1. Short title, extent and commencement.—(1) This Act may be called the Chit Funds Act, 1982.
(2) It extends to the whole of India 1
***.
(3) It shall come into force on such date2
as the Central Government may, by notification in the
Official Gazette, appoint, and different dates may be appointed for different States.
2. Definitions.—In this Act, unless the context otherwise requires,—
(a) “approved bank” means the State Bank of India constituted under section 3 of the State Bank
of India Act, 1955 (23 of 1955), or a subsidiary bank constituted under section 3 of the State
Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), or a corresponding new bank
constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1970 (5 of 1970), or a Regional Rural Bank established under section 3 of the Regional Rural
1. The words “except the State of Jammu and Kashmir” omitted by Act 34 of 2019, s. 95 and the Fifth Schedule (w.e.f. 31-10- 2019).
2. The provisions of this Act shall come into force in—
the State of West Bengal on 2nd April, 1984, vide notification No. S.O. 143(E), dated 1st March, 1984, see Gazette of India, Extraordinary,
Part II, sec. 3(ii).
the State of Tamil Nadu on 13th April, 1984, vide notification No. S.O. 281(E), dated 12th April, 1984, see Gazette of India, Extraordinary,
Part II, sec. 3(ii).
the State of Himachal Pradesh on 1st November, 1984, vide notification No. S.O. 808(E), dated 29th October, 1984, see Gazette of India,
Extraordinary, Part II, sec. 3(ii).
the State of Sikkim on 6th November, 1984, vide notification No. S.O. 837(E), dated 14th November, 1984, see Gazette of India, Extraordinary,
Part II, sec. 3(ii).
the Union territory of Andaman and Nicobar Islands on 1st July, 1985, vide notification No. S.O. 493(E), dated 27th June, 1985, see Gazette of
India, Extraordinary, Part II, sec. 3(ii).
the Union territory of Pondicherry on 1st November, 1986 vide notification No. S.O. 771(E), dated 28th October, 1986 see Gazette of India,
Extraordinary, Part II, sec. 3(ii).
the State of Rajasthan on 1st July, 1989 vide notification No. S.O. 481(E), dated 26th June, 1989, see Gazette of India, Extraordinary, Part II,
sec. 3(ii).
the State of Assam on 1st March, 1990, vide notification No. S.O. 166(E), dated 22nd February, 1992, see Gazette of India, Extraordinary,
Part II, sec. 3(ii).
the State of Manipur on 1st November, 1994, vide notification No. S.O. 779(E), dated 28th October, 1994, see Gazette of India, Extraordinary,
Part II, sec. 3(ii).
the State of Tripura on 1st March, 1995, vide notification No. S.O. 131(E), dated 1st March, 1995 see Gazette of India, Extraordinary, Part II,
sec. 3(ii).
the State of Bihar on 2nd October,1987, vide notification No. S.O. 864(E), dated 28th September, 1987, see Gazette of India, Extraordinary,
Part II, sec. 3(ii).
the State of Punjab on 1st April, 1999, vide notification No. S.O. 204(E), dated 31st March, 1999, see Gazette of India, Extraordinary, Part II,
sec. 3(ii).
the State of Karnataka on 2nd January, 1984 vide notification No. S.O. 946(E), dated 30th December, 1983, see Gazette of India, Extraordinary,
Part II, sec. 3(ii).
the Union territory of Chandigarh on 1st May, 1984, vide notification No. S.O. 322(E), dated 27th April, 1984, see Gazette of India,
Extraordinary, Part II, sec. 3(ii).
the Union territory of Dadra and Nagar Haveli on 3rd September, 1984, vide notification No. S.O. 660(E), dated 30th August, 1984, see Gazette
of India, Extraordinary, Part II, sec. 3(ii).
the State of Orissa on 1st September, 1985, vide notification No. S.O. 629(E), dated 26th August, 1985, see Gazette of India, Extraordinary,
Part II, sec. 3(ii).
the Union territory of Goa, Daman & Diu on 1st January, 1986, vide notification No. S.O. 910(E), dated 24th December, 1985, see Gazette of
India, Extraordinary, Part II, sec. 3(ii).
the State of Madhya Pradesh on 1st July 1986, vide notification No. S.O. 381(E), dated 27th June, 1986, see Gazette of India, Extraordinary, Part
II, sec. 3(ii).
the State of Meghalaya on 2nd January, 1988, vide notification No. S.O. 1135(E), dated 30th December, 1987, see Gazette of India,
Extraordinary, Part II, sec. 3(ii).
the State of Uttar Pradesh on 1st February, 1988, vide notification No. S.O. 133(E), dated 29th January, 1988, see Gazette of India, Extraordinary,
Part II, sec. 3(ii).
