THE CHIT FUNDS ACT, 1982 

(Last Updated on 1st January, 2020). 
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ARRANGEMENT OF SECTIONS 

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CHAPTER I 

PRELIMINARY 

SECTIONS 

1. Short title, extent and commencement. 

2. Definitions. 

3. Act to override other laws, memorandum, articles, etc. 

CHAPTER II 

REGISTRATION OF CHITS, COMMENCEMENT AND CONDUCT OF CHIT BUSINESS 

4. Prohibition of chits not sanctioned or registered under the Act. 

5. Prohibition of invitation for subscriptions except under certain conditions. 

6. Form of chit agreement. 

7. Filing of chit agreement. 

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

fund, by a company. 

9. Commencement of chit. 

10. Copies of chit agreement to be given to subscribers. 

11. Use of words “chit”, “chit fund”, “chitty”, “kuri”, “fraternity fund”, or “Rotating Savings and 

Credit Institution”. 

12. Prohibition of transacting business other than chit business by a company. 

13. Aggregate amount of chits. 

14. Utilisation of funds. 

15. Alteration of chit agreement. 

16. Date, time and place of conducting chits. 

17. Minutes of proceedings. 

18. Copies of minutes to be filed with Registrar. 

19. Restriction on opening of new place of business. 

CHAPTER III 

RIGHTS AND DUTIES OF FOREMAN 

20. Security to be given by foreman. 

21. Rights of foreman. 

22. Duties of foreman. 

23. Books, records, etc., to be kept by foreman. 

24. Balance sheet. 

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SECTIONS 

25. Liability of foreman to subscribers. 

26. Withdrawal of foreman. 

CHAPTER IV 

RIGHTS AND DUTIES OF NON-PRIZED SUBSCRIBERS 

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

28. Removal of defaulting subscribers. 

29. Substitution of subscribers. 

30. Amounts due to defaulting subscribers. 

CHAPER V 

RIGHTS AND DUTIES OF PRIZED SUBSCRIBERS 

31. Prized subscriber to furnish security. 

32. Prized subscriber to pay subscriptions regularly. 

33. Foreman to demand future subscriptions by written notice. 

CHAPTER VI 

TRANSFERS 

34. Restrictions 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. 

CHAPTET VII 

MEETINGS OF GENERAL BODY OF SUBSCRIBERS 

38. Meetings of general body of subscribers. 

CHAPTER VIII 

TERMINATION OF CHITS 

39. 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 IX 

INSPECTION OF DOCUMENTS 

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

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 records. 

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CHAPTER X 

WINDING UP OF CHITS 

SECTIONS 

48. Circumstances under which chits may be wound up. 

49. Application for winding up. 

50. Bar to winding up proceedings. 

51. Commencement and effect of winding up order. 

52. Injunction order. 

53. Powers of Registrar. 

54. Vesting of chit assets in Registrar or other persons. 

55. Suits, etc., to be stayed on winding up order. 

56. Notification of winding up order. 

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

company and transfer of such proceedings. 

58. Award of compensation to foreman. 

59. Right to appeal. 

60. Limitation. 

CHAPTER XI 

APPOINTMENT OF OFFICERS AND LEVY OF FEES 

61. Appointment of Registrar and other officers. 

62. Inspection of documents in Registrar’s office. 

63. Levy of fees. 

CHAPTER XII 

DISPUTES AND ARBITRATION 

64. Disputes relating to chit business. 

65. Period of limitation. 

66. Settlement of disputes. 

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

68. Attachment before judgment and other interlocutory orders. 

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 

MISCELLANEOUS 

73. Advisory role of Reserve Bank. 

74. Appeals. 

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

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SECTIONS 

76. Penalties. 

77. Penalty for second and subsequent convictions. 

78. Application of fine. 

79. Offences by companies. 

80. Cognizance of offences. 

81. Power to compound offences. 

82. Power to enter and search any place and to seize any documents. 

83. Officers to be public servants. 

84. Power to delegate. 

85. Act not to apply to certain chits. 

86. Banks not to conduct chit business. 

87. Power to exempt. 

88. Protection of action taken under the Act. 

89. Power to make rules. 

90. Repeal and saving. 

THE SCHEDULE. 

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THE CHIT FUNDS ACT, 1982 

ACT NO. 40 OF 1982 

[19th August, 1982.] 

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

BE it enacted by Parliament in the Thirty-third Year of the Republic of India as follows:— 

CHAPTER I 

PRELIMINARY 
1. Short title, extent and commencement.—(1) This Act may be called the Chit Funds Act, 1982. 
(2) It extends to the whole of India 1***. 
(3)  It  shall  come  into  force  on  such  date2  as  the  Central  Government  may,  by  notification  in  the 

Official Gazette, appoint, and different dates may be appointed for different States. 

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

(a) “approved bank” means the State Bank of India constituted under section 3 of the State Bank 
of  India  Act,  1955  (23  of  1955),  or  a  subsidiary  bank  constituted  under  section  3  of  the  State        
Bank  of  India  (Subsidiary  Banks)  Act,  1959  (38  of  1959),  or  a  corresponding  new  bank       
constituted  under  section  3  of  the  Banking  Companies  (Acquisition  and  Transfer  of  Undertakings)                             
Act, 1970 (5 of 1970), or a Regional Rural Bank  established under section 3 of the Regional Rural 

1. The words “except the State of Jammu and Kashmir” omitted by Act 34 of 2019, s. 95 and the Fifth Schedule (w.e.f. 31-10- 2019). 
2. The provisions of this Act shall come into force in— 
 the  State  of  West  Bengal  on  2nd  April,  1984,  vide  notification  No.  S.O.  143(E), dated  1st March, 1984,  see Gazette  of  India,  Extraordinary,    

Part II, sec. 3(ii). 

the  State  of  Tamil  Nadu  on  13th  April,  1984,  vide  notification  No.  S.O.  281(E),  dated  12th  April,  1984,  see  Gazette  of  India,  Extraordinary,     

Part II, sec. 3(ii). 

the  State  of  Himachal  Pradesh  on  1st  November,  1984,  vide  notification  No.  S.O.  808(E),  dated  29th  October,  1984,  see  Gazette  of  India, 

Extraordinary, Part II, sec. 3(ii). 

the State of Sikkim on 6th  November, 1984, vide notification No. S.O. 837(E), dated 14th November, 1984, see Gazette of India, Extraordinary, 

Part II, sec. 3(ii). 

the Union territory of Andaman and Nicobar Islands on 1st July, 1985, vide notification No. S.O. 493(E), dated 27th June, 1985, see Gazette of 

India, Extraordinary, Part II, sec. 3(ii). 

the Union territory of Pondicherry on 1st  November, 1986  vide notification No. S.O. 771(E), dated 28th October, 1986  see Gazette of  India, 

Extraordinary, Part II, sec. 3(ii). 

the State of Rajasthan on 1st July, 1989  vide notification No. S.O. 481(E), dated 26th June, 1989, see Gazette of  India, Extraordinary, Part  II,   

sec. 3(ii). 

the  State  of  Assam    on  1st  March,  1990,  vide  notification  No.  S.O.  166(E),  dated  22nd  February,  1992,  see  Gazette  of  India,  Extraordinary,     

Part II, sec. 3(ii). 

the State of Manipur on 1st  November, 1994, vide notification No. S.O. 779(E), dated 28th October, 1994, see Gazette of India, Extraordinary, 

Part II, sec. 3(ii). 

the State of Tripura on  1st March, 1995, vide notification No. S.O. 131(E), dated 1st March, 1995  see Gazette of India, Extraordinary, Part II, 

sec. 3(ii). 

the  State  of  Bihar  on  2nd  October,1987,  vide  notification  No.  S.O.  864(E),  dated  28th  September,  1987,  see  Gazette  of  India,  Extraordinary,    

Part II, sec. 3(ii). 

the State of Punjab on 1st April, 1999,  vide notification No. S.O. 204(E), dated 31st March, 1999,  see Gazette of India, Extraordinary, Part II,  

sec. 3(ii). 

the State of Karnataka on 2nd January, 1984 vide notification No. S.O. 946(E), dated 30th December, 1983, see Gazette of India, Extraordinary, 

Part II, sec. 3(ii). 

the  Union  territory  of  Chandigarh  on  1st  May,  1984,  vide  notification  No.  S.O.  322(E),  dated  27th  April,  1984,  see  Gazette  of  India, 

Extraordinary, Part II, sec. 3(ii). 

the Union territory of Dadra and Nagar Haveli  on 3rd September, 1984, vide notification No. S.O. 660(E), dated 30th August, 1984, see Gazette 

of India, Extraordinary, Part II, sec. 3(ii). 

the  State  of  Orissa  on  1st  September,  1985,  vide  notification  No.  S.O.  629(E),  dated  26th  August,  1985,  see  Gazette  of  India,  Extraordinary,    

Part II, sec. 3(ii). 

the Union territory of Goa, Daman & Diu on 1st January, 1986, vide notification No. S.O. 910(E), dated 24th December, 1985, see Gazette of 

India, Extraordinary, Part II, sec. 3(ii). 

the State of Madhya Pradesh  on 1st July 1986, vide notification No. S.O. 381(E), dated 27th June, 1986, see Gazette of India, Extraordinary, Part 

II, sec. 3(ii). 

the  State  of  Meghalaya  on  2nd    January,  1988,  vide  notification  No.  S.O.  1135(E),  dated  30th  December,  1987,  see  Gazette  of  India, 

Extraordinary, Part II, sec. 3(ii). 

the State of Uttar Pradesh on 1st February, 1988, vide notification No. S.O. 133(E), dated 29th January, 1988, see Gazette of India, Extraordinary, 

Part II, sec. 3(ii). 

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Banks  Act,  1976  (21  of  1976),  or  a  corresponding  new  bank  constituted  under  section  3  of  the 
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or a banking 
company as defined under clause (e) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), 
or a banking institution notified by the Central Government under section 51 of that Act or such other 
banking institution as the State Government may, in consultation with the Reserve Bank, approve for 
the purposes of this Act; 

(b)  “chit”  means  a  transaction  whether  called  chit,  chit  fund,  chitty,  kuri  1[,  fraternity  fund, 
Rotating Savings and Credit Institution] or by any other name by or under which a person enters into 
an agreement with a specified number of persons that every one of them shall subscribe a certain sum 
of  money  (or  a  certain  quantity  of  grain  instead)  by  way  of  periodical  instalments  over  a  definite 
period and that each such subscriber shall, in his turn, as determined by lot or by auction of by tender 
or  in  such  other  manner  as  may  be  specified  in  the  chit  agreement,  be  entitled  to  the  2[net  chit 
amount]. 

