The Chit Funds Act, 1982

The Chit Funds Act, 1982

ACT NO. 40 OF 1982

PREAMBLE

An Act to provide for the regulation of chit funds and for matters connected therewith.

ARRANGEMENT OF SECTIONS

CHAPTER I
PRELIMINARY
SECTIONS

  1. Short title, extent and commencement.
  2. Definitions.
  3. Act to override other laws, memorandum, articles, etc.
    CHAPTER II
    REGISTRATION OF CHITS, COMMENCEMENT AND CONDUCT OF CHIT BUSINESS
  4. Prohibition of chits not sanctioned or registered under the Act.
  5. Prohibition of invitation for subscriptions except under certain conditions.
  6. Form of chit agreement.
  7. Filing of chit agreement.
  8. Minimum capital requirements for the commencement, etc., of a chit, and creation of a reserve
    fund, by a company.
  9. Commencement of chit.
  10. Copies of chit agreement to be given to subscribers.
  11. Use of the words “chit”, “chit fund”, “chitty” or “kuri”.
  12. Prohibition of transacting business other than chit business by a company.
  13. Aggregate amount of chits.
  14. Utilisation of funds.
  15. Alteration of chit agreement.
  16. Date, time and place of conducting chits.
  17. Minutes of proceedings.
  18. Copies of minutes to be filed with Registrar.
  19. Restriction on opening of new place of business.
    CHAPTER III
    RIGHTS AND DUTIES OF FOREMAN
  20. Security to be given by foreman.
  21. Rights of foreman.
  22. Duties of foreman.
  23. Books, records, etc., to be kept by the foreman.
  24. Balance sheet.
  25. Liability of foreman to subscribers.
  26. Withdrawal of foreman.
    CHAPTER IV
    RIGHTS AND DUTIES OF NON-PRIZED SUBSCRIBERS
  27. Non-prized subscribers to pay subscriptions and obtain receipts.
  28. Removal of defaulting subscribers.
  29. Substitution of subscribers.
  30. Amounts due to defaulting subscribers.
    CHAPTER V
    RIGHTS AND DUTIES OF PRIZED SUBSCRIBERS
  31. Prized subscriber to furnish security.
  32. Prized subscriber to pay subscriptions regularly.
  33. Foreman to demand future subscriptions by written notice.
    CHAPTER VI
    TRANSFERS
  34. Restrictions on transfer of rights of foreman.
  35. Transfer of non-prized subscriber’s rights to be in writing.
  36. Recognition of transfer by foreman.
  37. Entry of transferee’s name in the books.
    CHAPTER VII
    MEETINGS OF THE GENERAL BODY OF SUBSCRIBERS
  38. Meetings of general body of subscribers.
    CHAPTER VIII
    TERMINATION OF CHITS
  39. Provision for continuation of chits in certain cases.
  40. Termination of chits.
  41. Copy of assent or consent to be filed with Registrar.
  42. Refund of non-prized subscribers’ subscriptions.
  43. Subscribers’ dues to be first charge on chit assets.
    CHAPTER IX
    INSPECTION OF DOCUMENTS
  44. Foreman to allow certain subscribers to inspect chit records.
  45. Preservation of chit records by foreman.
  46. Inspection of chit books and records by Registrar.
  47. Power of Reserve Bank to inspect chit books and records.
    CHAPTER X
    WINDING UP OF CHITS
  48. Circumstances under which chits may be wound up.
  49. Application for winding up.
  50. Bar to winding up proceedings.
  51. Commencement and effect of winding up order.
  52. Injunction order.
  53. Powers of Registrar.
  54. Vesting of chit assets in Registrar or other persons.
  55. Suits, etc., to be stayed on winding up order.
  56. Notification of winding up order.
  57. Cessation of winding up proceedings on insolvency of foreman, etc., or the winding up of the
    company and transfer of such proceedings.
  58. Award of compensation to foreman.
  59. Right to appeal.
  60. Limitation.
    CHAPTER XI
    APPOINTMENT OF OFFICERS AND LEVY OF FEES
  61. Appointment of Registrar and other officers.
  62. Inspection of documents in Registrar’s office.
  63. Levy of fees.
    CHAPTER XII
    DISPUTES AND ARBITRATION
  64. Disputes relating to chit business.
  65. Period of limitation.
  66. Settlement of disputes.
  67. Procedure for settlement of disputes and powers of Registrar or nominee.
  68. Attachment before judgment and other interlocutory orders.
  69. Decision of Registrar or nominee.
  70. Appeal against decision of Registrar or nominee.
  71. Money how recovered.
  72. Private transfer of property made after issue of certificate void against foreman.
    CHAPTER XIII
    MISCELLANEOUS
  73. Advisory role of Reserve Bank.
  74. Appeals.
  75. Powers of Registrar to give extension of time for filing documents.
  76. Penalties.
  77. Penalty for second and subsequent convictions.
  78. Application of fine.
  79. Offences by companies.
  80. Cognizance of offences.
  81. Power to compound offences.
  82. Power to enter and search any place and to seize any documents.
  83. Officers to be public servants.
  84. Power to delegate.
  85. Act not to apply to certain chits.
  86. Banks not to conduct chit business.
  87. Power to exempt.
  88. Protection of action taken under the Act.
  89. Power to make rules.
  90. Repeal and saving.
    THE SCHEDULE.

The Chit Funds Act, 1982

The-Chit-Funds-Act-1982
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