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The Chit Funds Act

An Act to provide for the regulation of chit funds and for matters connected therewith.
1982
List of Chapters & Sections

  1. PRELIMINARY

  2. 1
     Short title, extent and commencement
  3. 2
     Definitions
  4. 3
     Act to override other laws, memorandum, articles, etc

  • REGISTRATION OF CHITS, COMMENCEMENT AND CONDUCT OF CHIT BUSINESS

  • 4
     Prohibition of chits not sanctioned or registered under the Act
  • 5
     Prohibition of invitation for subscriptions except under certain conditions
  • 6
     Form of chit agreement
  • 7
     Filing of chit agreement
  • 8
     Minimum capital requirements for the commencement, etc., of a chit, and creation of a reserve fund, by a company
  • 9
     Commencement of chit
  • 10
     Copies of chit agreement to be given to subscribers
  • 11
     Use of words "chit", "chit fund", "chitty", "kuri", "fraternity fund", or "Rotating Savings and Credit Institution"
  • 12
     Prohibition of transacting business other than chit business by a company
  • 13
     Aggregate amount of chits
  • 14
     Utilisation of funds
  • 15
     Alteration of chit agreement
  • 16
     Date, time and place of conducting chits
  • 17
     Minutes of proceedings
  • 18
     Copies of minutes to be filed with Registrar
  • 19
     Restriction on opening of new place of business

  • RIGHTS AND DUTIES OF FOREMAN

  • 20
     Security to be given by foreman
  • 21
     Rights of foreman
  • 22
     Duties of foreman
  • 23
     Books, records, etc., to be kept by foreman
  • 24
     Balance sheet
  • 25
     Liability of foreman to subscribers
  • 26
     Withdrawal of foreman

  • RIGHTS AND DUTIES OF NON-PRIZED SUBSCRIBERS

  • 27
     Non-prized subscribers to pay subscriptions and obtain receipts
  • 28
     Removal of defaulting subscribers
  • 29
     Substitution of subscribers
  • 30
     Amounts due to defaulting subscribers

  • RIGHTS AND DUTIES OF PRIZED SUBSCRIBERS

  • 31
     Prized subscriber to furnish security
  • 32
     Prized subscriber to pay subscriptions regularly
  • 33
     Foreman to demand future subscriptions by written notice

  • TRANSFERS

  • 34
     Restrictions on transfer of rights of foreman
  • 35
     Transfer of non-prized subscriber's rights to be in writing
  • 36
     Recognition of transfer by foreman
  • 37
     Entry of transferee's name in the books

  • MEETINGS OF GENERAL BODY OF SUBSCRIBERS

  • 38
     Meetings of general body of subscribers

  • TERMINATION OF CHITS

  • 39
     Provision for continuation of chits in certain cases
  • 40
     Termination of chits
  • 41
     Copy of assent or consent to be filed with Registrar
  • 42
     Refund of non-prized subscribers' subscriptions
  • 43
     Subscribers' dues to be first charge on chit assets

  • INSPECTION OF DOCUMENTS

  • 44
     Foreman to allow certain subscribers to inspect chit records
  • 45
     Preservation of chit records by foreman
  • 46
     Inspection of chit books and records by Registrar
  • 47
     Power of Reserve Bank to inspect chit books and records

  • WINDING UP OF CHITS

  • 48
     Circumstances under which chits may be wound up
  • 49
     Application for winding up
  • 50
     Bar to winding up proceedings
  • 51
     Commencement and effect of winding up order
  • 52
     Injunction order
  • 53
     Powers of Registrar
  • 54
     Vesting of chit assets in Registrar or other persons
  • 55
     Suits, etc., to be stayed on winding up order
  • 56
     Notification of winding up order
  • 57
     Cessation of winding up proceedings on insolvency of foreman, etc., or the winding up of the company and transfer of such proceedings
  • 58
     Award of compensation to foreman
  • 59
     Right to appeal
  • 60
     Limitation

  • APPOINTMENT OF OFFICERS AND LEVY OF FEES

  • 61
     Appointment of Registrar and other officers
  • 62
     Inspection of documents in Registrar's office
  • 63
     Levy of fees

  • DISPUTES AND ARBITRATION

  • 64
     Disputes relating to chit business
  • 65
     Period of limitation
  • 66
     Settlement of disputes
  • 67
     Procedure for settlement of disputes and powers of Registrar or nominee
  • 68
     Attachment before judgment and other interlocutory orders
  • 69
     Decision of Registrar or nominee
  • 70
     Appeal against decision of Registrar or nominee
  • 71
     Money how recovered
  • 72
     Private transfer of property made after issue of certificate void against foreman

  • MISCELLANEOUS

  • 73
     Advisory role of Reserve Bank
  • 74
     Appeals
  • 75
     Powers of Registrar to give extension of time for filing documents
  • 76
     Penalties
  • 77
     Penalty for second and subsequent convictions
  • 78
     Application of fine
  • 79
     Offences by companies
  • 80
     Cognizance of offences
  • 81
     Power to compound offences
  • 82
     Power to enter and search any place and to seize any documents
  • 83
     Officers to be public servants
  • 84
     Power to delegate
  • 85
     Act not to apply to certain chits
  • 86
     Banks not to conduct chit business
  • 87
     Power to exempt
  • 88
     Protection of action taken under the Act
  • 89
     Power to make rules
  • 90
     Repeal and saving