 the chit funds bill, 1980 l-to be/as introduced in 10k sabha 71 - page (iii), 1 ine 1 5, -!:ll: "lea vy" ~ "levy" 2 page 1, in the marginal heading to cl~use 2,-~ "definitionj' ~ "defini tionsl' 3 page 2, in the marginal citation ag~inst line 1,-fqi "1948" ~ "194ry" 4 page 14, line 28,-!or "towrads" ~ "towards" 5' - page 18, 1 ine 10 , -fq1: "subscribes"r§aq "subscribers" , page 24, line 49,-!ol: "bill" ~ "just" 7 p~~c 27, line 10,-after "foreman" insert "such" 8 page 29, in the m::trgin;:)l heading to clause 87,-1qi: ''un ter" nll!l "under l1 9 page 31, ~g!1inst sno11, under the head "liabilities",-fqr "profi ts" ~ ''profit'' 1 0 page 40,-!qi line 8 read "cl~use f-4 provides f'or the ref'erence of' any dispute touching tho" 11 page 40, line 28,-for "p 9rtie s of" ~ ''parties to"  clml'ter'i p, • ,"cuuas 1 short title, extent and· collude_amat • 2 deftnitioluli: 3"  aatr toovemide, other laws, memoranlium,art1det,  etc  chapter it  ralmfta'i'ion or chits, commencement and conduct or chl'i' busihaiof prohibition of chits not sanctioned or registered under the act 5 prohibition of invitation for subscriptions' eeept 'un"" certain conditio  e form of chit agreement 7 filing of chit agreement' 8 minimum capital requirements for the commencement, etc, o! a chit, and creation of a reserve fund, by a company 9 commencement of chit 10 copies of chit agreement to be gi'yen to subiclliben~ 11 prohibition of the use of the words "chit", "~hit fund", ~hittv' or "kurih - 12 prohibition of transacting business other than chit busmell by a compallf 13 aggregate amount of chits 1f utilisation ot funds 15 alteration of ehit agreement 16 date, time, ,and, place' of conducting ,clillls  1' minutes of proceedings  18 copies oj minutes to be filed with registrar 19 restriction on opening o~ new place of business chapter· iii rights and dutij!8 or· j'ori:kalf, ~ security to be given· by foreman' 21 rt~· of· ·foreman ' 22 duties of foreman 23 books, records, etc, to be kept by foreman 204 balance-sheet 25 liability of foreman to subscribers  38 withdrawal of foreman  chapter iv rlgb'l's and duties of non-prized subscribers cuusbs27 non-prized subscribers to pay subscriptions and obtain receipts 2& removal of defaulting subscribers 29 substitution of subscribers 30 amounts due to defaulting subscribers  chapter v rights and dunes of prized subscribers31 prized subscriber to furnish security 32 prized subscriber to pay subscriptions regularly 33 foreman to demand future subscriptions by written notice  chapter vitransfers 34 reatrictions on transfer of rights of foreman 35 transfer of non-prized subscriber's rights to be in writing 36 recognition of transfer by foreman 37 entry of transferee's name in the books  chapter vii meetings 01" general body of subscribers38 :meetings of general body of subscribers  chapter viii termination of chits39 provision for continuation of chits in certain cases 40 termination of chits 41 copy of assent or consent to be filed with registrar 42 refund of non-prized subscribers' subscriptions 43 subscribers' dues to be first charge on chit assets  chapter i¥ inspection of documents4t foreman to allow certain subscribers to inspect chit recorda 45 preservation of chit records by foreman 46 inspection of chit books and records by registrar 47 power of reserve bank to inspect chit books and recorda  chapter x winding up of chits48 circumstances under which chita may be wouncl up  application for winding up 50 bar to winding up proceedings  culjllls51 commencement and effect of winding up order 52 injunction order 53 powers of registrar 54 vesting of chit assets in registrar or other period 55 suits, etc, to be stayed on winding up order 56 notfication of winding up order 57 c~'ation of winding up proceedings on insolvency of foreman, etc, or the winding up of the company and transfer of such pro-~p i 58 award of compensation to foreman 59 riaht to appeal 60 limitation  chapi'er xiappointment of ol-'flcers and leavy 01' j'i:iis 61 appointment of registrar and other officers 62 inspection of documents ill registrar's office 63 levy of fees  chapterxll disputes and arbitranon64 disputes relating to chit business 65 period of limitation 66 settlement of disputes 67 procedure ior settlement of disputes and powers of regiatrat 01' nominee 68 attachment before judgment and other interlocutory ordera 69 decision of registrar or nominee 70 appeal against decision of registrar or nominee 71 money how recovered 72 private transfer of property made after issue of certificate void against foreman  chapter xiii miscellaneous73 advisory role of reserve bank 74 appeals 75 powers of registrar to give extension of time for filing document 76 penalties 77 application of fine 78 offences by companies 79 cognizance of offences 80 power to compound offences 81 power to enter and search any place and to seize any documentl a officel's to be public servants  cia~83 power to d~te 84 act not to apply to certain chits 65 certain banks not to conduct chit busin- 86 power to jtujapt 87 protection of action aken lunder rille ac:l 88 power to make rules o •• ,,apeal 811d,wdng  the schedulea bill to provide for the regulation of chit funds and formatters connected the-rewtth -be it enacted by parliament in the thirty-first year of the republic of india as follows:-chaprer i  p'rellminary'i 1 (1) this act may be called the chit funds act, 1980 (2) it extends to the whole of india except the state of jammuland  kashmir (3) it shall come into force on such date as the central govemment may, by notification in the official gazette, appoint and dufetent dates short title utent and commencement to may be appointed for different states z in this act, \ullesa the context otherwise, req\liras,-deftnitlod 23 of 19~ 88 of 18" 15 ~ of 19'70 21 of 1976 (a) "approyed bank" means the state bank of india constituted under section 3 of tile state bank of india :act, j1i55, ~r a subsidiary bank constituted under section 3 of the state"amk of india (subsidiary banks) act, 1959, or a corresponding new bank  «:anbtituted under section 3, of the banking compadies '(acquibition ,and transfer ofunder1ia~gs) act, 1970,ior a regioaal rlualbank :established  jmder aection 3 of the &ilonal' rural banks act, i9t6, or a corresponding new bank constituted under section 3 of the ,banking; cmnpaaies j~acquisttion '8lld -tresferof 'undertak1nga) 20 act, 1980, ur a bankin& company as defined under clauee(c) of  mt 1980 tion 5 af the banking regulation act, 1949, or a banking institution notified by the central government under section 51 of that act ~ such other banking institution as the state government may, m consultation with the reserve bank, approve for the purposes of thds act; 5 (b) "chit" means a transaction whether called chit, chit fund, chitty, kuti or by any other name by or under which a person enters into an agreement with a specified number of persons that everyone of them shall subscribe a certain sum of money (or a certain quantity of grain instead) by way of periodical instalments 10 over a definite period and that each such subscriber shall, in his tum, as detennined by lot qr 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 15 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 20 a liability to pay future subscriptions; (c) "chit agreement" means the document containing the articles of agreement between the ~orcman and the subscribers relating to the chit; (d) "chit amount" means the sum-total of the subscrioptions 2r) payable by all the subscribe s i;ar any instalment of a chit without any deduction of discount or otherwise; (e) "chit business" means the business of conducting a chit; (f) "defaulting subscriber" means a subscriber who has de;· faulted in the paym~nt of subscriptions due in accordance wioth the 3n terlds 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 distrlbu- 35 tion among the subscribers or for both; (h) "dividend" means the share of the subscriber in the amount of discount available under the chit agreement for rateable distribution among the subscribers at each instalment of the chit· - (1) "draw" means the mflnner specified in the chit agreement 4[) for the purpose of ascertaining the prized subscriber at any instalment of the chit; (;) "foreman" means the person who under the chit agreement is responsible for the conduct at the chit and includes any person discharging the functions of the foreman under section 39; 45 (k) "non-prized subicriber" does not include a defaulting aub jlriber; (0 "preacribed" means prescribed by rules made under tbw act; (m) "prize amount" means the difference between the c:hit amount and the discount, and in the case of a fraction of a ticket s 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; (n) "prized subscriber" means a subscriber who has either re-10 ceived or is entitled to receive the prize amount; (0) "registrar" means the registrar of ch~ts appointed tinder ection 61, and includes an additional, a joint, deputy or an auf& tant registrar appointed under that section; 1011931 (p) "reserve bank" means the reserve bank of india con:;tituted under the reserve bank of india act, 1934; 15 (q) "state government", in relation to a union territory, me8jui the administrator of that union territory appointed by the president under article 239 of the constitution; (r) "subscriber" includes a person who holds a fraction of a 20 ticket and also a transferee of a ticket or fraction thereof by assignment in writing or by operation of law; (8) "ticket" means the share of a subscriber in a chit 3 save as otherwise expressly provided in this act,-act te override other lawsm  randum, articlm, etc (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--iaws 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 30 (b) any provision contained in the memorandum, articles, byelaws, agreement or resolution aforesaid, shall to the extent to which it is repugnant to the provisions of this act, become or be void, as the case may be  chapter ii35 registration of chits, commencement and condttcr of chit bttsinms 4 (1) no chit shall be commenced or conducted without obtaining the previous sanction of the state government within whose jurisdiction the chit is to be commenced or conducted or of such officer as may be empowered by that government in this behalf, and unless the chit is regil-40 tered in that state in accordance with the provisions of this act: prohibition of chits not sanctioned or registered under the act provided that a sanction obtained under this sub-section shall lapse if the chit is not registered within six months trom the date of such sanction or within such further period or periods not exceeding six months in the aggregate as the state government may, on application 45 made to it in this behalf, allow (2) an application for the purpose of obtaining a sanction under sub-5ection (1) shall be made by the foreman in such form and fn such manner u may be prescribed (3)'''''rtie prevtous'sanction"refened'to in'sub-4eetfmp(j) _y'be refuaed, if the foreman,-(ol had been' eollvicted-of any offence under'thti aet 'or under any other ac!t regulating chit business; 'or (b), had, defaulteclin, the payment of fees or the tuid& of any 5 iwemedt or ,reoerd, required, to be paid or· ,filed udder tbiiact or had violated any of; the· proviaiors of thia act or the rules, made thereunder; or (e) had been eonvicted ot any offence involving, moral tlupitude and sentenced to imprisonment for flny such offence unless a period 10 of five years has elapsed sincf' his release: provided that before'refusing, any such sanation, the foremanshall be given a reasonable opportunity of being heard (4) the order of the state government and; subject to the pruvibiod8 ot'sab-section' (5~, the order of the officer empowered under sub-section is (1)- t:dng' or refusing previous·sanction under this section shall be final (5) any person aggrieved by the refusal to issue previous sanction by an oftleer empowered undet" sub-section (1) may appeal to the state 60vernment within thirty days of the "ate of communication to him of such refusal and the decision of that government on such appeal shan be 20 final 5;noper8ol1 shall issue (lr cause to be issued any notice, circular, prospectus,' proposal or other document inviting the public to subseribe for tickets in any chit unless such notice, circular, prospectus pronosal or decumeabcontains a statement that the previous sanction required under 25 see&iod' 4t has ~ obtained and the particulars of such sanction prob1bwon o{ invit tion for subacjip tiona except under  certain condwona :ron of chit agreement 1'-, (1) every chit agreement shall be in duplicate and shall be signed by the subscribers or by any person authorised by them in writing and the foreman and attested by at least two witnesses and it shall contain the following particulars, namely~-30 (a)' full 'name' and reeidential adcbess of' every subseriber; (b)! the,number of tickets including the fraction of a ticket held by' eaeh' subtieriher; (e) the number 'of' instalments; add the aldould paya'blefor eaah tictetat fiver'! instalment; 35 (d) the date of commencement and the duration of the chit; () tt· 1d88iilir of 8bcel'taini~, the prized subscriber at each idltali l! t; (f) the maximum amount of discount whleh the prized mbiiedber: has to forego at any instalment; 4d (g)therldgde',odpropoljuon in ,which the disooujat isdijtrtbutable by way of dividend, foreman's commission 01' remueratton or expenses for rwming the drlt, g the caee may b8;  qi) the date, time ~nd pjace at wluch the ehit ie ,jio':be ,ctrp,wn; ' '  :'  ~     - ,  ~ ,', ,'' i ' (i) the instalment at which the foreman is to get the cl1tt