THE CHIT FUNDS ACT, 1982

No.40 OF 1982
[19th August, 1982.]
An Act to provide for the regultion of chit funds nd for !tters connected there"ith. #e it encted $%
&rli!ent in the 'hirt%(third )er of the *epu$lic of +ndi s follo"s,(
THE CHIT FUNDS ACT, 1982
CHAPTER I - PRELIMINARY
1.Short title, ete!t "!# $o%%e!$e%e!t.- (1) This Act may be called the Chit Funds Act, 1982.
(2) It extends to the hole o! India exce"t the #tate o! $ammu and %ashmi&.
(') It shall come into !o&ce on such date as the Cent&al (o)e&nment may, by noti!ication in the
*!!icial (a+ette, a""oint, and di!!e&ent dates may be a""ointed !o& di!!e&ent #tates.
2.De&i!itio!.- In this Act, unless the context othe&ise &e,ui&e, -
(a) -a""&o)ed ban.- means the #tate /an. o! India constituted unde& section ' o! the #tate /an.
o! India Act, 1900 (2' o! 1900), o& a subsidia&y ban. constituted unde& section ' o! the #tate /an.
o! India (#ubsidia&y /an.s) Act, 1909 ('' o! 1909), o& a co&&es"ondin1 ne ban. constituted
unde& section ' o! the /an.in1 Com"anies (Ac,uisition and T&ans!e& o! 2nde&ta.in1) Act, 1934 (0
o! 1993), o& a 5e1ional 5u&al /an. established unde& section ' o! the 5e1ional 5ules /an.s Act,
1936 (21 o! 1936) , o& a co&&es"ondin1 ne ban. constituted unde& section ' o! the /an.in1
Com"anies (Ac,uisition and T&ans!e& o! 2nde&ta.in1s) Act, 1984 (74 o! 1984), o& a ban.in1
com"any as de!ined unde& clause (e) o! section 0 o! the /an.in1 5e1ulation Act, 1979 (14 o!
1979 ), o& a ban.in1 institution noti!ied by the Cent&al (o)e&nment unde& section 01 o! that Act o&
such othe& ban.in1 institution as the #tate (o)e&nment may, in consultation ith the 5ese&)e
/an., a""&o)e !o& the "u&"oses o! this Act8
(b) -chit- means a t&ansaction hethe& called chit, chit !und, chitty, .u&i o& by any othe& name by
o& unde& hich a "e&son ente&s into an a1&eement ith a s"eci!ied numbe& o! "e&sons that e)e&y
one o! them shall subsc&ibe a ce&tain sum o! money (o& a ce&tain ,uantity o! 1&ain instead) by ay
o! "e&iodical installments o)e& a de!inite "e&iod and that each such subsc&ibe& shall, in his tu&n, as
dete&mined by lot o& by auction o& by tende& o& in such othe& manne& as may be s"eci!ied in the
chit a1&eement, be entitled to the "&i+e amount.
E'l"!"tio!.- A t&ansaction is not a chit ithin the meanin1 o! this clause, i! in such t&ansaction, -
(i) some alone, but not all, o! the subsc&ibe&s 1et the "&i+e amount ithout any liability to "ay
!utu&e subsc&i"tions8 o&
(ii) all the subsc&ibe&s 1et the chit amount by tu&ns ith a liability to "ay !utu&e subsc&i"tions8
(c) -chit a1&eement- means the document containin1 the a&ticles o! a1&eement beteen the
!o&eman and the subsc&ibe&s &elatin1 to the chit8
(d) -chit amount- means the sum-total o! the subsc&i"tions "ayable by all the subsc&ibe&s !o& any
installment o! a chit ithout any deduction o! discount o& othe&ise8
(e) -chit business- means the business o! conductin1 a chit8
(!) -de!aultin1 subsc&ibe&- means a subsc&ibe& ho has de!aulted in he "ayment o! subsc&i"tions
due in acco&dance ith the te&ms o! the chit a1&eement.
(1) -discount- means the sum o! money o& the ,uantity o! 1&ain hich a "&i+ed subsc&ibe& is,
unde& the te&ms o! the chit a1&eement, &e,ui&ed to !o&e1o and hich is set a"a&t unde& the said
a1&eement to meet the ex"enses o! &unnin1 the chit o& !o& dist&ibution amon1 the subsc&ibe&s o&
!o& both8
(h) -di)idend- means the sha&e o! the subsc&ibe& in the amount o! discount a)ailable unde& the
chit a1&eement !o& &ateable dist&ibution amon1 the subsc&ibe&s at each installment o! the chit8
(i) -d&a- means the manne& s"eci!ied in the chit a1&eement !o& the "u&"ose o! asce&tainin1 the
"&i+ed subsc&ibe& o! any installment o! the chit8
(9) -!o&eman- means the "e&son ho unde& the chit a1&eement is &es"onsible !o& the conduct o!
the chit and includes any "e&son discha&1in1 the !unctions o! the chit and includes any "e&son
discha&1in1 the !unctions o! the !o&eman unde& section '98
(.) -non-"&i+ed subsc&ibe&- does not include a de!aultin1 sub-sc&ibe&8
(l) -"&esc&ibed- means "&esc&ibed by &ules made unde& this Act8
(m) -"&i+e amount- means the di!!e&ence beteen the chit amount and the document, and in the
case o! a !&action o! a tic.et means the di!!e&ence beteen the chit amount and the discount
"&o"o&tionate to the !&action o! the tic.et, and hen the "&i+e amount is "ayable othe&ise then in
cash, and )alue o! the "&i+e amount shall be the )alue at the time hen it becomes "ayable8
(n) -"&i+e subsc&ibe&- means a subsc&ibe& ho has eithe& &ecei)ed o& it entitled to &ecei)e the
"&i+e amount8
(o) -5e1ist&a&- means the 5e1ist&a& o! Chits a""ointed unde& section 61, and includes an
Additional, a $oint, :e"uty o& an Assistant 5e1ist&a& a""ointed unde& that section8
(") -5ese&)e /an.- means the 5ese&)e /an. o! India constituted unde& the 5ese&)e /an. o!
India Act, 19'7 (2 o! 19'7)8
(,) -#tate (o)e&nment-, in &elation to a 2nion te&&ito&y, means the administ&ato& o! that 2nion
te&&ito&y a""ointed by the ;&esident unde& a&ticle 2'9 o! the Constitution8
(&) -subsc&ibe&- includes a "e&son ho hold a !&action o! a tic.et and also a t&ans!e&ee o! a tic.et
o& !&action the&eo! by assi1nment in &itin1 o& by o"e&ation o! la8
(s) -tic.et- means the sha&e o! a subsc&ibe& in a chit.
(. A$t to o)erri#e other l"*+, %e%or"!#i,% ,"rti$le+ ,et$.- #a)e as othe&ise ex"&essly
"&o)ided in this Act,-
(a) the "&o)isions o! this Act shall ha)e e!!ect notithstandin1 anythin1 to the cont&a&y contained
in any othe& la !o& the time bein1 in !o&ce o& in the memo&andum o& a&ticles o! association o&
bye-las o& in any a1&eement o& &esolution hethe& the same be &e1iste&ed, executed o& "assed,
as the case may be, be!o&e o& a!te& the commencement o! this Act8 and
(b) any "&o)ision contained in the memo&andum, a&ticles, bye-las, a1&eement o& &esolution
a!o&esaid, shall, to the extent to hich it is &e"u1nant to the "&o)isions o! this Act, become o& be
)oid, as the case may be.

