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TMI Blog1935 (10) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... is subscriptions no repayment has been made by defendants. The sum claimed is ₹ 270 which is the amount of 45 instalments paid by the first plaintiff on his two tickets. The material defence to the claim, so far as this reference is concerned, is in para 3 of the written statement, where the plea is raised that the agreement between the parties being in respect of a lottery unauthorised by Government, was for an illegal object, and was therefore unenforceable at law. 3. The lower Court held the defendants liable to refund the money. Hence the Revision Petition. The question has been referred to a Full Bench as there are decisions of this High Court on the status of Kuris which are not always easy to reconcile. 4. The first question to be decided is whether this kuri is a lottery. A lottery has been defined as the distribution of prizes by lot or chance without the use of any skill; See Arch-bold's Criminal Pleadings 27th Edn. p. 1345. In the Oxford New English Dictionary a lottery is defined as an arrangement for the distribution of prizes by chance among persons purchasing tickets. Tickets of course are only the tokens of the chance purchased, and it is the purchase of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a lottery. 6. But it has been contended that a lottery requires that the dominant motive of the persons participating in it is to gamble; and as a corollary to this proposition it is argued that a loss to some of the parties is a necessary element of a lottery. No case has been produced to show that the definition of lottery is qualified by the motives of the participants. On the contrary, in Hall v. Me William (1901) 85 L.T. 239 where a lottery was a competition promoted by a newspaper with the object of increasing the number of its purchasers and of its circulation, Ridley, J., said: It may be that the owners of the newspaper have other objects in their minds as to what they will do and how they will benefit by the offering of these prizes; but as far as the purchaser is concerned I think he does buy with this newspaper the chance of obtaining the prize 7. Which goes to show that the question lottery or no lottery? - is not to be determined by the quality of the promoters' motive. The contention, too, that it is an element of a lottery that some of the competitors must stand to lose seems to be founded upon a misconception of the passage in Halsbury Vol. 15 p. 525 which has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia unlawful in the sense that it is prohibited by law. It is only in relation to Section 294-A of the Penal Code that a lottery becomes illegal. This section makes it an offence (1) to keep any office or place for the purpose of drawing any lottery not authorised by Government, or (2) to publish any proposal to pay any sum on an event or contingency relating to the drawing of any ticket in such lottery. The evidence distinctly proves a publishing of the kuri regulations which contained the proposals relating to the lottery. One of the defendants says that the regulations were printed - a copy is before us - and a plaintiff's witness says that the regulations were shown to him. This constituted an offence against the second part of Section 294-A. Regarding the question whether defendants offended against the first part of the section, I think the temple would be a place , and that it is apparent from the Regulations (Clause 9) that the defendants had a control, possibly only de facto, over the place for the purpose of drawing the lottery there. Section 294-A does not make it an offence for the owner or occupier of the place to keep it for the unlawful purpose; it simply makes i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other set of men, the one, from their situation and condition, being liable to be oppressed or imposed upon by the other, there, the parties are not in pari delicto ; and in furtherance of these statutes, the person injured, after the transaction is finished and completed, may bring his action and defeat the contract. 11. The Lottery Acts in England make it an offence to sell or deliver a lottery ticket, to keep a lottery, to keep a place for the exercise of a lottery, and to publish a lottery. Section 294-A makes it an offence to keep a place for drawing a lottery or to publish a lottery. Neither under the English Acts nor under the Penal Code is it made an offence to buy a ticket in a lottery. Can it be doubted that these enactments are aimed at the class of persons who promote lotteries, and that they are intended to protect the class of persons who are tempted to take tickets in lotteries? This was the view of the policy of the Lottery Acts taken by Stirling, J., in Barclay v. Pearson (1893) 2 Ch. D. 154 and in this view the plaintiffs would be entitled to recover their subscriptions from the defendants even if the money had been distributed. But the argument is that the plaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase has been placed before this Bench because of the conflict between; The Udumalpet Nidhi, Ltd., In re (1934) 57 Mad. 844 : 67 M.L.J 445 and Shanniugha Mudali v. Kumaraswami Mudali I.L.R.(1925) 48 Mad. 661 affirmed in Narayana Aiyangar v. Vellachami Ambalam (1927) I.L.R. 50 Mad. 696 :: 1927 52 M.L.J. 687 (F.B.). and the points arising therefrom have been argued at great length before us, I have thought it right to express my opinion on some aspects of the wider question. 