CF Rules 62Chapter VII · Miscellaneous

Section 62 · Compounding of offences arising under the Act

(1)

Any officer empowered by the State Government shall issue a show-cause notice before taking any action under Section 76 or 77 of the Act against any person who has committed or reasonably suspected to have committed any offence under the Act, or rule made thereunder asking him to show cause within a period of fifteen days, why action under the said Section 76 or as the case may be under Section 77 of the Act should not be taken against him.

(2)

Notwithstanding anything contained in the said provision-

(i)

any officer empowered by the State Government compound the offence committed under the Act or reasonably suspected to have committed any offence under the Act and Rules made thereunder may compound the said offence committed by any person, either before or after the institution of the criminal proceedings under the Act, provided that the said proposal to compound the offence is accepted by any officer authorised by the State Government.

(ii)

On an approval of the said proposal by the officer empowered to approve such a proposal referred above the officer empowered to compound the offence shall send an intimation in writing in that behalf to that person specifying therein-

(a)

a sum determined by way of composition.

(b)

the date on or before which the sum shall be paid.

Note - It will be observed that while Section 81 of the Chit Funds Act, 1982 merely empowers the State Government/Union Territories to specified the conditions subject to which offence may be compounded. The provisions in sub-rule (1) of Rule-62 of the draft model Rules forwarded to the State Government Administration earlier goes a step further and specified the offences which are compoundable. In other words, offence of a serious type such as those mentioned in Section 76(1) and offences committed for the second time vide Section 77 of the Act, are not compoundable. A doubt had therefore arisen whether, in the circumstances, the provision in sub-rule (1) of Rule 62 of the model Rules might be struck down as ultra vires the provision in section 81 of the Act with a view therefore, to remove doubts, if any in this regard a redraft of a Rule 62 as above has been suggested. However the spirit under which new legislation was enacted is that offences under sub-section (1) of Section 76 and offence committed for the second time vide Section 77 should not be compoundable. The State Government/Administration may therefore please issue suitable administrative instructions to the officials empowered under the aforestated new Rule 62 not to agree to compounding of these offences after the proposed Rules are brought into force.Appendix-IForm I[See Section 4(2) and Rule (3)]Form of application to be used by a foreman for obtaining prior sanction to commence and conduct a chit.Place :Date :From:-........................................................................To,The Secretary to the Governmentof.....................................................Or(The Authorised officer by designation)Sir,I.............son/wife/daughter of............(here state profession or occupation) residing at............../we the Chairman and Secretary respectively on behalf of (name of the firm, company, co-operative society, etc.) situated at...........having its registered office at........desire to commence and conduct a chit as foreman at............(here specify the place with postal address in details). Full particulars in this regards are given in the Annexure hereto.

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