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REGISTERED No. D-(D)-72

The Gazette of India

EXTRAORDINARY

PART II—Section 2

PUBLISHED BY AUTHORITY

No. 40] NEW DELHI, FRIDAY, AUGUST 6, 1982/SRAVANA 15, 1904

Separate paging is given to this part in order that it may be filed

as a separate compilation

RAJYA SABHA

The following Report of the Select Committee of the Rajya Sabha on the Bill to provide for the regulation of the chit funds and for matters connected therewith, was presented to the Rajya Sabha on Friday, the 6th August, 1982: —

COMPOSITION OF THE COMMITTEE

Shri Era Sezhiyan—Chairman

MEMBERS

2. Shri Syed Sibtey Razi

3. Shri Surendra Mohanty

4. Shrimati Usha Malhotra

5. Shri N. P. Chengalaraya Naidu

6. Shri R. Ramakrishnan

7. Dr. Malcolm S. Adiseshiah

8. Shri K. Mohanan

9. Shri Suraj Prasad

10. Shri Pranab Mukherjee

(1)

REPRESENTATIVES OF MINISTRIES

Ministry of Finance (Department of Economic Affairs—Banking Division)

1. Shri R. N. MaLhotra, Secretary.

2. Shri R. K. Kaul, Additional Secretary.

3i Shri V. P. Sawhney, Joint Secretary.

4. Shri C. W. Mirchandani, Deputy Secretary.

5. Shri J. S. Jaspal, Chief Officer, Reserve Bank of India, Calcutta.

6. Shri B- N. Chikarmane, Chief Officer, Reserve Bank of India, Bombay.

Ministry of Law, Justice & Company Affairs

1. Shri S. Ramaiah, Joint Secretary and Legislative Counsel.

2. Shri C. Raman Menon, Additional Legislative Counsel

SECRETARIAT

1. Shrimati K. K. Chopra, Additional Secretary. 2. Shri K. Dayal, Chief Legislative Committee Officer. 3. Shri B. R. Goel, Senior Legislative Committee Officer.

REPORT OF THE SELECT COMMITTEE

1. I, the Chairman of the Select Committee to which the Bill* to provide for the :egulation of Chit Funds and for matters connected therewith as passed by the Lok Sabha was referred, having been autho- rised to submit the Report on its behalf, present this Report with the Bill, as amended by the Committee, annexed thereto.

2. The Bill as passed by the Lok Sabha was laid on the Table of Rajya Sabha on the 21st July, 1982.

3. The Motion for reference of the B 11 to the Select Committee of the House was moved by Shri Pranab Mukherjce, Minister of Finance, on the 2nd August, 1982 and was adopted the same day (Appendix I).

4. The Committee held 3 meetings,

5. In the first meeting held on the 3rd August, 1982, the Committee had a general discussion on important aspects of the Bill.

6. In the second meeting held on the 4th August, 1982, the Committee considered 3 Memoranda received from the following: —

(i) The All India Federation of Chit Funds, Delhi;

(ii) The Andhra Pradesh Federation of Chit Funds, Secunderabad;

and

(iii) The Andhra Pradesh Chit Fund Foremen Association, Hyderabad.

The Committee thereafter took up clause by clause consideration of the Bill and the amendments proposed thereto.

7. In its meeting held on the 5th August, 1982, the Committee consi- dered and adopted the Report.

3. The observations of the Committee with regard to the changes pro- posed in the Bill are set out In the succeeding paragraph.

Clause 7

9. The first proviso to sub-clause (2) of clause 7 specifies the grounds on which the Registrar may refuse to register a chit agreement. While agreeing with the three conditions laid down therein, the Committee feels that the grounds should also include conviction on any offence in- volving moral turpitude and sentenced to imprisonment for any such offence unless a period of five years has elapsed since the release of the foreman. Sub-clause (d) has been added to the proviso to achieve this objective.

*The Bill was published in the Gazette of India Extraordinary, Part II, Section 2, dated the 20th November, 1980, and parsed by the Lok Sabha on the 19th July, 1982.

Clause 16

10. The Committee is of the opinion that the clause should also pro- vide for a contingency where two subscribers may not be present at the time of a draw. The Committee feels that such an exigency could be met by an amendment of sub-clause (3) to enable the Registrar also to have the draw conducted in his presence or in the presence of any person deputed by him. The clause has been amended accordingly.

11. Regarding clauses 4 and 7 of the Bill the Committee feels that default in payment of fees or filing of any statement or record required to be paid or filed under the Act may be condoned if any such default is rectified before the actual grant of previous sanction or registration and should not normally become the ground for refusal of sanction or regis- tration by the authorities concerned. The Committee hopes that the State Governments will keep the same in view while making rules under the Act.

12. In regard to clause 74, under which a foreman aggrieved by a decision of the Registrar, may appeal to the State Government or to such officer or authority as may be empowered by the State Government in that behalf, the Committee feels that the officer or authority in such cases should be of a judicial character to inspire confidence in the minds of the people. The Committee hopes that the State Governments would keep the same in view while empowering authorities to hear appeals.

13. The Committee recommends that the Bill as amended be passed.

NEW DELHI;

ERA SEZHIYAN,

August 5, 1982.

Chairman,

Select Committee,

BILL N O. 186-C OP 1980

THB CHIT FUNDS BILL, 1982

(As REPORTED BY THE SELECT COMMITTEE)

[Words Side-lined or underlined indicate the amendment suggested by the

Comniittee; asterisks indicate omissions.]

A Bill to provide for the regulation of chit funds and for matters connected-

therewith.

BE it enacted by Parliament in the Thirty-third Year of the Republic

of India as follows: —

CHAPTER I

PRELIMINARY

1. (2) This Act may be called the Chit Funds Act, 1982.

(2) It extends to the whole of Ii^dia except the State of Jammu and

Kashmir.

Short title, ex- tent and rom- mence- ment.

(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different States.

2. In this Act, unless the context otherwise requires,—

DeflnL tions.

23 of 11)55.

38 of 1959

£ of 1970.

(a) "approved bank" means the State Bank of India consti- tuted under section 3 of the State Bank of India Act, 1955, or a subsidiary bank constituted under section 3 of the State Bank of India (Subsidiary Banks) Act, 1959, or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, or a Regional Rural Bank

ai oi fine.

40 of 1980.

10 of 1949.

established under section 3 of the Regional Rural Banks Act, 1976, or a corresponding new bank constituted under section 3 of the Bank- ing Companies (Acquisition and Transfer of Undertakings) Act, 1980, or a banking company as denned under clause (c) of sec- tion 5 of the Banking Regulation Act, 1949, or a banking institution notified by the Central Government under section 51 of that Act or such other banking institution as the State Government may, in consultation with the Reserve Bank, approve for the purposes of this Act;

(b) "chit" means a transaction whether called chit, chit fund, chitty, kuri or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or a certain quantity of grain instead) by way of periodical instalments over a definite period and that each such subscriber shall, In his turn, as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement, be entitled to the prize amount.

Explanation,—A transaction is not a chit within the meaning of this clause, if in such transaction,—

(1) some alone, but not all, of the subscribers get the prize amount without any liability to pay future subscriptions; or

(it) all the subscribers get the chit amount by turns with a liability to pay future subscriptions; (c) "chit agreement" means the document containing the arti- cles of agreement between the foreman and the subscribers relating to the chit;

(d) "chit amount" means the sum-total of the subscriptions payable by all the subscribers for any instalment of a chit without any deduction of discount or otherwise;

(e) "chit business" means the business of conducting a chit; (f) "defaulting subscriber" means a subscriber who has de- faulted in the payment of subscriptions due in accordance with the terms of the chit agreement;

(g) "discount" means the sum of money or the quantity of grain which a prized subscriber is, under the terms of the chit agreement, required to forego and which is set apart under the said agreement to meet the expenses of running the chit or for distribu- tion among the subscribers or for both;

(h) "dividend" means the share of the subscriber in the amount of discount available under the chit agreement for rateable distri- bution among the subscribers at each instalment of the chit;

(i) "draw" means the manner specified in the chit agreement for the purpose of ascertaining the prized subscriber at any in- stalment of the chit;

(j) "foreman" means the person who under the chit agree- ment is responsible lor the conduct of the chit and includes any person discharging the functions of the foreman under section 39; (k) "non-prized subscriber" does not include a defaulting sub- scriber;

(I) "prescribed" means prescribed by rules made under thii Act;

(m) "prize amount" means the difference between the chit amount and the discount, nnd in the case of a fraction of a ticket means the difference between the chit amount and the discount pro- portionate to the fraction of me ticket, and when the prize amount is payable otherwise than in cash, the value of the prize amount shall be thp value at the time when it heronries payable;

(n) "prized subscriber" means a subscriber who has either re- ceived or is entitled to receive the prize amount;

(o) "Registrnr" means the Registrar of Chits appointed under section 6], and includes an Additional, a Joint, Deputy or an Assis- tant Registrar appointed under that section;

(p) "Reserve Bank" means the Reserve Bank of India consti- 2 of 1934.

tuted under the Reserve Bank of India Act, 1934;

(q) "State Government", in relation to a Union territory, means the administrator of that Union territory appointed by the President under article 239 of the Constitution;

(r) "subscriber" includes a person who holds a fraction of a ticket and also a transferee of a ticket or fraction thereof by assign- ment in writing or by operation of law;

(s) "ticket" means the share of a subscriber In a chit.

3. Save as otherwise expressly provided In this Act,—

Act to nverride other laws, memo-

randum,

articles,

ntc.

