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Chit Funds Act 2016

This document is the Chit Funds Act of 2016 for the Jammu and Kashmir state legislature. It establishes regulations for chit funds in the state. Some key points: - It defines important terms related to chit funds such as foreman, subscriber, prized subscriber, chit amount, and more. - It establishes rules for the registration of chits, commencement of chit business, rights and duties of foremen and subscribers, restrictions on transfers, and more. - It states that the provisions of this Act shall take precedence over anything contrary in other laws, or in company memorandums or articles.
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0% found this document useful (0 votes)
41 views50 pages

Chit Funds Act 2016

This document is the Chit Funds Act of 2016 for the Jammu and Kashmir state legislature. It establishes regulations for chit funds in the state. Some key points: - It defines important terms related to chit funds such as foreman, subscriber, prized subscriber, chit amount, and more. - It establishes rules for the registration of chits, commencement of chit business, rights and duties of foremen and subscribers, restrictions on transfers, and more. - It states that the provisions of this Act shall take precedence over anything contrary in other laws, or in company memorandums or articles.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CHIT FUNDS ACT, 2016

(Act No. XI of 2016)


THE JAMMU AND KASHMIR CHIT FUNDS ACT, 2016

(Act No. XI of 2016)

CONTENTS
Section. Section.

CHAPTER I 11. Use of the words “chit”, “chit


fund”, “chitty” or “kuri”.
Preliminary
12. Prohibition of transacting busi-
1. Short title and commencement.
ness other than chit business by
2. Definitions. a company.

3. Act to override other laws, 13. Aggregate amount of chits.


memorandum, articles, etc.
14. Utilisation of funds.
CHAPTER II
15. Alteration of chit agreement.
Registration of Chits, Commencement
16. Date, time and place of conduct-
and Conduct of Chit Business
ing chits.
4. Prohibition of chits not sanctioned
17. Minutes of proceedings.
or registered under the Act.
18. Copies of minutes to be filed with
5. Prohibition of invitation for sub-
Registrar.
scription except under certain
conditions. 19. Restriction on opening of new
place of business.
6. Form of chit agreement.
CHAPTER III
7. Filing of chit agreement.
Rights and duties of Foreman
8. Minimum capital requirements for
the commencement, etc. of a chit, 20. Security to be given by foreman.
and creation of a reserve fund, by
21. Rights of foreman.
a company.
22. Duties of foreman.
9. Commencement of chit.
23. Books, records etc. to be kept by
10. Copies of chit agreement to be
foreman.
given to subscribers.
38 CHIT FUNDS ACT, 2016

Section.

24. Balance sheet.

25. Liability of foreman to subscrib-


ers.

26. Withdrawal of foreman.

CHAPTER IV

Rights and Duties of Non-Prized


Subscribers

27. Non-prized subscribers to pay


subscriptions and obtain receipts.

28. Removal of defaulting subscrib-


ers.

29. Substitution of subscribers.

30. Amounts due to defaulting sub-


scribers.

CHAPTER V

Rights and Duties of Prized Subscrib-


ers.

31. Prized subscriber to furnish secu-


rity.

32. Prized subscriber to pay subscrip-


tions regularly.

33. Foreman to demand future sub-


scriptions by written notice.

CHAPTER VI

Transfers

34. Restrictions on tyransfer of rights


of foreman.

35. Transfer of non-prized


subscriber’s right to be in writing.
CHIT FUNDS ACT, 2016 39

THE JAMMU AND KASHMIR CHIT FUNDS ACT, 2016

(Act No. XI of 2016)

Received the assent of the Governor on 23rd July, 2016 and published in
the Government Gazette dated 23rd July, 2016.

An Act to provide for the regulation of chit funds in the State and for matter
connected therewith.

Be it enacted by the Jammu and Kashmir State Legislature in the Sixty-


seventh Year of the Republic of India as follows: ––

CHAPTER I

Preliminary

1. Short title and commencement. ––(1) This Act may be called the Jammu
and Kashmir Chit Funds Act, 2016.

(2) It shall come into force on such date as the Government may, by notification
in the Government Gazette appoint.

