,t» J. I MINISTRY OF HOME AFFAIRS NOTIFICATION New Delhi, the 26th September 1962 G.S.R, 1311.—In exercise of the powers conferred by section •> of the Union territories (Laws) Act, 1950 (30 of 1950), the Centra] G o v e m Z t hereby extend.
X S ^ U m o n territory of Delhi the Madras Chit Funds A c t S (Madras S t g | n L t i S ^ L m e S y 6 : 8 - 1 * ^ " ^ S t 3 t e ° f M a d r a S ' S u b j e c t t o t h e ^ZZ^Ht J^gS^^^™* i S m 3 d e ' SWh cco^uenL'SiiSSt^ffi aame]^-Cti°n L fOT s u l > s e c t i o n (2>< t h e following sub-section shall be substituted, "(2) It extend? to the whole of the Union territory of Delhi".
3. In section 2-— fa) clause (1) shall be renumbered as clause (1A) and before the clause as so renumbered, the following clause shall be inserted, namely: — " < 1 } ' ^ ™ h i ^ f r a t ° r > m e 3 n S t h e A d m i n i s : t r a t o r f o r * e Union territory of
(b) clause (11) shall be omitted.
4. In section 12, the words "Government sevuriiiep" in all the places where they occur shall stand unmodified. F ^»e ie mey
5. In section 37, in the second proviso to sub-section (2) after the brackets jvords and figures "(Central Act X of 1949V, the words " W ' a corporation e s t a £ Hshed by or under anv statute and csrrving en the H I S ^ A C ^ 0* w ^ w " oh-m h» inserted. * " " ' ' " " s n a i I D s «. 6 - I n section 38, lor the portion beginning with the words "A chit registered in the Presidency-town" and ending with the words "where the chit has been redtetered", the following shall be substituted, namely:
"A chit may be wound up by the District Court".
7. In-section 46, in sub-section (2), for the words "District Gazette" the words '"Delhi Gazette" shall be substituted.
S. 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" *hal] be emitted, i
11. In section 59. in sub-section (1), the words "in the mufassa' or a presidency 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" j the words "Delhi Gazette" shal l 'be substituted: and fb) sub-section (4) shall be omitted.
13. For section 67. the following section shall be substituted, namely: — 67,. "krnendment of Central Act 11 of 1899 in its application to the Union terri tory of Delhi.—In Schedule 1A to the Indian Stamp Act, 1899 ^Central Act II of 1899), in! its application to the Union territory of Delhi, after.entry 20, [he following ST,try shall be inserted, namely: — '20-A. A chit agreement, that is an agreement relating to a chit as defined in clause (2) of section 2 of the Madras Chit Funds Act, 1961 as ex tended to the Union territory of Delhi, if either such agreement is executed or the chit is conducted in the Union territory of Delh i ' One rupee"
14. Section 68 shall be omitted:
15. Sub-section (2) of section eg shall be omitted. ' 3> 'O 9 jit ANNEXUHE THE MADRAS CHIT FUNDS ACT. 1961 AS EXTENDED TO THE UNION TERBI- TORY OF DELHI.
(Madras AcV'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 Sta ta of. Madras : - , • ; . . j Be it enacted in the Twelfth Year of the Republic of India as follows :-
CHAPTER I PRELIMINARY L Short title, extent and commencement. - Madras Chit Funds Act, 1W1.
(2) It extends to the whole of the Union territory of Delhi.
(3) It ^hall come into fm-ce <"•" such date as the Administrator may, by notifica tion,' appoint,'" and" different dates may be appointed for different areas and for different provisions of this Act.
