4.
Prohibition of chits not sanctioned or registered
under the Act.- (1) Not chit shall
be commenced or conducted without obtaining
the previous sanction of the State Government
within whose jurisdiction the chit is to be
commenced or conducted or of such officer as
may be empowered by that Government in this
behalf, and unless the chit is registered in
that state in accordance with the provisions
of this Act:
Provided that a sanction obtained
under this sub-section shall laps if the chit
is not registered within twelve months from
the date of such sanction or within such further
period or periods not exceeding six months in
the aggregate as the State Government may, on
application made to it in this behalf, allow.
(2) An application for the
purpose of obtaining a sanction under subsection
(1) shall be made by the foreman in such form
and in such manner as may be prescribed.
(3) The previous sanction
referred to in sub-section (1) may be refused,
if foreman, -
(a) had been convicted of
any offence under this Act or under any other
Act regulating chit business and sentenced to
imprisonment for any such offence; or
(b) had defaulted in the payment
of fees or the filing of any statement or record
required to be paid or filed under this Act
or had violated any of the provisions of this
Act or the rules made thereunder; or
(c) had been convicted of
any offence involving moral turpitude and sentenced
to imprisonment for any such offence unless
a period of five years has elapsed since his
release :
Provided that before refusing
any such sanction, the foreman shall be given
a reasonable opportunity of being heard.
(4) The order of the State
Government, and, subject to the provisions of
sub-section (5), the order of the officer empowered
under sub-section (1), issuing or refusing previous
sanction under this section shall be final.
(5) Any person aggrieved by
the refusal to issue previous sanction by a
officer empowered under sub-section (1) may
appeal to the State Government within thirty
days of the date of communication to him of
such refusal and the decision of that Government
on such appeal shall be final.
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