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2010 DIGILAW 749 (KAR)

KAMAKSHI v. STATE OF KARNATAKA

2010-06-23

A.RAJU NAGARAJ

body2010
ORDER The accused in C.C. No. 22406 of 1997 on the file of the learned X ACMM, Bangalore City, Bangalore which subsequently came to be renumbered as C.C. No. 14544 of 1999 on the file of the learned Metropolitan Magistrate, I Traffic Court, Bangalore City, Bangalore (hereinafter referred to as "Trial Court" for short) has challenged in this revision the legality and correctness of the judgment and order of conviction and sentence dated 28-7-2000 passed in the said case convicting her for the offence under Section 4 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (hereinafter referred to as "Prize Chits Act" for short). She has also challenged in this revision the correctness of the judgment and order dated 20-7-2006 passed in Cri.A. No. 15096 of 2000 on the file of the learned XIII Additional Sessions Judge, Mayohall Unit, Bangalore (hereinafter referred to as "Appellate Court" for short) confirming the judgment and order of conviction passed by the Trial Court. 2. Heard the arguments of Sri Amaresh A. Angadi, the learned Counsel for the revision petitioner-accused and Sri Vijayakumar Majage, the learned High Court Government Pleader. Perused both the impugned judgments and orders and also the entire material found in the original records obtained from the Trial Court. 3. Sri Amaresh A. Angadi, the learned Counsel for the revision petitioner-accused strongly contends that the charge framed against the revision petitioner-accused in the Trial Court for the offence under Section 4 of Prize Chits Act do not attract the definition of "Prize Chit" as defined under Section 2(e) of the said Act and therefore, conviction of the revision petitioner-accused under Section 4 of the said Act for contravention of Section 3 of the said Act which bans Prize Chit and Money Circulation Schemes cannot be sustained in law. 4. Per contra, Sri Vijayakumar Majage, the learned High Court Government Pleader contends that both the Trial Court as well as the Appellate Court have concurrently found that the revision petitioner accused committed the offence punishable under Section 4 of the Prize Chits Act and therefore, both the judgments do not call for any interference in this revision. 5. The charge framed by the Trial Court against the revision petitioner-accused reads as under: "That you on 12th June, 1993 at your house at Mottappanapallya, Indiranagar, told the neighbours that you are going to start a Chit of Rs. 5. The charge framed by the Trial Court against the revision petitioner-accused reads as under: "That you on 12th June, 1993 at your house at Mottappanapallya, Indiranagar, told the neighbours that you are going to start a Chit of Rs. 15,000/- p.m. and that it consists of 50 members and each has to pay Rs. 300/- p.m. and by giving false benefit information to members dishonestly induced 50 members to give Rs. 300/-. And further on 10th November, 1993 again told the neighbours that you are going to start another chit for Rs. 13,000/- consisting of 52 members each has to Rs. 250/- every month, and further dishonestly induced 52 members to pay Rs.250/- and thus collected the whole amount and cheated the members without giving the money back and further you were running the said chit without any valid licence from the Government and you thereby committed the offences punishable under Sections 3 and 4 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and within my cognizance". 6. 6. Section 2(e) of the Prize Chits Act defines Prize Chit as under: ""Prize chit" includes any transaction or arrangement by whatever name called under which a person collects whether as a promoter, foreman, agent or in any other capacity, monies in one lump sum or in instalments by way of contributions or subscriptions or by sale of units, certificates or other instruments or in any other manner or as membership fees or admission fees or service charges to or in respect of any savings, mutual benefit, thrift, or any other scheme or arrangement by whatever name called, and utilises the monies so collected or any part thereof or the income accruing from investment or other use of such monies for all or any of the following purposes, namely.- (i) giving or awarding periodically or otherwise to a specified number of subscribers as determined by lot, draw or in any other manner, prizes or gifts in cash or in kind, whether or not the recipient of the prize or gift is under a liability to make any further payment in respect of such scheme or arrangement; (ii) refunding to the subscribers or such of them as have not won any prize or gift, the whole or part of the subscriptions, contributions or other monies collected, with or without any bonus, premium, interest or other advantage by whatever name called, on the termination of the scheme or arrangement, or on or after the expiry of the period stipulated therein, but does not include a conventional chit". 