CHAPTER II - RE-ISTRATI.N .F CHITS, C.MMENCEMENT AND C.NDUCT .F CHIT
/USINESS
0. Prohi1itio! o& $hit+ !ot +"!$tio!e# or re2i+tere# ,!#er the A$t.- (1) <ot chit shall be
commenced o& conducted ithout obtainin1 the "&e)ious sanction o! the #tate (o)e&nment ithin
hose 9u&isdiction the chit is to be commenced o& conducted o& o! such o!!ice& as may be
em"oe&ed by that (o)e&nment in this behal!, and unless the chit is &e1iste&ed in that state in
acco&dance ith the "&o)isions o! this Act=
;&o)ided that a sanction obtained unde& this sub-section shall la"s i! the chit is not &e1iste&ed
ithin tel)e months !&om the date o! such sanction o& ithin such !u&the& "e&iod o& "e&iods not
exceedin1 six months in the a11&e1ate as the #tate (o)e&nment may, on a""lication made to it in
this behal!, allo.
(2) An a""lication !o& the "u&"ose o! obtainin1 a sanction unde& subsection (1) shall be made by
the !o&eman in such !o&m and in such manne& as may be "&esc&ibed.
(') The "&e)ious sanction &e!e&&ed to in sub-section (1) may be &e!used, i! !o&eman, -
(a) had been con)icted o! any o!!ence unde& this Act o& unde& any othe& Act &e1ulatin1 chit
business and sentenced to im"&isonment !o& any such o!!ence8 o&
(b) had de!aulted in the "ayment o! !ees o& the !ilin1 o! any statement o& &eco&d &e,ui&ed to be
"aid o& !iled unde& this Act o& had )iolated any o! the "&o)isions o! this Act o& the &ules made
the&eunde&8 o&
(c) had been con)icted o! any o!!ence in)ol)in1 mo&al tu&"itude and sentenced to im"&isonment
!o& any such o!!ence unless a "e&iod o! !i)e yea&s has ela"sed since his &elease =
;&o)ided that be!o&e &e!usin1 any such sanction, the !o&eman shall be 1i)en a &easonable
o""o&tunity o! bein1 hea&d.
(7) The o&de& o! the #tate (o)e&nment, and, sub9ect to the "&o)isions o! sub-section (0), the o&de&
o! the o!!ice& em"oe&ed unde& sub-section (1), issuin1 o& &e!usin1 "&e)ious sanction unde& this
section shall be !inal.
(0) Any "e&son a11&ie)ed by the &e!usal to issue "&e)ious sanction by a o!!ice& em"oe&ed unde&
sub-section (1) may a""eal to the #tate (o)e&nment ithin thi&ty days o! the date o!
communication to him o! such &e!usal and the decision o! that (o)e&nment on such a""eal shall
be !inal.
3. Prohi1itio! o& i!)it"tio! &or +,1+$ri'tio!+ e$e't ,!#er $ert"i! $o!#itio!+.- <o "e&son
shall issue o& cause to be issued any notice, ci&cula&, "&os"ectus, "&o"osal o& othe& document
in)itin1 the "ublic to subsc&ibe !o& tic.ets in any chit unless such notice, ci&cula&, "&os"ectus,
"&o"osal o& document contains a statement that the "&e)ious sanction &e,ui&ed unde& section 7
has been obtained and the "a&ticula&s o! such sanction.
4. For% o& $hit "2ree%e!t.- (1) >)e&y chit a1&eement shall be is du"licate and shall be si1ned
by each o! the subsc&ibe&s o& by any "e&son autho&ised by him in &itin1 and the !o&eman and
attested by at least to itnesses and it shall contain the !olloin1 "a&ticula&s, namely=-
(a) !ull name and &esidential add&ess o! e)e&y subsc&ibe&8
(b) the numbe& o! tic.ets includin1 the !&action o! a tic.et held by each subsc&ibe&8
(c) the numbe& o! installments, the amount "ayable !o& each tic.et at e)e&y installment and the
inte&est o& "enalty, i! any, "ayable on any de!ault in the "ayment o! such installments8
(d) the "&obable date o! commencement and the du&ation o! the chit8
(e) the manne& o! asce&tainin1 the "&i+in1 subsc&ibe& at each installment8
(!) the maximum amount o! discount hich the "&i+ed subsc&ibe& has to !o&e1o at any installment8
(1) the mode and "&o"o&tion in hich the discount is dist&ibutable by ay o! di)idend, !o&eman?s
commission o& &emune&ation o& ex"enses !o& &unnin1 the chit, as the case may be8
(h) the date, time and "lace at hich the chit is to be d&an8
(i) the installment at hich the !o&eman is to 1et the chit amount8
(9) the name o! the a""&o)ed ban. in hich chit moneys shall be de"osited by the !o&eman unde&
the "&o)isions o! this Act8
(.) he&e the !o&eman is an indi)idual, the manne& in hich a chit shall be continued hen such
indi)idual dies o& becomes unsound mind o& is othe&ise inca"acitated8
(l) the conse,uences to hich a non-"&i+ed o& "&i+ed subsc&ibe& o& the !o&eman shall be liable in
case o! )iolation o! any o! the "&o)isions o! the chit a1&eement8
(m) the conditions unde& hich a subsc&ibe& shall be t&eated as a de!aultin1 subsc&ibe&8
(n) the natu&e and "a&ticula&s o! the secu&ity o! to be o!!e&ed by the !o&eman8
(o) the dates on hich and time du&in1 hich the !o&eman shall, sub9ect to the "&o)isions
contained in section 77, allo ins"ection o! chit &eco&ds to non-"&i+ed and un"aid "&i+ed
subsc&ibe&s8
(") the names o! the nominees o! each subsc&ibe&, that is to say, the names o! the "e&sons to
hom the bene!its acc&uin1 to the subsc&ibe& unde& the chit may be "aid in the case o! the death
o! the subsc&ibe& o& hen he is othe&ise inca"able o! ma.in1 an a1&eement8
(,) any othe& "a&ticula&s that may, !&om time to time, be "&esc&ibed.
>x"lanation= - Fo& the "u&"oses o! this sub-section, it shall be su!!icient i! the si1natu&e o! each
subsc&ibe& is obtained in se"a&ate co"ies o! the a1&eement.
(2) The du&ation o! a chit shall not extend beyond a "e&iod o! !i)e yea&s !&om the date o! its
commencement8
;&o)ided that the #tate (o)e&nment may "e&mit the du&ation o! a chit u" to a "e&iod o! ten yea&s i!
it is satis!ied that it is necessa&y so to do, ha)in1 &e1a&d to,-
(a) the !inancial condition o! the !o&eman8
(b) his methods o! o"e&ation8
(c) the inte&ests o! "&os"ecti)e subsc&ibe&s8
(d) the &e,ui&ements as to secu&ity8 and
(e) such othe& !acto&s as the ci&cumstances o! the easy may &e,ui&e.
(') The amount o! discount &e!e&&ed to in clause (!) o! sub-section (1) shall not exceed thei& "e&
cent, o! the chit amount.
(7) @he&e the "&i+ed subsc&ibe& at any installment at any installment o! the chit is &e,ui&ed to be
dete&mined by auction and mo&e than one "e&son o!!e& the maximum discount, the "&i+ed
subsc&ibe& shall be dete&mined by lot.
5. Fili!2 o& $hit "2ree%e!t
(1) >)e&y chit a1&eement shall be !iled in du"licate by the !o&eman ith the 5e1ist&a&.
(2) The 5e1ist&a& shall &etain one co"y o! the chit a1&eement and &etu&n the du"licate to the
!o&eman ith an endo&sement that the chit a1&eement has been &e1iste&ed=
;&o)ided that the 5e1ist&a& may &e!use to &e1iste& the chit a1&eement on may one o& mo&e o! the
!olloin1 1&ounds, namely=-
(a) that the secu&ity o!!e&ed by the !o&eman unde& section 24 is insu!!icient8
(b) that the !o&eman had been con)icted o! any o!!ence unde& this Act o& unde& any othe& Act
&e1ulatin1 chit business and sentenced to im"&isonment !o& any such o!!ence8
(c) that the !o&eman had de!aulted in the "ayment o! !ees o& the !ilin1 o! any statement o& &eco&d
&e,ui&ed to be "aid o& !iled unde& this Act o& had )iolated any o! the "&o)isions o! this Act o& the
&ules made the&eunde&8
(d) that the !o&eman had been con)icted o! any o!!ence in)ol)in1 mo&al tu&"itude and sentenced
to im"&isonment !o& any such o!!ence unless a "e&iod o! !i)e yea&s has ela"sed since his &elease=
;&o)ided !u&the& that be!o&e &e!usin1 to &e1iste& a chit unde& the !i&st "&o)iso, the !o&eman shall be
1i)en a &easonable o""o&tunity o! bein1 hea&d.
(') >)e&y endo&sement made unde& sub-section (2) shall be conclusi)e e)idence that the chit is
duly &e1iste&ed unde& this Act and the &e1ist&ation o! a chit shall la"se i! the decla&ation by the
!o&eman unde& sub-section (1) o! section 9 is not !iled ithin th&ee months !&om the date o! such
endo&sement o& ithin such !u&the& "e&iod o& "e&iods not exceedin1 th&ee months in the
a11&e1ate as the 5e1ist&a& may, on a""lication made to him in this behal!, allo.
8. Mi!i%,% $"'it"l re6,ire%e!t+ &or the $o%%e!$e%e!t, et$., o& " $hit, "!# $hit, "!#
$re"tio! o& " re+er)e &,!# 17 " $o%'"!7.- (1) <otithstandin1 anythin1 contained in the
Com"anies Act, 1906, but sub9ect to the "&o)isions o! this Act, a com"any shall not commence o&
ca&&y on chit business unless it has a "aid-u" ca"ital o! not less than &u"ees one la.h.
(2) >)e&y com"any ha)in1 a "aid-u" ca"ital o! less than &u"ees one la.h and ca&&yin1 on chit
business on chit business on the commencement o! this Act, shall, be!o&e the ex"i&y o! a "e&iod
o! th&ee yea&s !&om such commencement, inc&ease its "aid-u" ca"ital to not less than &u"ees one
la.h.
;&o)ided that the #tate (o)e&nment may, i! it conside&s it necessa&y in the "ublic inte&est o& !o&
a)oidin1 any ha&dshi", extend the said "e&iod o! th&ee yea&s in &es"ect o! any com"any by such
!u&the& "e&iod at "e&iods not exceedin1 to yea&s in the a11&e1ate=
;&o)ided !u&the& that no such com"any shall commence any ne chit the du&ation o! hich ould
extend beyond the said "e&iod o! th&ee yea&s o& such extended "e&iod o& "e&iods unde& the !i&st
"&o)iso unless it inc&eases its "aid-u" ca"ital to not less than &u"ees one la.h.
(') >)e&y com"any ca&&yin1 on chit business shall c&eate and maintain a &ese&)e !und and shall,
out o! the balance o! "&o!it o! each yea& as disclosed in its "&o!it and loss account and be!o&e any
di)idend on its sha&es is decla&ed, t&ans!e& to such &ese&)e !und, a sum e,ual to not less than ten
"e& cent, o! such "&o!it.
(7) <o com"any shall a""&o"&iate any sum o& sums !&om the &ese&)e !und exce"t ith the "&io&
a""&o)al o! the 5e1ist&a& and !o& the "u&"ose o! obtainin1 such a""&o)al, it shall an a""lication in