-(1) This Act may be called th<r I
2. Definitions.—In this Act, unless the context otherwise requires —
(1) Administrator ' means the Administrator of Delhi;
(1A) "approved bank" means a bank approved by the Government;
(?) "cnit" means a transaction whether called chit funcL chit, kuri. or, by any other name by which its foreman enters into an agreement with a number of subscribers ' that every one of them shall subscribe a certain sum or a certain quantity of grain by instalments for a definite period and that each subscnoer m his turn as determined bv 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—
(a) some alone, but not all. 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 jwith a liability to pay luture 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 t o .pay future subscriptions. The transaction falls within clause (b) of the above Explanation and is not a chit;
(3) "chit agreement" means a document containing the articles of pg.reement between the foreman, and the subscribers relating to the chit; ;
(4) "chit, amount" means the sum total of the subscriptions payable by j all fee 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 oay» merit of subscriptions due according to the terms of the chit agreement; j
(6) "discount" means the sum or the quantity of grain, which a prized subscriber has under the terms of the chit agreement W forego and which Is set apart under the said agreement to meet the expenses of running the chit or tor distribution amount the subscribers or for both;
(7) "dividend" means the ' sha re of a subscriber in the discount available under the chit agreement for rateable distribution among the subscribers at each instal ment of the chit; . . . „ . ^ - , 48) "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 .Partnership Act, 1S32 (Central Act IX of 1932): :
(10) "foreman" means the person who under the chit agreeement is responsible for the conduct of the chit and includes any other person discharging the functions of the foreman under section 30:
Prodded that ill.: firm shed oe" u :V>-eiran unless such firm is reeis'ferea under She Indian Partnership Act, 1032 ("Centra:!. Act IX of 1932);
( .11) O m i t t e d . - • • • . . ; :
( i : M '"•inn-nri- eel subscriber" u.>,e not include a subscriber who ha.-; defaulted in .-:nc payment ot subscriptions due '.cording to the terms of the chit agreement;
i '••••' "!""'••<= •mvuinr' meu,., ilv> dnierenoe between the chit amount and the cl.tscount, a ' n d - '"• 1;ll<-' (-"l«- '''I "' fraction of a ticket means the difference between die clu amouid and tne discount proportionate to" the fraction of the ticket' and.
when the p; t-e amount is parable otherwise than in cash, the value of the 'pr ize s-i'.M'imt shad lie !he value ,d the time it becomes payable;
} \ l \ " rcped subscribe..-" means a subscriber who has either receiver] or is entitled to the prize amount:
^,(]i>) "Rf'SJy'n'ar" means a Registrar appointed under sub-section (1,).. of .section
(16)_ ••subscriber" inciud.es a person who holds a fraction of a ticket and also •a transferee of a ticket, or a fraction thereof by assignment in writing or bv oneralion of law;
117> ' t icket" means the sluice of a subscriber in a chit.
CHAPTER II CONSTITUTION AWD "RKCI.STIIATION
3. Registration of by-laws.—(.1) Sa \e as otherwise provided in this Act, no" per son shall s tar t or conduct any cli.it unless he has registered with the- Registrar t he proposed by- laws of the chit.
(.2.) For t he purpose of registration, there shall be filed with, the Pvegistrar the :.-y-laws of the chit in dupiicaV signed by the foreman and attested by at lei*st "-1- .'0 witnesses.
(3,0 The Registrar, on being satisfied thai, the by-laws are .not contrary to this- Act v-r to the- rides made thereunder, shall issue to the foreman a certificate ofregistration, and. such certificate shall bo conclusive evidence that the-:by-laws of ilie chit therein mentioned' are duly registered.
(4> Tiie Registrar shad u-.t.un the by-laws of the chit, and return the duplicate of ihe by-laws to the forciiiar- with an endorsement that the by-lav-: have been .registered
1. Prohibition of invitation, for sabscrjption to chit of which by-laws have'wot "been registered.--No person sh-d! issue, or publish any notice, cueuiar, prospectus or other document containing the terms and conditions of any eh.U or inviting the public to subscribe for tickets in any chit unless such notice, cm.ubir. prospectus •fir 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 sshall be signed by the subscribers or by persons- authorized in that behalf in writ ing D.y the subscribers, and the foreman and attested by at lea.d. *wo witnesses, jand 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;
(3) the number of instalments and the amount payable in respect of each, ticket Ifor each instalment;
(4) the dates of commencement and termination of the chit;
(5) the mode of ascertaining the -prized- subscriber-; - -
(6) Notwithstanding anything to the. contrary contained in any ether law, the feo forego;
• (7) the mode, and proportion in .which, the discount.-is distr ibutable by-way ot dividend,-foreman's commission-..and.. other .expenses... if any; •. ..;, ..;..- http://inciud.es http://cli.it 4
(8) the date, time and place at which the ehit is to be drawn;
(9) if under the chit agreement the foreman is entitled to the chit amount, t h e Instalment at which the foreman is to get the chit amount;
(10) the approved bank or banks in which chit moneys shall be deposited by the foreman under the provisions of this Act; j
(11) the manner in which a chit shall be continued, where a foreman; who i» an individual dies or becomes of unsound mind; and j
(12) any other particulars which may be prescribed.
Explanation.—It is sufficient to get the signature of each subscriber on Separate eepies of the agreement. i
6. 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 return the duplicate chit agreement to the foreman with an. endorsement that the chit agreement isj filed.
j
7. Commencement of chit business.— (1) No person shall commence any 'auct ion or drawing of any chit unless h« hgs obtained a certificate of commencement from.
me Registrar.
(2) The Registrar shall, on being satisfied that the by-laws of the chit have been registered and the chit agreement has been filed and the security required under section 12 has been furnished by the foreman, grant a certificate of com mencement.
