1. ' This is an application under Order XXXVII, Rule 3, C.P.C. Filed by the defendant seeking leave to appear and defend the suit. The plaintiff has filed suit for recovery of Rs,1,16,500 under Order XXXVII, C.P.C. As a cheque for Rs,1,15,000 issued by defendant in favour of the plaintiff was dishonoured. The facts disclosed in the plaint are that the defendant floated a scheme whereby every member was to contribute Rs,1,500 per month. From amongst the contributing members a lot was drawn every month and the member whose name was drawn was to receive a Suzuki Car 800 from the defendant and was not required to pay any further instalments under this scheme. If the name was not drawn then the member was to continue to pay the instalments for a period of 5-1/2. Years after which he would be entitled to a Suzuki Car. In the month of January 1989 when lot was drawn the plaintiff came out successful and he became entitled to Suzuki Car without paying any further contribution. According to the plaintiff when he applied for the delivery of the Suzuki Car the defendant expressed his inability and instead undertook to pay the price of the car. He issued a cheque for Rs,1,15,000 dated 13-4-1989 and another cheque of Rs,1,500 which was towards refund of the instalment. The cheques when presented were dishonoured. The defendant in his affidavit has admitted that a scheme as stated by the plaintiff was floated and it was under this scheme that the name of the plaintiff was drawn and he became entilted to Suzuki Car without payment of further instalments and further that the cheques were issued to the plaintiff. It has however taken the plea that after the cheque was issued the plaintiff was paid Rs,30,000 in the second week of December, 1989 and Rs,10,000 in the first week of January 1990 and another amount of Rs,20,000 in the last week of January 1990 before the witnesses whose names have not been given. The plaintiff had not executed receipt on the pretext that on receipt of the entire amount of Rs,1,15,000 the cheques will be returned and receipt will be executed in favour of the defendant. In this way the defendant's plea is that he has paid Rs,60,000 to the plaintiff against the cheque without any receipt. It has also been pleaded that Rs,1,15,000 was paid to the plaintiff only because his name was drawn although he had not paid the entire instalments. This plea empliedly raises the objection that the payment was without consideration.
2. ' So far the plea of payment of Rs,60,000 is concerned I am not impressed with it as the defendant has not been able to produce any document to substantiate this payment nor he has produced its account books in which such entries were made showing payments made to the plaintiff.
3. ' The plea that the cheque is without consideration depends upon the question whether the contract under which liability is sought to be enforced was a wagering contract. Mr. Abrar Hassan the learned counsel for the plaintiff has referred to Narayana Aiyangar v. Vellaghami Ambalam and others 1927 Mad. 583 in which the question whether the payment of chit fund transaction can be enforced in a Court of law was considered. As there was conflict of opinion the matter was referred to the Full Bench in which it was held that the suit chit fund was not a wagering contract and therefore, could be enforced in a Court of law. However, the Court cautioned that the chit fund transaction is required to be regulated in the interest of the public to avoid the perpetuation of fraud on poor and innocent persons. This judgment was followed in AIR 1934 Mad.136. Whether a particular contract or scheme is wagering in nature or not one has to examine its terms and conditions. Where there is element of uncertainty and the price or the benefit which accrues is dependent on happening of such uncertain event upon which one is the winner and the other a loser it will be called a wagering contract.
4. ' The learned counsel has pointed out that under the scheme in suit the member whose name is not drawn has to continuously pay for 5-1/2 years and therefore, the question of wager does not arise. The scheme can be divided in two parts. One is where a member's name is drawn in the lot and he gets a Suzuki Car without payment of further instalments. The other category is in respect of those members who are not successful and continue to pay till the end. The allurement in the scheme is the benefit which a member will get from draw of lots which is uncertain. Therefore, the compelling reason to join the scheme is the chance and expectation in the draw of lot and not the payment of instalments till the end. Considering from this point of view prima facie the defendant has made out an arguable case. However even if the defendant succeeds on this plea it will have to pay at least the entire amount which it has received as contribution made by the plaintiff namely Rs,13,500. There is no defence or plausible ground for defending the refund of Rs,13,500. I therefore, grant a partial decree in the sum of Rs,13,500 with interest at the rate of 12% per month amount i.e, 93,000. The defendant is granted conditional leave to appear and defend the suit on furnishing a bank guarantee within a period of two weeks. Written Statement to be filed within four weeks.