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Banks Act, 1976 (21 of 1976), or a corresponding new bank constituted under section 3 of the
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or a banking
company as defined under clause (e) of section 5 of the Banking Regulation Act, 1949 (10 of 1949),
or a banking institution notified by the Central Government under section 51 of that Act or such other
banking institution as the State Government may, in consultation with the Reserve Bank, approve for
the purposes of this Act;
(b) “chit” means a transaction whether called chit, chit fund, chitty, kuri 1
[, fraternity fund,
Rotating Savings and Credit Institution] or by any other name by or under which a person enters into
an agreement with a specified number of persons that every one of them shall subscribe a certain sum
of money (or a certain quantity of grain instead) by way of periodical instalments over a definite
period and that each such subscriber shall, in his turn, as determined by lot or by auction of by tender
or in such other manner as may be specified in the chit agreement, be entitled to the 2
[net chit
amount].
Explanation.—A transaction is not a chit within the meaning of this clause, if in such
transaction,—
(i) some alone, but not all, of the subscribers get the 2
[net chit amount] without any liability to
pay future subscriptions; or
(ii) all the subscribers get the 3
[gross chit amount] by turns with a liability to pay future
subscriptions;
(c) “chit agreement” means the document containing the articles of agreement between the
foreman and the subscribers relating to the chit;
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* * * * *;
(e) “chit business” means the business of conducting a chit;
(f) “defaulting subscriber” means a subscriber who has defaulted in the payment of subscriptions
due in accordance with the terms of the chit agreement;
(g) “discount” means the sum of money or the quantity of grain which a prized subscriber is,
under the terms of the chit agreement, required to forego and which is set apart under the said
agreement to meet the expenses of running the chit or for distribution among the subscribers or for
both;
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* * * * *;
(i) “draw” means the manner specified in the chit agreement for the purpose of ascertaining the
prized subscriber at any instalment of the chit;
(j) “foreman” means the person who under the chit agreement is responsible for the conduct of
the chit and includes any person discharging the functions of the foreman under section 39;
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[(ja) “gross chit amount” means the sum-total of the subscriptions payable by all the subscribers
for any installment of a chit without any deduction of discount or otherwise;
(jb) “net chit amount” means the difference between the gross chit amount and the discount, and
in the case of a fraction of a ticket means the difference between the gross chit amount and the
discount proportionate to the fraction of the ticket, and when the net chit amount is payable otherwise
than in cash, the value of the net chit amount shall be the value at the time when it becomes payable;]
1. Ins. by Act 41 of 2019, s. 2 (w.e.f. 1-1-2020).
2. Subs. by s. 3, ibid., for “prize amount” (w.e.f. 1-1-2020).
3. Subs. by s. 3, ibid., for “chit amount” (w.e.f. 1-1-2020).
4. Clause (d) omitted by s. 2, ibid. (w.e.f. 1-1-2020).
5. Clause (h) omitted by s. 2, ibid. (w.e.f. 1-1-2020).
6. Ins. by s. 2, ibid., (w.e.f. 1-1-2020).
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(k) “non-prized subscriber” does not include a defaulting subscriber;
(l) “prescribed” means prescribed by rules made under this Act;
1
* * * * *
(n) “prized subscriber” means a subscriber who has either received or is entitled to receive the
2
[net chit amount];
(o) “Registrar” means the Registrar of Chits appointed under section 61, and includes an
Additional, a Joint, Deputy or an Assistant Registrar appointed under that section;
(p) “Reserve Bank” means the Reserve Bank of India constituted under the Reserve Bank of India
Act, 1934 (2 of 1934);
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[(pa) “share of discount” means the share of the subscriber in the amount of discount available
under the chit agreement for rateable distribution among the subscribers at each instalment of the
chit.]
(q) “State Government”, in relation to a Union territory, means the administrator of that Union
territory appointed by the President under article 239 of the Constitution;
(r) “subscriber” includes a person who holds a fraction of a ticket and also a transferee of a ticket
or fraction thereof by assignment in writing or by operation of law;
(s) “ticket” means the share of a subscriber in a chit.
3. Act to override other laws, memorandum, articles, etc.—Save as otherwise expressly provided
in this Act,—
(a) the provisions of this Act shall have effect notwithstanding anything to the contrary contained
in any other law for the time being in force or in the memorandum or articles of association or
bye-laws or in any agreement or resolution whether the same be registered, executed or passed, as the
case may be, before or after the commencement of this Act; and
(b) any provision contained in the memorandum, articles, bye-laws, agreement or resolution
aforesaid, shall, to the extent to which it is repugnant to the provisions of this Act, become or be void,
as the case may be.