Explanation.—A  transaction  is  not  a  chit  within  the  meaning  of  this  clause,  if  in  such 

transaction,— 

(i) some alone, but not all, of the subscribers get the 2[net chit amount] without any liability to 

pay future subscriptions; or 

(ii)  all  the  subscribers  get  the  3[gross  chit  amount]  by  turns  with  a  liability  to  pay  future 

subscriptions; 

(c)  “chit  agreement”  means  the  document  containing  the  articles  of  agreement  between  the 

foreman and the subscribers relating to the chit; 

4* 

* 

* 

* 

*; 

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

(f) “defaulting subscriber” means a subscriber who has defaulted in the payment of subscriptions 

due in accordance with the terms of the chit agreement; 

(g)  “discount”  means  the  sum  of  money  or  the  quantity  of  grain  which  a  prized  subscriber  is, 
under  the  terms  of  the  chit  agreement,  required  to  forego  and  which  is  set  apart  under  the  said 
agreement to meet the expenses of running the chit or for distribution among the subscribers or for 
both; 
5* 

*; 

* 

* 

* 

 (i) “draw” means the manner specified in the chit agreement for the purpose of ascertaining the 

prized subscriber at any instalment of the chit; 

(j) “foreman” means the person who under the chit agreement is responsible for the conduct of 

the chit and includes any person discharging the functions of the foreman under section 39; 

6[(ja) “gross chit amount” means the sum-total of the subscriptions payable by all the subscribers 

for any installment of a chit without any deduction of discount or otherwise; 

(jb) “net chit amount” means the difference between the gross chit amount and the discount, and 

in  the  case  of  a  fraction  of  a  ticket  means  the  difference  between  the  gross chit  amount and  the 

discount proportionate to the fraction of the ticket, and when the net chit amount is payable otherwise 
than in cash, the value of the net chit amount shall be the value at the time when it becomes payable;] 

1. Ins. by Act 41 of 2019, s. 2 (w.e.f. 1-1-2020). 
2. Subs. by s. 3, ibid., for “prize amount” (w.e.f. 1-1-2020). 
3. Subs. by s. 3, ibid., for “chit amount”  (w.e.f. 1-1-2020). 
4. Clause (d) omitted by s. 2, ibid. (w.e.f. 1-1-2020). 
5. Clause (h) omitted by s. 2, ibid. (w.e.f. 1-1-2020). 
6. Ins. by s. 2, ibid., (w.e.f. 1-1-2020). 

6 

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

(l) “prescribed” means prescribed by rules made under this Act; 
1* 

* 

* 

* 

* 

(n)  “prized  subscriber”  means  a  subscriber  who has either received  or  is entitled  to  receive  the 

2[net chit amount]; 

(o)  “Registrar”  means  the  Registrar  of  Chits  appointed  under  section  61,  and  includes  an 

Additional, a Joint, Deputy or an Assistant Registrar appointed under that section; 

(p) “Reserve Bank” means the Reserve Bank of India constituted under the Reserve Bank of India 

Act, 1934 (2 of 1934); 

3[(pa) “share of discount” 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.] 

(q) “State Government”, in relation to a Union territory,  means 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 ticket and also a transferee of a ticket 

or fraction thereof by assignment in writing or by operation of law; 

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

3. Act to override other laws, memorandum, articles, etc.—Save as otherwise expressly provided 

in this Act,— 

(a) the provisions of this Act shall have effect notwithstanding anything to the contrary contained 
in  any  other  law  for  the  time  being  in  force  or  in  the  memorandum  or  articles  of  association  or      
bye-laws or in any agreement or resolution whether the same be registered, executed or passed, as the 
case may be, before or after the commencement of this Act; and 

(b)  any  provision  contained  in  the  memorandum,  articles,  bye-laws,  agreement  or  resolution 
aforesaid, shall, to the extent to which it is repugnant to the provisions of this Act, become or be void, 
as the case may be. 

CHAPTER II 

REGISTRATION OF CHITS, COMMENCEMENT AND CONDUCT OF CHIT BUSINESS 

4.  Prohibition  of  chits  not  sanctioned  or  registered  under  the  Act.—(1)  No  chit  shall  be 
commenced or conducted 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 registered in that State in accordance with the provisions 
of this Act: 

Provided that a sanction obtained under this sub-section shall lapse if the chit is not registered within 
twelve months from the date of such sanction or within such further period or periods not exceeding six 
months in the aggregate as the State Government may, on application made to it in this behalf, allow. 

(2) An application for the purpose of obtaining a sanction under sub-section (1) shall be made by the 

foreman in such form and in such manner as may be prescribed. 

(3) The previous sanction referred to in sub-section (1) may be refused, if the foreman,— 

(a)  had  been  convicted  of  any  offence  under  this  Act  or  under  any  other  Act  regulating  chit 

business and sentenced to imprisonment for any such offence; or 

1. Clause (m) omitted by Act 41 of 2019, s. 2 (w.e.f. 1-1-2020). 
2. Subs. by s. 3, ibid., for “prize amount” (w.e.f. 1-1-2020). 
3. Ins. by s. 2, ibid. (w.e.f. 1-1-2020). 

7 

 
 
 
 
 
 
 
                                                           
(b) had defaulted in the payment of fees or the filing of any statement or record required to be 
paid  or  filed  under  this  Act  or  had  violated  any  of  the  provisions  of  this  Act  or  the  rules  made 
thereunder; or 

(c) had been convicted of any offence involving moral turpitude and sentenced to imprisonment 

for any such offence unless a period of five years has elapsed since his release: 

Provided that before refusing any such sanction, the foreman shall be given a reasonable opportunity 

of being heard. 

(4) The order of the State Government, and, subject to the provisions of sub-section (5), the order of 
the officer empowered under sub-section (1), issuing or refusing previous sanction under this section shall 
be final. 

(5)  Any  person aggrieved  by  the  refusal  to issue  previous  sanction  by  an officer  empowered  under 
sub-section (1) may appeal to the State Government within thirty days of the date of communication to 
him of such refusal and the decision of that Government on such appeal shall be final. 

5. Prohibition of invitation for subscriptions except under certain conditions.—No person shall 
issue or cause to be issued any notice, circular, prospectus, proposal or other document inviting the public 
to subscribe for tickets in any chit unless such notice, circular, prospectus, proposal or document contains 
a statement that the previous sanction required under section 4 has been obtained and the particulars of 
such sanction. 

6. Form of chit agreement.—(1) Every chit agreement shall be in duplicate and shall be signed by 
each of the subscribers or by any person authorised by him in writing and the foreman and attested by at 
least two witnesses and it shall contain the following particulars, namely:— 

(a) full name and residential address of every subscriber; 

(b) the number of tickets including the fraction of a ticket held by each subscriber; 

(c)  the  number  of  instalments,  the  amount  payable  for  each  ticket  at  every  instalment  and  the 

interest or penalty, if any, payable on any default in the payment of such instalments; 

(d) the probable date of commencement and the duration of the chit; 

(e) the manner of ascertaining the prized subscriber at each instalment; 

(f) the maximum amount of discount which the prized subscriber has to forego at any instalment; 
(g) the mode and proportion in which the discount is distributable by way of 1[share of discount], 

foreman’s commission or remuneration of expenses for running the chit, as the case may be; 

(h) the date, time and place at which the chit is to be drawn; 
(i) the instalment at which the foreman is to get the 2[gross chit amount]; 

(j) the name of the approved bank in which chit moneys shall be deposited by the foreman under 

the provisions of this Act; 

(k) where the foreman is an individual, the manner in which a chit shall be continued when such 

individual dies or becomes of unsound mind or is otherwise incapacitated; 

(l) the consequences to which a non-prized or prized subscriber or the foreman shall be liable in 

case of violation of any of the provisions of the chit agreement; 

(m) the conditions under which a subscriber shall be treated as a defaulting subscriber; 

(n) the nature and particulars of the security to be offered by the foreman; 

1. Subs. by Act 41of 2019, s. 3, for “dividend” (w.e.f. 1-1-2020). 
2. Subs. by s. 3, ibid., for “chit amount” (w.e.f. 1-1-2020). 

8 

 
                                                           
 
(o)  the  dates  on  which  and  time  during  which  the  foreman  shall,  subject  to  the  provisions 
contained in section 44, allow inspection of chit records to non-prized and unpaid prized subscribers; 

(p)  the  names  of  the  nominees  of  each  subscriber,  that  is  to  say,  the  names  of  the  persons  to 
whom the benefits accruing to the subscriber under the chit may be paid in the case of the death of the 
subscriber or when he is otherwise incapable of making an agreement; 

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

Explanation.—For  the  purposes  of  this  sub-section,  it  shall  be  sufficient  if  the  signature  of  each 

subscriber is obtained in separate copies of the agreement. 

(2)  The  duration  of  a  chit  shall  not  extend  beyond  a  period  of  five  years  from  the  date  of  its 

commencement: 

Provided that the State Government may permit the duration of a chit up to a period of ten years if it 

is satisfied that it is necessary so to do, having regard to,— 
(a) the financial condition of the foreman; 
(b) his methods of operation; 
(c) the interests of prospective subscribers; 
(d) the requirements as to security; and 
(e) such other factors as the circumstances of the case may require. 

(3)  The  amount  of  discount  referred  to  in  clause  (f)  of  sub-section  (1)  shall  not  exceed  1[thirty  per 

cent.] of the 2[gross chit amount]. 

(4) Where the prized subscriber at any instalment of the chit is required to be determined by auction 

and more than one person offer the maximum discount, the prized subscriber shall be determined by lot. 

7.  Filing  of  chit  agreement.—(1)  Every  chit  agreement  shall  be  filed  in  duplicate  by  the  foreman 

with the Registrar. 

(2) The Registrar shall retain one copy of the chit agreement and return the duplicate to the foreman 

with an endorsement that the chit agreement has been registered: 

Provided  that  the  Registrar  may  refuse  to  register  the  chit  agreement  on  any  one  or  more  of  the 

following grounds, namely:— 

(a) that the security offered by the foreman under section 20 is insufficient; 

(b)  that  the  foreman  had  been  convicted  of  any  offence  under  this  Act  or  under  any  other  Act 

regulating chit business and sentenced to imprisonment for any such offence; 

(c) that the foreman had defaulted in the payment of fees or the filing of any statement or record 
required to be paid or filed under this Act or had violated any of the provisions of this Act or the rules 
made thereunder; 

(d) that the foreman had been convicted of any offence involving moral turpitude and sentenced 

to imprisonment for any such offence unless a period of five years has elapsed since his release: 

Provided  further that  before  refusing  to  register  a chit  under  the  first  proviso,  the  foreman  shall  be 

given a reasonable opportunity of being heard. 

(3) Every endorsement made under sub-section (2) shall be conclusive evidence that the chit is duly 
registered under this Act and the registration of a chit shall lapse if the declaration by the foreman under 
sub-section (1) of section 9 is not filed within three months from the date of such endorsement or within 
such  further  period  or  periods  not  exceeding  three  months  in  the  aggregate  as  the  Registrar  may,  on 
application made to him in this behalf, allow. 

