Section 65 of the Chit Funds Act, 1982 - Period of Limitation
Chit Funds Act, 1982 | Chapter XII - Disputes and Arbitration
Section 65 of the Chit Funds Act, 1982 prescribes the period of limitation for disputes that are required to be referred to the Registrar under Section 64 of the Chit Funds Act. It also explains when the Limitation Act, 1963 applies and gives the Registrar power to admit a delayed dispute where sufficient cause for the delay is established.
In brief: Section 65 creates specific limitation rules for certain chit business disputes. In the situations covered by Section 65(1), the limitation period is three years. Other disputes required to be referred under Section 64 are governed by the Limitation Act, 1963, and Section 65(3) permits delayed admission where sufficient cause is shown.
What is Section 65 of the Chit Funds Act?
Section 65 forms part of Chapter XII of the Chit Funds Act, 1982, dealing with disputes and arbitration. It must therefore be read together with Section 64, which identifies disputes relating to chit business that are required to be referred to the Registrar for arbitration.
The expression "period of limitation" refers to the legally prescribed period within which a dispute or claim must ordinarily be brought before the competent authority. Section 65 contains special limitation provisions for disputes falling within Section 64.
Text of Section 65 - Period of limitation
(1) Notwithstanding anything contained in the Limitation Act, 1963 (36 of 1963), but subject to the specific provisions contained in this Act, the period of limitation in the case of a dispute referred to the Registrar under section 64, shall -
(a) if the dispute relates to the recovery of any sum, including interest thereon, due to a foreman from a deceased subscriber, be three years, computed from the date on which such subscriber dies or ceases to be a subscriber; or
(b) if the dispute is between a foreman and a subscriber or a past subscriber, or the nominee, heir or legal representative of a deceased subscriber, and the dispute relates to any act or omission on the part of either party to the dispute, be three years from the date on which the act or omission with reference to which the dispute arose, took place.
(2) The period of limitation in the case of any dispute other than those referred to in sub-section (1) which are required to be referred to the Registrar under section 64 shall be regulated by the provisions of the Limitation Act, 1963 (36 of 1963), as if the dispute were a suit, and the Registrar, a Civil Court.
(3) Notwithstanding anything contained in sub-sections (1) and (2), the Registrar may admit a dispute after the expiry of the period of limitation specified therein, if the applicant satisfies the Registrar that he had sufficient cause for not referring the dispute within such period.
Section 65(1): Three-year limitation period
Section 65(1) begins with a non-obstante clause overriding the Limitation Act, 1963 to the extent that Section 65 itself provides a specific limitation rule, subject to other specific provisions of the Chit Funds Act.
Under clause (a), where the dispute concerns recovery of a sum, including interest, due to a foreman from a deceased subscriber, the prescribed period is three years. The period is computed from the date on which the subscriber dies or ceases to be a subscriber, as provided in the section.
Under clause (b), where the dispute is between a foreman and a subscriber, past subscriber, or the nominee, heir or legal representative of a deceased subscriber and concerns an act or omission of either party, the limitation period is three years from the date of the relevant act or omission.
Section 65(2): Application of the Limitation Act, 1963
Section 65(2) deals with disputes required to be referred to the Registrar under Section 64 that are not covered by the specific situations in Section 65(1).
For such disputes, limitation is regulated by the Limitation Act, 1963 as though the dispute were a suit and the Registrar were a Civil Court. The applicable limitation period therefore depends upon the nature of the particular claim and the corresponding provisions of the Limitation Act.
Section 65(3): Delayed reference and sufficient cause
Section 65(3) gives the Registrar statutory discretion to admit a dispute even after expiry of the applicable limitation period under sub-section (1) or sub-section (2).
For this power to be exercised, the applicant must satisfy the Registrar that there was "sufficient cause" for not referring the dispute within the prescribed period. The provision therefore does not make admission of every delayed dispute automatic; sufficient cause for the delay must be established before the Registrar.
Relationship between Sections 64 and 65
Section 64 determines the disputes relating to chit business that are to be referred to the Registrar for arbitration. Section 65 then determines how limitation operates in relation to those disputes.
The two provisions should therefore be considered together when deciding whether a particular chit business dispute is referable to the Registrar and whether the reference has been made within the prescribed time.
Key points about Section 65
- Section 65 applies to disputes referred to the Registrar under Section 64.
- Section 65(1) prescribes a three-year limitation period for the categories specifically described in clauses (a) and (b).
- For other Section 64 disputes, Section 65(2) applies the Limitation Act, 1963 as if the dispute were a suit and the Registrar were a Civil Court.
- Section 65(3) permits the Registrar to admit a dispute after expiry of limitation where sufficient cause for the delay is established.
- The starting point for calculating limitation depends upon the nature of the dispute and the statutory provision applicable to it.
Official text of the Chit Funds Act, 1982
For the authoritative Central Government text and amendments, readers should verify the provision from India Code, the official legislative database of the Government of India.
Official Chit Funds Act, 1982 - India Code