Chapter I PRELIMINARY

Short title, extent and commencement: -

1. (1) This Act may be called the Andhra Pradesh Chit Funds Act, 1971.
2. (2) It extends to the whole of the State of Andhra Pradesh.
3. (3) It shall come into force on such date as the Government may, by notification, appoint, and different dates may be appointed for different areas and for different provisions of this Act.

Definitions :- In this Act, unless the context otherwise requires :-

1. (1) ''approved bank" means a bank approved by the Government;
2. (2) "chit" means a transaction, whether called chit fund, chitty or by any other name, by which its foreman enters into an agreement with a number of subscribers that every one of them shall subscribe a certain sum of money or a certain quantity of grain or other commodity, by installments 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, whether payable in cash, kind or any other article of value. Explanation :- A transaction is not a chit within the meaning of this clause, if in such transaction, -
   • (a) some alone, not all, of the subscribers get the prize amount without any liability to pay further subscription ; or
   • (b) all the subscribers get the prizes by turns with a liability to pay future subscriptions if the prize winner is not entitled to get the prize amount.
3. (3) "chit agreement" means a document containing the articles of agreement between the foreman and the subscribers relating to the chit and filed under Section 6;
4. (4) "chit amount" means the sum total of the subscription payable by all the subscribers for any installment of a chit without any deduction for discount or otherwise;
5. (5) "defaulting subscriber" means a subscriber who have defaulted in the payment of subscriptions due according to the terms of the chit agreement;
6. (6) "discount" means the sum of money or the quantity of grain or other commodity, 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 both;
7. (7) "dividend" means the share of a subscriber in the discount avail able under the chit agreement for rateable distribution among the subscribers at each installment of the chit;
8. (8) "drawing" means ascertaining of the person or persons entitled to the prize amount at any installment of a chit;
9. (9) "firm" means a firm registered under the Indian Partnership Act, 1932;
10. (10) "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 30; Provided that no firm shall be a foreman unless such firm is registered under the Indian Partnership Act; 1932;
11. (11) "Government" means the State Government;
12. (12) "non-prized subscriber" does not include a defaulting subscriber;
13. (13) "notification" means a notification published in the Andhra Pradesh Gazette ;
14. (14) "prescribed" means prescribed by rules made under this Act;
15. (15) "prize amount" means the difference between 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 it becomes payable ;
16. (16) "prized subscriber" means a subscriber who has either received or entitled to the prized amount;
17. (17) "Registrar" means a Registrar appointed under sub-section ( I ) of Section 51 ;
18. (18) "subscriber" includes a person who holds a traction of a ticket and also a transferee of a ticket or a fraction thereof by assignment in writing or by operation of law.
19. (19) "ticket" means the share of a subscriber in a chit and the expression "fraction of ticket" shall be construed accordingly.