N.MARAGATHAM Vs. UNION OF INDIA

JUDGEMENT

(1.) This instant public interest litigation has been filed challenging the constitutional validity of Sections 64, 66 and 70 of the Chit Funds Act, 1982. The petitioner, who claims to be a women entrepreneur, is in the business of manufacturing corrugated boxes for packing the materials. It is stated in the writ petition that in order to extend her business, she was in need of funds and she approached the Mayavaram Financial Chit Corporation Ltd., Mayiladuthurai. She subscribed for monthly chit under Chit No.117 of 2013 dated 13.08.2013 for Rs.50 Lakhs and had to pay Rs.1,25,000/- for 40 months. She was effecting payment continuously and during the 7th month, she bid for the chit, effecting payment of Rs.35 Lakhs. She states that dispute arose between her and the chit fund. She states that the 4rd respondent organizer of the chit fund filed a petition before the Deputy Registrar (Chits) and obtained an exparte decree dated 08.12.2015 for Rs.31,37,058/-. She states that the challenge to the exparte decree, was unsuccessful and revision petition viz., CRP (NPD) No.711 of 2018, has been filed in this Court. This Court by an order dated 23.02.2018, has directed the petitioner to pay a sum of Rs.10 lakhs within four weeks failing which, stay would be vacated. The petitioner states that she is not in a position to pay the amount.

(2.) The petitioner states that Chit Funds Act, has been passed by the Parliament under Entry 7 in List III of Schedule VII of the Constitution of India. Various State Governments have framed rules and State Government of Tamil Nadu has framed Tamil Nadu Chit Fund Rules, 1984.

(3.) Parliament has framed Chit Funds Act, to regulate the business of Chit. The statement of objects and reasons of the Chit Funds Act, 1982, reads as under.