In this Act, unless the context otherwise requires,– (1) “approved bank” means a nationalised bank or a scheduled bank or a bank approved by the Government;
(2) “chit” means a transaction whether called chit fund, chit kuri or by any other name, by which its foreman enters in an agreement with a number of subscribers that every one of them shall subscribe a certain sum by instalments for a definite period and that each subscriber in his turn as determined by lot or by auction or by tender or in such other manner as may be provided for in the agreement, shall be entitled to a prize amount.
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Explanation.– A transaction is not a chit within the meaning of this clause, if in such transaction,–
(a) some alone, but not all, of the subscribers get the prize amount without liability to pay future subscriptions; or
(b) all the subscribers get the whole of the chit amount by turns with a liability to pay future subscriptions.
Illustration.– There are 100 subscribers to a chit and the subscription by each of them is ten rupees. All the subscribers get by turn one thousand rupees being the whole of the chit amount and are liable to pay future subscriptions. The transaction falls within clause
(b) of the above explanation and is not a chit;
(3) “chit agreement” means a document containing the articles of agreement between the foreman and the subscribers relating to the chit.
(4) “chit amount” means the sum total of the subscriptions payable by all the subscribers for any instalment of a chit without any deduction for discount or otherwise;
(5) “Chit Book” means a book in which a record of all the subscribers to a chit is maintained by the foreman in respect of subscription paid by each subscriber to the chit, the prize-amount received by any subscriber and which shall contain such other particulars relating to the chit in such form as may be prescribed;
(6) "defaulting subscriber" means a subscriber who has defaulted in the payment of two consecutive subscriptions due according to the terms of the chit agreement;
(7) "discount" means the sum which a prized subscriber has under the terms of the chit agreement 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;
(8) "dividend" means the share of a subscriber in the discount available under the chit agreement for rateable distribution among the subscribers at each instalment of the chit;
(9) "drawing" means ascertaining of the person or persons entitled to the prize amount at any instalment of a chit;
(10) "firm" means a firm registered under the Indian Partnership Act, 1932, (Central Act 9 of 1932) as applied to the Union territory;
(11) "foreman" means the person who under the chit agreement is responsible for the conduct of the chit and includes any other person discharging the functions of the foreman under section 31:
Provided that no firm shall be foreman unless such firm is registered under the Indian Partnership Act. 1932 (Central Act 9 of 1932) ;
(12) "Government" means the Administrator appointed by the President under article 239 of the Constitution;
(13) "non-prized subscriber" does not include a defaulting subscriber;
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(14) "prize amount" means the difference between the chit amount and the discount;
(15) "prized subscriber" means a subscriber who has either received or is entitled to the prize amount;
(16) "Registrar" means a Registrar appointed under sub-section (1) of section 52;
(17) "subscriber" includes a transferee of a ticket by assignment in writing or by operation of law:
(18) "ticket" means the share of a subscriber in a chit;
(19) "Union territory" means the Union territory of Goa, Daman and Diu.
CHAPTER II Constitution and Registration