The Madras High Court has upheld the constitutional validity of an amendment to the Tamil Nadu Chit Fund Rules of 1984 through which the State government increased the arbitration fee from 3% to 5% of the amount claimed.
Chief Justice Amreshwar Pratap Sahi and Justice Senthilkumar Ramamoorthy dismissed a writ petition filed by Incorporated Chit Funds Association which had challenged a Government Order issued in September 2017 for amending the rules.
The judges agreed with Special Government Pleader T.M. Pappaiah that the State government was competent to amend the statutory rules framed by it on the basis of powers conferred under the Chit Funds Act of 1982.
The petitioner association had claimed that it was unreasonable on the part of Registrar of Chit Funds to demand “exorbitant” payment for arbitration when a foreman (person responsible for conduct of chit) or a subscriber would have to pay only 3% as court fee even for filing a civil suit.
The association pointed out that the…