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

reserve  fund,  by  a  company.—(1)  Notwithstanding  anything  contained 

in 

the  Companies                   

1. Subs. by Act 10 of 2001, s. 2, for “forty per cent.” (w.e.f. 01-10-2001).  
2. Subs. by Act 41 of 2019,  s. 3, for “chit amount” (w.e.f. 1-1-2020). 

9 

 
                                                           
 
Act, 1956 (1 of 1956), but subject to the provisions of this Act, a company shall not commence or carry 
on chit business unless 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 lakh and carrying on chit business 
on  the  commencement  of  this  Act,  shall,  before  the  expiry  of  a  period  of  three  years  from  such 
commencement, increase its paid-up capital of not less than rupees one lakh: 

Provided  that  the  State  Government  may,  if  it  considers  it  necessary  in  the  public  interest  or  for 
avoiding any hardship, extend the said period of three years in respect of any company by such further 
period or periods not exceeding two years in the aggregate: 

Provided  further that  no  such  company  shall  commence  any  new  chit  the  duration  of  which  would 
extend beyond the said period of three years or such extended period or periods under the first proviso 
unless it increases its paid-up capital to not less than rupees one lakh. 

(3) Every company carrying on chit business shall create and maintain a reserve fund and shall, out of 
the  balance  of  profit  of  each  year  as  disclosed  in  its  profit  and  loss  account  and  before  any  1[share  of 
discount] on its shares is declared, transfer to such reserve fund, a sum equal to not less than ten per cent. 
of such profit. 

(4)  No  company  shall  appropriate  any  sum  or  sums  from  the  reserve  fund  except  with  the  prior 
approval of the Registrar and, for the purpose of obtaining such approval, it shall make an application in 
the prescribed form to the Registrar explaining the circumstances relating to such appropriation. 

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

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

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

(3) No foreman shall commence any auction or the draw of any chit or appropriate any  2[gross chit 

amount] unless a certificate of commencement referred to in sub-section (2) is obtained by him. 

10. Copies of chit agreement to be given to subscribers.—(1) A foreman shall, as soon as may be 
after  he  has  obtained  the  certificate  of  commencement  under  sub-section  (2)  of  section  9,  but  not  later 
than  the  date  of  the  first  draw  of  the  chit,  furnish  to  every  subscriber,  a  copy  of  the  chit  agreement 
certified to be a true copy. 

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

3[11. Use of words “chit”, “chit fund”, “chitty”, “kuri”, “fraternity fund” or “Rotating Savings 
and Credit Institution”.—(1) No person shall carry on chit business unless he uses as part of his name 
any  of  the  words "chit",  "chit  fund",  "chitty",  "kuri",  "fraternity  fund"  or  "Rotating  Savings  and  Credit 
Institution" and no person other than a person carrying on chit business shall use as part of his name any 
such word. 

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

(a)  any  person  is  carrying  on  chit  business  without  using  as  part  of  his  name  any  of  the  words 

specified in sub-section (1); or  

(b) any person not carrying on chit business is using any such word as part of his name,  
he shall, within a period of one year from such commencement, add as part of his name any such word or, 
as the case may be, delete such word from his name: 

Provided  that  the  State  Government  may,  if  it  considers  necessary  in  the  public  interest  or  for 

avoiding any hardship, extend the said period of one year by such further period or periods not exceeding 

one year in the aggregate.] 

1. Subs. by Act 41of 2019, s. 3, for “dividend” (w.e.f. 1-1-2020). 
2. Subs. by s. 3, ibid., for “chit amount” (w.e.f. 1-1-2020). 
3. Subs. by s. 4, ibid., for section 11 (w.e.f. 1-1-2020). 

10 

 
                                                           
12. Prohibition of transacting business other than chit business by a company.—(1) Except with 
the general or special permission of the State Government, no company carrying on chit business shall 
conduct any other business. 

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

Provided  that  the  State  Government  may,  if  it  considers  it  necessary  in  the  public  interest  or  for 
avoiding  any  hardship,  extend  the  said  period  of  three  years  by  such  further  period  or  periods  not 
exceeding two years in the aggregate. 

13.  Aggregate  amount  of  chits.—(1)  No  foreman,  other  than  a  firm  or  other  association  of 
individuals or a company or co-operative society, shall commence or conduct chits, the aggregate 1[gross 
chit amount] of which at any time exceeds 2[ rupees three lakh]. 

(2) Where the foreman is a firm or other association of individuals, the aggregate  1[gross chit amout] 

of the chits conducted by the firm or other association shall not at any time exceed,— 

(a) where the number of partners of the firm or the individuals constituting the association is not 

less than four, a sum of rupees 3[rupees eighteen lakhs]; 

(b) in any other case, a sum calculated on the basis of  2[rupees three lakh] with respect to each 

such partner or individual. 
(3) Where the foreman is a company or co-operative society, the aggregate 1[gross chit amount] of the 
chits conducted by it shall not at any time exceed ten times the net owned funds of the company or the           
co-operative society, as the case may be. 

Explanation.—For the purposes of this sub-section, “net owned funds” shall mean the aggregate of 
the paid-up capital and free reserves as disclosed in the last audited balance sheet of the company or     co-
operative  society,  as  reduced  by  the  amount  of  accumulated  balance  of  loss,  deferred  revenue, 
expenditure and other intangible assets, if any, as disclosed in the said balance-sheet. 

14. Utilisation of funds.—(1) No person carrying on chit business shall utilise the moneys collected 
in respect of such business (other than commission or remuneration payable to such person or interest or 
penalty, if any, received from a defaulting subscriber), except for— 

(a) carrying on chit business; or 
(b) giving loans and advances to non-prized subscribers on the security of subscriptions paid by 

them; or 

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

Act, 1882 (2 of 1882); or 

(d) making deposits with approved banks mentioned in the chit agreement. 

(2) Where any person carrying on chit business has utilised the moneys collected in respect of such 

business  before  the  commencement  of  this  Act,  otherwise  than  for  the  purposes  specified  in                 
sub-section  (1),  he  shall  secure  that  so  much  of  such  moneys  as  have  not  been  realised  before  such 
commencement are realised before the expiry of a period of three years from such commencement: 

Provided  that  the  State  Government  may,  if  it  considers  it  necessary  in  the  public  interest  or  for 
avoiding  any  hardship,  extend  the  said  period  of  three  years  by  such  further  period  or  periods  not 
exceeding one year in the aggregate. 

15.  Alteration  of  chit  agreement.—A  chit  agreement  shall  not  be  altered,  added  to  or  cancelled 

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

1. Subs. by Act 41 of 2019, s. 3, for “chit amount” (w.e.f. 1-1-2020). 
2. Subs. by s. 5, ibid., “rupees one lakh” (w.e.f. 01-10-2020). 
3. Subs. by s. 5, ibid., for,  “rupees six lakhs” (w.e.f. 01-01-2020). 

11 

 
                                                           
16. Date, time and place of conducting chits.—(1) Every draw in a chit shall be held on the date, at 
the time and place mentioned in the chit agreement and a notice therefor in such form and in such manner 
as may be prescribed shall be issued by the foreman to all the subscribers. 

(2) Every such draw shall be conducted in accordance with the provisions of the chit agreement and 
in the presence of not less than two subscribers  1[present in person or through video conferencing duly 
recorded by the foreman.] 

(3) Where any draw was not conducted on the ground that two subscribers required to be present at a 
draw  under  sub-section  (2)  were  not  present  or  on  any  other  ground,  the  Registrar  may,  on  his  own 
motion or on an application made by the foreman or any of the subscribers, direct that the draw shall be 
conducted in his presence or in the presence of any person deputed by him. 

17. Minutes of proceedings.—(1) The minutes of the proceedings of every draw shall be prepared 
and entered in a book to be kept for that purpose immediately after the closure of the draw and shall be 
signed by the foreman, the prized subscribers, if present, or their authorised agents, and at least two other 
subscribers who are present  2[in person or through video conferencing], and where a direction has been 
made under sub-section (3) of section 16, also by the Registrar or the person deputed by him under that 
sub-section. 

2[Provided that where two subscribers required to be present under sub-section (2) of section 16 are 
present through video conferencing, the foreman shall have the minutes of the proceedings signed by such 
subscribers within a period of two days of the date of the draw.] 

(2) The minutes referred to in sub-section (1) shall state clearly— 

(a) the date and hour when proceedings began and ended and the place where the draw was held; 

(b) the number of the instalment of the chit to which the proceedings relate; 

(c) the names of the subscribers present; 
(d) the person or persons who become entitled to the 3[net chit amount] in the instalment; 

(e) the amount of discount; 
(f) full particulars regarding the disposal of the unpaid 3[net chit amount], if any, in respect of any 

previous instalment; and 

(g) any other particulars that may be prescribed. 

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

19. Restriction on opening of new place of business.—(1) No person carrying on chit business shall 
open a new place of business without obtaining the prior approval of the Registrar within whose territorial 
jurisdiction  his  registered  office  or,  as  the  case  may  be,  the  place  or  the  principal  place  of  business  is 
situated. 

(2)  Before  granting  approval  under  sub-section  (1),  the  Registrar  shall  consult  the  Registrar  of  the 
State within whose territorial jurisdiction the new place of business is proposed to be opened and shall 
also keep in view the financial condition and methods of operation of the foreman, the extent to which 
public interest will be served by the opening of the new place of business and such other matters as may 
be prescribed. 

(3) Where a person carrying on chit business opens a new place of business in a State other than the 
State  (hereinafter  referred  to  as  the  State  of  origin)  in  which  his  registered  office  or  the  place  or  the 
principal place of his business is situated, the Registrar of the State in which such new place of business is 
opened may also exercise and perform any of the powers and functions which the Registrar of the State of 
origin may exercise and perform in respect of the chit business carried on at such new place of business. 

1. Ins. by Act 41 of 2019, s. 6 (w.e.f. 1-1-2020). 
2. Ins. by s. 7, ibid. (w.e.f. 1-1-2020). 
3. Subs. by s. 3, for “prize amount” (w.e.f. 1-1-2020). 

12 

 
                                                           
(4) For the purposes of this section, “place of business” shall include any branch office, sub-office, or 

any place of business where the chit business may be conducted by such person. 

CHAPTER III 

RIGHTS AND DUTIES OF FOREMAN 

20. Security to be given by foreman.—(1) For the proper conduct of the chit, every foreman shall, 

before applying for a previous sanction under section 4,— 

1[(a) deposit in the name of the Registrar, an amount equal to,— 

(i) fifty per cent. of the 2[gross chit amount] in cash in an approved bank; and 

(ii) fifty per cent. of the 2[gross chit amount] in the form of bank guarantee from an approved 

bank; or] 

(b) transfer Government securities of the face value or market value (whichever is less) of not less 

than one and a half times the 2[gross 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 Trusts Act, 1882 (2 of 1882), of such value, as may be 
prescribed by the State Government from time to time: 

Provided that the value of the securities referred to in clause (c) shall not, in any case, be less than 

one and a half times the value of the 2[gross chit amount]. 

