Sirhind Traders (Regd.) H.O.Sirhind vs State of Punjab

B.S. Yadav, J.

The petitionerfirm through his partner have filed this petition under section 482 of the Code of Criminal Procedure for quashing First Information Report No. 70 dated 6.6.1983 registered at Police Station Samrala, Distt. Ludhiana.

The brief facts, according to the First Information Report, so far as the present petition is concerned, are that Bhagat Singh, Shamsher Singh and Sohan Singh sons of Lehna Singh had previously started the business under the name and style of Janta Bhalai Scheme and now under the name of Sirhind Traders. Those people are trying to earn money by defrauding people and for making the money circulation scheme a success are enrolling members and offering more money or articles of more value after fixed period and are giving other facilities. On the basis of this a case under sections 3 and 4 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (For short the Act) was registered against them.

(Note : It may mentioned here that the translation of the First Information Report as given in the petition is not a correct one. The words "member" and "more money" are missing in the translation).

The learned counsel for the petitioner argued that the above allegations do not make out prima facie a case under the Act. He read out the definition of "money circulation scheme" as given in sub section 2(c) of the Act. That definition reads 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 enrollment 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 subscription;"

He argued that the said definition was interpreted by their Lordships of the Supreme Court in State of West Bengal and others v. Swapan Kumar Guha and others, A.I.R. 1982 SC 949. He pointed out the following passages :

"In order to give meaning and content to the definition of the expression `money circulation scheme'' which is contained in S. 2(c) of the Act, one has, therefore, to look perforce to the adjectival clause which qualifies the words "for the making of quick or easy money". What is within the mischief of the Act is not "any scheme, by whatever name called, for the making of quick or easy money "on any event or contingency relative or applicable to the enrollment of members into the scheme", (whether or not such money or things is derived from the entrance money of the members of such scheme or their periodical subscription). Two conditions must, therefore, be satisfied before a person can be held guilty of an offence under S. 4 read with Ss. 3 and 2(c) of the Act. In the first place, it must be proved that he is promoting or conducting a scheme for the making of quick or easy money and secondly, the chance or opportunity of making quick or easy money must be shown to depend upon an event or contingency relative or applicable to the enrollment of members into that scheme."

Though the First Information Report is cryptic and appears to have been `drawn up in a hurry but I am of the opinion that the conditions as laid down by their Lordships of the Supreme Court are satisfied in the present case. For making quick or easy money the Firm is enrolling members and for the receipt of money received from the members it is offering more money or valuable thing as the consideration on the happening of an event i.e. the expiry of the fixed period. From the arguments it appears that the petitionerfirm is offering articles of triple the amount after the expiry of 3 months to the members in lieu of the amount paid by them. Thus borrowing the words of their Lordships of the Supreme Court used in the above case, it is clear that the Firm is carefully arranging a systematic programme of action between two or more persons under which the subscriber agrees to advance or lend money on promise of being paid more money on the happening of an event (i.e. the expiry of 3 months) applicable to the enrollment of members into the programme and reciprocally the firm which is conducting the programme promises on receipt of an advance or loan to pay more money on the happening of the above event.

The case is still under investigation. At this stage it cannot be said that no cognizable offence is made out against the accused.

In Swapan Kumar''s case (supra) the facts were somewhat different. In that case the Firm was offering very high interest on the amount deposited with it and therefore, it was held that the said scheme did not fall within the definition of `money circulation scheme''.

For the foregoing reasons, I, do not find any ground for quashing the First Information Report and consequently the present petition is dismissed.