Foreman

Chapter III

Foreman

18. Procedure in the case of security given by the foreman.—
[(1)(a)] In case of cash deposited in an approved bank in the name of the
Registrar under sub-clause (i) of clause (a) of sub-section(1) of Section 20,
the receipt or the book issued by the approved bank mentioned in the chit
agreement shall be delivered to the Registrar.

[(1)(b) In case of bank guarantee from an approved bank under subclause (ii) of clause (a) of sub-section (1) of Section 20. The said bank
guarantee shall be delivered to the Registrar].

(2) In case of Government securities transferred in favour of the
Registrar under clause (b) of sub-section (1) of Section 20, the Registrar
shall keep them in safe custody under his control in any Government
Treasury.

(3) If the security charged is movable property other than deposit in
an approved bank or Government securities, the foreman shall make all
necessary arrangements for their deposit with the Registrar or with such
bank or other agency as may be approved by the Registrar for ensuring that
the property deposited is available as security for the proper conduct of a
chit.

(4) In the case of trustee securities to be transferred in favour of the
Registrar under clause (c) of sub-section (1) of Section 20.

(i) where the security is other than immovable property, the value of
the security shall not be less than one and a half times the value of the chit
amount, and

(ii) in respect of security of immovable property, the value of the
security shall not be less than two times the value of the chit amount.

(5) A foreman of chit proposing to give (movable or immovable
property as security for the proper conduct of a chit shall apply to the
Registrar in Form X. The application under this sub-rule shall clearly furnish
the correct and complete information regarding the property offered as
security. In case the property offered is immovable property, the application
shall be accompanied by the documents of title to the property and an
encumbrance certificate for 30 years relating to the property.

(6) Where the immovable property offered as security is situated
outside the jurisdiction of the Registrar having jurisdiction over the chit, te
the inspection of the property shall where the property is situated outside the
State of Tamil Nadu, be made and report sent by the Registrar having
jurisdiction over such property under an order special or general of the
Government to which he is subordinate, who shall forward a report to the
Registrar concerned as to the sufficiency of the security.

(7) If the security offered is accepted as sufficient by the Registrar, he
shall record in writing on the application, a certificate of sufficiency in Form
XI and attach a statement of the valuation made.

(8) If the security offered is not accepted by the Registrar, he shall
give the applicant an endorsement to that effect.

19. Valuation of the chit amount in grain chits.—~~Ina~~In grain chit for
the purpose of security under Section 20, the grain shall be valued, by the
Registrar as follows:

(a) The total quantity of grain due from all subscribers at one
installment of the chits shall be ascertained;

(b) The market value for the time being of the total quantity referred
to in clause (a) shall then be calculated;

(c) In assessing the market value, the Registrar shall adopt the current market price at the nearest taluk town as ascertained from the Tahsildar having jurisdiction;

(d) One and a quarter times the market value mentioned in clause (b) shall be taken to be the chit amount for the purpose of furnishing security by the foreman under sub-section 91) of Section 20.