PUBLIC PROSECUTOR Vs. SOOSAI PILLAI

JUDGEMENT

(1.) The prosecution case was that the three counter-petitioners had been conducting a chit fund and had thus committed an offence punishable under Section 294-A, Indian Penal Code. As however, chit funds had been very common in Southern India and there had been some misapprehension as to the law governing them, Courts having held at one time that chit funds were not illegal, the Government thought it would be unduly hard on persons conducting chit funds if prosecution were forthwith launched against them. G.O. No. 2621, dated 14th September, 1934, was thereupon passed ordering the District Magistrate of Malabar to give wide publicity to the fact that such chit funds were illegal and to order those who were conducting them to wind them up as soon as possible, adding that prosecutions need not be launched unless there were indications of fraud. The counter-petitioners were ordered to wind up this chit fund and it appears that no drawing took place after the order was communicated to them. They were given to understand, however, that they should, in winding the fund up, repay the subscriptions; and the counter-petitioners addressed the Government by a petition asking for time until the end of December, 1935, to pay up the amounts due to the subscribers. This petition seems to have been referred to the District Magistrate, who granted time to do so.

(2.) As this too was not done and the money was not repaid to the subscribers, this prosecution was launched. The Taluk Magistrate of Sivaganga acquitted the accused on the ground that the accused did not raise any subscriptions after receiving the order from the District Magistrate, that there was thereafter no drawing of any lot, that the shed in which the office had been located was dismantled that the fund did not continue to exist as a lottery, and that no proposals were published, and concluded his judgment by saying that there was no evidence that there was any fraud on the part of the organisers of the fund, that they had obeyed the District Magistrate's order and wound up the lottery, and that if dues were still to be paid to the subscribers, it was open to them to recover their dues through Civil Courts.

(3.) It is not denied that a transaction of this kind contravenes the provisions of Section 294-A, Indian Penal Code, but the learned Advocate for the accused has put forward the same argument here as seems to have found acceptance with the learned Taluk Magistrate. The accused have not been punished for contravening the order of the District Magistrate that they should wind up the lottery; for such an order would have had no binding and legal force if the lottery itself had been valid; but they have been convicted for conducting the lottery and thereby contravening the provisions of Section 294-A. The various points considered by the learned Taluk Magistrate have therefore no bearing on the question whether the accused committed an offence. If they conducted a lottery that was illegal, they were liable to be punished under Section 294-A whatever the action of the Crown might subsequently have been.