the "&esc&ibed !o&m to the 5e1ist&a& ex"lainin1 the ci&cumstances &elatin1 to such a""&o"&iation.
9. Co%%e!$e%e!t o& $hit.- (1) >)e&y !o&eman shall, a!te& all the tic.ets s"eci!ied in the chit
a1&eement a&e !ully subsc&ibed, !ile a decla&ation to that e!!ect ith the 5e1ist&a&
(2) As soon as may be a!te& a decla&ation is !iled unde& sub-section (1), the 5e1ist&a& shall, a!te&
satis!yin1 himsel! that all the &e,ui&ements &elatin1 to sanction, &e1ist&ation o! chit and othe&
matte&s ha)e been duly com"lied ith, 1&ant a ce&ti!icate o! commencement to the !o&eman.
(') <o !o&eman shall commence any auction o& the d&a o! any chit o& a""&o"&iate any chit o&
a""&o"&iate any chit amount unless a ce&ti!icate o! commencement &e!e&&ed to in sub-section (2)
is obtained by him.
18. Co'ie+ o& $hit "2ree%e!t to 1e 2i)e! to +,1+$ri1er+.- (1) A !o&eman shall, as soon as
may be a!te& he has obtained the ce&ti!icate o! commencement unde& sub-section (2) o! section 9,
but not late& than the date o! the !i&st d&a o! the chit, !u&nish to e)e&y subsc&ibe&, a co"y o! the
chit a1&eement ce&ti!ied to be a t&ue co"y.
(2)A !o&eman shall, ithin !i!teen days a!te& the close o! the month in hich the d&a !o& the !i&st
installment o! the chit is held, !ile ith the 5e1ist&a&, a ce&ti!icate to the e!!ect that the "&o)isions o!
sub-section (1) ha)e been com"lied ith.
11. U+e o& the *or#+ $hit, $hit &,!#, $hitt7 or 9,ri.- (1) <o "e&son shall ca&&y on chit business
unless he uses as "a&t o! his name any o! the o&ds -chit !und-, -chitty- o& -%u&i- and no "e&son
othe& than a "e&son ca&&yin1 on chit business shall use as "a&t o! his name any such o&d.
(2) @he&e at the commencement o! this Act,-
(a) any "e&son is ca&&yin1 on chit business ithout usin1 as "a&t o! his name any o! the o&ds
s"eci!ied in sub-section (1)8 o&
(b) any "e&son not ca&&yin1 on chit business is usin1 any such o&d as "a&t o! his name,
he shall, ithin a "e&iod o! one yea& !&om such commencement, add as "a&t o! his name any such
o&d o&, as the case may be, delete such o&d !&om his name=
;&o)ided that the #tate (o)e&nment may, i! it conside&s it necessa&y in the "ublic inte&est o& !o&
a)oidin1 any ha&dshi", extend the said "e&iod o! one yea& by such !u&the& "e&iod o& "e&iods not
exceedin1 one yea& in the a11&e1ate.
12. Prohi1itio! o& tr"!+"$ti!2 1,+i!e++ other th"! $hit 1,+i!e++ 17 " $o%'"!7.- (1) >xce"t
ith the 1ene&al o& s"ecial "e&mission o! the #tate (o)e&nment, no com"any ca&&yin1 on chit
business shall conduct any othe& business.
(2) @he&e at the commencement o! this Act, any com"any is ca&&yin1 on any business in addition
to chit business, it shall ind u" such othe& business be!o&e the ex"i&y o! a "e&iod o! th&ee yea&s
!&om such commencement=
;&o)ided that the #tate (o)e&nment may, i! it conside&s it necessa&y in the "ublic inte&est o& !o&
a)oidin1 any ha&dshi", extend the said "e&iod o! th&ee yea&s by such !u&the& "e&iod o& "e&iods not
exceedin1 to yea&s in the a11&e1ate.
1(. A22re2"te "%o,!t o& $hit+.- (1) <o !o&eman, othe& than a !i&m o& othe& association o!
indi)iduals o! a com"any o& co-o"e&ati)e society, shall commence o& conduct chits, the a11&e1ate
chit amount o! hich at any time exceeds tenty-!i)e thousand &u"ees.
(2) @he&e the !o&eman is a !i&m o& othe& association o! indi)iduals, the a11&e1ate chit amount o!
the chit conducted by the !i&m o& othe& association shall not at any time exceed,-
(a) he&e the numbe& o! "a&tne&s o! the !i&m o& the indi)iduals constitutin1 the association is not
less than !ou&, a sum o! &u"ees one la.h8
(b) in any othe& case, a sum calculated on the basis o! tenty-!i)e thousand &u"ees ith &es"ect
to each "a&tne& o& indi)idual.
(') @he&e the !o&eman is a com"any o& co-o"e&ati)e society, the a11&e1ate chit amount o! the
chits conducted by it shall not at any time exceed ten times the net oned !unds o! the com"any
o& the co-o"e&ati)e society, as the case may be.
>x"lanation.- Fo& the "u&"oses o! this sub-section, -net oned !unds- shall mean the a11&e1ate
o! the "aid-u" ca"ital and !&ee &ese&)es as disclosed in the last audited balance sheet o! the
com"any o& co-o"e&ati)e society, as &educed by the amount o! accumulated balance o! loss,
de!e&&ed &e)enue, ex"enditu&e and othe& intan1ible assets, i! any, as disclosed in the said
balance sheet.
10. Utili+"tio! o& &,!#+.- (1) <o "e&son ca&&yin1 on chit business shall utilise the moneys
collected in &es"ect o! such business (othe& than commission o& &emune&ation "ayable to such
"e&son o& inte&est o& "enalty, i! any, &ecei)ed !&om a de!aultin1 subsc&ibe&), exce"t !o&-
(a) ca&&yin1 on chit business8 o&
(b) 1i)in1 loans and ad)ances to non-"&i+ed subsc&ibe&s on the secu&ity o! subsc&i"tions "aid by
them8 o&
(c) in)estin1 in t&ustee secu&ities ithin the meanin1 o! section 24 o! the Indian T&usts Act, 18828
o&
(d) ma.in1 de"osits ith a""&o)ed ban.s mentioned in the chit a1&eement.
(2) @he&e any "e&son ca&&yin1 on chit business has utilised the moneys collected in &es"ect o!
such business be!o&e the commencement o! this Act, othe&ise than !o& the "u&"oses s"eci!ied in
sub-section (1), he shall secu&e that so much o! such moneys as ha)e not been &ealised be!o&e
such commencement a&e &ealised be!o&e the ex"i&y o! a "e&iod o! th&ee yea&s !&om such
commencement=
;&o)ided that the #tate (o)e&nment may, i! it conside&s it necessa&y in the "ublic inte&est o! !o&
a)oidin1 any ha&dshi", extend the said "e&iod o! th&ee yea&s by such !u&the& "e&iod o& "e&iods not
exceedin1 one yea& in the a11&e1ate.
13. Alter"tio! o& $hit "2ree%e!t.- A chit a1&eement shall not be alte&ed, added to o& cancelled
exce"t ith the consent in &itin1 o! the !o&eman and all the subsc&ibe&s to the chit.
14. D"te, ti%e "!# 'l"$e o& $o!#,$ti!2 $hit+.- (1) >)e&y d&a in a chit shall be held on the
date, at the time and "lace mentioned in the chit a1&eement and a notice the&e!o&e in such !o&m
and in such manne& as may be "&esc&ibed shall be issued by the !o&eman to all the subsc&ibe&s.
(2) >)e&y such d&a shall be conducted in acco&dance ith the "&o)isions o! the chit a1&eement
and in the "&esence o! not less than to subsc&ibe&s.
(') @he&e any d&a as not conducted on the 1&ound that to subsc&ibe&s &e,ui&ed to be "&esent
at a d&a unde& sub-section (2) e&e not "&esent o& on any othe& 1&ound, the 5e1ist&a& may, on
his on motion o& on an a""lication made by the !o&eman o& any o! the subsc&ibe&s, di&ect that
the d&a shall be conducted in his "&esence o& in the "&esence o! any "e&son de"uted by him.
15. Mi!,te+ o& 'ro$ee#i!2+.- (1) The minutes o! the "&oceedin1s o! e)e&y d&a shall be
"&e"a&ed and ente&ed in a boo. to be .e"t !o& that "u&"ose immediately a!te& the closu&e o! the
d&a and shall be si1ned by the !o&eman, the "&i+ed subsc&ibe&s, i! "&esent, o& thei& autho&ised
a1ents, and at least to othe& subsc&ibe&s ho a&e "&esent, and he&e a di&ection has been
made unde& sub-section (') o! section 16, also by the 5e1ist&a& o& the "e&son de"uted by him
unde& that sub-section.
(2) The minutes &e!e&&ed to in sub-section (1) shall state clea&ly-
(a) the date and hou& hen "&oceedin1s be1an and ended and the "lace he&e the d&a as
held8
(b) the numbe& o! the installment o! the chit to hich the "&oceedin1s &elate8
(c) the names o! the subsc&ibe&s "&esent8
(d) the "e&son o& "e&sons ho become entitled to the "&i+e amount in the installment8
(e) the amount o! discount8
(!) !ull "a&ticula&s &e1a&din1 the dis"osal o! the un"aid "&i+e amount, i! any, in &es"ect o! any
"&e)ious installment8 and
(1) any othe& "a&ticula&s that may be "&esc&ibed.
18. Co'ie+ o& %i!,te+ to 1e &ile# *ith Re2i+tr"r.- A t&ue co"y o! the minutes o! the
"&oceedin1s o! e)e&y d&a ce&ti!ied as such by the !o&eman shall be !iled by the !o&eman ith the
5e1ist&a& ithin tenty-one days !&om the date o! the d&a to hich it &elates.
19. Re+tri$tio! o! o'e!i!2 o& !e* 'l"$e "!# 1,+i!e++.- (1) <o "e&son ca&&yin1 on chit
business shall o"en a ne "lace o! business ithout obtainin1 the "&io& a""&o)al o! the 5e1ist&a&
ithin hose te&&ito&ial 9u&isdiction his &e1iste&ed o!!ice o!, as the case may be, the "lace o& the
"&inci"al "lace o! business is situated.
(2) /e!o&e 1&antin1 a""&o)al unde& sub-section (1), the 5e1ist&a& shall consult the 5e1ist&a& o! the
#tate ithin hose te&&ito&ial 9u&isdiction the ne "lace o! business is "&o"osed to be o"ened and
shall also .ee" in )ie the !inancial condition and methods o! o"e&ation o! the !o&eman, the extent
to hich "ublic inte&est ill be se&)ed by the o"enin1 o! the ne "lace o! business and such othe&
matte&s as may be "&esc&ibed.
(') @he&e a "e&son ca&&yin1 on chit business o"ens a ne "lace o! business in a #tate othe& than
the #tate (he&eina!te& &e!e&&ed to as the #tate o! o&i1in) in hich his &e1iste&ed o!!ice o& the "lace
o& the "&inci"al "lace o! his business is situated, the 5e1ist&a& o! the #tate in hich such ne
"lace o! business is o"ened may also exe&cise and "e&!o&m any o! the "oe&s and !unctions
hich the 5e1ist&a& o! the #tate o! o&i1in may exe&cise and "e&!o&m in &es"ect o! the chit business
ca&&ied on at such ne "lace o! business.
(7) Fo& the "u&"oses o! this section, -"lace o! business- shall include any b&anch o!!ice, sub-
o!!ice, o& any "lace o! business he&e the chit business may be conducted by such "e&son.
THE CHIT FUNDS ACT, 1982
CHAPTER III - RI-HTS AND DUTIES .F F.REMAN
