MINISTER OF HOME AFFAIRS New Delhi, the 24zh August 19&7 G.SJi. I316.--ln exercise of the powers conferred by section 87 of the Puniah Reorganisation Act, ISM (31 of 1966), the Central Government hereof e - t S to the Union territory of Chandigarh the Madras Chit Fund* Ac t I9(Ji (Madras Act 24 of 1961), as at present in force in the State of Madras, subject to the following modifications, namely:— r ' v 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.
tu t id ^amef0-—*' ^ s u b ~ s e c t i o n {2) • t h e &P#&m sub-section shall be substi- "(2J It extends to the whole of the Union territory of Chandigarh.".
3. In section 2,—
(a) for clause (1), the following clauses shall be substituted, namely: — "(1) "Administrator" means the Administrator for the Union territory of Chandigarh; J (LA) "approved hank" means a bank approved by the Administrator;";
(b) Clause (11) shall be omitted.
4. In section 12, the words "Government securities" in a l l places where they occur shall stand unmodified. J 5 In section 37, in the second proviso to sub-section (2), for the words figures brackets and letter 'Banking Companies Act, 1949 (Central Act X of 1949)7sucri inspection shall be made only at the premises of the company", the words figures and brackets "Banking Regulation Act. 1949 (Central Act 10 of 1949) or a corpo ration established by pr under any statute and carrying on the business of bank ing, 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 "A chit registered in the oresidency-town" and ending with the words "where the chit has been registered", 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 "Chandigarh Gazette" shall he substituted.
5. In section 47, the words "Where insolvency proceedings against the fore man are pending m 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), flor the words "Fort St. George Gazette" the words "Chandigarh Gazette" shall be substituted. *?***•*
10. In section 57, the words "a salaried presidency magistrate or" shall be omitted.
11 In section 59, in sub-section ( I ) , the words "in the mufassal or presidency magistrate in the Presidency town," shall be omitted.
12. In section 63,—
(a) in clause (a) or sub-section (3), for the words "Fort St. George Gazette , the words "Chandigarh 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 2 of 1899 in its application to the Union territory of Chandigarh.—In Schedule IA to the Indian Stamp Act, 1899 (Central Act 2 of fSSfi), in its application to the Union territory of Chandigarh, alter 20, the following entry shall be inserted, namely: — "20-A, A chit Kireement. that is Sn agreement re- '] lating to a chi1 as defined iifclsose <2) of sec- | tion 2 of the Madras Chit Ponds Act, 1933 as [ extended to the Union territory of Chandi- ;. One rupee".
garh. if either such agreement is executed or i the chit is conducted in the Union territory of 1 Chandi carh. ' \ J
14. Section 63 shall be omitted.
15. Sub-section (2) of section 69 shall be omitted.
ANNEXURE THE MADRAS CHIT FUND ACT, 1061 AS EXTENDED TO THE UNION TERRITORY OF CHANDIGARH (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:
B E it enacted in the Twelfth Year of the Republic of India as follows: —
CHAPTER I Pre lint mar y
1. Short title and commencement—(1) This Act may be called the Madras Chit Funds Act, 1961.
(2) I t extends to the whole of the Union territory of Chandigarh.
(3) It shall come into force on such date as the Administrator may, by notifi cation, appoint, and different dates may "be appointed for different areas and for different provisions of this Act.
2. Definitions.—In this Act, unless the context otherwise requires,—
(1) "Administrator" means the Administrator for the Union territory of Chandigarh;
(1A) "approved bank" means a bank approved by the Administrator;
(2) "chit" means a transaction whether called chit fund chit, Ituri, or, by any pther name, by which its foreman enters into an agreement with a number of subscribers that every one of them sha 1 subscribe a certain sum or a certain quantity of gram 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—
(a) some alone, but not all, of the subscribers get the prize amount without any liability to pay future subscription; 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. A11 the subscribers get by turns Es- ],0D0 being the whole of the chit amount and are liable to pay future subs crip t ions. 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 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;
(5j "defaulting subscriber' ' means a subscriber who has defaulted in t he pay ment of subscriptions due according to the terms of the chit agreement;
(61 "discount" means the sum or toe Quantity of grain, which a prized sub scribe^ 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 tax cistnoution 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;
(8) "drawing" means ascertaining of the person or persons entitled to the prize amount at any instalment of a chit;
( 9 ) « n r r a » m e a n s a firm registered under the fndian Partnership Act, 1932 (Central Act IX of 1932);
(10) "foreman" means the person who under the chit agreement.is^respons^le for the conduct of the chit and includes any other person discharging the xunctions of the foreman under section 30;
Provided that no firm shall be a foreman unless such firm is registered under the Indian Partnership 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 due 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 o£ a ticket means the difference between the chit amount and the discount proportionate to the fraction of the jacket, ana when the prize amount is payable otherwise than m cash, the value of the prize amount shall be the value at the time it becomes payable;
(14) "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 a^o a transferee of a ticket or a fraction thereof by assignment in writing or by operation of law;
(17) "ticket" means the share of a subscriber in a chit.
