(REGISTERED No. D. 221 ^ ™ ^ \ %kz (H&sette f j | of f rtMa EXTRAORDINARY P A R T II—Section 3-Sub-sec t ion (i) PUBLISHED BY AUTHORITY
3Sfo. 108] NEW DELHI, FRIDAY, JULY 10, 1964/ASADHA 19, 1886 Separate paging is given to this Pa r t in order tha t it may be filed as a separate compilation MINISTRY OF HOME AFFAIRS , /...._ NOTIFICATION New Delhi, the 9th July, 1964 G.S.R. 1002.—In exercise of the powers conferred by section 2 of the Union territories (Laws) Act, 1950 (30 of 1950), the Central Government herebv extends to the Union terr i tory of Delhi the Madras Chit Funds Act, 1961 (Madras Act 24 of 1961), as at present in force in the State of Madras, subject to the following modifications, namely:— Modifications
1. Throughout the Act, unless otherwise specified, for the word "Government", "the- word "Administrator" shall be substituted and there shall also be made in any sentence, in which such substitution is made, such,.consequential amendments as the rules of grammar may require. :
2. In section 1, for sub-section (2), the following sub-section shall be substitut- •ed, namely:— "(2) It extends to the whole of the Union terr i tory of Delhi".
3. In Section 2,—
(a) for clause (1), the following clauses shall be substituted, namely:— "(1) 'Administrator ' means the Administrator for the Union terr i tory of Delhi;
(1A) 'approved bank' means a bank approved by the Administrator;";
(b) clause (11) shall be omitted. ^ \ . . ^
4. In section 12, the words "Government securities" in all the places Where they occur shall stand unmodified.
5. In section 37, in the second proviso to sub-section (2), for the words "such inspection shall be made only at the premises of the company", the words "or a corporation established by or under any statute and carrying on the business of "banking, such inspection shall be made only at the premises of the company or the corporation, as the case may be," shall be substituted.
6. In section 38, for the portion beginning with the words "A chit registered in the Presidency-town" and ending with the words "where the chit has "been xegistered", the following shall be substituted^ namely:— "A chit may be wound up by the District Court".
( 591 ) 592 • THE GAZETTE OF INDIA EXTRAORDINARY [PART II-
1. In section 46, in sub-section (2), for the words "District Gazette", the- ' words ' 'Delhi Gazette" shall be^substituted. ' a "̂ ^
8. In section 47, the words "Where insolvency proceedings against the foreman are pending in different courts, the High Court may transfer the proceedings from one court to another as it may deem fit" shall be omitted.
9. In section 53. in sub-section (2), for words "Fort St. George Gazette", the words "Delhi Gazette" shall be substituted.
10. In section 57. the words "a salaried presidency magistrate or" shall be omitted,
11. In section 5.9, in sub-section CI), the words "in the mufassal or a presidencj** magistrate in the Presidency-town" shall be omitted.
12. In section 63,—
(a) in clause (a) of sub-section (3), for the words "Fort St. George Gazette , the words "Delhi Gazette" shall be substituted; and
(b) sub-section (4) shall be omitted.
13. For section 67, the following section shall be substituted, namely:
"67. Amendment of Central Act II of 1899 in its application to the Union territory of Delhi.—In Schedule 1A to the Indian Stamp Act, 1899 (Central Act II of 1899), in its application to the Union terri tory of Delhi, after entry 20, the following entry shall be inserted, namely:— '20-A. A chit agreement, that is an agreement relating 1 to a chit as defined in clause (2) of section 2 of I the Madras Chit Funds Act, 1961 as extended to I One r u p e e ' " the Union terr i tory of Delhi, if either such agree- f ment is executed or the chit is conducted in the Union terri tory of Delhi. j
14. Section 68 shall be omitted.
15. Sub-section (2) of section 69 shall be omitted. . *' ANNEXURE THE MADRAS CHIT FUNDS ACT. 1S61 AS EXTENDED TO THE UNION- TERRITORY OF DELHI (Madras Act 24 of 1961) An Act to provide for the regulation of chit funds in the State of Madras.
- Whereas it is expedient to provide for the regulation of chit funds in the State of Madras:
Be it enacted in the Twelfth Year of the Republic of India as follows:—
CHAPTER I PRELIMINARY
1. Short title, extent and commencement.— (1) This Act may be called the Madras Chit Funds Act; 1961.
(2) It extends to the whole of the Union terri tory of Delhi, ..--r^'
(3) It shall come into force on such date as the Administrator may, by not i fication, appoint, and different dates may be appointed for different areas and cfor different provisions of this Act.
2. Definitions.—In this Act, unless the context otherwise requires,—
(1) 'Administrator ' means the Administrator for the Union terr i tory of Delhi- CIA) "approved bank" means a bank approved by the Administrator;
«*« t '>Jl l»- U<r jj: ;>-,7 ty SEC. S(i)] T H E GAZETTE OF INDIA EXTRAORDINARY 59 : <2) "chit" means a transaction whether called chit fund, chit, kuri , or, by any other name, by which its foreman enters into ^an agreement with a number of subscribers that e v e r y one of them shall subscribe a certain sum or a certain qliantity of grain by instalments for a definite period and that each subscriber in his turn as determined by lot or by auction or by tender or in such other manner as may be provided for in the agreement, shall be entitled to a prize amount;
Explanation.—A transaction is not a chit within the meaning of this clause, if in such transaction— r
(a) some alone but not ail, of the subscribers get the prize amount without any liability to pay future subscriptions; or
(b) all the subscribers get the whole of the chit amount by turns with a liability to pay future subscriptions.
