Chit Funds Act, 1982 › Section 52

Section 52 of the Chit Funds Act, 1982 - Injunction Order

Section 52 forms part of the winding-up provisions of the Chit Funds Act, 1982. It gives the Registrar a limited discretionary power, during a specified stage of a chit winding-up proceeding, to restrain other proceedings brought against the foreman for recovery of amounts due from the foreman.

Text and meaning of Section 52

Section 52 - Injunction order. The provision authorises the Registrar, on an application by the foreman or by a subscriber to whom money is due in respect of the chit, to restrain other recovery proceedings against the foreman after a winding-up application has been presented and before an interim receiver is appointed or a winding-up order is made. The Registrar may impose such terms as considered fit.

The operative text published on the official India Code website states that the power arises only within this intervening period. The provision therefore does not create a general or permanent bar against recovery proceedings. It is a case-specific power exercised by the Registrar in connection with pending winding-up proceedings.

Who may apply for an injunction?

An application under Section 52 may be made by either of two categories: the foreman of the chit, or a subscriber to whom amounts are due in respect of the chit. The expression "foreman" is a defined term under Section 2 of the Act and broadly refers to the person responsible for conducting the chit under the chit agreement.

When can the Registrar exercise the power?

Requirement	An application for winding up of the chit under the Act must already have been presented.
Time window	The power operates after presentation of the winding-up application but before an order appointing an interim receiver or an order winding up the chit.
Proceedings affected	Other proceedings instituted against the foreman for realisation of amounts due from the foreman.
Nature of power	Discretionary. The section uses the word "may", and the Registrar may impose terms considered fit.

Purpose and practical effect

Section 52 enables the Registrar to protect the orderly administration of a chit while a winding-up application is pending at the preliminary stage. Where its statutory conditions are satisfied, the Registrar can temporarily restrain competing recovery proceedings against the foreman so that the pending winding-up process is not disrupted before the next statutory stage is reached.

The provision should be read with the surrounding winding-up sections. Section 51 deals with commencement and effect of a winding-up order; Section 53 sets out the Registrar's powers after hearing an application under the Chapter; and Section 55 separately addresses the stay of suits and other legal proceedings after a winding-up order.

Section 52 and the 2019 amendment

The Chit Funds (Amendment) Act, 2019 amended several provisions of the principal Act. For the authoritative current statutory text, readers should verify the Chit Funds Act, 1982 and applicable amendments on the official India Code portal. The text of Section 52 reproduced by India Code continues to describe the Registrar's injunction power in the terms explained above.

Official legal source

For the statutory text, commencement information, amendments and related materials, see the Chit Funds Act, 1982 on India Code. India Code identifies the legislation as Act No. 40 of 1982, enacted on 19 August 1982, under the Ministry of Finance, Department of Financial Services.

Legal note: This page is a general explanation of Section 52. Whether an injunction can be granted in a particular matter depends on the statutory stage of the winding-up proceedings, the nature of the other proceedings, the relief sought and the facts placed before the competent Registrar.

Last reviewed: 16 September 2026.