(2)  Where  a  foreman  conducts  more  than  one  chit,  he  shall furnish  security  in accordance  with  the 

provisions of sub-section (1) in respect of each chit. 

(3)  The  Registrar  may,  at  any  time  during  the  currency  of  the  chit,  permit  the  substitution  of  the 

security: 

Provided that the face value or market value (whichever is less) of the substituted security shall not be 

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

(4)  The  security  given  by  the  foreman  under  sub-section  (1),  or  any  security  substituted  under        

sub-section (3), shall not be liable to be attached in execution of a  decree or otherwise until the chit is 
terminated and the claims of all the subscribers are fully satisfied. 

(5)  Where  the  chit  is  terminated  and  the  Registrar  has  satisfied  himself  that  the  claims  of  all  the 
subscribers have been fully satisfied, he shall order the release of the security furnished by the foreman 
under sub-section (1), or the security substituted under sub-section (3), as the case may be, and in doing 
so, he shall follow such procedure as may be prescribed. 

(6) Notwithstanding anything to the contrary contained in any other law for the time being in force, 
the security furnished under this section shall not be dealt with by the foreman during the currency of the 
chit to which it relates and any dealing by the foreman with respect thereto by  way of transfer or other 
encumbrances shall be null and void. 

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

(a) in the absence of any provision in the chit agreement to the contrary, to obtain the 2[gross chit 
amount]  at  the  first  instalment  without  deduction  of  the  discount  specified  in  the  chit  agreement, 
subject to the condition that he shall subscribe to a ticket in the chit: 

Provided that in a case where the foreman has subscribed to more than one ticket, he shall not be 

eligible to obtain more than one 2[gross chit amount] in a chit without discount; 

1. Subs.by Act 10 of 2001, s. 4, for clause (a) (w.e.f. 01-10-2001). 
2. Subs. by Act 41 of 2019, s. 3, for “chit amount” (w.e.f. 1-1-2020). 

13 

 
 
 
                                                           
(b) to such amount not exceeding 1[seven per cent.] of the 2[gross chit amount] as may be fixed in 
the chit agreement, by way of commission, remuneration or for meeting the expenses of running the 
chit; 

(c) to  interest  and  penalty,  if  any,  payable  on  any  default in  the  payment  of  instalments and to 

such other amounts as may be payable to him under the provisions of the chit agreement; 

(d) to receive and realise all subscriptions from the subscribers and to distribute the prize amounts 

to the prized subscribers; 

(e)  to  demand  sufficient  security  from  any  prized  subscriber  for  the  due  payment  of  future 

subscriptions payable by him. 

Explanation.—A  security  shall  be  deemed  to  be  sufficient  for  the  purposes  of  this  clause  if  its 
value exceeds by one-third, or of it consists of immovable properties, the value of which exceeds by 
one-half, of the amount due from the prized subscriber; 

(f) to substitute subscribers in place of defaulting subscribers; 3*** 
4[(fa) to exercise his right to lien against the credit balance in other non-prized chits; and.] 

(g) to do all other acts that may be necessary for the due and proper conduct of the chit. 

(2)  Where  any  dispute  arises  with  regard  to  the  value  of  the  property  offered  as  security  under     

clause (e) of sub-section (1), it shall be referred to the Registrar for arbitration under section 64. 

22.  Duties  of  foreman.—(1)  The  foreman  shall,  on  the  prized  subscriber  furnishing  sufficient 

security for the due payment of future subscriptions, be bound to pay him the 5[net chit amount]: 

Provided that the prized subscriber shall be entitled to the payment of the  5[net chit amount] without 
any security whatsoever if he agrees to the deduction therefrom of the amount of all future subscriptions 
and in such a case, the foreman shall pay the 5[net chit amount] to the prized subscriber within seven days 
after the date of the draw or before the date of the next succeeding instalment, whichever is earlier: 

Provided further that where the  5[net chit amount] has been paid to the prized subscriber under the 
first proviso, the amount deducted shall be deposited by the foreman in an approved bank mentioned in 
the chit agreement and he shall not withdraw the amount so deposited except for the payment of future 
subscriptions. 

(2) If, owing to the default of the prized subscriber, the 5[net chit amount] due in respect of any draw 
remains unpaid until the date of the next succeeding instalment, the foreman shall deposit the  5[net chit 
amount]  forthwith  in  a  separate  account  in  an  approved  bank  mentioned  in  the  chit  agreement  and 
intimate  in  writing  the  fact  of  such  deposit  and  the  reasons  therefor  to  the  prized  subscriber  and  the 
Registrar: 

Provided that  where any  prized  subscriber  does  not  collect  the  5[net chit amount] in respect  of  any 
instalment  of  a  chit  within  a  period  of  two  months  from  the  date  of  the  draw,  it  shall  be  open  to  the 
foreman to hold another draw in respect of such instalment. 

(3) Every payment of the  5[net chit amount] or the amount of future subscriptions under sub-section 
(1), and the deposit of the 5[net chit amount] under sub-section (2), shall be intimated to the subscribers at 
the next succeeding draw and the particulars of such payment or deposit shall be entered in the minutes of 
the proceedings of that draw. 

(4) The foreman shall not appropriate to himself any amount in excess of what he is entitled to under 

clause (b) or clause (c) of sub-section (1) of section 21: 

1. Subs. by Act 41 of 2019, s. 8, for “five per cent.” (w.e.f. 1-1-2020). 
2. Subs. by s. 3,  ibid., for “chit amount” (w.e.f. 1-1-2020). 
3. The word “and” omitted by s. 8, ibid. (w.e.f. 1-1-2020). 
4. Ins. by s. 8, ibid. (w.e.f. 1-1-2020). 
5. Subs. by s. 3, ibid., for “prize amount” (w.e.f. 1-1-2020). 

14 

 
                                                           
Provided that where the foreman is himself a prized subscriber, he shall be entitled to appropriate to 

himself the 1[net chit amount] subject to his complying with the provisions of section 31: 

Provided  further  that  the  foreman  may  appropriate  to  himself  the  interest  accruing  on  the  amount 

deposited under the second proviso to sub-section (1). 

(5) The foreman shall not admit any person as a subscriber to a chit, if, by such admission, the total 

number of tickets mentioned in the chit agreement is increased. 

(6) The  foreman  shall  distribute  among  the  subscribers,  in  accordance  with the chit  agreement,  the 
2[share of discount] either in cash, grain or by way of adjustment towards the subscriptions payable for 
the next instalment, if any. 

23.  Books,  records,  etc.,  to  be  kept  by  foreman.—The  foreman  shall  maintain  in  his  registered 
office, or, as the case may be, in the place or the principal place of his business, or, where the foreman has 
any branch office, sub-office or any place of business for the conduct of chit business in a State other than 
the State in which his registered office or the principal place of his business is situated, in such branch 
office, sub-office or place of business in respect of the business conducted in that State— 

(a) a register containing— 

(i) the names and full particulars of the subscribers in each chit together with the number of 

tickets held by each subscriber; 

(ii) the dates on which the subscribers signed the chit agreement; and 

(iii) in the case of an assignment of a ticket by a subscriber, the name and full address of the 
assignee with the date of assignment and the date on which the assignment had been recognised 
by the foreman; 

(b) a book containing the minutes of the proceedings of each draw; 

(c) a ledger containing— 

(i) the amounts paid by the subscribers in each chit and the dates of such payments; 

(ii) the amounts paid to the prized subscribers and the dates of such payments; and 

(iii) in the case of any deposit in an approved bank mentioned in the chit agreement, the date 

and the amount of such deposit; 

(d)  a  register  in  the  prescribed  form  showing  the  amounts  deposited  in  approved  banks  as 
required under the provisions of this Act in respect of all chits conducted by the foreman at his office; 
and 

(e) such  other registers and books in such form as may be prescribed by the State Government 

within whose jurisdiction the chit is conducted. 

24.  Balance  sheet.—Without  prejudice  to  the  provisions  of  the  Companies  Act,  1956  (1  of  1956), 
every  foreman  shall  prepare  and  file  with  the  Registrar  within  such  time  as  may  be  prescribed,  a     
balance sheet as on the last date of each calendar year, or, as  the case may be, the financial year of the 
foreman, and a profit and loss account relating to the year of account, in the forms set out in Parts I and II 
of the Schedule, or as near thereto as circumstances admit, in respect of the chit business and audited by 
auditors qualified to act as auditors under the Companies Act, 1956, or by a chit auditor appointed under 
section 61: 

Provided  that  where  a  balance  sheet  is  audited  by  an  auditor  qualified  to  act  as  auditor  under  the 
Companies Act, 1956 (1 of 1956), a chit auditor appointed under section 61 shall have the right to audit 
the balance sheet at any time if so authorised by the Registrar in this behalf. 

1. Subs. by Act 41 of 2019, s. 3, for “prize amount” (w.e.f. 1-1-2020). 
2. Subs. by s. 3, ibid., for “dividend” (w.e.f. 1-1-2020). 

15 

 
                                                           
25.  Liability  of  foreman  to  subscribers.—(1)  Every  foreman  shall  be  liable  to  account  to  the 

subscribers for the amounts due to them. 

(2) Where there are more than one foreman in a chit, each one of them jointly and severally and, if the 
foreman is a firm or other association of individuals, each one of the partners or individuals thereof jointly 
and severally and, if the foreman is a company, the company as such, shall be liable to the subscribers in 
respect of the obligations arising out of the chit. 

26. Withdrawal of foreman.—(1) No foreman, or where there are more than one foreman in a chit, 
none of them shall withdraw from the chit until its termination unless such withdrawal is assented to in 
writing by all the non-prized and unpaid prized subscribers and a copy of such assent has been filed with 
the Registrar under section 41. 

(2) The withdrawal from a chit of any one of the foreman shall not affect the security given by him 

under section 20 or section 31. 

CHAPTER IV 

RIGHTS AND DUTIES OF NON-PRIZED SUBSCRIBERS 

27.  Non-prized  subscribers  to  pay  subscriptions  and  obtain  receipts.—Every  non-prized 
subscriber shall pay his subscription due in respect of every instalment on the dates and times and at  the 
places mentioned in the chit agreement and shall, on such payment, be entitled to obtain a receipt from the 
foreman. 

28.  Removal  of  defaulting  subscribers.—(1)  A  non-prized  subscriber  who  defaults  in  paying  his 
subscription in accordance with the terms of the chit agreement shall be liable to have his name removed 
from  the  list  of  subscribers  and  a  written  notice  of  such  removal  shall  be  given  by  the  foreman  to  the 
defaulting subscriber within fourteen days of the date of such removal: 

Provided  that  if  the  defaulter  pays  the  defaulted  instalment  with  interest  at  such  rate  as  may  be 
prescribed within seven days of the date of receipt of such notice, his name shall be re-entered in the list 
of such subscribers. 