Illustration.—There are 100 subscribers to a chit and the subscription by each of them is Rs. 10. All the subscribers get by turns Rs. 1,000 being the whole of the chit amount and are liable to pay future subscriptions. The transaction falls within clause (b) of the above Explanation and is riot a chit;
(3) "chit agreement" means a document containing the articles of agreement between the foreman and the subscribers relating to the chit;
(4) "chit amount" means the sum total of the subscriptions payable by all the subscribers for any instalment of a chit without any deduction for discount or otherwise:
(5) "defaulting subscriber" means a subscriber who has defaulted- in the pay ment of subscriptions due according to the terms of the chit agreement;
(6) "discount" means the sum or the quantity of grain, which a prized sub scriber has under the terms of the chit agreement to forego and which is set apart under the said agreement to meet the expenses of running the chit or for distribu tion among the subscribers or for both;
(7) "dividend" means the share of a subscriber in the discount available under the chit agreement for rateable distribution among the subscribers at each instal ment of the chit;
(3) "drawing" means ascertaining of the person or persons entitled to the prize amount at any instalment of a chit;
(9) "firm" means a firm registered under the Indian Par tnership Act, 1932 (Central Act IX of 1932);
(10) "foreman" means the person who under the chit agreement is responsible for the conduct of the chit and includes any other person discharging the functions of the foreman under section 30:
Provided that no firm shall be a foreman unless such firm is registered under the Indian Par tnership Act, 1932 (Central Act IX of 1932);
(11) Omitted.
(12) "non-prized subscriber" does not include a subscriber who has defaulted in the payment of subscriptions clue according to the terms of the chit agreement;
(13) "prize amount" means the difference between the chit amount and the - discount, and, in the case of a fraction of a ticket means the difference between the chit amount and the discount proportionate to the fraction of the ticket; and when the prize amount is payable otherwise than in cash, the value of the prize amount shall be the value at the time it becomes payable;
C-M) "prized subscriber" means a subscriber who has either received or is entitled to the prize amount;
(15) "Registrar" means a Registrar appointed under sub-section (1) of section 51;
(16) "subscriber" includes a person who holds a fraction of a ticket and also a transferee of a ticket or a fraction thereof by assignment in wri t ing or by operation of lawr;
(17) "ticket" means the share of a subscriber in a chit.
THE GAZETTE OF INDIA EXTRAORDINARY [PART I I -
CHAPTER II -* CONSTITUTION AND REGISTRATION 3 Registration of by-laws.—(1) Save as otherwise provided in this Act, no per son shall start or conduct any chit unless he has registered with the Registrar the proposed by-laws of the chit.
(2) For the purpose of registration, there shall be filed with the Registrar the by-laws of the chit in duplicate signed by the foreman and attested by at least two witnesses.
(3) The Registrar, on being satisfied that the by-laws are not contrary to this Act or to the rules made thereunder, shall issue to the foreman a certificate of registration and such certificate shall be conclusive evidence that the by-laws of the chit therein mentioned are duly registered.
(4) The Registrar shall retain the by-laws of the chit and re turn the duplicate of the by-laws to the foreman with an endorsement that the by-laws have been registered. .
4. Prohibition of invitation for subscription to chit of v/hich by-laws have not been registered.—No person shall issue or publish any notice, circular, prospectus or other document containing the terms and conditions of any chit or inviting the public to subscribe for tickets in any chit unless such notice, circular, prospectus or other document relates to a-chit the by-laws of which have been registered.
5. Form of chit agreement.—Every chit agreement shall be in duplicate and shall be signed by the subscribers or try persons authorized in that behalf in writ ing by the subscribers, and the foreman and attested by at least two witnesses, and it shall contain the following particulars, namely:—
(1) The full name and the permanent residential address of every subscriber;
(2) the tickets held by each subscriber;
(31 the number of instalments and the amount payable in respect of each ticket for each instalment;
(4) the dates of commencement and termination of the chit; V_
(5) the mode of ascertaining the prized subscriber;
(6) the amount of discount which the prized subscriber at any instalment has to forego;
(7) the mode and proportion in which the discount is distributable by way of dividend, foreman's commission and other expenses, if any;
<8) the date, t ime and place at which the chit is to be drawn;
(9) if under the chit agreement the foreman is entitled to the chit amount, the instalment at which the foreman is to get the chit amount;
(10) the approved bank or banks in whch cfeit moneys shall be deposited by the foreman under the provisions of this A'ct;
(11) the manner in which a chit shall be continued, where a foreman who is an individual dies or becomes of unsound mind; and
(12) any other particulars which may be prescribed.
Explanation.—It is sufficient to get the signature of each subscriber on separate copies of the agreement. , - t>. Filing of chit agreement.—(1) Every chit agreement with its duplicate shall be filed with the Registrar.
(2) The Registrar shall retain the chit agreement and re turn the duplicate chit agreement to the foreman with an endorsement that the chit agreement is filed.
'l Commencement of chit business.—(1) No person shall commence any auction or drawing of any chit unless he has obtained a certificate of commencement from the Registrar.
SEC. 3(i)] THE GAZETTE OF INDIA EXTRAORDINARY
(2) The Registrar shall, on being satisfied that the by-laws of the chit have been registered and the chjt - agreement has been filed and the security required under section 12 has been furnished byi the foreman, grant a certificate of com mencement.
8. Copies of by-laws and chit agreement to be given to subscribers.—(1) The foreman shall, as soon as may be after he has obtained the certificate of commence ment referred to in section 7, but not later than the date of the first drawing of the chit, furnish to every subscriber a copy of the by-laws of the chit and of the chit agreement certified by him to be a t rue copy.
(2) The foreman shall, within the fifteenth day of the month succeeding the month in which the first instalment of the chit is drawn, file with the Registrar a certificate to the effect that he has complied with the provisions of sub-section (1).
9. Alteration of chit agreement.—The chit agreement shall not be altered, added to or cancelled except with the consent in writing of the foreman and all the sub scribers to the chit.
10. Minutes of proceedings.—(1) Minutes of the proceedings of every drawing shall be drawn up and entered in a book to foe kept, for that purpose and shall be signed by the foreman and all the subscribers present. It shall also be signed by the prized subscriber or his authorized agent.