(a) the provisions of this Act shall have effect notwithstanding anything to the contrary contained in any other law for the tlmt being in force or In the memorandum or articles of association or bye-laws or in any agreement or resolution whether the same be registered, executed or passed, as the case may be, before or after the commencement of this Act; and

(b) any provision contained in the memorandum, articles, bye- laws, agreement or resolution aforesaid, shall, to the extent to which it Is repugnant to the provisions of this Act, become or be void, at the case may be.

CHAPTER II

REGISTRATION OF CHITS, COMMENCEMENT AND CONDUCT OF CHIT BUSINESS

4. (1) No chit shall be commenced or conducted without obtaining the previous sanction of the State Government within whose jurisdiction the chit is to be commenced or conducted or of such officer as may be em- powered by that Government In this behalf, and unless the chit is regis- tered in that State in accordance wHh the provisions of this Act:

Prohibi- tion of chits not Bnncti on- ed or re- gistered under the Act. Provided that a sanction obtained under this sub-section shall lapse if the chit is not registered within twelve months from the date of such sanction or within such further period or periods not exceeding six months in the aggregate as the State Government may, on application made to jt In this behalf, allow.

(2) An application for the purpose of obtaining a sanction under sub- section (2) shall be made by the foreman in such form and in such manner as may be prescribed.

(3) The previous sanction referred to in sub-section (1) may be re- fused, if the foreman,—

(a) had been convicted of any offence under this Act or under any other Act regulating chit business and sentenced to imprisonment for any such offence; or

(b) had defaulted in the payment of fees or the filing of any statement or record required to he paid or filed under this Act or had violated any of the provisions of this Act or the rules made there- under; or

(c) had been convicted of any offence involving moral turpitude and sentenced to imprisonment for any such offence unless a period of five years has elapsed since his release;

Provided that before refusing any such sanction, the foreman shall be given a reasonable opportunity of being heard.

(4) The order of the State Government, and, subject to the provisions of sub-section (5), the order of the officer empowered under sub-section (1), issuing or refusing previous sanction under this section shall be final. (5) Any person aggrieved by the refusal to Issue previous sanction by an officer empowered under sub-section (1) may appeal to the State Government within thirty days of the date of communication to him of such refusal and the decision of that Government on such appeal shall be final.

5. No person shall issue or cause to be issued any notice, circular, pros- pectus, proposal or other document Inviting the public to subscribe for tickets in any chit unless such notice, circular, prospectus, proposal or document contains a statement that the previous sanction required under section 4 has been obtained and the particulars of such sanction.

Prohibitio of Invita- tion for subscrip- tions exceyrt under certain condi tions.

Form oi chit agreement.

6. (1) Every chit agreement shall be in duplicate and shall be signed by each of the subscribers or by any person authorised by him in writing and the foreman and attested by at least two witnesses and it shall contain the following particulars, namely: —

(a) full name and residential address of every subscriber;

(b) the number of tickets including the fraction of a ticket held by each subscriber;

(c) the number of instalments, the amount payable for each ticket at every instalment and the interest or penalty, if any, payable on any default in the payment of such instalments;

(d) the probable date of commencement and the duration of the chit;

(e) the manner of ascertaining the prized subscriber at each Instalment;

(f) the maximum amount of discount which the prized subscri- ber has to forego at any Instalment;

(g) the mode and proportion in which the discount is distribu- table by way of dividend, foreman's commission or remuneration or expenses for running the chit, as the case may be;

(h) the date, time and place at which the chit la to bo drawn;

(i) the instalment at which the foreman is to get the chit amount;

(j) the name of the approved bank in which chit moneys shall be deposited by the foreman under the provisions of this Act;

(Jc) where the foreman is an individual, the manner in which * chit shall be continued when such Individual dies or becomes of un- sound mind or is otherwise incapacitated;

(I) the consequences to which a non-prized or prized subscriber or the foreman shall be liable in case of violation of any of the provisions of the chit agreement;

(m) the conditions under which a subscriber shall be treated as a defaulting subscriber;

(n) the nature and particulars of the security to be offered by the foreman;

(o) the dates on which and time during which the foreman shall, subject to the provisions contained in section 44, allow inspection of chit records to non-prized and unpaid prized subscribers;

(p) the names of the nominees of each subscriber, that Is to say, the names of the persons to whom the benefits accruing to the subs- criber under the chit may be paid in the case of the death of the subscriber or when he is otherwise incapable of making an agree- ment;

(q) any other particulars that may, from time to time, be pres- cribed

Explanation.—For the purposes of this sub-section, it shall be suffi- cient if the signature of each subscriber is obtained in separate copies of the agreement.

(2) The duration of a chit shall not extend beyond a period of five years from the date of its commencement:

Provided that the State Government may permit the duration of a chit up to a period of ten years if it Is satisfied that it is necessary so to do, having regard to,—

(a) the financial condition of the foreman;

(b) his methods of operation;

(c) the interests of prospective subscribers;

(d) the requirements as to security; and

(e) such other factors as the circumstances of the case may re- quire.

(3) The amount of discount referred to in clause (f) of sub-section (1J shall not exceed thirty per cent, of the chit amount.

(4) Where the prized subscriber at any instalment of the chit is re- quired to be determined by auction and more than one person offer the maximum discount, the prized subscriber shall be determined by lot.

7. (1) Every chit agreement shall be filed in duplicate by the fore- man with the Registrar.

nilnf of chit Agreement,

(2) The Registrar shall retain one copy of the chit agreement and return the duplicate to the foreman with an endorsement that the chit agreement has been registered:

Provided that the Registrar may refuse to register the chit agreement

on any one or more of the following grounds, namely: —

(a) that the security offered by the foreman under section 20 is

Insufficient;

(b) that the foreman had been convicted of any offence under this Act or under any other Act regulating chit business and sentenced to imprisonment for any such offence;

(c) that the foreman had defaulted in the payment of fees or the filing of any statement or record required to be paid or filed tinder this Act or had violated any of the provisions of this Act or the rules made thereunder;

(d) that the foreman had been convicted of any offence Involv- ing moral turpitude and sentenced to imprisonment for any such offence unless a period of five years has elapsed since his release; Provided further that before refusing to register a chit under the first proviso, the foreman shall be given a reasonable opportunity of being heard.

(-3) Every endorsement made under sub-section (2) shall be conclu- sive evidence that the chit is duly registered under this Act and the registration of a chit shall lapse if the declaration by the foreman under sub-section (1) of section 9 Is not filed within three months from the date of such endorsement or within such further period or periods not exceed- ing three months in the aggregate as the Registrar may, on application made to him in this behalf, allow.

1 of 1956.

8. (1) Notwithstanding anything contained in the Companies Act, 195ff, but subject to the provisions of this Act, a company ahall not com- mence or carry on chit business unless it has a paid-up capital of not less than rupees one lakh.

i2) Every company having a paid-up capital of less than rupees one lakh and carrying on chit business on the commencement of this Act, shall, before the expiry of a period of three years from such commence- ment, increase its paid-up capital to not less than rupees one lakh:

Minimum capital require- ment! for the com- mence- ment, etc., tit a chit, and crea- tion of a reserve fund, by a com- pany.

Provided that the State Government may, if it considers It necessary in the public interest or for avoiding any hardship, extend the said period of three years in respect of any company by" such further period or periods not exceeding two years in the aggregate:

Provided further that no such company shall commence any new chit the duration of which would extend beyond the said period of three years or such extended period or periods under the' first proviso unless it in- creases its paid-up capital to not less' than rupees one lakh-

(3) Every company carrying on chit business shall create and main- tain a reserve fund and shall, out of the balance of profit of each year as disclosed in its profit and loss account and before any dividend on its shares is declared, transfer to such reserve fund, a sum equal to not less than ten per cent, of 3iich profit.

(4) No company shall appropriate anv sum or sums from the reserve fund except with the prior approval of the Registrar and. for the purpose of obtaining such approval, it shall make an application in the prescribed form to the Registrar explaining the circumstances relating to such appro- priation.

". (i) Lvery ioxeman shall, after all the tickets specified in the chit agreement are fully subscribed, file a declaration to that effect with ths Registrar.

Com- mence- ment of chit..

(2) As soon us may be alter a declaration is filed under sub-section (1), the registrar snail, alter satisfying himself that all the require- ments relating to sanction, registration of chit and other matters have been duly complied with, grant a certificate of commencement to th# foreman.

(3) No foreman shall commence any auction or the draw of any chit or apprupnate any chit amount unless a certificate of commencement refeired to in sub-section (2) is obtained by him.

10. (1) A foreman shall, as soon as may be after he has obtained the certificate of commencement under sub-section (2) of section 9, but not later than the date of the first draw of the chit, furnish to every sub- scriber, a copy of the chit agreement certified to be a true copy.

Copiei of chit agree- ment to be given to subs- criber!.

^2) A ioreman shall, within fifteen days after the close of the month m which the draw for the first instalment of the chit is held, file with the riegiblrar, a certificate to the eflect that the provisions of sub-section (1) have been complied with.

11. (1) No person shall carry on chit business unless he uses as part of his name any of the words "chit¹', "chit fund", "chitty" or "kuri" and no person other than a person carrying on chit business shall use as part of his name any such word.

Use of the word* "chit", "chit fund", "chitty" or '-kuri".

(2) Where at the commencement of this Act,—

(a) any person is carrying on chit business without using as

part of his name any of the words specified in sub-section (1); or

(b) any person not carrying on chit business is using any such

word as part of his name,

he shall, within a period of one year from such commencement, add a3 part of his name any such word or, as the case may be, delete such word from his name:

Provided that the State Government may, if It considers it necessary in the public interest or for avoiding any hardship, extend the said period of one year by such further period or periods not exceeding one year in the aggregate.

12 (1) Except with the general or special permission of the State Government, no company carrying on chit business shall conduct any other business.

