Chapter III-Foreman

Home/ Act and Rules/ Delhi Chit Fund Rules, 2007/ Chapter III-Foreman

Delhi Chit Fund Rules, 2007    

Chapter III

FOREMAN 18.Procedure in the case of security given by the foreman.-

  1. In case of cash deposited in an approved bank in the name of the Registrar under sub clause (i) of clause (a) of sub-section (1) of section 20 , the receipt issued by the approved bank mentioned in the chit agreement shall be delivered to the Registrar. (b) In case of bank guarantee from an approved bank under sub-clause (ii) of clause (a) of sub-section (1) of section 20, the said bank guarantee shall be delivered to the Registrar.
  2. In case the foreman of a chit proposes to give movable property as security for the proper conduct of a chit, it shall only be Government Securities or Government Promissory Notes, National Saving Certificate or other similar bonds issued by the Central Government from time to time without any lock-in period. It shall be duly endorsed in favour of the Registrar.
  3. In case the foreman of a chit proposes to give immovable property as security for the conduct of a chit, he shall clearly state the correct and complete particulars regarding the property offered as security. Every such application shall be accompanied by –
    1. an affidavit to the effect that-
    2. the property is free from encumbrance, freehold and is in the name of the company; and
    3. the property is situated in the territory of Delhi;
    4. documents of title to the property;
    5. copy of mutation made by revenue authorities;
    6. copy of property tax receipt or water bill or electricity bill issued by the concerned department;
    7. valuation report from the registered valuer appointed by the competent authority; and
    8. encumbrance certificate for the last ten years.
    9. The Registrar or any officer empowered by him in this behalf shall, by inspection of the said property and examination of records produced or inquiries made, satisfy himself to the sufficiency of the security for the realisation of at least two times of the chit amount.
    10. If the security offered is accepted as sufficient by the Registrar, he shall make a note of it on the application for furnishing security. If the security offered is not accepted by the Registrar, he shall give the applicant an endorsement to that effect.

19.Valuation of property.-

  1. Where any property which, in the opinion of the Registrar, requires a valuation by a competent agency, the bank or any other authority appointed in this behalf by the Registrar, shall estimate the value of such property and such valuation shall be final.
  2. Any fee or charge demanded for such valuation by such bank or authority shall be borne by the foreman.  

20. Substitution of security.-

  1. During the currency of chit, the foreman may apply to the Registrar in FormX for permission to substitute the security given by him for the proper conduct of the chit by fresh security.
  2. The Registrar may grant permission as applied for in sub-rule (1) after satisfying himself- (i) that the reasons for substitution of the security, given by the foreman in the applications, are justifiable ; and (ii) that the fresh security offered is adequate.
  3. The procedure prescribed in rule 18 shall apply mutatis mutandis to the substituted security given by the foreman under this rule.  

21. Release of original security in case of substitutions.- The Registrar shall, if so required by the foreman, execute and register a deed of release in respect of the original security at the cost of the foreman.

22. Application for release of security.- On termination of the chit, the foreman shall make an application to the Registrar for the release of the security given by him.

23. Declaration of Foreman.- The application for release of security shall contain a declaration in the form of an affidavit, duly signed by the foreman and attested by a Notary Public, stating-

  1. that the claims of all the subscribers have been fully satisfied and nothing is due to them from the company;
  2. the company shall be held responsible for any complaint or claim put forth by any subscriber of the chit group in future;
  3. that all dues payable by the foreman under the Act and these rules, to the Registrar or any other officer have been fully paid.

24. Procedure for release of security.-(1) (a) The Registrar may for the purpose of releasing the security under sub-section (5) of section 20 call upon the foreman to produce a copy duly certified to be a true copy of any register and books of accounts maintained by the foreman, a bank certificate regarding clearance of payments made to the subscribers (excluding the foreman) in respect of last five auctions, detailed list of payments made to all the subscribers and last balance sheet of the chit group. The Registrar shall exhibit a notice on his office notice board/website of the Department stating that the security is proposed to be released and that any person objecting to such release may file with the Registrar his statement of objections, if any, within fifteen days from the date of exhibition of such notice. (b) If no objections are received within the period specified in the notice, the Registrar shall release the security. (2) If any objections are received, the Registrar shall enquire into the objections summarily within one month after the date of expiry of the period specified in the notice referred to in sub-rule(1) (a) and record his decision in writing and send a copy thereof to the foreman and to the objector.

25. Books of account to be maintained by the foreman.-In addition to the book of minutes of draws mentioned in section 17, the foreman shall keep the following registers and books of accounts in the Forms mentioned against each or in the Forms as near thereto as possible:-

  1. a register of subscribers in Form XI;
  2. a ledger in Form XII;
  3. a day book in Form XIII;
  4. a proper receipt book, duly certified by the foreman as to the number of pages in duplicate;
  5. a book containing copies of all notices issued by the foreman to the subscribers;
  6. a file containing the letter of authorization of every subscriber for subscribing his name in the chit agreement and for participating in the auction of the chit;
  7. a file containing the vouchers for payment made by the foreman;
  8. a file containing documents relating to securities offered by the prized subscribers; and
  9. a register in Form XIV showing the amounts deposited in approved bank in respect of all chits conducted by the foreman.

26. Accounts to be maintained.-

  1. Every entry in the register of subscribers, the ledger or the day book mentioned in rule 25, shall be made as and when the particular event occurs.
  2. On receipt of any money, a proper receipt shall immediately be prepared or cause to be prepared by the foreman and delivered to the payer.
  3. The foreman, shall, at the time of issuing every notice, prepare a copy thereof in the book mentioned under clause (e) of rule 25, certifying it to be a true copy and enter therein under his signature, the date of dispatch of the notice.
  4. A voucher duly signed by the recipient shall be obtained by the foreman at the time any payment is made to him and such voucher shall be immediately filed in the file specified in clause (g) of rule 25 after due verification of all the particulars entered therein.
  5. Every document relating to the security given by the prized subscriber shall, as soon as it is received, be filed in the file mentioned in clause (h) of rule 25. The file shall contain an index for facilitating the scrutiny of the documents.  

27.Filing of vouchers.-As soon as each payment is made, the foreman shall obtain a voucher from the payee. He shall verify whether the voucher specifies the purposes for which the payment was received and whether it is properly signed by the recipient and preserve it in the file mentioned in clause (g) of rule 25 after assigning a serial number thereto for each calendar month.

28.Date for submission of balance sheet.-

  1. In addition to the balance sheet referred to in section 24, every foreman shall also prepare and file with the Registrar a receipt and payment account and a statement showing the assets and liabilities of the individual chit group as on the last date of each calendar or financial year, as the case may be, in FormXV , duly audited either by auditors qualified to act as auditors under the Companies Act,1956(Central Act 1 of 1956) or by a chit auditor appointed under section 61.
  2. The balance sheet referred to in section 24 shall be filed with the Registrar within a period of three months from the expiry of the period with reference to which it is prepared.
  3. Receipts and payments account and statement showing the assets and liabilities of the individual chit group, referred to in sub-rule (1) above, shall be filed with the Registrar within a period of two months from the expiry of the period with reference to which it is prepared and also on the termination of the chit.  

29.Change in ownership and name of a foreman.- Subject to the provisions contained in section 26, any change in the ownership or name of a foreman shall be notified to the Registrar within fourteen days of such change.  

Top