(2) Such minutes shall state clearly—
(i) the date and hour when the proceedings began and ended and the place where the drawing was held;
(ii) the number of the particular instalment of the chit of which proceedings are recorded;
(iii) the names of the subscribers present;
(iv) the person or persons who become entitled to the prize amount in the part icular instalment;
(v) the amount of discount;
fvi) full part iculars regarding the disposal of the prize _ amount in respect of the preceding instalment and disposal of unpaid prize amount, it any, in respect of any previous instalment; and
(vii) any other particulars which may be prescribed.
11 CODV of minutes to be filed with the Registrar.—Every foreman shall, with in the fifteenth dav. of the month succeeding the month in which one or more instal men t ! of the same chit or one or more instalments of any other chit are drawn me withL thef Registrar a copy of the minutes referred to in section 10 m respect of the drawings at all such instalments and certified by the foreman to be a true copy.
CHAPTER III FOREMAN 1? Security to be given by foreman.—(1) For the proper conduct of the chit every foreman shall before applying for the certificate of commencement under section 7,—
(a) execute an indenture of mortgage and trust in favour of the Registrar W as trustee charging by way of ^ c u r t y property sufficient to the satis faction of the Registrar for the realization of the chit amount, or
(b). (i) deposit in any approved bank an amount of cash not less than half of the chit amount, or fitt invest in Government securities of the face value or market value, ( ° wMcheveT is less of not less than half of the chit amount, and transfer the amount so deposited or the Government securities in favour o? the Registrar to be held in trust by him as security:
Provided tha t where movable property is charged by way of security, only s u c ^ k i n d ^ molabYe property as m>y 1>e prescribed^ shall be ^ ^ f ^ ^ movable property shall be deposited in such manner and with such peison or as may be prescribed.
596 THE GAZETTE OF INDIA EXTRAORDINARY [PART I I - i = = r — - =5K
(2) Where a foreman conducts more than one chit, he shall furnish security in accordance with the provisions of sub-section (1) in respect of each such chit.
(3) Subject to the provisions of section 520 of the.Companies Act, 1956 (Central Act I of 1956), the security given by the foreman under sub-section (1) shall not be liable to be attached in execution of a decree or otherwise—
(i) until the chit is terminated and the claims of all the subscribers are fully satisfied;
(ii) unti l all dues payable by the foreman under this Act to the Eegistrar or any other officer have been paid;
(iii) where owing to the default of the prized subscriber the prize amount due remains unpaid even after the termination of a chit until the foreman deposits such amount in an approved bank mentioned in the chit agreement and intimates in writing the fact of such deposit to the prized subscriber.
(4) The Registrar shall, after the termination of a chit and after satisfying himself that the requirements under clauses (i) to (iii) of sub-section (3) have been complied with, release the property charged by way of security or order t h e s release of the cash security or the Government securities referred to in sub-section
(1) and in so doing, he shall follow such procedure as may be prescribed.
(5) The Registrar may, on the application of any foreman, instead of releasing the security under sub-section (4), accept the same as security in respect of any ^.iher chit or chits conducted by the same foreman. If the value or amount of the security so accepted is less than the value or amount specified in sub-section (1), the Registrar shall require the foreman to furnish additional security to make up the deficiency. If the value or amount of such security is in excess of the value or amount reqiiired, the Registrar shall releae such excess.
(6) Notwithstanding anything to the contrary contained in any other law, the security furnished under this section shall not be dealt with by the foreman during the currency of the chit and any dealing by the foreman with respect thereto by way of transfer, charge, mortgage or other encumbrance shall be void.
13. The rights of the foreman.—The foreman shall be entitled— .,-
(a) in the absence of any provision in the chit agreement to the contrary, to obtain the chit amount at the instalment specified in the chit agree ment;
(b) to such commission or remunerat ion not exceeding five per cent of the chit amount as may be fixed in the chit agreement;
(c) to receive and realize all contributions from the subscribers and to dis tr ibute the prize amounts to prized subscribers and the dividend among the subscribers;
(d) to demand sufficient security from any prized subscriber for the duepayment of future subscriptions;
(e) to substitute subscribers in the place of defaulters; and
(f) to do all other acts that may be' necessary for the due and proper con duct of the chit.
14. The duties of the foreman.—(i) The foreman shall, on the prized subscriber furnishing1 sufficient security for the due payment of future subscriptions, be bound to pay him the prize amount;
Provided tha t the prized subscriber shall be entit led to demand immediate l a ment of the prize amount after deducting all future subscriptions without any security whatsoever, and in such case the foreman shall, before the date of the next succeeding instalment, deposit in an approved bank mentioned in the chit agreement the amount of future subscriptions deducted as aforesaid and he shall .
not. wi thdraw the amount so deposited except for payment of future subscriptions.
(2) If owing to the default of the prized subscriber the prize amount due in respect of any drawing remains unpaid before t he date of the next succeeding drawing, the foreman shall deposit trie same forthwith in an approved bank men tioned in the chit agreement and1 intimate in wri t ing the fact of such deposit to the prized subscriber.
•SEC. 3(i)] T H E GAZETTE OF INDIA EXTRAORDINARY 597 .subscripIS S r ^ u b ^ s e S L f ' a 6 ) " f e e ^ p o s T S " < — of future .sub-section (2) shall be intimated t* the subscrioS g t ^ n S ^ u S S S V ^ mg, and particulars of such payment or deposit enteredMri Z S t » g r^~ proceeding's of that drawing. deposit entered in the minutes of the
(4) The foreman shall not appropriate for himself anv amount in e^P« nf what he is entitled to under clauses (a) and (b) of section 13?