16. The arguments before us may be grouped under four heads: (i) what are the elements necessary to make a scheme a lottery (ii) what are the conditions to be established before persons participating in a lottery can be held guilty under Section 294-A Indian Penal Code (iii) what is the position for the purposes of the 'Criminal' law of persons who subscribe to or purchase tickets in a lottery as distinguished from that of those who organise, promote or manage the lottery (iv) what is the position for the purpose of the Civil Law of such subscribers or ticket holders in relation to the organisers, promoters or managers. 17. Though there is no formal definition of 'lottery' in the Indian Penal Code, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 of the article on ' Gaming and Wagering' in Halsbury's Laws of England (Vol. 15) that 'the substantial object of the whole scheme ' must be looked at and where the object is the carrying on of a legitimate business, the fact that it provides for the distribution of its profits in certain events by lot will not make it a lottery. 19. On behalf of the Respondent, Mr. Raghava Rao insisted that a scheme cannot amount to a lottery unless it involved the elements to be found in a 'wagering' contract and the deciding factor should be taken to be not the chance of getting a 'prize' but the chance of loss in certain contingencies. There may not be much in this antithesis but for the fact that in Shanmugha Mudali v. Kumaraswami Mudali I.L.R.(1925) 48 Mad. 661 the learned Judges laid stress on the fact that every subscriber at least got back the principal amount contributed by him and in Narayana Aiyangar v. Vellachami Ambalam I.L.R.(1927) 50 Mad. 696 : 52 M.L.J. 687 (F.B.) Ramesam, J., held that any payments out of the interest derived or likely to be derived from the investment of the subscriptions must not be regarded as a 'loss' sustained by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the promoters hoped to reimburse themselves in due course from out of the interest earned will not make the payments to the subscribers who are lucky in the early drawings any the less a 'prize'. 21. I cannot help feeling that in the judgments of Ramesam and Venkatasubba Rao, JJ., in Shanmuga Mudali v. Kumaraswami Mudali I.L.R.(1925) 48 Mad. 661 and that of Ramesam, J., in Narayana Aiyangar v. Vellachami Ambalam (1927) I.L.R. 50 Mad. 696 :: 1927 52 M.L.J. 687 (F.B.) a great deal too much has been read into the observations. On this point in the Wallingford Case (1880) L.R. 5 A.C. 685 Lord Blackburn (at p. 70.5) disposed of the objection under the Lottery Acts by pointing out that 'a drawing of lots on one occasion' would not make the society illegal. Lord Watson contented himself with the remark that the appellant stated no case showing that this mutual society is a gaming or gambling society' (p. 709). Lord Hatherley said 'if this were held to be a lottery nearly every one of the societies I have referred to, namely building societies and a great many other societies framed upon a similar footing, might be found to fall within the enactments against lotte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... araswami Mudali I.L.R.(1925) 48 Mad. 661 at p.664 and Venkataramana v. Sanyasayya (1933) 66 M.L.J. 76. In Narayana Aiyangar v. Vellachami Ambalam I.L.R.(1927) 50 Mad. 696 : 52 M.L.J. 687 (F.B.) the head note would make it appear that the decision of the Full Bench in some measure rested on the circumstance that the 'number of subscribers is determined beforehand'. This is somewhat misleading. In the order calling for a finding, the only relevant observation (on p. 700) is 'it is essential to know how it was organised and advertised and whether any one who liked could join by merely paying subscriptions'. On the return of the finding the Court only observed that no offence has been committed 'as no office or place for the purpose of drawing any lottery was kept'. It is true that the expression 'keeping an office or place' implies a degree of habitualness and continuity of operations but this will be satisfied as much by a repetition of drawings as amongst a fixed number of persons as by permitting an unlimited number of persons to come in as and when they please. Further, it is disclosed by the evidence in this case and it is only natural that after t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary or expedient to express any definite opinion, on the evidence in this case, as to whether or not the defendants are guilty of an offence under Section 294-A of the Indian Penal Code. Though the interest of the moment has tempted them to plead that the case falls within Section 294-A, I am sure they would be the first to plead 'not guilty' if they were threatened with a prosecution. It is well settled that it is not sufficient for the purpose of the first part of Section 294-A that the scheme amounts to a lottery; it is further required that the person charged should keep any office or place for the purpose of drawing any lottery . It has frequently been pointed out that the scope of this provision is very much more limited than that of the law in England relating to lotteries. (See the varieties of offences under the English Law referred to in Martin v. Benjamin (1907) 1 K.B. 64 and Halstmry para 934 in the Article on 'gaming and wagering' in Vol. XV). Even in India, the prohibition was wider under Act V of 1844 but when incorporating this portion of the law into the Penal Code in 1860, the legislature has to some extent narrowed it. Under similar Acts in Engl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid in the 'keeping'. I am not however sure that this is the correct view. Assuming that they aid in the lottery by subscribing thereto or taking tickets, it cannot necessarily be said that they aid in the 'keeping' of a place for the purpose. It would make no difference to them if the lots are drawn at one place on one occasion, and at another place on another occasion so as to avoid the habitual user of place as required by the section. 