(2)  Every  such removal  under  sub-section (1)  shall  with the  date  thereof  be  entered in the  relevant 

book maintained by the foreman. 

(3)  A  true  copy  of  the  entry  referred  to  in  sub-section  (2)  shall  be  filed  by  the  foreman  with  the 

Registrar within fourteen days from the date of removal. 

(4) Any defaulting subscriber aggrieved by the removal of his name from the list of subscribers may, 
within  seven  days  of  the  date  of  receipt  of  the  notice  of  removal  refer  the  matter  to  the  Registrar  for 
arbitration under section 64. 

29. Substitution of subscribers.—(1) A foreman may substitute in the list of subscribers any person 
(thereafter in this Chapter referred to as the substituted subscriber) in place of the defaulting subscriber 
whose name has been removed under sub-section (1) of section 28. 

(2)  Every  substitution  referred  to  in  sub-section  (1)  shall,  with  the  date  thereof,  be  entered  in  the 
relevant book maintained by the foreman and a true copy of every such entry shall be filed by the foreman 
with the Registrar within fourteen days from the date of substitution. 

30. Amounts due to defaulting subscribers.—(1) A foreman shall, out of the amounts payable by 
and realized from the substituted subscriber towards the instalments relatable to the period before the date 
of the substitution (including the arrears due from the defaulting subscriber), deposit, before the date of 
the next succeeding instalment, in a separate identifiable account in an approved bank mentioned in the 
chit  agreement,  an  amount  equal  to  the  contributions  made  by  the  defaulting  subscriber  less  such 
deductions  as  may  be  provided  for  in the  chit  agreement,  and  shall  inform  the  defaulting  subscriber  as 
well as the Registrar of the fact of such deposit and shall not withdraw the amount so deposited except for 
payment to the defaulting subscriber. 

16 

 
(2) The amount so deposited under sub-section (1) shall be paid to the defaulting subscriber as and 
when he claims the amount and the amount so deposited shall not be withdrawn by the foreman for any 
purpose other than for such payment. 

(3) The contributions of any defaulting subscriber who has not been substituted till the termination of 
the chit shall be paid to him within fifteen days from the date of termination of the chit subject to such 
deductions as may be provided for in the chit agreement. 

CHAPER V 

RIGHTS AND DUTIES OF PRIZED SUBSCRIBERS 

31. Prized subscriber to furnish security.—Every prized  subscriber shall, if he has not offered to 
deduct  the  amount  of  all  future  subscriptions  from  the  1[net  chit  amount]  due  to  him,  furnish,  and  a 
foreman shall take, sufficient security for the due payment of all future subscriptions and, if the foreman 
is  a  prized  subscriber,  he  shall  give  security  for  the  due  payment  of  all  the  future  subscriptions  to  the 
satisfaction of the Registrar. 

32.  Prized  subscriber  to  pay  subscriptions  regularly.—Every  prized  subscriber  shall  pay  his 
subscriptions regularly on the dates and times and at the place mentioned in the chit agreement and, on his 
failure  to  do  so,  he  shall  be  liable  to  make  a  consolidated  payment  of  all  the  future  subscriptions 
forthwith. 

33. Foreman to demand future subscriptions by written notice.—A foreman shall not be entitled 
to claim a consolidated payment from a defaulting prized subscriber under section 32 unless he makes a 
demand to that effect in writing. 

(2)  Where  a  dispute  is  raised  under  this  Act  by  a  foreman  for  a  consolidated  payment  of  future 
subscriptions from a defaulting prized subscriber and if the subscriber pays to the foreman on or before 
the date to which the dispute is posted for hearing the arrears of subscriptions till that date together with 
the  interest  thereon  at  the  rate  provided  for  in  the  chit  agreement  and  the  cost  of  adjudication  of  the 
dispute,  the  Registrar  or  his  nominee  hearing  the  dispute  shall,  notwithstanding  any  contract  to  the 
contrary,  make  an  order  directing  the  subscriber  to  pay  to  the  foreman  the  future  subscriptions  on  or 
before  the  dates  on  which  they  fall  due,  and  that,  in  case  of  any  default  of  such  payments  by  the 
subscriber, the foreman shall be at liberty to realise, in execution of that order, all future subscriptions and 
interest together with the costs, if any, less the amount, if any, already paid by the subscriber in respect 
thereof: 

Provided  that  if  any  such  dispute  is  on  a  promissory  note,  no  order  shall  be  passed  under  this          

sub-section unless such promissory note expressly states that the amount due under the promissory note is 
towards the payment of subscriptions to the chit. 

(3) Any person who holds any interest in the property furnished as security or part thereof, shall be 

entitled to make the payment under sub-section (2). 

(4) All consolidated 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 
amount so deposited shall not be withdrawn except for payment of future subscriptions. 

(5)  Where  any  property  is  obtained  as  security  in  lieu  of  the  consolidated  payment  of  future 

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

CHAPTER VI 

TRANSFERS 

34.  Restrictions  on  transfer  of  rights  of  foreman.—(1)  No  transfer  of  the  rights  of  a  foreman  to 
receive subscriptions from the prized subscribers shall be made without the previous sanction in writing 
of the Registrar. 

1. Subs. by Act 41 of 2019, s. 3, for “prize amount” (w.e.f. 1-1-2020). 

17 

 
                                                           
(2) Any transfer of the rights of a foreman to receive subscriptions from the prized subscribers shall, 
if it is likely to defeat or delay the interests of a non-prized or unpaid prized subscriber, be voidable at the 
instance of such subscriber. 

(3) When under sub-section (2), a transfer is disputed by a subscriber, the burden of proving that the 
foreman was in solvent in circumstances at the time of the transfer and that the transfer does not defeat or 
delay the interests of such subscriber is on the transferee. 

35. Transfer of non-prized subscriber’s rights to be in writing.—Every transfer by a non-prized 
subscriber of his rights in the chit shall be in writing duly attested by at least two witnesses and shall be 
filed with the foreman. 

36.  Recognition of transfer by foreman.—Every transfer under section 35 shall, within a period of 
fourteen days from the date of receipt of the proposal for transfer by the foreman, be recognised by him 
unless the transferee is not solvent or the transfer was effected with a view to defeating the provisions of 
any law including this Act and the decision of the foreman to recognise the transfer or not shall forthwith 
be communicated to the parties concerned. 

37. Entry of transferee’s name in the books.—Every transfer under section 34 or section 35 shall 
be entered by the foreman in the books of the chit forthwith and a true copy of such entry shall be filed by 
the foreman with the Registrar within fourteen days from the date of making such entry. 

CHAPTET VII 

MEETINGS OF GENERAL BODY OF SUBSCRIBERS 

38. Meetings of general body of subscribers.—(1) The foreman may, on his own motion, convene a 
special  meeting  of  the  general  body  of  subscribers  for  considering  any  proposal  to  pass  a  special 
resolution. 

(2)  The  foreman  shall  convene  such  a  meeting  on  the  requisition  in  writing  of  not  less  than         

twenty-five  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  requisition  and  if  the  foreman 
refused or fails to call such a meeting within fourteen days of the date of receipt of such requisition, not 
less than twenty-five per cent. of the number of non-prized and unpaid prized subscribers may give notice 
of the fact to the Registrar. 

(3)  The  Registrar  shall,  within  twenty-one  days  of  the  receipt  of  the  notice  under  sub-section  (2), 
convene or direct the convening of a special meeting of the general body of the subscribers and on receipt 
of such a direction, it shall be the duty of the foreman to comply with such direction. 

(4) Notice of not less than fourteen days shall be given to all the subscribers of a meeting under this 
section specifying the object, date, hour and place of meeting and a copy of the special resolution shall 
also be sent along with the notice of the meeting. 

Explanation.—For the purposes of this section and section 39, “special resolution” means a resolution 
which is passed at a meeting of the general body of the subscribers specially convened for the purpose, by 
a majority of not less than two-thirds of the subscribers to the chit present at the meeting in person or by 
proxy and representing not less than three-fourths of the amount or, as the case may be, the value of the 
grain, subscribed by all the non-prized and unpaid prized subscribers, if any. 

CHAPTER VIII 

TERMINATION OF CHITS 

39. Provision for continuation of chits in certain cases.—(1) Where a foreman dies or becomes of 
unsound mind or is otherwise incapacitated, the chit may continue in accordance with the provisions of 
the chit agreement. 

(2) Where a foreman is adjudicated an insolvent, or withdraws from the chit under section 26, or fails 
to conduct the chit at any instalment or on any other date before the next succeeding instalment as may 
have been agreed upon by a special resolution, any one or more of such subscribers authorised by such 
resolution may, in the absence of any provision in the chit agreement for the future conduct of the chit, 

18 

 
take the place of the foreman and continue the chit or make other arrangements for the further conduct of 
the chit. 

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

(a) when the period specified therefor in the chit agreement has expired provided the payment of 

dues to all the subscribers has been completed; or 

(b) when all the non-prized and unpaid prized subscribers and the foreman consent in writing to 
the termination of the chit and a copy of such consent is filed with the Registrar as required under 
section 41; or 

(c) where a foreman dies or becomes of unsound mind or is otherwise incapacitated and the chit 

is not continued in accordance with the provisions of the chit agreement: 

Provided that, in a case where the foreman is a firm, if a partner thereof dies or becomes of unsound 
mind  or  is  otherwise  incapacitated,  the  chit  shall  not  be  deemed  to  have  terminated  and  the  surviving 
partner  or  partners  shall  conduct  the  chit  in  the  absence  of  any  provision  to  the  contrary  in  the  chit 
agreement. 

41. Copy of assent or consent to be filed with Registrar.—A true copy of every assent referred to 
in section 26 and of every consent referred to in clause (b) of section 40 with their dates shall be filed by 
the foreman or by the surviving partner or partners, as the case may be, with the Registrar within fourteen 
days from the date of such assent or consent. 

42.  Refund  of  non-prized  subscribers’  subscriptions.—Except  in  the  cases  referred  to  in       

clauses (a) and (b) of section 40,— 

(a)  every  non-prized  subscriber  shall,  unless  otherwise  provided  for  in  this  Act  or  in  the  chit 
agreement,  be  entitled  to  get  back  his  subscriptions  at  the  termination  of  the  chit  without  any 
deduction for 1[share of discount], if any, earned by him: 

Provided  that,  any  person  to  whom  the  rights  of  a  non-prized  subscriber  are  transferred  in 
accordance with the provisions of section 35, shall, in addition to his own subscriptions, be entitled to 
get back the subscriptions paid by such non-prized subscriber, subject to the conditions specified in 
this section; 

(b) if a chit terminates on a date earlier than the date originally fixed in the chit agreement, the      

non-prized  subscriber’s  claim  shall  be  deemed  to  have  arisen  on  the  date  on  which  he  has  notice 
thereof. 
43. Subscribers’ dues to be first charge on chit assets.—Any amount due to the subscriber from a 

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

CHAPTER IX 

INSPECTION OF DOCUMENTS 

44.  Foreman  to  allow  certain  subscribers  to  inspect  chit  records.—Every  foreman  shall,  on 
payment  of  such  fee  not  exceeding  five  rupees  as  may  be  specified  in  the  chit  agreement,  allow  the      
non-prized subscribers and unpaid prized subscribers reasonable facilities on all the dates of draw or on 
such other dates and within such hours as may be provided for in the chit agreement, for the inspection of 
security bonds and documents, receipts and other records taken from the prized subscribers or furnished 
by the foreman as a subscriber and all chit records, including books of account, pass books, balance sheet 
and profit and loss accounts and such other records as may show the actual financial position of the chit. 

