State has power to fix fees for Chit-fund related dispute resolution

State has ample power to determine and fix fees for dispute resolution of matters involving chit business under Chit Funds Act, 1982, which provides speedy remedy when compared to Civil Courts.

Appendix II, Cl 12 of Tamil Nadu Chit Fund Rules, 1984 was amended by G.O.Ms.No.176, Commercial Taxes and Registration (G), D/- 29.11.2017. By virtue of this amendment, fees for dispute resolution relating to chit business has been increased from 3% of amount claimed to 5% of such amount.

Registrar of Chit Funds is providing services in relation to resolution of disputes. Thus, there is broad correlation between the fee collected and the service rendered. Further, Chit Funds Act provides for speedy resolution of disputes and nature of services provided under Chit Funds Act cannot be compared with or equated with that of civil courts. State Government has ample power to frame rules in relation to the fixation of fees for the resolution of disputes under S. 64 of the Chit Funds Act. In such scenario, increase of fees for dispute resolution relating to chit business, cannot be challenged.

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