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THE ANDHRA PRADESH CHIT FUNDS ACT, 1971

The Andhra Pradesh Chit Funds Act, 1971

Finance197167 sections11 chapters

The Andhra Pradesh Chit Funds Act, 1971 regulates the operation and administration of chit fund schemes across the state of Andhra Pradesh. It applies to chit fund organizers, known as foremen, as well as participating subscribers. The law mandates that foremen register official bye-laws, execute formal written agreements, maintain accurate financial accounts, and provide security deposits before commencing chit drawings. It also requires filing meeting minutes with the Registrar and giving copy documentation to members. By enforcing strict legal accountability, this Act safeguards citizens' savings against fraud and ensures fair, transparent operations in rotating credit schemes.

Start reading →Read full ActSections

Chapter I PRELIMINARY →

  1. 1Short title, extent and commencement
  2. 2Definitions

Chapter II CONSTITUTION AND REGISTRATION →

  1. 3Registration of bye-laws
  2. 4Prohibition of invitation for subscription to chit of which bye laws have not been registered
  3. 5Form of chit agreement
  4. 6Explanation: - It is sufficient to get the signature of each subscriber on separate copies of the agreement.
  5. 7Commencement of chit business
  6. 8Copies of bye-laws and chit agreement to be given to subscribers
  7. 9Alteration etc., of chit agreement
  8. 10Minutes of proceedings
  9. 11Copy of minutes to be filed with the Registrar

Chapter III FOREMAN →

  1. 12Security to be given by the foreman
  2. 13Rights of the foreman
  3. 14Registrar, whose decision thereon shall be final.
  4. 15Provided further that the foreman may appropriate for himself the interest accruing on the amount deposited under the provision to sub-section {1).
  5. 16Balance sheet
  6. 17Liability of the foreman to the subscribers
  7. 18Withdrawal of a foreman

Chapter IV NON-PRIZED SUBSCRIBERS →

  1. 19Non -prized subscriber to pay subscription and get receipt
  2. 20Removal of defaulting subscribers
  3. 21Substitution of subscribers
  4. 22Explanation :- For the purpose of sub-section (3), "arrears' of subscriptions shall mean all the previous instalments realised from the substituted subscriber.

Chapter V PRIZED SUBSCRIBER →

  1. 23Prized subscriber to give security
  2. 24Registrar.
  3. 25Foreman to demand future subscriptions by written note

Chapter VI TRANSFER →

  1. 26Restrictions on transfer of rights of foreman
  2. 27Transfer of non-prized subscriber's rights to be in writing
  3. 28Recognition of transfer by the foreman
  4. 29Entry of transferee's name in the books

Chapter VII TERMINATION OF CHITS →

  1. 30Provisions for continuation of chits in certain cases
  2. 31Termination of chit
  3. 32Copy of assent or consent to be filed with the Registrar
  4. 33Refund of non-prized subscribers' contribution
  5. 34Subscriber's dues to be first charge on chit assets

Chapter VIII INSPECTION OF DOCUMENTS →

  1. 35Foreman to allow subscriber to examine chit records
  2. 36Preservation of chit records by foreman
  3. 37Inspection of chit books and records

Chapter IX WINDING UP OF CHITS →

  1. 38When chit may be wound up
  2. 39Application for winding up
  3. 40Insolvency or liquidation a bar to winding up proceedings
  4. 41Commencement and effect of winding up order
  5. 42Injunction order
  6. 43Powers of Court on hearing the application
  7. 44Chit assets to vest in Court for distribution
  8. 45Suits stayed on winding up orders
  9. 46Copy of winding up order to be filed with the Registrar
  10. 47Provided that the Registrar may, upon application in writing by such petitioner or Receiver, allow, in his discretion further time not exceeding fifteen days for the filing of any such copy.
  11. 48Where insolvency proceedings, against the foreman are pending in different courts, the High Court may transfer the proceedings from one Court to another as it may deem fit.
  12. 49Right of appeal
  13. 50Limitation

Chapter X OFFICER, INSPECTION AND FEES →

  1. 51Appointment of director of chits, Inspecting officer, Registrars and chit Auditors
  2. 52Inspection of documents in the Registrar’s Office
  3. 53Levy of Fees

Chapter XI MISCELLANEOUS →

  1. 54Appeals
  2. 55Power of Registrar to condone delay in certain cases
  3. 56Penalties
  4. 57Cognizance of offences
  5. 58Application of fines
  6. 59Power to enter and search any place and to seize documents, etc
  7. 60Payment to be evidenced by documents
  8. 61Interest at more than twelve percent not be allowed
  9. 62Power of court to grant relief in certain cases
  10. 63Power to make rules
  11. 64Recovery of amounts due from a foreman
  12. 65Act not apply to certain Chits
  13. 66Power to exempt
  14. 67Amendment of Central Act 2 of 1899

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