Operation of unregistered chit/committee
Querist :
Anonymous
(Querist) 15 September 2024
This query is : Resolved
Sir
I was the operator of a unregister chit in which I suffered a loss. I have nothing with which I can compensate the loss.Customers are threatening a lot to get their money back And they are threats of sending me to jail.They are threatening my family too.How do I protect myself and my family in this situation?please help 🙏I had done this work with complete honesty for the last 12 years.I suffered a lot of loss during the Corona period, to compensate for which I sold everything I owned.
kavksatyanarayana
(Expert) 15 September 2024
Operation of unauthorised chits is a crime. You can solve your problem with the subscribers amicably. However, consult a local criminal lawyer and follow his guidance.
Querist :
Anonymous
(Querist) 16 September 2024
Thanks sir for your valuable reply.I have proof of transactions with all the customers. Because most of the time chit amount was paid by me through UPI.Can a case be registered against me under sections 406 and 420?🙏
T. Kalaiselvan, Advocate
(Expert) 16 September 2024
Operating an unauthorized chit fund is a legal offense in India and can result in severe punishments.
The Chit Funds Act of 1982 states that anyone who contravenes the act can be imprisoned for up to two years, fined up to Rs. 5,000, or both.
Only companies which have a paid-up capital of one lakh rupees or more can start a chit fund business. Any advertisement or notice inviting the public to subscribe to the chit should carry an announcement that a sanction to start the chit fund business has been obtained under Section 4(1) of the Chit funds Act.
Querist :
Anonymous
(Querist) 16 September 2024
Thank you kalaiselvan sir for your valuable reply. What is your suggestion for me in this situation?I am ready to face the punishment for the crime I have committed.
Querist :
Anonymous
(Querist) 16 September 2024
However, I committed this crime unknowingly. When I started this work, I was 17 years old and I was not aware of the law related to it.
Querist :
Anonymous
(Querist) 16 September 2024
I worked for a person related to this work and after working there for 2 years, I started my own work.
