(Contd.)

12.Prohibition of transacting business other than chit business by a company.-

(1) ExceptwithExcept with the general or special permission of the State Government, no company
 carrying on chitbusinesschit business shall conduct any other business.

(2) Where at the commencement of this Act, any company is carrying on any business in
 addition to chit business, it shall wind up such other business before the expiry of a period
 of three years from such commencement: Provided that the State Government may, if it
 considers it necessary in the public interest or foravoidingfor avoiding any hardship, extend the said
 period of three years by such further period or periods not exceeding two years in the
 aggregate.

13. Aggregate amount of chits.-

(1) No foreman, other than a firm or other association ofindividualsof individuals of a company or
 co-operative society, shall commence or conduct chits, the aggregatechitaggregate chit amount of which
 at any time exceeds twenty-five thousand rupees.

(2)Where the foreman is a firm or other association of individuals, the aggregate chit
 amount oftheof the chit conducted by the firm or other  association shall not at any time exceed,-

(a) where the number of partners of the firm or the individuals constituting the association
 is notlessnot less than four, a sum of rupees one lakh;

(b) in any other case, a sum calculated on the basis of twenty-five thousand rupees with
 respect to each partner or individual.

(3)Where the foreman is a company or co-operative society, the aggregate chit amount of
thechits the chits conducted by it shall not at any time exceed ten times the net owned funds of the
companyor company or the co-operative society, as the case may be.

Explanation.- For the purposes of this sub-section, "net owned funds" shall mean the
 aggregate of the paid-up capital and free reserves as disclosed in the last audited balance
 sheet of the company or co-operative society, as reduced by the amount of accumulated
 balance of loss, deferred revenue, expenditure and other intangible assets, if any, as
 disclosed in the said balance sheet.

14.Utilisation of funds.-

(1) No person carrying on chit business shall utilise the money collected in respect of such
 business (other than commission or remuneration payable to suchpersonsuch person or interest or
 penalty, if any, received from a defaulting subscriber), except for- 

(a) carrying on chit business; or

(b)giving loans and advances to non-prized subscribers on the security of subscriptions paid
 by them; or

(c)investing in trustee securities within the meaning of section 20 of the Indian Trusts Act,
 1882; or

(d)making deposits with approved banks mentioned in the chit agreement.

(2) Where any person carrying on chit business has utilised the moneysmoney collected in respect
 of such business before the commencement of this Act, otherwise than for the purposes
 specified in sub-sectionsubsection (1), he shall secure that so much of such moneysmoney as have not been
 realised before such commencement are realised before the expiry of a period of three
 years from such commencement:

Provided that the State Government may, if it considers it necessary in the public interest
of forto avoidingavoid any hardship, extend the said period of three years by such further period or
 periods not exceeding one year in the aggregate.

15. Alteration of chit agreement.- A chit agreement shall not be altered, added to or
 cancelled except with the consent in writing of the foreman and all the subscribers to the
 chit.