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Legal Library
THE CHIT FUNDS ACT, 1982 (Last Updated on 1st January, 2020).
All Acts
THE CHIT FUNDS ACT, 1982 (Last Updated on 1st January, 2020).
ACT NO. 40 OF 1982 · Enacted [19th August, 1982.] · 90 sections
PRELIMINARY
Section 1.
Short title, extent and commencement.
Section 2.
Definitions.
Section 3.
Act to override other laws, memorandum, articles, etc.
REGISTRATION OF CHITS, COMMENCEMENT AND CONDUCT OF CHIT BUSINESS
Section 4.
Prohibition of chits not sanctioned or registered under the Act.
Section 5.
Prohibition of invitation for subscriptions except under certain conditions.
Section 6.
Form of chit agreement.
Section 7.
Filing of chit agreement.
Section 8.
Minimum capital requirements for the commencement, etc., of a chit, and creation of a reserve fund, by a company.
Section 9.
Commencement of chit.
Section 10.
Copies of chit agreement to be given to subscribers.
Section 11.
Use of words “chit”, “chit fund”, “chitty”, “kuri”, “fraternity fund”, or “Rotating Savings and Credit Institution”.
Section 12.
Prohibition of transacting business other than chit business by a company.
Section 13.
Aggregate amount of chits.
Section 14.
Utilisation of funds.
Section 15.
Alteration of chit agreement.
Section 16.
Date, time and place of conducting chits.
Section 17.
Minutes of proceedings.
Section 18.
Copies of minutes to be filed with Registrar.
Section 19.
Restriction on opening of new place of business.
RIGHTS AND DUTIES OF FOREMAN
Section 20.
Security to be given by foreman.
Section 21.
Rights of foreman.
Section 22.
Duties of foreman.
Section 23.
Books, records, etc., to be kept by foreman.
Section 24.
Balance sheet.
Section 25.
Liability of foreman to subscribers.
Section 26.
Withdrawal of foreman.
RIGHTS AND DUTIES OF NON-PRIZED SUBSCRIBERS
Section 27.
Non-prized subscribers to pay subscriptions and obtain receipts.
Section 28.
Removal of defaulting subscribers.
Section 29.
Substitution of subscribers.
Section 30.
Amounts due to defaulting subscribers.
RIGHTS AND DUTIES OF PRIZED SUBSCRIBERS
Section 31.
Prized subscriber to furnish security.
Section 32.
Prized subscriber to pay subscriptions regularly.
Section 33.
Foreman to demand future subscriptions by written notice.
TRANSFERS
Section 34.
Restrictions on transfer of rights of foreman.
Section 35.
Transfer of non-prized subscriber’s rights to be in writing.
Section 36.
Recognition of transfer by foreman.
Section 37.
Entry of transferee’s name in the books.
MEETINGS OF GENERAL BODY OF SUBSCRIBERS
Section 38.
Meetings of general body of subscribers.
TERMINATION OF CHITS
Section 39.
Provision for continuation of chits in certain cases.
Section 40.
Termination of chits.
Section 41.
Copy of assent or consent to be filed with Registrar.
Section 42.
Refund of non-prized subscribers’ subscriptions.
Section 43.
Subscribers’ dues to be first charge on chit assets.
INSPECTION OF DOCUMENTS
Section 44.
Foreman to allow certain subscribers to inspect chit records.
Section 45.
Preservation of chit records by foreman.
Section 46.
Inspection of chit books and records by Registrar.
Section 47.
Power of Reserve Bank to inspect chit books and records.
WINDING UP OF CHITS
Section 48.
Circumstances under which chits may be wound up.
Section 49.
Application for winding up.
Section 50.
Bar to winding up proceedings.
Section 51.
Commencement and effect of winding up order.
Section 52.
Injunction order.
Section 53.
Powers of Registrar.
Section 54.
Vesting of chit assets in Registrar or other persons.
Section 55.
Suits, etc., to be stayed on winding up order.
Section 56.
Notification of winding up order.
Section 57.
Cessation of winding up proceedings on insolvency of foreman, etc., or the winding up of the company and transfer of such proceedings.
Section 58.
Award of compensation to foreman.
Section 59.
Right to appeal.
Section 60.
Limitation.
APPOINTMENT OF OFFICERS AND LEVY OF FEES
Section 61.
Appointment of Registrar and other officers.
Section 62.
Inspection of documents in Registrar’s office.
Section 63.
Levy of fees.
DISPUTES AND ARBITRATION
Section 64.
Disputes relating to chit business.
Section 65.
Period of limitation.
Section 66.
Settlement of disputes.
Section 67.
Procedure for settlement of disputes and powers of Registrar or nominee.
Section 68.
Attachment before judgment and other interlocutory orders.
Section 69.
Decision of Registrar or nominee.
Section 70.
Appeal against decision of Registrar or nominee.
Section 71.
Money how recovered.
Section 72.
Private transfer of property made after issue of certificate void against foreman.
MISCELLANEOUS
Section 73.
Advisory role of Reserve Bank.
Section 74.
Appeals.
Section 75.
Powers of Registrar to give extension of time for filing documents.
Section 76.
Penalties.
Section 77.
Penalty for second and subsequent convictions.
Section 78.
Application of fine.
Section 79.
Offences by companies.
Section 80.
Cognizance of offences.
Section 81.
Power to compound offences.
Section 82.
Power to enter and search any place and to seize any documents.
Section 83.
Officers to be public servants.
Section 84.
Power to delegate.
Section 85.
Act not to apply to certain chits.
Section 86.
Banks not to conduct chit business.
Section 87.
Power to exempt.
Section 88.
Protection of action taken under the Act.
Section 89.
Power to make rules.
Section 90.
Repeal and saving.