Section 46 of the Chit Funds Act, 1982: Inspection of Chit Books and Records by Registrar
Section 46 gives the Registrar, or an officer authorised by the State Government, statutory powers to inspect the books and records of a chit. It also places corresponding duties on the foreman to produce records, provide required information, remedy defects identified during inspection and comply with the Registrar's directions.
Meaning and scope of Section 46
The provision is an inspection and regulatory-compliance mechanism. It enables the competent authority to verify the chit books and records maintained by the foreman and to require corrective action when defects are found. The power may be exercised through inspection at the foreman's premises under sub-section (1), or through a written direction under sub-section (2) requiring specified books and records to be produced at the stated time and place.
| Provision | What it provides |
|---|---|
| Section 46(1) | Inspection during working hours on a working day at the foreman's premises, with or without notice, together with a duty to produce records and furnish information. |
| Section 46(2) | Production of specified chit books and records for inspection after seven days' written notice. |
| Section 46(3) | If defects are found, the Registrar may identify them and order specified remedial action within a stated time. |
| Section 46(4) | The foreman is bound to comply with directions contained in an order under sub-section (3). |
Text of Section 46 - Inspection of chit books and records by Registrar
(1) Without prejudice to the provisions of sections 209 and 209A of the Companies Act, 1956 (1 of 1956), the Registrar or an officer authorised by the State Government in this behalf may inspect chit books and all the records of a chit during working hours on any working day at the premises of the foreman with or without giving notice and it shall be the duty of every foreman to produce to the Registrar or the officer so authorised, all such books and records as are in his custody or power and to furnish him with any statement or information relating to the chits as he may require from the foreman within such time as he may specify.
(2) The Registrar or an officer authorised by the State Government in this behalf may, after giving seven days' notice in writing to the foreman, direct him to produce before him for inspection such chit books and records as he may require at the time and place mentioned in the notice.
(3) If on an inspection made under sub-section (1) or sub-section (2), any defects are found, the Registrar may bring such defects to the notice of the foreman and may also make an order directing the foreman to take such action as may be specified in the order to remedy the defects within the time specified therein.
(4) Every foreman shall be bound to comply with the directions contained in an order made under sub-section (3).
Who may inspect the chit records?
The inspection power is vested in the Registrar and may also be exercised by an officer authorised by the State Government for this purpose. Under Section 2 of the Act, the expression "Registrar" refers to the Registrar of Chits appointed under Section 61 and includes an Additional, Joint, Deputy or Assistant Registrar appointed under that section.
Duties of the foreman during inspection
When inspection is undertaken under Section 46(1), the foreman must produce the chit books and records that are within the foreman's custody or power. The foreman must also furnish statements or information relating to the chits when required and within the time specified by the inspecting authority.
Seven days' written notice under Section 46(2)
Sub-section (2) provides a separate route for inspection. After giving seven days' written notice, the Registrar or authorised officer may direct the foreman to produce the required chit books and records at the time and place stated in the notice. This is distinct from the premises inspection contemplated by sub-section (1), which may be conducted with or without notice.
Defects found during inspection
If inspection under sub-section (1) or (2) reveals defects, Section 46(3) permits the Registrar to bring those defects to the foreman's notice and to issue an order specifying the remedial action and the time allowed for compliance. Section 46(4) makes compliance with directions in such an order binding on every foreman.
Related record-keeping provisions
Section 46 should be read with nearby provisions dealing with access to and preservation of chit records. Section 44 concerns inspection of specified chit records by certain subscribers, while Section 45 requires the foreman to preserve records pertaining to a chit for eight years from the date of termination of the chit. Section 47 separately deals with the Reserve Bank's power to inspect chit books and records in the circumstances stated there.
Practical compliance points
A foreman should maintain the statutory chit records in an organised and retrievable form, ensure that records required for inspection can be produced promptly, respond to information requirements within the specified time, and carefully track any defect-removal direction issued under Section 46(3). State rules and notifications applicable to the particular chit should also be checked because administration of the Act involves the State Government and the Registrar appointed for the relevant jurisdiction.
Legal text checked against India Code and the Chit Funds (Amendment) Act, 2019. Page updated: 16 September 2026.