- (1.) These appeals on a certificate are against the judgment of the High Court upholding the validity of S. 12 of the Tamil Nadu Chit Funds Act, 1961 as amended by the Amendment Act 14 of 1975.
(2.) Section 12, as it stood before the amendment, required the foreman of the chit-scheme to execute an indenture by mortgaging property in favour and to the satisfaction of the Registrar by way of security for the realisation of the chit amount deposited in an approved bank. The said section after amendment required the foremen to deposit cash amount as security in such manner as prescribed. The conditions of depositing cash security were made more hazardous in the amended provisions of the section.
(3.) The vires of the amended S. 12 of the Tamil Nadu Chit Funds Act, 1961 was primarily challenged on the ground that the amendment was in violation of Art. 301 read with Art. 304 of the Constitution of India. It was contended that the provisions of the amended section were not reasonable restrictions made in public interest and were, therefore, beyond the competence of the Legislature. It was also argued that before enacting the impugned law the previous sanction of the President as required under clause (b) of Art. 304 was not obtained.;