alnautm; (j) the name of th~ approved bank in 'which ehjt modeys shall be deposited by the foreman under the provisions of" t'hmi act;·  (k) where the foreman is an individual, the manner in which:a chit shan 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 hable in case of violation' of gy i»f the 10 pro\' ;sions of the chit agreement; :  (m) the conditions tinder which a subscriber shall be  treated as a defaulting subscriber; (n) the nature and particulars of the security to be offered by the foreman; 15 (0) the dates on which and time during which the foreman shall, subject to the provisions contained in section 44, allow inspeetlon of chit records to non-prized and unpaid prized subscribers; 20 (p) the names of the nominees of each subscriber, that is to lay, the names of the pm"selt,:; t~j whom the bene1its accruing to the 1ut criber under the ('hit m(iy be paid in the case of the death of tile subscriber or when he is otherwise incapable of making an qree ~t; ~ (q) any other particulars that may, from time to time, be prescribed ~s expla1lation,-for the purposes or this sub-section, it shall be sumcient if the sig:1att1l'f> d: cci<:h subscriber is obtained in separate copies of the agreement (2) the duration of a chil shall not extend ~eyond a period of five years from the date of its commencement: 30 provided that the state government may permit the·duration of a chit up to a period of ten years if it is satisfied that it is' neceuary 10 110 4" having regard to,-(a) the financial condition cif the foreme;  - i • (b) his method~ of uperatijn;· 3s (c) the interests of prospective subscribers; (d) the requirements as ~o security; and (e) such other factors as the circumstances of the case may re-quire (3) the amo,\ult of discount referred to in clause (f) of sulhection 40 (1) shall not exceed thirty per ct>nt of the, chit amount (4) where the prized subscriber ~t any instalment of, the, chit is required to be determined by auction ['nd tnore thtm one 'pentron oller the maximum discount, the prized subs-crjhl'" shall b~ determin~ by "lot 1' ( (i)  ," ellit , ••• t ikall be -tuad ill duplicate , the be-~~ wit,iul~ ~strar    (j) t_ ~~iz ~l retain one copy of the chit atreement aftg return thtt' •• plicate to the farernaa with an endorsement that the chit ag,reement has been registered: s plrovided that the reeis:trarm~y refuse to register the chit agreement en anyone or more of ute following grounds, namely:-'(e) that the security offered by the foreman under section 20 is 'insglleient; (b) that the foreman had been convicted of any offence udd  10 'thtl act or under any other act regulating chit business; (c) that the foreman had defaulted in the payment of fees or the ftlm, of any statement or record required to be paid or flied under this act or had violated any of the provisions of this act or the niles made thereunder: 15 _ fl;ovided further that before refusing to register a chit under the first proviso, the foreman shall be given a reasonable opportunity of being heard, • (3):~",efy ~dorsement made under sub-section (2) shall be conclujpve, ,evidence that the chit is duly registered under this act 20 i (1) notwithstanding anything contained in the companies act, 1956, but subject to the provisions of this act, a company shall !lot com-·ruence' or earry on chitbuliiness \jnless it has a paid-up capital of not less than rupees one lakh, (2) every company having a paid-up capital of less than rupees one 25 'i !lkh and carrying on chit business on the commencement of this act, shall, befjre the expiry of a period of three years from such commeneement, increase its paid-up capital lo not less than rupees one lakh: minimum capital requirement, for the commencement, etc, of a chit, anel ereationo! a reserve fund, by a company provided that the state government may, if it considers it necessary in the public interest or for avoiding any hardship, extend the said period 30 at three yufs iu, respect of any company by such further period or p,erjocli not ~caedinl two yeats in the aggregate: provided further that no such company shall commence any new emit the duration of which would extend beyond the said period of three yeare: or such extended period or periods under the first proviso unless it in- 35 creases 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, shah;' out of the balance of profit of each year as diiclohd id ita proat 8j1d loss account and before any dividend is declared, transfer to such reserve fund, a sum equal to not less than twenty 40 per cent of such profit (4) no com»any shall appropriate any sum or sums from the reserve fund e~cept with the prior approval· of the registrar and, for the purpose of obtuliql ncb approval, it  shall make all application in the pr8lcribed fg~,to the, bepuar explaiqiu, the circ\lmstances relating to such ap- 4s pr~ ' •   4 -,, ",-_~ "_ •• - ~  _, '' 10 ,  ,~t •• - ",l·_t ',,(i) ·£ftl) fmoeman shall, after all the tickett apec:iaed,mtba chlt aldeemeat are· fully subscribed, ale a declaration to tmt e8ect with  registrar mene  rnent of chit (2) ~ soon as may be dter a declaration :ia tiled uncler iubsectioll 5 (1), th"registrar shall, after satisfying himself taat au the requir ments relaij,na to 8anction, registration of chit add other matters have been duly complied with, grant a certificate of commencemellt totli foreman  (3) no foreman shall commence any auction or the draw of j1ny chit i (lor appropriate any chit amount wue811 a certificate of commedeemern referred to in sub-section (2) ~,; obtained by him 10 (1) a foreman shall, as soon 81 may be after he has obtained the certificate of commencement under sub-section (2) of section 9, but not later than the date of the first draw of the chit, furnish to every sub-15 scriber, a copy of the chit agreement certified to be a true copy copies r chit al1'eement t be aiven to subscribers (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 211 11 no person shall carryon chit business unless he uses as !,jart of his name any of the words "chit", "chit fund", "chitty" or "kuri't an,d no person other than a person carryini an chit businqs shall use' as part of his name any such word 12 (1) except with the general or special permission of the state 2) government, no company carrying on chit business shall conduct any other business (2) where at the commencement of this act, any company is carryina on any business in addition to chit business, it shall wind up sueh other business before the expiry of a period of three years from such commence-30 ment: prohibition of the ijse of the words "chit" "chit ' fund", "chtttv" or "cu,;", prohibition gl  tradmctlnl btjslmml other than chit tuarlled by a colapan), provided that the state government may, if it considers it nece81817 in the public interest or for avoiding any hardship, extend the said period of ~ years by such further period or periods not exceeding two years in the aggregate 13 (1) no foreman, other than a firm or otller 88iociation of individuals or a company, shall commence or conduct chits, the acgregate chit amount of which at any time exceeds ten thousand rupees agre-"ate amount ot cb1ts (2) where the foreman is a firm or other associatioll of inciivittuals, the aggregate chit amount of the chits conducted by the firm :>r other '\ ,  40 association shall not at any time exceed,-(a) where the numbec of partners of the arm or theindi\1iduala constituting the association is dot leas tam tour, - iuiil et forty thousand rupees; (b) in any other case, a sun:: calculated on the b~sisof ten thousand rupees with respect to each slolch partner ·btui~w 5 tj) where the fortman is a company the aggregate chit aidoudt of the chits colllhtctecl by itshau not at any time exceed ten timet the at as&ets of the company e:rptamtion-for the purposes of tills sub-section, ":net assets" ihall mean the total assets of a eompany less the total outside liabilitiel, bad and doubtful debts as certified by the auditors for which no prcmiod baa been made and other intangible assets such as deferred revenue expenditure as disclosed by the last audited balance-sheet of the company utiu  uon u (l) n<> person carrymg on chit business shall utilise the' moneys i')f fimda collected in respect ot such business except for-(a) carr)'ing on chit business; or (b) giving loans and advances to non-prized subscribers on the security of subscriptillns pald by them; or (c) investng in trustee securiiit!s wiclin the meaning of sec-hon 20 of the indian trusts act, 1882; or t 5 2 of 1- (d) making deposits with approved banks mentioned in the chit aareement (02) where any per'sun carrying un chit bublness has l1tililed the moneys collected in respect of such business before the commencement of this act, otherwise than for the purposes spec,iied in sub-sectton (1) ~(\ lie shall secure that so much o~ such moneys as nave not been realiled 'before such commencement are rea:ised before the expiry of a period of three years from such commencement: provided that the state govcrn:nent may, if it considers it nace  "y in the public interest ql' for avoiding any hardship, extend the said period 2~ of three years by such further period or periods not exceeding two years in the aggregate ,!::tion 15 (1) subject to the provisions of this act and of the chit agreement,  t the subscribers to a chit may, by a special resolutlon-(a) alter- or add to the chit agreement such provisions as may be go necessary in respect qf all or any of the following matterb, namel!y:_ (i) the date on which, or the time at which, or the place where, the chit is to be conducted; (ii) , the reduction of the chit amount· , (iii) the continuance of the chit in accordance with the pre- 35 visions of section 39; (iv) the suspension or the prolongation of the chit; (v) the termination of the chit; (b) omit 'the name of any approved bank mentioned in the chit agreement or add the name of any approved bank; or 40 (c) alter any ?f the arti~les of the chit agreement that :may be found to be mcollslbtet:jt with any oj the provisions of this act orule rules mad~,the~under {2) 'any &iteration, ~ddition or omission made undersubseetton (1) ~aul bebe vabl~d as if1i~kt ,is originally contained in th, chit agreement aru:i 45 - ' au led, ~~  ' ,,~, ~anner, u:l alterath),n, addition or amlulon by a ip~a!!~~:"""" ', ,'  , , tj) a uue copy of every special resolution passed under sub-section (1) or~ (2) shall be med by the foreman with the registrar within twenty-one days from the date of such resolution (4) the foreman ihall-«(i,) inpply to every subscriber, by registered post or otherwise, a copy of every special resolution paued under sub-section (1) or sub-ction (2) within seven days from the date of such resolu;;ionj and (b) file with the registrar along with a copy of such resolution the acknowledgements given by the subscribers of the receipt by them of the copies of such resolution 10 15 exp14n4tion-for the purposes of this section and section 38, "special i'8iowtion" means a resolution which is passed at 8 meeting of the general body of subscribers specially convened for the purpose, by 8 majority 01 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 me grain, subscribed by all the non-prized and unpaid prized subscribers, if any 16 (1) every draw in a chit shall be conducted on the date, at the time and place mentioned in the chit agreement and in accordance with the provisions contained therein 20 date, time and place af conducl ing chits (2) the registrar may, if he considers it necessary, ciirect that the draw shall be conducted in his presence or in the presence of any person deputed by blm  0  :: ~: 17 (1) the minutes of the proceedings of every draw shau be prepar-minutes 25 ed and entered in a book to be kept for that purpose immediately after ~he of proceeliclosure of the draw and shall be signed by the foreman, the prized subings scribers, if present, or their authorised agents, and at least two other subscribers who are present, and where a direction has been made under sub-section (2) of section 16, also by the registrar or the period 30 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 dr8iw was held; (b) the number of the instalment of the chit to which the pro-3s ceedings 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; 4(1 (f) full partinlars regarding the disposal of the unpaid prize amount, if any, in respect of any previous instalment; and (go) any other particulars that may be prescribed 18 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 4s within fourteen days from the dab! of the draw to which it relates copies of minutes to be flied with be  11 (1) no per~ carrying on· chit business shall open a new plliee of business without ubtainin'g the prior· approval of the begja  witiill whose territorial jurisdiction its registered office' or, sthe car may be the place or the principal place of business is situated ~tiod on openinl af new place af bui1d- (2) before granting approval under sub-section (1), the~trar s shau consult the registrar of the state within whose territqrialjurisdiction the new place of business is proposed to be opened and shall also keep in view the linancial condition and methods of operation of ~e foreman, 'the extent to which public interest will be served by the opeftlng of the new place of business and such other matters as may be presctibed 10 (3) for the purposes of this section, "place of businesa" shall jmbade any branch office, sub-01fice 01' any place of business where the chit business may be conducted by such person  chapter 111 r1ghts and duties of foreman issecuruy 18 (1) for the proper conduct of the chit, every foreman shall, before to be liven filing a decl8l'jjtion