26. It remains to deal with the relations of the parties for the purpose of the civil law. In Veeranan Ambalam v. Ayyachi Ambalam AIR1926Mad168 Spencer, J., says: The Civil law goes further (than the Criminal law) and prevents obligations arising out of lotteries being enforced in a Court of law whether the lottery is held in an office to which the public have access or in a private place to which admission is not to be had for the mere asking 27. The meaning of this passage is not very clear. In Narayana Aiyangar v. Vellachami Ambalam I.L.R.(1927) 50 Mad. 696 : 1927 52 M.L.J. 687 (F.B.) Ramesam, J., understood it only to mean that such obligations will be unenforceable if the arrangement is in the nature of a wagering contract . I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both parties are in such cases in pari delicto. Assuming that the payment was made by the subscriber for an illegal purpose , Section 84 of the Trusts Act contemplates three cases in which the payment may be claimed back. In the face of the terms of the section, I am unable to agree with the contention of Mr. Krishnaswami Aiyar on behalf of the petitioner that the statement of the rule in Petherpermal Chetty v. Muniyandi Servai I.L.R. (1908) 35 Cal. 551 : 1908 L.R. 35 IndAp 98 : 1908 18 M.L.J. 277 (P.C.) is exhaustive. The second class contemplated by Section 84 comprises cases where the person making the payment or transfer is not as guilty as the transferee and is meant to reproduce a well recognised exception known to the English law see Reynell v. Sprye (1852) De G.M G. 660 : 42 E.R. 710 As early as in Browning v. Morris (1718) 2 Cowp 790 Lord Mansfield recognised the right of the subscriber to claim a refund from the lottery office keeper, on the principle that lottery was prohibited by statute for the sake of protecting one set of men from another set of men , and that therefore the parties are not in part delicto. This principle which has been re-affirmed in Kearly v. Thomp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a lottery as a distribution of prizes by lot or chance; and I think it has been held consistently both in England and here that this distribution must not be entirely gratuitous. An attempt has been made to argue before us that a lottery is necessarily a type of wager and that the element of hazard and risk of loss necessarily enters therein. In a sense it is true that whenever a man purchases a chance in a lottery he risks losing the money which he has paid for that chance. But I do not think that it can be said that risk of loss necessarily enters into the contract of every person who joins a lottery. Otherwise it would be obvious that a case like that covered by Wills v. Young and Stembridge (1907) 1 K.B. 448 could not be a lottery; for in that case, the distribution of medals which supplied the place of tickets was gratuitous. The element of payment entered only to the extent that most of the holders (but not all of them) purchased copies of the newspaper in order to ascertain the result. Similarly in such cases as the tea packet case Taylor v. Smetten (1883) 11 Q.B. 207. or the music hall case Morris v. Blackman (1864) 2 H.O.C. 912 : 159 E.R. 378 or the case of the lucky new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re to follow that the scheme now under consideration is certainly a lottery. 33. Now a lottery is not per se illegal, though if it could be shown that the lottery was in fact a series of wagering contracts as was held by Spencer, J., in Veeranan Ambalam v. Ayyachi Ambalam AIR1926Mad168 so as to fall within Section 30 of the Indian Contract Act, the contract might be void. But it has not been contended by the petitioner before us that this lottery is in fact a wagering contract and we are only concerned with the question of the extent to which the parties to the lottery committed offences under Section 294-A of the Indian Penal Code In dealing with this question one has necessarily to refer to the decision of the House of Lords in Walling ford v. Mutual Society (1880) 5 A.C. 685 which has given rise to a great deal of discussion. The difficulty about this case is that the consideration of the lottery question was a minor point in that case, not discussed at any length in their Lordships' speeches, and it is not easy to be certain of the reasons which govern the decision on this point in the case. Probably the best summary of the effect of this decision is that given in Halsbury& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribers is known, but I would go so far as to say that it is almost inevitable that the number of subscribers should be known when the drawing takes place and when the offence under Section 294-A, first part, is committed. 