The Registrar of Firms, Societies and Chits must take a final decision on the matter of a Chit Scheme before passing any interim orders, to avoid complications if the scheme is ultimately allowed to run for its full term.

The factual matrix in short compass is that the Sahara India Limited has started a scheme known as Golden Key Scheme by means of which it invited persons to subscribe certain amount of money for certain period and thereafter they would return the said amount after expiry of the said period with some interest and during the period of the said Scheme they would also give prizes after drawing lots.

2. After coming into force of the Scheme (Banning) Act, 1978 an embargo Prize Chits and Money Circulation was put under the provisions of the aforesaid Act for running such a Scheme. Being aggrieved against the afore said action, the petitioners preferred writ petition before Honble Supreme Court. After the judgment in the case of M/s. Secured Investment Company v. State of U. P. , interim orders passed in the writ petition filed by Sahara India Limited stood vacated but the writ petitions remained pending. Ultimately, the writ petition filed by Sahara India was also dismissed on 18th February, 1993. Before parting with the case, the following observations were made by Honble Supreme Court:

"we may, however, observe that the Registrar of the Firms while taking action against the persons or firms under the Act will take care to see that the members of the Scheme are not denied of their contributions or prizes which they are legitimately entitled to, if the prize chit is allowed to run for the full term. "

Thereafter the review petition was also filed which was dismissed.

3. It seems that in spite of the said orders, it continued with the afore said Chit Scheme which was initiated in January, 1987 and would come to an end in the year 1999. In this regard objection was taken by the Registrar, Firms, Societies and Chits, U. P. , Lucknow and by means of the order dated 7th August, 1993, wherein it was indicated that the writ petition was dismissed on 19th February, 1993, but it was unfortunate that in spite of the dismissal of the aforesaid writ petition the petitioners-firm on 29th March, 1993 pro ceeded with the 25th Bumper and 75th Main Draw illegally. Being the Execu tive Head, the Registrar, therefore, directed that till the final action would be taken by him the entire process or activity would remain stayed and the money which was deposited by the members, stood forfeited, and it would be returned to the depositors forthwith. The aforesaid order was challenged in the writ petition bearing number 3915 (M/b) of 1993 by Sahara India Limited.

4. It appears that on 17th August, 1993 an F. I. R. was lodged against Sarvsri Subrata Roy, Jayabrata Roy, and O. P. Srivastava as well as against the Company under Section 4 of the Prize, Chits & Money

Circulation Scheme (Banning) Act, 1978. The writ petition bearing No. 3647 (M/b) of 1993 was preferred before this Court for quashing the said information report.

5. Lengthy arguments were advanced on behalf of the petitioners as well as learned Standing Counsel in the said case. Mr. Gopal Subramaniam relying upon some of the observations of the Supreme Court, mentioned above, while dismissing the writ petition, submitted that the petitioners have not com mitted any offence for the reason that the Supreme Court by implications indicated that the matter be left in the hands of the Registrar of Firms, while taking action against the persons of the Firm under the Act who would take care to see that the members of the Scheme were not denied of their contribu tions or prizes which they would legitimately entitled to if the prize chit would be allowed to run for the full term, submitted that the provisions of Section 4 of the aforesaid Act could not have been invoked particularly for the reason that the Registrar had to decide about the continuance of the aforesaid Scheme or not. Besides, the above, he submitted that after the decision of Honble Supreme Court in the case of the Secured Investment Company and the vacation of the interim order passed in this writ petition, no action was taken by the State of U

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