under sec·tion 9,-by foreman (0) deposit in an approved bank mentioned in the chtt agreement, an amount equal to the chit amount in the name of the registiar; or (0) transfer government securities of the face value or muket 20 value (whichever is less) of not less than qile 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 indian trugts act, 1882, of such value, as may be prescribed 25 lolita, by the state government from time to time: provided that the value af the securities referred to in clause 1c) shall not, 111 any case, be less than one and a half times the value of the chit amount (z) where a foreman conducts mol'e than ofte chit he sball flllrnish 30 8ecurity 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 subatitution of the ~ty: provided that the face value or market value (whichever is len) of the 35 substituted secqrity shall nqt be less than the value of the security given by the foreman udder sub-section (1) (4) the security given by the foreman udder sub"'lectian (j) or iil1j security sub$tjtuted under sub-section (3), shall not be liabie to be attached in execution of a decree or otherwise until the chtt is'tlerminated and the clairm of all the subscribers are ful1y satisfied, 40 (5) where the chit is terminated anel tbe be8iiuar jaaa eatilfied thimself that the claims of all the subscribers have been fullyaatuw· he shall· order the release of the seeurlty fumfshed by the foremua ,  'ub--~ (l), or the security su~stituted under u~seotiqa w, ' ~ qme may be, and in cioiag 10, he shall follow such procedure a m8y be plescribed (6) notwithstanding anything to the contrary contained in any other 5 law for the time being in force, the security furnished under this section , ~l not be d~t with by the foreman during the currency of the chit to which it relates and any dealing by the foreman with respect thereto by way of transfer or other encumbrances shall be null and void  21 (1) the foreman shall be entitjed,-rijhtl of f~ 10 (a) in the absence of any provision in the chit agreement to the contrary, to obt~ the chit amount at the first instalment without deductio~ of the discount specified in the chit agret:olent subject to tbe condition that he shall subscribe to a ticket to the chit: provided that in a case where the foreman has 'subscribed to more than one ticket, he shall not be eligible to obtain mure than one chit amount in a chit; - (b) to such amount not exceeding five per cent of the chit amount as may be fixed in the chft agreement, by way of commission, remuneration or for meeting the expenses of running the chit; 20 (c) to receive and realise all subscriptions from the subscribers and' to distribute the prize amounts tn the prized sublscribers; (d) 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 mfticient for the 25 purposes of this clause if its value exceeds by one-third, or if it consists of immovable properties, the value of which cx~~eds by one-half, of the amount duet'rom the prized subscriber; (e) to substitute subscribers fn place of defaulting subscribers; and 30 u) to do all other acts that may he necessary for the due and proper conduct cjf the chit (2) where any dispute arises with regard to the value of the property ~ as security under elause (d) of sub-section (1) it !'hall be referred to the registrar for arbitration under section 64   ( 35 zz (1) the foreman shall, on the prized subscriber furnishing suffthue or c;iejltsecurity for· the due payp1ent of future subscriptions,be bound to foreme pay 'him the prize amount: i' provideci that the prized subscriber shall be entitled to the payt ment of the prize amount without any security whatsoever if he agrees to 40 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 subseriber within seven days after the date of the' draw or 'belore the date of the next succeeding instalment whichever is earlier: provided further that wlaere the prize amolllltt, haa been paid to the 45 prized subscriber under the first proviso, the ~t d~ucted shall be deposited by the foreman in 1m approved bank mentioned in the· ehit ae!i'e8lnent and he :;hall not withdraw the amount so deposited except' for the payment of future subscriptkns  - 2) if owina to the default of the prized subscriber, the prize amount due in respect of any draw remains unpaid until the next succeeding s draw, the foreman shall deposit the' prize amount forthwith in an appro\1-ed bank mentiuned in the chit agreement and intimate i'n writing the fact of such deposit and the reasons therefor to the prized subscriber and the registrar (3) every payment of the prize amount or the amount of future sub-10 scriptions 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 ) s 'if what he is entitled to under clause (b) of sub-section (1) of section 21: - provided that where the foreman is himself a prized subscriber, he shall be entitled to appropriate to himself the prize amount subject to his complying with the provisions of section 31: provided further that the {oreman may appropriate to himself the i'n-20 tercst acl'tuing on the amount deposited under the second proviso to subsection (1) (5) the foreman shall not admit any person as a imlbscriber to a chit, if, by such admission, the total number of tickets mentioned in the chit ~i{reement is increased 3, (6) the foreman shall distribute among the subscribers, in accordance with the chit agreement, the dividend either in cash or by way of adjustl1ent towards the subscriptions payable for the next instalment, if any 23 the foreman shall maintain-(a) a register containing-30 books, records, etc, to be kept by foreman (i) the names and full particulars of the auhacrlbers 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, 35 the name and full address of the a_gnee wtth the date of usignment and the date on which the assignment had been recognlll8d by the foreman;    proceedings of each (b) a book containing the mi"nutes of the draw; (c) a ledger containing-(i) the amounts paid by mlbscribers in each chit and the dates of such payments; (ti) the amounts paid to the prlzed subscribers and the da_  h ~ of suc payments; and (iii) in the case of any deposit in au 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 deposit-s ad 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 10 - without prejudice to the provisions of the companies act, balance-1011816 1956, every foreman shall prepare and file with the registrar sheet within such time as may be prescribed, a balance-sheet as on the last date 01 each calendar' year, or, as the case may be, the financial year of the foreman, and a profit and 10$ account relating to the year of acrowit, in j s 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 ajuclitors 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 nudited by an auditor qualified i of 1158 20 to act as auditor under the companies act, 1956, a chit auditor appointed under section 61 shall have the right to audit th2 balance-sheet at any time if so authorised by the regi9trar in this behalf 25 (1) every foreman shall be liable to account to the subscribers f~ liabillt, the amounts due to them '  ot foremlul to subscri-bers (2) where there are more than one foreman in a chit, each one of them jointly and severally and, if the foreman is a firm or other association of individuals, each one of the partners or individuals thereof join'tty 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 ~o withdrawal of foreman 26 (1) no foreman, or where there are more than one foreman in a chit, none of them shall withdraw frwn 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 h~ been filed with the registrar' under section 41 3s (2) the withdrawal from a chit of anyone of the foremen shall not dect the security given by him under section 20  chapter iv rights and duties 01' non-prized subscribers:1 21 every non  prized subscriber sh~l pay his subscription on the ~ 'pates ~d'time~~and at the places mentioned in the chit agreement and  shall, on such paym~nt be entitled i to obtain a receipt from the fore-, ' ,,'  mala i'; nonprized subscribers topa, sublcriptiona and o~ ~ llemoval of defauluni subscribers 28 (1) a noh-prized wbscriber who defaults in paying, his subacrip tion in accordance with the terms of the chit agreement shall be liable to have his name removed £rom the list of subscribers and a written notice of such removal shall be given by the foreman to the defaultina subscriber within fourteen days of the date of such removal: provided that if the defaulter pays the de£aulted instalment with interest at such rate as may be prescribed within seven days of the date of receipt of sueh 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 10 thereof be entered in the relevant book maintained by the foreman (3) a true copy ol the entry refen-cd to in sub-section (2) shall be rued by the foreman with the registrar within fourteen days from the date of removal -  ll  w ••• i (4) any defaulting subscriber aggrieved by the removal of hia name 15 from the list of subscribers may, within seven days ot the date of receipt of the notice of removal refer the matter to the registrar for arbitration under section 64 substitution ofsu criben zt  (1) a foreman may substitute in the list of subscribers any person (hereafter in this chapter referred to as the substituted subscriber) in ao place of the defaulting subscriber whose name has been removed under bubo-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 as the registrar within fourteen days from the date of substitution amounts due to defaulting sub_ scribers 30 (1) a foreman shall, out of the amounts payable by' and realized from the substituted subscriber towrads the instalments relatable to the period ~fore the date of the substitution (including the arrear due frum the defaulting subscriber), deposit, before the date of the nut 30 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 deductioda  may be provided for in the chit agreement, and shall inform the de1aultidg subscriber as well as the registrar of the fact of such depoait and ahall 35 not, withdraw the amount so depo&ited except for payment to the defaulting subscriber (2) the amount so deposited under sub-section (1) shall be paid to the defaulting subs<:riber as and when he claims the amount and the amount so deposited shall not be withdrawn by the foreman for any 40 purpose other than for such payment (3) the contributions of any defaulting subscriber who baa _t been substituted till the termination of the chit shall be paid to him within flfteen days from the date of termin~tion of the eh1t subject to 'web' deductions as may be provided for in the chit agreement 4s chapter v rights and duties of prized 8lj'bscjtibj:as 31 every prized subscriber shall, if he has not offered to deduct the amount of all future subscriptions from the prize amount due to him, furnish, and a foreman shall take, sufficient security for the due payment so of all fuwre subscriptions and, if the fa,eman is a prized subscriber, he shall give security tor the due payment of all the future subscription&' to the satfbfa~tion of the registrar d every prized subscriber shall pay his subscriptions regularly prized on the dates and times and at the place mentioned in the chit agreement subscriber 5 and, on his failure to do so, he shall be liable to make a colllolidated to pay payment of all the future subscriptions forthwith ~p-r,warly 33 '(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 et!ect in writing foreman to demuu1 futurt ' ilubicrlp , 10 tiodi ' written notlc& '  ~ (2) where a dispute is raised under this act by a foreman for a consolidated payment of future subscriptions from a defaulting prized sud-scriber and if the subscriber pays to the foreman on or before the date to which the dispute is posted for hearing the arrears of subscriptions till that date together with the interest thereon at the rate provided is tor 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 liio by the subscriber, the foreman shall be at liberty to realise, in execution of that order, all future rubscriptions and interest together with the costs, if any, less the amount, it any, already paid by the subscriber in respect thereof: '  r' ,- ,- ': provided that if any such dispute is on a promissory note, no order 25 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 fumislied as security or part thereof, shall bel entitled to make the payment under 30 sub-section (z)  ' ' ,- , " (4) all consolidated payments of future subscriptions realised by a foreman shall be deposited by him in an approved bank mentioned in the chit agreement before the date of the succeeding instalment and the amolmt so deposited shall not be withdrawn except for payment of 35 future subscriptions '  (5) where any property is obtained as security in lieu of the consolidated payment of future subscriptions, it shall remain as securlty for the due payment of future !mbscriptfons  chapter vi traim"!1i840 u (1) no transfer of the rf~hts of a foreman to receive subscriptions restricfrom the prized suhscribers shall be rn lde without the previous sanction :z:f:~ 1 in writing of the registrar of rlehts of foreman (2) any transfer of the rights of a foreman to receive subscriptin from the prized subscribers shall, if it is ukely to defeat or delay tile interests of r nor-prized or unpaid prized subscriber, be voidable· at the iditadce of such subscriber (9) when under sub-section (2), a transfer is disputed by a liublctl·  s ber, the burden of proving that the foreman was in solvent circumstances at the time of the transfer and that the transfer does not defeat or delay the interests of such subscriber is on the transferee 3s 