Anil K.Sen, J. - (1.) Two writ petitions, preferred by the appellants, the Peerless General Finance and Investment Co. Ltd. (hereinafter referred to as ',' the Peerless ") and its shareholder-director, Sunil Kanti Roy, which were registered as C.R. No. 9764 (W) of 1979 and C.R. No. 6832(W) of 1980 were dismissed on contest by a learned single judge of this court by an order dated March 14, 1986. Feeling aggrieved, the appellants have preferred the present two appeals under Clause 15 of the Letters Patent. Though extensively argued, the point involved is a short one and such a point is common to both the appeals. The point is as to whether the business carried on by the appellant company, Peerless, conies within the prohibition of Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
(2.) There is not much dispute with regard to the nature of business carried on by the Peerless. It carries on a long standing business since 1932 in finance and investment. It offers certain schemes for future provision, children's education, daughter's marriage, house building, fixed pension, etc. The term of deposit varies from 10 to 30 years. Under its endowment certificate scheme, the subscriber is required to pay a fixed subscription periodically for a fixed number of years, varying between 10 to 30 years and on the expiry of the period, the subscriber gets back a lump sum of money, which is called " endowment sum ", or the face value of the certificate with bonus. The scheme also provides for loan, surrender and paid up and also for revival of lapsed certificate. Its social welfare schemes are run on actuarial principles. None of its schemes, however, contemplates or provides for giving or awarding to all or specified number of subscribers prizes or gifts in whatsoever manner.
(3.) On December 12, 1978, a Central Act, called "the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, came into force (hereinafter referred to as " the said Act"). Section 3 of the said Act totally banned promotion, conducting of any prize chit or money circulation scheme and also prohibited participation therein by any person. Section 4 of the said Act made violation of Section 3 an offence punishable with imprisonment or fine. Section 12 of the said Act further provided that any person conducting any such prize chit or money circulation scheme at the time of the commencement of the Act, was to wind up such a business and such winding up was to be effected through the instrumentality of the State Government acting in consultation with the Reserve Bank of India. The State Government was authorised to frame rules for the said purpose. Section 11 of the said Act provided for certain exemptions in favour of State Governments, State-owned companies and certain banks. The Act, in Section 2(c), defined " money circulation scheme" and, in Section 2(e), it defined " prize chit". The relevant definitions are set out as follows : "2. (c) ' money circulation scheme' means any scheme, by whatever name called, for the making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions;...... (e) ' 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, moneys 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 utilise the moneys so collected or any part thereof or the income accruing from investment or other use of such moneys 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 moneys 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.";