Section 5 in The Prize Chits and Money Circulation Schemes (Banning) Act, 1978
5. Penalty for other offences in connection with prize chits or money ... Whoever, with a view to the promotion or conduct of any prize chit or money circulation scheme in contravention of the provisions of this
Section 6 in The Prize Chits and Money Circulation Schemes (Banning) Act, 1978
6. Offences by companies.—
(1) Where an offence under this
Section 4 in The Prize Chits and Money Circulation Schemes (Banning) Act, 1978
4. Penalty for contravening the provisions of section 3.—
Whoever contravenes
SC1930 (2)
ACT:
Prize Chits and Money Circulation Schemes (Banning ... very extensive scale.
In the year 1978 Parliament passed the Prize Chits and
Money Circulation Schemes (Banning) Act 1978. The Act came
into force
scheme without a prize, and therefore, the endowment
certificate scheme of the Peerless Company is outside the
Prize Chits and Money Circulation Scheme (Banning ... Proceeding to consider Chit Funds and their working, the
Study Group identified three classes of Chit Funds: (a)
Simple Chits, (b) Prize Chits
Section 3 in The Prize Chits and Money Circulation Schemes (Banning) Act, 1978
3. Banning of prize chits and money circulation schemes or enrolment ... members or participation therein.—
No person shall promote or conduct any prize chit or money circulation scheme, or enrol as a member to any such
about 1978, the Reserve Bank of India enacted the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 , and the business of the petitioner-company ... banned on the allegation that the said business constituted a prize chit and/or money circulation scheme as defined in the 1978 Act. The petitioner
chit, deduction from the subscription paid by a member who wants to resign, dividends on the chit reserved for himself, interest on the chit prize ... defines 'chit', 'chit agreement', 'chit amount', 'chit business' and 'foreman' respectively which read as follows
approve for the purposes of this Act; (b) “chit” means a transaction whether called chit, chit fund, chitty, kuri or by any other name ... instalment of a chit without any deduction of discount or otherwise; (e) “chit business” means the business of conducting a chit; (f) “defaulting subscriber” means
conventional chits and prize chits are substantially similar
and, therefore, permission to continue 'conventional chits'
and prohibition of prize chits was discriminatory under ... luckless
illiterates succumbing (perhaps astrologically) to the prize
mania:
....It was observed that several companies
conducting prize chits, benefits or savings schemes or
lucky draws