Provided that the foreman mav appropriate for himself thp inrcr^-t .,,,„„• - the amount deposited under the proviso to subsectloT(l) ^ "mng on
15. Registers and books of account—The foreman shall keep such renters and books of account, and m such form, as may be prescribed. iebisieib and ™ i^alance-sheet—a) Every foreman shall prepare and file with the Registrar an such manner and withm such time as may be prescribed -T hViV'Ll c w î ?
audited either by auditors duly qualified trf a?^ a^ludSSs ^ c o m ^ l S the Companies Act, 1956 (Central Act I of 1956), or by a Chief A u S ™ S ' under sub-section (2) of section 51 and relating'to the periS of account
(2) The balance-sheet referred to in sub-section (1) shall—
(a) contain a summary of the assets and liabilities of the chit; and ,(b) give such particulars as will disclose the nature of the assets and liabi lities and how the value of the assets has been arrived at.
17. Liability of the foreman to the subscribers•—m TP„Q liable to account to the subscribers for t h ^ ^ ^ a L ^ e ^ * " 1 8 * ^ b e
(2) Where there are more than one foreman each nne n f +T> • - ., severally or if the foreman is a firm each on7nf t b f L t ! of them jointly and .severally and if the foreman !s a Corporation ThCo S U h e r e ° f j,°inLly a n d hahle to the subscribers in respect of f h e ^ a t i o ^ a ^ ^ S t ^ ^ c t t " ^
18. Withdrawal of a foreman.—Where there are more than ™n , o man m a chit, none of them shall withdraw from it until tL°?f p e r S ^ a s f o r e " •chit unless such withdrawal is assented to by allthe rSn o r ^ l S ^ T ? °f t h?
unpaid prized subscribers and a copy of such assent has been fillsubscribers ^and section 32. Such withdrawal shall not hoWe? affect thl securltf i S " ' e d , b y .section 12. CLL u i e security given under C H A P T E R I V N O N - P R I Z E D SUBSCRIBERS S e e S i f e e m e n t ^ S h a " °" S U C h » a y m e n t ^ e S l e f V ^ f S t c Z
20. Removal of defaulting- subscribers.—(1) A non-prized *„iwT.iw u •defaults in paying his subscription in accordance w°thP the terms of the ?£?
agreement shall be liable to have his name removed from fL \?J X-r i t h e .^c h l t Every such removal shall, with the' date therlofTeentered^m J h l ^ ^ T E 6 1 ' ? - ^maintained by the foreman. A written notice of such removal hall be ^ v e ^ l f the foreman to the defaulting subscriber within fourteen days of such lemoval. Y
(2) A true copy of the entry referred to in sub-section (1) shall be filed bv the •foreman with the Registrar within fourteen days from the date-of such removal
(3) Any defaulting subscriber aggrieved by the removal of his name from the list of subscribers may. within seven clays of the communication to him of the notice of removal, appeal to the Registrar. - e
(4) The Registrar may, after giving the parties an opportunity of being heard I S n b e final r S °D 8 P P a S h e t W n k S fit a n d t h & d e d s i o n o f t h e Sar 598 THE GAZETTE OF INDIA EXTRAORDINARY [PART I I -
21. Substitution.—(1) The foreman may substitute in the list of subscribers;
any person in the place of a defaulting subscriber whose name has been removed from such list under sub-sction (1) of section 20:
Provided that no such substitution shall be made until the expiry of the period:
allowed for appeal under sub-section (3) of section 20, or where any such appeal has been preferred, until the same has been disposed of.
(2) Every substitution referred to in sub-section (1) shall, with the date the re of. be entered in the relevant book maintained by the foreman. A t rue copy of every such entry shall be filed by the foreman with the Registrar within fourteen" days from the date of substitution.
(.3) All arrears of subscriptions realised from the substituted subscriber, less any amount advanced by the foreman, shall, before the date of the next succeed ing instalment be deposited by t h e foreman in an approved bank mentioned in the chit agreement. The foreman shall not withdraw the amount so deposited except for payment to the defaulting subscriber.
Explanation.—For the purposes of sub-section (.3), 'arrears of subscriptions' shall mean all the previous instalments realised from the substituted subscriber.
22 Amount due to defaulting subscriber how dealt with.—When a substituted subscriber draws the prize amount the defaulting subscriber shall be entitled t o recover from the foreman his contributions subject to such deductions as may be provided for in the chit agreement. The foreman shall on demand made by the defaulting subscriber and on his executing an acknowledgement duly signed be bound to pay to the defaulting subscriber the amount due to h im before the date of the next succeeding instalment. If the defaulting subscriber fails to furnish the acknowledgement as aforesaid, the foreman shall, before the date of the next suc ceeding instalment, deposit in an approved bank the amount due to tire defaulting.
subscriber The amount so deposited shall not be withdrawn by the foreman for any purpose other than for payment to the defaulting subscriber.
CHAPTER V .. >&' PRIZED SUBSCRIBERS 23 Prized subscriber to give security.—Before receiving the prize amount without deducting all future subscriptions, every prized subscriber shall furnish and the foreman lha l l take sufficient security for the due payment, of future subs c r i p t i o n s a n d l ? the foreman is the prized subscriber, he shall give security for • the due p S m e n t of future subscriptions to the satisfaction of the Registrar.
?4 Prized subscriber to pay the subscription regularly.—Every prized subscriw t h f l f n a v hisi subscriptions regularly at, the t ime and place and on the da te ^ K d ^ l £ ? c h S ^ S e S i t a i d on his failure to do so, he shall be liable t o S a k e T consolidated payment of al l the future subscriptions at once.
9* Foreman to demand future subscriptions by wri t ten notice.—(1) A forem „ : h a ^ n M t be entitled to claim consolidated payment of all the future subscrip t s S o m T defaulting prized subscriber unless he shall have demanded the same in writing.
m Tf in a suit by a foreman for consolidated payment of future subscriptions defendant of any f ^ ^ ^ ^ ^ t i o n a U the future subscriptions and interest Sefeon6 i t s ' ^ t m o u X ^ a n y 'already deposited by the defendant.
chit.
SEC. 3(i)] THE GAZETTE OF INDIA EXTRAORDINARY 599'
(3) Any person who holds an interest in the property furnished as secruity or any par t thereof shall be entitled to make payment under sub-section (2).