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 shal' 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 return 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 cliit of which by-laws have not been registered.—No person shall issue or publish any notice, circular, prospectus or other document containing the terms ano* 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 he in duplicate and shall be signed bv the subscribers or by persons authorized in that behalf iri wr i t ing by the subscribers, and the foreman and attested by at least TOO 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;
(3) 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;
(5) the mode of ascertaining the prized subscriber;
6. Filing of chit agreement.—(1) Every chit agreement with its duplicate shall to forego;
(7) the mode and proportion in which the discount is distributable by way Ol dividend, foreman's commission and other expenses, if any;
(8) the date, time 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 which chit moneys shall be deposited by the foreman under the provisions of this Act;
(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.
6. Filing of chit agreement.—(1) Every chit agreement with its duplicate shall be filed with the Registrar.
"{21 The Registrar shall, on being satisfied that the by-laws of the chit have agreement to the foreman with an endorsement that the chit agreement is riled.
7 Commencement ol 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. , ,,. ,,, .
(2) The Registrar shall, on being satisfied that the b y l a w s of the chit have been registered and the chit agreement has bean filed and the security required under section 12 has been furnished" by the foreman, grant a certrncate of com mencement.
8 Conies of by-laws and chit agreement to be given to subscribers.—(1) The f o r e m a S l l ^ s l o o n a's may be a f & e l r a s obtained thece r t ficateof g m m e n c e - ment referred to in section 7. but not later than the date Qf the nrsl drawing oi t W W t f m m i s h to every subscriber a copy of the by-laws of the chit and of the chit agreement certified by him t o b e a t rue copy.
% , ! • • . - •• - • * • " • * • '
(2) The foreman shall, within the Siitientb 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
9. Alteration of chit agreement.—The chit agreement shall not he altered added So 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 snail be drawn up and entered in a book to b e kept for that purpose and shali 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 proceed ings are recorded;
t(iii) the names of the subscribers present;
(iv) the person or persons who become entitled to the prize amount in the particular instalment;
(v) the amount of discount;
<vi) full particulars regarding the disposal of the prize amount in respect of the preceding instalment and disposal of unpaid prize amount, if any, in respect of any previous instalment; and -(vii) any other particulars which may b e prescribed.
11. Copy of minutes to be filed wi th the Registrar.—Every foreman shall, wi th in the fifteenth day of the month succeeding the month in which one or more instal ments of the same chit or one or more instalments of any other chit are drawn, file with the Registrar a copy of the minutes referred to in section 10 in respect of the drawings at all such instalments and certified by the foreman to be a t rue copy.
CHAPTER III Foreman
12. 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 Hegistrar 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) deposit 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 less of not less than half of the chit amount, and transfer the amount so deposited or the Government securitine ,-„ *.,„ b of the Registrar to be held in trust by him as security: f a v o u r
Provided that, where movable property is charged bv way of security nnlv such .kind of movable property, as may be prescribed shali be so charged and <;iirh movable property shall be deposited in such manner and with such oersrm r£ Officer as may be prescribed. , p^^u. ur.
(2) Where a foreman conducts more than, one chit, he shall furnish securitr in accordance with the provisions of sub-section (1) in respect of each svtch ch i t /** £B m i n »«» * » i= terminated and t t e claims of all l i e subscribers ar , fully satisfied;
(ii) until all dues payable by the foreman under tf* Act to the Registrar OT any other oificcr have been paid,
(iii) where owing to & * » * * < * £ * f f & S S S ^ ^ ffunTfe due remains unpaid even s*sr tae J ^ ^ l S ibank mentioned in the foreman deposits such amount » ' ^ . g | f K such deposit to chit agreement and intimates in writing «« lat-L u the priced subscriber.
(4) The Registrar shall. after the &*g*ff& &f$ %LgSL i f f fig
(5) The Registrar may on %*%£&£*& ffiBSa^RUSSSfS S amount requ£e l the Registrar shall release such excess.
