The Chit Funds Act, 1982
Administered Ministry: Ministry of Finance / Department of Financial Services
Section
Section 81 Power to compound offences.
(1) Subject to such conditions as may be prescribed, any officer empowered by the State Government in this behalf may, either before or after the institution of criminal proceedings under this Act, accept from the person who has committed or is reasonably suspected to have committed an offence under this Act, by way of composition of such offence, a sum of money not exceeding such amount as may be prescribed.
(2) Where an offence has been compounded under sub-section (1), the offender, if in custody, shall be discharged and no further proceedings shall be taken against him in respect of such offence.
(2) Where an offence has been compounded under sub-section (1), the offender, if in custody, shall be discharged and no further proceedings shall be taken against him in respect of such offence.
Section 82 Power to enter and search any place and to seize any documents.
(1) If the Registrar or any other officer authorised by him in this behalf, has reason to suspect that any person conducts, or is responsible for the conduct of, a chit in any place in contravention of the provisions of this Act, he may, for reasons to be recorded in writing and at any reasonable time, enter into and search such place, and may seize such books, registers, accounts or documents as may be necessary.
(2) The Registrar or officer authorised by him in this behalf, may apply for assistance to an officer in charge of a police station and take police officers to accompany and assist him in discharging his duties under sub-section (1).
(3) All searches under sub-section (1) shall be made in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974).
(2) The Registrar or officer authorised by him in this behalf, may apply for assistance to an officer in charge of a police station and take police officers to accompany and assist him in discharging his duties under sub-section (1).
(3) All searches under sub-section (1) shall be made in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974).
Section 83 Officers to be public servants.
The Registrar and all officers appointed by the State Government to perform any functions under this Act shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).
Section 84 Power to delegate.
The State Government may, by notification in the Official Gazette, direct that any power (other than the power to hear appeals or to make rules) exercisable by it under this Act or the rules made thereunder may be exercised also by any officer of the State Government subject to such terms and conditions, if any, as may be specified therein.
STATE AMENDMENTS
[Karnataka
Amendment of section 84.--In section 84 of the principal Act, the words “to hear appeals or” shall be omitted.
[Vide Karnataka Act 2 of 2008, s. 3.]
STATE AMENDMENTS
[Karnataka
Amendment of section 84.--In section 84 of the principal Act, the words “to hear appeals or” shall be omitted.
[Vide Karnataka Act 2 of 2008, s. 3.]
Section 85 Act not to apply to certain chits.
Nothing in this Act shall apply in respect of
(a) any chit started before the commencement of this Act; or
(b) any chit the amount of which, or where two or more chits were started or conducted simultaneously by the same foreman, the aggregate amount of which does not exceed 1[such amount as may be specified, by notification in the Official Gazette, by the State Goverment].
(a) any chit started before the commencement of this Act; or
(b) any chit the amount of which, or where two or more chits were started or conducted simultaneously by the same foreman, the aggregate amount of which does not exceed 1[such amount as may be specified, by notification in the Official Gazette, by the State Goverment].
1. Subs. by Act 41 of 2019, s. 9, for “one hundred rupees” (w.e.f. 1-1-2020).
Section 86 Banks not to conduct chit business.
(1) Notwithstanding anything contained in this Act, no bank shall commence or carry on chit business after the commencement of this Act.
(2) Where a chit had been started by any bank before such commencement, such chit may be continued after such commencement until it is completed, and the provisions of the chit agreement and such laws, if any, as were applicable to it immediately before the commencement of this Act shall apply to such chit.
Explanation.-- For the purposes of this section "bank" means an approved bank or a co-operative bank as defined in clause (bii) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934).
(2) Where a chit had been started by any bank before such commencement, such chit may be continued after such commencement until it is completed, and the provisions of the chit agreement and such laws, if any, as were applicable to it immediately before the commencement of this Act shall apply to such chit.
Explanation.-- For the purposes of this section "bank" means an approved bank or a co-operative bank as defined in clause (bii) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934).
Section 87 Power to exempt.
The State Government may, in consultation with the Reserve Bank, by notification in the Official Gazette, and subject to such conditions as may be specified in the notification, exempt any person or class of persons or any chit or class of chits from all or any of the provisions of this Act.
Section 88 Protection of action taken under the Act.
No suit, prosecution or other legal proceeding shall lie against the State Government, the Registrar or other officers of the State Government or of the Reserve Bank or any of its officers exercising any powers or discharging any functions under this Act in respect of anything which is in good faith done or intended to be done in pursuance of this Act or the rules made thereunder.
Section 89 Power to make rules.
