Disputes relating to chit business
Section 64 of the Chit Funds Act, 1982 deals with disputes relating to chit business. 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 The Act came into force on 02 Apr 1984.
(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).
Section 64, The Chit Funds Act, 1982 (Act 40 of 1982).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Munigala Jalapathi v. Kapil Chit Fund (P) Limited
Court's Decision & Legal Precedent
After the Chit Funds Act, 1982 came into force (15.09.2008 in State), a chit company cannot sue in civil court for chit recoveries; it must proceed before the Registrar/Chit Arbitrator under s.64. Ex parte civil decree and EP closure remanded for JD to raise s.64 exclusivity and other defences.
On this section: s.64 exclusive forum for disputes relating to chit business — bars parallel civil suit after Act in force.
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Dhanalakshmi Srinivasan Chit Funds Pvt. Ltd. v. The Government of Tamil Nadu
Court's Decision & Legal Precedent
In chit dispute recovery architecture under s.64, a State GO directing recover first from subscriber then guarantor was quashed as contrary to statutory dispute/settlement scheme and Contract Act suretyship principles (ss.126/128) applied in chit recoveries.
On this section: s.64 disputes relating to chit business — recovery sequencing from subscriber vs guarantor in s.64 proceedings.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… If the petitioners have any dispute regarding the claim of the KSFE Limited, the petitioners will have to resort to the dispute redressal mechanism available under Section 64 of the Chit Funds Act. 19. The petitioners' claim for compensation cannot be considered in a writ petition under Article 226 of the Constitution of India as it is a civil dispute/claim arising out of commercial transactions involving disputed questions of fact. In the afore circumstances, the writ petition is …
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… The petitioners did not raise any grievance then. It is much later when the Section 36 notice was issued that the petitioners have challenged the proceedings. : 9 : 8. The Kerala State Financial Enterprises Limited stated that Section 64 of the Chit Funds Act only prescribes the method of resolving disputes relating to conduct of chit business. If the subscriber or anyone claiming under him has got any grievance regarding the conduct of the chit, he / she can make a reference to the Arbitrator for resolving the dispute by arbitration. Though the …
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… The petitioners did not raise any grievance then. It is much later when the Section 36 notice was issued that the petitioners have challenged the proceedings. : 9 : 8. The Kerala State Financial Enterprises Limited stated that Section 64 of the Chit Funds Act only prescribes the method of resolving disputes relating to conduct of chit business. If the subscriber or anyone claiming under him has got any grievance regarding the conduct of the chit, he / she can make a reference to the Arbitrator for resolving the dispute by arbitration. Though the …
Questions about Section 64
What have the courts held on Section 64 of the Chit Funds Act?
Munigala Jalapathi v. Kapil Chit Fund (P) Limited (27 Jun 2025) is the leading judgment on this section among those set out below: s.64 exclusive forum for disputes relating to chit business — bars parallel civil suit after Act in force. Another 1 judgment on this section is set out below.
How do I find court cases under Section 64 of the Chit Funds Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Chit Funds Act 1982 64, section 64 Chit Funds Act 1982, section 64 of the Chit Funds Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 2 reported judgments on this section are set out on this page, beginning with Munigala Jalapathi v. Kapil Chit Fund (P) Limited (27 Jun 2025).
What should I read with Section 64 of the Chit Funds Act, and has it changed?
6 other provisions in this corpus refer back to it.
When did Section 64 of the Chit Funds Act come into force?
Section 64 of the Chit Funds Act, cited as Chit Funds Act 1982 64, came into force on 02 Apr 1984, having been enacted on 19 Aug 1982. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions795 words
- 6. Form of chit agreement577 words
- 22. Duties of foreman483 words
- 89. Power to make rules471 words
- 20. Security to be given by foreman428 words
- 67. Procedure for settlement of disputes and powers of Registrar or nominee419 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 17 Oct 2026. This page is not a substitute for legal advice.