1999 (11) TMI 792 - HC - Companies Law

Summary

Issues:
1. Alteration of place of auction in chit agreement.
2. Interpretation of sections 15, 19 of the Chit Funds Act, 1982.
3. Jurisdiction of Registrar over chit agreements.
4. Compliance with chit agreement requirements.
5. Enforcement of provisions by Registrar.

Analysis:

Issue 1: Alteration of place of auction in chit agreement
The petitioner, a chit Corporation, sought to change the place of auction in a chit agreement from Mayiladuthurai to Thanjavur. The alteration was made with consent and was sent for registration as per rule 14 of the Chit Funds Rules. The District Registrar objected, citing section 19(1) and (2) of the Act, stating that the alteration must be registered with the Joint Registrar having jurisdiction over the new place. The petitioner challenged this in a writ petition.

Issue 2: Interpretation of sections 15, 19 of the Chit Funds Act, 1982
The court analyzed section 15, which allows alterations in chit agreements, and section 19, which deals with opening new places of business. It found that changing the place of auction did not constitute opening a new place of business under section 19. The court clarified that the place of draw is not considered a chit place of business, allowing the alteration requested by the petitioner.

Issue 3: Jurisdiction of Registrar over chit agreements
The court addressed the jurisdiction of the Registrar, emphasizing that since the chit agreement was registered with the respondent, he had control over the chit. The court rejected the argument that the draw must be conducted within the Registrar's jurisdiction, stating that as long as the agreement was registered with the respondent, he could enforce provisions, including directing the draw.

Issue 4: Compliance with chit agreement requirements
It was noted that the petitioner had complied with all requirements under the Act, including registering the chit agreement with the District Registrar. The alteration sought was specific to the place of auction and did not impact other clauses in the agreement.

Issue 5: Enforcement of provisions by Registrar
The court concluded that there was no prohibition in the Act or rules preventing the petitioner from changing the place of auction beyond the jurisdiction of the registering officer. As long as the Registrar could fulfill duties related to the chit, the objection to registering the alteration was deemed unsustainable. The court set aside the respondent's order and directed the registration of the alteration regarding the place of auction in the chit agreement.