(4) All consolidated payments of future subscriptions realized by a foreman shall be deposited in an approved bank before the date of the next succeeding instalment. The amount so deposited may be withdrawn only for payment of future subscriptions. When any property is acquired in lieu of the consolidated' payment, it shall remain as security for the due payment of future subscriptions..
CHAPTER VI TRANSFER
26. Restrictions on transfer of right of foreman.—(1) No transfer of the rights o f a f ° r e m a n . t o receive subscriptions from prized subscribers shall be made with out the previous sanction in writing of the Registrar.
(2) Any such transfer of the rights of a foreman to receive subscriptions from a prized subscriber shall, if it is likely to affect prejudicially the interest of any non-prized subscriber or unpaid prized subscriber, be set aside on application bysuch subscriber to such officer as may be empowered by the Administrator in this behalf.
(3) When under sub-section (2) a transfer is disputed by a subscriber, the burden of proving that the foreman was in solvent circumstances at the time of the transfer and that the transfer is not likely to affect prejudicially the interest of any such subscriber is upon the transferee.
27. Transfer of non-prized subscriber's rights to be in writing.—Every t rans i t b y / , n o n ; P r i z e d subscriber of his rights in the chit shall be in writing dSlv attested by at least two witnesses and shall be filed with the foreman 28 Recognition of transfer by the foreman.—Every transfer under section 27 shall be recognized by the foreman, unless the transferee is no solvent or the transfer was effected with -a view to defeat the provisions of any law!
29. Entry of transferee's name in the book.—Every transfer made under sec t i o n 2 6 or section 27 shall be entered by the foreman in the b o T s of the cWt forthwith and a t rue copy of such entry shall be filed by the foreman with the Registrar within fourteen days from the date of such entry.
CHAPTER VII TERMINATION OF CHITS
30. Provisions from continuation of chits in certain cases.—Where the foreman who is an individual dies or becomes of unsound mind, the chit may be continued m accordance with the provisions of the chit agreement;
31. Termination of chit.—A chit shall be deemed to have terminated—
(a) when the period fixed in the chit agreement has exoired, provided pay ment of dues to all the subscribers has been completed; or
(b) when all the non-prized and unpaid prized subscribers consent in writ ing to the termination of the chit and a copyi of such consent is filed as required by section 32; or
(c) When a foreman, who is an individual, dies or becomes of unsound mind and the chit is not continued in accordance with the provisions of the chit agreement:
Provided that in the case of a foreman which is a firm, if a par tner dies or becomes of unsound..mind, the chit shall not be deemed to have terminated and the surviving par tner or partners shall conduct the chit in the absence of any provision to the contrary in the chit agree ment.
32. Copy ofi lassent or consent to be filed-with tjie Registrar.—A true copy of every assent mentioned in section 18 and of every consent mentioned in section 31, wi th the da te of such assent or cons.ent shall be filed by the foreman or by the remaining foreman or foremen, as the case may be, with the Registrar withiir fourteen days from the date of such assent or consent.
' 600 THE GAZETTE OF INDIA EXTRAORDINARY t P A K r u _
33. Refund of non-prized subscr ibers contributions.—Except in the ca=:es refer red to m clauses (a) and (b) of section 31—
(a) every non-prized subscriber shal l unless otherwise provided for in the chit agreement, be entitled to get back his contribution at the termi nation of the chit without deduction for dividend, if any, received.by
Provided that any person to whom the rights of a non-prized subscriber are transferred under sections 27, 28 and 29 shall, in" addition to his own contributions, be entitled to get back the contribution made by such non-prized subscriber, subject to the conditions specified in this clause;
(b) if the chit terminates on a date earlier than the date originally fixed in the chit agreement, the non-prized subscriber's claim shall be deemed to have arisen on the date on which he has notice thereof.
34. Subscribers' dues to be first charge on chit assets.—Where there are debts •due from the foreman of a chit in relation thereto and also other debts due from such foreman, the chit debts due to the subscribers shall be a first charge on the chit assets.
CHAPTER VIII INSPECTION OF DOCUMENTS
35. Foreman to allow subscriber to examine chit records.—Every foreman shall, on payment of such fee not exceeding five rupees as may be specified in the chit agreement, allow non-prized and unpaid prized subscribers "all reasonable facilities on all days of drawing of chits or on such days and within such hours as may be provided for in the chit agreement for the inspection of security bonds and documents, receipts and other records taken from the prized subscribers or furnished by the foreman himself in his capacity as a subscriber and all chit records including books of account and pass books, the balance sheets and profit and loss accounts and such other records as may show the actual financial position •of the chit scheme.
36. Preservation of chit records by foreman.—All the records p e r t a i n i n g ^ a chit shall be preserved intact by the foreman and kept for a period of six years :from the date of the termination of the chit.
37. Inspection of chit books and records.— (1) (a) The Registrar; or
(b) any officer authorized by the Director of chits in this behalf, may inspect the chit books and all records after giving due notice in writing to the foreman.
(2) Every foreman shall be bound to produce the chit books and records before the Registrar or the officer authorized under sub-section (1) at the t ime and place mentioned in the notice and shall furnish such information to him as he may require:
Provided that such inspection may be made at the premises of the foreman if he pays in advance such fees as may be prescribed for the inspection:
Provided further that if the foreman is a banking company as defined in the 'Banking Companies Act, 1949 (Central Act X of 1949) or a corporation establish ed by or under any statute and carrying on the business of banking, such inspec tion shall be made" only at the premises of the company or the corporation, as the case may be, and only on a working day and such foreman shall pay such fees as •may be prescribed for the inspection. ^
CHAPTER IX *"* WINDING UP OF. CHITS
38. When chit may be wound up.—A chit may be wound up by the District Court—
(a) if the chit has terminated under clause (c) of, section 31, or
(b) if the foreman fails to give the security specified in section 12 or if he commits any such act in respect thereto as are calculated to impair \ materially the na ture of the security or the value thereof, or ^ l l g j . . . ™ E GAZETTE )̂!.- INDIA EXTRAORDINA • (c) if o ? f f t t d T s i t t h e ~ < ^ ^ ^
(d) if it is proved to the satisfaction of the court t W +h * to pay the amounts due to the subfcr ibfe or f o r e m a « ^ unable the chit is retu/ned u n s a S ^ e ? to^Se^or^Srt T ^ * * » ^ <g) if the foreman has appropriated the prize amount ;*, i,--~ subscriber without furnishing sufficient s S r i t v £ f f c aPaci ty as a tions, or , " u e n t security for future subscrip-
(h) if it is just and equitable that the chit should be wound up.
