Raghavan, J.-These three writ petitions are filed by three Chit Fund Companies for the issue of a writ of mandamus restraining the Reserve Bank of India (1st respondent) from enforcing the provisions of the Non-Banking Financial Companies (Reserve Bank) Directions, 1966, framed under sections 45-J to 45-L of the Reserve Bank of India Act, 1934. The petitioners are companies carrying on business as foreman of chits. The allegations in each of the writ petitions are of the same pattern and we shall take up the allegations in W.P. No. 1126 of 1967. The scheme of working of chits as set out by the petitioners in their affidavits is as follows:

2. A number of persons called subscribers join together undertaking to subscribe a certain sum of money at stated intervals for a certain period. The aggregate of the sums payable by all the subscribers in one instalment is called the capital of the chit. The prize amount is ascertained by auctioning the fund among the subscribers or by draw. After deducting the discount which is either a fixed percentage of the capital or the difference between the capital and the prize amount, the prize amount is taken by the successful bidder in full satisfacti

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