8. .Copies of by-laws audi ehit agreement to be given to subscribers.—(l) 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 'f irst drawing oi ine' chit, furnish to every subscriber a copy of the by-laws of the ehit and of the chit agreement certified by him' to be a true copy.
(2) The foreman shall., within the fifteenth day of the month succeeding^ the month in which the first t instalment of the chit is drawn, file with the Regis t rar a certificate to.the effect that he has complied with the provisions of sub-section (1) .
9. Alteration of eMi 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. Minnies of proceedings.— (1) Minutes of the proceedings of every drawing.
shall be drawn up and entered in- a book to be kept for that purpose and shall b e signed by the foreman and all the • subscribers ©resent. It shall also be signed b y the prized subscriber or his authorized agent.
(2) Such minutes shall state clearly—
(i) .the date and hour when toe proceeding's 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 t h e particular instalment;
(V) the amount of discount; _ ^ ,^
(vi) full particulars regarding the disposal of the prize amount in respect of t he preceding instalment and disposal of unpaid prize amount, if any, in respect of any previous instalment; and . .
/ , (vii) any other part iculars .'which may be prescribed. " • • .
11. Copy of minutes Ut be filed with the Eegistrar.—Every foreman shall, wi th- Sira the fifteenth day of the month succeeding the month in which one or- more instal ments of the same ehit or- one o-r nacre instalments of any. otheE chit are? dxawiat, Me with the Registrar a copy of ihe minutes referred to in sectiorT-iiTm respect o£ the drawing? at all such instalments and certified by the foreman to be a true copy.
CHAPTER III FOREMAN
12. Secumy to be given by foreman.—(1) For the proper conduct of the chit every foreman shaL, before applying for the certificate of commencement under section 7,—
(a) execute an indenture of mortgage and trust in favour of the Registrar as trustee charging by way -of security property sufficient to the satis faction of the Registrar for the realization of the chit amount; or
(b) (i) ckv;osil in any approved bank an amount of cash not less than half of the chit amount, or (ii; invest in Government securities of the face value or market value, whichever is les>- of not less than half of the chit amount, .and transfer the amount >-.n deposited or the Government securities in favour of the f-ieg;ibU'..,r io '•:•. heid in trust by him as st-, i.. .iiy:
Provided that, where movable property j s charged by way of security, only such kind of movable prnuerty .-.is may In- prescribed shall be »'o charged and such movable property sha'; be dei.-osru.-i' in such manner and with such person or officer as may be prescribe^.
(2) Where a Toreman cooduei;.: 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 A.ct I of 1956), the securirv -'I'en by 'he foreman under sub-section (1) shall not rse liable to be attached in execution o1: a decree or otherwise—
(i) until the chit is terminated and the claims of all the subscribers are fully saiisaeu;
(ii) until all dues payable by the foreman under this Act to the Registrar or any other officer have been pnid;
.(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 m an approved bank mentioned in the chit agreement and intimates in writing the fact of such deposit to the prized subscriber.
1(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 the release of the casn 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 o ' any foreman, instead of releasing •the security under sub-section (4). accept t h t same as security in respect of anv ather chit or chits conducted by the same foreman. If the value or amount of the security so accepted is less than the value or arrount specified in sub-section (1), *he Registrar shall require the foreman to furnish additional security to make up the deficiency. l'.f the value or amount of such security is in excess of the value or amount required, the Registrar shall release such excess.
(6) Notwithstanding anything to the contrary contained in any other law, tbe security furnished under this section shall not be dealt with oy the foreman durinij the currency of the chit and any dealing by the foreman with respect thereto 1»-v w^y of transfer, charge, mortgage or other encumbrance shall be vo'id.
13. The rights of the foreman.—The foreman shall be entitled—
(a) in the absence of any provision in the cb*t agreement to the contrary, to obtain the chit amount at the instalment specified in the shit agree ment:
6
(b) to such commission .or remuneration not exceeding five per cent of ttes chit amount as may be fixed in the chit agreement;
(c) to receive and. realize ail cuiilnbutioiis from the subscribers and"to"iiistribute the prize amounts to prized subscribers and the dividend among the subscribers;
(d) to demand sufficient security from any prized subscriber for the du* payment 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 eor> ctuct of the chit.
14. The duties of the foreman.—-(1) The foreman shah, on the prized subscriber.
furnishing sufficient security for the due payment of future subscriptions, be boumf to pay him the prize amount;
Provided that the prized subscriber shall be entitled to demand immediate pay ment of the prize amount after deducting ail .future subscriptions without any security whatsoever, and in such ,.se .the foreman shall, before the date of th* next succeeding instalment, deposit in an approved bank mentioned in the ehS agreement the amount of future subscriptions deducied as aforesaid and he shall not withdraw the amount so deposited except for payment of future subscriptions.