m a f l ? unable* t o " p £ l £ S m t ^ l i t X ^ b ^ d e t e ™ £ w h e t h e r « * foreaccount his c o n t i n e n t a n c f X T p e c ^ ^^^ t a k e i n t o p a n S l d c f S ( C ^ ^ c f l ^ ^ ^ ^ " * » * » « ° f « * Cornhaving jurisdiction under that Act W 0 U n d u p o n l y b ^ t h e court of f c h K f e *or the winding up prized subscriber or by the Reenter lio^X - f l J n o n - P * p e d subscriber or unpaid ed by the Code of Civil P r o S e , * 19 ^ C e n T r a i T c f v of fe^T f ^ " t am such part iculars as may be prescribed: ° 9 0 8 ) ' a n d s h a ] 1 c o n - twenty-five per cent of the amounts contributed by all the non-onVed subscribers and unpaid prized subscribers; or P
(b) with the previous sanction of the Administrator.
KxpZanatio?!,—For the purposes of the above proviso a suh^Hhm- n f , * +- •of a ticket shall be deemed to be a subscriber omy Y o V e e S e S ' r f 1 ^ f r a r t k S !
40. Insolvency or liquidation a bar to winding up proceeding's — N n f ^ i t w ^ mg anything contained in sections 38 and 39 no petition for f h l w i ^ b a ? d " •chit shall be entertained by a court if p r o c f e d m g s C d e r t h e law ^ K S ? t o ^ n l o f vency for the t ime being m force are pending against the foreman f o f adludicSinohim an insolvent or when the foreman is a company, if proceedings for wind n - up the company are pending against such company in a court winding
41. Commencement and effect of winding- up order—An nrrW fn, th : , ing up of a chit shall operate in favour of all the subscriber J to w W , *L ~ 'm d~ are due from the chit and it shall be deemedI to have^commenced from theTime of the presentat ion of the application for the winding up.
42. Injunction o rde r—The court may, upon the application of the foreman or of any subscriber to whom amounts are due in respect of the chit V L « ™ =*2 the presentat ion of the application for the w i n d i n g ^ ox a chit under this Act Sid before the making of an order for the appointment of a n I n t e r i m Receiver or fn?
winding u p the chit, restrain further proceedings in anv ™ t n r w n 3 „ " ^q tuted against the foreman for the reafizatfon of amounts Z l from the c^ft unon such terms as the court thinks fit. m e oillt u p o n or unconditionally or make an i n t e r i m V c S ' * o r ^ S n e r ^ / e f S a ? f t ^ e ' i T I f THE GAZETTE OF INDIA EXTRAORDINARY £ P A R T ** the winding u p of a chit, the entire chit a s s e t s n a i l v e s w t f t h e c h i t and h ^ ^ ^ S Z ^ T ^ S i " ^ ^ ^ appoint of a receiver) as it deems fit.
45. Suits stayed on winding, up * * e n d i n g u ^ g t a has been made by a court no s u ^ ° \ ° * e r s l f c S b e r for theT realization of amounts due to &^«%£^^^™^™« the C ° U r t ^ ° n SUCh termS " the court may impose.
46. Copy of wind ta r up orde,: to be « e d w * * * ~ 3 ^ \ ' $ * S A i n g „f a wind ing .up .o rder .1.shall be the au ty 01 P a c o p y rf ^ o r d e r > „?,iSnOCoene ' S n t h f t t r ' ^ S o " * t°he making of the order:
the filing of any such copy.
m ^ " t h e r e o r l n M X %SZ?p& " « M M S S Gazette that such an order has been made.
47. Stay of winding ***£•**£ ^ ^ S S S S f h ^ o c e T d l g T M insolvency P ^ c e e d u m P ; r W f S ^ n ^ a d i u d i S d an insolvent or when the forewinding up of a chit t ] f l ° ^ a l a f S ordered to be wound up by the court man is a company, * e c o m p a i w . h a s o e e n o m x distribution of the the winding up P ^ e e d m g s u n d e i t h i s A c ™ ^ t i o n s 3 4 a n d 4 2 , be maae £ \ f f g y & ^ o°r S I S S T X l S g «P the company, as the case may ce.
48. Compensation for frivolous J . v ^ 3 « S d ^ S J u ^ s a S i ^ tion presented for winding u p a c h U « J t ^ y a w a r d against the a p p V £ n t a ^ ^ ^ ^ the award were a decree.
< » Compensation under sub-section (1) shai. bar any suit tor compensat.cn.
« . Ri S ht of appea , ._ -Theforeman any subscriber. * e Rece iver o r ^ n y , other & r * g £ Z W 3 X S & I r o S t o dhafeCof such decision or order, appeal to the High Court.
under this Act, the chit shall b e deraaea x o n g u c h Q r d e r respect of | S L S L n t " P S ? d a p S S n e ? o r W w 1 n S u T s h a l f A d e e m e d to be a defaulter on the date of its dismissal.
< » Where an order refusing: t c - . J * * ^ ^ 1 ^ . ^ ? ? . ^ ^ ^ .
in comnuting the period of limitation prescr ibe a "£* * . w h i c h the leave of the c e e d K T t h e r than a suit or a r i ^ g * ^ h f e n l e b ^ h t ( ? M i u t e d " t h e period S ^ & d ^ o F ^ ^ ^ ^ ^ ^ S S ^ t o ?he date of the order refus- S r ^ wind u p \ h e chit shall be excluded.