( 6) Notwithstanding ^ W f e M f g ^ S t t f f l fb? l f i S ^ & * | p u r i t y furnishedi under to ^ ^ f i g * £ fcrlman i ^ - s p e c t thereto by ^ C ^ ^ ^ ^ ^ ^ t K ^ * » encumbrance shall be void.
13. The rights or the foreman.—The foreman shall be entitled— , - .-u i „ „ „ -vf a m - nrovision in the chit agreement to the contrary, ( 3 ) '"to obffin the chit amouTatThe instalment specified in the chit agreement;
among the subscribers:
m to demand sufficient security from any prized subscriber for the duepayment of future subscriptions;
M tc substitute subscribers in the place of defaulters; and m to do all other acts that may be necessary for the due and proper eonduct of the chit.
, r ~- fts TIIP foreman shall, on the prized subscriber «ja*s aats atfs?*aasan——»— - •— to pay hfm the prize amount:
. , _, ^ i +>,„ ™?*ea subscriber shall be entitled to demand immediate pay -
Provided that the prized ^ b ™ ^ s a l l future subscriptions without any ment of the prize a n ™ » w case ttw foreman shall, before the date of the security whatsoever and m such case mo IO fcani m ( ? n t i o n e d ^ ^ h g next ^ c « c i m g a ^ ^ m 0 f f a t 7 ^ , bscViptions deducted as aforesaid and he shall j g g ^ S S j so d e b i t e d except for payment of future subscriptions.
- ~ +„ +>,*> default of the prized subscriber the prize amount due in ( 2) l . owmg to the d e f a u l t mea.p ^ ^ ^ ^ d m g respect of « r * J g « K * g d e p o s i t the same forthwith in an approved ban^ drawing, the . M ^ ^ ^ a n d intimate in writing the fact of such deposit xnerttjonci m u p ua« -e to.thr prized subscriber.
gO . (3) Every payment esE the prize amount, the deposil cf the {.mount of future sub-sect on (S) shall h* intimated to the subscribers &i fee next succeeding draw ing. an; particulars of sucfc payment or deposit entered in Ha* minutes of the proceedings 01 that drawing, , , . > 1 i 4 H T ! ? e ?°jeni2n shay not appropriate for himself any amount in excess of what he is. entitled to under clauses (a\ and (b) of sectStin 13:
Provided that the foreman may appropriate for himself the interest accruing on the amount deposited under the proviso to sab-section (1); 8
15. Registers anfi books of account—The foreman shall keep such register- and nooks of account, and m su.h form, as may he prescribed.
1G. Balance-sheet—(l) Every foreman shall prepare and file with the Registrar * J 5 £ £ ffi«»« ffi* f f b time as may be proscribed. « fc./llnce-sheef duly t & T & S K Ay + s ^ t o r ^ d u ! y QU^aed to act as auditors of companies under 2 & ? 3 e 2 S w f t « 9 2 ( U e " t r a I K 1 A c t I °* 10.58). ^ by a Chief Auditor appointed turner sub-section (2) stE 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 atli.v,1!7' ****W$T •* the foreman to the subscribers—(1) Every foreman sfasH be table to account to the subscribers for the amounts due to them sevir lVv^offf £ f w a I L m ? r e *£*" ° " e f o r e ™ a r l e a l * « « of them jointly and 2 £ t\/ 0 r / - h ! . f o r e m a n is a Brm. each one of the partners thereof iointlv and !%Z&% *lnd f l t t e 1 , I o r e ! " a n i s a Corporation, the Corporation as such "hall be liable to the subscribers m respect of the obligations arising out of the chit.
*, J 8 " -„ W i t h ^ f W 3 1 o f 5 ^ r eman —Wh ere there are more than one person as fore man in a chit none of them shall withdraw from it until the termination of t h t S S L y f ^ y T h w ^ ™ * ^ & assented to by all the n o n - p r i x e d ^ s crib e r f and unpaid prized subscribers and a copy v£ such assent has been filed a ' r e q u i r e d b v slot!™ & S U C h w r i t h d r a w a l shM n ° * h°™=ver. affect t h e ^ s e c u r i t y g S under
CHAPTER IV IVon-prizcd Subscribers n r J J s ^ " P 1 ? * " * sotatjrfber to pay subscription and get receipt.—Every nong ^ & ^ t e S f • h a U J p ? ' » h l s subscription at the time and place mentioned hi th l fo^emaan r e e m e l l t ^ S h a " ^ S U C h p a y m e D t b e e n t i t l e d t o ^ e t » K S f g e S ^ 2°:,Removal . of defaulting subscribers—(1) A non-nrized KB8ser*'rto* , - h n defaults m paying his subscription in accordance with the t e r m , of tbe Sri?
