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
27
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
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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).
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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.
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(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