7. Further conventional chit is defined under Section 2(a) of the said Act as under: ""Conventional chit" means a transaction whether called chit, chit fund, kuri or by any other name by or under which a person responsible for the conduct of the chit enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or certain quantity of grain instead) by way of periodical instalments for a definite period and that each such subscriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be provided for in the chit agreement, be entitled to a prize amount. Explanation.-In this clause "prize amount" shall mean the amount, by whatever name called, arrived at by deducting from out of the total amount paid or payable at each instalment by all the subscribers. (i) the commission charged as service charges as a promoter or a foreman or an agent; and (ii) any sum which a subscriber agrees to forego, from out of the total subscriptions of each instalment, in consideration of the balance being paid to him". 8. On careful reading of the above definitions of 'Prize Chit' and 'conventional chit', it could be seen that, if the money collected is used either for giving or awarding periodically or otherwise to a specified number of subscribers as determined by lot, draw or in any other manner, prizes or gifts in cash or in kind, or if it is used for refunding to the subscribers or such of them as have not won the prize or gift etc., the definition of prize chit as given under clause (e) of Section 2 of the Prize Chits Act would be attracted. If the said amount is not used for either of these two purposes, the definition of 'prize chit' is not attracted. On the other hand the definition of 'conventional chit' is attracted under clause (a) of Section 2 of said Act. Further, Section 3 of the Prize Chits Act which provides banning of prize chit and circulation of money etc., reads as under: "Section 3. Banning of prize chits and money circulation schemes or enrollment as members or participation therein.-No person shall promote or conduct any prize chit or money circulation scheme, or enrol as a member to any such chit or scheme, or participate in it otherwise, or receive or remit any money in pursuance of such chit or scheme". 9. On careful reading of the charge framed by the Trial Court against the revision petitioner-accused which is extracted supra, it could be seen that the allegations against the revision petitioner-accused are that: (a) She collected a sum of Rs. 300/- per month from each of 50 members with a promise that on completion of the chit period, each member would be paid a sum of Rs. 15,000/-; (b) She also collected a sum of Rs. 300/- per month from each of 50 members with a promise that on completion of the chit period, each member would be paid a sum of Rs. 15,000/-; (b) She also collected a sum of Rs. 250/- per month from each of 52 members with a promise that on completion of the chit period each member would be paid a sum of Rs. 13,000/-. (c) Despite collecting the said amount periodically from each of the members of the said two groups, she failed to pay them back the said amount as agreed after expiry of the chit period. 10. Thus, it is clear, from the above allegations in the charge, that the revision petitioner-accused is not alleged to have entered into any agreement with the members of the said two groups that the amount so collected would be used for giving or awarding the periodical prizes or gifts, either in cash or in kind, or that it would be used for refunding to the subscribers or such of them as have not won any prize or gift. 11. Therefore, I am of the considered opinion that the contents of the said charge do not attract the definition of 'prize chit' which has been banned under Section 3 and the doing of which is made punishable under Section 4 of the Prize Chits Act. This being so, conviction of the revision petitioner-accused under Section 4 of the Prize Chits Act for the alleged contravention of the provisions of Section 3 of the said Act cannot be sustained in law. 12. For the reasons aforesaid, the present revision petition is allowed. The impugned judgment and order dated 28-7-2000 passed in C.C. No. 14544 of 1999 by the Trial Court and the judgment and order dated 20-7-2006 passed in Cri.A. No. 15096 of 2000 passed by the Appellate Court are hereby set aside. The revision petitioner-accused is hereby acquitted of the offence punishable under Section 4 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. The bail bond, if any, executed by the revision petitioner-accused shall stand cancelled. Fine, if any, paid by the revision petitioner-accused, shall be returned to her.