Security to be given by foreman

Of the Foreman

Security to be given by foreman.—

1. (1) Every foreman shall, before the first drawing of the chitty,—
   • (a) execute a bond in favour of or in trust for the other subscribers for the proper conduct of the chitty, charging immovable property sufficient to the satisfaction of the Registrar for the realization of twice the chitty amount; or
   • (b) deposit in an approved bank an amount equal to the chitty amount or invest in Government securities of the face value of note less than one and a half times the chitty amount and transfer the amount so deposited or the Government securities in favour of the Registrar to be held in trust by him as security for the due conduct of the chitty.
2. (2) If any foreman makes default in complying with the requirements of sub-section (1), he shall be punishable with fine which may extend to five hundred rupees.
3. (3) The security given by the foreman under sub-section
4. (1) or any security substituted under sub-section
5. (6) shall not be liable to be attached in execution of a decree or otherwise until the chitty is terminated and the claims of all are fully satisfied.
6. (4) The Registrar shall, after the termination of a chitty and after satisfying himself that the claims of all the subscribers have been fully satisfied, order the release of the security furnished by the foreman under sub-section
7. (1) or the security substituted under sub-section (6), as the case may be, and in so doing he shall follow such procedure as may be, prescribed in that behalf.
8. (5) The security furnished under sub-section
9. (1) shall, subject to the provisions of sub-section (6), be kept intact during the currency of the chitty and the foreman shall not commit any such act with respect thereto as are calculated to impair materially the nature of the security or the value thereof.
10. (6) The Registrar may,—
    • (a) at any time during the currency of the chitty, permit the substitution of the security: Provided that such substituted security shall not be less than the security given by the foreman under sub-section (1); or
    • (b) on the termination of the chitty, release a part of the security: