Section 44 of the Chit Funds Act, 1982: Inspection of Chit Records by Subscribers
Section 44 is contained in Chapter IX, "Inspection of Documents", of the Chit Funds Act, 1982. It gives specified subscribers a statutory facility to inspect records that disclose the documentation and financial position of a chit.
What Section 44 provides
Under Section 44, every foreman must, on payment of the fee specified in the chit agreement, subject to the statutory ceiling of five rupees, provide reasonable inspection facilities to non-prized subscribers and unpaid prized subscribers.
The inspection is to be allowed on dates of draw, or on other dates and during hours provided in the chit agreement.
Records that may be inspected
The inspection right extends to the records identified by Section 44, including security bonds and documents, receipts and other records taken from prized subscribers, records furnished by the foreman where the foreman is also a subscriber, and the chit records generally. The provision expressly includes books of account, pass books, balance sheet, profit and loss accounts, and other records showing the actual financial position of the chit.
Who can exercise the right?
- Non-prized subscriber: a subscriber who has not received the prize amount in the chit.
- Unpaid prized subscriber: a prized subscriber to whom the prize amount has not yet been paid.
- Foreman: the person responsible for conducting the chit in accordance with the Act and the chit agreement.
The precise statutory meanings of expressions used in the Act should be read with Section 2 of the Chit Funds Act, 1982 and the applicable amendments.
Purpose and practical effect
Section 44 promotes transparency in the administration of a chit. It enables the subscribers covered by the provision to examine documents relating to security, payments, accounts and the financial position of the chit instead of depending only on information supplied orally by the foreman.
The right is not framed as unrestricted access at any time. The inspection must be exercised in accordance with the dates and hours contemplated by the chit agreement, and the foreman is required to provide reasonable facilities within the statutory framework.
Official statutory source
For the authoritative text and amendments, refer to the Chit Funds Act, 1982 on India Code. The Chit Funds (Amendment) Act, 2019 should also be consulted when reading the Act in its current amended form.
Related provisions
Section 44 should be read with the surrounding provisions concerning subscribers' dues, preservation of chit records and statutory inspection. See Section 43, Section 45, Section 46 and Section 47.
This page is an informational explanation of the statutory provision. In case of any difference, the text published by the competent authority prevails.