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 10 be filed with the foreman transfer of nonprized subscribers rights· to~in wrltidj recoinitiod of transfer by toreman 18 every transfer under section 35 shall, within a period of fourteen days from the date of receipt of the proposal for transfer by the fore~an, be recogqised by him un less the transferee is not solvent or the transfer was effected with a view to defeating the provisions of any law includ~ 15 ing this act and the' decision of the: foreman to recognise the transfe:t; ir not shall forthwith be communicated to the parties concerned 37 every transfer under section 34 or section 35 shall be entered by the foreman in the books of the chit forthwith and a true copy of such entry shall be filed by the foreman with the registrar within fourteen 20 days from the date of making such entry entry ot transferee's name in the books  chapter vn meetings of general body of subscribers38 (1) the foreman may, on his own motion, convene a special meeting of the general body of subscribers for considering any proposal 25 to pass a special resolution meeting ot general body of subscribers (2) the foreman shall convene such a meeting on the requlsitior in writing·of not legs than twenty-five per cent of the number of non-prized and unpaid prized subscribers, and the meeting so convened shall be held within thirty days of the date of receipt of the requilition and if 30 the foreman refuses or fails to can such a meeting within fourteen days of the date of receipt of such requisition, not less than twenty-five per cent ot 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 35 notice under sub-:;;ection (2), convene or direct the convening of a special meeting of the ~ene"~l 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) the regilrtrar or any officer deputed by him shall be present at 040 every special meeting convened u1flder sub-section (1) or sub-section (2), if the meeting is convened for considering ooy proposal to pass ~ special pio]utiolq :ftor amending the chit agreement (5) notice of not less than fourteen days shall be given to all the subscribers of a meeting under this section specifying the object date, 5 hour and place of meeting and a copy of the special resolution shall allo bit sent along with the notic~ of the meetin,  chapter viii ti:amination of chl'l'831 (1) whell"e a foreman dies or becomes of unsound mind or is otherwise incapacitated, the chit may oontinue in accordance with the s provisions of the chit agreement provialoll for continua· tion of chita~ ce~ cases (2) where a foreman is adjudicated an insolvent, or withdraws from the ehft under section 26, or fails to conduct the chit at any instalment or on any other date before the next succeeding instalment 8s may have been agreed upon by a special resolution passed at a meeting of the non-10 prljled and unpaid prized subscribers held in that behalf in accordance with the provisions of section 38, &tty 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 15 further conduct of· the chit 40 a chit shall be deemed to have terminated,-termination of chits, (a) when the period specified theref-or in the chit agreement has expired provided the payment of dues to all the subscribers has been completed; or 20 (b) when all the non-prized and unpaid prized subscribers consent in writing to the tennination of the chit and a copy of such consent is filed wi,th the registrar as required under section 41; or (e) where a foreman dies or becomes of unsound mind or is otherwise ineapaeitated and the chit is not continued in accordance 25 with the provisions of the chit agreement: provided that, in a case where the foreman is a firm, if a partner thereof dies fyt: becomes of unsound mind or is otherwise incapacitated the chit shall not be deemed to have terminated and thesurvivin~ pr:rtner or partners shall conduct the chit in the absence of any provi-30 sion to the contrary in the chit agreement | copy       | of    ||------------|-------|| assent     | or    || consent    |       || to         |       || be         |       || filed      |       || with       |       || registrar |       |41 a true copy of every assent referred to in section 26 ~nd 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 caose may be, with the registrar within fourteen days nom the date of such 35 assent or consent 41 except in the cases referred to in clauses (4) and (b) of lection 40,-refund of nonprized subscribers' subseriptiona (a) every nonprized subllcriber shall, unless otherwise provided for in the chit agreement, be entitled to get back his subscriptions 40 at the termination of the chit without any deduction f-or ~ividend, if any, received by him: provided that, any person to whom the rights of a nonprized subscriber are transferred in accordance with the provisions of section 35,' sha1l,m addition to his own subscriptions be entitled to 4s get back the iiubacriptlons paid by sueh non-prized subscriber, subject to the conditions specified in this clause; (b) if a chit tennmates on '8 date earlier thatl the date orjginallv flxed in the chit agreement, the non-prized subscriber's claim shall be deemed to have arisen on the date on whieh he hu ,notice thereof rd any amount due to the subscriber from a foreman in relation to the chit business shall be a first charge on the chit 8s1ets subscri bers'dues to be flrst charge od cbit aneb  chapter ixforeman to allow certain su~rs to inspect chit records inspection 01' document8 ft every foreman shall, on payment of such fee not exceedingftve s rupees as may be speci1ied 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 datps 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 subscribe or 10 furnished by the foreman as a subscriber and all chit records, including books of accounts, pass books, balance-sheet and profit and loss accounts and such other records as may show the actual financial posltion of the chit ts all the records pertaining to a chit shall be kept by the foreman for a period of eight years from the da~ of termination of the chit 15 preservatlou ot chit records by for~ inapection of chit boob ad recorda by registrar 46 (1) without preiudice to the provisions of osections 209 and 209a of the companies act, 1956 the registrar or an officer authorised by the 1 of 1956 state government in this behalf may inspect chit books and all the records of a chit during 'working nours on any'workfngo day at tne premises of the foreman with or without giving notice and it "halt be the 20 duty of every foreman to produce to the registrat' or the officer so author1osed, all such books and'records as are in his custody or power and to furnish him with any statement or 'information telatin~ to the chits as he may require from the foreman within such time as he may specify (2) the re~strar or an officer authorised by the state govemment 25 in this behalf may, after givin~ seven davs' notice in wrftin~ to the foreman, dfrect him to produce before him for inspection ruch chit books anel 'records as he may require at the time and place mentioned in the notice (3) if on an inspection made under sub-section (1) or sub-section (2) any defects are found, the registrar may brin~ such defeds to the notice 30 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 specifted tnerein ' (4) every foreman !;hall be bound to comply with the directions contained in an order made under sub-section (3) " 35 4'1 (1) nothing in section 46 shall be deemed to affect the power of the reserve bank to inspect the books and records of an, foreman under the' provisions of section 45n' of the reset've bank of india aet,l9m 2 of 11m power of reserve bank to inspect cb1t boob and nccdi (2) the reserve bank may, jf it considers necessary, fiorwat"d a co-py of its report or of any part of its report on the fflb1)ection oft'fie book 40 and records of a fl3!'eman to the foreman for taking necesaary aetion (3) every foreman shall, on receipt of the report or 1)8rf; th~f under sub-section (2), be bound to comply with the dtrecttons, ff -any, lrlven by' the reserve bank in this behalf an,d mall, if so required,· _bi mit periodical reports in regard to the action taken by him 45 (4) the reserve bank may also forward a copy of the r~rt -on the inspection of the books and records of a foreman to the state govemment within whole jut'iadiction the regletered oftlce of the company if ule toreman,u a tod:lpad1,ot the place or the principal place of buatn_ et the foreman in any' other case, - situateet for auch action as may be codiidered neceab8l'1 chapter x  winding 'up of chits s 48 a chit may be wound up by the registrar within whose territorial  jurisdiction the chit has been registered, either on his own motion or on an application made by any non-prized or unpaid prized subscriber,-(g)· if the chit has terminated under clause (c) of section 40; or 10 circum~ stances under which chita may be wowui up (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 amoudlt required to be deposited under any of the provisions of this act; or (d) if it i proved to the satis:fiaction of the registrar tnat the foreman is unable to pay the amounts due to the subscribers; or (e) if the execution or other process iss1\ed on an order passed by the registrar in favour of any· 'subscriber m respect of amounts due to him from the foreman in relation to the chit business is returned unsatisfied in whole or in part;' or 20 ,(f) if it is proved that there has been a fraud or collusion on the part of the ioreman m the matter of taking secwities from any prized subscriber; or (g) if the foreman has approlfiated the prize amount in his capacity as a subscriber without furnishing sujficient security for wture subsariptiodsj or (h), if the registrar is satisfied that the aftairs 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 30 e~"'nation-for the purposes of clause (d), in determining whether the foreman is :unable to pay' the amounts due to the subscribers the hegistrar shall take into account his contingent and future liabilities in respect of the chit 35 u an application for the windina up of a chi~ ihall be made by a app1lcapetition preseil~ by' ally' non~prized or unpaid prized subscriber to tion for  sot 1908til~ liegistrar slgileu and verified ld tile manner laid dowd by the code windin, of civil procedure, 1908, and shall contain such p'articulars as may' be up preacribed: 40 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 'la presented,-(g) by non-prized and unpaid prized subscribers representing not less than twenty-five p'er cent of the amount or, as the case may be, the value of the grain subscribed by; all the non-prized aild unpaid prlzed subscribers, if anyi or (b) with the previous sa;nction of the state government witbm whose jurisc:liction the chit is commenced or conducted ezplg7'&criob-for the purposes oii clause (g) of the proviso, a ~u iubacribu of a fractiod of a ticket shall be deemed 10 be a sublcriber 0111): to u gut of such fraction '  _  to winding up proeeedinp c 58 notwithstanding any thine contained in aecuods 48  ,  petition for the winding up of a chit shall be entertained b,the bep-trar,-• 0{ - i (a) if proceedings relating to insolvency are pending against the foreman; or 5 (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 dislolution of the ftrm are pending; or (c) where the foreman is a company, if proceedings for the 10 winding up 0:£ such company are pending 51 an order for the winding up of a chit shall operate in f  vour 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 is c0mmencementand eftect of winding up order injunction order 5~ 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 20 other proceedings instituted against the foreman for the realijation of amounts due from him on such terms as the registrar thinks fit powers of registrar 53 the registrar may, after hearing an application under this chapter, dismiss it with or without cost:;, or adjourn the hearing conditionally or unconditionally or make an interim or any other order that he deems 25 fit 54 on the making of an order for the winding up of a chit, all the chlt assets sh~h vest in the registrar or in any persqn iqpointed by him for distribution amongst the subscribers to whom amounts are due in respect ot the chit 30 55 when a winding up order has been made or a receiver has been appointed, no suit or other legal proceedings shall be continued or commenced against the foreman by a subscriber for the realisation of amount 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 35 56 on the malting of a winding up order, the registrar shall make an entry in his book relating to the chit and shall notify in the official gazette that the order has been made veatini of chit -ets in registrar or other person suits, etc, to be stayed on windlni up ordf'r notiflca-uoa of windinl up order 57 where during the pendency of the proceedings fjor the winding up of a chit, the fioreman is adjudicated an insolvent, or where the 40 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, tihe winding up proceedings under this chapter shall cease and the distribution of the chit assets shall, subject to the provisions of aections 43 and 52, be made 45 by the insolvency court or the court windina up the co~p8n7, sa the case may be cessation of winding up proceedingson insolvency qf foreman, etc  or the winding up of the company and transfer of such proceed1dp ~'58( '(1) fwhere an ap~licat1on for the winding up of a chit i's dismissed li:ui' the regfstrar 1s "satfsfteci that the petltion is frivolous or vexatious, he !tbay, on the applfeation ot the foreman award against the petitioner award of compensation to foreman ~~ch  amount,  ,not