(2) Where at the commencement of this Act, any company is carrying on a vy business in addition to chit business, it shall wind up such other i >usiner,s before the expiry of a period of three years from such commence- ment :

Prohibi- tion of transac- ting business other than, chit business by a com- pany.

Provided that the State Government may, if it considera it necessary m the public interest or for avoiding any hardship, extend the said period of three years by such further period nr periods not exceeding two yean in the aggregate.

AgfT*- gmte amount "f chit*

13. (2) No foreman, other than a firm or other association of indivi- duals or a company or co-operative society, shall commence or conduct chits, the aggregate chit amount of which at any time exceeds twenty-five thousand rupees.

(2) Where the foreman is a firm or other association of individuals, the aggregate chit amount of the chits conducted by the firm or other associa- tion shall not at any time exceed,—

(a) where the number of partners of the firm or the indivi- duals constituting the association is not less than four, a sum of rupees one lakh;

(b) in any other case, a sum calculated on the basis of twenty- five thousand rupees with respect to each such partner or individual.

(3) Where the foreman is a company or co-operative society, the aggre- gate chit amount of the chits conducted by it shall not at any tune exceed ten times the net owned funds of the company or the co-operative society, as the case may be.

Explanation.—For the purposes of this sub-section, "net owned funds" shall mean the aggregate of the paid-up capital and free reserves as disclosed in the last audited balance sheet of the company or co-operative society, as reduced by the amount of accumulated balance of loss, deferred revenue, expenditure and other intangible assets, if any, as disclosed in the said balance sheet.

Utilisation

of funds.

14. (1) No person carrying on chit business shall utilise the moneys collected in respect of such business (other than commission or remuneration payable to such person or interest or penalty, if any, received from a defaulting subscriber), except for—

(a) carrying on chit business; or

(b) giving loans and advances to non-prized subscribers on the

aecurity of subscriptions paid by them; or

(c) investing in trustee securities within the meaning of sec-

tion 20 of the Indian Trusts Act, 1882; or

2 of 1882 (d) making deposits with approved banks mentioned in the chit

agreement.

(2) Where any person carrying on chit business has utilised the moneys collected in respect of such business before the commencement of this Act, otherwise than for the purposes specified in sub-section (1), he shall secure that so much of such moneys as have not been realised before such commencement are realised before the expiry of a period of three years from such commencement:

Provided that the State Government may, if It considers it necessary in the public Interest or for avoiding any hardship, extend the said period of three years by such further period or periods not exceeding one year in the aggregate.

15. A chit agreement shall not be altered, added to or cancelled except ifcitb the consent in wviUi r of the torerran and all the subscribers tc th" chit.

Altera-

tion of

chit agree-

ment.

Date, time and place 01 conduct- ing chits.

IS. (1) Every draw in a chit shall be held on the date, at the time and place mentioned in the chit agreement and a notice therefor in such form and In such, manner as may be prescribed shall be issued by the foreman to all the subscribers.

(2) Every such draw shall be conducted in accordance with the pro- visions of the chit agreement and in the presence of not less than two subscribers.

(3) Where any draw was not conducted on the ground that two subscribers required to be present at a draw under sub-section (2) were not present or on any other ground, the Registrar may, on his own motion or on an application made by the foreman or any of the subs- cribers, direct that the draw shall be conducted in his presence or in the presence of any person deputed by him.

17. (1) The minutes of the proceedings of every draw shall be prepar- Minute* of proceed- ings.

ed and entered in a book to be kept for that purpose immediately after the closure of the draw and shall be signed by the foreman, the prized sub- scribers, if present, or their authorised agents, and at least two other subscribers who are present, and where a direction has been made under sub-section (3) of section 16, also by the Registrar or the person deputed by him under that sub-section.

(2) The minutes referred to in sub-section (I) ahall state clearly—

(a) the date and hour when proceedings began and ended and the place where the draw was held;

(b) the number of the instalment of the chit to which the pro- ceedings relate;

(c) the names of the subscriber present; (d) the person or persons who become entitled to the priz* amount in the instalment;

(e) the amount of discount; (f) full particulars regarding the disposal of the unpaid prize amount, if any, In respect of any previous instalment; and (9) any other particulars that may be prescribed.

18. A true copy of the minutes of the proceedings of every draw certifi- ed as such by the foreman shall be filed by the foreman with the Regis- trar within twenty-one days from the date of the draw to which it relates..

10. (1) No person carrying on chit business shall open a new place of business without obtaining the prior approval of the Registrar within whose territorial jurisdiction his registered office or, as the case may be, the place or the principal place of business is situated.

Copies of minutes to be filed with Registrar. Restriction on opening of new place of huslneis.

(2) Before granting approval under sub-section (1), the Registrar •hall consult the Registrar of the State within whose territoirial jurisdic- tion the new place of business is proposed to be opened and shall also keep in view the financial condition and methods of operation of the fore- man, the extent to which public interest will be served by the opening of the new place of business and such other matters as may be prescribed.

(3) Where a person carrying on chit business opens a new place of business in a State other than the State (hereinafter referred to as the State of origin) In which his registered office or the place or the principal place of hla business is situated, the Registrar of the State in which such new place of business is opened may also exercise and perform any of the

powers and functions which the Registrar of the State of origin may exer- cise and perform in respect of the chit business carried on at such new place of business.

(4) For the purposes of this section, "place of business" shall include any branch office, suboince, or any place of business where the chit busi- ness may be conducted by such person.

CHAPTER III

RIGHTS AND DUTIES OF FOREMAN

20. (1) For the proper conduct of th'i chit, every foreman shall, before applying for a previous sanction under section 4,—

Security to be givan by foreman

(a) deposit in an approved bank an amount equal to the chit amount in the name of the Registrar; or

(b) transfer Government securities of the face value or market value (whichever is less) of not less than one and a half times the chit amount in favour of the Registrar; or

2 of 18ftl (c) transfer in favour of the Registrar such other securities, being securities in which a trustee may invest money under section 20 of the Indian Trusts Act, 1882, of such value, as may be pres- cribed by the State Government from time to time:

Provided that the value of the securities referred to in clause (c) shall not, in any case, be less than one and a half times the value of the chit amount.

(2) Where a foreman conducts more than one chit, he shall furnish security in accordance with the provisions of sub-section (1) in respect of each chit.

(3) The Registrar may, at any time during the currency ot the chit, permit the substitution of the security:

Provided that the face value or market value (whichever is less) of the substituted security shall not be less than the value of the security given by the foreman under sub-section (1).

(4) The security given by the foreman under sub-section (I), or any security substituted under sub-section (3), shall not be liable to be attached in execution of a decree or otherwise until the chit is terminated and the claims of all the subscribers are fully satisfied.

(5) Where the chit is terminated and the Registrar has satisfied him- self that the claims of all the subscribers have been fully satisfied, he shall order the release of the security furnished by the foreman under sub-section (1), or the security substituted under sub-section (3), as the case may be, and in doing so, he shall follow such procedure as may be -prescribed.

(6) Notwithstanding anything to the contrary contained in any other law for the time being in force, the security furnished under this section shall not be dealt with by the foreman during the currency of the chit to which it relates and any dealing by the foreman with respect thereto by way of transfer or other encumbrances shall be null and void.

21. (1) The foreman shall be entitled,—

Rights of foreman.

(a) in the absence of any provision in the chit agreement to the contrary, to obtain the chit amount at the first instalment without

deduction of the discount specified in the chit agreement, subject to the condition that he shall subscribe to a tickle in the chit:

Provided that in a case where the foreman has subscribed to more than one ticket, he shall not be eligible to obtain more than one chit amount in a chit without discount;

(b) to such amount not exceeding five per cent, of the chit amount as may be fixed in the chit agreement, by way of commission, remuneration or for meeting the expenses of running the chit;

(c) to interest and penalty, if any, payable on any default in the payment of instalments and to such other amounts as may be payable to him under the provisions of the chit agreement;

(d) to receive and realise all subscriptions from the subscribers and to distribute the prize amounts to the prized subscribers;

(e) to demand sufficient security from any prized subscriber for the due payment of future subscriptions payable by him.

Explanation.—A security shall be deemed to be sufficient for the purposes of this clause if its value exceeds by one-third, or if it con- sists of immovable properties, the value of which exceeds by one-half, of the amount due from the prized subscriber;

(f) to substitute subscribers in place of defaulting subscribers;

and

(g) to do all other acts that may be necessary for the due and proper conduct of the chit.

(2) Where any dispute arises with regard to the value of the pro- perty offered as security under clause (e) of sub-section (1), it shall be referred to the Registrar for arbitration under section 64.

Duties of foreman.

22. (1) The foreman shall, on the prized subscriber furnishing suffi- cient security for the due payment of future subscriptions, be bound to pay him the prize amount:

Provided that the prized subscriber shall be entitled to the pay- ment of the prize amount without any security whatsoever if he agreefl to the deduction therefrom of the amount of all future subscriptions and in such a case, the foreman shall pay the prize amount to the prized subs- <• iber within seven days after the date of the draw or before the date of the next succeeding instalment, whichever is earlier:

Provided further that where the prize amount has been paid to the prized subscriber under the first proviso, the amount deducted shall be deposited by the foreman in an approved bank mentioned in the chit agreement and he shall not withdraw the amount so deposited except for the payment of future subscriptions.

(2) If, owing to the default of the prized subscriber, the prize amount due in respect of any draw remains unpaid until the date of the next succeeding instalment, the foreman shall deposit the rnize amount forth- with in a separate account in an approved bank mentioned in the chit agree- ment and intimate in writing the fact of such deposit and the reasons therefor to the prized subscriber and the Registrar:

Provided that where any prized subscriber does not collect the prize amount in respect of any instalment of a chit within a period of two months from the date of the draw, it shall be open to the foreman to hold another draw in respect of such instalment.

