In exercise of the powers
conferred by Section 13 of the Prize Chits and Money Circulation Schemes
(Banning) Act, 1978 (Central Act 43 of 1978), the Government of Karnataka in
consultation with the Reserve Bank of India hereby makes the following rules, namely.-- (1) These rules may be called the Karnataka Prize Chits and Money
Circulation Schemes (Banning) Rules, 1980. (2) They shall come into force at once. (1) In these rules, unless the context otherwise requires,-- (a) "Act" means the Prize Chits and Money Circulation Schemes
(Banning) Act, 1978 (Central Act 43 of 1978); (b) "Authorised Officer" means the officer authorised by the State
Government for the purposes of Section 12; (c) "Form" means a form appended to these rules; (d) "Office of the Reserve Bank" means the office of the Deputy
Chief Officer, Department of non-banking companies, Reserve Bank of India,
Bangalore Regional Office, Nrupathunga Road, Bangalore 560 002; (e) "Promoter" means a person conducting a prize chit or money
circulation scheme at the commencement of the Act and desiring to continue such
chit or schemes pursuant to sub-section (1) of Section 12 for winding up the
business relating to such chit or scheme; (f) "Section" means a section of the Act; (g) "Subscriber" means a subscriber to a prize chit or money
circulation scheme. (2) Words and expressions used in these rules but not defined shall have the
meanings respectively assigned to them in the Act. (1) A charitable or an educational institution desiring to be notified under
clause (d) of Section 11 shall make an application in Form I in duplicate to
the authorised officer. Two copies of such application shall, simultaneously,
be forwarded by such institution to the office of the Reserve Bank. (2) The State Government may, in consultation with the Reserve Bank notify
such institution under clause (d) of Section 11 of the Act. (1) A promoter conducting a prize chit or money circulation scheme, on the
date of commencement of the Act, shall, furnish in duplicate to the authorised
officer on or before 28th February, 1981 a statement in Form II together with a
detailed plan for the winding up of the business of such chit or scheme. (2) Two copies of such statement and plan shall also be simultaneously
forwarded by such promoter to the office of the Reserve Bank. (3) On receipt of the statement of particulars and the winding up plan referred
to in sub-rule (1), a written acknowledgement in token of receipt thereof shall
be issued by the authorised officer. (4) The authorised officer shall maintain or cause to be maintained a
register of persons furnishing the statements of particulars and the winding up
plans furnished under sub-rule (1). If for any reason, the
promoter is unable to wind up the existing business of such chit or scheme on
or before the date specified by him in the winding up plan submitted by him
under Rule 4 or such other date as has been approved by the State Government,
and is desirous of continuing it for its beneficial winding up beyond the
specified date or the approved date as the case may be, he shall, not later
than six weeks before such specified date or such approved date, submit to the
authorised officer, an application in duplicate in Form HI giving full details
of such business which needs extension of time, the period for which the
extension is sought and the reasons why such business cannot be finally wound
up within the said specified date or such approved date. Two copies of the
application shall, simultaneously be forwarded by him to the office of the
Reserve Bank. (1) On receipt of the application containing the statement of particulars
and the winding up plan submitted under sub-rule (1) of Rule 4 or as the case
may be, of the application for extension of time submitted under Rule 5, the
State Government shall cause it to be examined by the authorised officer or
such other officer as it may deem fit. (2) On receipt of the comments of such officer and after consulting the
Reserve Bank, the State Government may.-- (a) in the case of a statement of particulars and plan under Rule 4 approve
such plan with or without modifications or reject the same and may accordingly
grant or refuse to grant permission to continue the chit or scheme; and (b) in the case of an application for extension of time, grant or refuse
such permission in accordance with the proviso to sub-section (1) of Section 12
of the Act: Provided that no order
modifying or rejecting the application containing the winding up plan or
modifying or rejecting the application for extension of time for the winding up
of the existing schemes shall be passed without giving to the promoter an
opportunity of being heard. (3) The State Government shall maintain or cause to be maintained by the
authorised officers, a register specifying the particulars such as the names of
the persons promoting or conducting the prize chit or money circulation scheme,
the statements of particulars and winding up plans submitted, the periods for
which extension of time have been granted, or the applications for extension of
time which have been rejected. The State Government shall
intimate to the promoter the particulars of the terms and conditions subject to
which the winding up plan has been approved or extension of time granted or its
refusal to grant further extension of time. (A gist of the modifications, if
any, in the winding up plan or the extension of time, if any, granted or
rejected shall be notified in the Official Gazette and particulars thereof
shall, simultaneously, be advised by the State Government to the office of the
Reserve Bank). During the period for which a
winding up plan has been approved or the extension of time granted to wind up
the business of the prize chit or money circulation schemes pursuant to any
order passed by the State Government under sub-rule (2) of Rule 6, is in
force.-- (a) the subscribers may remit money to the promoter in accordance with the
winding up plan; (b) the promoter may receive moneys from the subscribers and may also
distribute prize by way of cash or otherwise to the subscribers in accordance
with the winding up plan; and (c) the subscribers may receive moneys from the promoter in accordance with
the winding up plan due to them under the schemes. Where a promoter commits
default in furnishing winding up plans as required by sub-rule (1) of Rule 4,
he shall refund within a period of six months from the date of such default the
moneys and subscriptions collected till the date of default.KARNATAKA
PRIZE CHITS AND MONEY CIRCULATION SCHEMES (BANNING) RULES, 1980
PREAMBLE