PARAMSOTHY v. SUPPRAMANIAM

146-NLR-NLR-V-39-PARAMSOTHY-v.-SUPPRAMANIAM.pdf


Paramsothy v. Suppramaniam.
529
Present: Maartensz and Koch JJ.
PARAMSOTHY v. SUPPRAMANIAM18—D. C. Jaffna, 211
Cheetu Club—Application of Ordinance to existing cheetus—Action for recoveryof contributions—Ordinance No. 61 of 1935, ss. 5 (2) and 46.
The effect of section 46 (4) of the Cheetu Ordinance, No. 61 of 1935, isto make the Ordinance applicable to cheetus existing at the date ofits commencement.
A contributor to a cheetu, which does not comply with the essentialterms of section 3 (1), is precluded by section 5 (2) from maintaining anaction for the recovery of his contributions.
Section 5 (2) applies both to an action for the recovery of contributionsas well as to an action for the recovery of a prize.
T
HE defendants were the managers of a cheetu club which was openedin January, 1936. In June, 1937, the plaintiff as the highest bidder
was entitled to the prize of Rs. 800 and a dividend of Rs. 8.38. As thissum of money had not been paid, the plaintiff sued the defendants for areturn of the instalments, paid by him from January 1, 1936, to the end ofMay, 1937, aggregating Rs. 1,020. The learned District Judge held that,as the contributions of each subscriber had to be paid in instalmentsspread over a period of thirty-one months which was inconsistent withsection 3 (c) of the Cheetu Ordinance, No. 61 of 1935, the action was notmaintainable. From this order the plaintiff appealed.
V. Perera, K.C. (with him M. Balasunderam and S. Sabapathipillai),for plaintiff, appellant.—The plaintiff paid Rs. 1,020 up to the end ofMay, 1937. As he was the highest bidder at the auction held on that day,he became entitled to Rs. 800 and a dividend of Rs. 8.38. The clubceased to exist from that day. The learned District Judge decided thefacts in favour of the plaintiff but held that the plaintiff could not maintainthe action under the Ordinance, as the cheetu did not comply withsection 3 (1) as there were thirty-one contributions.
The Cheetu Ordinance came into operation on April 1,1937—
Gazette No. 8,226 of March 12, 1937. The present cheetu was in existenceon that day. Only chapter VII. applies in this case. The word “ cheetu ”is defined in section 2. Section 5 prohibits the promotion of certaincheetus, but the Ordinance has not penalized the past cheetus. Section5 (2) deals with claims but not with ah action claiming the return of themoney. The Ordinance is not very clear. The word “cheetu” has notthe same meaning in chapter VII. as in the earlier portions. The regis-tration of the cheetu was a duty cast on the manager. Under section 29,the members may recover the money paid.
S. J. V. Chelvanayagam. (N. Nadarajah with him and A. Muthucumaroe),for the defendants, respondents.—The position taken now by the plaintiffis not the same as that taken in the lower Court. The defendants did nottake any objection as the plaint did not disclose a cause of action.
Under the Ordinance certain cheetus are legal and the rest are illegal.In the latter, exemptions of certain regulations may be allowed by the
530MAARTENSZ J.—Paramsothy v. Suppramaniam.
Registrar. Then they would become legal. The provisions of chapter
apply to all cheetus. The necessity of registration is indicated inchapter VII. Under section 5, the present action cannot be maintained.
M. Balasunderam, in reply.—Though there were thirty-one instalments,the interval between them is thirty months.
The Ordinance is for the control and registration of cheetus. It doesnot legalize or illegalize a-cheetu. No ordinance could' be interpreted soas to have retrospective effect unless there were clear provisions in theordinance itself to that effect.
Cur adv. vnlt.
June 1, 1938. Maartensz J.—
The plaintiff-appellant in this action sued the defendants, who healleged were the joint managers of an auction cheetu, to recover theinstalments paid by him from January 1, 1936, to the end of May, 1937,aggregating Rs. 1,020.
The plaintiff averred that in June, 1937, he was as the1 highest bidderdeclared entitled to the prize of Rs. 800 and a dividend of Rs. 8.38, andthat as the defendant failed to pay him this sum of Rs. 808.38 he becameentitled to a refund of the amount contributed by him up to the end ofMay, 1937.
The defendants in their answer denied all the averments in the plaintand pleaded that the action was not maintainable “ as the cheetu, if any,was not constituted as required by Ordinance No. 61 of 1935 ”.