agreement shall be liable to have bis name removed from theTfflof subscribers & E L ® i F S P ^ Sha]1- M t 5 t h * d a t e t h e r e r f > ^ entered in the relevant book maintained by the foreman. A written notice of such removal shall' ne given bv the foreman to the defaulting subscriber within fourteen days of such r e m S
(2) A true copy of the entry referred to in sub-section (1) shall be filed bv th* foreman with the Registrar within fourteen days from the date oi such rem oval j , - ^ C ! i *fZ defaulting subscriber aggrieved by the removal of his name from the L l w . f l b < T m ^ V ? t h i Q ' ^ v e n d a y s o f t n s communication to him o? the notice of removal, appeal to the Registrar.
M J * L S h ^ , e s i s t r a r J»Sy< af te? Siting the parties an opportunity of being heard shaU be finar] ° n t h e a P P 6 a l 3E h e t h i n k s fit a n d t h e d e c i s i o n ^ f T S
23. 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-section (1) of section 20: v e C !
Provided that no such substitution shall be made until the. expiry ol the period il 'Jwed for appeal under sub-section (3) of section 20. or where any such appeal nas. been preferred, until the same has been disposed of.
m Every substitution referred to in sub-section (I) shall, with the date there- ^ hi cme^ed in the relevant book maintained by the foreman. AJaruo.copyert i e r f S ^ t r y San* filled by the foreman with the Registrar within lourteen days from the date of substitution.
m All arrears of subscriptions realised from the substituted subscriber, less -«v -mMiit advanced by the foreman, shall, beiore the date of the next succeed.
w f n T ' m e n t b ^ deposited by the foreman in an approved bank mentioned Jg thf ^ r t S ^ t ^ W f t S M r n t t shall not withdraw the amount s 0 deposited except for payment to the defaulting subscriberr« , i n m*imi - F o r the purposes of sub-section (3), 'arrears of subscriptionsshah mean a h t h f p r e v i d u s 5 instalments realised from the substituted subscriber.
99 Amount due to defaulting subscriber how dealt with—When a substituted
CHAPTER V Prized Subscribers 9? Prized subscriber to give security.—Before receiving the prize fflMtffit thePdue P ^ i e n t of future subscriptions to the satisfaction of the Registrar.
24 Prized subscriber to pay the subscription regularly—Every prized subscri_ in writing.
'ftft Tf in a suit by a foreman for consolidated payment of future subscriptions mmmm¥mggMm t u r e e n less the amount, if any already deposited by the defendant.
Provided that if any such suit is upon a promissory note, no decree shall be nasfed under this sub-section unless such promissory note expressly sta e that the amount due under the promissory note is towards payment of subscriptions to the chit .
m Any person who holds an interest in the property furnished as security or any part thereof shall be entitled to make payment under sub-section (2).
If
(4) AJl consolidated payments of future subscriptions realized bv a foremar jnall be deposited in an approved bank before toe date of the ne^-t succeeding Instalment The amount so deposited may be withdrawn only 'or payment o* future subscriptions. When any property is acquired in lieu of the consolidated payment, it shall remam as security for the due payment of future subscriptions.
CHAPTER VI Transfer
26. Restrictions orj transfer of right of foreman.—(1) No transfer of the right* of a foreman to receive subscriptions from prized subscribers shall be made with out the previous sanction m writing of Registrar.