exceeding one thousand i'ljpees, as he deems reason-5h~tcf as' com~nsatlon to, the' foreman for the expenses or injury caused fo 'nlm('by' thepresentat!on of the application and the proceedings therr dn,' arid such amount maybe 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 ri,ht to appeal io compensation in respect of an application for any winding up o~ the chit shall be entertained 59 tbeforeman or any' subscriber or any other person aggrieved by a decision or order of the registrar in any proceedings for the winding tip' ~ a chit may, wfthin sixty days from the date of such decision or 15 order, appeal to the state government limitation so (1) 'where an order retuslng to wind up a chit has beer made ithder 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 orde,:, in tespectofhon':'prlzed subscribers; and, notwithstanding anything con-2{) tained in the chit agreement, no non-prized subscriber who was not a def~ujter on the date of the presentation of the petition for wind;ng up, shall ~ deemed to be a defaulter on the date of its dismissal  (2) where an order refusing to wind up a chit has been made under this act, in computiqg the period of limitation prescribed for any suit 25 or other legal proce~irtgs (other than a suit or application in respect ot which the leave of the court has been obtained) which might have been brot1gnt or instituted,  but for the presentation of the applicatfon fior the winding up of the chit, the period from the date of the presentatioj1 of the pplication to the date of the order re!using to wind up a chit 30 shall be excluded (3) 'n'ot!11hg' corltained 'in' this chapter shall affect the rights of a subscriber to proceed against the fureman personally for the balance, if any, of the&motlilt 'due 'to 'him 'after the d~larati6n 'ali the final dividend in the proceedinls for the winding up of 'the chit and in computing the 35 pery~ o~, limit~tion prescribed for any such proceedings, the period from 'die date of the presentation of the application for the winding up ()f thechit to the date of the declaration of the final dividend shall be excluded  chapter xi appouitment of officers and levy of fees40 61 (1) the state government may, by notification in the official gazette, appoint a registrar of chits and as many additional, joint deputy and assistant registrars as may be necessary for the purpose of dilewgiitc the tlutiet imposed 'lipon the registrar by or under this act appointment of registrar and other officerll, (2) tiae registrar may appoint as many inspectors of chits and chit 45 aud~1'i as may be aecessary for the pul'pose of dischargin~ the dutie8 tin'posed on the inspectors of chits or chit auditors by or under this act (9) all tmpectots 'of chits and chit auctitors shall discharge the duties uposed upon them ~ or under this act under the general superintend ence and' oon!llrot of 'ilke ~s'trar (4) if the registrar is ot the opinion that the accounts of any chit are not properly maintained and that such acco:ults should be audited " shall be lawful for him to have such accounts audited by a chit auditor (5) it shall be the duty of the foreman of the chit whose account are to be audited by a chit auditor under sub-section (4) to produce 5 before the chit auditor, all accounts, books and other records relatina to the chit, to furnish him with such information as may be required and afford him all such assistance and facili'ties as may be necessary and reasonable in regard to the audit of the accounts of the chit (6) the foreman shall pay to the ch:t auditor such fees as may be 10 prescribed for the audit of the accounts ot the chit under sub-section (4): provided that different scales of fees may be prescribed for di1ferent chits depending on the quantum of the chit amount 62 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 15 such fees as may be prescribed,-lnapection of documents in regis trar's osee (a) inspect the documents of the concerned chit kept by the registrari or (b) obtain a certified copy o'i' an extract of any such document or record ~o levy of fees 63 (1) there shall be paid to the registrar such fees as the st$~ government may, from time to time, prescribe for,-(a) the issue of previous sanction under section 'i (b) the filing of the chit agreement with the registrar and the registration of the chit under section 7; 25 (c) the filing of a declaration with the registrar and the grant of, a certificate of commencement under section 9; (d) the filhlg of copies of documents under any of the provisions of this act; (e) the audit of the accounts of the foreman under section 81; 30 (f) the inspection of documents under section 82; (g) the obtaining of certified copies or extracts of document and records under section 62; and (h) such other matters as may appear necessary to the state 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 xu disp~!1'es and arbitrationdisputes relatid& te ehit business  64 (!) ~otwithstanding anything conta:ned in any other law for the 40 time bemg in force, any dispute touching the management of a chit business shall be referred by any of the parties to the dispute, to the registrar for arbitration if each party thereto is one or the other of the following, namely:_ (a~ a foreman: a prized subscriber or a nod-prized subscriber, 45 includmg a defaulting subscriber, past 8ub9criber or a penon claiming through a subscriber, or a deceased lubeariber to - chit; (&) a lul'ety oj a subscriber, past subscriber ora deceaaedtsuh-icriber e,;plclnation-for thepurpo~s of this sub-section, a dispute touchma the management of a chit business shall include--s (i) a claim by or against a foreman for any debt or demand due to him kom a subscriber or due from him to a subscriber, past  - ubscriber or the noffilnee, heir or legal representative of a deceased subscriber whether such debt or demand is admitted or not; 10 (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 ass"ignment (2) where any question arises as to whether any matter referred to for the award of the registrar is a dispute or not for the purposes of subsection (1), the same shall be decided by the registrar whose decision 20 thereon shalil be final (3) save as otherwise provided in sub-section (3) of section 66, no civll court shall have jurisdiction to entertain any suit or other proceedings in respect of any dispute referred to in sub-section (1)  b6 of 1161period ol limitau 65 (1) notwithstanding anything contained in the limitation act, 25 1963, but subject to the specific provisions contained in this act, the period ot limitation in the case of a dispute referred to the registrar under section 64, shall-(4) if the dispute relates to the recovery of any sum, including interest thereon, due to a foreman from a deceased subscriber, be 30 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 3s on the part ot 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 4 the registrar under section 64 shay be regulated by lhe provisions o~ o the limitation act, 1963, as if the dispute were a suit, and the registrar, 36 of 1963 a civil court (3) notwithstanding anything contained in sub-sections (1) and (2), the registrar may admit a dispute after the expiry of the period ot 4s limitation specified therein, if the applicant osatisfies the registrar that he had sufficient ca'use for not refe'rring the dispute within such peried h (1) if the registrar is sati¢,n that ady mat!a'refe~'" to him or brought to his notice is a dispute within the meaning of :t4oa 64, he shall, subject to such rules as may be prescribed, settle the cuapute himself, or refer it for di5posal:to a person awointed by him  (~ in this chapter referred to as ~e nqlxlinee) (2) where any dispute is referred under sub-sec:~on (1) ~r settlement to the nominee, the registrar may, at anyti~,e tor ~~ be recorded in writing, withdraw such dispute from the nominee and may settll' the dispute himself, or refer it again for settlement to any' other nominee appointed by him 10 (3) notwithstanding anything contained in section 64, the registrar may, if he thinks fit, fluspend the proceedings in regard to my dispute, if the question at issue between a foremail and a subleriber o1behfeen different subscribers, is one involving complicated questions of law and ifact, until the question has been decided in a regular suit instituted iby anyone of the parties to the dispute and if any such suit is not instituted i s within two months from the order of the registrar suspending the proceedinp, the registrar shall take action under sub-seetion (1) 67 (1) the registrar or the nominee hearing a dispute under section 66, shall, in addition to the powers conferred on him, under tha~ sec:tlon, have the same powers as are vested in a civil court while tryidj ~ ji~~ 20 under the code of civil procedure, 1908, in respect oil the follow~ matters, namely:-(a) summoning and enforcing the attendance of pe~lls and examining them on oath; procedure for settlement of dlaputes and power of be·· jistrar or nominee (b) requiring the discovery and inspection of documents; (c) receiving evidence on affidavits; (d) requisitioning any public record or copies th'!'reof from bu court or office;  (e) issuing commissions for the examination of witnesses or 30 documents; and (f) any other matter which may be prescribed (2) except with the permission of the redistrar or the nominee no eo· , , party shall be represented at the hearing of a dispute by a legal practitioner  3s (3) (a) if the registrar or the nominee is satisfied that ~ p8l'80n, whether he is a subscriber or not, has acquu'edany interest 1d, the property of a person who is a party to a dispute, he may ordw that, the person who has acquired the interest in the property may be joined as a party to the dhpute, and any decision ~t may be given by the 40 registrar or the nom~nee on the dispute shall be binding on the' pany' so joined, in the same manner as if be were an original party·to tk8' dispute  , (b) where a dispute has been referred in the na~e of a wronlr~n, or where a~ the ne<:essary parties have not been included, the ft;tk8~ 4s or the nommee may, if he is sbtisfted that it was due to a ,,~~u~~~:ipls7  take, order any other person to be substituted or added as pa~i~s' to ~e ~te at any stage of hearing of t'he'dispute ou' such 'terms aalb'; tliidb" bill (c) the registrar or the nominee may, at any stage of the proceedmgd, either upon or without -the application of either part,:and on such terms a may appear to the registrar or the jlominee to be just, order that the •• me ofuy party improperly joided be struck off 5 (d) any person wh, \s a party to the dispute and entitled to more than one relief in respect of the same cause of action may claim all or ~, s~l"e~,,b~t,;f,lu;, oljli~"to c~ any s~ r~, he shall ~ot bt;"l~~' ~o  cl4iill,,~~t·re~ e~t with the le,ve of the regist;rar ~jbepo:xni4~e  10 68 (1) where a dispute has been referred under section 64 and the rp~~ ot tbia n~,~:~~ ~te, is  sa~eci on enquiry or otp~,1ll~~,a p~ty to,,,,~cl1 4i~1;f:;, with,i~tl~ todefest,or obstruct the execution of any award or the carrying out of any order that may be made,-15 attachment before judgment and other interlocutory orden (4) is about to dispose of the whole or any part of his property; or (b) is a~o~t ,to rempve tl\e" whqie or any part of the property from th~ iuri$clj~~ipq,of th~ r~strar, he jmy, unl~ aq~:~~b~urity is ,iurjj,ished, dtf~t conditional attach-20 ldajjlt ~ t4~ "aw,ijrrwl"\y", ~::~~ attmjjmet,lt shall, hav~ the  eft'ec{ as if it is m~4e by  a c~t: ciwi~ c01!ll1-(2) where the registrar or the nominee directs the attachment of any property under sub-section (1), he shall issue a notice callin, upon the person whose property is so attached to furnish such security as he 25 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 deci$ion in tbedispute, direct the disposal of the property so attached towards the claiia if awarded (3) ·any attachment made wwler ·this section shall not deat the 30 rights, subsisting prior to the attachment of the property, of persons who are not parties to the dispute, or bar any person holding a deoreeagaitwt the,per~ wqol!eproperty, isso attached frqm applying far the sale o£ the property under the attachment of such decree  (4), th~ ~~urdr ~e  pominee may, in order to prevent the ends 35 of justice being defeated, make such interloc4tory orqer$ pending the award in a dispute referred to in sub-section (1) as may appear to be just and convenient 69 -when a dispute is referred to ·arbitration und  this chapter, the rem~ or the(p~~, may;, after giyii\ia re$sonable opportunity to ~tl,l,~e, to thediwu~to be  beard ljl8~ean /l-ward on thedifglute, od decision of registrar or nominee  ~);~s incul11"~;~  ~~,il~e~ tothe,disp\lte in cojiu\e~~~o~ with the proceedings and the fees and expenses payable to the ~ar or the nominee, and such an award shall not be invalid merely on the ground thai it was made after the' expiry  of the period, if any, fixed  for deoiciing the cuapute by the registrar, arid ean; subjectto appeal under aeotiod~ 4$,_ a'fand'1riddidlon 'tite~ 6e·~te 70 any party aggrieved by any order passed by the registrar or the nominee or the award of the registrar or the nominee under section 69, may, within two months from the date of the order or award, appeal to the state government appeal aeainst deciaion of reptrar or nominee money how recovered 71 every order passed by the registrar or the nominee under sec-5 tion 68 or section 69 and every order passed by the state government in appeal und~ section 70 for payment of any money shall, if not carried out,-j» - ,~ldt '141 (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 10 3 tiecree