45. Preservation of chit records by foreman.—All the records pertaining to a chit shall be kept by 

the foreman for a period of eight years from the date of termination of the chit. 

46. Inspection of chit books and records by Registrar.—(1) Without prejudice to the provisions of 
sections 209 and 209A of the Companies Act, 1956 (1 of 1956), the Registrar or an officer authorised by 
the State Government in this behalf may inspect chit books and all the records of a chit during working 
hours on any working day at the premises of the foreman with or without giving notice and it shall be the 
duty of every foreman to produce to the Registrar or the officer so authorised, all such books and records 

1. Subs. by Act 41 of 2019, s. 3, for “dividend” (w.e.f. 1-1-2020). 

19 

 
                                                           
as are in his custody or power and to furnish him with any statement or information relating to the chits as 
he may require from the foreman within such time as he may specify. 

(2) The Registrar or an officer authorised by the State Government in this behalf may, after giving 
seven days’ notice in writing to the foreman, direct him to produce before him for inspection such chit 
books and records as he may require at the time and place mentioned in the notice. 

(3)  If  on  an  inspection  made  under  sub-section  (1)  or  sub-section  (2),  any  defects  are  found,  the 
Registrar may bring such defects to the notice of the foreman and may also make an order directing the 
foreman  to  take  such  action  as  may  be  specified  in  the  order  to  remedy  the  defects  within  the  time 
specified therein. 

(4)  Every  foreman  shall  be  bound  to  comply  with  the  directions  contained  in  an  order  made  under 

sub-section (3). 

47. Power of Reserve Bank to inspect chit books and records.—(1) Nothing in section 46 shall be 
deemed to affect the power of the Reserve Bank to inspect the books and records of any foreman under 
the provisions of section 45N of the Reserve Bank of India Act, 1934 (2 of 1934). 

(2) The Reserve Bank may, if it considers necessary, forward a copy of its report or of any part of its 
report on the inspection of the books and records of a foreman to the foreman for taking necessary action. 

(3)  Every  foreman  shall,  on  receipt  of  the report  or  part  thereof  under sub-section  (2), be bound  to 
comply  with  the  directions,  if  any,  given  by  the  Reserve  Bank  in  this  behalf  and  shall,  if  so  required, 
submit periodical reports in regard to the action taken by him. 

(4)  The  Reserve  Bank  may  also  forward  a  copy  of  the  report  on  the  inspection  of  the  books  and 
records  of  a  foreman  to  the  State  Government  within  whose  jurisdiction  the  registered  office  of  the 
company, if the foreman is a company, or the place or the principal place of business of the foreman in 
any other case, is situated for such action as may be considered necessary. 

CHAPTER X 

WINDING UP OF CHITS 

48.  Circumstances  under  which  chits  may  be  wound  up.—A  chit  may  be  wound  up  by  the 
Registrar within whose territorial jurisdiction the chit has been registered, either on his own motion or on 
an application made by any non-prized or unpaid prized subscriber,— 

(a) if the chit has terminated under clause (c) of section 40; or 

(b)  if  the  foreman  commits  any  such  act  in respect of  the security  specified  in  section  20  as  is 

calculated to impair materially the nature of the security or the value thereof; or 

(c) if he fails to deposit any amount required to be deposited under any of the provisions of this 

Act; or 

(d) if it is proved to the satisfaction of the Registrar that the foreman is unable to pay the amounts 

due to the subscribers; or 

(e) if the execution or other process issued on an order passed by the Registrar in favour of any 
subscriber  in  respect  of  amounts  due  to  him  from  the  foreman  in  relation  to  the  chit  business  is 
returned unsatisfied in whole or in part; or 

(f) if it is proved that there has been a fraud or collusion on the part of the foreman in the matter 

of taking securities from any prized subscriber; or 

(g) if the foreman has appropriated the  1[net chit amount] in his capacity as a subscriber without 

furnishing sufficient security for future subscriptions; or 

(h)  if  the  Registrar  is  satisfied  that  the  affairs  of  the  chit  are  being  conducted  in  a  manner 

prejudicial to the interests of the subscribers; or 

1. Subs. by Act 41 of 2019, s. 3, for “prize amount” (w.e.f. 1-1-2020). 

20 

 
                                                           
(i) if it is just and equitable that the chit should be wound up. 

Explanation.—For the purposes of clause (d), in determining whether the foreman is unable to pay the 
amounts due to the subscribers, the Registrar shall take into account his contingent and future liabilities in 
respect of the chit. 

49. Application for winding up.—An application for the winding up of a chit shall be made by  a 
petition presented by any non-prized or unpaid prized subscriber to the Registrar signed and verified in 
the manner laid down by the Code of Civil Procedure, 1908 (5 of 1908), and shall contain such particulars 
as may be prescribed: 

Provided that no application for the winding up of a chit under clause (d) or clause (i) of section 48 

shall lie unless such application is presented,— 

(a) by non-prized and unpaid prized subscribers representing not less than twenty-five per cent. of 
the amount or, as the case may be, the value of the grain subscribed by all the non-prized and unpaid 
prized subscribers, if any; or 

(b)  with  the  previous  sanction  of  the  State  Government  within  whose  jurisdiction  the  chit  is 

commenced or conducted. 

Explanation.—For  the  purposes  of  clause  (a),  of  the  proviso,  a  subscriber  of  a  fraction  of  a  ticket 

shall be deemed to be a subscriber only to the extent of such fraction. 

50. Bar to winding up proceedings.—Notwithstanding anything contained in sections 48 and 49, no 

petition for the winding up of a chit shall be entertained by the Registrar,— 

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

(b) where the foreman is a firm, if proceedings relating to insolvency are pending against all the 
partners  or  all  the  partners  except  one  thereof,  or  proceedings  for  the  dissolution  of  the  firm  are 
pending; or 

(c) where the foreman is a company or co-operative society, if proceedings for the winding up of 

such company or co-operative society are pending. 

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

52. Injunction order.—The Registrar may, on the application of the foreman or of any subscriber to 
whom amounts are due in respect of a chit, at any time after the presentation of the application for the 
winding up of the chit under this Act and before the making of an order for the appointment of an interim 
receiver or for the winding up of the chit, restrain any other proceedings instituted against the foreman for 
the realisation of amounts due from him on such terms as the Registrar thinks fit. 

53.  Powers  of  Registrar.—The  Registrar  may,  after  hearing  an  application  under  this  Chapter, 
dismiss  it  with  or  without  costs,  or  adjourn  the  hearing  conditionally  or  unconditionally  or  make  an 
interim or any other order that he deems fit. 

54.  Vesting  of  chit  assets  in  Registrar  or  other  persons.—On  the  making  of  an  order  for  the 
winding up of a chit, all the chit assets pertaining to such chit shall vest in the Registrar or in any person 
appointed by him for distribution amongst the subscribers to whom amounts are due in respect of the chit. 

55. Suits, etc., to be stayed on winding up order.—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 amounts due to him in respect of the chit except with the 
leave of the Registrar winding up the chit and on such terms as he may impose. 

56.  Notification  of winding  up  order.—On  the  making  of  a  winding  up  order,  the  Registrar  shall 
make an entry in his book relating to the chit and shall notify in the Official  Gazette that the order has 
been made. 

21 

 
57. Cessation of winding up proceedings on insolvency of foreman, etc., or the winding up of the 
company  and  transfer  of  such  proceedings.—Where  during  the  pendency  of  the  proceedings  for  the 
winding  up  of  a  chit,  the  foreman  is  adjudicated  an  insolvent,  or  where  the  foreman  is  a  firm,  all  the 
partners  or  all  the  partners  except  one  thereof  are  adjudicated  insolvents,  or  where  the  foreman  is  a 
company, the company has been ordered to be wound up by the Court, the winding up proceedings under 
this  Chapter  shall  cease  and  the  distribution  of  the  chit  assets  shall,  subject  to  the  provisions  of       
sections 43 and 52, be made by the insolvency court or the court winding up the company, as the case 
may be. 

58. Award of compensation to foreman.—(1) Where an application for the winding up of a chit is 
dismissed  and  the  Registrar  is  satisfied  that  the  petition  is  frivolous  or  vexatious,  he  may,  on  the 
application of the foreman, award against the petitioner such amount, not exceeding one thousand rupees, 
as he deems reasonable as compensation to the foreman for the expenses or injury caused to him by the 
presentation  of the  application  and  the  proceedings  thereon,  and  such amount may  be  realised  as  if the 
award were a decree of a Civil Court. 

(2)  On  the  making  of  an  award  under  sub-section  (1),  no  suit  for  compensation  in  respect  of  an 

application for any winding up of the chit shall be entertained. 

59. Right to appeal.—The foreman or any subscriber or any other person aggrieved by a decision or 
order of the Registrar in any proceedings for the winding up of a chit may, within sixty days from the date 
of such decision or order, appeal to the State Government. 

60. Limitation.—(1) Where an order refusing to wind up a chit has been made under this Act, the 
chit shall be deemed to have been under suspension from the date of presentation of the application to the 
date of  such  order  in  respect  of  non-prized  subscribers;  and,  notwithstanding  anything  contained in the 
chit agreement, no non-prized subscriber who was not a defaulter on the date of the presentation of the 
petition for winding up, shall be deemed to be a defaulter on the date of such order. 

(2) Where an order refusing to wind up a chit has been made under this Act, in computing the period 
of limitation prescribed for any suit or other legal proceedings (other than a suit or application in respect 
of which the leave of the court has been obtained) which might have been brought or instituted, but for 
the  presentation  of  the  application  for  the  winding  up  of  the  chit,  the  period  from  the  date  of  the 
presentation of the application to the date of the order refusing to wind up a chit shall be excluded. 

(3)  Nothing  contained  in  this  Chapter  shall  affect  the  rights  of  a  subscriber  to  proceed  against  the 
foreman  personally  for  the  balance,  if  any,  of  the  amount  due  to  him  after  the  declaration  of  the  final 
1[share  of  discount]  in  the  proceedings  for  the  winding  up  of  the  chit  and  in  computing  the  period  of 
limitation  prescribed  for  any  such  proceedings,  the  period  from  the  date  of  the  presentation  of  the 
application for the winding up of the chit to the date of the declaration of the final  1[share of discount] 
shall be excluded. 