(2) Any such transfer of the rights of a foreman to receive subscription* from a prized subscriber shall, if it is likely to affect prejudicially the interest of anv non-prized subscriber or unpaid prized subscriber, be set aside on application by such subscriber to such officer as may be empowered -by the Administrator in this
(3) When under sub-section (2) a transfer is disputed by a subscriber, the burden of proving that the foreman was insolvent 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, A"«XHM
27. Transfer of nonprized subscriber's right to be in writ ing—Bverv tran*- £ j by a non-prized subscriber of his rights in the chit shall be in writing duly attested by at least two witnesses and shall b e 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 solverft or the transfer was effected with a view to defeat the provisions of any law x, S9~EntTy °t transferee's name in the book—Every transfer made imi*«. «.r^ & & r a S e , C t i ° ? 2 7 S h a i l b,e e ^ e r e d hy t h e f o r e i ^ " t h e S T c r f t t S chit forthwith and a true copy of such entry shall be filed by the foreman with the Registrar withm tourteen days from the date of such entry. i , J l r e n l a n ™ " c ™
CHAPTER VII Termination of Chits
30. Provisions ifrom continuation of chits in certain cases.—Where the foreman who is an individual dies or becomes of unsound mind, the chit mav K S m accordance with the provisions of the chit agreement y c ™ t l n u e d
31. Termination of chit—A chit shall be deemed to have terminated—
(a) when the period fixed in the chit agreement has exnirprf ™*«*w^ « ment of dues to all the subscribes has been compfet'edT^ ^ <b> when all the non-prized and unpaid prized subscribers consent in writ ing to the termination of the chit and a copy of such c c n - e n i ^ w as required by section 32; or con_ent is nied (ej When a foreman, who is an individual, dies or h p m m ^ „r ,.
;pr°Vidoerd b ^ e n s ^ u n l o u n a a m i n d e X S S f t j & l * J f t % 3 * » <** terminated and the pmgag 3 ^ « ? & g ^ £ r £ £ £ J ^ ' chit m the absence of any provision to R « R S % a B ^ f t
32. Copy of assent or consent to be filed with the Reirfcrrar A 4 every assent mentioned in section 18 and of ever7eorS „ T ^ c o p y o f 31 with .the date of such assent or consent shall be fi^dbvfh.T'3 ** S e c t i 2 n the remaining foreman or foremen, as the case mav h . t i t ^ V e D ^ M 5 n o r ' b ?
fourteen days from the date of such assent or consent. * l h e R e £ l s t r a r within.
J'.
33 Refund of no.-pri.ed subscriber's contribatioas.-Except in the cases refer red to 1E clauses W and (b) oi section 8 1 - W ever, n0n-Pri,ed g » « ^ ^ V ^ fi"SSSffl^ S * * ?
S & S W S f t f ^ S f f * 3 A S * dividend, il any, received by him:
M U M that any ̂ % £ ^ % « % ^ w ^ S W S B S l f f S S T < S transferred under sections *C,, _B ana t£ " £ ' ifa U o n m a d e by such S ^ ^ e S & ^ r c n n d l t i r ^ c i n e d in this clause;
• K- -first eharee on chit assets—Where there are debts
34. Subscribers' g H » t o be flirt ^ ^ ^ g ^ a n d alsC) other debts due torn ftte&*W^^VS™*k ft* be a nrst charge on t ta cbit assets-
CHAPTER VIII Inspection of Documents 3 , Foreman to allow ^ ^ ^ ^ ^ T ^ ^ ^ ^ ^ on payment of such fee ? ° * e * * f ^ f K a f d prized subscribers all reasonable chit agreement, allow non-prizei « ^ a n p a n d w i l h f a s u c h ^ours S t i e s on all days of drawing c£ S ^ ^ t S the inspection of security bonds as may be providea for m the chat a^e~ment X r o m t h e prized subscribers or SSsSs ana ssass. ws*« s» MI *—»—- of the chit scheme.
^iSSS?3^?wSS&?! £ CM,.
the foreman.
require:
&»« -rr-av be made at the premises of the foreman if ^ v l l n ^ S n c r ^ c h ^ f e e s as S be prescribed for the inspection:
, „ j , „ Tm-nkmc companv as defined in the
Provided further that if the foreman ft£a3ffit£St». * a corporation He^laHon. Banking Companies Act. W f J ^ on t h e b l l s i n e S E of banking, such ^ t K h e d by or under any statute; and carryi g c o r m ) a r l y or the corporation.
