Section 61 of the Chit Funds Act, 1982: Appointment of Registrar and Other Officers

Section 61 is contained in Chapter XI of the Chit Funds Act, 1982. It establishes the administrative and audit machinery for chits by providing for the Registrar of Chits, other registering officers, inspectors of chits and chit auditors.

Current statutory position: The Chit Funds (Amendment) Act, 2019 substituted the expression "gross chit amount" for "chit amount" throughout the principal Act with effect from 1 January 2020. Accordingly, the proviso to Section 61(6) is read with the expression "gross chit amount".
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Section 61 - Appointment of Registrar and other officers

Sub-section (1): The State Government may, by notification in the Official Gazette, appoint a Registrar of Chits and as many Additional, Joint, Deputy and Assistant Registrars as may be necessary for discharging the duties imposed upon the Registrar by or under the Act.

Sub-section (2): The Registrar may appoint as many inspectors of chits and chit auditors as may be necessary for discharging the duties imposed on those officers by or under the Act.

Sub-section (3): Inspectors of chits and chit auditors discharge their statutory duties under the general superintendence and control of the Registrar.

Sub-section (4): Where the Registrar considers that the accounts of a chit are not properly maintained and should be audited, the Registrar may have those accounts audited by a chit auditor.

Sub-section (5): The foreman must produce the relevant accounts, books and records before the chit auditor, furnish required information, and provide reasonable assistance and facilities for the audit.

Sub-section (6): The foreman must pay the prescribed audit fee. Different scales of fees may be prescribed for different chits depending on the quantum of the gross chit amount.

Who appoints the Registrar and other chit officers?

The power is divided between two authorities. The State Government appoints the Registrar of Chits and the Additional, Joint, Deputy and Assistant Registrars by notification in the Official Gazette. The Registrar, in turn, may appoint inspectors of chits and chit auditors as required for administration of the Act.

Registrar's power to order audit of chit accounts

Section 61(4) gives the Registrar a specific supervisory power over the maintenance of chit accounts. If the Registrar forms the opinion that the accounts of a chit are not properly maintained and should be audited, the accounts may be audited through a chit auditor. This statutory audit mechanism is distinct from ordinary record-keeping obligations and supports regulatory supervision of chit operations.

Duties of the foreman during a statutory audit

Once an audit is undertaken under Section 61(4), Section 61(5) places direct obligations on the foreman. The foreman must make the relevant accounts, books and records available, supply information requested by the chit auditor, and provide reasonable assistance and facilities necessary for completing the audit.

Audit fees and the meaning of "gross chit amount"

Under Section 61(6), the foreman is responsible for the audit fee prescribed for an audit ordered under sub-section (4). The proviso permits different fee scales according to the quantum of the gross chit amount.

The 2019 Amendment introduced the statutory expression "gross chit amount". In substance, it refers to the total subscriptions payable by all subscribers for an instalment of a chit without deduction of discount or otherwise. The amendment replaced the earlier expression "chit amount" throughout the principal Act from 1 January 2020.

Practical significance of Section 61

  • It identifies the public authorities responsible for administration of the Chit Funds Act.
  • It places inspectors and chit auditors under the Registrar's general supervision and control.
  • It enables regulatory audit where chit accounts are considered improperly maintained.
  • It creates a corresponding duty on the foreman to cooperate with the chit auditor.
  • It authorises prescribed audit fees, including different fee scales based on the gross chit amount.

Related provisions

For the next provisions in Chapter XI, see Section 62 - Inspection of documents in Registrar's office and Section 63 - Levy of fees. For the complete collection, see the Chit Funds Act, 1982.

This page is a general statutory reference. State rules and notifications may prescribe administrative details, including fees and the officers exercising powers in a particular State.