Jammu and Kashmir Chit Funds Act, 2016
No: 11 Dated: Jul, 23 2016
THE JAMMU AND KASHMIR CHIT FUNDS ACT, 2016
(Act No. XI of 2016)
An Act to provide for the regulation of chit funds in the State and for matter connected therewith.
Be it enacted by the Jammu and Kashmir State Legislature in the Sixty-seventh Year of the Republic of India as follows :-
CHAPTER I
Preliminary
1. Short title and commencement. - (1) This Act may be called the Jammu and Kashmir Chit Funds Act, 2016.
(2) It shall come into force on such date as the Government may, by notification in the Government Gazette appoint.
2. Definitions. - In this Act, unless the context otherwise requires,-
(a) "approved bank" means the State Bank of India constituted under section 3 the State Bank of India Act, 1955 (Central Act No. 23 of 1955), or a subsidiary bank constituted under section 3 of the State Bank of India (Subsidiary Banks) Act, 1959 (Central Act No. 38 of 1959), or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Central Act No. 5 of 1970), or a Regional Rural Bank established under section 3 of the Regional Rural Banks Acts, 1976 (Central Act No. 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 35 of the Banking Regulation Act, 1949 (10 of 1949) or such other banking institution as the 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 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 or by tender or in such other manner as may be specified in the chit agreement, be entitled to the prize 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 prize amount without any liability to pay future subscriptions ; or
(ii) all the subscribers get the 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 ;
(d) "chit amount" means the sum total of the subscriptions payable by all the subscribers for any instalments of a chit without any deduction of discount or otherwise ;
(e) "chit business" means the business of conducting a chit ;
(f) "defaulting subscriber" means the 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 ;
(h) "dividend" 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 ;
(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 ;
(k) "Government", means the Government of Jammu and Kashmir ;
(l) "non-prized subscriber" does not include a defaulting subscriber ;
(m) "prescribed" means prescribed by rules made under this Act ;
(n) "prize amount" means the difference between the chit amount and the discount, and in the case of a fraction of a ticket means the difference between the chit amount and the discount proportionate to the fraction of the ticket, and when the prize amount is payable otherwise than in cash, the value of the prize amount shall be the value at the time when it becomes payable ;
(o) "prized subscriber" means a subscriber who has either received or is entitled to receive the prize amount ;
(p) "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 ;
(q) "Reserve Bank" means the Reserve Bank of India constituted under the Reserve Bank of India Act, 1934 (2 of 1934) ;
(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.