(3) Every payment of the prize amount or the amount of future subs- criptions 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 and the particulars of such payment or deposit shall be entered in the minutes of the proceedings of that draw.

(4) The foreman shall not appropriate to himself any amount in excess of what he is entitled to under clause (b) or clause (c) of sub-section (1) of section 21:

Provided that where the foreman is himself a prized subscriber, he shall be entitled to appropriate to himself the prize amount subject to his complying with the provisions of section 31:

Provided further that the foreman may appropriate to himself the in- terest accruing on the amount deposited under the second proviso to sub- section (I).

(5) The foreman shall not admit any person as a subscriber to a chit, if, by such admission, the total number of tickets mentioned in the chit agreement is increased.

(6) The foreman shall distribute among the subscribers, in accordance with the chit agreement, the dividend either in cash, grain or by way of adjustment towards the subscriptions payable for the next instalment, if any.

Booka, records, etc., to be kept by foremen.

23. The foreman shall maintain in his registered office, or, as the case may be, in the place or the principal place of his business, or, where the foreman has any branch office, sub-office or any place of business for the conduct of chit business in a State other than the State in which his registered office or the principal place of his business is situated, in such branch office, sub-office or place of business in respect of the business conducted in that State—

(a) a register containing—

(i) the names and full particulars of the subscribers in each chit together with the number of tickets held by each subscriber;

(ii) the dates on which the subscribers signed the chit agree-

ment; and

(Hi) in the case of an assignment of a ticket by a subscriber, the name and full address of the assignee with the date of assign- ment and the date on which the assignment had been recognised by the foreman;

(b) a book containing the minutes of the proceedings of each

draw;

(c) a ledger containing—

(i) the amounts paid by the subscribers in each chit and the

dates of such payments;

(ii) the amounts paid to the prized subscribers and the dates

of such payments; and

(in) in the case of any deposit in an approved bank men- tioned in the chit agreement, the date and the amount of such deposit;

(d) a register in the prescribed form showing the amounts deposit- ed in approved banks as required under the provisions of this Act ir respect of all chits conducted by the foreman at his office; and

(e) such other registers and books in such form as may be pres- cribed by the State Government within whose jurisdiction the chit is conducted.

1 of 1956.

Balance sheet.

24. Without prejudice to the provisions of the Companies Act, 1956, every foreman shall prepare and file with the Registrar within such time as may be prescribed, a balance sheet as on the last date of each calendar year, or, as the case may be, the financial year of the foreman, and a profit and loss account relating¹ to the year of account, in the forms set out in Parts I and II of the Schedule, or as near thereto as circumstances admit, in respect of the chit business and audited by audi- tors qualified to act as auditors under the Companies Act, 1956, or by a chit auditor appointed under sectoin 61:

1 of 1956.

Provided that where a balance sheet is audited by an auditor qualified to act as auditor under the Companies Act, 1956, a chit auditor appointed under section 61 shall have the right to audit the balance sheet at any time if so authorised by the Registrar in this behalf.

25. (1) Every foreman shall be liable to account to the subscribers for

the amounts due to them.

Liability of foreman to subscri- bers.

(2) Where there are more than one foreman in a chit, each one of them jointly and severally and, if the foreman is a firm or other association of individuals, each one of the partners or individuals thereof jointly and severally and, if the foreman is a company, the company as such, shall be liable to the subscribers in respect of the obligations arising out of the chit,

With- drawal of toro. man.

26. (1) No foreman, or where there are more than one foreman in a chit, none of them shall withdraw from the chit until its termination un- less such withdrawal is assented to in writing by all the non-prized and unpaid prized subscribers and a copy of such assent has been filed with the Registrar under section 41.

(2) The withdrawal from a chit of any one of the foreman shall not

affect the security given by him under section 20 or section 31.

CHAPTER IV

RIGHTS ANB DUTIES OF NON-PRIZED SUBSCRIBERS

27. Eevery non-prized subscriber shall pay his subscription due in respect of every instalment on the dates and times and at the places mentioned in the chit agreement and shall, on such payment, be entitled to obtain a receipt from the foreman.

Non- prized subs^i- bers to pay subscrip- tions and obtain receipts.

Removal of defaulting subs- cribers.

28. (2) A non-prized subscriber who defaults in paying his subscrip- tion in accordance with the terms of the chit agreement shall be liable to have his name removed from the list of subscribers and a written notice of such removal shall be given by the foreman to the defaulting subscriber within fourteen days of the date of such removal:

Provided that if the defaulter pays the defaulted instalment with interest at such rate as may be prescribed within seven days of the date of receipt of such notice, his name shall be re-entered in the list of such subscribers.

(2) Every such removal under sub-section (1) shall with the date

thereof be entered in the relevant book maintained by the foreman.

(3) A true copy of the entry referred to in sub-section (2) shall be filed by the foreman with the Registrar within fourteen days from the date of removal.

(4) Any defaulting subscriber aggrieved by the removal of his name from the list of subscribers may, within seven days of the date of receipt of the notice of removal refer the matter to the Registrar for arbitration under section 64.

Substitu- tion of subs- cribers.

29. (I) A foreman may substitute in the list of subscribers any person (hereafter in this Chapter referred to as the substituted subscriber) in place of the defaulting subscriber Whose name has been removed under sub-section (2) of section 28.

(2) Every substitution referred to in sub-section (I) shall, with the date thereof, be entered in the relevant book maintained by the foreman and a true copy of every such entry shall be filed by the foreman wUh the Registrar within fourteen days from the date of substitution.

Amounts due to default- ing sub- scribers.

30. (I) A foreman shall, out of the amounts payable by and realized from the substituted subscriber towards the instalments relatable to the period before the date of the substitution (including the arrears due from the defaulting subscriber), deposit, before the date of the next succeeding instalment, in a separate identifiable account In an approved bank mentioned in the chit agreement, an amount equal to the contri- butions made by the defaulting subscriber less such deductions as may be provided for in the chit agreement, and shall inform the defaulting subscriber as well as the Registrar of the fact of such deposit and Shall not withdraw the amount so deposited except • for payment to thff defaulting subscriber.

(2) The amount so deposited under sub-section (1) shall be paid to the defaulting subscriber as and when he claims the amount and the amount so deposited shall not be withdrawn by the foreman for atty purpose other than for such payment.

(3) The contributions of anv defaulting subscriber who has not been substituted till the termination of the chit shall be paid to him within fifteen days from the date of termination of the chit subject to such deductions as may be provided for in the chit agreement.

CHAPTER V

RIGHTS AND DUTIES OF PRIZED SUBSCRIBERS

Prized subscri- ber to furnish security.

31. Every prized subscriber shall, if he has not offered to deduct the amount of all future subscriptions from the prize amount due to him, furnish, and a foreman shall take, sufficient security for the due payment of all future subscriptions and, if the foreman is a prized subscriber, he shall give security for the due payment of all the future subscriptions to the satisfaction of the Registrar.

32. Every prized subscriber shall pay his subscriptions regularly on the, dates and times and at the place mentioned in the chit agreement and, on his failure to do so, he shall be liable to make a consolidated payment of all the future subscriptions forthwith.

Prized subscriber to pay subscrip- tions regularly. 33- (I) A foreman shall not be entitled to claim a consolidated pay- ment from a defaulting prized subscriber under section 32 unless he makes a demand to that effect in writing.

Foreman to demand future subscrip- tions by written notice.

(2) Where a dispute is raised under this Act by a foreman for a con- solidated payment of future subscriptions from a defaulting prized sub- scriber and if the subscriber pays to the foreman on or before the date to which the dispute is posted for hearing the arrears of subscriptions till that date together with the interest thereon at the rate provided for in the chit agreement and the cost of adjudication of the dispute, the Registrar or his nominee hearing the dispute shall, notwithstanding any contract to the contrary, make an order directing the subscriber to pay to the foreman the future subscriptions on or before the dates on which they fall due, and that, in case of any default of such payments by the subscriber, the foreman shall be at liberty to realise, in execution of that order, all future subscriptions and interest together with the costs, if any, less the amount, if any, already paid by the subscriber in respect thereof:

Provided that if any such dispute is on a promissory note, no order shall be passed under this sub-section unless such promissory note expressly states that the amount due under the promissory note is towards the payment of subscriptions to .the chit.

(3) Any person who holds any interest in the property furnished as security or part thereof, shall be entitled to make the payment under sub-section (2).

(4) All consolidated payments of future subscriptions realised by a foreman shall be deposited by him in an approved bank mentioned in the chit agreement before the date of the succeeding instalment and the amount so deposited shall not be withdrawn except for payment of future subscriptions-

(5) Where any property is obtained as security in lieu of the con- solidated payment of future subscriptions, it shall remain as security for the due payment of future subscriptions.

CHAPTER VI

TRANSFERS

34. (1) No transfer of the rights of a foreman to receive subscriptions from the prized subscribers shall be made without the previous sanction in writing of the Registrar.

Restric- tions on transfer of rights of foreman.

\6) J\ny transier oi UK ngnus 01 a ioreman LO receive yuusunpiiuiia

from the prized subscribers shall, if it is likely to defeat or delay the interests of a non-prized or unpaid prized subscriber, be voidable at the instance of such subscriber.

(3) When under sub-section (2), a transfer is disputed by a subscri- ber, the burden of proving that the foreman was in solvent circumstances at the time of the transfer and that the transfer does not defeat or delay the interests of such subscriber is on the transferee.

35. Every transfer by a non-prized subscriber of his rights - in the

chit shall be in writing duly attested by at least two witnesses and shall be filed with the foreman-

Transfer of non- prized subscri- b e r^ rights to be in writing.

Recog- nition of transfer by foreman.

36. Every transfer under section 35 shall, within a period of fourteen days from the date of receipt of the proposal for transfer by the foreman, be recognised by him unless the transferee is not solvent or the transfer was effected with a view to defeating t he provisions of any law includ- ing this Ant and the decision of the foreman to recognise the transfer or oot shall forthwith be communicated to the parties concerned.

37. Every transfer under section 34 or section 35 shall be entered by the foreman in the books of the chit forthwith and a true copy of such entry shall be filed by the foreman with the Registrar within fourteen days from the date of making such entry.

Entry of trans- feree's name in the books.

CHAPTER VII

MEETINGS OF GENERAL BODY OF SUBSCRIBERS

38. (1) The foreman may, on his own motion, convene a special meeting of the general body of subscribers for considering any proposal to pass a special resolution.

(2) The foreman shall convene such a meeting on the requisition in

Meetings of general body of subs- cribers. Writing of not less than twenty-five per cent- of the number of non-prized and unpaid prized subscribers, and the meeting so convened shall be held within thirty days of the date of receipt of the requisition and if the foreman refuses or fails to call such a meeting within fourteen days of the date of receipt of such requisition, not less than twenty-five per cent, of the number of non-prized and unpaid prized subscribers may give notice of the fact to the Registrar.

(3) The Registrar shall, within twenty-one days of the receipt of the

notice under sub-section (2), convene or direct the convening of a special meeting of the general body of the subscribers and on receipt of such a direction, it shall be the duty of the foreman to comply with such direction.

(4) Notice of not less than fourteen days shall be given to all the

subscribers of a meeting under this section specifying the object, date, hour and place of meeting and a copy of the special resolution shall also be sent along with the notice of the meeting.

Explanation.—For the purposes of this section and section 39, "special resolution" means a resolution which is passed at a meeting of the general body of the subscribers specially convened for the

httc. U] I'llK UAZDITL Of IlMUxA E'Xri.tAOHJ>XlMAKV

it 1

purpose^, by a majority ox not le^s than twu-thnds uf the subscribers io me cnu present at me meeting in person or by proxy and represent- ing not less tnan three-lourtns 01 Uie amouni or, as Uie case may be, me value of the grain, subscribed by ail the non-prized and unpaid prized subscribers, if any.

CHAPTER VIII

TERMINATION OF CHITS

39. (1) Where a foreman dies or becomes of unsound mind or is otherwise incapacitated, the chit may contmue in accordance with the provisions of tne chit agreement.

Provision for continua- tion of chits in certain case* (2) Where a foremarj is adjudicated an insolvent, or withdraws from the ciiit under section 26; or iaiis to conduct the chit at any instalment or on any other date before the next succeeding instalment as may have been agreed upon by a special resolution, any one or more of such subs- cribers authorised by such resolution may( in the absence of any provi- sion in the chit agreement for the future conduct of the chit, take the place oi the foreman and continue the chit or make other arrangements for the further conduct of the chit.

40. A chit shall be deemed to have terminated,—

Termina- tion of chits.

(a) when the period specified therefor in the chit agreement has expired provided the payment of dues to all the subscribers has been completed; or

(b) when all the non-prized and unpaid prized subscribers and the foreman consent in writing to the termination of the chit and a copy of such consent is filed with the Registrar as required under section 41; or

(c) where a foreman dies or becomes of unsound mind or is otherwise incapacitated and the chit is not continued in accordance with the provisions of the chit agreement:

Provided that, in a case where the foreman is a firm, if a partner thereof dies or becomes of unsound mind or is otherwise incapacitated, Uie chit shall not be deemed to have terminated and the surviving partner or partners shall conduct the chit in the absence of any provi- sion to the contrary in the chit agreement,

41- A true copy of every assent referred to in section 26 and of every consent referred to in clause (b) of section 40 with their dates shall be filed by the foreman or Dy the surviving partner or partners, as the case may be, with the Registrar within fourteen days from the date of such assent or consent.

Copy of assent or consent to be filed with Registrar.

42. Except in the cases referred to in clauses (a) and (b) of section 40,—

Refund of non-prized subscri- bers' subscrip- tions.

(a) every non-prized subscriber shall, unless otherwise provide*d for in this Act or in the chit agreement, be entitled to get back his subscriptions at the termination of the chit without any deduction for dividend, if any, earned by him:

Provided that, any person to whom the rights of a non-prized subscriber are transferred in accordance with the provisions of section 35, shall, in addition to his own subscriptions, be entitled to

get back the subscriptions paid by such non-prized subscriber, sub- ject to the conditions specified in this section;

(b) if a 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

43. Any amount due to the subscriber from a foreman in relation to

the chit business shall be a first charge on the chit assets-

Subscri- bers' dues to be first charge on chit assets.

CHAPTER IX

INSPECTION OF DOCUMENTS

Forcrrian to allow certain subscri- bers to inspect chit re- cords.

44. Every foreman shall, on payment of such fee not exceeding five rupees q3 may be specified in the chit agreement, allow the non-prized subscribers and vwipajd prized subscribers reasonable facilities on all the dates of ,dfaw or ,pn, such other dates and within such hours as may be provided for in the chit agreement, for the inspection of security ponds and documents, repeipts and other records taken from the prized subscribers or furnished by the foreman as a subscriber and all chit records, including books of accounts, pass books, balance sheet and profit and loss accounts and such other records as may show the actual financial ppsition of the chit.

45. All the records pertaining to a chit shall be kept by the foreman

for a period of eight years from the date of termination, of the phit.

Preserva- tion of chit irecords by fore- mnn.

1 of 19M.

Inspection of chit books and records by Registrar.

46- (1) Without prejudice to the previsions of sections 209 and 20i)A of the Companies Act, 1956, t he Registrar or an officer authorised by the State Government in this behalf may inspect chit books and all the records of a chit during working hours on any working day at the pre- mises of the foreman with or without giving notice and it shall be the duty of every foreman to produce to the Registrar or the officer so autho- rised, all such books and records as are in his custody or power and to furnish him with any statement or information relating to the chits as he may require from the foreman within such time as he may specify.

(2) The Registrar or an officer authorised by the State Government in this behalf may, after giving seven days' notice in writing to the fore- man, direct him to produce before him for inspection such chit books and records as he may require at the time and place mentioned in the notice.

(3) If on an inspection made under sub-section (1) or sub-section

(2), any defects are found, the Registrar may bring such defects to the notice of the foreman and may also make an order directing the foreman to take such action as may be specified in the order to remedy the defects within the time specified therein.

(4) Every foreman shall be bound to comply with the directions con-

tained in an order made under sub-section (3).

2 of 1934.

47. (1) Nothing in section 46 shall be deemed to affect the power of the Reserve Bank to inspect the books and records of any foreman under the provisions of section 45N of the Reserve Bank of India Act, 1934.

Power of Reserve Bank to inspect chit books and records.

(2) The Reserve Bank may, if it considers necessary, forward a copy of its report or of any part of its report on the. inspection of the books and records of a foreman to the foreman for taking necessary action.

(3) Every foreman shall, on receipt of the report or part thereof under sub-section (2), be bound to comply with the directions, if any, given by the Reserve Bank in this behalf and shall, if so required, gub- mit periodical reports in regard to the action taken by him.

(4) The Reserve Bank may also forward a copy of the report on the inspection of the books and records of a foreman to the State Govern- ment within whose jurisdiction the registered office of the company, 11 thle foreman Is a company, or the place or the principal place of business of the foreman in any other case, is situated for such action as may be considered nficeseary.

CHAPTER X

WINDING UP OF CHITS

48. A chit may be wound up by the Registrar within whose territorial jurisdiction the chit has been registered, either on his own motion or on an application made by any non-prized or unpaid prized subscriber,—

(a) if the chit has terminated under clause (c) of section 40; or

Circum-

itances

under

which

chits may

be

wound

up.

(b) if the foreman commits any such act in respect of the secu- rity specified in section 20 as is calculated to impair materially the nature of the security or the value thereof; or

(c) if he fails to deposit any amount required to be deposited under any of the provisions of this Act; or

(d) if it is proved to the satisfaction of the Registrar that the foreman is unable to pay the amounts due to the subscribers; or

(e) if the execution or other process issued on an order passed by the Registrar In favour of any subscriber in respect of amounts due to him from the foreman in relation to the chit business is re- turned umatisfterd in whole or in part; or

(f) if it is proved that there has been a fraud or collusion on th" part of the foreman in the matter of taking securities from any pr'^ect subscriber; or

(fir) if the foreman has appropriated the prize amount in hip capacity as 'a subscriber without furnishing sufficient security for future subscriptions; or

(h) if the Registrar is satisfied that the affairs of the chit ar" being conducted in a manner prejudicial to the interests of the subscribers; or

(i) if it is just and equitable that the chit should be wound up.

Explanation.—For the purposes of clause (d), in determining whe- ther the foreman is Unable to pay the amounts due to the subscribers. the Registrar shall take into account his contingent and future lia- bilities in respect of the chit.

Applica-

tion for

winding

up.

5 ol 1908.

49, An application for the winding up of a chit shall be made by a petition presented by any non-prized or unpaid prized subscriber to the Registrar signed and verified in the manner laid down by the Code of Civil Procedure, 1908, and shall contain such particulars a? may be prescribed:

Provided that no application for the winding up of a chit under clause (d) or clause (i) of section 48 shall He -unless such'application is presented,—

(a) by non-prized and unpaid prized subscribers representing not less than twenty-five per cent, of the amount or, as the case may be, the value of the grain subscribed by all the non-prized and unpaid prized subscribers, if any; or

(b) with the previous sanction of the State Government within

whose jurisdiction the chit is commenced or conducted. Explanation.—For the purposes of clause (a) of the proviso, a subscriber of a fraction of a ticket shall be deemed to be a subscriber only to the extent of such fraction,

50. Notwithstanding anything contained in sections 48 and 49, no petition for the winding up of a chit shall be entertained by the Regis- trar,—

Bar to winding up pro- ceedings.