(2.) ft owing to the default of the prized subscriber the prize amount due ia respect of any drawing remains unpaid before the date of the next succeeding •rawing, the foreman shall deposit, the same forthwith in am approved bank men tioned in the chit agreement and intimate in writing the fact of such deposit t* the prized subscriber.
to) Every payment of the prize amount, the deposit of the amount of futur* subscriptions under sub-section (1) and the deposit of the prize amount under sub-section (2) shall be intimated to the subscribers at the next succeeding draw ing, and particulars of such payment or deposit entered in the minutes of the pro- ' ceedings of that drawing.
<4; The foreman shall not appropriate for himself any amount in excess of wiiat he is entitled to under clauses (a) and (b) of section 13:
Provided that the foreman may appropriate for himself the interest accruing -on.
the amount deposited under the proviso to sub-section (1).
15. Registers and books of account.—The foreman shall keep such registers and.
ooeRa of account, and in such form, as may be prescribed.
tb. Balance-sheet.— (1) Every foreman shall prepare and file with the Registrar in such manner ana within such time as may be prescribed, a balance-sheet dulv audited either by auditors duly qualified to act as auditors of companies under the Companies Act. 1956 (Central Act I of 1956). or bv a Chief Auditor appointedunder sub-section (2) of section 51 and relating to the period 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 t0 the subscribers.—(1) Every foreman shall be liable to account to the subscribers for the amounts due to them.
(2) Where there are more than one foreman each one of them joint)v and severally or if the foreman is a firm, each one of the partners thereof jointly and severally and if the foreman is a Corporation, the Corporation' as such shall be liable to the subscribers in respect of the obligations arising out of the chit. * "^
13. Withdrawal of a foreman.—Where there are more than one person as fore man in a chit, none of them shall withdraw from it until the termination of the chu upJess such withdrawal is assented to by all the non-prized subscribers and unpaid prized subscribers and a copy of such assent has: been filed' as required by section 32. Such 'withdrawal shall not however, affect the security given under section 12. '
CHAPTER IV No s-PRIZED SUBSCRIBERS 19 Non-prized subscriber to pay subscription and get receipt.—Every nonwized subscriber shall, pay his subscription at the time a r i place mentioned m the chit agreement and shall on such payment be entitled to get a receipt i rom the foreman.
20, Removal of defaulting- s u b s c r i b e r s . - ( l ) A non-prized subscriber who defaults in paving his subscription in- accordance with the terms ot the clnt agreement shall b i liable to have his name removed from the list of subscribers.
feerv such removal shall, with the date thereof, be en t , red m tbn relevant book maintained by the foreman. A writ ten notice ot such removal f * , ^ 8 ™ b ) the foreman to the defaulting subscriber within fourteen days ot Mich removal.
(9) A true copy of the entry referred to in sub-section (1) shall be. filed by the foreman with ^ R e g i s t r a r within fourteen days from the date of such removal.
m Anv defaulting subscriber aggrieved by the removal of his name from the l i s t ^ f sScT-iberV may. 'vithin .seven days of the commumcauon to h,m ot the notice of removal, appeal to the Registrar.
shall be final.
91 Substitution — (1) The torernan may substitute in the list of subscribers a n / p V ™ i n l h T p l a c i ' u f a defaulting subscriber whose name has been removed from such list under sub-section (1) of section 20.
davs from the elate of substitution.
^ All arrears of subscriptions realised from tbe subst t ,^subscribe,, ic^s . a r y amount advanced by the forema n s ta l l W oie I h t ^ ° t m e f t .
Except f b r l f y m e n t to the defaulting subscriber.
22. Amount due to defaulting subscri b « J j w ^ t ^ ^ W h e n a substituted subscriber draws t h e prize a ^ ^ l ^ ^ f ^ ect to such deductions as may be recover from the torernan J i « * 1 ! , o n 0 ^ ^ l s ° a l l o n demand made by the provided for m the chi a g i e e ^ ^ f ^ 1 * m acknowledgment duly signed be defaulting subscriber and n nis " i n , / ; ^ W m b e f Q r e t h e date bound to pay to the-deiaui . i g , u o . i ci d™ e J l t i s u b s c r i b e r fails to furnish the of the next succeeding instalment, f""1^^0^" before the date of the next sucacknowledgment f aforesaid, the Coif man g a U beta ^ ^ ^ d e f a u l t i ceeding instalment, d f P f l V d e n o s U e d shall not be wi thdrawn by the foreman for S T u ^ o s e ^ h e r t b T n S ^ ^ y m e n ' t o M * defaulting subscriber.