of such court, or (b) be executed in accordance with the provisions of any law for the time being in force for the recovery of amounts as arrears of land revenue: provided that no application for execution under clause (b) shall 15 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 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 fqreman on 20 whose application the said certificate was iasued  chapter xiiiprivate transfer of property made after issue of certificate vgid against foremad  miscellaneous73 the reserve bank may tender to any state government such advice on questions of policy with respect to this act as it thinks fit 2s either on its own motion or on a request made by the state government advisory role of reserve b'ulk 74 (1) any foreman aggrieved by the decision of the registrar,-appeals (a) refusing to register the chit agreement under section 7; (b) refusing to grant a certificate of commencement under subsection (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 aection 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 35 be empowered by notification in the official gazette by the state government in that behalf (2) any foreman or other person aggrieved by the order o£ the beltistrar under sub-sectlon (i) of section 34 may, within thirty day of the communication to him of such decilion, appeal to the state qo~ 40 ment or to such officer or authority as may be empowerea dy notifteatt"h in the official gazette by the state government in that behalf (3) the state government or such officer or authority aforesaid may, after giving the appellant an opportunity of making his represen-5 tation, pass such order on the appeal as it or he thinks fit and such order shall be final 75 the registrar may, in his discreti·()n 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 10 section 29, section 37 or section 41, allow the foreman further time not exceeding fifteen days to file coples of such documents powers of registrar to give extension  of time for fllin, documents penaltie • 76 (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 15 section 61 shall, on conviction, be tlunishable 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 20 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 8areement regarding the date, time and place at which the chit is to be drawn or who fails to comply with the requirements of nny fl5 direction jdven 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 thoulalld rupees 30 (3) whoever wilfully makes a statement in any document required to be filed under this act which is false in anv' 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 ftve thouaand rupees or with both application of fine 35 77 a court imposing any flne 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 offences by compani~s 78 (1) where an offence under this act ha!> been committed by a company, every person who at the time the offence was ('ommitted wag 40 in charge of, and was responsible to, the comnany for th~ 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 aga;nst and  punished accordingly: provided thl'lt nothing contained in thic; "1uh-rection ",hall render anv 45 such nel's01'\ liable to any punishment providerl in thic; act if he nrov",s that the offence was committed without hi's knowledge or that he exc:!rcised all due diligence to prevent the commission of such offence '(2) notwitb'sblrldfilg anyth!t\g' eonlaihed ' in ' su~sect1~, (i),' 9!1iete an offence under 'this aet' 'has oe-m cobiiiiftted by a "eomjri,y dnd: it ''fa proved that the offence has been committed with the consent or connivance of, o()l' is attributable to,,, any neglect on the p~ of, any director, manager, secretary or other officer of the company, ~uch curec-5 tor, manager, secretary or other oftlcer shall also be deemed to qe guilty of that offence and shall be liable to be proceeded against and pumshed accordingly explanation-for the purposes ot 'this section,-(a) "company" means any body corporate and includes a fi'tm 10 or other association of individuals; and (b) "director" in relation to a firm means a partner in the finn 79 (1) all offences under section 11 shall be cognizable cb~nce of offences (2) no court inferior to that of a metropolitan magistrate or a judicial magistrate of the first class shall try an oitence puriishable unaer 15 this act power to eomp::und offences so (1) subject to such conditions as may be prescribed, any ofjicer empowered by the state government in this behalf may, either before or after the institution of criminal proceedings tinder this act, accept m,m the person who has cotntni~ or is reliotiably ~d to have 20 committed an offence under this act, by 'wily of compositfon 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 dischallged and no further, praceed-, tngs shall be taken against him in respect of such offence 2s power to enter and search any place and t::l seize l>ny documents 81 (1) if the registrar or any other ofticer'authorlied'by'hb:n inthis behrlf, 'has reason to' susp~t 'that imy'~· ~cts, or 'hi 'respbt\i!bte for the conduct of, a chit in any place in contravention of'ttle jii'6~b of this act, he may, for reasons to be reeorded'in writing ami at any reasonable time, enter into and search such place, and may seize luch 30 books, registers,aecounts or documents as 'may be necessary (2) the re~strar or ofb(ier authot1tied by' 1fli'n in! this lbfffidlf, 'tti(y apply for assistance to an officer in charge ofa '~ilce' station' anti lti1te police officers to accompany and assist him in discharging his duties ~jlder sub-section (1) ' ' , ,",-' 15 (3) all searches under sub-section (1) shan be 'made in 'acemaatlee with the provisions of the code of crimin,l procedure, 1973 2 of 1974 82 the registrar and au officers appointed bv the state gove~ept to perform any functionc; under this act shall be" deemed f,o b~ ?ublic servanlc; within the meaning of section 21 o'f the indian penal code 40 45 of 1860 offirel"3, lobe publh; aervants power to delegate 83, the state government may, by notification in the omcial gazette direct that any power (other than the power to hear appeals or to make rules) exercisable by it under this actor the rules made thereunder may be exercised also byanv officer ot the state government 8\1bjaot to !iiuch terim and conditions, if any,s may be pecified~ i; j 14 nothing in this 'act shall apply in respect of,- ' - t ," _  (4) a~y chit started before the commencement of this act; or ," act dot to apply to certain chltl 5  (b) any cait the amount of which, or where two or more cbits were staned er conducted simultaneously by the same foreman, the aggregate amoujlt of which does not exceed one hundred iz'upees u (l)' notwithstanding anything contained in this aet, no bank shan commence or earry on chit business after the commencement of tb!s act (2) where a chit had been started by any bank' before such commencement, such chit may be continued after such commencement until certain banka not to conduct chit business 10 it is completed, and the provisions of the chit agreement and such laws, harty, as were applicable to it immediately before the commencement of this act shall apply to such chit 2 of 1934, explanation-for the purposes of this s~tion "bank" means an approved bank or a ccroperative bank as defined in clause (bii) , of section 15 2 of the reserve bank of india act, 1934 st the state government may, in con!!ultation with the reserve bank, by notification in the offtcial gazette, and subject to such c()nc:u-- tion!! 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 2:> of this act~ 87 no suit, presecution or other legal proceeding &hall lie against the state government, the registrar or other officers of the state govern-protection of actton tak!n unter the act ~ent or of the reaerve bank or any of its officers taxercising any powers or discharging any functions under this act in respect of anything whh;h 25 is in good faith dene or intended to be done in pursuance~f this act dr the rules made thereunder pow~, ie make, rull'!,s 88 (1) the state government may, in consultation with the reserve  bank, by notification in the official gazette, make rules for giving eft'ect to the provisions of this act ' 30 (2) in particular, ajld without prejudioe to the eenerality of ~e foregoing power, such rules may provhe for all or any of the fo~w­lng matters, namely:-(4) the form and manner in which an application for obtaining the previous sanction may be made under sub-section (2) of section 4; 35 (b) the additional particulars ~hat a chit aereementmay contain under clause (q) of sub  section (1) of section 6; 40 (c) the particulars that may be included in the minutes of the proceedings of a draw under section 17; (d) the method of valuation by the registrar in a grain chit for the purpose of furnishing security under section 20; (e) the procedure that may be followed b:v the registrar it releasing the security furnished by the fnreman under section 21; (f) the registers and books and the fonn in which such registers and bo~ks may be maintained by the foreman lmder section 23; 45 (g) the time within which the balance-sheet and the profit and loss account in respect of a chit business ~hall be filed under section 24;    (h) the rate at which intereat sball be pvbjt ~,tbje,detlplted instalments by a defaulted subscriber under section 28; (i) the particulars that may be included in ail application for the winding up of chits under section 49; - (j) the procedure ·to be' followed fqt the wiacjiy ,upqf chits s ~,chapter x; (k) the foees payable under section 63; (1) the auditing of balance-sheets and the profit and 1_ accouts of chit business and the issue of ~udit cediflcau!&j " (m) the forql and manner in which a dispute shall,be ~'ferred 10 to t~e registrar under section 64; (,,) the ~dure to be followed by the regiatr<8a"- 'of,h, apmu18ie for ~ttling the disputes refeited to him under se¢ion ,64; (0) the matters referred to in clause <i) of sub-aection ,(i) ot section 67' 15 , t (p) the conditions subject to which and the amou~t op the payment of which composition of offences may be made ,under section 80; (q) the form and manner in which an appeal may be preferred under this act and the fees payable foor such appeal; 20 (r) the iasue and senrice of noti~s or other ptocus under t4is ~tj , (8) the procedure for, and the manner' of receiving, any ~ payable under this act; " (t)any other matter wbioch is required to be or may be pres- 2s eribed -",'  a-1 ' ,-:,-\ '\'f+li  ,p~ (3) every rule made under this section shall be laid, as soon as may be after it is made, before each house of the state legislature where it consists of two houses, or, where such legislature consists of one house, before that ho'use ' 30 ( ) andhrr u 1 the al)dhra pradesh chit funds act, 1971, ~, ,bjerala pradelb ~t~ act, 1975, the maharashtra chit funds act, 1~7~ t~ l'npil:' act 9 ('f nndu chit funds act, 1961, as in force in the state of t~,~,d  1971 i!1 the union territories of chanoigarh and delhi, the uttarp~desh! kerala chit fund!! act, 19'75, the goa, daman and diu chit funds act 1973 85 act 2a , '" ' of 1976 and the pondieherry chit funds act, 1966, are he~eby repealed am ''tj:le m har~shprovisions of section 6 of the general clauses art, 1897, shall apply to tr: at:: lv fi\ich repeal as if each such act, so repealed were a central act of 1974 tamil (2) notwithstanding such reperu,tbe acts mentioned in sub-section ~::~4 of (1) shall continue to apply to chits in operation on the eommaaement 40 lini1 of this act, in the same manner as they applied to s~b owts before uttar such commencement pradoesh  act 08 of 1870 goa, daman and diu act 18 of 1973 pondlchen7 act 18 of 1966 10 of 1897  the schedule (see section 24) part i-form: of balance-shdt----------------liabilities allets ri i capital: authorised iasued  paid-up ri ri rs ri rs ri ri i cash 2 balances with banks : <a> current account (b) deposit account 3 investments: | (a>     | in       ||---------|----------|| ri     |          || 2      |          || reserve | fund     || 3      | deposits || ri     |          || ~       |          |ri ri ri ~ rs ri ri ri ri rs rs 4 borrowings -   - 5 foreman's liability in tickets prized - 6 prize amount payable   , defaulted subscribers' amount payable 8 advance subscription received   9· liability to non-prized subscribers (arrears ftom non-prized siibicrlbers to be indicated) 10 amount payable in terminated chits  ri rs ri ri ii auction profits payable to non-prized subscribers  ill other liabilities  is profit and loss account rs ri ri ) in go'-emment securities  - ri c) others      rs 4 hare amount due from prized subscribers: (a> secured ri (b) ujliecured  - • ri 5 arrears due from prized subscribers: <a) secured     (m unsecured     6 amount due in terminated chits: <a) secured    (b) unsecured    7 cliit prize amount paid earlier 8 loan and adyances w subscribers 9 iitigation apenses 10 premises   i i purniture and fixture 12 stamps ~ atock 13 other assets  14 profitand loss account ri ri rs ri ri ra ri rs rs total: ri tara! : rs | particubrs    | to        ||----------------|------------|| hi:            |            || 'pccificd      |            || in             |            || reipect        | of         || 'i             | i          || total          |            || ellit          |            || amounts        | of         || running        | chits     || (i) amoldlts   | due        || either         |            || jointly        |            || or             |            || leverally      |            || with           | any        || penon         |            || (ii)           | amounts    || of             |            || the            | company    || interested     |            || 1             |            || directon,      | ptrtner  || in             |            || the            | case       || or             |            || private        | companies, || u              |            || man-           |            || 35             |            || hers          |            || -              |            || ~              |            || '1:=1':-:-     | -/         || -              |            | part it-form of profit and loss &ccotnn' - ----------------- ---- ~---------------expendi~re income - to interest paid on depolits, bortowings, - etc~ i by foreman's commission rs ri ri ri ri ri ri  rs rs 2 by bonus 3 by interest  4 by indivisible idcome in auction profit 5 byrcnt 6 by net profit oil sale ofinvcstmentl 7 by other receipts 8 8yloss ii to salaries, allowadcei, boouaand provident fund , to directors, sittins feel - - 4 to rent, taxes, insurance, lighting - 5 to law charges -  6 to postages, telepama and ltamps 7 toauditon'feft - 8 to filing fees 9 1'0 depreciatjoll and repain  - ri rs  ri r, rs r, ri rs rs ri rs 10 to itatiolluy, printillg_d advenilelllent 11 to other apau:uture u to balance of pl'ofit ----~---~-------r • total : toral : rs ------------- --- - ------------ -------------a 'conventional chit' is an old indigenous financial institution involving regular periodical subscriptions by a group of persons it is, in law, a contract between the subscribers and· the foreman which provide that the subscribers shall subscribe a certain sum by periodical instalments tor a definite period each subscriber shall, in his turn, as determined by lot or by auction or in such other agreed manner, be entitled to the prize amount there will be as many periodi<:al instalments as there are members as there is a mutuality of interest among tee, small dumber o~ subscribers to each chit fund, it constitutes a convenient instrument combining savings and borrowings 2 in the wider context of examining in depth the activities of the non-banking financial intermediaries (which term also includes institu· tions conducting chit funds or kwries), the banking commission (1972) had recommended intter alia, that it is essential to have a uniform chit fund legislation applicable to the whole country and as such either an all~ india chit funds act may be enacted or a model law may be prepared for adoption by all the states the commission also observed that it would be desirable to provide in the legislation that only public limited companies can run chit funds 3 the recommendations of the banking commissi'on were examined by government the reserve bank, at the instance of the government, drafted a model bill to regulate the conduct of chit fund,s for adoption by all the state governments the reserve bank also sent the draft bill to the 'study group on non-banking companies constituted by it in june, 1974, under the chairmanship of late shri james s raj, the then chairman of the unit trust of india the study group was unanimously of the view that the bill should be enacted as a central legislatiod, as such a step, besides ensuring uniformity in the provisions applicable to chit fund institutions throughout the country, would also prevent such institutions from taking advantage either of the absence of any law governing chit funds in any state or exploit the benefit of any lacuna or relaxation in any state law by extending their activitiel in such states the group further recommended that the administration of the law should be left to the state government concerned which in turn could seek the advice and assistance of the reserve bank on policy matters further, there should be, according to the group no abjection to chits being conducted by private limited companies also and on a limited scale even by unincorporated bodies such as, individuals, sole proprietorships and partnership firms 4 the bill has been finalised after taking into account the views of all the state governments to whom a draft bill was sent for comments the scheme of the bill and the provisions made therein largely follow the pattern of chit fund legislations in force in some of the states altd includes certain new provisions, such as, minimum capital requiremej;lts for companies conducting chit business, prohibiting chit fund complmies from doing any other business, placing a ceiling on the aggregate chit amounts of chits that are being conducted by chit fund institutions, providing ror a self-contained machinery for the settlement of dispute bl~tween a foreman and the subscribers by means of arbitration, etc, the repeal of the existing state legislations on the subject has also been p'mvided for in the bill '5: the '''notes on clauses" appended to the bill explain in detail the provisiens of' the bill new delhi; r venkataraman' ~r&th neotm"r, 1980 cl4u1e 2-thfs clause defines the various expressions commonly u8eci in:t,bul sup-clau~ (a), defines "approved banks" as referritlg to coipaer$l ~;~,,1jch other blqlking institutions at the state govei'duwllt,~, in consultation with the reserve bank, approve for tbe purpoaes of the bill sub~)~ (b) defines the term "chit" this definition is on the,same lines as the definition of the expression "collventiollal chit" in the p,rized chits and money circulation schemes (banning) act, 1978 (43 of 1978) sub-clause (g) defines "discount" as the sum of money which a pj"imd subscriber is required to forego under the terms of the cjut agreement sub-clause (h) defines "dividend" to mean the share of the subscriber in the amount of discount available under the chit agreement for rateable distribution amona the subscribers at each instalment of the chit clause s-this clause provides that the provisions of the billlhljll have e~ect notwithstandi~g anything to the contrary contafrled in the provisions of any other law in force or in the memorandu1l1 andartiel~ of association, or bye-laws, etc, and if any such provision is repugnant to the provisions of the bill, it shall, to the extent of the repugnancy blteome or be void clause 4-this clause provides that no chit shall be commenced or conc;iucted wiulout obtaining the previous sanction of the state govern-~t within whose juri$diction the chit is to be conducted andunlus tint chit is registered under the provisions of the bill it has also been proviclw that such sanction shall lapse if the chlt is not registered before the expiry of six months from the date of such sanction or within such further period of six months as the state government may allow sub-clause (3) of this clause specifies the cases in which previous sanction may be refused c14use 5-this clause prohibits the invitation for subscriptions to a chit by issuing a notice, cfrcular, prospectus or document unless such notice, circular, prospectus or document contains a statement that the previous sanction referred to in clause 4 has been obtained and also the particulars of such san,ction clause 6-while the various particulars which are required to be specified in every chit agreement and the other formalities to be complied with have been specifted in sub-clause (1) of this clause, it has been provided in sub-clause (~) that the duration of a chit shall not extend beyond a perlodof five years from the date of its commencement however, the state government concerned has been empowered to permit the duration of a chit up to a period of ten years on the existence of certain conditions flveclfted in that sub·f'lause sub-clause (3) provides that the amount of discount in any chit shall not ex'ceed thirty per cent of the chit amount (that is, the sum-total of subscriptions payable by all the subscribers for any instalment of a chit without any deduction for discount or otherwise) clause 7-sub-clause (1) of this clause provides for the chit agreement being filed in duplicate by the foreman with the registrar  j '1 ' , '  , su})clause (2) empowers the registrar to retain one copy of theeldt agreement and return the duplicate to the foreman with an endorsement that the chit agreement has been registered by him; and such an endorsement shall be conclusive evidence that the chit is duly registered "under the provisions of the bill  , " clause 8-sub-clause (1) of this c:ause provides that a company shall not codciuct any 'chit or carry on any chit business unless its paid-up eapital fsnot less than rupees one lakh sub-clause (2) requires the existing companies having a share capital of leas than rupees one lakh to increase its paid-up capital to not lesa tha~ rupees one lakh within a period of three years from the commencemen; of the proposed legi~lation the state government has however, been empowered to extend the period of ulree years in respect of ~y company for such further period not exceeding two years in the aggregate sub-clause (3) provides that every company carrying on chit business shall create a reserve fund and transfer to such reserve fund a ,sum not less than twenty per cent of the balance of profit for each year as disclosed in its profit and loss account before declaring any dividend on its shares clause 9-this clause providlo's that every foreman shall after all the tickets specified in the chit agreement are fully subscribed, file a declaration to that effect with the registrar su~lause (2) empowers the registrar to issue a certificate ofeommencement after the filing of such declaration and no foreman can commence any auction or draw unless such certificate is granted clause lo-this clause requires every foreman to furnish a copy 01 the chit agreement to every subscriber after the foreman has obtained the certificate of commencement under clause 9 and before the first draw clause n-this clause prohibits the use of the word "chit", "chit jund" j hchitty" or "kuri" by any person other than a person carrying on chit business and makes it obligatory on ~ person carrying on chit business to use ,as part of· his name anyone of such words clause 12':"-sub-c1ause (1) provides that no company carrying on chit business shall conduct any other business except with the general  or special ,pe~ion of the state government sub-clause (2) provides for ute winding up of such other busineu before the expiry of a period of three y~ars from the cojnqletlcejllent, ,of the proposed legislation or such extended period not exceeding two years clause 13-under th:s clause, no foreman other than a firm or other association of individuals or a company can commence o~ conduct chits, the aggregate amount of which at any time exceeds ten thousand rupees where the foreman is a firm or other association of individuals, itaei"'uljepte ·-ehit ·  amewrt  aball  dot ·uoeedl~ ,wl "thou-··1ed1or ;everyopartner or ,individual, as ,the'use may , be"sqbjeci- t a it iiakiunm ·of rupees forty taoulalld where the forema·is ,a,edpipii'ly, the aggregate chit amount of the chits conducted by it, shall no~latr~y time"exceed ten times the net assets of the company (that is _tj:ae total  assets of the company less its total liabilities, bad and doubtful debta as  also other iptangible assets as disclosed by its last audited b~ance-sheet) 'clause 14-this clause prohibits a person carrying on chit business from uti:ising the moneys collected in respect of such business except for "itbe -porpo~s' mentioned therein, namely, for carrying en cbit'business,  ghring' loans' and, advances to 'non-prb:ed 'subscribers, etc  mrthe leeuity of thp subscriptions paid by them, investment in trustee senrities, etc clau<:e 1s-this clause lays down the procedure to be follow~ for making any alteration in the chit agreement  ,,clauset 16· to ·l8·~hese -clauses 'provide for the coruiuet ·gf[th~w, maintenance of minutes of the proceedings of every draw and,tae-riwng of ,minutes qf such proceedings with the registrar 'clause 19-this clause prohibits the opening of new places' of' busjness w~thout obtaining the approvdi of the' registrar clauses' 20 to 22  :these clauses specify the rights and duties of"lile foreman of a chit glause 20 specifiesthe various_securities to be given by a foreman for the proper conduct of the chit they· areas follows:-{a) deposit in an ·,app~ed· bank of an amount, equal '-'to \ the chit  'amount-in; ·the name· of the registrar; (b) transfer government securities orother  securities referred to in section 20 of the indian trusts act, 1882, in favour of the registrar ''the value of the government !'lecurities should be not less thad'one>4hda-half times the value of the chit amount and the value of other secrurities wqulldbe:~cjfied by the state government by ru!es·whioah ,shaijnot be less-than tone~and-a-half times the value _of the chit amount thesecupty  given, ,maybe substituted by ai'other security of the _same value_ aodl,the ,security so furnished or substituted would not be released to tbeforeman until the chit is terminated and the clrumscof au the subscrlbersare-tully satisfied c ,a foreman's rights include the right to take the chit,amountlat the llrst ,\nita1ment-wtilbout:deeucuon ofdiscountyto receive and  ealilelall,aubs-'cmptlqllsfromthe subscribers and ·to distribute the prizeamo~ tolthe  ""iaed,-6lubleribers the duties include the ,disbursement  qf tbe-prize hhrauftts,tothe pt'iozed-sl!bscribers on their fumishin~· suftldent: ,iecllrfty for the due payment of future subscriptions, deposit the undisbursed prize amount in approved banks before the next succeeding draw,etc i ~t· 23,~"phfs elrse 'enumerates  the  various! liok5 'ancf··temrds to ";"be" maintained ·by a ·for8rwl ( clause 24-this clause enjoins every foreman to prepare and ftle with the registrar within such time as may be prescribed by rules a balancesheet and profit and loss account in the 'fonns set out in the schedule to the bill clauses 25 and ~6-while c1ause 25 lays down 'that the foreman shall be liable to account to the subscribers for the amounts due to them, clause 26 prohibits a foreman from withdrawing from the chit until its termination unless such withdrawal is assented to in writin, by all the non-prized and unpaid prized subscribers clause 27-this clause provides for payment of subscriptions by every non-prized subscriber on the date, time and place mentioned in the chit agreement clause 28-this clause provides for the removal of a non-prized subscriber if he defuults in the payment of the subscriptions clauses 29 and 30-these clauses provide for the substitution of 8 new subscriber in place of a defaulting subscriber and the amounts payable to the defaulting subscriber clauses 31 to 33-these clauses provide for the rights and duties of prized subscribers the prized subscriber has to furnish security for payment of the prize amount and he has to pay the future subscriptions regularly if he defaults in the payment of subscriptions, the foreman is entitled to a consolidated payment of all future subscriptions by following the procedure specified in clause 33 cla'u'le 34-this clause prohihits the transfer of the rights of the foreman to receive subscriptions from the prized subscribers without the previous sanction in writing of the registrar clause! 