) of the State Act, The Lottery (Niyantran Tatha Kar) Adhiniyam, 1973, defines "lotterry" to mean "a scheme for distribution of prizes by lot or chance to those persons participating in the chances of a prize by purchasing tickets.' "Ticket" is defined by Section 2 (1) (f) to include "in relation to any lottery or proposed lottery any document evidencing the claim of a person to participate in the chances of the lottery". Section 3 of the Act declares all lotteries excepting those organised by the Central Government and the State Government of Madhya Pradesh to be unlawful. Provision is made in Section 6 for licensing private lotteries. Section 6 (1) provides that a private lottery shall be deemed to be an unlawful lottery unless the promotor thereof has obtained a licence in respect of such lottery. The Collector is the licensing authority under Section 7. Provision is made in Section 9 for suspension or cancellation of licence. The Madhya Pradesh Legislature had also enacted the M. P. Dhan Panchalan Skeem (Pratishedh) Adhiniyam. 1975 (Act No. 19 of 1975) which was repealed by the Central Act, the Prize Chits any Money Circulation Schemes (Banning) Act, 1078, Section 3 of this Act provides that no person shall promote or conduct any prize chit or money circulation scheme, or enroll as a member to any such chit or scheme, or participate in it otherwise, or receive or remit any money in pursuance of such chit or scheme. The definitions of "money circulation scheme" and, "prize chit" are contained in Sections 2 (c) and 2 (e), respectively. We are here not concerned with a money circulation scheme and, therefore, it js not necessary to quote the definition in Section 2 (c). The definition relevant for this case is of "price chit" as contained in Section 2 (e) which reads as follows: