TaxTMI 
TaxTMI 
1934 (2) TMI 17
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....ers on the security of deposits, immovable property, goods and sureties, to receive deposits etc, when necessary and to pay interest and do other banking business, to conduct various kinds of trade should directors decide to establish branches outside, to conduct various kinds of auction chits and prize chits as will be determined by the Board from time to time and to do all acts which will be helpful to the above objects." The alteration was approved by Stone, J., subject to the deletion of those parts of the clauses relating to the conduct of various kinds of trade and prize chits. With regard to the latter, which, in my opinion, was the most important alteration proposed, the conditions of the prize chit are set out; and it is only nec....
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....ts Rs. 100. He has paid for 15 months, at the rate of Rs. 3 a month, Rs. 45, and he gets Rs. 100 for it. Taking that section 1 to 15 months, the subscriber whose name is drawn earlier gains a very large benefit over the other subscribers whose names or numbers have not been drawn. As the chit progresses, the benefit to the subscriber whose name is drawn earlier becomes further emphasised. It is contended here that this prize chit is not a lottery. If it is a lottery, obviously our learned brother was quite right in dealting that object of the Nidhi from the proposed altered rule. In support of the appellants' argument we were referred to the Full Bench Decision in Narayana Ayyangar v. Vellachami Ambalam. I myself was a member of that Full B....
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....ed in funds which are to be divided amongst them by lot. and divided unequally. That is, the persons who get the benefit of the drawings get a bond bearing interest and a bonus which gives them different advantages from the persons whose certificates are not drawn, and it depends upon chanee which gets the greater or lesser advantage. It is, therefore, a subscription by a number of persons to a fund for the purpose of dividing that fund between them by chance and unequally." It appears to me that the conditions laid down by Jessel, M. R., are present here. The subscribers to that chit fund are investing in a fund which is to be divided amongst them by lot and clearly dividend unequally. The conditions of the fund have only got to be examin....