The action was tried on the following issues :—•
Were the defendants joint managers of an auction cheetu for an
amount of Rs. 930 to run for a period of 31 months from January,
1936.
Was plaintiff subscriber to two shares.
Did plaintiff become the purchaser of the collection in June, 1937,
at a discount of Rs. 130.
What amount, if any, is plaintiff" entitled to recover.
Is plaintiff seeking to enforce a right or claim contemplated by
section 5 (2) of Ordinance No. 61 of 1935.
If so, is the plaintiff entitled to maintain this action.
Neither in the answer nor in the issues was it pleaded that the defend-ants were not personally responsible for the payment of the prize or thatthe contribution of the plaintiff had been distributed to the previouswinners.
The plaintiff’s evidence on the issues of fact was not rebutted and theDistrict Judge answered them accordingly.
On the 5th and 6th issues he held that the action was not maintainableby reason of the provisions of sub-section (1) of section 3 and sub-section(2) of section 5 of the Cheetu Ordinance, No. 61 of 1935, and dis-missed plaintiff’s action with costs.
Section 3 (1) of the Cheetu Ordinance, No.'61 of 1935, enacts that “Noscheme or arrangement purporting to be a cheetu shall be deemed to be acheetu for the purposes of this Ordinance, unless-at the time of theformation of that scheme or arrangement the persons joining as subscribers
MAARTENSZ J.—Paramsothy v. Suppramaniam.531
and the person acting as manager agree upon and' adopt each of thefollowing essential terms and conditions ”: —The terms and conditionsare set out in clauses (a) to (k).
Clause (c) enacts “ that the contribution of each subscriber is to be paidto the manager in money in equal instalments of a specified value duringa specified period not exceeding thirty months
Section 4 enacts that. “ every scheme or arrangement which, notwith-standing that it purports to be a cheetu, is not based wholly on theessential terms and conditions set out in section 3 or which is based onterms and conditions inconsistent wholly or in part with those essentialterms and conditions, shall for the purposes of this Ordinance be deemedonly to partake of the nature of a cheetu
Section 5 provides that “ fl) No person shall promote or conduct, oraid, assist or take any part in the promotion or conduct of, any scheme orarrangement which only partakes of the nature of a cheetu within themeaning of section 4.
(2) No right or claim under any scheme or arrangement which onlypartakes of the nature of a cheetu within the meaning of section 4, shallbe enforceable by action in any Court or Village Tribunal in this Island ”,
In the cheetu in question the contribution of each subscriber was to bepaid during a period of thirty-one months. The District Judge held thatthe cheetu embodied a condition inconsistent with clause (c) quoted above,and was an arrangement partaking of the nature of a cheetu within themeaning of section 4. He held further that section 5 (2) applied toexisting cheetus and that the action was not maintainable.
The District Judge also held that the cheetu did not 'comply withanother essential condition, but that ruling is due to a misreading of theevidence and need not be considered.
The main contention in appeal was that the Ordinance did not apply tocheetus which were being conducted when the Ordinance came intooperation. (The Ordinance came into operation on April 1, 1937.)These cheetus I shall refer to as “ existing cheetus ”.
It was contended in the alternative (a) that section 5 (2) did not applyto actions for the recovery of contributions, (b) that in any event theplaintiff could, as the cheetu period had terminated, recover .the amountof the contribution from the manager under the provisions of section 29of the Ordinance.
The alternative contentions can be disposed of very shortly.
The terms of section .5 (2) are very comprehensive and in my opinionapply to an action for the recovery of contributions as well as to an actionfor the recovery of the prize. The decision in the case of Sinnaturai v.Chmniah1 is not applicable to section 5 (2)._
Section 29 of the Ordinance creates a right and the right cannot beenforced if the cheetu is one which only partakes of the nature of a cheetuana if the Ordinance is applicable to existing cheetus the plaintiff cannotproceed under the section.
5 (1906) 10 N. L. R. 5.
532
MAARTENSZ J.—Paramsothy v. Suppramaniam.