28. Se$,rit7 to 1e 2i)e! 17 &ore%"!.- (1) Fo& the "&o"e& conduct o! the chit, e)e&y !o&eman
shall, be!o&e a""lyin1 !o& a "&e)ious sanction unde& section 7,-
(a) de"osit in an a""&o)ed ban. an amount e,ual to the chit amount in the name o! the 5e1ist&a&8
o&
(b) t&ans!e& (o)e&nment secu&ities o! the !ace )alue o& ma&.et )alue (hiche)e& is less) o! not
less than one and a hal! times the chit amount in !a)ou& o! the 5e1ist&a&8 o&
(c) t&ans!e& in !a)ou& o! the 5e1ist&a& such othe& secu&ities, bein1 secu&ities in hich a t&ustee
may in)est money unde& section 24 o! the Indian T&usts Act, 1882 (2 o! 1882)., o! such )alue, as
may be "&esc&ibed by the #tate (o)e&nment !&om time to time.
;&o)ided that the )alue o! the secu&ities &e!e&&ed to in clause (c) shall not, in any case, be less
than one and a hal! time the )alue o! the chit amount.
(2) @he&e a !o&eman conducts mo&e than one chit, he shall !u&nish secu&ity in acco&dance ith
the "&o)isions o! sub-section (1) in &es"ect o! each chit.
(') The 5e1ist&a& may, at any time du&in1 the cu&&ency o! the chit, "e&mit the substitution o! the
secu&ity=
;&o)ided that the !ace )alue o& ma&.et )alue (hiche)e& is less) o! the substituted secu&ity shall
not be less than the )alue o! the secu&ity 1i)en by the !o&eman unde& sub-section (1).
(7) The secu&ity 1i)en by the !o&eman unde& sub-section (1), o& any secu&ity substituted unde&
sub-section ('), shall not be liable to be attached in execution o! a dec&ee o& othe&ise until the
chit is te&minated and the claims o! all the subsc&ibe&s a&e !ully satis!ied.
(0) @he&e the chit is te&minated and the 5e1ist&a& has satis!ied himsel! that the claims o! all the
subsc&ibe&s ha)e been !ully satis!ied, he shall o&de& the &elease o! the secu&ity !u&nished by the
!o&eman unde& sub-section (1), o& the secu&ity substituted unde& sub-section ('), as the case may
be, and in doin1 so, he shall !ollo such "&ocedu&e as may be "&esc&ibed.
(6) <otithstandin1 anythin1 to the cont&a&y contained in any othe& la !o& the time bein1 in !o&ce,
the secu&ity !u&nished unde& this section shall not be dealt ith by the !o&eman du&in1 the
cu&&ency o! the chit to hich it &elates and any dealin1 by the !o&eman ith &es"ect the&eto by ay
o! t&ans!e& o& othe& encumb&ances shall be null and )oid.
21. Ri2ht+ o& &ore%"!.- (1) The !o&eman shall be entitled,-
(a) in the absence o! any "&o)ision in the chit a1&eement to the cont&a&y to obtain the chit amount
at the !i&st installment ithout deduction o! the discount s"eci!ied in the chit a1&eement, sub9ect to
the condition that he shall subsc&ibe to a tic.et in the chit=
;&o)ided that in a case he&e the !o&eman has subsc&ibed to mo&e than one tic.et, he shall not
be eli1ible to obtain mo&e than one chit amount in a chit ithout discount8
(b) to such amount not exceedin1 !i)e "e& cent.o! the chit amount as may be !ixed in the chit
a1&eement, by ay o! commission, &emune&ation o& !o& meetin1 the ex"enses o! &unnin1 the chit8
(c) to inte&est and "enalty, i! any, "ayable on any de!ault in the "ayment o! installments and to
such othe& amounts as may be "ayable to him unde& the "&o)isions o! the chit a1&eement8
(d) to &ecei)e and &ealise all subsc&i"tions !&om the subsc&ibe&s and to dist&ibute the "&i+e
amounts to the "&i+ed subsc&ibe&s8
(e) to demand su!!icient secu&ity !&om and "&i+ed subsc&ibe& !o& the due "ayment o! !utu&e
subsc&i"tions "ayable by him.
>x"lanation.- A secu&ity shall be deemed to be su!!icient !o& the "u&"oses o! this clause i! its
)alue exceeds by one-thi&d, o& i! it consists o! immo)able "&o"e&ties, the )alue o! exceeds by one-
hal!, o! the amount due !&om the "&i+ed subsc&ibe&8
(!) to substitute subsc&ibe&s in "lace o! de!aultin1 subsc&ibe&s8 and
(1) to do all othe& acts that may be necessa&y !o& the due and "&o"e& conduct o! the chit.
(2) @he&e any dis"ute a&ises ith &e1a&d to the )alue o! the "&o"e&ty o!!e&ed as secu&ity unde&
clause (e) o! sub-section (1), it shall be &e!e&&ed to the 5e1ist&a& !o& a&bit&ation unde& section 67.
22. D,tie+ o& &ore%"!.- (1) The !o&eman shall, on the "&i+ed subsc&ibe& !u&nish su!!icient secu&ity
!o& the due "ayment o! !utu&e subsc&i"tions, be bound to "ay him the "&i+e amount=
;&o)ided that the "&i+e subsc&ibe& shall be entitled to the "ayment o! the "&i+e amount ithout any
secu&ity hatsoe)e& i! he a1&ees to the deduction the&e!&om o! the amount o! all !utu&e
subsc&i"tions and in such a case, the !o&eman shall "ay the "&i+e amount to the "&i+ed subsc&ibe&
ithin se)en days a!te& the date o! the d&a o& be!o&e the date o! the next succeedin1 installment,
hiche)e& is ea&lie&=
;&o)ided !u&the& that he&e the "&i+e amount has been "aid to the "&i+ed subsc&ibe& unde& the
!i&st "&o)iso, the amount deducted shall be de"osited by the !o&eman in an a""&o)ed ban.
mentioned in the chit a1&eement and he shall not ithd&a the amount so de"osited exce"t !o&
the "ayment o! !utu&e subsc&i"tions.
(2) I!, oin1 to the de!ault o! the "&i+ed subsc&ibe&, the "&i+e amount due in &es"ect o! any d&a
&emains un"aid until the date o! the next succeedin1 installment, the !o&eman shall de"osit the
"&i+e amount !o&thith in a se"a&ate account in an a""&o)ed ban. mentioned in the chit
a1&eement and intimate in &itin1 the !act o! such de"osit and the &easons the&e!o&e to the "&i+ed
subsc&ibe& and the 5e1ist&a&=
;&o)ided that he&e any "&i+ed subsc&ibe& does not collect the "&i+e amount in &es"ect o! any
installment o! a chit ithin a "e&iod o! to months !&om the date o! the d&a, it shall be o"en to
the !o&eman to hold anothe& d&a in &es"ect o! such installment.
(') >)e&y "ayment o! the "&i+e amount o& the amount o! !utu&e subsc&i"tions unde& sub-section
(1), and the de"osit o! the "&i+e amount unde& sub-section (2),shall be intimated to the
subsc&ibe&s at the next succeedin1 d&a and the "a&ticula&s o! such "ayment o& de"osit shall be
ente&ed in the minutes o! the "&oceedin1s o! that d&a.
(7) The !o&eman shall not a""&o"&iate to himsel! any amount in excess o! hat he is entitled to
unde& clause (b) o& clause (c) o! sub-section (1) o! section 21=
;&o)ided that he&e the !o&eman is himsel! a "&i+ed subsc&ibe&, he shall be entitled to a""&o"&iate
to himsel! the "&i+e amount sub9ect to his com"lyin1 ith the "&o)isions o! section '1=
;&o)ided !u&the& that the !o&eman may a""&o"&iate to himsel! the inte&est acc&uin1 on the amount
de"osited unde& the second "&o)iso to sub-section (1)
(0) The !o&eman shall not admit any "e&son as a subsc&ibe& to a chit, i! by such admission, the
total numbe& o! tic.ets mentioned in the chit a1&eement is inc&eased.
(6) The !o&eman shall dist&ibute amon1 the subsc&ibe&s, in acco&dance ith the chit a1&eement,
the di)idend eithe& in cash, 1&ain o& by ay o! ad9ustment toa&ds the subsc&i"tions "ayable !o&
the next installment, i! any.
2(. /oo9+, re$or#+, et$., to 1e 9e't 17 &ore%"!.- The !o&eman shall maintain in his &e1iste&ed
o!!ice, o& as the case may be in the "lace o& the "&inci"al "lace o! his business, o&, he&e the
!o&eman has any b&anch o!!ice, sub-o!!ice o& nay "lace o! business !o& the conduct o! chit
business in a #tate othe& than the #tate in hich his &e1iste&ed o!!ice o& the "&inci"al "lace o! his
business is situated, in such b&anch o!!ice, sub-o!!ice o& "lace o! business in &es"ect o! the
business conducted in that #tate-
(a) a &e1iste& containin1-
(i) the names and !ull "a&ticula&s o! the subsc&ibe&s in each chit to1ethe& ith the numbe& o!
tic.ets held by each subsc&ibe&8
(ii) the dates on hich the subsc&ibe&s si1ned the chit a1&eement8 and
(iii) in the case o! an assi1nment o! a tic.et by a subsc&ibe&, the name and !ull add&ess o! the
assi1nee ith the date o! assi1nment and the date on hich the assi1nment had been &eco1nised
by the !o&eman8
(b) a boo. containin1 the minutes o! the "&oceedin1s o! each d&a8
(c) a led1e& containin1-
(i) the amounts "aid by the subsc&ibe&s in each chit and the dates o! such "ayments8
(ii) the amounts "aid to the "&i+ed subsc&ibe&s and the dates o! such "ayments8 and
(iii) in the case o! any de"osit in an a""&o)ed ban. mentioned in the chit a1&eement the date and
the amount o! such de"osit8
(d) a &e1iste& in the "&esc&ibed !o&m shoin1 the amounts de"osited in a""&o)ed ban.s as
&e,ui&ed unde& the "&o)isions o! this act in &es"ect o! all chits conducted by the !o&eman at his
o!!ice8 and
(e) such othe& &e1iste&s and boo.s in such !o&m as may be "&esc&ibed by the #tate (o)e&nment
ithin hose 9u&isdiction the chit is conducted.
20. /"l"!$e +heet.- @ithout "&e9udice to the "&o)isions o! the Com"anies act, 1906 (1 o! 1906.),
e)e&y !o&eman shall "&e"a&e and !ile ith the 5e1ist&a& ithin such item as may be "&esc&ibed, a
balance sheet as on the last date o! each calenda& yea&, o& as the case may be the !inancial yea&
o! the !o&eman, and a "&o!it and loss account &elatin1 to the yea& o! account, in the !o&ms set out
in ;a&ts I and II o! the #chedule o& as nea& the&eto as ci&cumstances admit, in &es"ect o! the chit
business and audited by audito&s ,uali!ied to act as audito&s unde& the Com"anies act, 1906, o&
by chit unde& a""ointed unde& section 61=
;&o)ided that he&e a balance sheet is audited by an audito& ,uali!ied to act as audito& unde& the
Com"anies Act, 1906 (1 o! 1906.), a chit audito& a""ointed unde& section 61 shall ha)e the &i1ht
to audit the balance sheet at any time i! so autho&ised by the 5e1ist&a& in this behal!.