35. The second part of this section deals with the publication of the proposals connected with any such lottery . It seems to me that the words such lottery must only refer to a lottery not authorised by the Government and that publication would be complete by the circulation of printed prospectuses to members of the public or to persons known to be likely to subscribe. In the present case it is established that at least 600 persons were recruited to the scheme by means of canvasing agents, private letters and circulation of printed prospectuses. There can, I think, be no doubt as to the fact of publication and it seems to me to make no difference whatever, on the question of publication or on the question of keeping an office how and when the number of subscribers was fixed. As a matter of fact in the present case the number was fixed in the first instance at 500 and was later increased presumably as a result of popular response to 625. But the point seems to me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present scheme did keep a place for the purpose of drawing an unauthorised lottery. That is to say, the defendants as proprietors committed offences under both the parts of Section 294-A, Indian Penal Code. 37. The next question is, to what extent the plaintiff can be said to be a party to the illegality of the action of the defendants? He was a mere subscriber. There is, so far as I am aware, no evidence that he took part in the organisation of the lottery or even that he was present at the drawing, though under the prospectus he had a right to be present if he so wished. He certainly cannot be said to have committed an offence under Section 294-A. It is suggested that he may be an abettor of such an offence. Clearly he did not abet the publication of this lottery proposal for it was published persumably before he paid over his money and it was by the publication that he was induced to join the scheme. Can he be said to have abetted the keeping of the place for the drawing of the lots? I do not think he can. Granted that the scheme under which he bought a ticket contemplated the keeping of a place for the drawing of lots, the mere purchase by the plaintiff of a ticket would not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it be a question of ex turpi causa non oritur actio. The plaintiff can plead the contract without pleading his own criminality and he should therefore be allowed to recover his money. 39. It seems to me unnecessary to consider at length the plea that there is no personal liability upon the defendants for such a liability is in my opinion imposed by the terms of the contract. In this view therefore I agree that the petition should be dismissed with costs. Venkataramana Rao, J. 40. The suit out of which this Civil Revision Petition arises was instituted by the plaintiff to recover a sum of ₹ 270 being the amount contributed by him towards his share of subscriptions to a chit fund which was conducted by the defendants with interest thereon at 12 per cent per annum. The defence was that the chit fund transaction was lottery within the meaning of Section 294-A, of the India Penal Code and any claim arising thereunder could not be legally enforced and that the petitioners were not personally liable and at best the remedy of the plaintiff could only be against the moneys, if any, of the fund. 41. The learned District Munsiff, Palghat was of opinion that the chit fund in question wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of winning a prize. In Webster's dictionary 'lottery' is defined as a scheme for the distribution of prizes by lot or chance, especially a scheme by which one or more prizes are distributed by chance among persons who have paid or promised a consideration for a chance to win them, usually as determined by the numbers on tickets as drawn from a lottery wheel . In Murray's dictionary the following meaning is given; An arrangement for distribution of prizes by chance among persons purchasing tickets . In the latest Universal Dictionary of English Language it is defined as follows: Organised competition for money or other prizes, the winners of which are selected by lots, the funds being subscribed by the competitors . 45. From a study of decisions both English and Indian the following four elements appear to be essential to constitute a lottery: (1) A prize or some advantage in the nature of a prize; (2) Distribution by chance; (3) Consideration paid or promised; (4) risk or loss. 46. I shall endeavour with reference to the decisions to show that if any one of these elements is wanting the transaction will not be lottery. Before proceeding to do so it is necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of forfeiting for every such offence the sum of five hundred pounds, to be recovered in the Court of Exchequer at the suit of his majesty's Attorneygeneral, and to be to the use of his majesty, his heirs and successors'. 47. The Lotteries Act 1823 provided that if any person or persons were to sell ticket or chances in any lottery not authorised by an Act of Parliament or publish any scheme or proposal for the sale of any ticket or chance in such a lottery, for every such offence he had to forfeit and pay a sum of fifty pounds. 48. It will be seen from the preamble of 42 Geo. 3 the underlying public policy which declared the lotteries common public nuisances was that they promote gambling and speculation so that great sums are obtained fraudulently from servants, children, and unwary persons to the great impoverishment and utter ruin of many families. In India, Act V of 1844 was enacted on these lines. The relevant provisions are as follows: Whereas great mischief has been found to result from the existence of Lotteries: (i) It is hereby enacted, that in the Territories subject to the Government of the East India Company, all lotteries not authorised by Government, shall, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titute the transaction a lottery as the return of their contributions is not made a matter of chance. Both in the Saddar Dewani decision and in Kamakshi Achari v. Appavu Pillai (1863) 1 M.H.C.R. 448 their Lordships held such a transaction will not amount to a lottery., It is well worthquoting the reasons on which the conclusion was arrived at: (i) It has in it no element of chance or risk, the monies paid by each subscriber being eventually returned to him Aiyangar Kone v. Vidoomada Kone (1858) Sudder Dewani adalat 83. (ii) Lotteries ordinarily understood are games of chance in which the event of either gain or loss of the absolute right to a prize or prizes by the persons concerned, is made wholly dependent upon the drawing or casting of lots, and the necessary effect of which is to beget a spirit of speculation and gaming that is often productive of serious evils. It is to lotteries of this description that the Act, we think, must be construed to apply when declaring 'them to be common and public nuisances and against law' and as such providing for their suppression. Here no such lottery appears to have taken place... and neither the right of the subscribers to the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them money on interest upon certificates of appropriation. By Article 27 it was declared that appropriations shall be allotted in two ways, the first and every fourth one thereafter, by drawing free of any premium or interest, while those intermediate shall be allotted to the member or members tendering the highest premium for the same respectively. All appropriations were to be repaid by equal quarterly payments extending over 20 years from the advance. It was urged in that case that the constitution of the society itself was illegal, as its promised benefits were to be given to the members by drawings, which made the society illegal under the Lottery Acts. Their Lordships had no hesitation in repelling the contention. Referring to the Lottery Acts, Lord Selborne observed as follows: One of those acts plainly on the face of its recitals (the enacting part not departing from those recitals,) had reference to gambling transactions only; and in my judgment this was not a gambling transaction, within the meaning of that Act 54. Thus it will be seen in this case there was a prize obtained by some of the subscribers at the expense of the others. That prize was determined by chance. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he profits therefrom were to be divided in a certain manner stated therein. There was provision for redemption of certificates by purchase. There was also provision for redemption in a certain event by a drawing of the certificates which entitled the recipient of that certificate to particular benefits i.e., gain of 30 per share. It was contended in that case that the object of the association being for the acquisition of gain and that the drawing of the certificates for purchase by lot was a lottery. Chitty Q.C. who appeared for the association in that case met the argument relating to lottery by saying All argument that this case is within the Lottery Acts is precluded by the decision of the House of Lords in Walling ford v. Mutual Society (1880) 5 A.C. 685 . Their Lordships in the Court of appeal reversed the judgment of Sir George Jessel M.R. holding that the association was not for the purpose of gain within the meaning of the Companies Act, that: If there is any business at all it is to be carried on by the trustees. Whatever is to be done is to be done by the trustees - persons who have no mutual rights and obligations do not constitute an association because they happen to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7) 1 K.B. 448 that an absolutely free and gratuitous distribution of chances, none of which has been paid for, would not be a lottery. It will thus be seen that the combination of a prize, chance and gain would not be enough. That which is essential therefore is consideration paid or promised because it is only then that the fourth element of risk or loss comes in. If there is no consideration there can be no question of gain or loss. Every one of the English cases on which reliance is placed tends undoubtedly to establish this. As rightly observed in Halsbury, Vol. 15, p. 525 footnote (f): In spite of the fact that the Courts have adopted as a definition the description of a lottery given above, in which the gambling element is not mentioned, (a lottery has been described as a scheme for distributing prize by lot or chance), there is no reported case in which the element has been wholly absent. Indeed, the Courts have gone out of their way to discover its presence 61. In Taylor v. Smetten (1883) 11 Q.B. 207 a packet containing a pound of tea was sold at 2 Section 6d. a packet. In each packet was a coupon entitling the purchaser to a prize. Hawkins, J., who delivered the leading ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for 6d. each upon the terms that the purchaser of the ticket bearing a number to be subsequently drawn by an independent person would be entitled to a bicyle as a prize. The bicyle in this case was presented as a gift by a firm of cycle manufacturers for the purpose of advertisement. The ground on which this transaction was held to be a lottery is thus stated by Ridley, J.: I am unable to see how the fact that no part of the money which was paid for tickets went for the purchase of the prize, which was presented by the Cycle Company, makes any difference. I think a lottery is held whenever there is a sale of tickets which gives the holders of them the chance of winning a prize. It is selling a chance where one ticket, by chance, entitles the holder to a prize 67. This again emphasises the necessity of a consideration. It is unnecessary to multiply cases because every one of the cases when examined established the necessity of a loss as an element in determining whether the transaction is a lottery or not. 68. Coming to Indian Cases I have already shown that in the two cases decided under Act V of 1844, 'risk' was considered an element of lottery and the same interpretation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rect stand point when in Shanmugha Mudali v. Kumaraswami Mudali I.L.R.