As regards the main contention, it is laid down in Maxwell’sInterpretation of Statutes (7th. ed- by Bridgman), at page 186, that “No ruleof construction is more firmly established than this : that a retrospectiveoperation is not to be given to a statute so as to impair an existing rightor obligation, otherwise than as regards a matter of procedure, unless thateifect cannot be avoided without doing violence to the language of theenactment. If the enactment is expressed in language which is fairlycapable of either interpretation, it ought to be construed as prospectiveonly ”, And at page 187 that, “ It is chiefly where the enactment wouldprejudicially affect vested rights, or the legality of past transactions, irimpair contracts, that the rule in question prevails. Every statute, ithas been said, which takes away or impairs vested rights acquired underexisting laws, or creates a new obligation, or imposes a new duty, orattaches a new disability .in respect of transactions or considerationalready past, must be presumed, out of respect to the legislature, to beintended not to have a retrospective operation
The respondent contended that the provisions of chapter VII. of theOrdinance gave the Ordinance retrospective effect. This chapter isentitled “Transitory Provisions relating to Cheetus actually conducted atthe date of the commencement of the Ordinance ”.
It provides (vide section 46 (1) ) that, “Within one month after thedate on which this Ordinance comes into operation, the manager of everycheetu of which the cheetu amount exceeds fifty rupees and which isactually being conducted at that date, shall furnish to the Registrar ofLands of the District in which the manager resides or has his place ofbusiness, a statement verified by affidavit and containing the terms andconditions of, and the following particulars relating to, that cheetu ” : —
The particulars required are : —
the name and address of the manager or of the company, firm or
individual with a business name, conducting the cheetu ;
the'cheetu amount;
the date of the formation of the cheetu ;
the cheetu period ;
the names and addresses of the subscribers ;
the names of the several purchasers of the cheetu amounts already
sold, and the amount of the respective prizes drawn by-them ;
the manager’s commission ;
the amount contributed up to that date as dividends each month to
each of the subscribers.
Sub-sections (3), (4), and (5) enact as follows : —
“ (3) On receipt of a statement furnished under sub-section (1) theRegistrar shall enter the particulars set out therein in a Registerof existing cheetus, and shall forward to the Registrar-Generalthe statement and all other information relating to the cheetu ”.
“ (4) The Registrar-General may of his own motion or on applicationmade by the manager of any cheetu registered under this section,exempt that cheetu by an order under his hand from the provi-sions of all or any of the other sections of this Ordinance, either
MAARTENSZ J.—Paramsothy v. Suppramanian.
533
unconditionally or subject to the condition that the managershall give security for the proper conduct of the cheetu by thehypothecation in favour of the Crown of movable or immovableproperty approved by the Registrar and not less in value thantwice the cheetu amount of that cheetu ; and the provisions o-fall other sections of this Ordinance shall cease to apply to anycheetu in respect of which an unconditional order is so made orthe condition so imposed as to the security to be given is dulyfulfilled
“ (5) The failure to furnish a statement under sub-section (1), or anyadditional information or explanation called for under sub-section (2), in respect of any cheetu to which this section appliesor the conducting of any such cheetu without fulfilling thecondition as to the security to be' given where such conditionhas been imposed by the Registrar-General, shall be an offencepunishable with a fine not exceeding one thousand rupees orwith imprisonment of either kind for a period not exceeding sixmonths, or with both such fine and imprisonment, after summarytrial by a Police Court notwithstanding that such penaltyexceeds the limits imposed on its jurisdiction by any otherwritten law
There is no positive enactment in this chapter that the Ordinance shouldapply to existing eheetus but sub-section (4) appears to do so byimplication.
Now the usual phrase in an exempting clause is that the exemptingauthority shall have power to ^xempt from “ all or any of the sections ”of a Statute. Is there any significance in the introduction of the word“ other ” before the word “ sections ” in sub-section (41 ?
Was the word “other” used to limit the applicability of the Ordinanceto existing eheetus to sections which cast a duty upon the manager ?That would be the more reasonable construction if it could- be justified forI do not think that the Legislature could have intended to deprive asubscriber to an existing cheetu which unfortunately did not comply withthe essential conditions prescribed by section 3 of his rights of action,and leave intact the rights of action of a subscriber who was fortunateenough to subscribe to a cheetu which did comply with thoseconditions.
I am however of opinion that the general terms in which sub-section
of section 46 is expressed has the effect of making by implication, theOrdinance applicable to existing'eheetus and that the plaintiff is precludedby sub-section (2) of section 5 from enforcing his claim by action byreason of the fact that the contributions of each subscriber are to be paidduring a specified period exceeding thirty months.
I would accordingly dismiss the appeal with costs.
Koch J.—I agree.
4ppeal dismissed.