23.Li"1ilit7 o& &ore%"! to +,1+$ri1er+.- (1) >)e&y !o&eman shall be liable to account to the
subsc&ibe&s !o& the amounts due to them.
(2) @he&e the&e a&e mo&e than one !o&eman in a chit, each one o! them 9ointly and se)e&ally and i!
the !o&eman is a !i&m o& othe& association o! indi)iduals each one o! the "a&tne&s o& indi)iduals
the&eo! 9ointly and se)e&ally and i! the !o&eman is a com"any, the com"any as such ,shall be
liable to the subsc&ibe&s in &es"ect o! the obli1ations a&isin1 out o! the chit.
24. :ith#r"*"l o& &ore%"!.- (1) <o !o&eman, o& he&e the&e a&e mo&e than one !o&eman in a
chit, none o! them shall ithd&a !o&m the chit until its te&mination unless such ithd&aal is
assented to in &itin1 by all the non-"&i+ed and un"aid "&i+ed subsc&ibe&s and a co"y o! such
assent has been !iled ith the 5e1ist&a& unde& section 71.
(2) The ithd&aal !&om a chit o! any one o! the !o&eman shall not a!!ect the secu&ity 1i)en by him
unde& section 24 o& section '1.

CHAPTER I; - RI-HTS AND DUTIES AND N.N-PRI<ED SU/SCRI/ERS
25. No!-'ri=e# +,1+$ri1er+ to '"7 +,1+$ri'tio!+ "!# o1t"i! re$ei't+.- >)e&y non-"&i+ed
subsc&ibe& shall "ay his subsc&i"tion due in &es"ect o! e)e&y installment on the dates and times
and at the "laces mentioned in the chit a1&eement and shall, on such "ayment be entitled to
obtain a &ecei"t !&om the !o&eman.
28. Re%o)"l o& #e&",lti!2 +,1+$ri1er+.- (1) A non-"&i+ed subsc&ibe& ho de!aults in "ayin1 his
subsc&i"tion in acco&dance ith the te&ms o! the chit a1&eement shall be liable to ha)e his name
&emo)ed !&om the list o! subsc&ibe&s and a &itten notice o! such &emo)al shall be 1i)en by the
!o&eman to the de!aultin1 subsc&ibe& ithin !ou&teen days o! the date o! such &emo)al8
;&o)ided that i! the de!aulte& "ays the de!aulted installment ith inte&est at such &ate as may be
"&esc&ibed ithin se)en days o! the date o! &ecei"t o! such notice, his name shall be &e-ente&ed in
the list o! such subsc&ibe&s.
(2) >)e&y such &emo)al unde& sub-section (1) shall ith the date the&eo! be ente&ed in the
&ele)ant boo. maintained by the !o&eman.
(') A t&ue co"y o! the ent&y &e!e&&ed to in sub-section (2) shall be !iled by he !o&eman ith the
5e1ist&a& ithin !ou&teen days !&om the date o! &emo)al.
(7) Any de!aultin1 subsc&ibe& a11&ie)ed by the &emo)al o! his name !&om the list o! subsc&ibe&s
may ithin se)en days o! the date o! &ecei"t o! the notice o! &emo)al &e!e& the matte& to the
5e1ist&a& !o& a&bit&ation unde& section 67.
29. S,1+tit,tio! o& +,1+$ri1er+.- (1) A !o&eman may substitute in the list o! subsc&ibe&s any
"e&son (he&ea!te& in this Cha"te& &e!e&&ed to as the substituted subsc&ibe&) in "lace o! the
de!aultin1 subsc&ibe& hose name has been &emo)ed unde& sub-section (1) o! section 28.
(2) >)e&y substitution &e!e&&ed to in sub-section (1) shall ith the date the&eo!, be ente&ed in the
&ele)ant boo. maintained by the !o&eman and a t&ue co"y o! e)e&y such ent&y shall be !iled by the
!o&eman ith the 5e1ist&a& ithin !ou&teen days !&om the date o! substitution.
(8. A%o,!t+ #,e to #e&",lti!2 +,1+$ri1er+.- (1) A !o&eman shall ou& o! the amounts "ayable
by and &eali+ed !&om the substituted subsc&ibe& toa&ds the installments &elatable to the "e&iod
be!o&e the date o! the substitution (includin1 the a&&ea&s due !&om the de!aultin1 subsc&ibe&),
de"osit, be!o&e the date o! the next succeedin1 installment, in a se"a&ate identi!iable, account in
an a""&o)ed ban. mentioned in the chit a1&eement, an amount e,ual to the cont&ibutions made
by the de!aultin1 subsc&ibe&, less such deductions as may be "&o)ided !o& in the chit a1&eement
and shall in!o&m the de!aultin1 subsc&ibe& as ell as the 5e1ist&a& o! the !act o! such de"osit and
shall not ithd&a the amount so de"osited exce"t !o& "ayment to the de!aultin1 subsc&ibe&.
(2) The amount so de"osited unde& sub-section (1) shall be "aid to the de!aultin1 subsc&ibe& as
and hen he claims the amount and the amount so de"osited shall not be ithd&an by the
!o&eman !o& any "u&"ose othe& than !o& such "ayment.
(') The cont&ibutions o! any de!aultin1 subsc&ibe& ho has not been substituted till the te&mination
o! the chit shall be "aid to him ithin !i!teen days !&om the date o! te&mination o! the chit sub9ect to
such deductions as may be "&o)ided !o& in the chit a1&eement.