2. Definitions. ––In this Act, unless the context otherwise requires, ––

(a) “approved bank” means the State Bank of India constituted under
section 3 of the State Bank of India Act, 1955 (Central Act No. 23 of
1955), or a subsidiary bank constituted under section 3 of the State
Bank of India (Subsidiary Banks) Act, 1959 (Central Act No.38 of 1959),
or a corresponding new bank constituted under Sec.3 of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1970
(Central Act No.5 of 1970), or a Regional Rural Bank established under
Section 3 of the Regional Rural Banks Act, 1976 (Central Act No.21 of
1976), or a corresponding new bank constituted under Section 3 of the
Banking Companies (Acquisition and Transfer of Undertakings) Act,
1980 (40 of 1980), or a banking company as defined under clause(e) of
section 35 of the Banking Regulation Act, 1949 (10 of 1949) or such
other banking institution as the Government may in consultation with
the Reserve Bank, approve for the purposes of this Act ;
40 CHIT FUNDS ACT, 2016

(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––

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

(ii) all the subscribers get the chit amount by turns with a liability to
pay future subscriptions ;

(c) “chit agreement” means the document containing the articles 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 instalments of a chit without any deduction of
discount or otherwise ;

(e) “chit business” means the business of conducting a chit ;

(f) “defaulting subscriber” means the subscriber who has defaulted 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 distribution among the subscribers
or for both ;
CHIT FUNDS ACT, 2016 41

(h) “dividend” means the share of the subscriber in the amount of discount
available under the chit agreement for rateable distribution 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 instalment of the
chit ;

(j) “foreman” means the person who under the chit agreement is
responsible for the conduct of the chit and includes any person
discharging the functions of the foreman under section 39 ;

(k) “Government” means the Government of Jammu and Kashmir ;

(l) “non-prized subscriber” does not include a defaulting subscriber ;

(m) “prescribed” means prescribed by rules made under this Act ;

(n) “prize amount” means the difference between the chit amount and the
discount, and in the case of a fraction of a ticket means the difference
between the chit amount and the discount proportionate to the fraction
of the ticket, and when the prize amount is payable otherwise than in
cash, the value of the prize amount shall be the value at the time when
it becomes payable ;

(o) “prized subscriber” means a subscriber who has either received or is


entitled to receive the prize amount ;

(p) “Registrar” means the Registrar of Chits appointed under section 61,
and includes an Additional, a Joint, Deputy or an Assistant Registrar
appointed under that section ;

(q) “Reserve Bank” means the Reserve Bank of India constituted under
the Reserve Bank of India Act, 1934 (2 of 1934) ;

(r) “subscriber” includes a person who holds a fraction of a ticket and


also a transferee of a ticket or fraction thereof by assignment in writing
or by operation of law ;
42 CHIT FUNDS ACT, 2016

(s) “ticket” means the share of a subscriber in a chit.

3. Act to override other laws, memorandum, articles, etc.––Save as otherwise


expressly provided in this Act,––

(a) the provisions of this Act shall have effect notwithstanding anything
to the contrary contained in any other law for the time 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 null or be void, as the
case may be.

CHAPTER II

Registration of Chits, Commencement and Conduct of Chit Business

4. Prohibition of chits not sanctioned or registered under the Act.––(1) No


chit shall be commenced or conducted in the State without obtaining the previous
sanction of the Government or of such officer as may be empowered by Government
in this behalf, and unless the chit is registered in the State in accordance with the
provisions of this 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
Government may, on application made to it in this behalf, allow.

(2) An application for the purpose of obtaining a sanction under sub-section


(1) shall be made by the foreman in such form and in such manners as may be
prescribed.

(3) The previous sanction referred to in sub-section (1) may be refused, if the
foreman, ––
CHIT FUNDS ACT, 2016 43

(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 be paid or filed under this Act or had violated any of
the provisions of this Act or the rules made thereunder ; 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 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 any
officer empowered under sub-section (1) may appeal to the Government within
thirty days of the date of communication to him of such refusal and the decision of
Government on such appeal shall be final.

5. Prohibition of invitation for subscription except under certain


conditions.–– No person shall issue or cause to be issued any notice, circular,
prospectus, 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.

6. Form of chit agreement.––(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 ;


44 CHIT FUNDS ACT, 2016
(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 subscriber has to
forego at any instalment ;

(g) the mode and proportion in which the discount is distributable 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 is to be 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 ;

(k) where the foreman is an individual, the manner in which a chit shall be
continued when such individual dies or becomes of unsound mind or
is otherwise incapacitated ;

(l) 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 ;
CHIT FUNDS ACT, 2016 45

(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
name of the chit may be paid in the case of the death of the subscriber
or when he is otherwise incapable of making an agreement ;

(q) any other particulars that may, from time to time, be prescribed.

Explanation. — For the purpose of this sub-section, it shall be sufficient 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 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 require.

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

(4) Where the prized subscriber at any instalment of the chit is required to
be determined by auction and more than one person offer the maximum discount,
the prized subscriber shall be determined by lot.
46 CHIT FUNDS ACT, 2016

7. Filing of chit agreement.––(1) Every chit agreement shall be filed in


duplicate by the foreman with Registrar.

