Section 64 of the Chit Funds Act, 1982: Disputes Relating to Chit Business

Section 64 is contained in Chapter XII, "Disputes and Arbitration", of the Chit Funds Act, 1982. It creates a special statutory mechanism under which specified disputes touching the management of a chit business are referred to the Registrar for arbitration and excludes civil court jurisdiction for disputes falling within sub-section (1).

In brief: Where the parties and the subject matter satisfy Section 64(1), the dispute is to be referred to the Registrar for arbitration. A question whether a referred matter qualifies as such a dispute is decided by the Registrar under Section 64(2).

Text of Section 64 - Disputes relating to chit business

(1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the management of a chit business shall be referred by any of the parties to the dispute, to the Registrar for arbitration if each party thereto is one or the other of the following, namely:--

(a) a foreman, a prized subscriber or a non-prized subscriber, including a defaulting subscriber, past subscriber or a person claiming through a subscriber, or a deceased subscriber to a chit;

(b) a surety of a subscriber, past subscriber, or a deceased subscriber.

Explanation.-- For the purposes of this sub-section, a dispute touching the management of a chit business shall include--

(i) a claim by or against a foreman for any debt or demand due to him from a subscriber, or due from him to a subscriber, past subscriber or the nominee, heir or legal representative of a deceased subscriber whether such debt or demand is admitted or not;

(ii) a claim by a surety for any sum or demand due to him from the principal borrower in respect of a loan by a foreman and recovered from the surety owing to the default of the principal borrower, whether such sum or demand is admitted or not; and

(iii) a refusal or failure by a subscriber, past subscriber or the nominee, heir or legal representative of a deceased subscriber to deliver possession to a foreman of land or any other asset resumed by him for breach of conditions of the assignment.

(2) Where any question arises as to whether any matter referred to for the award of the Registrar is a dispute or not for the purposes of sub-section (1), the same shall be decided by the Registrar whose decision thereon shall be final.

(3) No Civil Court shall have jurisdiction to entertain any suit or other proceedings in respect of any dispute referred to in sub-section (1).

What Section 64 means

The opening non-obstante words, "Notwithstanding anything contained in any other law for the time being in force", give the statutory dispute-resolution mechanism priority where Section 64 applies. The provision is not framed as a general arbitration clause for every disagreement involving a chit; it identifies both the required connection with management of the chit business and the categories of parties covered by the section.

Parties covered by Section 64(1)

The provision expressly covers disputes involving a foreman, prized or non-prized subscriber, a defaulting or past subscriber, a person claiming through a subscriber or deceased subscriber, and a surety of a subscriber, past subscriber or deceased subscriber, subject to the requirements of Section 64.

Examples expressly included

Registrar's role under Section 64(2)

If a question arises whether a matter referred for an award is a "dispute" for the purpose of Section 64(1), sub-section (2) assigns that question to the Registrar and states that the Registrar's decision on it shall be final.

Bar of civil court jurisdiction under Section 64(3)

Sub-section (3) states that a civil court has no jurisdiction to entertain a suit or other proceeding in respect of a dispute referred to in Section 64(1). Whether the bar applies in a particular case therefore depends on whether the dispute falls within the statutory scope of sub-section (1).

Related provisions

Section 64 should be read with the following provisions in Chapter XII, including Section 65 on limitation, Section 66 on settlement of disputes, Section 67 on procedure and powers of the Registrar or nominee, Section 68 on attachment before judgment and interlocutory orders, Section 69 on the decision of the Registrar or nominee, and Section 70 on appeal.

Official source

The current central Act can be checked on the official India Code portal. The Chit Funds Act, 1982 is Act No. 40 of 1982 and regulates chit funds and matters connected with them.

Official India Code - Chit Funds Act, 1982

Last reviewed: 16 September 2026. This page is for general legal information; application of Section 64 depends on the facts and applicable law.