CHAPTER V PRIZED STIBSCTBERS . ' .. ix „.;„„ =prnritv Before receiving the prize amount
23. Prized subscriber lo g i v e s e e m i l y . ac io re s m 3 S c r i b e r shall furnish without deducting a . ^ i B S v K d u e payment, of future subsand the foreman shal \ \ f ; f f™ p ^ d subscriber, he shall give security for S d u ^ p a y m e n t ' o f S u b s c r i p t i o n s to the satisfaction ot the Registrar.
24. Frtaed subscriber to pay the subscription ^ ^ S ^ ^ o m ^ S ber shall pay his subscriptions l e g u a i l y at the time Q P ^ fee ] i a b ] e t@ ^entioB-ei .in the chit ^ X \ f t e n £ t o ; 1 U u i S e r i p t i « S at e « e .
make a aumsehdate-Gt payment at an rne u a u n . r 8
25. Foreman to demand future subscriptions by wri t ten no t i ce—t i ) A f. re man shall not be entitled to claim consolidated payment of all the future subse, l o tions from a defaulting prized subscriber unless he shall have demanded the same in writing.
(2) If in a suit by a foreman for consolidated payment of future subscriptions from a defaulting prized subscriber, the defendant pays into court on or before i u . J 1 ^ 1° w f ? l c h t l l e s u l t 1S posted for hearing the arrears of subscriptions till that date together with interest thereon at the ra te provided for in the chit agree ment or at twelve per cent per annum simple interest whichever is lower and the costs of the suit for payment to the plaintiff, then, notwithstanding any con tract to the contrary, the court shall pass a decree directing thai the defendant shall deposit in court for payment to the plaintiff, the future subscriptions on or before the dates on which they fall due and that, in default of p >vment by the defendant of any future subscription on or before the due dat< ." the plaintiff shall be at liberty to realize in execution all the future subscriptioi •s and interest thereon, less the amount, if any already deposited by the defendan •
Provided that if any such suit is upon a promissory note, no de ree shall be passed under this sub-section unless such promissory note expressly state that the amount due under the promissory note is towards payment of subscriptions to the chit.
(3) Any person who holds an interest in the property furnished as 'securi ty or any part 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 wi thdrawn 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 of a foreman to 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 by such subscriber to such officer as may be empowered bv 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 tl » time of the transfer and that the transfer is not likely to affect prejudicially tl » interest of any such subscriber is upon the transferee.
27. Transfer of non-prized subscriber's rights to be in writing.—Every t rans fer by a non-prized subscriber of his rights in the chit shall be in writ ing duly 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 not 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 tion 26 or section 27 shall be entered by the foreman in the books of the chit 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 for continuation of chits in certain cases.—Where the foreman who is an individual dies or becomes of unsound mind, the chit may be continued in accordance wi th the provisions of the chit agreement.
31. Termination of chit.—A chit shall be deemed to have terminated- : (a) w h e n the period fixed in the chit agreement has expired, 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 wr i t ing to the termination of the chit and a copy 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 par tners shall conduct the chit in the absence of any provision to the contrary in the chit agree ment .
32. Copy of assent or consent to be filed wi th the Registrar.—A t rue copy of every assent mentioned in section 18 and of every consent mentioned in section 31, with the date of such assent or consent shall be filed by the foreman or by the remaining foreman or foremen, as the case may be, with the Registrar within fourteen days from the date of such assent or consent.
33. Refund of non-prized subscriber's contributions.—Except in the cases refer red to in clauses (a) and (b) of section 31—
(a) every non-prized subscriber shall, 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 him:
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 m 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 s h a l l ' 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 posi tion of the chit scheme.
36 Preservat ion of chit records by foreman.—All the records pertaining to a chi t 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 m wri t ing to the foreman.
(2) Every foreman snan oe oound to produce the chit books and records before the Registrar o r ' t he officer authorized under sub-section (1) at the time and place % K X 10 •Mentioned i n ' t h e notice and shall furnish such information to him as he m a y •squire: •-£... ~«>.
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 194(3) 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 and only on a working;
day and such foreman shall pay such fees as may be prescribed for the inspection..
