Chit Funds Act, 1982 - Chapter on winding up of chits

Section 49 of the Chit Funds Act, 1982: Application for Winding Up

Section 49 lays down who may apply to wind up a chit and how the application must be presented. The petition is made to the Registrar by a non-prized subscriber or an unpaid prized subscriber, must be signed and verified in the manner prescribed for pleadings under the Code of Civil Procedure, 1908, and must contain the particulars prescribed by the applicable rules.

Current-law note: Section 49 continues as part of the Chit Funds Act, 1982. The Chit Funds (Amendment) Act, 2019 made amendments elsewhere in the principal Act. That amending Act was later included among enactments repealed by the Repealing and Amending Act, 2025; the 2025 Act contains a savings provision protecting the legal effect and consequences of enactments already applied or incorporated.

Text and effect of Section 49

Application for winding up. A winding-up application is made by petition to the Registrar by a non-prized subscriber or an unpaid prized subscriber. The petition must be signed and verified in the manner laid down by the Code of Civil Procedure, 1908 and must contain the prescribed particulars.

For an application based on Section 48(d) or Section 48(i), the statutory proviso imposes an additional threshold: the petition must either be presented by qualifying subscribers representing not less than twenty-five per cent of the relevant subscribed amount or value, or be presented with the previous sanction of the State Government having jurisdiction over the chit.

The Explanation provides that a person holding a fraction of a ticket is counted as a subscriber only to the extent of that fraction for calculating the threshold.

Who can file an application?

The provision identifies two categories of applicant: a non-prized subscriber and an unpaid prized subscriber. In practical terms, Section 49 gives these subscribers the statutory route to approach the Registrar when a ground for winding up under Section 48 exists.

How must the petition be made?

The application must be in the form of a petition presented to the Registrar.
It must be signed and verified in the manner laid down by the Code of Civil Procedure, 1908.
It must contain the particulars prescribed under the rules applicable in the relevant State or Union Territory.
Where the petition relies on Section 48(d) or 48(i), the additional statutory condition in the proviso to Section 49 must be satisfied.

Twenty-five per cent requirement under the proviso

For petitions falling under Section 48(d) or Section 48(i), one route is a collective petition by non-prized and unpaid prized subscribers representing at least twenty-five per cent of the amount subscribed by all such subscribers. Where the chit subscription is expressed in grain, the provision refers to the corresponding value of grain.

Alternative: previous sanction of the State Government

Instead of satisfying the twenty-five per cent subscriber threshold, the proviso permits the application to proceed with the previous sanction of the State Government within whose jurisdiction the chit was commenced or is conducted.

Meaning of important terms

Non-prized subscriber

A subscriber who has not received the prize amount in the chit. The precise statutory meaning should be read with the definitions in Section 2 of the Chit Funds Act, 1982.

Prized subscriber

A subscriber who has become entitled to the prize amount under the chit. Section 49 specifically refers to an unpaid prized subscriber, meaning the relevant prized subscriber whose amount remains unpaid for the purpose of this provision.

Registrar

The statutory authority to whom the winding-up petition under Section 49 is presented. The competent Registrar and procedural requirements may depend on the State or Union Territory rules and notifications applicable to the chit.

Section 49 must be read with Sections 48 and 50

Section 48 specifies the circumstances in which a chit may be wound up. Section 49 supplies the application procedure and special threshold for specified grounds. Section 50 then places a statutory bar on entertaining a winding-up petition in certain situations involving pending insolvency, dissolution or winding-up proceedings concerning the foreman.

Official legal resources

For the authoritative statutory text and subsequent legislative changes, refer to the official Government of India sources below. State-specific chit fund rules should also be checked because Section 49 requires the petition to contain the particulars prescribed under the applicable rules.

Legal information: This page is a general explanation of Section 49 and is not a substitute for the Act, applicable State rules, notifications or professional advice in a particular matter.