P V VEERANAN AMBALAM Vs. AYYACHI AMBALAM

JUDGEMENT

(1.) Two questions have been argued in this Civil Revision Petition. The first is whether the chit transaction, in which the petitioner was the promoter and the respondent was a subscriber, partook of the character of a lottery or consisted of wagering agreements between the subscribers and the promoter. The second is whether the respondent is entitled to recover the money which he subscribed either upon the terms of the contract between him and the petitioner, or by reason of the obligation cast by S. 65, Indian Contract Act, upon persons who have received any advantage, of restoring it upon an agreement or contract becoming void or being discovered to be void.

(2.) The mere fact that the order in which members of a Mutual Benefit Society take their benefits is determined by the drawing of lots does not constitute the transaction a lottery [vide Walling ford V/s. Mutual Society (1880) 5 AC 685].

(3.) In the particular form of chit transaction that is before us, 500 persons undertook each to subscribe two rupees at each instalment and there were to be 50 drawings at each of which the winner was to get Rs. 100 and walk out without any liability to subscribe for any subsequent instalments. In other words, the promoter laid odds of 98 to 2 at the first drawing against any particular subscriber drawing the winning ticket. At the second drawing he laid odds of 96 to 4 with each of the remaining 499 subscribers, and so on till 50 drawings had taken place and 50 subscribers had drawn the prize of Rs. 100.