Section 28 of The Chit Funds Act, 1982
- (1)A non-prized subscriber who defaults in paying his subscription in accordance with the terms of the chit agreement shall be liable to have his name removed from the list of subscribers and a written notice of such removal shall be given by the foreman to the defaulting subscriber within fourteen days of the date of such removal: Provided that if the defaulter pays the defaulted instalment with interest at such rate as may be prescribed within seven days of the date of receipt of such notice, his name shall be re-entered in the list of such subscribers.
- (2)Every such removal under sub-section (1) shall with the date thereof be entered in the relevant book maintained by the foreman.
- (3)A true copy of the entry referred to in sub-section (2) shall be filed by the foreman with the Registrar within fourteen days from the date of removal.
- (4)Any defaulting subscriber aggrieved by the removal of his name from the list of subscribers may, within seven days of the date of receipt of the notice of removal refer the matter to the Registrar for arbitration under section 64.
Summary
- If a non-prized subscriber defaults on their payments, the foreman can remove their name from the subscriber list.
- The foreman must give a written notice of this removal to the defaulting subscriber within fourteen days of removing them.
- If the subscriber pays the defaulted amount plus interest within seven days of receiving the notice, their name must be re-entered in the list.
- The interest rate charged for the late payment must be the rate prescribed by the rules.
- The foreman must enter the date and details of every such removal in the relevant book.
- A true copy of this book entry must be filed with the Registrar within fourteen days from the date of removal.
- If a subscriber is unhappy with the removal, they can refer the dispute to the Registrar for arbitration under Section 64 within seven days of receiving the notice.
Practical examples
FAQ
1. Within how many days must a foreman notify a subscriber of their removal?
The foreman must give a written notice of removal to the defaulting subscriber within fourteen days of the date of the removal.
2. Can a removed subscriber get back onto the list?
Yes. If the subscriber pays the defaulted installment with interest within seven days of receiving the removal notice, the foreman must put their name back on the list.
3. How many days does a subscriber have to challenge an unfair removal?
An aggrieved subscriber can refer the matter to the Registrar for arbitration under Section 64 within seven days of receiving the notice of removal.
4. Does the foreman have to report the removal to the government?
Yes. The foreman must file a true copy of the removal entry with the Registrar within fourteen days from the date of the removal.
Test yourself
Q1.Under Section 28 of The Chit Funds Act, 1982, within how many days from the date of removing a defaulting subscriber's name must the foreman give them written notice?
Q2.Under Section 28 of The Chit Funds Act, 1982, how many days does a defaulting subscriber have to pay their arrears to get their name re-entered, counting from the receipt of the notice?
Q3.Under Section 28 of The Chit Funds Act, 1982, within what period must the foreman file a true copy of the removal entry with the Registrar?
Q4.Under Section 28 of The Chit Funds Act, 1982, if a subscriber disputes their removal, they must refer the matter for arbitration under Section 64 within how many days of receiving the notice?
Q5.Under Section 28 of The Chit Funds Act, 1982, which section is cross-referenced for resolving disputes regarding the removal of a subscriber?