Darshan
RECENT DEVELOPMENTS IN CHIT INDUSTRY
CA. Varghese John FCA, DISA(ICAI)
Why Chit Funds Act, 1982
Notification by Finance Ministry
[F.No.10/01/2012-BO.II dated 30/04/2012]
Ministry of Finance, Department of Financial Services issued Notification under Section 1(3) of the Chit Funds Act, 1982 to appoint 30/04/2012 as the date on which the provisions of the Act shall come into force in the States of Arunachal Pradesh, Gujarat, Hariyana, Kerala, Nagaland and Tripura. This resulted in commencement of the Act in these States w.e.f. 30/04/2012.
1
Why Chit Funds Act, 1982
Judgment of the Supreme Court – 08/05/2012
In State of Kerala & Others v. Mar Appraem Kuri Co. Ltd & Others Hon’ble Supreme Court has held that on the enactment of the Central Chit Funds Act, 1982, on 19.08.1982, which covered the entire field of “chits” under entry 7 of List III of the Constitution, the Kerala Chitties Act, 1975, on account of repugnancy as enshrined in Article 254(1), became void and stood impliedly repealed. ……. If and when the Central Government brings into force the Chit Funds Act, 1982 by a notification in State of Kerala, under Section 1(3), Section 90(2) will come into play and thereby the Kerala Chitties Act, 1975 shall continue to apply only to chits in operation on the date of commencement of the Central Chit Funds Act, 1982 in the same manner as the Kerala Chitties Act, 1975 applied to chits before such commencement.
Chit Funds Act, 1982 – Applicability
• Act extend to the whole of India except Jammu and Kashmir • Act overrides all other Acts, Memorandum or Articles of Association, Bye-laws or any agreement etc. • Noting in this Act shall apply to any chit started before the commencement of this Act i.e. 30/04/2012. • Banks including co-operative banks are not allowed to carry on chit business.
2
Name of the Foreman (S. 11)
• Name of the foreman should contain any of the words “chit”, “chitty” or “kuri” • No person shall carry any other business
CA. Varghese John FCA, DISA(ICAI)
Why Chit Funds Act, 1982
Notification by Finance Ministry
[F.No.10/01/2012-BO.II dated 30/04/2012]
Ministry of Finance, Department of Financial Services issued Notification under Section 1(3) of the Chit Funds Act, 1982 to appoint 30/04/2012 as the date on which the provisions of the Act shall come into force in the States of Arunachal Pradesh, Gujarat, Hariyana, Kerala, Nagaland and Tripura. This resulted in commencement of the Act in these States w.e.f. 30/04/2012.
1
Why Chit Funds Act, 1982
Judgment of the Supreme Court – 08/05/2012
In State of Kerala & Others v. Mar Appraem Kuri Co. Ltd & Others Hon’ble Supreme Court has held that on the enactment of the Central Chit Funds Act, 1982, on 19.08.1982, which covered the entire field of “chits” under entry 7 of List III of the Constitution, the Kerala Chitties Act, 1975, on account of repugnancy as enshrined in Article 254(1), became void and stood impliedly repealed. ……. If and when the Central Government brings into force the Chit Funds Act, 1982 by a notification in State of Kerala, under Section 1(3), Section 90(2) will come into play and thereby the Kerala Chitties Act, 1975 shall continue to apply only to chits in operation on the date of commencement of the Central Chit Funds Act, 1982 in the same manner as the Kerala Chitties Act, 1975 applied to chits before such commencement.
Chit Funds Act, 1982 – Applicability
• Act extend to the whole of India except Jammu and Kashmir • Act overrides all other Acts, Memorandum or Articles of Association, Bye-laws or any agreement etc. • Noting in this Act shall apply to any chit started before the commencement of this Act i.e. 30/04/2012. • Banks including co-operative banks are not allowed to carry on chit business.
2
Name of the Foreman (S. 11)
• Name of the foreman should contain any of the words “chit”, “chitty” or “kuri” • No person shall carry any other business