CF Act 14Chapter II · Registration of Chits, Commencement and Conduct of Chit Business
Section 14 · Utilisation of funds
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(1) No person carrying on chit business shall utilise the moneys collected
in respect of such business (other than commission or remuneration payable to such person or interest or
penalty, if any, received from a defaulting subscriber), except for--
(a) carrying on chit business; or
(b) giving loans and advances to non-prized subscribers on the security of subscriptions paid by them; or
(c) investing in trustee securities within the meaning of section 20 of the Indian Trusts Act, 1882 (2 of 1882); or
(d) making deposits with approved banks mentioned in the chit agreement.
(2) Where any person carrying on chit business has utilised the moneys collected in respect of such business before the commencement of this Act, otherwise than for the purposes specified in sub-section (1), he shall secure that so much of such moneys as have not been realised before such commencement are realised before the expiry of a period of three years from such commencement:
Provided that the State Government may, if it considers it necessary in the public interest or for avoiding any hardship, extend the said period of three years by such further period or periods not exceeding one year in the aggregate.
(a) carrying on chit business; or
(b) giving loans and advances to non-prized subscribers on the security of subscriptions paid by them; or
(c) investing in trustee securities within the meaning of section 20 of the Indian Trusts Act, 1882 (2 of 1882); or
(d) making deposits with approved banks mentioned in the chit agreement.
(2) Where any person carrying on chit business has utilised the moneys collected in respect of such business before the commencement of this Act, otherwise than for the purposes specified in sub-section (1), he shall secure that so much of such moneys as have not been realised before such commencement are realised before the expiry of a period of three years from such commencement:
Provided that the State Government may, if it considers it necessary in the public interest or for avoiding any hardship, extend the said period of three years by such further period or periods not exceeding one year in the aggregate.
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