(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 under his 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 involving 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 conclusive


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 exceeding three months in the aggregate as the
Registrar may, on application made to him in this behalf, allow.

8. Minimum capital requirements for the commencement, etc. of a chit, and


creation of a reserve fund, by a company.––(1) Notwithstanding anything contained
in the Companies Act, 1956, but subject to the provisions of this Act, a company
CHIT FUNDS ACT, 2016 47

shall not commence or carry on chit business unless it has a paid-up capital of not
less than rupees ten lakhs.

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

Provided that the 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 increases its paid-up
capital to not less than rupees one lakh.

(3) Every company carrying on chit business shall create and maintain 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 percent of such profit.

(4) No company shall appropriate any 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 from to the Registrar
explaining the circumstances relating to such appropriation.

9. Commencement of chit.––(1) Every foreman shall, after all the tickets


specified in the chit agreement are fully subscribed, file a declaration to that effect
with the Registrar.

(2) As soon as may be after a declaration is filed under sub-section (1), the
Registrar shall, after satisfying himself that all the requirements relating to sanction,
registration of chit and other matters have been duly complied with, grant a
certificate of commencement to the foreman.
48 CHIT FUNDS ACT, 2016

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

10. Copies of chit agreement to be given to subscribers.––(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 subscriber, a copy of the chit agreement certified to be a
true copy.

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

11. Use of the words “chit fund”, “chitty’ or “kuri”.––(1) No person shall
carry on chit business unless he uses as part of his name any of the words “chit”,
“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.

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

(a) any person 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 as part of his
name any such word or, as the case may be, delete such words from his name :

Provided that the 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. Prohibition of transacting business other than chit business by a


company.––(1) Except with the general or special permission of the Government,
no company carrying on chit business shall conduct any other business.
CHIT FUNDS ACT, 2016 49

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

Provided that the 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 two years in the aggregate.

13. Aggregate amount of chits.––(1) No foreman, other than a firm or other


association of individuals or company or co-operative society, shall commence or
conduct chits, the aggregate chit amount of which at any time exceeds one lakh
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 association shall
not at any time exceed,––

(a) where the number of partners of the firm or the individuals constituting
the association is not less than four, a sum of rupees ten lakhs ;

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

(3) Where the foreman is a company or co-operative society, the aggregate


chit amount of the chits conducted by it shall not at any time exceed ten times the
net-owned funds of the company or the co-operative society, as the case may be.

Explanation:–– For the purpose 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.

14. Utilisation of funds.––(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,––
50 CHIT FUNDS ACT, 2016

(a) carrying on chit business ; or

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


of subscriptions paid by them ; or

(c) investing in trustee securities within the meaning of section 20 of the


Trusts Act,(Samvat) 1977 ; or

(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 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. Alteration of chit agreement.––A chit agreement shall not be altered,


added to or cancelled except with the consent in writing of the foreman and all the
subscribers to the chit.

16. Date, time and place of conducting chits.––(1) Every draw in a chit shall
be held on the date, at the time and place mentioned in the chit agreement and
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 provisions 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 subscribers, direct that the draw shall be conducted in
his presence or in the presence of any person deputed by him.
CHIT FUNDS ACT, 2016 51

17. Minutes of proceedings.––(1) The minutes of the proceedings of every


draw shall be prepared 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
subscribers, 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 (1) shall 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 instalments of the chit to which the proceedings
relate ;

(c) the names of the subscribers present ;

(d) the person or persons who become entitled to the prize 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 instalments ; and

(g) any other particulars that may be prescribed.

18. Copies of minutes to be filed with Registrar.––A true copy of the minutes
of the proceedings of every draw certified as such by the foreman shall be filed by
the foreman with the Registrar within twenty-one days from the date of the draw to
which it relates.

19. Restriction on opening of new place of business.––(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.
52 CHIT FUNDS ACT, 2016

(2) Before granting approval under sub-section (1), the Registrar shall consult
the Registrar within whose territorial jurisdiction 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 foreman, 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 his 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 exercise 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, sub-office, or any place of business where the chit business may be
conducted by such person.

CHAPTER III

Rights and Duties of Foreman

20. Security to be given by foreman.––(1) For the proper conduct of the chit,
every foreman shall, before applying for a previous sanction under Section 4,––

(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) of not less than one and a half times the chit amount in
favour of the Registrar ; or

(c) transfer in favour of the Registrar such other securities, being securities
in which a trustee may invest money under section 20 of the Trusts
Act, (Samvat 1977) of such value, as may be prescribed by the State
Government from time of time :
CHIT FUNDS ACT, 2016 53

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 of 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 one and a half times the value of the chit
amounts.

(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 of 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 security given by the
foreman under sub-section (1).