CHAPTER. IX WINDING UP OK CHITS . 38. When chit may be wound up.—A chit may be wound up by the Distr ic t *'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• hecommits any such act in respect thereto as are calculated to impa i r materially the nature of the security or the value thereof, or
(c) if he fails to deposit the chit moneys in accordance with the provisions;
of this Act, or
(d) if it is proved to the satisfaction of the court that the foreman is u n able to pay the amounts due to the subscribers, or (e'> if execution or other process issued on a decree or order of any court in favour of any subscriber in respect of amounts due to him from:
the chit is re turned unsatisfied in whole or in part, or
(f) if it is proved that there has been fraud or collusion on the part of theforeman in the matter of taking securities from prized subscribers, o r C ) if thp foreman has appropriated the prize amount in his capacity as a.
subscriber without furnishing sufficient security for future subscrip tions, or
(h) if it is just and equitable that the chit should be wound up.
Explanation.—For the purposes of clause (d ) , in determining whether the fore- • man 'is unable to pay the amounts due to the subscribers, the court shall take into.
account his contingent and prospective liabilities in respect of the chit:
Provided that a chit conducted by a company within the meaning of the Com panies Act, 1956 (Central Act I of 1956), shall be wound up only by the court;
having jurisdiction under that Act.
<?9 Winrtinff up application.—The application to the court for the winding up, at a chit shall be bv a petition presented by any non-prized subscriber or unpaid.
S i z e d subscribed-or by the Registrar, signed and verified in the manner p r e s e n b - • | ? ? y the Code of Civil Procedure, 1908 (Central Act V of 1908), and shall con- 'tain such particulars as may be prescribed:
Provided that no application for the winding up of a chit under clauses (d) a n * ..(h) of section, 38 shall lie unless such petition is presented—
(a) by those non-prized subscribers and those unpaid prized subscribers.
-whose subscriptions to the chit amount in the aggregate to at least twenty-five pe? cent of the amounts contributed by all the non-prized, subscribers and unpaid prized subscribers; or
(b) with the previous sanction of the Administrator.
rvDlanation —For the purposes of the above proviso a subscriber of a fraction-.
«f f t?cket shah be deemed to be a subscriber only to the extent of such fraction.
4ft- Insolvency or liquidation a fear to winding up proceedings— Notwithstand-- **g anvthmg contaTned^n sections 38 and 39 no P e t ^ 0 1 ^ ^ r 1 t h % ^ ^ ^ " P i n f o l a :
m g anyumis ^ court if proceedings under the law relating to lnsol- **"* s h t U i h . ir^P be ln t in force are pending against the foreman for adjudicating- ^ ^ J V ^ e T o r ^ l n S r i l r e m L is a ^ o m p a n y . if proceedings for winding- £ the company are pending against such company in a c u r t .
1 I are due from the chit and it shall be deemed to have commenced from the time <o£ the presentation of the application for the winding up.
42. Injunction order.—The court may, upon the application of the foreman or of anv subscriber to whom amounts are clue in respect of the chit at any time after the presentation of the application !'r>.v the winding up of a chit under this Act and before the making of an order for the appointment at an Interim Receiver or for winding up the chit, restrain further proceedings in any suit or proceeding insti tuted against the foreman for the realization of amounts du..; from the chit upon such terms as the court thinks fit.
43. Powers of court on hearing the application.-—On hearing the application, the court mav dismiss it with or without costs or adjourn the hearing conditional ly or unconditionally or make an interim order or any other ord'-r that it deems fit..
44. Chit assets to vest in court for distribution.—On the making of an order for the winding up of a chit, the entire chit assets shall vest in the court for distribu tion amongst the subscribers to whom amounts are due in respect of the chit and the court "shall pass such orders in the matter (.including the appointment of a receiver) as it deems lit.
45 Suits stayed on winding- up orders.—When a winding up order has been made by a court, no suit ur other legal proceedings shall be continued or com menced' afainst the foreman by a subscriber for the realization of amounts due to him in r.-'spect of the eVit except with the leave of the court and on such terms as the court may impose, 4P Copy of winding' up order to be filed with the Registrar.—(1) On the mak ing of a winding up order, it shall be the duty of the petitioner m the windingup proceeding's and of the Receiver to file with the Registrar a copy of the order, within one month from the date of the making of Ihe order:
Provided that the Registrar may, upon application in writing by such petitioner or Receiver, allow, in his discretion, further time not exceeding fifteen days for the filing of any such copy.
t"V) On the filing of a copy of the winding up order, the Registrar shall make an entry thereof in his book's relating to the chit and shall notify m the Delhi .
Gazet te ' tha t such an order has been made.
47 Stay of winding up proceedings on insolvency of foreman and transfer of insolvency proceedings.—When during the pendency of the proceedings tor the winding up of a chit, the foreman is adjudicated an insolvent or when tne fore man' is" a company, the company has been ordered 1o be wound up by the court, the winding up proceedings under this Act shall cease and the distribution of the chit assets shall subject to 1h•• provisions contained m sections 34 and 42, be made by the insolvency court or the court winding up the company, as the ease may be.
