The Chit Funds Act, 1982 – All Sections

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

The Chit Funds Act, 1982 has 90 sections in 13 chapters, amended 2 times. Each link below opens the official text of that section.

The Chit Funds Act, 1982 PDF

All sections of the Chit Funds Act, 1982

Chapter I: PRELIMINARY

• Section 1 – Short title, extent and commencement
• Section 2 – Definitions
• Section 3 – Act to override other laws, memorandum, articles, etc

Chapter II: REGISTRATION OF CHITS, COMMENCEMENT AND CONDUCT OF CHIT BUSINESS

• Section 4 – Prohibition of chits not sanctioned or registered under the Act
• Section 5 – Prohibition of invitation for subscriptions except under certain conditions
• Section 6 – Form of chit agreement
• Section 7 – Filing of chit agreement
• Section 8 – Minimum capital requirements for the commencement, etc., of a chit, and creation of a reserve fund, by a company
• Section 9 – Commencement of chit
• Section 10 – Copies of chit agreement to be given to subscribers
• Section 11 – Use of words “chit”, “chit fund”, “chitty”, “kuri”, “fraternity fund”, or “Rotating Savings and Credit Institution”
• Section 12 – Prohibition of transacting business other than chit business by a company
• Section 13 – Aggregate amount of chits
• Section 14 – Utilisation of funds
• Section 15 – Alteration of chit agreement
• Section 16 – Date, time and place of conducting chits
• Section 17 – Minutes of proceedings
• Section 18 – Copies of minutes to be filed with Registrar
• Section 19 – Restriction on opening of new place of business

Chapter III: RIGHTS AND DUTIES OF FOREMAN

• Section 20 – Security to be given by foreman
• Section 21 – Rights of foreman
• Section 22 – Duties of foreman
• Section 23 – Books, records, etc., to be kept by foreman
• Section 24 – Balance sheet
• Section 25 – Liability of foreman to subscribers
• Section 26 – Withdrawal of foreman

Chapter IV: RIGHTS AND DUTIES OF NON-PRIZED SUBSCRIBERS

• Section 27 – Non-prized subscribers to pay subscriptions and obtain receipts
• Section 28 – Removal of defaulting subscribers
• Section 29 – Substitution of subscribers
• Section 30 – Amounts due to defaulting subscribers

Chapter V: RIGHTS AND DUTIES OF PRIZED SUBSCRIBERS

• Section 31 – Prized subscriber to furnish security
• Section 32 – Prized subscriber to pay subscriptions regularly
• Section 33 – Foreman to demand future subscriptions by written notice

Chapter VI: TRANSFERS

• Section 34 – Restrictions on transfer of rights of foreman
• Section 35 – Transfer of non-prized subscriber’s rights to be in writing
• Section 36 – Recognition of transfer by foreman
• Section 37 – Entry of transferee’s name in the books

Chapter VII: MEETINGS OF GENERAL BODY OF SUBSCRIBERS

• Section 38 – Meetings of general body of subscribers

Chapter VIII: TERMINATION OF CHITS

• Section 39 – Provision for continuation of chits in certain cases
• Section 40 – Termination of chits
• Section 41 – Copy of assent or consent to be filed with Registrar
• Section 42 – Refund of non-prized subscribers’ subscriptions
• Section 43 – Subscribers’ dues to be first charge on chit assets

Chapter IX: INSPECTION OF DOCUMENTS

• Section 44 – Foreman to allow certain subscribers to inspect chit records
• Section 45 – Preservation of chit records by foreman
• Section 46 – Inspection of chit books and records by Registrar
• Section 47 – Power of Reserve Bank to inspect chit books and records

Chapter X: WINDING UP OF CHITS

• Section 48 – Circumstances under which chits may be wound up
• Section 49 – Application for winding up
• Section 50 – Bar to winding up proceedings
• Section 51 – Commencement and effect of winding up order
• Section 52 – Injunction order
• Section 53 – Powers of Registrar
• Section 54 – Vesting of chit assets in Registrar or other persons
• Section 55 – Suits, etc., to be stayed on winding up order
• Section 56 – Notification of winding up order
• Section 57 – Cessation of winding up proceedings on insolvency of foreman, etc., or the winding up of the company and transfer of such proceedings
• Section 58 – Award of compensation to foreman
• Section 59 – Right to appeal
• Section 60 – Limitation

Chapter XI: APPOINTMENT OF OFFICERS AND LEVY OF FEES

• Section 61 – Appointment of Registrar and other officers
• Section 62 – Inspection of documents in Registrar’s office
• Section 63 – Levy of fees

Chapter XII: DISPUTES AND ARBITRATION

• Section 64 – Disputes relating to chit business
• Section 65 – Period of limitation
• Section 66 – Settlement of disputes
• Section 67 – Procedure for settlement of disputes and powers of Registrar or nominee
• Section 68 – Attachment before judgment and other interlocutory orders
• Section 69 – Decision of Registrar or nominee
• Section 70 – Appeal against decision of Registrar or nominee
• Section 71 – Money how recovered
• Section 72 – Private transfer of property made after issue of certificate void against foreman

Chapter XIII: MISCELLANEOUS

• Section 73 – Advisory role of Reserve Bank
• Section 74 – Appeals
• Section 75 – Powers of Registrar to give extension of time for filing documents
• Section 76 – Penalties
• Section 77 – Penalty for second and subsequent convictions
• Section 78 – Application of fine
• Section 79 – Offences by companies
• Section 80 – Cognizance of offences
• Section 81 – Power to compound offences
• Section 82 – Power to enter and search any place and to seize any documents
• Section 83 – Officers to be public servants
• Section 84 – Power to delegate
• Section 85 – Act not to apply to certain chits
• Section 86 – Banks not to conduct chit business
• Section 87 – Power to exempt
• Section 88 – Protection of action taken under the Act
• Section 89 – Power to make rules
• Section 90 – Repeal and saving