Private Chits
Ravinder reddy K
(Querist) 21 December 2010
This query is : Resolved
Hi, please let us know that the running of Chit fund business without any license is acceptable if so upto what extent we can legally take the action on those who evade the regular payment of chit.
Y V Vishweshwar Rao
(Expert) 21 December 2010
Running a private Chit Fund Company ( with out Registration with Registrar of Chits ) is prohibited !
Advocate. Arunagiri
(Expert) 22 December 2010
It is prohibited and risky also for the promoter. In case of defaulter you can not initiate action against them. For the registered chit companies , they need not go the civil court, they can get orders from the chit registrar.
Guest
(Expert) 22 December 2010
(1) Your query is not clear. Are you asking whether the Chit Fund firm/company itself requires registration? ; or - Any particular Chit shall be registered with the Registrar of Chits?
(2) If the firm/Company itself is not registered, it cannot sue the Chit Subscriber for default committed by him.
(3) If the firm/company is registered but a particular Chit is not registered with the Registrar of Chits, EVEN THEN the firm/company can sue the defaulted Chit Subscriber and recover the money from him.
malipeddi jaggarao
(Expert) 23 December 2010
Chit funds are regulated under the Central Chit Fund Act 1982, hence could be
assumed to have sufficient protection to the subscribers of the chit. There are separate State Chit Fund Acts and all the Chit Funds are to be registered with the registrar of Chit Funds nominated by the State Act. In case of Registered Chit Funds,when a member fails to make his monthly contribution, he is appropriately communicated to that extent. After the continuous period of 3 months default,
he may be removed from the Subscribers List. Notice of such removal and
substitution, if any, of the new subscriber, shall be intimated to the Registrar.
There may be partial recovery, depending upon the solvency of the defaulting
member. Registrar may attach his salary, personal property or collateral, if
given, towards the recovery of unpaid dues. If such a member is absconding,
his guarantors or sureties may be asked to make the payment. Bank
guarantees may be enforced, for the future repayment. There are many protective provisions for members of Registered Chit Fund Companies. If the Chit Fund is not registered there is no legal course available against the default-members.