(4) The security given by the foreman under sub-section(1), 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 himself that
the claims of all the subscribers have been fully satisfied, he shall order the release
of the security finished 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
54 CHIT FUNDS ACT, 2016

dealing by the foreman with respect thereto by way of transfer or other


encumbrances shall be null and void.

21. Rights of foreman.––(1) The foreman shall be entitled,––

(a) in the absence of any provision in the chit agreement to the contrary,
to obtain the chit amount at the first instalment without deduction of
the discount specified in the chit agreement, subject to the condition
that he shall subscribe to a ticket 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 percent 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 purpose of


this clause if its value exceeds by one-third, or if it consists of
immoveable properties, the value of which exceeds by one-half,
of the amount due from prized subscriber ;

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

(g) to do all other acts that may be necessary for the due and proper
conduct of the chit.
CHIT FUNDS ACT, 2016 55

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

22. Duties of foreman.––(1) The foreman shall, on the prized subscriber


furnishing sufficient 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 payment of the
prize amount without any security whatsoever if he agrees 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 subscriber within seven days after the date of the
draw or before the date of the next succeeding instalments, 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 instalments,
the foreman shall deposit the prize amount forthwith in a separate account in an
approved bank mentioned in the chit agreement 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 instalments 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
instalments.

(3) Every payment of the prize amount or the amount of future subscriptions
under sub-section (1), and the deposit of the prize amount under sub-section (2),
shall be intimated to the subscribers at the next succeeding draw 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 :
56 CHIT FUNDS ACT, 2016
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
provisions of section 31 :

Provided further that the foreman may appropriate to himself the interest
accruing on the amount deposited under the second proviso to sub-section (1).

(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 instalments, if any.

23. Books, records etc. to be kept by foreman.––The foreman shall maintain


in the 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 the 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 agreement ;
and

(iii) in the case of an assignment of a ticket by a subscriber, the name


and full address of the assignee with the date of assignment 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 prized 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
CHIT FUNDS ACT, 2016 57

(iii) in the case of any deposit in an approved bank mentioned in the


chit agreement, the date and the amount of such deposit ;

(d) a register in the prescribed form showing the amounts deposited in


approved banks as required under the provisions of this Act in respect
of all chits conducted by the foreman at his office ; and

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

24. Balance-sheet.––Without prejudice to the provisions of the Companies


Act,1956 (1 of 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 relating 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 auditors qualified to act as auditors under the Companies Act,
1956, or by a chit auditor appointed under section 61 :

Provided that where a balance-sheet is audited by an auditor qualified to act


as auditor under the Companies Act, 1956 (1 of 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. Liability of foreman to subscribers.––(1) Every foreman shall be liable to


account to the subscribers for the amounts due to them.

(2) Where there are more than one foreman 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.

26. Withdrawal of foreman.––(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
unless 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.
58 CHIT FUNDS ACT, 2016
(2) The withdrawal from a chit of any one of the foreman shall not effect the
security given by him under section 20 or section 31.

CHAPTER IV

Rights and Duties of Non-prized Subscribers

27. Non-prized subscribers to pay subscriptions and obtain receipts.––


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

28. Removal of defaulting subscribers.––(1) A non-prized subscriber who


defaults in paying his subscription 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 instalments 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.

29. Substitution of subscribers.––(1) A foreman may substitute in the list of


subscribers any person (hereinafter in this Chapter referred to as the substituted
subscriber) in place of the defaulting subscriber whose name has been removed
under sub-section (1) of section 28.

(2) Every substitution referred to in sub-section (1) 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 with the Registrar within fourteen
days from the date of substitution.
CHIT FUNDS ACT, 2016 59

30. Amounts due to defaulting subscribers.––(1) A foreman shall, out of the


amounts payable by and realised 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 contributions 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 of the 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 any purpose other than for
such payment.

(3) The contributions of any 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 deduction as may be
provided for in the chit agreement.

CHAPTER V

Rights and Duties of Prized Subscribers

31. Prized subscriber to furnish security.––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 prized subscriber, he
shall give security for the due payment of all the future subscriptions to the
satisfaction of the Registrar.

32. Prized subscriber to pay subscriptions regularly.––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.
60 CHIT FUNDS ACT, 2016
33. Foreman to demand future subscriptions by written notice.––(1) A
foreman shall not be entitled to claim a consolidated payment from a defaulting
prized subscriber under section 32 unless he makes a demand to that effect in
writing.

(2) Where a dispute is raised under this Act by a foreman for a consolidated
payment of future subscriptions from a defaulting prized subscriber 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 payment 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 instalments 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 consolidated


payment of future subscriptions, it shall remain as security for the due payment of
future subscriptions.