(1) The State Government may, in consultation with the Reserve Bank, by notification in the Official Gazette, make rules for giving effect to the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:--
(a) the form and manner in which an application for obtaining the previous sanction may be made under sub-section (2) of section 4;
(b) the additional particulars that a chit agreement may contain under clause (q) of sub-section (1) of section 6;
(c) the particulars that may be included in the minutes of the proceedings of a draw under section 17;
(d) the method of valuation by the Registrar in a grain chit for the purpose of furnishing security under section 20;
(e) the procedure that may be followed by the Registrar in releasing the security furnished by the foreman under section 20;
(f) the registers and books and the form in which such registers and books may be maintained by the foreman under section 23;
(g) the time within which the balance sheet and the profit and loss account in respect of a chit business shall be filed under section 24;
(h) the rate at which interest shall be payable on the defaulted instalments by a defaulted subscriber under section 28;
(i) the particulars that may be included in an application for the winding up of chits under section 49;
(j) the procedure to be followed for the winding up of chits under Chapter X;
(k) the fees payable under section 63;
(l) the auditing of balance sheets and the profit and loss accounts of chit business and the issue of audit certificates;
(m) the form and manner in which a dispute shall be referred to the Registrar under section 64;
(n) the procedure to be followed by the Registrar or his nominee for settling the disputes referred to him under section 64;
(o) the matters referred to in clause (f) of sub-section (1) of section 67;
(p) the conditions subject to which and the amount on the payment of which composition of offences may be made under section 81;
(q) the form and manner in which an appeal may be preferred under this Act and the fees payable for such appeal;
(r) the issue and service of notices or other process under this Act;
(s) the procedure for, and the manner of, receiving any sum payable under this Act;
(t) any other matter which is required to be or may be prescribed.
(3) Every rule made under this section shall be laid, as soon as may be after it is made before each House of the State Legislature where it consists of two Houses, or, where such Legislature consists of one House before that House.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:--
(a) the form and manner in which an application for obtaining the previous sanction may be made under sub-section (2) of section 4;
(b) the additional particulars that a chit agreement may contain under clause (q) of sub-section (1) of section 6;
(c) the particulars that may be included in the minutes of the proceedings of a draw under section 17;
(d) the method of valuation by the Registrar in a grain chit for the purpose of furnishing security under section 20;
(e) the procedure that may be followed by the Registrar in releasing the security furnished by the foreman under section 20;
(f) the registers and books and the form in which such registers and books may be maintained by the foreman under section 23;
(g) the time within which the balance sheet and the profit and loss account in respect of a chit business shall be filed under section 24;
(h) the rate at which interest shall be payable on the defaulted instalments by a defaulted subscriber under section 28;
(i) the particulars that may be included in an application for the winding up of chits under section 49;
(j) the procedure to be followed for the winding up of chits under Chapter X;
(k) the fees payable under section 63;
(l) the auditing of balance sheets and the profit and loss accounts of chit business and the issue of audit certificates;
(m) the form and manner in which a dispute shall be referred to the Registrar under section 64;
(n) the procedure to be followed by the Registrar or his nominee for settling the disputes referred to him under section 64;
(o) the matters referred to in clause (f) of sub-section (1) of section 67;
(p) the conditions subject to which and the amount on the payment of which composition of offences may be made under section 81;
(q) the form and manner in which an appeal may be preferred under this Act and the fees payable for such appeal;
(r) the issue and service of notices or other process under this Act;
(s) the procedure for, and the manner of, receiving any sum payable under this Act;
(t) any other matter which is required to be or may be prescribed.
(3) Every rule made under this section shall be laid, as soon as may be after it is made before each House of the State Legislature where it consists of two Houses, or, where such Legislature consists of one House before that House.
Section 90 Repeal and saving.
(1) The Andhra Pradesh Chit Funds Act, 1971 (Andhra Pradesh Act 9 of 1971), the Kerala Chitties Act, 1975 (Kerala Act 23 of 1975), the Maharashtra Chit Funds Act, 1974 (Maharashtra Act LV of 1974), the Tamil Nadu Chit Funds Act, 1961 (Tamil Nadu Act 24 of 1961), as in force in the State of Tamil Nadu and in the Union territories of Chandigarh and Delhi, the Uttar Pradesh Chit Funds Act, 1975 (Uttar Pradesh Act 53 of 1975), the Goa, Daman and Diu Chit Funds Act, 1973 (Goa, Daman and Diu Act 16 of 1973) and the Pondicherry Chit Funds Act, 1966 (Pondicherry Act 18 of 1966), are hereby repealed and the provisions of section 6 of the General Clauses Act, 1897 (10 of 1897), shall apply to such repeal as if each such Act so repealed were a Central Act.
(2) Notwithstanding such repeal, the Acts mentioned in sub-section (1) shall continue to apply to chits in operation on the commencement of this Act, in the same manner as they applied to such chits before such commencement.
(2) Notwithstanding such repeal, the Acts mentioned in sub-section (1) shall continue to apply to chits in operation on the commencement of this Act, in the same manner as they applied to such chits before such commencement.