Section 40 of Maharashtra Chit Funds Act, 1974

When chit may be wound up.- A chit registered in Greater Bombay may be wound up by the City Civil Court, and a chit registered elsewhere may be wound up by the District Court having jurisdiction over the place where the chit has been registered, for all or any of the following reasons, namely:- (a) if the chit has terminated under clause (c) of section 33,

(b) if the Foreman fails to give the security specified in section 13 or if he commits any such act in respect thereto as is calculated to impair materially the nature of the security or the value thereof, or

(c) if he fails to deposit the chit moneys in accordance with the provisions of this Act, or

(d) if it is proved to the satisfaction of the court that the Foreman is unable to pay the amounts due to the subscribers, or

(e) if execution or other process issued on a decree or order of any court in favour of any subscriber in respect of amounts due to him from the chit is returned unsatisfied in whole or in part, or

(f) if it is proved that there has been fraud or collusion on the part of the Foreman in the matter of taking securities from prized subscribers, or

(g) if the Foreman has appropriated the prize amount in his. capacity as a subscriber without furnishing sufficient security for future subscription, or

(h) if it is just and equitable that the chit should be wound up.

Explanation. - For the purposes of clause (d), in determining whether a Foreman is unable to pay the amounts due to the subscribers, the court shall take into account his contingent and prospective liabilities in respect of the chit :

Provided that, a chit conducted by a company within the meaning of the Companies Act, 1956, shall be wound up only by the court having jurisdiction under that Act.