g g 2 E r & * made only at t h ^ P ™ - ^ ^ s u c h f o r e m a n ^ p a y s u c h http://no.-pri.ed 11
CHAPTER IX Winding up of Chits S3. When chit may be wound: up.—A chit may be wound up bv the Disiriri Court— " {a) if the chit has terminated under clause (c) of section 31, or Cb) if the foreman fails to give the security specified in section 12 or if the commits any such act in respect thereto as are calculated to impaiv materially the nature of the security or the value thereol, or
(c) if he fails to deposit the chit moneys in accordance with the provision* of this Act, or
(d) if it is proved to the satisfaction of the court that the foreman is unable to pay the amounts due to the subscribers, or
(e) in execution or other process issued on a decree or order of any courl in favour of any subscriber in respect of amounts due to him from the chit is returned unsatisfied in whole or in part, or
(f) if it is proved that there has been fraud or collusion on the part of the foreman m the matter of taking securities from prized subscribers, or
(g) if the foreman has appropriated the prize amount in his capacity as a subscriber without furnishing sufficient security for future sub^crinticws, or ™
(b) if it is just and equitable that the chit should bs wound upm ^ ^ ^ ^ T Z ^ £ e P u r P ° s ? s °* c ]a u s* (d) in determining whether the fore man is unable- to pay the amounts due to the subscribers, the court shall take into aceojnt his contingent and prospective liabilities in respect of the chit:
M ^ c V i d ^ d l l * ^ c W J c.on^"ctfd b v a company within the meaning of the Com panies Act, 1958 (Central Act I of 1956), shall be wound up only by the court having jurisdiction under that Act.
39. Winding up application—The application to t h e court for the winding ,up . 5 shall be by a petition presented by any non-prized subscriber or urnaid P l \ e d + s . u b s £ r l ? e r p J r J t o g Registrar, signed and verified in the manner prescrib ed by the Code of Civil Procedure, 1903 (Central Act V of 1908), and shall contarn such particulars as may be prescribed: »•«» ™ - Prcvided that no application for the winding up of a chit under clauses (d) and
(h) of section 33 shall lie unless such petition is presented— .. (a) by those non-prized subscribers and those unpaid prized subscriber^ whose subscriptions to_ the chit amount in the aggregate to at least twenty-five per cent oi the amounts contributed by all the non-prized subscribers and unpaid prized subscribers: or
(b) with the previous sanction of ' the Administrator.
Explanation—For the purposes of the above proviso, a subscriber of a fractior of a ticket shall be deemed to be a subscriber only to the extent of such traction ,-„,r40' Jf^.03^1"^ ™ liquidation a bar to winding up proceedings Notwithstand- ^ aly^ug c ™ 1 ^ l n sections 38 and 39. no petition for the S S a chit shall be entertained by a court if proceedings under the law relatins to info!
St™ J l n ° U n ? ^ ? * £ in £rc? ! 2 ̂ d ^ a ^ n s t the foreman lor ad'udicat ng ™ \ e ^ V e Q t ° r W h ^ " t h S f (? r e™ a n *s ^ company, if proceedings for wineng up t i e company are pending against such company in a court. wmumg i n ^ ^ T f ^ ? " ^ a n d *?•?* °,f w l n d " E i P order—An order fc- the wind ing up of a chit shall operate in favour of all the subscribers to whom ^ n i Z are due from the chit and it shall be deemed to have commenced I ron? tfaT time Of the presentation of the application for the winding u p 12 42- "Injunction order.—The court may., upon ths application of the foreman or of any subscriber to whom amounts are due in respect of the chit at any t ime after the presentation of the application for the minding up of a chii under this Act and before the making of an order for the appointment of 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 amount* due from the chit upon such terms as the court thinks fit.
43. Powers of court on hearing the application•—On hearing the ippiication, the court may dismiss it with or without costs or adjourn the hearing conditionally or unconditionally or make an interim order or any other order that it deems fit.
4 4 Chit assets, to vest in coart 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 respec; of the chit and the court shall pass such orders in the matter (hieluding the appointment of a receiver) as it deems fit 55- Suits stayed on winding up orders—When a winding up order has been .made by a court, no suit or other legal proceedings shall be continued or com menced against the foreman by a subscriber for the realization of amounts due to .him in respect of the chit except with the leave of the court and on such terms as the court may impose-
46. Copj of winding up order to be filed with the Registrar.— {lj On the mak ing of a winding up order, it shall be the duty of the petitioner in the winding u p proceedings and of the Receiver to file with the Registrar a copy of the order3 within one month from the date of the making of the 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 cf any such copy.