CHAPTER ; - RI-HTS AND DUTIES .F PRI<ED SU/SCRI/ERS
(1. Pri=e# +,1+$ri1er to &,r!i+h +e$,rit7.- >)e&y "&i+ed subsc&ibe& shall, i! he has not o!!e&ed
to deduct the amount o! all !utu&e subsc&i"tion !&om the "&i+e amount due to him, !u&nish and a
!o&eman shall ta.e, su!!icient secu&ity !o& the due "ayment o! all !utu&e subsc&i"tions and i! the
!o&eman is a "&i+ed subsc&ibe&, he shall 1i)e secu&ity !o& the due "ayment o! all the !utu&e
subsc&i"tion to the satis!action o! the 5e1ist&a&.
(2. Pri=e# +,1+$ri1er to '"7 +,1+$ri'tio!+ re2,l"rl7.- >)e&y "&i+ed subsc&ibe& shall "ay his
subsc&i"tion &e1ula&ly on the dates and times and at the "lace mentioned in the chit a1&eement
and on his !ailu&e to do so, he shall be liable to ma.e a consolidated "ayment o! all the !utu&e
subsc&i"tions !o&thith.

((. Fore%"! to #e%"!# &,t,re +,1+$ri'tio!+ 17 *ritte! !oti$e.- (1) A !o&eman shall not be
entitled to claim a consolidated "ayment !&om a de!aultin1 "&i+ed subsc&ibe& unde& section '2
unless he ma.es a demand to that e!!ect in &itin1.
(2) @he&e a dis"ute is &aised unde& this Act by a !o&eman !o& a consolidated "ayment o! !utu&e
subsc&i"tions !&om a de!aultin1 "&i+ed subsc&ibe& and i! the subsc&ibe& "ays to the !o&eman on o&
be!o&e the date to hich the dis"ute is "osted !o& hea&in1 the a&&ea&s o! subsc&i"tion till that date
to1ethe& ith the inte&est the&eon at the &ate "&o)ided !o& in the chit a1&eement and the cost o!
ad9udication o! the dis"ute, the 5e1ist&a& o& his nominee, hea&in1 the dis"ute, shall
notithstandin1 any cont&act to the cont&a&y, ma.e an o&de& di&ectin1 the subsc&ibe& to "ay to the
!o&eman the !utu&e subsc&i"tion on o& be!o&e the dates on hich they !all due, and that, in case o!
any de!ault o! such "ayments by the subsc&ibe& ,the !o&eman, shall be at libe&ty to &ealise, in
execution o! that o&de&, all !utu&e subsc&i"tions and inte&est to1ethe& ith the costs, i! any less the
amount, i! any al&eady "aid by the subsc&ibe& in &es"ect the&eo!=
;&o)ided that i! any such dis"ute is on a "&omisso&y note, no o&de& shall be "assed unde& this
sub-section unless such "&omisso&y note ex"&essly states that the amount due unde& the
"&omisso&y note is toa&ds the "ayment o! subsc&i"tions to the chit.
(') Any "e&son ho holds any inte&est in the "&o"e&ty !u&nished as secu&ity o& "a&t the&eo!, shall
be entitled to ma.e the "ayment unde& sub-section (2).
(7) All consolidated "ayments o! !utu&e subsc&i"tions &ealised by a !o&eman shall be de"osited by
him in an a""&o)ed ban. mentioned in the chit a1&eement be!o&e the date o! the succeedin1
installment and the amount so de"osited shall not be ithd&an exce"t !o& "ayment o! !utu&e
subsc&i"tions.
(0) @he&e any "&o"e&ty is obtained as secu&ity in lieu o! the consolidated "ayment o! !utu&e
subsc&i"tions it shall &emain as secu&ity !o& the due "ayment o! !utu&e subsc&i"tions.

CHAPTER ;I - TRASNFERS
(0. Re+tri$tio!+ o! tr"!+&er o& ri2ht+ o& &ore%"!.- (1) <o t&ans!e& o! the &i1hts o! a !o&eman to
&ecei)e subsc&i"tions !&om the "&i+ed subsc&ibe&s shall be made ithout the "&e)ious sanction in
&itin1 o! the 5e1ist&a&.
(2) Any t&ans!e& o! the &i1hts o! a !o&eman to &ecei)e subsc&i"tions !&om the "&i+ed subsc&ibe&s
shall, i! it is li.ely to de!eat o& delay the inte&ests o! a non-"&i+ed o& un"aid "&i+ed subsc&ibe&, be
a)oidable at the instance o! such subsc&ibe&.
(') @hen unde& sub-section (2)a t&ans!e& is dis"uted by a subsc&ibe&, the bu&den o! "&o)in1 that
the !o&eman as in sol)ent ci&cumstances at the time o! the t&ans!e& and that the t&ans!e& does
not de!eat o& delay the inte&ests o! such subsc&ibe& is on the t&ans!e&ee.
(3. Tr"!+&er o& !o!-'ri=e# +,1+$ri1er+ ri2ht+ to 1e i! *riti!2.- >)e&y t&ans!e& by a non-
"&i+ed subsc&ibe& o! his &i1hts in the chit shall be in &itin1 dully attested by at least to itnesses
and shall be !iled ith the !o&eman.
(4. Re$o2!itio! o& tr"!+&er 17 &ore%"!.- >)e&y t&ans!e& unde& section '0 shall ithin a "e&iod
o! !ou&teen days !&om the date o! &ecei"t o! the "&o"osal !o& t&ans!e& by the !o&eman, be
&eco1nised by him unless the t&ans!e&ee is not sol)ent o& the t&ans!e& as e!!ected ith a )ie to
de!eatin1 the "&o)isions o! any la includin1 this Act and the decision o! the !o&eman to &eco1nise
the t&ans!e& o& not shall !o&thith be communicated to the "a&ties conce&ned.
(5. E!tr7 o& tr"!+&eree+ !"%e i! the 1oo9+.- >)e&y t&ans!e& unde& section '7 o& section '0
shall be ente&ed by the !o&eman in the boo.s o! the chit !o&thith and a t&ue co"y o! such ent&y
shall be !iled by the !o&eman ith the 5e1ist&a& ithin !ou&teen days !&om the date o! ma.in1 such
ent&y.
THE CHIT FUNDS ACT, 1982
CHAPTER ;II - MEETIN-S .F -ENERAL /.DY .F SU/SCRI/ERS
(8. Meeti!2+ o& 2e!er"l 1o#7 o& +,1+$ri1er+.- (1) The !o&eman, may, on his on motion,
con)ene a s"ecial meetin1 o! the 1ene&al body o! subsc&ibe&s !o& conside&in1 any "&o"osal to
"ass a s"ecial &esolution.
(2) The !o&eman shall con)ene such a meetin1 on the &e,uisition in &itin1 o! not less than
tenty-!i)e "e& cent.o! the numbe& o! non-"&i+ed and un"aid "&i+ed subsc&ibe&s, and the meetin1
so con)ened shall be held ithin thi&ty days o! the date o! &ecei"t o! the &e,uisition and i! the
!o&eman &e!uses o& !ails to call such a meetin1 ithin !ou&teen days o! the date o! &ecei"t o! such
&e,uisition, not less than tenty-!i)e "e& cent o! the numbe& o! non-"&i+ed and un"aid "&i+ed
subsc&ibe&s may 1i)e notice o! the !act to the 5e1ist&a&.
(') The 5e1ist&a& shall, ithin tenty-one days o! the &ecei"t o! the notice unde& sub-section 92)
con)ene o& di&ect the con)enin1 o! a s"ecial meetin1 o! the 1ene&al body o! the subsc&ibe&s and
on &ecei"t o! such a di&ection it shall be the duty o! the !o&eman to com"ly ith such di&ection.
(7) <otice o! not less than !ou&teen days shall be 1i)en to all the subsc&ibe&s o! a meetin1 unde&
this section s"eci!yin1 the ob9ect date, hou& and "lace o! meetin1 and a co"y o! the s"ecial
&esolution shall also be sent alon1 ith the notice o! the meetin1.
>x"lanation- Fo& the "u&"oses o! this section and section '9, -s"ecial &esolution- means a
&esolution hich is "assed at a meetin1 o! the 1ene&al body o! the subsc&ibe&s s"ecially con)ened
!o& the "u&"ose, by a ma9o&ity o! not less than to-thi&ds o! the subsc&ibes to the chit "&esent at
the meetin1 in "e&son o& by "&oxy and &e"&esentin1 not less than th&ee-!ou&ths o! the amount, o&
as the case, may be the )alue o! the 1&ain subsc&ibed by all the non-"&i+ed and un"aid "&i+ed
subsc&ibe&s i! any.

CHAPTER ;III - TERMINATI.N .F CHITS
(9. Pro)i+io! &or $o!ti!,"tio! o& $hit+ i! $ert"i! $"+e+.- (1) @he&e a !o&eman dies o&
becomes o! unsound mind o& is othe&ise inca"acitated, the chit may continue in acco&dance ith
the "&o)isions o! the chit a1&eement.
(2) @he&e a !o&eman is ad9udicated as insol)ent, o& ithd&as !&om the chit unde& section 26, o&
!ails to conduct the chit at any installment o& on any othe& date be!o&e the next succeedin1
installment as may ha)e been a1&eed u"on by a s"ecial &esolution, any one o& mo&e o! such
subsc&ibe&s autho&ised by such &esolution may, in the absence o! any "&o)ision in the chit
a1&eement !o& the !utu&e conduct o! the chit, ta.e the "lace o! the !o&eman and continue the chit
o& ma.e othe& a&&an1ements !o& the !u&the& conduct o! the chit.
08. Ter%i!"tio! o& $hit+.- A chit shall be deemed to ha)e te&minated,-
(a) hen the "e&iod s"eci!ied the&e!o& in the chit a1&eement has ex"i&ed "&o)ided the "ayment o!
dues to all the subsc&ibe&s has been com"leted8 o&
(b) hen all the non-"&i+ed and un"aid "&i+ed subsc&ibe&s and the !o&eman consent in &itin1 to
the te&mination o! the chit and a co"y o! such conceit is !iled ith the 5e1ist&a& as &e,ui&ed unde&
section 718 o&
(c) he&e a !o&eman dies o& becomes o! unsound mind o& is othe&ise inca"acitated and the chit
is not continued in acco&dance ith the "&o)isions o! the chit a1&eement.
;&o)ided that, in a case he&e the !o&eman is a !i&m, i! a "a&tne& the&eo! dies o& becomes o!
unsound mind o& is othe&ise inca"acitated, the chit shall not be deemed to ha)e te&minated and
the su&)i)in1 "a&tne& o& "a&tne&s shall conduct the chit in the absence o! any "&o)ision to the
cont&a&y in the chit a1&eement.

01. Co'7 o& "++e!t o& $o!+e!t to 1e &ile# *ith Re2i+tr"r.-. A t&ue co"y o! e)e&y assent &e!e&&ed
to in section 26 and o! e)e&y consent &e!e&&ed to in clause (b) o! section 74 ith thei& dates shall
be !iled by the !o&eman o& by the su&)i)in1 "a&tne& o& "a&tne&s, as the case may be ith 5e1ist&a&
ithin !ou&teen days !&om the date o! such assent o& consent.
02. Re&,!# o& !o!-'ri=e# +,1+$ri1er+ +,1+$ri'tio!+.- >xce"t in the cases &e!e&&ed to in
clauses (a) and (b) o! section 74,-
(a) e)e&y non-"&i+ed subsc&ibe&, shall, unless othe&ise "&o)ided !o& in this Act o& in the chit
a1&eement, be entitled to 1et bac. his subsc&i"tions at the te&mination o! the chit ithout any
deduction !o& di)idend i! any ea&ned by him=
;&o)ided that, any "e&son to hom the &i1hts o! a non-"&i+ed subsc&ibe& a&e t&ans!e&&ed in
acco&dance ith the "&o)isions o! section '0, shall, in addition to his subsc&i"tions, be entitled to
1et bac. the subsc&i"tions "aid by such non-"&i+ed subsc&ibe&, sub9ect, to the conditions s"eci!ied
in this section8
(b) i! a chit te&minates on a date ea&lie& than the date o&i1inally !ixed in the hit a1&eement the non-
"&i+ed subsc&ibe&?s claim shall be deemed to ha)e a&isen on the date on hich he has notice
the&eo!.
0(. S,1+$ri1er+ #,e+ to 1e &ir+t $h"r2e o! $hit "++et+.- Any amount due to the subsc&ibe&
!&om a !o&eman in &elation to the chit business shall be a !i&st cha&1e on the chit assets.

