Section 52 of the Act of 1961 enabling a stranger to inspect documents and obtain copies tkertof, kept by the Registrar is bad and struck down.

Madras Act XXIV of 1961 received the assent of the President on the 22nd June, 1961, and was published on the 5th of July, 1961. Section 1(3) directed that the Act shall come into force on such date as the Government may by notification appoint, and that different dates may be appointed for different areas. By a notification dated 8th September, 1964, this Act was brought into force in Tirunelyeli and Kanyakumari districts of the Madras State. The Act is intended to provide for the regulation of Chit Funds. Broadly stated, certain companies and individuals have been carrying on business in the shape of chit transactions. The person who organises the business is called the stake-holder or the foreman. A certain number of individuals join together and subscribe daily, weekly or monthly instalments for a fixed period of days, weeks or months. On a date appropriate to each class, an auction is conducted in respect of the total of the subscriptions of any one instalment less certain discounts. The subscribers bid at the auction and the lowest bidder gets the amount. The difference between the collection and the bid is distributable among the other subscribers. The bidder (prize winner) draws the money and furnishes security for the payment of the further instalments for the duration of that chit. It is said this form of business transaction is widely prevalent and affords an opportunity to subscribers both to borrow on reasonable terms as it were or to make profitable investments. The conduct of this business is on these lines. The foreman takes Upon himself the responsibility of conducting the chit and financing the chit transactions. He gets a commission of 5 per cent, of the total chit amount. He has to finance every auction, even though some of the subscribers may be in default and to pay the full amount of the prize money even if the collections fall short. To that extent he has to advance his own moneys. If the security given by a prize winner proves useless or the amount is irrecoverable, the foreman has to face the loss. He has to enforce the security, if need be, by filing suits. In the Madras Act referred to, however, it is said these responsibilities have been completely ignored and so many restraints have been placed upon the foreman which affect his right to carry on the business. The Act requires by section 3 that every chit should be registered with the Registrar on payment of a fee. Even if the same foreman conducts more than one chit, each such chit has to be separately registered. The fee is a fixed sum of Rs. 25 irrespective of whether the total of the subscriptions collected is large or small. A chit agreement in duplicate has to be signed by every subscriber and attested by two witnesses, and such agreement has to be filed in duplicate with the Registrar. Section 7 prohibits the commencement of any auction or drawing of any chit unless the foreman has obtained a certificate of commencement. Such a certificate is granted on his complying with the requisites of registration referred to and also on the foreman furnishing security provided for in section 12. This section requires that a foreman shall execute a mortgage in favour of the Registrar as trustee by way of security of properties sufficient for the realisation of the chit amount, the chit amount being the total of subscriptions payable by all the subscribers for any one instalment without any deduction. In the alternative, the foreman is required to deposit in an approved bank or invest in Government securities an amount not less than half the chit amount and transfer the amount so deposited or the securities in favour of the Registrar. Such security has necessarily to be given in respect of each chit transaction. The prized subscriber receives the prize amount on his furnishing security for the due payment of future subscriptions. It is open to the prized subscriber to set-off all future subscriptions and take only the balance of prize amount in wh