Section 13 in The Maharashtra Chit Funds Act, 1974
13. Security to be given by Foreman.
(1)For the proper conduct of a chit, every Foreman shall , before applying for the certificate of commencement under section 8,-(a)deposit in any approved bank, an amount equal to the chit amount; or(b)invest in State Government securities of the face value or market value whichever is less, an amount equal to the chit amount, and transfer the amount so deposited or the State Government securities in favour of the Registrar to be held in trust by him as security.(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, 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 duly authorised in this behalf have been paid;(iii)where owing to the default of a prized subscriber, the prize amount due remains unpaid even after the termination of a chit, until the Foreman deposits the prize 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), (ii) and (iii) of sub-section (3) have been complied with, order the release of the cash security or the State Government securities referred to in sub-section (1) in such manner as may be prescribed.(5)The Registrar may, on the application of any 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 value or amount of the security so accepted is less than the value or amount specified in sub-section (1), the Registrar shall require the Foreman to furnish additional security to make up the deficiency.(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 to which it relates and any dealing by the Foreman with respect thereto by way of transfer or, charge, or other encumbrance shall be null and void.
