NARAYANA AIYANGAR Vs. KVELLACHAMI AMBALAM

JUDGEMENT

(1.) Petitioners were subscribers to a chit fund. They sued to recover from the stakeholder Rs. 36, being the amount paid by them for 18 instalments at Rs. 2 a month. The defendants set up the usual dishonest plea that the fund was a lottery and their plea was accepted by the lower Court.

(2.) Two questions arise: (1) Whether the fund is a lottery; (2) If it is, whether the subscriptions are recoverable.

(3.) On both of these questions there is a great conflict of authority. The cardinal feature of this fund and of all the other funds dealt with in the decisions cited before me is this that lots are drawn for prizes monthly and that the winners get Rs. 50, the full amount of the chit without any liability for further subscriptions. After the 50 drawing, the unsuccessful subscribers get back the full amount of their subscriptions, but without interest.