(2) On the filing of a copy of the winding up order, the Registrar shall make .an entry thereof in his books relating to the chit and shall notify in the Chandi garh Gazette that 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 for the winding up of a chit, the foreman is adjudicated an insolvent or when the fore man is a company, the company has been ordered to 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 the provisions contained in sections 34 and 42, be made by the insolvency court or the court winding up the company, as the case may be- 48- Compensation for frivolous or vexatious application.—(1) When an applica tion presented for winding up a chit is dismissed and the court is satisfied that the application is frivolous or vexatious, the court may award against the appli cant such amount, not exceeding five hundred rupees, as it deems reasonable as compensation to the foreman for the expense or injury occasioned to him by the application and the proceedings thereon and such amount may be realized as if the award were a decree-
(2) Compensation under sub-section (1) shall bar any suit for compensation-
48. Right of appeal.—The foreman, any subscriber, the Receiver or any other person 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 cr order, appeal to the Hi<m 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 from the date of the presentation of the application to the date of such order in 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-
(2) Wbere an order refusing to wind uu a chit has h e e n m a d e imder ihis Act in computing the period of limitation prescribed for any suit or other legal pro ceedings (other than a suit or an application in respect of which the leave of the court has been obtained) which might have been brought or instituted the period from the date of the presentation of the application to the date of the order refus ing to wind up the chit shall be excluded.
13 &
(3) Nothing contained in this Act shall affect the right of the subscriber to proceed by soft or application against the foreman personally for the S e a S S ^ . ^ " 8 ™ ? * * * 1 * t 0 J? l m u l t e r t h e P ^ ^ a t i o f l of the final dividend' in pruce«iiQKs lor wind&E up the chit and in computing the period oi limitation SWMesbnd tor any such sun or application, the period from the o'ate < , f £ 2 presentation of the application for winding up the chit to the date of the declara tion of *&*! final dividend shall be excluded. aeciara- CiiAPIER X Oncers, Inspection a)id Fees * » ^ ^ A l f f l K S W f f i « « % . J f c * t o » and CMt Chits and as many Inspectmg O t a ' a n d S r ^ f U ^ ^ l a D i r e c t o r o f «*§! i t x r f t , 5B8? tLn s d ^o^th^ru^if c!rge r under the general superintendence C d control of | e | g | | f , S T
(4) If the Registrar is of the opinion that the accounts of anv chit a™ »*» ^ M ™ y t S a £ m t a m e d » . a n d t h a t s u c h a « o u n t s should be audited ft shall bffawfu'l for him to have such accounts audited bv a Chit Auditor Tt =>.tn *S +i, i 2 ? S the foreman of the chit concerned to produce before^tbaChit A ? L l ? 6 , d u l y P ?
books and other.records relating to t ^ f f t o t o i A h S ^ ^ ^ ^ ^ ^ as may be required and to afford him all such assistance a n d f a c i l i t i e s ^ a f ™ v E£ i o r ( f L T a h u ^ T ^ S a c i o ^ t y s ^ S ^ J ^ ^ ^ * * * ^
52. InspBCtloa of documents in the Registrar 's office.—Any person mav or, payment of such fess as may be prescribed— y p e r s o n m ay> o n <i} inspect the documents kept by the Registrar; and
(ii) obtain a copy or extract of any document to be certified by the Regis-
53. Levy Or fees—(1) There shall be paid to the Registrar such fees as the administrator may, from tune 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;
Cc) filing with the Registrar of the chit agreement and copies of documents under sections 11, 20, 21, 29 and 32;
t (d) the inspection of documents under section 52;
Ce) 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 certificate; o u ^ ,>
(g) such other matters as may appear necessary to give effect to the pur - t; poses of this Act.
<2) A table of fees payable under sub-section CI) shall be published in the Chandigarh Gazette-
CHAPTER XI , '".' Miscellaneous
54. Appeals.—CD Any foreman aggrieved by an order of the Registrar • •',.. Ca) refusing to register the bye-laws of a chit under sub-section (1) of section 3;
'.
14
(b) refusing to gram a certificate of commencement under sub-section (2) of section 7;
(cj refusing to accept the security under clause (a) of sub-section (1) of section 12 or under section 23; or
(d) refusing to release the property charged b_y way of security or la ;irder the release of the cash security or the Government securities under sub-section (4) or sub-section (5) 01 section 12.
may, WitJlic 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 subjection (1) of section 2S or by an order of an officer empowered by the Administrator under sub-section (2) ot that seciion may. within thirty days of the communication to him ol such order, appeal to the Director of Chits.
(3) The Director of Chits may, after giving the appellant an opportunity of hems heard, pass such orders on the appeal under sub-section (1) or sub-section
(2), as be thinks fit.
55. Fower of Registrar ta 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 to the foreman further time not exceeding fifteen days to file a copy cl any document under any of the provisions referred to above-
5G. Pouallies,—(I) Whoever contravenes or abets the contravention oi 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 (21 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
(b) who contravenes any ol the provisions of section S, 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 eomply wi th the requirements o* the chit agreement re garding the date, time and place at which the chit is to be drawn, •shall be punish able 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 particularly 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 try any offence under this Act.