CHAPTER XI 

APPOINTMENT OF OFFICERS AND LEVY OF FEES 

61. Appointment of Registrar and other officers.—(1) The State Government may, by notification 
in the Official Gazette, appoint a Registrar of Chits and as many Additional, Joint, Deputy and Assistant 
Registrars as may be necessary for the purpose of discharging the duties imposed upon the Registrar by or 
under this Act. 

(2) The Registrar may appoint as many inspectors of chits and chit auditors as may be necessary for 
the purpose of discharging the duties imposed on the inspectors of chits or chit auditors by or under this 
Act. 

(3) All inspectors of chits and chit auditors shall discharge the duties imposed upon them by or under 

this Act under the general superintendence and control of the Registrar. 

(4) If the Registrar is of the opinion that the accounts of any chit are not properly maintained and that 
such accounts should be audited, it shall be lawful for him to have such accounts audited by a chit auditor. 

1. Subs. by Act 41 of 2019, s. 3, for “dividend” (w.e.f. 1-1-2020). 

22 

 
                                                           
(5) It shall be the duty of the foreman of the chit whose accounts are to be audited by a chit auditor 
under sub-section (4) to produce before the chit auditor, all accounts, books and other records relating to 
the chit, to furnish him with such information as may be required and afford him all such assistance and 
facilities as may be necessary and reasonable in regard to the audit of the accounts of the chit. 

(6)  The  foreman  shall  pay  to  the  chit  auditor  such  fees  as  may  be  prescribed  for  the  audit  of  the 

accounts of the chit under sub-section (4): 

Provided that different scales of fees may be prescribed for different chits depending on the quantum 

of the 1[gross chit amount]. 

62. Inspection of documents in Registrar’s office.—The foreman of a chit or any subscriber in a 
chit or the heirs or legal representatives of any foreman or subscriber may, on payment of  such fees as 
may be prescribed,— 

(a) inspect the documents of the concerned chit kept by the Registrar; or 

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

63. Levy of fees.—(1) There shall be paid to the Registrar such fees as the State Government may, 

from time to time, prescribe for,— 

(a) the issue of previous sanction under section 4; 
(b)  the  filing  of  the  chit  agreement  with  the  Registrar  and  the  registration  of  the  chit  under  

section 7; 

(c) the filing of a declaration with the Registrar and the grant of a certificate of commencement 

under section 9; 

(d) the filing of copies of documents under any of the provisions of this Act; 
(e) the audit of the accounts of the foreman under section 61; 
(f) the inspection of documents under section 62; 
(g) the obtaining of certified copies or extracts of documents and records under section 62; and 
(h) such other matters as may appear necessary to the 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 XII 

DISPUTES AND ARBITRATION 

64. Disputes relating to chit business.—(1) Notwithstanding anything contained in any other law for 
the time being 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 non-prized subscriber, including a defaulting subscriber, 

past subscriber or a person claiming through a subscriber, or a deceased subscriber to a chit; 

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

Explanation.—For  the  purposes  of  this  sub-section,  a  dispute  touching  the  management  of  a  chit 

business shall include— 

(i) a claim by or against a foreman for any debt or demand due to him from a subscriber, or due 
from him to a subscriber, past subscriber or the nominee, heir or legal representative of a deceased 
subscriber whether such debt or demand is admitted or not; 

(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 

1. Subs. by Act 41 of 2019, s. 3, for “chit amount” (w.e.f. 1-1-2020). 

23 

 
                                                           
 
(iii)  a  refusal  or  failure  by  a  subscriber,  past  subscriber  or  the  nominee,  heir  or  legal 
representative of a deceased subscriber to deliver possession to a foreman of land or any other asset 
resumed by him for breach of conditions of the assignment. 
(2) Where any question arises as to whether any matter referred to for the award of the Registrar is a 
dispute  or  not  for  the  purposes  of  sub-section  (1),  the  same  shall  be  decided  by  the  Registrar  whose 
decision thereon shall be final. 

(3) No Civil Court shall have jurisdiction to entertain any suit or other proceedings in respect of any 

dispute referred to in sub-section (1). 

65.  Period  of 

limitation.—(1)  Notwithstanding  anything  contained 
Act,  1963  (36  of  1963),  but  subject  to  the  specific  provisions  contained  in  this  Act,  the  period  of 
limitation in the case of a dispute referred to the Registrar under section 64, shall— 

in 

the  Limitation                     

(a) if the dispute relates to the recovery of any sum, including interest thereon, due to a foreman 
from a deceased subscriber, be three years, computed from the date on which such subscriber dies or 
ceases to be a subscriber; or 

(b) if the dispute is between a foreman and a subscriber or a past subscriber, or the nominee, heir 
or legal representative of a deceased subscriber, and the dispute relates to any act or omission on the 
part  of  either  party  to  the  dispute,  be  three  years  from  the  date  on  which  the  act  or  omission  with 
reference to which the dispute arose, took place. 

(2) The period of limitation in the case of any dispute other than those referred to in sub-section (1) 
which are required to be referred to the Registrar under section 64 shall be regulated by the provisions of 
the Limitation Act, 1963 (36 of 1963), as if the dispute were a suit, and the Registrar, 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 of limitation specified therein, if the applicant satisfies the Registrar that he 
had sufficient cause for not referring the dispute within such period. 

66.  Settlement  of  disputes.—(1)  If  the  Registrar  is  satisfied  that  any  matter  referred  to  him  or 
brought to his notice is a dispute within the meaning of section 64, he shall, subject to such rules as may 
be prescribed, settle the dispute himself, or refer it for disposal to a person appointed by him (hereafter in 
this Chapter referred to as the nominee). 

(2) Where any dispute is referred under sub-section (1) for settlement to the nominee, the Registrar 
may, at any time for reasons to be recorded in writing, withdraw such dispute from the nominee and may 
settle the dispute himself, or refer it again for settlement to any other nominee appointed by him. 

67. Procedure for settlement of disputes and powers of Registrar or nominee.—(1) The Registrar 
or the nominee hearing a dispute under section 66, shall, in addition to the powers conferred on him under 
that section, have the same powers as are vested in a Civil Court while trying a suit under the Code of 
Civil Procedure, 1908 (5 of 1908), in respect of the following matters, namely:— 

(a) summoning and enforcing the attendance of persons and examining them on oath; 

(b) requiring the discovery and inspection of documents; 

(c) receiving evidence on affidavits; 

(d) requisitioning any public record or copies thereof from any court or office; 

(e) issuing commissions for the examination of witnesses or documents; and 

(f) any other matter which may be prescribed. 

(2) Except with the permission of the Registrar or the nominee, no party shall be represented at the 

hearing of a dispute by a legal practitioner. 

(3) (a) If the Registrar or the nominee is satisfied that any person, whether he is a subscriber or not, 
has acquired any interest in the property of a person who is a party to a dispute, he may order that the 
person  who  has  acquired  the  interest  in  the  property  may  be  joined  as  a  party  to  the  dispute,  and  any 

24 

 
decision that may be given by the Registrar or the nominee on the dispute shall be binding on the party so 
joined, in the same manner as if he were an original party to the dispute. 

(b)  Where  a  dispute  has  been  referred  in  the  name  of  a  wrong  person,  or  where  all  the  necessary 
parties have not been included, the Registrar or the nominee may, if he is satisfied that it was due to a 
genuine mistake, order any other person to be substituted or added as parties to the dispute at any stage of 
hearing of the dispute on such terms as he thinks just. 

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

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

68. Attachment before judgment and other interlocutory orders.—(1) Where a dispute has been 
referred under section 64 and the Registrar or the nominee hearing the dispute is satisfied on enquiry or 
otherwise that a party to such dispute, with intent to defeat or obstruct the execution of any award or the 
carrying out of any order that may be made,— 

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

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

he may, unless adequate security is furnished, direct conditional attachment of the said property, and such 
attachment shall have the same effect as if it is made by a competent Civil Court. 

(2) Where the Registrar or the nominee directs the attachment of any property under sub-section (1), 
he shall issue a notice calling upon the person whose property is so attached to furnish such security as he 
thinks adequate within a specified period, and if the person fails to provide such security, the Registrar or 
the nominee may confirm the order, and may, after the decision in the dispute, direct the disposal of the 
property so attached towards the claim, if awarded. 

(3)  Any  attachment  made  under  this  section  shall  not  affect  the  rights,  subsisting  prior  to  the 
attachment  of  the  property,  of  persons  who  are  not  parties  to  the  dispute,  or  bar  any  person  holding  a 
decree against the person whose property is so attached from applying for the sale of the property under 
the attachment of such decree. 

(4) The Registrar or the nominee may, in order to prevent the ends of justice being defeated, make 
such interlocutory orders pending the award in a dispute referred to in sub-section (1) as may appear to be 
just and convenient. 

69. Decision of Registrar or nominee.—When a dispute is referred to arbitration under this Chapter, 
the Registrar or the nominee, may, after giving a reasonable opportunity to the parties to the dispute to be 
heard, make an award on the dispute, on the expenses incurred by the parties to the dispute in connection 
with  the  proceedings  and  the  fees  and  expenses  payable  to  the  Registrar  or  the  nominee,  and  such  an 
award shall not be invalid merely on the ground that it was made after the expiry of the period, if any, 
fixed for deciding the dispute by the Registrar, and shall, subject to appeal under section 70, be final and 
binding on the parties to the dispute. 

70. Appeal against decision of Registrar or nominee.—Any party aggrieved by any order passed 
by  the  Registrar  or  the  nominee  or  the  award  of  the  Registrar  or  the  nominee  under  section  69,  may, 
within two months from the date of the order or award, appeal to the State Government. 

STATE AMENDMENTS 

[Karnataka 

Amendment  of  section  70.—In  the  Chit  Funds  Act,  1982  (Central  Act  40  of  1982)  (hereinafter 

referred to as the principal Act),— 

25 

 
(i) section 70 shall be renumbered as sub-section (1) thereof and in sub-section (1) as so renumbered, 
after the words “State Government”, the words “or to such officer or authority, as may be empowered by 
notification by the State Government, in that behalf” shall be inserted; 

(ii) after sub-section(1) as so renumbered, the following shall be inserted, namely:— 

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

(3)  All appeals  pending  before  the  State  Government,  on  such  date  of notification  empowering 
such officer or authority, shall be transferred to such officer or authority and shall be disposed off as 
if it has been filed before such authority.” 

[Vide Karnataka Act 2 of 2008, s. 2.] 

71. Money how recovered.—Every order passed by the Registrar or the nominee under section 68 or 
section 69 and every order passed by the State Government in appeal under section 70 for payment of any 
money shall, if not carried out,— 

(a) on a certificate issued by the Registrar, be deemed to be a decree of a Civil Court, and shall be 

executed in the same manner as a decree of such Court, or 

(b) be executed in accordance with the provisions of any law for the time being in force for the 

recovery of amounts as arrears of land revenue: 

Provided that no application for execution under clause (b) shall be made after the expiry of three 

years from the date fixed in the order, and if no such date is fixed, from the date of the order. 

