Section 66 of the Chit Funds Act, 1982: Settlement of Disputes
Updated: 16 September 2026
Section 66 of the Chit Funds Act, 1982 forms part of the statutory mechanism for deciding disputes connected with chit business. Once the Registrar is satisfied that a matter is a dispute within the meaning of Section 64, the Registrar must deal with it in the manner provided by Section 66, subject to the applicable rules.
Text of Section 66 - Settlement of disputes
66. Settlement of disputes. - (1) If the Registrar is satisfied that any matter referred to him or brought to his notice is a dispute within the meaning of section 64, he shall, subject to such rules as may be prescribed, settle the dispute himself, or refer it for disposal to a person appointed by him (hereafter in this Chapter referred to as the nominee).
(2) Where any dispute is referred under sub-section (1) for settlement to the nominee, the Registrar may, at any time for reasons to be recorded in writing, withdraw such dispute from the nominee and may settle the dispute himself, or refer it again for settlement to any other nominee appointed by him.
Meaning and scope of Section 66
Section 66 becomes relevant after the threshold requirement under Section 64 is met. In practical terms, the Registrar first has to be satisfied that the matter is a dispute of the kind covered by Section 64. The settlement process under Section 66 is therefore linked directly to the statutory definition and coverage of disputes under Section 64.
The expression Registrar refers to the statutory authority functioning under the Chit Funds Act and the applicable State framework. Section 66 authorises that authority either to settle the dispute personally or to refer it to an appointed nominee for disposal.
Registrar may decide or refer the dispute
Under sub-section (1), once the Registrar is satisfied that the matter falls within Section 64, the Registrar has two statutory courses available: the dispute may be settled by the Registrar, or it may be referred to a person appointed as nominee. The exercise of this power remains subject to the rules prescribed for implementation of the Act.
Withdrawal and fresh reference under Section 66(2)
Sub-section (2) preserves the Registrar's supervisory control after a dispute has been referred to a nominee. The Registrar may withdraw the dispute from that nominee and either decide it personally or refer it to another nominee. The provision expressly requires the reasons for withdrawal to be recorded in writing.
How Section 66 connects with Sections 64 to 70
- Section 64 identifies disputes relating to chit business that are referable to the Registrar.
- Section 65 deals with the limitation period for referring such disputes.
- Section 66 provides for settlement by the Registrar or referral to a nominee.
- Section 67 deals with procedure and specified powers of the Registrar or nominee while hearing the dispute.
- Section 68 concerns attachment before judgment and other interlocutory orders.
- Section 69 deals with the decision of the Registrar or nominee.
- Section 70 provides for an appeal against the decision of the Registrar or nominee.
Key points to remember
The jurisdiction under Section 66 depends on the matter being a dispute within Section 64. A nominee acts by virtue of a reference made by the Registrar. If the Registrar later withdraws the reference, written reasons are required. The detailed procedure must also be read with the applicable rules and the succeeding provisions of the Act.