NAGAPPA PILLAI Vs. ARUNACHALAM CHETTY

JUDGEMENT

(1.) This Civil Revision Petition has been referred to a Bench by Coleridge, J. as he considered that the ruling of Phillips, J., in Sankunni V/s. Ikkora Kirtti (1919) MWN 570 on which the judgment of the District Munsif is based required re- consideration.

(2.) The suit refers to a chit fund carried on by the defendant. There were 500 subscribers each paying a rupee a month. The chit was to last for 50 months during which period two prizes were to be drawn by lot of Rs. 25 each among the subscribers every month. Any subscriber who happened to win a prize was paid Rs. 25 at once and was thereafter to pay only a subscription of eight annas a month. If he won a second prize he would be paid Rs. 25 more and his subscription ceased and his name would no longer be included in drawing the prizes. At the end of the 50 month all the subscribers who had won no prizes were to be paid back the whole of the money they subscribed, namely Rs. 50 each; the single prize winners were similarly to be repaid Rs. 25 each. These are the rules under which the chit was carried on. There were certain other rules regarding defaulting subscribers, but it is not necessary now to refer to them.

(3.) It will thus be seen that while the subscribers do not lose any part of the subscriptions they pay they get a chance of winning one or two prizes. That chance was decided by lot. But the prizes did not come out of the subscription paid as the total amount had to be repaid to the subscribers after the 50 month. The prize money was apparently obtained from the interest that the defendant could realise by himself investing the subscription moneys received by him for the 50 months, during that period.