72.  Private  transfer  of  property  made  after  issue  of  certificate  void  against  foreman.—Any 
private transfer of delivery of, or encumbrance or charge on, property made or created after the issue of 
the  certificate  by  the  Registrar  under  section  71  shall  be  null  and  void  against  the  foreman  on  whose 
application the said certificate was issued. 

CHAPTER XIII 

MISCELLANEOUS 

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

74. Appeals.—(1) Any foreman aggrieved by the decision of the Registrar,— 

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

(b) refusing to grant a certificate of commencement under sub-section (2) of section 9; 

(c) refusing to accept any security under sub-section (1) of section 20 or under section 31; or 

(d) refusing to release the security charged under section 20 or section 31, 

may, within thirty days of the communication to him of such decision, appeal to the State Government or 
to  such  officer  or  authority  as  may  be  empowered  by  notification  in  the  Official  Gazette  by  the  State 
Government in that behalf. 

(2)  Any  foreman  or  other  person  aggrieved  by  the  order  of  the  Registrar  under  sub-section  (1)  of 
section  34  may,  within  thirty  days  of  the  communication  to  him  of  such  decision,  appeal  to  the  State 
Government or to such officer or authority as may be empowered by notification 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  representation,  pass  such  order  on  the  appeal  as  it  or  he  thinks  fit  and  such 
order shall be final. 

75. Powers of Registrar to give extension of time for filing documents.—The Registrar may, in his 
discretion and upon an application in writing by a foreman made within the period specified for the filing 

26 

 
of documents, under sub-section (3) of section 28, sub-section (2) of section 29, section 37 or section 41, 
allow the foreman further time not exceeding fifteen days to file copies of such documents. 

76.  Penalties.—(1)  Whoever  contravenes  or  abets  the  contravention  of  any  of  the  provisions  of 
sections 4, 5, 8, 9, 11, 12, 13, 14, 19, 20, 22, 24, 30, 31, sub-section (4) of section 33, sections 46, 47 or 
sub-section (5) of section 61 shall, on conviction, be punishable with imprisonment for a term which may 
extend to two years or with fine which may extend to five thousand rupees or with both. 

(2) Any foreman,— 

(a) who fails to file any document required to be fied under this Act within the period specified 

therefor or within such further time as may be allowed; or 

(b) who fails to comply with the requirements of the chit agreement regarding the date, time and 
place at which the chit is to be drawn or who fails to comply with the requirements of any direction 
given under sub-section (3) of section 38; or 

(c) who contravenes or fails to comply with any other requirement under this Act, 

shall, on conviction, be punishable with fine which may extend to three thousand rupees. 

(3) Whoever wilfully makes a statement in any document required to be filed under this Act which is 
false in any material particular shall, on conviction, be punishable with imprisonment for a term which 
may extend to two years or with fine which may extend to five thousand rupees or with both. 

77. Penalty for second and subsequent convictions.—If any person convicted of an offence under 
sub-section  (1)  or  sub-section  (3)  of  section  76  is  again  convicted  of  an  offence  under  any  of  the  said    
sub-sections he shall be punishable for the second and for every subsequent offence with imprisonment 
for a term which may extend to two years and shall also be liable to fine. 

78. Application of fine.—A court imposing any fine under this Act may direct that the whole or any 

part thereof shall be applied in, or towards payment of, the cost of the proceedings. 

79.  Offences  by  companies.—(1)  Where  an  offence  under  this  Act  has  been  committed  by  a 
company, every person who at the time the offence was committed was in charge of, and was responsible 
to, the company for the conduct of the business of the company, as well as the company, shall be deemed 
to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: 

Provided  that  nothing  contained  in  this  sub-section  shall  render  any  such  person  liable  to  any 
punishment provided in this Act, if he proves that the offence was committed without his knowledge or 
that he exercised all due diligence to prevent the commission of such offence. 

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been 
committed  by  a  company  and  it  is  proved  that  the  offence  has  been  committed  with  the  consent  or 
connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other 
officer  for  the  company,  such  director,  manager,  secretary  or  other  officer  shall  also  be  deemed  to  be 
guilty of that offence and shall be liable to be proceeded against and punished accordingly. 

Explanation.—For the purposes of this section,— 

(a)  “company”  means  any  body  corporate  and  includes  a  firm  or  other  association  of   

individuals; and 

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

80. Cognizance of offences.—(1) All offences under section 11 shall be cognizable. 

(2)  No  court inferior to  that  of a  Metropolitan  Magistrate or  a Judicial  Magistrate  of  the  first  class 

shall try an offence punishable under this Act. 

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 

27 

 
committed  an  offence  under  this  Act,  by  way  of  composition  of  such  offence,  a  sum  of  money  not 
exceeding such amount as may be prescribed. 

(2) Where an offence has been compounded under sub-section (1), the offender, if in custody, shall be 

discharged and no further proceedings shall be taken against him in respect of such offence. 

82. Power to enter and search any place and to seize any documents.—(1) If the Registrar or any 
other  officer  authorised  by  him  in  this  behalf,  has  reason  to  suspect  that  any  person  conducts,  or  is 
responsible for the conduct of, a chit in any place in contravention of the provisions of this Act, he may, 
for  reasons to  be recorded in  writing  and  at  any  reasonable  time,  enter  into  and search such  place,  and 
may seize such books, registers, accounts or documents as may be necessary. 

(2) The Registrar or officer authorised by him in this behalf, may apply for assistance to an officer in 
charge of a police station and take police officers to accompany and assist him in discharging his duties 
under sub-section (1). 

(3) All searches under sub-section (1) shall be made in accordance with the provisions of the Code of 

Criminal Procedure, 1973 (2 of 1974). 

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). 

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.] 

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 Government]. 

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). 

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. 

1. Subs. by Act 41 of 2019, s. 9, for “one hundred rupees” (w.e.f. 1-1-2020). 

28 

 
                                                           
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. 

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. 

29 

 
(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. 

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. 

30 

 
 
 
THE SCHEDULE 

[See section 24] 

PART I.—FORM OF BALANCE SHEET 

Assets 

Cash 
Balances with banks: 
(a) Current account    .     .      . 
 Rs. 
(b) Deposit account   .      .      .  Rs. 
Investments: 
(a) In chits    .       .       .         . 
(b) In government securities  . 
(c) Others      .       .        .       . 
Share  amount  due  from  prized 
subscribers: 
(a) Secured    .       .      .        . 

Rs. 
Rs. 
Rs. 

Rs. 

Rs. 

Rs. 

Rs. 

(b) Unsecured    .      .     .      . 

Rs. 

Rs. 

due 

from 

Arrears 
subscribers: 
(a) Secured     .     .      .    .      .  Rs. 
Rs. 
(b) Unsecured   .      .       .      . 

prized 

Rs. 

Rs. 
Rs. 
Rs. 

in 

and 

advances 

terminated 

Amount  due 
chits: 
(a) Secured    .    .     .    .    .     .  Rs. 
(b) Unsecured   .    .     .     .     .      Rs. 
Chit prize amount paid earlier 
Loans 
to 
subscribers   .    .     .     .    .     . 
9. 
Litigation expenses      .    .      . 
10.  Premises     .     .     .      .     .    . 
11.  Furniture and fixture      .    .    . 
12.  Stamps in stock   .     .    .    .    .   
13.  Other assets   .     .    .    .     .    . 
14.  Profit and loss account   .    .    . 
TOTAL 

Rs. 
Rs. 
Rs. 
Rs. 
Rs. 
Rs. 
Rs. 
Particulars  to  be  specified  in  respect  of  amounts 
shown against 4, 5 and 6. 

(i) Amounts due from directors or officers of the 
company  or  any  of  them  either  jointly  or 
severally with any other person. 

(ii) Amounts due by companies or firms in which 
the directors of the company are interested as 
directors,  partners  or  in  the  case  of  private 
companies, as members. 

1.  Capital  

Liabilities 

Authorised   .       .        .        .       .    Rs. 
Issued    .      .       .       .       .        .    Rs. 
Paid-up   .      .       .       .      .        .     Rs.  Rs. 

1. 
2. 

3. 

2.  Reserve Fund   .      .       .       .      .   
3.  Deposits     .        .        .        .        .   
4.  Borrowings   .       .       .       .        .   
Foreman’s liability in tickets prized 
5. 

6. 

1[net chit amount] payable   .     .     .     
. 

7.  Defaulted 

amount 
subscribers’ 
payable      .         .         .       .         .   

8.  Advance subscription received       . 

9. 

Liability to non-prized subscribers  
(Arrears from non-prized subscribers 
to be indicated)       .       .       .        .         

10.  Amount payable in terminated chits . 

11.  Auction profit payable to non-prized  
Subscribers    .       .       .       .        .   
12.  Other liabilities       .       .       .       .         
13.  Profit and loss account    .       .       .       

Rs. 
Rs. 
Rs. 
Rs.  4. 

Rs. 

Rs. 

Rs.  5. 

Rs. 

Rs.  6. 

Rs. 

Rs.  7. 
Rs.  8. 

TOTAL  

Rs. 

Total chit amounts of the chits in fore, i.e., running 
chits. 

1. Subs. by Act 41 of 2019, s. 3, for “chit amount” (w.e.f. 1-1-2020). 

31 

 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
  
 
  
  
  
  
 
 
 
 
 
  
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         
 
 
 
                                                           
PART II.—FORM OF PROFIT AND LOSS ACCOUNT 

Expenditure 

Income 

1.  To interest paid on deposits, borrowings, 

1.  By foreman’s commission     .       .      .             Rs. 

etc.    .        .       .       .       .       .      . 

Rs.  2.  By bonus       .       .      .          .      .      .       Rs. 

2.  To salaries, allowances, bonus and  

3.  By interest     .       .       .         .      .      .     Rs. 

provident fund        .        .       .        .            Rs.  4.  By indivisible income in auction profit .   Rs. 

3.  To directors’ sitting fees   .       .       .            Rs.  5.  By rent           .       .        .        .       .     .    Rs. 

4.  To rent, taxes, insurance, lighting     . 

Rs.  6.  By net profit on sale of investments .    .  Rs. 

5.  To law charges   .      .       .       .       .     

Rs.  7.  By other receipts      .      .       .     .       .           Rs. 

6.  To postages, telegrams and stamps   .         Rs.  8.  By loss       .       .        .         .        .      .  Rs. 

7.  To auditors’ fees   .       .       .      .     . 

8.  To filing fees      .       .       .        .     . 

Rs. 

Rs. 

9.  Ro depreciation and repairs   .     .     .           Rs. 

10.  To stationery, printing and 

advertisement   .       .       .      .    .    . 

11.  To other expenditure   .      .       .      .     

12.  To balance of profit    .       .       .      .    

Rs. 

Rs. 

Rs. 

TOTAL 

Rs. 

TOTAL 

Rs. 

32 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