CHAPTER VI

Transfers

34. Restrictions on transfer of rights of foreman.––(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 Registrar.
CHIT FUNDS ACT, 2016 61

(2) Any transfer of the rights of a foreman to receive subscriptions form 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 subscriber, 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. Transfer of non-prized subscriber’s right to be in writing.––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.

36. Recognition of transfer by foreman.––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 the provisions of any law
including this Act and the decision of the foreman to recognise the transfer or not
shall forthwith be communicated to the parties concerned.

37. Entry of transferee’s name in the books.––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.

CHAPTER VII

Meetings of General Body of Subscribers

38. Meetings of general body of subscribers.––(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 writing of
not less than twenty-five percent 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
62 CHIT FUNDS ACT, 2016

meeting within fourteen days of the date of receipt of such requisition, not less
than twenty-five percent 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 purpose 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
purpose by a majority of not less than two-thirds of the
subscribers to the chit present at the meeting in person or by
proxy and representing not less than three-fourths of the amount
or, as the case may be, the value of the grain, subscribed by all
non-prized and unpaid prized subscribers, if any.

CHAPTER VIII

Termination of Chits

39. Provisions for continuation of chits in certain cases.––(1) Where a


foreman dies or becomes of unsound mind or is otherwise incapacitated, the chit
may continue in accordance with the provisions of the chit agreement.

(2) Where a foreman is adjudicated an insolvent, or withdraws from the chit


under section 26, or fails 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 subscribers authorised by such resolution
may, in the absence of any provision in the chit agreement for the future conduct
of the chit, take the place of the foreman and continue the chit or make other
arrangements for the further conduct the chit.
CHIT FUNDS ACT, 2016 63

40. Termination of chits.––A chit shall be deemed to have terminated,––

(a) when the period specified there for 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, the chit shall not be
deemed to have terminated and the surviving partner or partners shall conduct the
chit in the absence of any provision to the contrary in the chit agreement.

41. Copy of assent or consent to be filed with Registrar.––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 by the surviving
partner or partners, as the case may be, with the Registrar within fourteen days
from the date of such assent or consent.

42. Refund of non-prized subscriber’s subscriptions.––Except in the cases


referred to in clauses (a) and (b) of section 40, ––

(a) every non-prized subscriber shall, unless otherwise provided 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 subscription, be entitled to get back the subscriptions
paid by such non-prized subscriber, subject to the conditions specified in
this section ;
64 CHIT FUNDS ACT, 2016
(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. Subscriber’s dues to be first charge on chit assets.––Any amount due to


the subscriber from a foreman in relation to the chit business shall be a first charge
on the chit assets.

CHAPTER IX

Inspection of Documents

44. Foreman to allow certain subscribers to inspect chit records.––Every


foreman shall, on payment of such fee not exceeding five hundred rupees as may
be specified in the chit agreement, allow the non-prized subscribers and unpaid
prized subscribers reasonable facilities on all the dates of draw or on such other
dates and within such hours as may be provided for in the chit agreement, for the
inspection of security bonds and documents, receipts and other records taken
from the prized subscribers, or furnished by the foreman as a subscriber and all the
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 position
of the chit.

45. Preservation of chit records by foreman.––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 chit.

46. Inspection of chit books and records by Registrar.––(1) Without prejudice


to the provisions of any law for the time being in force in the State, the Registrar
or an officer authorised by the Government in this behalf may inspect chit books
and all the records of a chit during working hours on any working day at the
premises 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 authorised, 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 Government in this behalf


may, after giving seven days’ notice in writing to the foreman, 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.
CHIT FUNDS ACT, 2016 65

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

47. Power of Reserve Bank to inspect chit books and records.––(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 45-N of the
Reserve Bank of India Act, 1934 (Central Act No. 2 of 1934).

(2) The Reserve Bank may, if it considers necessary, forward a copy of its
repost 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, submit 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 Government within whose
jurisdiction the registered office of the company, if the 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 necessary.

CHAPTER X

Winding up of Chits

48. Circumstances under which chits may be wound up.––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


66 CHIT FUNDS ACT, 2016

(b) if the foreman commits any such act in respect of the security 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 returned unsatisfied
in whole or in part ; or

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

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

(h) if the Registrar is satisfied that the affairs of the chit are 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 purpose of clause (d), in determining whether the foreman
is unable to pay the amount due to the subscribers, the Registrar
shall take into account his contingent and future liabilities in
respect of the chit.

49. Application for winding up.––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, Samvat 1977, and shall contain such particulars as may be
prescribed :
CHIT FUNDS ACT, 2016 67

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

(a) by non-prized and unpaid prized subscribers representing not less


than twenty-five percent 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 Government.

