M PURIJAGANNADH Vs. GOVERNMENT OF A P

JUDGEMENT

(1.) The writ petition is misconceived. The petitioner challenges provisions of Rule 17(3) of the A.P. Chit Fund Rules, 2008 as arbitrary, discriminatory and violative of Articles 14, 19(1)(g) and 21 of the Constitution. Rule 17(3) of the A.P. Chit Fund Rules, 2008, reads as under:-

(2.) The A.P Chit Fund Rules, 1971 are framed in exercise of the rule making powers under Section 89 of the Chit Funds Act, 1982, sub-section (1) of which empowers the State, in consultation with the Reserve Bank, by notification in the Official Gazette, to make rules for giving effect to the provisions of the Act. Sub-section (2) enacts that in particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the matters enumerated in Clauses (a) to (t). Two (2) contentions alone are urged before this Court; (a) that the impugned provision [Rule 17(3)] is outside the enumerated subjects (for framing rules), in Clauses (a) to (t) of Section 89(2). This is a contention that is stated to be rejected. Sub-section (2) of Section 89 clearly enacts that in particular and without prejudice to the generality of the power conferred under Sub-section (1), Rules may be made for any of the matters enumerated in Clauses (a) to (t). Sub-section (1) of Section 89, confers a broad power to make rules i.e., for giving effect to the provisions of the Act. Such a statutory context cannot be restrictively interpreted to circumscribe the generality of the powers conferred by Sub-section (1).

(3.) The other contention urged by the learned counsel is that the rules made under the earlier enactment (The Chit Fund Act, 1971) did not contain a restriction as in the impugned Rule [17(3)] enjoining a prohibition of an employee or the foreman or members of his family, to act as an agent of the subscriber; that in view of the impugned Rule the petitioners who are subscribers to chits with the 3rd respondent herein (the chit fund company), are disabled the assistance of the foreman or a member of his family to assist them in bidding at the chit. This is a contention that is equally without merit or force. Subscribers are not denuded or deprived of the assistance of an agent, absolutely. What all the impugned provision prohibits is the employment of the foreman or a member of his family to act as an agent of the subscriber for the purpose of participating in a chit auction. A subscriber is at liberty to avail the assistance and to appoint as an agent any other person of choice, other than the foreman or member of the foreman's family. The provision is clearly structured to ensure that there is no conflict of interest, which is potentially the situation if the foreman acts not only for the chit fund company but also for the subscriber. The impugned provision is enacted to ensure public morality and suffers from no infirmity warranting its invalidation.