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State of Tamilnadu - Section

Section 12 in Tamil Nadu Chit Funds Act, 1961

12. Security to be given by foreman.

- [(1) For the proper conduct of the chit every foreman shall, before applying for the certificate of commencement under section 7, deposit with the Government by way of security in such manner as may be prescribed an amount of cash at the rate specified below:-
  Rate of Security.
(i) In the case of a chit of not more thantwenty instalments. An amount equal to the chit amount.
(ii) In the case of a chit more than twentyinstalments, but not more than forty instalments. An amount equal to two times the chit amount.
(iii) In the case of a chit of more than fortyforty instalments, but not more than sixty instalments. An amount equal to three times the chit amount.
(iv) In the case of a chit of more than sixtyinstalments. An amount equal to four times the chit amount.
]
(2)Where a foreman conducts more than one chit, he shall furnish security in accordance with the provisions of sub-section (1) in respect of each such chit.
(3)Subject to the provisions of section 520 of the Companies Act, 1956 (Central Act I of 1956) the security given by the foreman under sub-section (1) shall not be liable to be attached in execution of a decree or otherwise-
(i)until the chit is terminated and the claims of all the subscribers are fully satisfied;
(ii)until all dues payable by the foreman under this Act to the Registrar or any other officer have been paid;
(iii)where owing to the default of the prized sub-scriber the prize amount due remains unpaid even after the termination of a chit until the foreman deposits such amount in an approved bank mentioned in the chit agreement and intimates in writing the fact of such deposit to the prized subscriber.
(4)The Registrar shall, after the termination of a chit and after satisfying himself that the requirements under clauses (i) to (iii) of sub-section (3) have been complied with, [order the release of the cash security] [This expression was substituted for the expression 'release the property charged by way of security or order the release of the each security or the Government securities' by Tamil Nadu Chit Fund (Amendment) (Tamil Nadu Act 14 of 1975).] referred to in sub-section (1) and in so doing, he shall follow such procedure as may be prescribed.
(5)The Registrar may, on the application of nay foreman, instead of releasing the security under sub-section (4), accept the same as security in respect of any other chit or chits conducted by the same foreman. If the [* * *] [The Words 'value or' were ommited by section 3(iii) of Tamil Nadu Act 14 of 1975.] amount of the security so accepted is less than the [* * *] [The Words 'value or' were ommited by section 3(iii) of Tamil Nadu Act 14 of 1975.] amount specified in sub-section (1), the Registrar shall require the foreman to furnish additional security to make up the deficioncy. If the [* * *] [The Words 'value or' were ommited by section 3(iii) of Tamil Nadu Act 14 of 1975.] amount of such security is in excess of the [* * *] [The Words 'value or' were ommited by section 3(iii) of Tamil Nadu Act 14 of 1975.] amount required, the Registrar shall release such excess.
(6)Notwithstanding anything to the contrary contained in any other law, the security furnished under this section shall not be dealt with by the foreman during the currency of the chit and any dealing by the foreman with respect thereto by way of transfer, charge, mortgage or other encumbrance shall be void.