CHATPER I> - INSPECTI.N .F D.CUMENTS
00. Fore%"! to "llo* $ert"i! +,1+$ri1er+ to i!+'e$t $hit re$or#+.- >)e&y !o&eman shall, on
"ayment o! such !ee not exceedin1 !i)e &u"ees as may be s"eci!ied in the chit a1&eement, allo
the non-"&i+ed subsc&ibe&s and un"aid "&i+ed subsc&ibe&s &easonable !acilities on all the dates o!
d&a o& on such othe& dates and ithin such hou&s as may be "&o)ided !o& in the chit a1&eement
!o& the ins"ection o! secu&ity bonds and documents, &ecei"ts and othe& &eco&ds ta.en !&om the
"&i+ed subsc&ibe&s o& !u&nished by the !o&eman as a subsc&ibe& and al chit &eco&ds includin1
boo.s o! account "ass boo. balance sheet and "&o!it and loss accounts and such othe& &eco&ds
as may sho the actual !inancial "osition o! the chit.

03. Pre+er)"tio! o& $hit re$or#+ 17 &ore%"!.- All the &eco&ds "e&tainin1 to a chit shall be .e"t
by the !o&eman !o& a "e&iod o! ei1ht yea&s !&om the date o! te&mination o! the chit.
04. I!+'e$tio! o& $hit 1oo9+ "!# re$or#+ 17 Re2i+tr"r.- (1) @ithout "&e9udice to the "&o)isions
o! sections 249 and 249A o! the Com"anies Act, 1906 (1 o! 1906), the 5e1ist&a& o& an o!!ice&
autho&ised by the #tate (o)e&nment in this behal! may ins"ect chit boo.s and all the &eco&ds o! a
chit du&in1 o&.in1 hou&s on any o&.in1 day at the "&emises o! the !o&eman ith o& ithout
1i)in1 notice and it shall be the duty o! e)e&y !o&eman to "&oduce to the 5e1ist&a& o& the o!!ice& so
autho&ised, all such boo.s and &eco&ds as a&e in his custody o& "oe& and to !u&nish him ith any
statement o& in!o&mation &elatin1 to the chits as he may &e,ui&e !&om the !o&eman ithin such time
as he may s"eci!y.
(2) The 5e1ist&a& o& an o!!ice& autho&ised by the #tate (o)e&nment in this behal! may, a!te& 1i)in1
se)en days? notice in &itin1 to the !o&eman, di&ect him to "&oduce be!o&e him !o& ins"ection such
chit boo.s and &eco&ds as he may &e,ui&e at the time and "lace mentioned in the notice.
(') I! on an ins"ection made unde& sub-section (1) o& sub-section (2) any de!ects a&e !ound, the
5e1ist&a& may b&in1 such de!ects to the notice o! the !o&eman and may also ma.e an o&de&
di&ectin1 the !o&eman to ta.e such action as may be s"eci!ied in the o&de& to &emedy the de!ects
ithin the time s"eci!ied the&ein.
(7) >)e&y !o&eman shall be bound to com"ly ith the di&ections contained in an o&de& made unde&
sub-section (').

05. Po*er Re+er)e /"!9 to i!+'e$t $hit 1oo9+ "!# re$or#+.- (1) <othin1 in section 76 shall
be deemed to a!!ect the "oe& o! the 5ese&)e /an. to ins"ect the boo.s and &eco&ds o! any
!o&eman unde& the "&o)isions o! section 70< o! the 5ese&)e /an. o! India Act, 19'7 (2 o! 19'7).
(2) The 5ese&)e /an. may, i! it conside&s necessa&y !o&a&d a co"y o! its &e"o&t o& o! any "a&t o!
its &e"o&t on the ins"ection o! the boo.s and &eco&ds o! a !o&eman to the !o&eman !o& ta.in1
necessa&y action.
(') >)e&y !o&eman shall, on &e"o&t o& "a&t the&eo! unde& sub-section (2), be bound to com"ly ith
the di&ections, i! any 1i)en by the 5ese&)e /an. in this behal! and shall i! so &e,ui&ed submit
"e&iodical &e"o&ts in &e1a&d to the action ta.en by him.
(7) The 5ese&)e /an. may also !o&a&d a co"y o! the &e"o&t on the ins"ection o! the boo.s and
&eco&ds o! a !o&eman to the #tate (o)e&nment ithin hose 9u&isdiction the &e1iste&ed o!!ice o!
the com"any, i! the !o&eman, is a com"any o& the "lace o& the "&inci"al "lace o! business o! the
!o&eman in any othe& case, is situated !o& such action as may be conside&ed necessa&y.

CHAPTER > - :INDIN- UP .F CHITS
08. Cir$,%+t"!$e+ ,!#er *hi$h $hit+ %"7 1e *o,!# ,'.- A chit may be ound u" by the
5e1ist&a& ithin hose te&&ito&ial 9u&isdiction the chit has been &e1iste&ed ithe& on his on motion
o& on an a""lication made by any non-"&i+ed o& un"aid "&i+ed subsc&ibe&,-
(a) i! the chit has te&minated unde& clause (c) o! section 748 o&
(b) i! the !o&eman commits any such act in &es"ect o! the secu&ity s"eci!ied in section 24 as is
calculated to im"ai& mate&ially the natu&e o! the secu&ity o& the )alue the&eo!8 o&
(c) i! he !ails to de"osit any amount &e,ui&ed to be de"osited unde& any o! the "&o)isions o! this
act8 o&
(d) i! it is "&o)ed to the satis!action o! the 5e1ist&a& that the !o&eman is unable to "ay the amounts
due to the subsc&ibe&s8 o&
(e) i! the execution o& othe& "&ocess issued on an o&de& "assed by the 5e1ist&a& in !a)ou& o! any
subsc&ibe& in &es"ect o! amounts due to him !&om the !o&eman in &elation to the chit business is
&etu&ned unsatis!ied in hole o& in "a&t8 o&
(!) i! it is "&o)ed that the&e has been a !&aud o& collusion on the "a&t o! the !o&eman in the matte& o!
ta.in1 secu&ities !&om any "&i+ed subsc&ibe&8 o&
(1) i! the !o&eman has a""&o"&iated the "&i+e amount in his ca"acity as a subsc&ibe& ithout
!u&nishin1 su!!icient secu&ity !o& !utu&e subsc&i"tions8 o&
(h) i! the 5e1ist&a& is satis!ied that the a!!ai&s o! the chit a&e bein1 conducted in a manne&
"&e9udicial to the inte&ests o! the subsc&ibe&s8 o&
(i) i! it is 9ust and e,uitable that the chit should be ound u".

>x"lanation- Fo& the "u&"oses o! clause(d) in dete&minin1 hethe& the !o&eman is unable to "ay
the amounts due to the subsc&ibe&s, the 5e1ist&a& shall ta.e into account his contin1ent and
!utu&e liabilities in &es"ect o! the chit.

09. A''li$"tio! &or *i!#i!2 ,'.- An a""lication !o& the indin1 u" o! a chit shall be made by a
"etition "&esented by any non-"&i+ed o& un"aid "&i+ed subsc&ibe& to the 5e1ist&a& si1ned and
)e&i!ied in the manne& laid don by the Code o! Ci)il ;&ocedu&e, 1948 (0 o! 1998), and shall
contain such "a&ticula&s as may be "&esc&ibed.
;&o)ided that no a""lication !o& the indin1 u" o! a chit unde& clause (d) o& clause (i) o! section
78 shall lie unless such a""lication is "&esented,-
(a) by non-"&i+ed and un"aid "&i+ed subsc&ibe&s &e"&esentin1 not less than tenty-!i)e "e& cent o!
the amount o&, as the case may be the )alue o! the 1&ain subsc&ibed by all the non-"&i+ed and
un"aid "&i+ed subsc&ibe&s, i! any8 o&
(b) ith the "&e)ious sanction o! the #tate (o)e&nment ithin hose 9u&isdiction the chit is
commenced o& conducted.
>x"lanation- Fo& the "u&"oses o! clause (a) o! the "&o)iso, a subsc&ibe& o! a !&action o! a tic.et
shall be deemed to be a subsc&ibe& only to the extent o! such !&action.

38./"r to *i!#i!2 ,' 'ro$ee#i!2+.- <otithstandin1 anythin1 contained in sections 78 and 79,
no "etition !o& the indin1 u" o! a chit shall be ente&tained by the 5e1ist&a&,-
(a) i! "&oceedin1s &elatin1 to insol)ency a&e "endin1 a1ainst the !o&eman o&
(b) he&e the !o&eman is a !i&m, i! "&oceedin1s &elatin1 to insol)ency a&e "endin1 a1ainst all the
"a&tne&s o& all the "a&tne&s exce"t one the&eo!, o& "&oceedin1s !o& the dissolution o! the !i&m a&e
"endin18 o&
(c) he&e the !o&eman is a com"any o& co-o"e&ati)e society, o! "&oceedin1s !o& the indin1 u" o!
such com"any o& co-o"e&ati)e society a&e "endin1.
31. Co%%e!$e%e!t "!# e&&e$t o& *i!#i!2 ,' or#er.- An o&de& !o& the indin1 u" o! a chit
shall o"e&ate in !a)ou& o! all the subsc&ibe&s to hom amounts a&e due !&om the !o&eman and it
shall be deemed to ha)e commenced !&om the date o! the "&esentation o! the a""lication !o& the
indin1 u".