58. Application, of fines.—The court imposing smy 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 seaTCh any place and to seize documents, etc.—(1) A magistrate of the first-c'ass may. c-n receiving a report from the Registrar t r the Inspecting Officer appointed under sub-section (1) of section 51 that any person conducts r.V is responsible for the conduct of a chit in any nlaos in contravention of the provisions of this Act, issue a warrant empowering the Registrar or the Inspecting Officer to enter such place with such assistants BE 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 place with such assistants as he considers necessary and inspect the books, registers, accounts or documents in such place and may take to his office for further investigation such books, registers, accounts and documents as he considers necessarv :
^ ) ir-rovided that if the Registrar or the Inspecting Officer removes from the place any b-.ic-k, register, account or document, he shall give io the person in charge of tne place s receipt describing the book, register, account or document so removed ay him :
Provided further that within twenty-four hours of the removal of the books, registers, accounts and documents from the p'ace, the Registrar or the Inspecting Officer shall either return them to the person from whose custody they were removed or produce them in the court of the magistrate who issued the warrant.
Such magistrate may return the books, registers, accounts and documents 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 or by the inspecting Officer or by the court, or may pass such other orders as tc their disposal as appear just and convenient to the magistrate,
(5) The Registrar or the Inspecting Officer shall have authority to 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 to examine such person on oath.
(3) The Registrar or the Inspecting Officer may apply tor assistance to1 an officer 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.
60. Payment to be evidenced by document.—All payments in respect of a chit whether by the foreman or by the subscriber shall be "evidenced by documents in writing.
61. Interest at more than twelve per cent not to be allowed.—No court shall award interest on claims arising under this Act at more than twelve per cent per annum simple interest- ' 62- 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 for granting relief against any of the provisions contained in the chit agreement if the same be unconscionable or opposed to the provisions of any law.
63- Power to make rules—(1) The Administrator may make rules for carrying out all cr any of the purposes of this Act.
(2) In particular and without prejudice to the generalitv of the foregoing power, such rules may provide for or regulate— fa) all matters expressly required or allowed by this Act to be prescribed;
f » the matters in respect of which provision shall be made In the by-laws of a chit and the procedure to b e followed in making, registering a tering and abrogating by-laws, and the conditions to be satisfied prior to such making, registration, alteration or abrogation* I • I i <c) the particulars which every chit agreement shall contain;
(A) the- method of valuation of grains by the Registrar in a pram chit for the purposes of security under section 12;
(el the restrictions and conditions subject to which and the manner in which, any security given by a foreman under section 12 may be changed or substituted;
m the procedure to be followed by the Registrar for the release of security given by the foreman under section 12 • (gl the maintenance of registers and books trf 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;
ffcl tbe^procedurs to be followed for the winding up of a chit under Chapter fi> ̂ .g^aSlle^^^ Snd Pr0?U and l0SS ™ t s m ** , 16 <3) (a} All rules made under this Act shall be published in the Chandigarh Gasetta and, unless they are expressed to come into force on a particular day, shall come into force on the day on which they are so published.
fb) All notifications issued under this Act, shall, unless they ere expressed to come intc lorce on a particular day, come into lorce on the day on which they are published.
(4) Omitted- U4. Recovery :JR amounts due from a foremac.—All amounts due irom a fore man to the Registrar or any other officer under this Act by way cf any fee shall be recoverable as arrears of land revenue.
65- Act not tci 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. cr
(2) any chit the amount of which or where two or more chits are start eo or conducted simultaneously by the same foreman, the aggregate chit amciunt 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 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 U of 1899 in its application to the Union terri tory of Chandigarh.—In Schedule 1-A, to the Indian Stamp Act, 1899 (Central Act II of 1899). in its application to the Union territory of Chandigarh, 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 erf the ( Madras Chit Funds Act. 1961 as extended to the I n „ . _ „ . „ ..
Union territory of Chandigarh if either such agree- f . l ment is executed* or the chit is conducted in J the Union territory of Chandigarh. J 68- Omitted-
6D. Power to remove difficulties.—(1) If any difficulty arises, in giving effect t j 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 purpctee of r e moving the difficulty.
(2) Omitted.
[No. P. 15/3/67-UTL-97.]
P. N- VASUDEVAN. Dy. Secy.
L GMGIPNU—J27 M, of H A . - J . C . 26S7—3-10-67— 60.