(a) if proceedings relating to insolvency are pending against

the foreman; or

(b) where the foreman is a firm, if proceedings relating ±o in- solvency are pending against all the partners or all the partners except one thereof, or proceedings for the dissolution of the firm are pending; or

(c) TXrhere the foreman is a company or co-operative society, if proceedings for the winding up of such company or co-operattve society are pending.

51. An order for the winding up of a chit shall operate in favour of all the subscribers to whom amounts are rlue from the foreman ?nd it shall be deemed to have commenced from the date of the presentation of the application for the winding up.

Commence- ment and effect of winding up order.

Injunction order.

52. The Registrar may, on the application of the foreman or of any subscriber to whom amounts are due in respect of a chit, at any time after the presentation of the application for the winding up of the chit tinder this Act and before the making of an order for the appointment of an interim receiver or for the winding up of the chit, restrain any other proceedings instituted against the foreman for the realisation of amounts due from him on such terms as the Registrar thinks fit.

Powers of Registrar.

53. The Registrar may, after hearing an application under this Chap- ter, dismiss it with or without costs, or adjourn the hearing conditionally or unconditionally or make an interim or any other order that he deems it.

54. On the making of an order for the winding up of a chit, all the chit assets pertaining to such chit shall vest in the Registrar or in anv person appointed by him for distribution amongst the subscribers to whom amounts are due in respect of the chit.

55. When a winding up order has been made or a receiver has been appointed, no suit or other legal proceedings shall be continued or com- menced against the foreman by a subscriber for the realisation of amounts due to him in respect of the chit except with the leave of the Registrar winding np thc chit and on sucr terms as he may impose-

Vesting of chit assets in Registrar or other person. Suits, etc., to be stayed on wind- ing up order,

5G. On the making of a winding up order, the Registrar shall maJte an entry in his book relating to the chit and shall notify in the Official Gazette that the order has been made.

Notifica- tion of winding up order.

57. Where during the pendency of the proceedings for the winding up of a chit, the foreman is adjudicated an insolvent, or where the foreman is a firm, all the partners or all the partners except one thereof are adjudicated insolvents, or where the foreman Is a company, the company has been ordered to be wound up by the Court, the winding up proceedings under this Chapter shall cease and the distribution of the chit assets shall, subject to the provisions of sections 43 and 52, be made by the insolvency court or the court winding up the company, as the case may be.

Cassation of winding up proceed- ings on insol- vency of fore- man, etc., or the winding up of

the com- pany and transfer of Buch pro- ceeding*.

Award Of compen- sation to foreman.

58. (1) Where an application for the winding up of a chit is dismissed and the Registrar is satisfied that the petition is frivolous or vexatious, he may, on the application of the foreman, award against the petitioner such amount, not exceeding one thousand rupees, as he deems reason- able as compensation to the foreman for the expenses or injury caused to him by the presentation of the application and the proceedings there- on, and such amount may be realised as if the award were a decree of a Civil Court.

(2) On the making of an award under sub-section (1), no suit for compensation in respect ot an application for any winding up of the chit shall be entertained.

Right to appeal.

59. The foreman or any subscriber or any other person aggrieved by a decision or order of the Registrar in any proceedings for the winding up of a chit may, within sixty days from the date of such decision or order, appeal to the State Government.

Limita- tion.

60. (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 presentation of the application to the date of such order In respect of non-prized subscribers; and, notwithstanding anything con- tained In the chit agreement, no non-prized subscriber who was not a defaulter on the date of the presentation of the petition for winding up, shall be deemed to be a defaulter on the date of such order.

(2) Where an order refusing to wind up a chit has been made under this Act, in computing the period of limitation prescribed for any suit

or other legal proceedings (other than a suit or application in respect of which the leave of the court has been obtained) which might have been brought or instituted, but for the presentation of the application for the winding up of the chit, the period from the date of the presenta- tion of the application to the date of the order refusing to wind up a chit shall be excluded.

(3) Nothing contained in this Chapter shall affect the rights of a sub- scriber to proceed against the foreman personally for the balance, if any, of the amount due to him after the declaration of the final dividend in the proceedings for the winding up of the chit and in computing the period of limitation prescribed for any such proceedings, the period from the date of the presentation of the application for the winding up of the chit to the date of the declaration of the final dividend shall be excluded.

CHAPTER XI

APPOINTMENT OF OFFICERS AND LEVY OF FEES

61. (1) The State Government may, by notification in the Official Gazette, appoint a Registrar of Chits and as many Additional, Joint, Deputy and Assistant Registrars as may be necessary for the purpose of discharging the duties imposed upon the Registrar by or under this Act. Appoint- ment of Registrar and other officers.

(2) The Registrar may appoint as many inspectors of chits and chit auditors as may be necessary for the purpose of discharging the duties imposed on the inspectors of chits or chit auditors by or under this Act,

(3) All inspectors of chits and chit auditors shall discharge the duties imposed upon them by or under this Act under the general superintend- ence and control of the Registrar.

(4) If the Registrar i" o£ 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.

(5) It shall be the duty of the foreman of the chit whose accounts are to be audited by a chit auditor under sub-section (4) 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 afford him all such assistance and facilities as may be necessary and reasonable in regard to the audit of the accounts of the chit.

(6) The foreman shall pay to the chit auditor such fees as may be prescribed for the audit of the accounts of the chit under sub-section (4):\

Provided that different scales of fees may be prescribed for different chits depending on the quantum of the chit amount,

62. The foreman of a chit or any subscriber in a chit or the heirs oi legal representatives of any foreman or subscriber may, on payment of fuch fees as may be prescribed,—

(a) inspect the documents of the concerned chit kept by the Inspection of docu- ments in Regis- trar's offlc*.

Registrar; or

(b) obtain a certified copy or an extract of any such document or record.

C3. (I) There shall be paid to the Registrar such fees as the State Levy of fees.

Government may, from time to time, prescribe for,—

(a) the issue of previous sanction under section 4;

(b) the filing of the chit agreement with the Registrar and the registration of the chit under section 7;

(c) the filing of a declaration with the Registrar and the grant of a certificate of commencement under section 9;

(d) the filing of copies of documents under any of the provisions of this Act;

(e) the audit of the accounts of the foreman under section 61;

(f) the inspection of documents under section 62;

(fif) the obtaining of certified copies or extracts of documents and records under section 62; and

(7i) such other matters as may appear necessary to the State Government.

(2) A table of fees prescribed under sub-section (1) shall be exhibi- ted on a notice board in the office of the Registrar.

CHAPTER XII

DISPUTES AND ARBITRATION

Disputes relating to chit business.

64. (1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the management of a chit business shall be referred by any of the parties to the dispute, to the Registrar for arbitration if each party thereto is one or the other of the following, namely: —

(a) a foreman, a prized subscriber or a non-prized subscriber, including a defaulting subscriber, past subscriber or a person claim- ing through a subscriber, or a deceased subscriber to a Chit;

(b) a surety of a subscriber, past subscriber, or a deceased sub- scriber.

Explanation.—For the purposes of this sub-section, a dispute touch- ing the management of a chit business shall include—

(i) a claim by or against a foreman for any debt or demand due to him from a subscriber, or due from him te a subscriber, past subscriber or the nominee, heir or legal representative of a deceased subscriber whether such debt or demand is admitted or not;

(ii) a claim by a surety for any sum or demand due to him from the principal borrower in respect of a loan by a foreman and recovered from the surety owing to the default of the principal borrower, whether such sum or demand is admitted or not; and

(fit) a refusal or failure by a subscriber, past subscriber or the nominee, heir or legal representative of a deceased subscriber to deliver possession to a foreman of land or any other asset re- sumed by him for breach of conditions of the assignment.

(2) Where any question arises as to whether any matter referred to for the award of the Registrar is a dispute or not for the purposes of sub- section (1), the same shall be decided by the Registrar whose decision thereon shall be final.

(3) No Civil Court shall have jurisdiction to entertain any suit or other proceedings in respect of any dispute referred to in sub-section (I).

36 of 1968.

Period of limita- tion.

65. (1) Notwithstanding anything contained in the Limitation Act, 1963, but subject to the specific provisions contained in this Act, the period of limitation In the case of a dispute referred to the Registrar t:nder section 64, shall—

(a) if the dispute relates to the recovery of any sum, including interest thereon, due to a foreman from a deceased subscriber, be three years, computed from the date on which such subscriber dies or ceases to be a subscriber; or

(b) if the dispute is between a foreman and a subscriber or a past subscriber, or the nominee, heir or legal representative of a deceased subscriber, and the dispute relates to any act or omission on the part of either party to the dispute, be three years from the date on which the act or omission with reference to which the dis- pute arose, took place.

(2) The period of limitation in the case of any dispute other than

36 of 1961

those referred to in sub-section (1) which are required to be referred to the Registrar under section 64 shall be regulated by the provisions of the Limitation Act, 1963, as if the dispute were a suit, and the Registrar, a Civil Court.

(3) Notwithstanding anything contained in sub-sections (1) and (2), the Registrar may admit a dispute after the expiry of the period of limitation specified therein, if the applicant satisfies the Registrar that he had sufficient cause for not referring the dispute within such period.

Settle- mant at dlsputei.

60. (1) If the Registrar is satisfied that any matter referred to him or brought to his notice is a dispute within the meaning of section 64, he shall, subject to such rules as may be prescribed, settle the dispute himself, or refer it for disposal to a person appointed by him (hereafter in this Chapter referred to as the nominee).