35 to 37-these clauses provide for the procedure to be followed for the transfer of rights of non-prized subscribers such transfer shall be in writing and shall be filed with the foreman who shall recognise it if the transferee :s solvent clause 38-this clause lays down the procedure for convening a special meeting of the general body of the subscribers for passing a special resolution clause 39-this clause provides for the manner in which a chit has to be conducted if the foreman dies or becomes of unsound mind or is declared an insolvent, etc it provides for the conduct of the chit by any one or more subscribers authorised by a special resolution in accordance with the provisions of the chit agreement alauses 40 4nd 41-these clauses lay down the circumstances in which a chit shall be deemed to· have terminated the expiration of the period specified in the chit agreement, death or unsound mind of the foreman and the consent of all the subscribers to terminate the chit are some of the circumstances under which a chit shall be terminated 'nle consent of the subscribers 1s required to be filed with the registrar under clause 41 clause 42-this clause specifies the circumstances in which a nonprized subscriber is entitled to the refund of the subscriptions paid by him clause 43-under this clause, the amount due to the subscriber from a foreman in relation to the chit business shall be a first charge on the chit assets czciuae 44-this clause entitles a non-prized or unpaid prized w briber to inspect the books and records of the foreman on payment of the prescribed fee not exceeding five rupees clause 45-this clause requires every foreman to preserve all recorda pertaining to a chit for a period of eight years from the date of termidatir)n of the chit clause 46-this clause, inter alia, empowers the registrar or an officer authorised by the state government to inspect the chit books or recorqa maintained by a foreman and also authorises the registrar to direct the iorem  :n to remedy any defects noticed within the specmed time clause 47-this clause saves the power of the reserve bank under section 45n of the reserve bank of india act to inspect the books and records of any foreman it also, inter alia, empowers the reserve bmk to give appropriate directions to the foreman on the basis of the inspection report clau;;es 48 to 59--these cl<luscs provde for the winding up of chits and other connected matters clause 48 specifies the circumstances in which a chit may be wound up and clause 49 lays down the manner in which an application for the purpose may be presented by any non-prized or w1paid prized subscriber clause 50 prohibits the entertainment of the winding up petition of a chit by the hegistrar if insolvency proceedings, or, as the case may be, proceeding, for dissolution or wionding up, are pending against the foreman clause 53 empowers the registrar to pass appropriate orders in the proceedings for the winding up of a chit and clause 54 provides for the vesting of all chit assets in the registrar or a person appointed by him clause 56 requires the registrar to make an entry in his book on the passing of an order of winding up of a chit and to notify in the official gazette that the winding up order has been made clause 58 empowers the registrar to award cornpensation to the foreman where he is satisfied that the pet~tion for winding up is frivolous or vexatious clause 59 empowers any party aggrieved by the decision or order of the registrar to prefer an appeal to the state government within sixty days from the date of receipt of the order clause 60-this clause provides for computation of the limitation periods where an order refusing to wind up a chit :is made clause 61-this clause empowers the state government to appoint a registrar of chits and other officers for discharging the functions conferred on the registrar by or under the provisions of the bill cl4use 62-this clause provides for the inspection of the documents kept by the registrar and obtain certified copies thereof clause &s-this clause empowers the state government to specify by rules the fees payable under the provisions of the bill fdf-~ aettl$dellt of, disputes c 81'ising'betweeft,tbe: fot!eman' ant·ltb_~: cribers, etc, to a chi t the:ion tention is to provide· for a machitle!'y' fo!t , the settlement of disputes which is cheap and expeditious tbe ptovisions made in these clauses are on the lines of the machinery provided in the state co-operatiye laws for the settlement df 'disputes' between a society and its members by arbitration clawes 64to 72-these clauses provide for a self-contained machinery liuu'&aaement,ofa chit business to the award of the registrar clause 65 provides for special periods of limitation in respect of disputes and empowers the registrar to condone delay in referring the disp\ite within the prescribed period clause 66 enables the registrar to se~he the dispute himself or to refer it 'for disposal to his nominee this clause also empowers the regis'~rar to suspend the proceedings in regard to any dispute if the question at issue between the parties is one involving complicated questions of law and fact to be decided in a regular suit instituted by anyone of the parties to the dispute but if no suit is instituted within a period of two months :frqm the order suspending the proceedings, the registrar shall ~~tle the dispute himself'  cui  67 seeks to confer on the registrar certain powers of a civil co\1pticlause·68 empowers the registrar or his nominee to order conditional attachment of the property of a party to the dispute and any attachment so made shall have' the same effect as an attachment made by a competent civtl court: clause 69 enables the registrar to make an award after giving a reuonablefopportunity to the parties of the dispute of being heard he 1s also; empowered to give his award on the expenses incurred by the pries or fees and expenses payable to the registrar or his nominee it has also been provided that the award of the registrar or his nominee shall be final and binding on the parties to the dispute subject to an appeai being made··to the'state government under clause 70 clause 70 provides for the appeal to the state government against an award of the registrar or his nominee clause 71-this clause provides that where any ordel pasl8d by 'the,·  registrar or his nominee is for payment of money, such order, on the issue o!f l cert1ftt!ate by the registrar, be deemed to be a decree of a civil court and executable as such br where no such certificate is given, the money' spe,cldeil-therein will be recoverable ,as arrears of land revenue cllluse 73:--!fbis clause confers an advisory role on the reserve bank  of tendering advice to the state governments on its own motion or on '8 reqljestmade by,astate ·government on questjqns of policy,regqlating,~ business of chits-clause 76-thi's clause ,provides for the penalties for coniravention-of certain provisions of the bill clause 79-this clause provides that offences under clause 11 shall ,~ cognizable and no court inferior tel! that of 8 metropolitan magistrate or - judicial magistrate of the first class shall try an oftence punishable under this act clause 80-this clause authorises any officer empowered by the state gohrnmant to eon$oudd:ran-oftenee pulliabablet: udder  this, mt~·· on piftjl8m:ofsuch _/of·money,u maybe speciladcby''tbe atatgflvamof· meat :in the·~ rules clauae 81-this clause empowers the registrarorail¥ offic6rauthoriieg· by; him to enter- and search an,'  plaae and tosedeany doaumedia,wllelr"· he has·reasoll to suspect that any persobi conducts  achit in contaw  , tion of the provisions of the bill cla:use 83-this clause empowers the state govermnent· to delu~te any powers exercisable by it (except the power to hear appeaj"~1 to'l make rules) to any officer of the state government i subject tosuca terms and eonditions as may be specified therein clouse 84~ this clause makes the provisions of' the bill inapplicable to any chit started befwe the commencement of the proposed legislation or to any chit 'the aggregate-amowlt of which does not exceed 'one hundred rupees; clause 85-this clause prohibits commercial and co-operative banks from commencing or conducting chit buiiness· after the commeacament of the poop~ed legislation and also provides that any chitstartea,~ any bank before  such commencement may be continued till its com~tion subject to the provisions of the chit agreement and the state laws appliable to it clau'bi!!-86!-this clause- empowers the state government, in consultation with the reserve bank, to exempt any person or class qf persons or azwy[cbiilor;cluil'ofchita from all or any o£the:provisiou,of· the pmpollmir legis1atiad;, ~i clause 88>-this clause empowers the state government to make rules to give effect to the provisions of the bill ctause 89-this clause repeals certain state enactments regulatfngch1l business and provides for the continued applicauon of those enactments to the chits in force on the commencement of the proposed legislation clause 61 (1) of the bill provides for the appointment of a registrat of chits and as many additicmal, joint, deputy or asaiatant registrara as may be necessary by the state government sub-clause (2) of this clause provides for the appointment of inspectors of chits and chit auditors in respect of the union territories of the and am an and nicobar islands, chandigarh, dadra and nagar haveli, delhi and lakshadweep, any expenditure on this accmmt will be met from out of the consolidated fund of india 2 out of these five union territories, budget for the union territory of delhi alone provides at present separate expenditure for the enforcement of the tami1 nadu chit funds act, 1961 as extended to delhi this is of the order of rs 175 lakhs annually after the proposed legislation comes into force in that union territory, it is estimated that there may not be any significant addition to the recurring expenditure for the purpose of discharging the duties imposed by this act in relation to the union territory of delhi for the remaining four union territories, the recurring expenditure is estimated c:s follows:-| 1          | the andarnan and nicobar islands    ||-------------|-------------------------------------|| 2          | chandigarh                          || 3          | dadra and nagar haveli              || 4          |                                     || lakshadweep |                                     || &          |                                     || 50,000      |                                     || 65,000      |                                     || 21,000      |                                     || 25,000      |                                     || total:      |                                     || 1,61,000    |                                     |thus, the recurring expenditure that is likely to be involved if the bill is enacted and brought into operation in all the union territories is estimated to be of the order of rupees 336 lakhs per annum no non-recurring expenditure is expected the provisions of this bill do not involve any other expenditure of a recurring or non-recurring nature  memorandum regarding delegated legislationsub-clause (1) of clause 88 of the bill confers on the state govemments the power to make rules to give effect to the provisions of the bill sub-clause (2) of that clause specifie9 the matters in respect of which rules may be made under this clause these include, among other things, the fonn and manner in which an application may be made for obtaining the previous sanction of the state government for the commencement of a chit, the particulars that a chit agreement shall <:ontain, the procedure to be followed by the registrar for the re-lease of the lecurity furnished by the foreman for the proper conduct of the chits, the fees payable under the provisions of the bill and the procedure to be followed for the winding up of <:hits and for the settlement of disputes 2 the matters with respect to which rules may be made are ~natters of procedure or detail the delegation of legi9lative power is thus normal in character a bill to provide for the regulation of chit funds and for matters connected therewith  (shri r venkataraman, minister of finant:e) 