Vidhi Codex

The Kerala Chitties Act, 1975

The Kerala Chitties Act, 1975

General197573 sections12 chapters

The Kerala Chitties Act, 1975, provides a comprehensive legal framework for the regulation of chit funds (chitties) within the state of Kerala. It mandates that all chitty schemes must be registered with the government to ensure transparency and protect the financial interests of subscribers. The Act defines the specific roles and responsibilities of the "foreman" (the organizer) and the subscribers, requiring the foreman to provide security for the chitty funds. It establishes strict rules for conducting auctions, maintaining accurate financial records, and handling disputes. By providing a clear mechanism for winding up insolvent chitties and penalizing fraudulent activities, the Act safeguards ordinary citizens from financial exploitation.

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Part I Part I

  1. 1Short title, extent and commencement
  2. 2Insertion of new section 70A

Part II Part II

  1. 3Prohibition of chitty not sanctioned or registered under this Act
  2. 4Prohibition of invitation for subscription except under certain conditions
  3. 5Saving of some chitties
  4. 6Variola
  5. 7Particulars of variola
  6. 8Registration
  7. 9Effect of registration
  8. 10Copies of variola to be given to subscribers and acknowledgements to be filed
  9. 11Alteration of variola
  10. 12Time and place of conducting chitty
  11. 13Minutes of proceedings of drawing of chitty
  12. 14Copy of minutes to be filed with Registrar

Part III Part III

  1. 15Security to be given by foreman
  2. 16Provided that the security left after release of the part is sufficient to satisfy the outstanding claims of all subscribers.
  3. 17Duties of foreman
  4. 18Books to be kept by foreman
  5. 19Punishment for failure to keep books
  6. 20Balance sheet
  7. 21Liability of foreman to subscribers
  8. 22Withdrawal of foreman

Part IV Part IV

  1. 23Non-prized subscribers to pay subscriptions and get receipts
  2. 24Removal of defaulting subscribers
  3. 25Amount due to defaulting subscriber how dealt with

Part V Part V

  1. 26Prized subscriber to sign minutes of proceedings
  2. 27Prized subscriber to give security
  3. 28Consequences of prized subscriber defaulting to pay subscriptions
  4. 29Foreman to give notice in writing before demanding payment of all future subscriptions

Part VI Part VI

  1. 30Transfer of rights of foreman when voidable
  2. 31Transfer to be in writing
  3. 32Recognition of transfer by foreman
  4. 33Entry of transferee's name in the books

Part VII Part VII

  1. 34How meetings to be held

Part VIII Part VIII

  1. 35Provision for continuation of chitties in certain cases
  2. 36Termination of chitty
  3. 37Copy of resolution, etc., to be filed with the Registrar
  4. 38Refund of non-prized subscribers subscription
  5. 39Preference of subscribers over chitty assets

Part IX Part IX

  1. 40Foreman to allow subscriber to examine chitty records
  2. 41Preservation of chitty records by foreman
  3. 42Inspection of chitty books and records

Part X Part X

  1. 43Chitty when to be wound up
  2. 44Winding up application
  3. 45Insolvency or liquidation a bar to winding up proceedings
  4. 46Commencement and effect of winding up order
  5. 47Injunction order
  6. 48Powers of court on hearing the petition
  7. 49Vesting of chitty assets in receiver
  8. 50Suits stayed on winding up order
  9. 51Copy of winding up order to be filed with the Registrar
  10. 52Stay of winding up proceedings on insolvency of foreman and transfer of insolvency proceedings
  11. 53Award of compensation to foreman
  12. 54Right of appeal
  13. 55Limitation

Part XI Part XI

  1. 56Registration Office
  2. 57Appointment of Registrars, inspecting officers and chitty auditors
  3. 58Inspection of documents in Registrar's Office
  4. 59Levy of fees

Part XII Part XII

  1. 60Penalty if the foreman is a company
  2. 61Application of fine
  3. 62Compounding of offences
  4. 63Penalty for false statement
  5. 64Power to enter and search any place and to seize documents, etc
  6. 65Interest at more than 9 per cent not to be allowed on grain
  7. 66Power of courts to grant relief in certain cases
  8. 67Protection of action taken under this Act
  9. 68Power to make rules
  10. 69Recovery of amounts due from foreman
  11. 70Application of Act to certain existing chitties
  12. 70APower to exempt
  13. 71Power to remove difficulties
  14. 72Repeal

PDF: pending for this language.