(2) Where any dispute is referred under sub-section (1) for settle- ment to the nominee, the Registrar may, at any time for reasons to be recorded in writing, withdraw such dispute from the nominee and may settle the dispute himself, or refer it again for settlement to any other nominee appointed by him.

5 of 1908.

fi7. (1) The Registrar or the nominee hearing a dispute under section G6, shall, in addition to the powers conferred on him under that section, have the same powers as are vested in a Civil Court while trying a suit under the Code of Civil Procedure, 1908, in respect of- the following matters, namely: —

(a) summoning and enforcing the attendance of persons and

examining them on oath;

Proce- dure for settle- ment of dispute! and powers of Re- gistrar or nomi- nee.

(b) requiring the discovery and inspection of documents;

(c) receiving evidence on affidavits;

(d) requisitioning any public record or copies thereof from any court or office;

(e) Issuing coramis^iorjs for the examination of witnesses or

documents; and

(f) any other matter which may be prescribed.

(2) Except with the permission of the Registrar or the nominee, no party shall be represented at the hearing of a dispute by a legal practitioner.

(3) (a) If the Registrar or the nominee is satisfied that any person, whether he is a subscriber or not, has acquired any interest in the property of a person who is a pnrty to a dispute, he may order that the person who has acquired thp interest in the property may be joined as a party to the dispute, and any decision that may be given by the Rcgistiar or the nominee on the dispute shall be binding on the party so joinrd, in the same m.mnoi a^ if ho were an original party to the dispute.

(b) Where a dispute has been referred in the name of a wrong person, or where all the necessary parties have not been included, the Registrar or the nominee may, if h" is satisfied that it was due to a genuine mis- take, order any other person to be substituted or added as parties to the dispute at any stage of hearing of the dispute on such torms as he thinks just.

3 nominee to be lust, order that the onme of any party improperly 1

(d) Any person who is 3 party to the dispute and entitled to more than one relief in rospe-rt of thp same cause of action may claim all or any such reliefs, but it he omits to claim any such relief, he shall not be entitled to claim that relief, except with the leave of the Registrar ".r the nominee.

6fi (1) Wher" a dispute has been referred under section 64 and the Registrar or the nominee hearing the dispute is satisfied on enquiry or otherwise that a party to such dispute, with intent to defeat or obstruct the execution of any award or the carrying out of any order that ~iay be made,—

(a) Is about to dispose of the whole or any part of his property;

• Attach- ment before Judg- ment and other in- terlocu- tory crders.

or

(b) is about to remove the whole or any part of the property from the jurisdiction of the Registrar,

he may, unless adequate security is furnished, direct conditional attach- ment of the said property, and such attachment shall have the same effect as If it is made by a competent Civil Court.

(2) Where the Registrar or the nominee directs the attachment of any property under sub-section (1), he shall Issue a notice calling upon the person whose property is so attached to furnish such security as he thinks adequate within a specified period, and If the person fails to provide such security, the Registrar or the nominee may confirm the order, and may, after the decision in the dispute, direct the disposal of the property so attached towards the claim, if awarded.

(3) Any attachment made under this section shall not affect the rights, subsisting prior to the attachment of the property, of persons who are not parties to the dispute, or bar any person holding a decree against the person whose property is so attached from applying for the sale of the property under the attachment of such decree.

(4) The Registrar or the nominee may, in order to prevent the ends of justice being defeated, make such interlocutory orders pending the award in a dispute referred to in sub-section (1) as may appear to be just and convenient.

Decision of Re- gistrar or nomi- nee,

69. When n dispute is referred to arbitration under this Chapter, the Registrar or the nominee, may, after giving a reasonable opportunity to the parties to the dispute to be heard, make an award on the dispute, on the expenses incurred by the parties to the dispute In connection with the proceedings and the fees and expenses payable to the Registrar or the nominee, and such an award shall not be invalid merely on the ground that it was made after the expiry of the period, if any, fixed for deciding the dispute by the Registrar, and shall, subject to appeal under section 70, be final and binding on the parties to the dispute.

70. Any party aggrieved by any order passed by the Registrar or the nominee or the award of the Registrar or the nominee under section 69, may, within two months from the date of the order or award, apraeal to the State Government.

Appeal

•gainst

decision

o* He-

gistrar or

nomi-

nee.

Money how re- coveTed.

71. Every order passed by the Registrar or the nominee under sec- tion 68 or section 69 and every order passed by the State Government in appeal under section 70 for payment of any money shall, if not carried out,—

(a) on a certificate issued bv the Registrar, be deemed to be a decree of a Civil Court, and shall be executed in the same manner as a decree of such Court, or

(b) be executed in accordance with the provisions of any law for the time being In force for the recovery of amounts as arrears of land revenue:

Provided that no application for execution under fiause (b) shall be made aiter the expiry of three years from the date fixed in the order, and if no such date is fixed, from the date of the order.

72. Any private transfer or delivery of, or encumbrance or charge on, property made or created after the issue of the certificate by the Registrar under section 71 shall be null and void against the foreman on whose application the said certificate was issued.

Private

transfer

of pro-

perty

made

after

iiaue of

certificate

•old

against

fore-

man.

CHAPTER XIII

MISCELLANEOUS

73. The Reserve Bank may tender to any State Government such advice on questions of policy with respect to this Act as it thinks fit •ither on its own motion or on a request made by the State Government.

Advisory

role of

Reserve

Bank.

Appeal*.

74. (1) Any foreman aggrieved by the decision of the Registrar,—

(a) refusing to register the chit agreement under aection 7;

(b) refusing to grant a certificate of commencement under sub- section (2) of section ";

(c) refusing to accept any security under sub-section (1) oi!

section 20 or under section 31; or

(d) refusing to release the security charged under section 20 or section 31,

may, within thirty days of the communication to him of such decision, appeal to the State Government or to such officer or authority as may be empowered by notification in the Official Gazette by the State Gov- ernment in that behalf.

(2) Any foreman or other person aggrieved by the order of the Re- gistrar under sub-section (1) of section 34 may, within thirty days of the communication to him of such decision, appeal to the State Govern- ment or to such officer or authority as may be empowered by notification in the Official Gazette by the State Government in that behalf.

(3) The State Government or such officer or authority aforesaid may, after giving the appellant an opportunity of making his represen- tation, pass such order on the appeal as it or he thinks fit and such order shall be final.

75. The Registrar may, in his discretion and upon an application in writing by a foreman made within the period specified for the filing of¹ documents, under sub-section (3) of section 28, sub-section (2) of •ection 29, section 37 or section 41, allow the foreman further time not exceeding fifteen days to file copies of such documents.

Powers oi Re- gistrar to give extension of time for flllnf docu- ment*.

76. (I) Whoever contravenes or abets the contravention of any of Penal- ties.

the provisions of sections 4, 5, 8, 9, 11, 12, 13, 14, 19, 20, 22, 24, 30, 31, sub-section (4) of section 33, sections 46, 47 or sub-section (5) of section 61 shall, on conviction, be punishable with imprisonment for a term which may extend to two years or with fine which may extend to five thousand rupees or with both.

(2) Any foreman,—

(a) who fails to file any document required to be filed under this Act within the period specified therefor or within such further time as may be allowed; or

(b) who fails to comply with the requirements of the chit agreement regarding the date, time and place at which the chit is to be drawn or who fails to comply with the requirements of any direction given under sub-section (3) of section 38; or

(c) who contravenes or fails to comply with any other require- ment under this Act,

shall, on conviction, be punishable with fine which may extend to three thousand rupees.

(3) Whoever wilfully makes a statement in any document required to be filed under this Act which is false in any material particular shall, on conviction, be punishable with imprisonment for a term which may extend to two years or with fine which may extend to five thousand rupees or with both.

77. If any person convicted of an offence under sub-section (1) or sub-section (3) of section 76 is again convicted of an offence under any of the said sub-sections he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to two years and shall also be liable to fine.

Penalty for second and subsequent convic- tlOTf.

Applica-

tion

of fine,

78. A court imposing any fine under this Act may direct that the whole or any part thereof shall be applied in, or towards payment of, the cost of the proceedings.

Offenoes

by

com-

panies.

79. (1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was In charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he ex- ercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where

an offence under this Act has been committed by a company and it is

proved that the offence has been committed with the consent or con-

nivance of, or is attributable to, any neglect on the part of, any

director, manager, secretary or other officer of the company, such direc-

tor, manager, secretary or other officer shall also bo deemed to be

guilty of that offence and shall be liable to be proceeded against and

punished accordingly.

Explanation,—For the purposes o£ this section,—

(a) "company" means any body corporate and includes a Ann

or other association of individuals; and

(b) "director" in relation to a firm means a partner in the firm.

80. (1) All offences under section 11 shall be cognizable-

Cognis-

ance of

offences.

(2) No court Inferior to that of a Metropolitan Magistrate or a Judi-

cial Magistrate of the first class shall try an offence punishable under

this Act.

Power to

compound

offenceo

81. (1) Subject to such conditions as may be prescribed, any officer

empowered by the State Government in this behalf may, either before

or after the institution of criminal proceedings under this Act, accept

from the person who has committed or Is reasonably suspected to have

committed an offence under this Act, by way of composition of such

offence, a sum oD money not exceeding such amount as may be prescribed.

(2) Where an offence has been compounded under sub-section (1),

the offender, if in custody, shall be discharged and no further proceed-

ings shall be taken against Mm in respect of such offence.

Power to

enter and

learch

any pla""

and to

setae any

documents.

