3. Prohibition of chitty not sanctioned or registered under this Act.
(1)No chitty shall, after the commencement of this Act, be started and conducted unless the previous sanction of the Government or of such officer as may be empowered by the Government in this behalf is obtained therefore and unless the chitty is registered in accordance with the provisions of this Act:Provided that the previous sanction under this sub-section shall lapse unless the chitty is registered before the expiry of six months from the date of such sanction:Provided further that such previous sanction shall not be necessary for starting and conducting any chitty by"(i)a company owned by the Government of Kerala; or(ii)a co-operative society registered or deemed to be registered under the Co-operative Societies Act for the time being in force; or(iii)a scheduled bank as defined in the Reserve Bank of India Act, 1934 ; or(iv)a corresponding new bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Central Act 5 of 1970).(2)The previous sanction referred to in sub-section (1) shall not be granted if"(i)the foreman has been convicted of any offenceunder this Act or under any of the Acts repealed by this Act; or(ii)the foreman has defaulted in the payment of fees or the filing of statements or records, required to be paid or filed under this Act, or has violated any of the provisions of this Act or the rules made thereunder; or(iii)the foreman has been convicted of any offence involving misappropriation, forgery, counterfeiting, falsification of accounts or any other offence involving breach of trust and sentenced to imprisonment for any term, unless a period of five years has elapsed since his release :Provided that before refusing previous sanction, the foreman shall be given an opportunity of being heard.(3)The order of the Government and subject to the provisions of sub-section (4), the order of the officer empowered under sub-section (1), either granting sanction or refusing sanction, shall be final.(4)Any person aggrieved by the refusal to grant previous sanction by an officer empowered under sub-section (1) may appeal to the Government within such time and in such manner as may be prescribed, and the decision of the Government on the appeal shall be final.(5)No foreman shall be entitled to conduct at a time chitties, the aggregate amount of which exceeds"(a)where foreman is a banking company as defined in the Banking Regulations Act, 1949 (Central Act 10 of 1949) or a corresponding new bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Central Act 5 of 1970), 60 per cent of the net assets of the foreman:(b)in other case, 50 per cent of the net assets of the foreman:Provided that the chitty amount in the case of anyone chitty conducted by a foreman shall not exceed twenty-five thousand rupees:Provided further that the maximum limit specified in the foregoing proviso shall be two lakhs rupees in the case of any chitty of which the foreman is a banking company as defined in the Banking Regulations Act, 1949 (Central Act 10 of 1949) or a corresponding new bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Central Act 5 of 1970):Provided also that nothing contained in this sub-section shall apply in the case of any chitty of which the foreman is a company owned by the Government of Kerala.Explanation. - In determining the net assets of a foreman for the purposes of this sub-section, the amount of the security furnished by him under section 15 shall be excluded if such amount is the amount of subscription received in advance from the subscribers.(6)Whoever contravenes the provisions of sub-section (1) shall be punishable with imprisonment for a term which shall not be less than three months but which may extend to two years and with fine which shall not be less than five hundred rupees but which may extend to two thousand rupees.