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. Bar to winding up proceedings.––Notwithstanding anything contained


in section 48 and section 49, no petition for the winding up of a chit shall be
entertained by the Registrar, ––

(a) if proceedings relating to insolvency are pending against the


foreman ; or

(b) where the foreman is a firm, if proceedings relating to insolvency 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) where the foreman is a company or co-operative society, if proceedings


of the winding up of such company or co-operative society are pending.

51. Commencement and effect of winding up order.––An order for the


winding up of a chit shall operate in favour of all the subscribers to whom amounts
are due from the foreman and it shall be deemed to have commenced from the date
of the presentation of the application for the winding up.

52. Injunction order.––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 under 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.
68 CHIT FUNDS ACT, 2016
53. Powers of Registrar.––The Registrar may, after hearing an application
under this Chapter, dismiss it with or without costs, or adjourn the hearing
conditionally or unconditionally or make an interim or any other order that he
deems fit.

54. Vesting of chit assets in Registrar or other person.––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 any person appointed by him for distribution amongst
the subscribers to whom amounts are due in respect of the chit.

55. Suits, etc. to be stayed, on the making of a winding up order.––No suit


or other legal proceedings shall be continued or commenced 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 up the chit and on such terms as he
may impose.

56. Notification of winding up order.––On the making of a winding up order,


the Registrar shall make an entry in his book relating to the chit and shall notify in
the Government Gazette that the order has been made.

57. Cessation of winding up proceedings on insolvency of foreman, etc. or


the winding up of the company and transfer of such proceedings.––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 proceeding under this Chapter shall cease and the distribution of the chit
assets shall, subject of the provisions of section 43 and section 52, be made by the
insolvency Court or the Court winding up the company, as the case may be.

58. Award of compensation to foreman.––(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
reasonable as compensation to the foreman for the expenses or injury caused to
him by the presentation of the application and the proceedings thereon, 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 of an application for any winding up of the chit shall be entertained.
CHIT FUNDS ACT, 2016 69

59. Right to appeal.––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 a chit may, within sixty days from the date of such decision or order, appeal to
the Government.

60. Limitation.––(1) Where an order refusing to wind up a chit has been


made under this Act, the chit shall be deemed to have been under suspension from
the date of presentation of the application to the date of such order in respect of
non-prized subscribers; and, notwithstanding anything contained 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 a 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 had 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
presentation 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 effect the rights of a subscriber
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 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. Appointment of Registrar and other officers––(1) The State Government


may, by notification in the Government 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.
70 CHIT FUNDS ACT, 2016

(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 superintendence and control of
the Registrar.

(4) If the Registrar is of opinion that the accounts of any chit are not properly
maintained and that such accounts should be 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 with 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 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. Inspection of documents in Registrar’s office.––The foreman of a chit or


any subscriber in a chit or the heirs or legal representatives of any foreman or
subscriber may, on payment of such fees as may be prescribed,––

(a) inspect th e documents of the concerned chit kept by the


Registrar ; or

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

63. Levy of fees.––(1) There shall be paid to the Registrar such fees as the
Government may, from time to time, prescribe for––

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

(b) the filing of the chit agreement of the Registrar and the registration of
the chit under section 7 ;
CHIT FUNDS ACT, 2016 71

(c) the filling 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 ;

(g) the obtaining of certified copies or extracts of documents and records


under section 62 ; and

(h) such other matters as may appear necessary to the Government.

(2) A table of fees prescribed under sub-section (1) shall be exhibited on a


notice board in the office of the Registrar.

CHAPTER XII

Disputes and Arbitration

64. Disputes relating to chit business.––Notwithstanding anything


contained in any other law for the time being in force, any dispute touching the
management of 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 claiming through a
subscriber, or a deceased subscriber to a chit ;

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

Explanation:–– For the purpose of this sub-section, a dispute touching 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 to a subscriber, past subscriber or the
nominee, heir or legal representative of a deceased subscriber whether
such debt or demand is admitted or not ;
72 CHIT FUNDS ACT, 2016

(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

(iii) 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 resumed 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 purpose 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 (1).

65. Period of limitation.––(1) Notwithstanding anything contained in the


Limitation Act, (Samvat) 1995, but subject to the specific provisions contained in
this Act, the period of limitation in the case of dispute referred to the Registrar
under 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 dispute arose, took place.

(2) The period of limitation in the case of any dispute other than 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, (Samvat)
1995, as if the dispute were a suit, and the Registrar, a Civil Court.
CHIT FUNDS ACT, 2016 73

(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.

66. Settlement of disputes.––(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 settlement of 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.

