JUDGMENT

FATHIMA BEEVI, J.:- These appeals arise out of the common judgment of the Madras High Court in a batch of writ petitions in which the respondents challenged the validity of the amendments effected to Article 1 and insertion of Article 8-A to Appendix 11 of the Tamil Nadu Chit Fund Rules, 1961 (for short the Rules). The High Court in its judgment dated 20-3-1985 has struck down as invalid the impugned amendments.

2. The Tamil Nadu Chit Funds Act, 1961 (The Act) provides for the regulation of chit fund in the State of Tamil Nadu. Chit is a transaction by which its foreman enters into an agreement with number of subscribers that every one of them shall subscribe certain sum by instalments for a definite period and that each subscriber in his turn as determined by lot or by auction, shall be entitled to a prize amount. The sum total of the subscription payable by all the subscribers for any instalment of a chit without any deduction for discount or otherwise is chit amount.

3. It is useful to summarise the scheme of the Act and the Rules. The Registrar of chit funds is appointed by the Government under Section 51. No person can start or conduct any chit unless he registers with the Registrar the proposed bye-laws of the chit. Section 7 provides that the Registrar, on being satisfied that the bye-laws have been registered, the chit agreement has been filed, and the security required under Section 12 has been furnished by the foreman, grants "certificate of commencement". The auction or drawing of any chit commences only on obtaining such certificate. The security furnished under Section 12 can only be released by Registrar in accordance with the prescribed procedure.

4. Under Section 16 every foreman has to prepare and file with the Registrar a duly audited balance-sheet. The defaulting nonprized subscriber is liable to be removed and the aggrieved person has a right of appeal to the Registrar whose order in the matter is final. Any substitution in place of a defaulting subscriber has to be recorded and copy filed with the Registrar. The rights of the prized or non-prized subscribers in the chit cannot be transferred or interfered with without the previous sanction in writing of the Registrar. The foreman is required to maintain all the records pertaining to a chit for a specified period. The Register is empowered under Section 37 to inspect the chit books and all records after giving due notice. If the Registrar is of the opinion that the accounts of any chit are not properly maintained and that such account should be audited, it shall be lawful for him under Section 51(4) to have such account audited by a chit auditor. The foreman has a right of appeal against the order of the Registrar refusing to register byelaws or to grant a certificate of commencement or refuse to accept the security or refusing to release the property charged by way of security as provided under Sec. 54. Penalty for the contravention of the provisions is provided under Sec. 56.

5. The provisions of the Act impose duties on the Registrar and are intended to regulate the conduct of the business. The Registrar has to take adequate security and keep the same intact until the claims of all subscribers are satisfied and till the termination of the chit, the Registrar is required to discharge several duties.

6. Section 63 empowers the Government to make rules for carrying out all or any of the Purposes of the Act. Section 53 which provides for levy of fees reads:-

"53. (1) There shall be paid to the Registrar such fees as the Government may from time to time, prescribe for -

(a) the registration of the bye-laws of a chit under Section 3;

(b) the grant of a certificate of commencement under Section 7;

(c) filing with the Registrar of the chit agreement and copies of documents under Sections 11, 20, 21, 29 and 32;

(d) the inspection of documents under Section 52;

(e) the certificate, copy of or extract of documents under Section 52;

(f) the audit of accounts of the for