48 Compensation for frivolous or vexatious application.—l i ) When an applica tion presented for winding up a chit is dismissed and the couri is satisfied that the application is frivolous or vexatious, the court may aw/.: c 3„ : : . ^ i the applic ant such amount, not exceeding five hundred rupees, as it drems reasonable as compensation to the foreman for the expense or injury occasion d to him by the application and the proceedings thereon and such amount may be realized as if t h e award were a decree.
(2) Compensation under sub-section (1) shall bar any suit for compensation.
49 Right of appeal.—The foreman, any subscriber, the Receiver or any other nerson aggrieved by a decision or order of the court in proceedings for winding up a chit may, within two months from the date of such decision or order, appeal to the High Court.
50 Limitation.— (1) Where an order refusing to wind up a chit has been made under this Act, the chit shall be deemed to have, been under suspension i rom the la te of the presentation of the application to the date of such oraer m respect of non-prized subscribers, and notwithstanding anything contained in the chit agree ment', no non-prized subscriber who was not a defaulter on the date of the presentation of the application for winding up shall be deemed to be a defaulter on the date of its dismissal.
(?) Where an order r a i s i n g to wind up a chit has been made under this Act, in computing the period of limitation prescribed for any suit or other legal pro ceedings Cother than a suit or an application in respect of which the leave of the 12 :iCOurt has been obtained) which miglit have been brought or instituted the period .from the date of the presentation of the application to the date of the order__r^?using to wind up the chit shall be excluded.
(3) Nothing contained in this Act shall affect the right of the subscriber to •proceed by suit or application against the foreman personally for the balance, if any, of the amount due to him after the declaration of the final dividend in proceedings for winding up the chit and in computing the period of limitation prescribed for any such suit or application, the period from the date of the presentation of the application for winding up the chit to the date of the declara tion of the final dividend shall be excluded.
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 required 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- Q £ 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 trar.
53. Levy oJ fees.—Q) 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 he published in the •.'Delhi Gazette. :
13 i ; CHAPTER XI MISCELLANEOUS &4, Appeals.—(1) Any foreman aggrieved by an order of the Registrar—
(a) refusing to register the by-laws of a chit under sub-section (1) of s e c tion 3;
(b) refusing to gram a certificate of commencement under sub-section (2)< of section 7;
(c) refusing tc aceept the security under clause (a) of sub-section (1) of" section 12 or under section 23; or
(d) refusing to release the property charged by way of security or to order" the release of the cash security or the Government securities u n d e r sub-section (4) or sub-section (5) of section 12, m&y, within thir ty days of the communication to him of such order, appeal tothe. Director of Chits.
(2) Any foreman or any other person aggrieved by an order of the Regis t ra r undter sub-section (1) of section 26 or by an order of an officer empowered by the Administrator under sub-section (2) of that section may, within thirty days of fee 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 th inks fit.
55 Power of Registrar to ce.at8.oiae delay in certain cases.—The Registrar may, k. his discretion and upon an application in writ ing by any foreman made within the period of fourteen day* specified in any of the provisions of sub-section (2) #f section 20, sub-section (2) of section 21, section 29 and section 32, allow to the foreman further time not exceeding fifteen days to file a copy of any document wider 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 1 shall be punishable with imprisonment for a tenrV which may extend to one year or with fine which may extend to five hundredw p e e s or wi th both.
C.2) Any foreman—
(a) who does not file the chit agreement .under section 6 ox a oopy of a n y document under section 31, sub-section (2) of section 20, sub-section
(2) of section 21. section 29 or section 32 within the period specified.
for such filing or within the further time allowed under section 55 for such filing: or lb) who contravenes any of the provisions of section 8, sub-section (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 re-- ' garding the date, "time and place at which the chit is to be drawn;
•hall 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 aw with both.
57. Cognizance of offenees.—No court inferior to that of a salaried magistrate of-the first-class shall t ry any offence under this Act.
5>8. Application of fiiaeB.—The court imposing aay fine under this Act maydirect that the whole o r ' a n y part thereof be applied in or towards payment of She' costs of the proceedings.
59.. Power to enter amdl- .search any place and to 'seize documents, ete,—(1) A aniwgisitrsSe of the first-class may. .on receiving a .report from the Registrar or thehttp://ce.at8.oiae *4 ./inspecting Officer appointed under sub-sect ion ' ( I ) of section 51 that any pe.r^pn conducts or is responsible for the conduct of a chit in any place in 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..