67. Procedure for settlement of disputes and powers of Registrar or


nominee.––(1) The Registrar or the nominee hearing a dispute under section 66,
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, Samvat 1977 in respect of the following matters, namely: ––

(a) summoning and enforcing the attendance of persons and examining


them on oath ;

(b) requiring the discovery and inspection of documents ;

(c) receiving evidence on affidavit ;

(d) requisitioning any public record or copies thereof from any Court or
Office ;

(e) issuing commissions for the examination of witnesses or document ; 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.
74 CHIT FUNDS ACT, 2016

(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 party to a dispute, he may order that the person who has acquired the interest in
the property may be joined as a party to the dispute and any decision that may be
given by the Registrar or the nominee on the dispute shall be binding on the party
so joined, in the same manner as if he 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 he is satisfied that it was due to a genuine mistake, order any other person
to be substituted or added as parties to the dispute at any stage of hearing of the
dispute on such terms as he thinks just.

(c) The Registrar or the nominee may, at any stage of the proceedings either
upon or without the application of either party and on such terms as may appear to
the Registrar or the nominee to be just, order that the name of any party improperly
joined be struck off.

(d) Any person who is a party to the dispute and entitled to more than one
relief in respect of the same cause of action may claim all or any such relief, but if
he omits to claim any such relief, he shall not be entitled to claim that relief, except
with the leave of the Registrar or the nominee.

68. Attachment before judgment and other interlocutory orders.––(1) Where


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 may be made,––

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

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

he may, unless adequate security is furnished, direct conditional attachment of the


said property, and such attachment shall have the same effect as if it is made by
competent Civil Court.
CHIT FUNDS ACT, 2016 75

(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 effect 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 order pending the award in a dispute
referred to in sub-section (1) as may appear to be just and convenient.

69. Decision of Registrar or nominee.––When a 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. Appeal against decision of Registrar or the nominee.––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, appeal to the State Government.

71. Money how recovered.––Every order passed by the Registrar or the


nominee under section 68 or section 69 and every order passed by the Government
in appeal under section 70 for the payment of any money shall, if not carried out, —

(a) on a certificate issued by 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
76 CHIT FUNDS ACT, 2016
(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 clause (b) shall be made
after 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. Private transfer of property made after issue of certificate void against
foreman.––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.

CHAPTER XIII

Miscellaneous

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

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

(a) refusing to registrar the chit agreement under section 7 ;

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


of section 9 ;

(c) refusing to accept any security under sub-section (1) of 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 Government Gazette by the Government in that behalf.

(2) Any foreman or other person aggrieved by the order of the Registrar
under sub-section (1) of section 34 may, within thirty days of the communication
CHIT FUNDS ACT, 2016 77

to him of such decision, appeal to the Government or to such officer or authority


as may be empowered by notification in the Government Gazette by the Government
in that behalf.

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

75. Powers of Registrar to give extension of time for filing documents.––


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

76. Penalties.––(1) Whoever contravenes or abets the contravention of any


of 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 requirement under
this Act, shall on conviction, be punishable with fine which may extend
to three thousand rupees.

(4) 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.
78 CHIT FUNDS ACT, 2016
77. Penalty for second and subsequent convictions.––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.

78. Application of fine.––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.

79. Offences by Companies.––(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 exercised 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 with the consent or connivance of, or is
attributable to, any neglect on the part of, any director, manager, secretary or other
officer shall also be deemed to be guilty of that offence and shall be liable to be
proceeded against and punished accordingly.

Explanation:- —For the purposes of this section, ––

(a) “company” means anybody corporate and includes a firm or other


association of individuals ; and

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

80. Cognizance of offences.––(1) All offences under the Act shall be


cognizable.

(2) No Court inferior to that of a Judicial Magistrate of the 1st Class shall try
an offence punishable under this Act.
CHIT FUNDS ACT, 2016 79

81. Power to compound offences.––(1) Subject to such conditions as may be


prescribed, any officer empowered by the 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 of 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 proceedings shall be
taken against him in respect of such offence.

82. Power to enter and search any place and to seize any documents.––(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, Samvat, 1989.

83. Officers to be public servants.––The Registrar and all officers appointed


by the Government to perform any function under this Act shall be deemed to be
public servants within the meaning of section 21 of the Ranbir Penal Code, Samvat
1989.

84. Power to delegate.––The State Government may, by notification in the


Government Gazette, direct that any power (other than the power to hear appeals
or to make rules) exercisable by it under this Act or the rules made thereunder may
be exercised also by any officer of the State Government subject to such terms and
conditions, if any, as may be specified therein.