(1925) 48 Mad. 661 on page 664 he observes: The element, therefore that is generally present in a lottery or wagering transaction, viz., that loss is occasioned to one or more does not exist in this transaction 72. It is necessary now to consider whether loss of interest to some of the subscribers can be considered a hazard of loss to constitute the transaction a lottery. The view taken in Shanmugha Mudali v. Kumaraswami Mudali I.L.R.(1925) 48 Mad. 661 was that it was not but in Veeranan Ambalam v. Ayyachi Ambalani AIR1926Mad168 Spencer, J. and Madhavan Nair, J., held it was. In so holding they relied upon the judgment of Richards v. Starck (1911) 1 K.B. 296. The scheme therein is thus described by Channel, J.: A person who desires to participate in the scheme deposits a sum of money, whether 5 or 10 or some multiple thereof, with the defendant, who is to be at liberty to speculate with it on the Stock Exchange in certain stocks, and if at the end of three months from the date of the deposit the price of those stocks is higher than the price at the date when the deposit is made the defendant undertakes to pay to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng between the defendants and the plaintiff. The defendants in effect said to the plaintiff, we (the defendants) are going to speculate on the Stock Exchange, and if you will advance us money we guarantee its return in the event of our speculations resulting in a loss 76. (Vide also 15 Halsbury p. 474 foot-note). The decision of the Full Bench is thus a distinct authority that loss of interest is not an element which would go to constitute a lottery. So far as the suit chit transaction is concerned, no question of loss of interest arises as all the subscribers have made a gift of such interest as may be earned to the temple. It is competent for a subscriber to forego interest and there is nothing illegal in it and there is thus no loss hazarded and the return of the subscription is not made a matter of risk or speculation. Pollock and Mulla in their Commentary on Contract Act (6th Edn.) approving Narayana Aiyangar v. Vellachami Ambalam I.L.R.(1927) 50 Mad. 696 : 1927 52 M.L.J. 687 (F.B.), observe: A 'Chit Fund' plan under which all subscribers are repaid their capital by a fixed date, though some determined by lot get more and sooner is not a lottery (page 250). 77. I am th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 80. The next question is whether the plaintiff is entitled to recover the subscriptions paid by him. It is contended by Mr. T.M. Krishnaswami Aiyar that the plaintiff having been a party to an illegal contract and the illegal purposes having been substantially carried out is disentitled from getting any relief. Strong reliance is placed on the decision in Petherpermal Chetty v. Muniandy Servai I.L.R.(1908) 35 Cal. 551 : L.R. 35 IndAp 98 : 18 M.L.J. 277 (P.C.). There is no doubt that the general rule is that no person can claim any right or remedy on the basis or ground that he has been a party to an illegal contract and as the illegal contract is an essential constituent of the cause of action, he cannot succeed. In English law there are well-recognised exceptions to this rule and one of them is where the contracting parties are not in pari delicto: the offence of one of them so far exceeds that of the other as to make it just and reasonable that the other should be entitled not indeed to enforce the contract but to obtain in some measure or form restitutio in integrum in respect of acts of performance done by him in favour of the more guilty party 81. It is in virtue of this pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... last argument of Mr. T.M. Krishnaswami Aiyar is that in any event his client cannot be made personally liable. He based his argument on Clause 13 of the regulations of the Kuri. From a reading of the regulations of the Kuri there is nothing to exclude the personal liability of the defendants and Clause 13 only confers an additional security on the moneys of the Kuri. 84. In the result the petition fails and I concur with my learned brothers in dismissing the revision petition with costs. K.P. Lakshmana Rao, J. 85. I agree that the petition should be dismissed with costs, and in my opinion the crucial test is whether or not the chance of winning a prize by lot enters into the bargain. If it does the subscribers would necessarily be risking something, and it is not essential that the fund out of which the prizes are provided should consist only or at all, of sums contributed by them. That every one of them would in any event obtain full value for his subscription would not prevent the scheme from being a lottery and it is only when the chances of a prize are obtained wholly gratuitously that the scheme would not be a lottery. Viewed in this light the scheme under consideration is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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