Clause 20

Every scheme or arrangement by whatever name called which is not based wholly on the essential terms and conditions set out in section 24 of this Act or which is based on terms and conditions inconsistent wholly or in part with those essential terms and conditions, shall for the purposes of this Act be deemed only to partake of the nature of a chit fund.

Regulations made under this Act may describe or define what schemes or arrangements shall be deemed only to partake of the nature of a chit fund for the purposes of this section.

Any person who promotes or conducts, or aids, assists, or takes any part in the promotion or conduct of any scheme or arrangement which only partakes of the nature of a chit fund within the meaning of this Act shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding three years or to a fine not exceeding five thousand dollars or to both such imprisonment and fine.

No right or claim under any scheme or arrangement which only partakes of the nature of a chit fund within the meaning of this Act or regulations made thereunder shall, without prejudice to the provisions of subsection (1) of this section, be enforceable by action in any court.