85. Act not to apply to certain chits.––Nothing in this Act shall apply in
respect of ––

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

(b) any chit the amount of which, or where two or more chits were
started or conducted simultaneously by the same foreman, the
aggregate amount of which does not exceed ten thousand
rupees.
80 CHIT FUNDS ACT, 2016

86. Banks not to conduct chit business.––(1) Notwithstanding anything


contained in this Act, no bank shall commence or carry on chit business after the
commencement of this Act.

(2) Where a chit had been started by any bank before such commencement,
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.

Explanation:–– For the purposes of this section “bank” means an approved


bank or a co-operative bank as defined in clause (b-ii) of section
2 of the Reserve Bank of India Act.

87. Power to exempt.––The Government may, in consultation with the Reserve


Bank, by notification in the Government Gazette, and subject to such conditions
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 of this Act.

88. Protection of action taken under the Act.––No suit, prosecution or


other legal proceedings shall lie against the Government, the Registrar or other
officer of the Government 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.

89. Power to make rules.––(1) The Government may, by notification in the


Government 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 of the following 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 (1) of section 6 ;

(c) the particulars that may be included in the minutes of the proceedings
of a draw under section 17 ;
CHIT FUNDS ACT, 2016 81

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

(g) 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 ;

(i) 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 ;

(l) the auditing of balance sheet and the profit and loss accounts 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 nominee for settling
the disputes referred to him under section 64 ;

(o) the matters referred to in clause (f) of sub-section (1) of section 67 ;

(p) the conditions subject to which and the amount on the payment of
which composition of offences may be made under section 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 ;
82 CHIT FUNDS ACT, 2016

(s) the procedure for, and the manner of, receiving any sum payable under
this Act ;

(t) any other matter which is required to be or may be prescribed.

(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.

–––––
CHIT FUNDS ACT, 2016 83

THE SCHEDULE

(See Section 24)

Part I-Form of Balance Sheet

Liabilities Assets
1. Capital Rs. 1. Cash Rs.

Authorized Rs. 2. Balance with Banks

Issued (a) Current account Rs.


Rs.
(b) Deposit account Rs. Rs.
Paid-up Rs.
3. Investments.
2. Reserve Fund Rs.
(a) In chits Rs.
3. Deposits Rs. (b) In Government Rs.
securities
4. Borrowings. Rs.
(c) Others Rs. Rs.
5. Foreman’s liability in Rs.
tickets prized 4. Share amount due
from prized subscribers
6. Prize amount payable Rs.
(a) Secured Rs.
7. Defaulted subscriber’s Rs. Rs.
(b) Unsecured Rs.
amount payable
5. Arrears due from
8. Advance subscription Rs. prized subscribers
received
(a) Secured Rs.
9. Liability to non-prized Rs. (b) Unsecured Rs. Rs.
subscribers (Arrears
from non-prized 6. Amount due in
subscribers to be terminated chits
indicated) (a) Secured Rs.

10. Amount payable in (b) Unsecured Rs. Rs.


Rs.
terminated chits 7. Chit prize amount Rs.
paid earlier
84 CHIT FUNDS ACT, 2016

11. Auction profit payable to Rs. 8. Loans and advances Rs.


non-prized subscribers. to subscribers

9. Litigation expenses Rs.


12. Other liabilities Rs.
10. Premises Rs.
13. Profit and loss account Rs.
11. Furniture and fixture Rs.

12. Stamps-in-stock Rs.

13. Other assets Rs.

14. Profit and loss Rs.


account

Total Rs. Total Rs.


Total chit amounts of the Pa r t i cul a r s t o be
chits in force, i.e. specified in respect
running chits of a m oun t sh own
against 4, 5 and 6
(i) Amounts due from
directors or officers
of the company or
any of them either
jointly or severally
wi t h a n y ot h e r
person ;
(ii) A m oun t s d ue by
companies or firms
in which directors
of the company are
interested as direc-
tors, partners or in
the case of private
companies, as mem-
bers.
CHIT FUNDS ACT, 2016 85

Part II–Form of profit and loss account

Expenditure Income

1. To i n ter est pa i d on Rs. 1. By foreman’s commission Rs.


deposits, borrowings
etc.
2. By bonus Rs.
2. To salaries, allowances, Rs.
bonus and provident
3. by interest Rs.
fund

3. To director’s sitting fees Rs. 4. By indivisible income in Rs.


auction profit
4. To rent, taxes, insurance, Rs.
lighting
5. By rent Rs.
5. To law charges Rs.

6. To postages, telegrams Rs. 6. By net profit on sale of Rs.


and stamps investment

7. To audito’s fees Rs.


7. By other receipts Rs.
8. To filing fees Rs.

8. By loss Rs.
9. To depreciation and Rs.
repairs

10. To stationery, printing Rs.


and advertisement

11. To other expenditure Rs.

12. To balance of profit Rs.

Total Rs. Total Rs.

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