82. (1) If the Registrar or any other officer authorised by him in this

behalf, has reason to suspect that any person conducts, or is responsible

for the conduct of, a chit In any place in contravention of the provisions

of this Act, he may, for reasons to be recorded In writing and at any

reasonable time, enter into and search such place, and may seize such

books, registers, accounts or documents as may be necessary.

(2) The Registrar or officer authorised by him In this behalf, may

apply for assistance to an officer in charge of a police station and take

police officers to accompany and assist him in discharging his duties under

sub-section (1).

(3) All searches under sub-section (1) shall be made in accordance

with the provisions of the Code of Criminal Procedure, 1978.

2 <4 1974.

83. The Registrar and all officers appointed by the State Government

OAVeit

to be

43 of 1860.

to perform any functions under this Act shall be deemed to be public

servants within the meaning of section 21 of the Indian Penal Code.

public

servants.

Power to delegate.

84 The State Government may, by notification in the Official Gazette,

direct that any power (other than the power to hear appeals or to make

rules) ejcercteable by it under this Act or the rules made thereunder

may be exercised also by any officer of the State Government subject to

Mich terms and conditions, if any, as may be specified therein.

85. Nothing in this Act shall apply in respect of—

(a) any chit started before the commencement of this Act; or

Act not to apply to certain chits.

(b) any chit the amount of which, or where two or more chits

wur" started or conducted simultaneously by the same foreman, the

aggregate amount of which does not exceed one hundred rupees.

Banka not to conduct

86. (1) Notwithstanding anything contained in this Act, no bank shall

oommenee or carry on chit business after the commencement of thia Act.

chit

business.

(2) Where a chit had been started by any bank before auch com-

mencement, such chit may be continued after such commencement until

it is completed, and the provisions of the chit agreement and such laws,

if any, as were applicable to it immediately before the commencement

of this Act shall apply to such chit.

2 of 1934.

Afcplonatfon.—For the purposes ofi this section "bank" means an ap-

proved bank or a co-operative bank as defined in clause (bii) of section

2 of the Reserve Bank of India Act, 1934.

Power to

exempt.

87. The State Government may, in consultation with the Reserve

Bank, by notification hi the Official Gazette, and subject to such condi-

tions as may be specified in the notification, exempt any person or class

of persons or any chit or class of chits from all or any of the provisions

•f this Act.

Protection

of Action

taken

under

the Act.

88. No suit, prosecution or other legal proceeding shall lie against the

State Government, the Registrar or other officers of the State Govern-

ment or of the Reserve Bank or any of its officers exercising any powers

or discharging any functions under this Act in respect of anything which

is in good faith done or Intended to be done in pursuance of this Act or

the rules made thereunder.

Power te

M kt

rulct.

89. (I) The State Government may, In consultation with the Reserve

Bank, by notification in the Official Gazette, make rules for giving effect

to the provisions of this Act.

(2) In particular, and without prejudice to the generality of the

foregoing power, such rules may provide for all or any of1 the follow-

ing matters, namely:—

(a) the form and manner in which an application for obtaining

the previous sanction may be made under sub-section (2) of section 4;

(b) the additional particulars that a chit agreement may contain

under clause (q) of sub-section (2) of section 6;

(c) the particulars that may be included In the minutes of the

proceedings of a draw under section 17;

(d) the method of valuation by the Registrar in a grain chit

for the purpose of furnishing security under section 20;

(e) the procedure that may be followed by the Registrar In

releasing the security furnished by the foreman under section 20;

(f) the registers and books and the form in which such register*

and books may be maintained by the foreman under section 23;

(0) the time within which the balance-sheet and the profit and

loss account in respect of a chit business shall be filed under section

24;

(h) the rate at which interest shall be payable on the defaulted

Instalments by a defaulted subscriber under section 28;

(1) the particulars that may be included in an application for

the winding up of chits under section 49;

(j) the procedure to be followed for the winding up of chits

under Chapter X;

(k) the fees payable under section 63;

(I) the auditing of balance-sheets and the profit and loss ac-

counts of chit business and the issue of audit certificates;

(m) the form and manner in which a dispute shall be referred

to the Registrar under section 64;

(n) the procedure to be followed by the Registrar or his no*

minee for settling the disputes referred to him under section 84;

(o) the matters referred to in clause (/) of sub-section (1) oi

section 67;

(p) the conditions subject to which and th* amount on th"

payment of which composition of offences may bt made under sec-

tion 81;

(q) the form and manner in which an appeal may be preferred

under this Act and the fees payable for such appeal;

(r) the issue and service of notices or other process under this

Act;

(s) the procedure for, and the manner of, receiving any sum

payable under this Act;

(t) any other matter which is required to b* or may be pres-

cribed.

(3) Every rule made under this section shall be laid, as soon as may

be after it Is made, before each House of the State Legislature where

It consists of two Houses, or, where such Legislature consists of one

House, before that House.

Repeal

and

Mviat

90. (1) The Andhra Pradesh Chit Funds Act, 1971, the Kerala Chitties Act, 1975, the Maharashtra Chit Funds Act, 1974, the Tamil Nadu Chit Funds Act, 1961, as In force In the State of Tamil Nadu and In the Union territories of Chandigarh and Delhi, the Uttar Pradesh Chit Funds Act, 197B, the Ooa, Daman andi Diu Chit Funds Act, 1973 and the Pondicherry Chit Funds Act, I960, are hereby repealed and the provisions of section 6 of the General Clauses Act, 1897, shall apply to such repeal as if each such Act so repealed were a Central Act.

(2) Notwithstanding such repeal, the Ada mentioned In sub-section (1) shall continue to apply to chits in operation on the commencement of this Act, In the same manner as they applied to iucb chits before iuch commencement.

Andhra Pradesh Act 9 of 1971. Kerala Act 23 of 1878. Maharash- tra Act LV of 1074. Tamil Nadu Act 24 of 1061. Uttar Pradesh Act W "f 1976. Ooa, Daman and Diu Act 10 of 197J. Pondi- thurjt A c t l S tl 1966. 10 of 1897.

THE SCHEDULE

(See section 24)

PART I F O RM OF BALANCE SHEET

Liabilities

Assets

R".

i. Capita, :

1, Caiu 3. B a t i n c es with banks :

o

(a) C u r r e nt account . . .. R s. (b) D e p u a l a c c o u ni . . .. Rs,

Rs.

R s. Aulh.x-iM-! R"- lisued R*. Paid-uo R s,

3. lavestmenLs:

(a) In chits Rt (b) I n G o v c m m e ct securities . . R*. (c) O t h e rs R s.

o

Rj.

4. Share a m o u nt d ue from prized subscribers:

(a) Secured . . . . .. R s. (b) Unsecured R*.

Ri.

5. Arrearj d ue from prized subscribers:

Ri. Rs. Rs. Rs. Rs. Rs. Rs.

a. Reserve Fund . . . .. j. Deposits . . . . .. 4. Borrowings . . . . .. s. Foreman's liability in tickets prized . 0. Prize a m o u nt pnyabtr . . .. •j. Defaulted s u b s c r i b e r s ' a m o u n t p a y a b ie 8. A d v a n ce subscription received 9. Liability to non-prized subscribers (Arrears

I

(a) Secured R s. (b) Unsecured R s,

from non-prized subscribers to be indicated)

Rs.

6. A m o u nt d ue in terminated c h i d:

Rs. Rs.

10. A m o u nt payable in terminated chits 11. Auction profit p a y a b l e to non-prizrd subscri-

(a) Secured R s. (b) Unsecured R s.

b e"

l a. O t h er liabilities . . . .. 13. Profit a nd loss account . . ..

Rs. Rs. Rs.

Rs. Rs. Rs. Rs. Rs. Ri. Ri. Ri.

\

7. C h it p r i i e a m o u nt paid earlier 8. Loans a nd a d v a n c c s to subscribers 9. Litigation expenses . . .. 10. Premises . . . . .. 1 1. F u r n i t u re a nd fixture . . .. ' 2. S t a m p s in stock . . . .. 13. O t h er assets . . . . .. 14. Profit a nd loss a c c o u nt . . ..

RI.

Rs.

T O T AL :

T O T AL :

Rs.

Total chit a m o u n ts of t he chits in force, i.t.,

Particulars to be specified in respect of a m o u n ts shown against 4, 5 a nd 6.

(i) A m o u n ts d ue from directors or officers of t he c o m p a ny or a ny of d i em r u n n i ng chits.

either jointly or severally with a ny other person.

(ii) A m o u n ts d ue by companies or firms in which t he directors of t he c o m p a ny a re interested as directors, partners or in t he case of privatr companift, a s u . a u. bert.

PART II.—FORM OF PROFIT AND LOSS ACCOUNT

CO

Expenditure

Inctnne

Rs.

| Py CiifiIUii'T rmimMinn

1. To interest paid on deposits, borrowings,

Rs.

e tc

2. ByboDtn

Rs.

Rs.

2- To talariei, allowances, bonus and provi-

3. By interest . . . ..

Rs.

dent fund . . . ..

4. By indivisible income in auction profit ,

Rs.

H

R*.

3. To directors* sitting fees

5. By rent

R".

Rs.

4. To rent, t i ^ n^ insurance, l i g h t i ng ,

6. By net profit on sale of inrertment*

R s.

3. To l aw charges . . . ..

7. By other receipts

R s.

Ri. Rs.

6. To postages, telegrami s ad •tampi

8. By loss

R*.

S3 o> 7. To auditors' feet

R s.

8. To filing fee)

9. To depreciation a nd r e p a in

o *!

10. To fitationfry, pruitiu^ and advertisement

11. To other expenditure . . ..

12. To balance of profit . . ..

Ri. Rs. Ri. Ri. Rs.

o > T O T AL

Rs.

TOTAL

SUDARSHAN AGARWAL,

Secretary-General.

i i—ir

( i i i)

( i v)