32. I!?,!$tio! or#er.- The 5e1ist&a& may, on the a""lication o! the !o&eman o& o! any subsc&ibe&
to hom amounts a&e due in &es"ect o! a chit, at any time a!te& the "&esentation o! the a""lication
!o& the indin1 u" o! the chit unde& this Act and be!o&e the ma.in1 o! an o&de& !o& the a""ointment
o! an inte&im &ecei)e& o& !o& the indin1 u" o! the chit, &est&ain any othe& "&oceedin1s, instituted,
a1ainst the !o&eman !o& the &ealisation o! amounts due !&om him on such te&ms as the 5e1ist&a&
thin.s !it.
3(. Po*er+ o& Re2i+tr"r.- The 5e1ist&a& may, a!te& hea&in1 an a""lication unde& this Cha"te&
dismiss, it ith o& ithout costs, o& ad9ou&n the hea&in1 conditionally o& unconditionally o& ma.e an
inte&im o& any othe& o&de& that he deems !it.
30. ;e+ti!2 o& $hit "++et+ i! Re2i+tr"r or other 'er+o!+.- *n the ma.in1 o! an o&de& !o& the
indin1 u" o! a chit all the chit asset "e&tainin1 to such chit shall )et in the 5e1ist&a& o& in any
"e&son a""ointed by him !o& dist&ibution amon1st the subsc&ibe&s to hom amounts a&e due in
&es"ect o! the chit.
33. S,it+, et$., to 1e +t"7e# o! *i!#i!2 ,' or#er.- @hen a indin1 u" o&de& has been made
o& a &ecei)e& has been a""ointed no suit o& othe& le1al "&oceedin1s shall be continued o&
commenced a1ainst the !o&eman by a subsc&ibe& !o& the &ealisation o! amounts duet o him in
&es"ect o! the chit exce"t ith the lea)e o! the 5e1ist&a& indin1 u" the chit and on such te&ms as
he may im"ose.
34. Noti&i$"tio! o& *i!#i!2 ,' or#er.- *n the ma.in1 o! a indin1 u" o&de&, the 5e1ist&a& shall
ma.e an ent&y in his boo. &elatin1 to the chit and shall noti!y in the *!!icial (a+ette, that the o&de&
has been made.
35. Ce++"tio! o& *i!#i!2 ,' 'ro$ee#i!2+ o! i! +ol)e!$7 o& &ore%"!, et$., or the *i!#i!2
,' o& the $o%'"!7 "!# tr"!+&er o& +,$h 'ro$ee#i!2+.- @he&e du&in1 the "endency o! the
"&oceedin1s !o& the indin1 u" o! a chit the !o&eman is ad9udicated an insol)ent o& he&e the
!o&eman is a !i&m, al the "a&tne&s o& all the "a&tne&s exce"t one the&eo! a&e ad9udicated insol)ent
o& he&e the !o&eman is a com"any the com"any has been o&de&ed to be ound u" by the Cou&t,
the indin1 u" "&oceedin1s unde& this Cha"te& shall cease and the dist&ibution o! the chit assets
shall sub9ects, to the "&o)isions o! sections 7' and 02, be made by the insol)ency cou&t o& the
cou&t indin1 u" the com"any, as the case may be.
38. A*"r# o& $o%'e!+"tio! to &ore%"!.- (1) @he&e an a""lication !o& the indin1 u" o! a chit is
dismissed and the 5e1ist&a& is satis!ied that the "etition is !&i)olous o& )exatious, he may, on the
a""lication o! the !o&eman aa&d, a1ainst the "etitione& such amount, not exceedin1 one
thousand &u"ees, as he deems &easonable as com"ensation tot he !o&eman !o& the ex"enses o&
in9u&y caused to him by the "&esentation o! the a""lication and the "&oceedin1s the&eon, and such
amount may be &ealised as i! the aa&d e&e a dec&ee o! a Ci)il Cou&t.
(2) *n the ma.in1 o! an aa&d unde& sub-section (1) no suit !o& com"ensation in &es"ect o! an
a""lication !o& any indin1 u" o! the chit shall be ente&tained.
39. Ri2ht to "''e"l.- The !o&eman o& any subsc&ibe& o& any othe& "e&son a11&ie)ed by a decision
o& o&de& o! the 5e1ist&a& in any "&oceedin1s !o& the indin1 u" o! a chit may, ithin sixty days
!&om the date o! such decision o& o&de&, a""eal to the #tate (o)e&nment.
48. Li%it"tio!.- (1) @he&e an o&de& &e!usin1 to ind u" a chit has been made unde& this Act, the
chit shall be deemed to ha)e been unde& sus"ension !&om the date o! "&esentation o! the
a""lication to the date o! such o&de& in &es"ect o! non-"&i+ed subsc&ibe&s, and notithstandin1
anythin1 contained in the chit a1&eement no non-"&i+ed subsc&ibe& ho as not a de!aulte& on the
date o! the "&esentation o! the "etition !o& indin1 u" shall be deemed to be a de!aulte& on the
date o! such o&de&.
(2) @he&e an o&de& &e!usin1 to ind u" a chit has been made unde& this Act in com"utin1 the
"e&iod o! limitation "&esc&ibed !o& any suit o& othe& le1al "&oceedin1s (othe& than a suit o&
a""lication in &es"ect o! hich the lea)e o! the cou&t has been obtained) hich mi1ht ha)e been
b&ou1ht o& instituted, but !o& the "&esentation o! the a""lication !o& the indin1 u" o! the chit, the
"e&iod, !&om the date o! the "&esentation o! the a""lication to the date o! the o&de& &e!usin1 to
ind u" a chit shall be excluded.
(') <othin1 contained in this Cha"te& shall a!!ect the &i1hts o! a subsc&ibe& to "&oceed a1ainst the
!o&eman "e&sonally !o& the balance, i! o! the amount due to him a!te& the decla&ation o! the !inal
di)idend in the "&oceedin1s !o& the indin1 u" o! the chit and in com"utin1 the "e&iod o! limitation
"&esc&ibed !o& any such "&oceedin1s, the "e&iod !&om the date o! the "&esentation o! the
a""lication !o& the indin1 u" o! the chit to the date o! the decla&ation o! the !inal di)idend shall be
excluded.

CHAPTER >I - APP.INTMENT .F .FFICERS AND LE;Y .F FEES
41. A''oi!t%e!t o& Re2i+tr"r "!# other o&&i$er+.- (1) The #tate (o)e&nment may by
noti!ication in the *!!icial (a+ette, a""oint a 5e1ist&a& o! Chits and as many Additional, $oint,
:e"uty and Assistant 5e1ist&a&s as Amy be necessa&y !o& the "u&"ose o! discha&1in1 the duties
im"osed u"on the 5e1ist&a& by o& unde& this Act.
(2) The 5e1ist&a& may a""oint as many ins"ecto&s o! chits and chit audito&s as may be necessa&y
!o& the "u&"ose o! discha&1in1 the duties im"osed on the ins"ecto&s o! chits o& chit audito&s by o&
unde& this Act.
(') All ins"ecto&s o! chits and chit audito&s shall discha&1e the duties im"osed u"on them by o&
unde& this Act unde& the 1ene&al su"e&intendence and cont&ol o! the 5e1ist&a&.
(7) I! the 5e1ist&a& is o! the o"inion that the accounts o! any chit a&e not "&o"e&ly maintained and
that such accounts should be audited it shall be la!ul, !o& him to ha)e such accounts audited by
a chit audito&.
(0) It shall be the duty o! the !o&eman o! the chit hose accounts a&e to be audited by a chit
audito& unde& sub-section (7)to "&oduce be!o&e the chit audito&ium all accounts, boo.s and othe&
&eco&ds &elatin1 to the chit, to !u&nish him ith such in!o&mation as may be &e,ui&ed and a!!o&d
him all such assistance and !acilities as may be necessa&y and &easonable in &e1a&d to the audit
o! the accounts o! the chit.
(6) The !o&eman shall "ay to the chit audito& such !ees as may be "&esc&ibed !o& the audit o! the
accounts o! the chit unde& sub-section (7)8
;&o)ided that di!!e&ent scales o! !ees may be "&esc&ibed !o& di!!e&ent chits de"endin1 othe&
,uantum o! the chit amount.
42. I!+'e$tio! o& #o$,%e!t+ i+ Re2i+tr"r+ o&&i$e.- The !o&eman o! a chit o& any subsc&ibe& in a
chit o& the hei&s o& le1al &e"&esentati)es o! any !o&eman o& subsc&ibe& may, on "ayment o! such
!ees as may be "&esc&ibed,-
(a) ins"ect the documents o! the conce&ned chit .e"t by the 5e1ist&a&8 o&
(b) obtain a ce&ti!ied co"y o& an ext&act o! any such document o& &eco&d.
4(. Le)7 o& &ee+.- (1) The&e shall be "aid to the 5e1ist&a& such !ees as the #tate (o)e&nment
may, !&om item to time "&esc&ibe, !o&,-
(a) the issue o! "&e)ious sanction unde& section 7=
(b) the !ilin1 o! the chit a1&eement ith the 5e1ist&a& and the &e1ist&ation ! the chit unde& section
3.
(c) the !ilin1 o! a decla&ation ith the 5e1ist&a& and the 1&ant o! a ce&ti!icate o! commencement
unde& section 98
(d) the !ilin1 o! co"ies o! documents unde& any o! the "&o)isions o! this Act8
(e) the audit o! the accounts o! the !o&eman unde& section618
(!) the ins"ection o! documents unde& section 628
(1) the obtainin1 o! ce&ti!ied co"ies o& ext&acts o! documents and &eco&ds unde& section 628 and
(h) such othe& matte&s as may a""ea& necessa&y to the #tate (o)e&nment.
(2) A table o! !ees "&esc&ibed unde& sub-section (1) shall be exhibited on a notice boa&d in the
o!!ice o! the 5e1ist&a&.