Legality of sale by lucky draw in India


A JEWELRY SHOP OWNER FORMS A GROUP COMPRISING OF 100 CUSTOMERS.THESE CUSTOMERS CONTRIBUTE RS 2000/-PER MONTH.BY LUCKY DREW,ONE CUSTOMER GETS GOLD ORNAMENTS EVERY MONTH.THIS PROCESS CONTINUE TILL EACH MEMBER GETS THE ORNAMENTS .WHETHER THIS PRACTICE IS LEGAL OR BANNED UNDER THE PRESENT LAW IN INDIA.

Answers (1)


90 votes

Hi,
The scheme as quoted by you does not attract the penal privisions of "Prize Chits and Money Circulation Schemes (Banning) Act, 1978" or any other act. As in this situation every customer will get the ornaments, but the draw will only decide that who will get the same first. this scheme amount to selling of ornaments on easy EMI with predeposit of price or postdeposit of price, which is not punishable in India.


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