Or receiving such warrant the Registrar or the Inspecting Officer'may enter the olace with such assistants as he considers necessary and inspect the books, regis ters. accounts or documents in such place and may take to his olfre for further investigation such books, registers. accounts and documents as- he considers • necessary:
Provided that if the Registrar or the Inspecting Officer remove*' from the place ; any book, register, account or document, he shall give to the person in charge e€ "•the place, a receipt describing the book, register, account or document so remov- •*ed by him:
Provided further that within twenty-four hours of the removal of the books, -.-registers, accounts and documents from the place, the Registrar or the Inspecting 'Officer shall either re turn them to the person from whose custody they were re moved or produce them in the court of the magistrate who issued the warrant.
i'Such magistrate may return the books,' registers, accounts and document;: or any • of them to the person from whose custody they were removed,, by the Registrar • or the Inspecting Officer, after taking from such person such security as the,' •magistrate considers necessary for the production of the books, registers, accounts' and documents when required whether by the Registrar cr by ihe Inspecting Officer or by the court, or may pass such other orders as *G their disposal as •appear just and convenient to the magistrate.
(2) The Registrar or the Inspecting Officer shall have authority io require any person whose testimony he may require regarding any chit agreement to attend before him or to produce or cause to be produced any document and tc examine vsuch person on oath.
i'.T) The Registrar or the Inspecting Officer may apply for assistance to an inVer in charge of a police station and take Police officers to accompany, and assist the Registrar or the Inspecting Officer in performing his duties under this Act. .
• - > 4 ~ -• • • SO. Payment to he evidenced by document.—All payments in r-spect of a chit whether by the foreman or by the subscriber shall be evidenced by dccuments in • writing.
61. Interest at more than twelve per cent not to he allowed.—~No court shall award interest on claims arising under this Act at more than twelve oer cent per annum simple interest.
0,2. Power of court to grant relief in certain cases.—Nothing contained in the foregoing provisions of this Act shall affect the powers vested in a court [or gran'ing relief against any of the provisions contained in the cttit agreement, fi' the same be unconscionable or opposed to the • provisions.- di any law.
63.' Power to make rules.—-(1) The Administrator may make rules for carrying out all or any of the purposes of this Act.
(2) In particular and without prejudice to the generality ' of the foregoing •power, such r ides .may provide for or regulate— . .
(a) all matters expressly required or allowed by *:Ms AH to be prescribed;
(b) the matters in respect of which, provision shaH 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;
fc) the particulars which every chit agreement shall contain; ' ""J*' ~~ (d; the method of valuation, of grains b y the Registrar • in a-.grata chit, tax the purposes of security under section 12;
.-,:.(e) .the restrictions and condition;, subject, to whirh- ' arid.'the manner in which, any security given by a foreman , under .section' .12":*oay' be changed or substituted;
' ;(f>-the procedure to be followed" b r the'-Registrar- for 'the release "of securi ty given b y ' t h e foreman'- under' ''section 1.2; "" -- "" ' :- »•-, • . . , . .
(g) the maintenance of registers and books, of aeeounb by ihe .foreman, the sate custody ot DOOIYS, ^apers and documents in me Ke^istiar's office and also for the destruction of such books, pane A; and doeumencs as need no longer be kepi,
(h) the procedure to bo followed. for the' winding up of a chit under Chap ter IX; and
(i) the auditing of the balance sheets and profit and loss accourus and the issue of audit certiiicat.es.
|3) (a) All rules made under this Act shall be published, in the Delhi Gazette :an<, unless they are expressed to come into force on a particular dav, shcdJ come inu force on the clay on which they are so published.
(b) All notifications issued under this Act, shall, unless ihey are expressed to come into force on a particular clay, come into, force on the day on which they .are published.
(4) Omitted.
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 shall be recoverable as arrears of land revenue.
65. Act not to apply to certain chits,—The provisions of this Act shall not .apply in respect of—
(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 aggr\ ..ate chit amount o£ 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 this 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..
67 Amendment of Central Act 11, of 1899 in its anpueatioti to the Union terri tory H" Delhi.—In Schedule 1-A, to the Indian Stamp Act. 1899. (Central Act II of 1399), 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 to a chit as defined in. clause (2) of section 2 of the Madras Chit Funds Act. 1962 as extended to fe Union territory of Delhi, if either such agreement is executed or the chit is conducted in the U.a;.-.>c.
terri tory of Delhi.
68. Omitted.
69. Power to rfcrnow difficulties.—O) If any difficulty arises in giving effect 4o the provisions- of this .Act. the Administrator may, a s occasion may require, by order, do anything wltlch appears to him to be necessary for trie purpose 'of r e moving the difficulty,.
,<2) Omitted, [No. F. 5/fl/62-Judl.II-UT'L~51.'I ?.. K. KAUL, Dy. Secy.
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