Clause 32

Where default in the payment of any contribution is made by any subscriber who has not purchased a chit fund amount, the chit fund company shall be entitled to remove the name of the defaulting subscriber from the register of subscribers kept under section 37 of this Act and to substitute therein the name of a new subscriber except that the removal of his name from the register shall not be deemed to prejudice the right of the defaulting subscriber to a refund of the actual amount of any earlier contributions paid to him, at such time and with such deductions by way of penalty as may be prescribed by regulations made under this Act.

All the rights and liabilities that would under the agreement have accrued to or been incurred by the defaulting subscriber after the date of such substitution if he had not made default, shall be deemed to be transferred to the new subscriber.

No collateral undertaking, as to mutual rights and obligations entered into by the chit fund company and the new subscriber for the purposes of the substitution of the new subscriber, shall be deemed to affect in any respect the duties and liabilities of the new subscriber under the terms and conditions of the agreement.