( 3 ) Nothing contained in this Act ^ l « M l h e £ ^ * e ^ t o ^ ^ proceed by suit or application against W ^ R t t e M dividend in Sf&£SjSr£|&.' - ^to the date *,he dedara" http://compensat.cn SEC. 3(i)] THE GAZETTE OF INDIA EXTRAORDINARY
CHAPTER X OFFICERS, INSPECTION AND FEES 51 Appointment of Director of Chits, inspecting Officers, Registrars and Chit Auditors.—(1) The Administrator may, by notification, appoint a Director of Chits and as many Inspecting Officers and Registrars as may be necessary for the pur pose of discharging the duties imposed upon the Director of Chits, the Inspecting Officers and the Registrars by or under this Act or the rules made thereunder.
(2) The Director of Chits may appoint as many Chit Auditors as may be neces sary for the purpose of discharging the duties imposed upon the Chit Auditors by or under this Act or the rules made thereunder .
(3) All Inspecting Officers, Registrars and Chit Auditors shall discharge the duties imposed upon them by or under this Act or the rules made thereunder under the general superintendence and control of the Director of Chits.
(4) If the Registrar is of the opinion that the accounts of any chit are not properly maintained and that such accounts should be audited, it shall be lawful for him to have such accounts audited by a Chit Auditor. It shall be the duty of the foreman of the chit concerned to produce before the Chit Auditor all accounts, books and other records relating to the chit, to furnish him with such information as may be requi red and to afford him all such assistance and facilities as may be necessary or reasonable and as may be required in regard to the audit of the accounts of the chit.
(5) The foreman shall pay to the Chit Auditor such fees as may be prescribed for the audit of the accounts of a chit under sub-section (4).
52. Inspection of documents in the Registrar's office.—Any person may, on pay ment of such fees as may be prescribed—
(i) inspect the documents kept by the Registrar; and
(ii) obtain a copy or extract of any document to be certified by the Regis t rar . '
53. Levy of fees.—(1) There shall be paid to the Registrar such fees as the Administrator may, from time to time, prescribe for—
(a) the registration of the bye-laws of. a chit under section 3;
(b) the grant of a certificate of commencement under section 7;
(c) filing with the Registrar of the chit agreement and copies of documents under sections 11, 20, 21, 29 and 32;
(d) the inspection of documents under section 52;
(e) the certificate, copy of or extract of documents under section 52;
(f) the audit of the accounts of the foreman and the issue of an audit certi ficate;
(g) such other matters"as may appear necessary to give effect to the pur poses of this Act.
(2) A table of fees payable under sub-section (1) shall be published in the Delhi Gazette.
CHAPTER XI MISCELLANEOUS
54. Appeals.— (1) Any foreman aggrieved by an order of the Registrar—
(a) refusing to register the bye-laws of a chit under sub-section (1) of section 3;
(b) refusing to grant a certificate of commencement under sub-section (2) of section 7;
(c) refusing to accept the security under clause (a) of sub-section (1) of ( section 12 or under section 23; or 60-1 THE GAZETTE OF INDIA EXTRAORDINARY [PART II—
(d) refusing to release the property charged by way of security or to order C the release of the cash security or the Government securities under * sub-section (4) or sub-section (5) of section 12, may. within thirty days of the communication to him of such order, appeal to the Director of Chits.
(2) Any foreman or any other person aggrieved by an order of the Registrar under sub-section (1) of section 26 or by an order of an officer empowered by the Admimstrator under sub-section (2) of that section may, within thirtv, days of the communication to him of such order, appeal to the Director of Chits.
(3) The Director of Chits may, after giving the appellant an opportunity of being heard, pass such orders on the appeal under sub-section (1) or sub-section
(2), as he thinks fit. .
55. Power of Registrar to condone delay in certain cases.—The Registrar may, in his discretion and upon an application in writing by any foreman made within the period of fourteen days specified in any of the provisions of sub-section (2) of section 20, sub-section (2) of section 21, section 29 and section 32. allow t 0 the foreman further time not exceeding fifteen days to file a copy of any document under any of the provisions referred to above.
56. Penalties.—(1) Whoever contravenes or abets the contravention of any of the provisions of sections 3, 4 and 7 shall be punishable with imprisonment for a term which may extend to one year or with fine which may extend to five hundred rupees or with both.
(2) Any foreman—
(a) who does not file the chit agreement under section 6 or a copy of any document under section 11, sub-section (2) of section 20, sub-section
(2) of section 21, section 29 or section 32 v/ithin the period specified for such filing or within the further t ime allowed under section 55- for such filing; or
(b) who contravenes any of the provisions of section 8. sub-sections (1) and
(6) of section 12, section 14, section 15, section 16, section 20, section 21, section 22, section 23, sub-section (4) of section 25, section 29, section 35, section 36, section 37 and sub-section (4) of section 51; or
(c) who fails to comply with the requirements of the chit agreement r ^ , garding the date, time and place at which the chit is to be drawn;.'
shall be punishable with fine which may extend to one hundred rupees.
(3) Whoever in any document required by, or for purposes of, any of the provisions of this Act wilfully makes a statement false in any material particular knowing it to be false, shall' be punishable with imprisonment for a term which may extend to one year or with fine which may extend to five hundred rupees or with both.
57. Cognizance of offences.—No court inferior to that of a salaried magistrate of the first-class shall t ry any offence under this Act.
58. Application of fines.—The court imposing any fine under this Act may direct that the whole or any part thereof be applied in or towards payment of the costs of the proceedings.
59. Power to enter and search any place and to seize documents, etc.—(1) A magistrate of the first-class may, on receiving a report from the Registrar or the Inspecting Officer appointed under sub-section (1) of section 51 that any person conducts or is responsible for the conduct of a chit in any place m contraven tion of the provisions of this Act. issue a warrant empowering the Registrar or the Inspecting Officer to enter such place with such assistants as he considers ••*• necessary and inspect the books, registers, accounts or documents in such place.
On receiving such warrant the Registrar or the Inspecting Officer may enter the n l a o with such assistants as he considers necessary and inspect the books, regis ters " accounts or documents in such place and may. take to his office for further investigation such books, registers, accounts and documents as he considers necessary:
•Provided that if the Registrar or the Inspecting Officer removes from the place * any book, register, account or document, he shall give to the person m charge of t ^ a e e ^ receipt describing t h e b o o k , ^ ^ ^ ^ ^ ^ ~ _ « / ^ c c ^ of the books Officer shall either return them to the i l P a ' t h e a ^ t r a r or the Inspecting moved or produce them in the court J ^ T V°™ w h o s e custody thly were r- Such magistrate may return the booL r e ^ t e ^ 8 ' ^ ^ + W h ° i s s U e d « £ warrant" of them to the person from whose custody thlv *?c?unts a n d documents or any or the Inspecting Officer after t n H ^ t y w e r e r e m °ved bv the Reeistramagistrate considers n ^ e S S ^ i o i h ^ £ i ^ l C \ ^ r S ^ a S U c h Neuri t? Is the' and documents when required whether by he £ £ b o o k s ' fegisters/accounts.
Ofhcer or by the court, or may pass such ntLr TfTHT 0r 4 b y t h e Inspecting appear just and convenient to the magistrate ' 3S t o t h e i r disposal as perSa w h ^ f i S o n v *£? n i T S r e ^ f J* 1 1 h a v e a u t h o " ^ to require any before him or to produce or cause to be produced 2 ^ agreement to attend such person on oath. produced any document and to examine writing, ' e SUDSC11Der shall be evidenced by documents in
61. Interest at more than twelve iter cent not +« i™ „!]„ , -*T award interest on claims arising uncle? his Act at 1 f y J i ^ T " 1 * 0 C 0 U r t s h a 1 1 annum simple interest. a t m o i e t h a n twelve per cent per f o r e l o i ^ S v ^ s i ^ f l h f f l c t ' S ? ! ^ e ^ T c a s e s - N o t h i n g contained in the* S « e f ' ^ W - f t l e ^ o v K S c o n t a i n i f f e n t i r e e n S *gthe same.be unconscionable or opposed to the provisions of any law.
out^n O ^ - ^ P U ^ ^ m a - ™*e " l e s *or carrying p o . S U u c n S f m a ^ o S ^ ? ^ ? a t * 1 t b e g e n e r a U t y 0 f t h e ' o ^ 1 * ( a ; all matters expressly required or allowed by this Act to be prescribed:
(b.» the matters in respect of which provision shall be made in the by-laws of a_ chit and the procedure to be followed in making, registering altering and abrogating by-laws, and the conditions to be satisfied prior to such making, registration, alteration or abrogation;
(c) the particulars which every chit agreement shall contain;
•(d) the method of valuation of grains by the Registrar in a grain chit for the purposes of security under section 12;
(e) the restrictions and conditions subject to which and the manner in which, any security given by a foreman under section 12 mav be changed or substituted;
(f) the procedure to be followed by the Registrar for the release of securitv given by the foreman under section 12;
ig) the maintenance of registers and books of accounts by the foreman, the safe custody of books, papers and documents in the Registrar's office and also for the destruction of such books, papers and documents as need no longer be kept;
(h'l the procedure to be followed for the winding up of a chit under Chap ter IX; and
(i) the auditing of the balance sheets and profit and loss accounts and theissue of audit certificates.
http://same.be THE GAZETTE OF INDIA EXTRAORDINARY [PART I I -SEC. 3 (i)] 60o * — in force on the day on which they are so published.
(b) All notifications issued under this A c t . s h a l l , u n l e - t g y are e^p re^e^ -to come into force on a particular day, come into foxce on tne ciay ^ are published. |
(4) Omitted. J
64. Recovery of amounts due from a foreman.—All amounts due from a fore- | man to the Registrar or any other officer under this Act by- way of any fee. ^nau | be recoverable as arrears of land revenue. " I
65. Act not to apply to certain chits.—The provisions of this Act shall not j apply in respect of— I
(1) any chit started before the commencement of this Act, or ]-
(2) any chit the chit amount of which or where two or more chits are started ;
or conducted simultaneously by the same foreman, the aggregate chit amount of ' which does not exceed one hundred rupees.
66 Power to exempt.—The Administrator may, by notification, exempt any | person or class of persons to whom or any chit or class of chits to which the Jj Act applies from all or any of its provisions, subject to such conditions as he ^ deems fit and may cancel or modify any such notification. \ x
67. Amendment of Central Act H of 1899 in its application to the Union tern- j tory of Delhi.—In Schedule 1-A. to the Indian Stamp Act 1899 (Central Act II ;f of 1399), in its application to the Union terri tory of Delhi, after entry 20, the 9 ,.
following entry shall be inserted, namely:— \ | "20-A. A chit agreement, that is an agreement relating 1 * • i to a chit as defined in clause (2) of section 2 of the t , Madras Chit Funds Act, 1961 as extended to the , Union territory of Delhi, if either, .such' agree- > One rupee."
ment is executed or the chit is conducted in .-•;.• | - the Union terri tory of Delhi. *- J
68. Omitted. ?*''
69. Power to remove difficulties.— (1) If any difficulty arises in giving effect' to the provisions of this Act, the Administrator may, as occasion may require,, 'by;
order, do anything which appears to him to be necessary for the purpose eft'* re-.
moving the difficulty. V ;
(2) Omitted. [ N a F_ 3/6/63J[m^^:;
HARI SHARMA, Additional Secretary.
» PRINTED IN INDIA BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PS'iSS, NEW DELHI AND PUBLISHED BY THE MANAGER OF PUBLICATIONS, DELHI,. 1964 **