Vol. 17, Part I · pages 296–300

271A BILL............MONEY-LENDING (2) Any person, who, without reasonable cause, makes default in producing any license as required, shall in respect of each offence, be liable on conviction to fine not exceeding five rupees for each day during which the default continues. Chapter IV Mode of carrying on business. Prohibition of advertisements circular of moneylending 20. (1) A money-lender shall not, for the purpose of his business as such issue or publish or cause to be issued or published any advertisement, circular, business-letter, or other similar document- (a) containing an invitation to borrow or, (b) containing expressions which might reasonably be held to imply that he carries on banking business. (2) Any money-lender who acts in contravention of the provisions of sub-section (i) of this section shall be liable on conviction to a fine not exceeding Rs. 100/in respect of each offence. Prohibition against employment of agents 21. (1) No money-lender or any person on his behalf shall employ any agent or canvasser for the purpose of inviting any person to borrow money or to enter into any transaction involving the borrowing of money from a money-lender, and no person shall act as such agent or canvasser, or demand or receive directly or indirectly any sum or other valuable consideration by way of commission or otherwise for introducing or undertaking to introduce to a money-lender any person desiring to borrow money. (2) Any person who acts in contravention of the provisions of sub-section (1) of this section shall be liable on conviction to simple imprisonment for a term not exceeding three months or to a fine not exceeding one hundred rupees or both.

272 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES Penalty for breach of Sec. 20 and 21 22. When it is shown that a money-lending transaction was brought about by a contravention of any of the provisions of *Section 19 and 20, the transaction shall, notwithstanding that the money-lender was duly licensed under this Act, be void, unless the money-lender proves that the contravention occured without his consent or connivance. Agreement for payment by borrower of costs, charges etc. void 23. Any agreement between a money-lender and a borrower or intending borrower for the repayment by the borrower or intending borrower to the money-lender of any sum on account of costs, charges or expenses incidental to or relating to the negotiations for or the granting of the loan or proposed loan shall be void and if any sum is paid to a money-lender by a borrower or intending borrower on account of any such costs, charges or expenses, that sum shall be recoverable as a debt due to the borrower or intending borrower or in the event of the loan being completed, shall, if not so recovered, be set off against the amount actually lent and that amount shall be deemed to be reduced accordingly ; Provided that it shall not be unlawful for a money-lender to charge the debtor with an amount not exceeding half the amount due on account of stamp duty and registration fee payable in respect of any document evidencing the transaction. Chapter V Duties of Money-lender Transaction to be reduced to writing 24. (1) After the commencement of this Act every contract for the repayment of the loan or for the payment of interest on the loan and for security of the loan shall be evidenced by a memorandum in writing signed by the borrower personally. (2) The memorandum shall be in the prescribed form and shall contain all the terms of the contract and shall in particular show— (a) the date on which the loan was made, * Section number might be 20 and 21.—Editors

273A BILL............MONEY-LENDING (b) the amount of the loan, (c) the nature of the consideration, (d) the interest, (e) the nature of the security taken, and (f) where the loan wholly or partly superseeds the previous loan, the particular loan and the security therefor, if any. Copy of memo to be supplied to debtor 25. A copy of every such memorandum shall be delivered to the borrower within seven days from the date of the contract by the lender. Transaction in contravention of Sec. 23 or 24 void 26. A contract or security in which it is proved that the memorandum was not signed by the borrower before the money was lent or before the security was given as the case may be or that a copy thereof was not sent to the borrower within seven days of the making of the contract as provided *section 24 be inserted of this Act, shall be void. Agreement to pay compound interest void 27. Any contract made after the commencement of this Act for the loan of money by a money-lender shall be void in so far as it provided directly or indirectly for the payment of compound interest or for the rate of interest being increased by reason of any default in the payment of sums due under the contract, and he shall not be entitled to any interest: Provided that provision may be made by any such contract that if default is made in the payment upon the due date, of any sum payable to the money-lender under the contract, whether in respect of principal or interest, the money-lender shall be entitled to charge simple interest on that sum from the date of the default until the sum is paid, at a rate not exceeding the rate payable in respect of the principal apart from any default, and any interest so charged shall not be reckoned for the purpose of this Act as part of the interest charged in respect of the laon. * Section ‘23 or’ be inserted.—Editors

274 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES Chapter VI Method of keeping Accounts Money-lender to give pass-book to debtor 28. Every money-lender shall give to his debtor a passbook provided by Government and shall enter therein every payment made by the debtor or to the debtor and authenticate the same by his signature. Money-lender to supply annually a statement of debtor’s account. 29. Every money-lender shall deliver to hi s debtor and such other persons from whom he is entitled to claim payment of the debt, on or before the 31st January of every year, a statement of his accounts in respect of the debt in such form as may be prescribed by Government, upto the 31st December of the previous year authenticated by his signature. Money-lender not entitled to sue during default 30. A money-lender, who fails to comply with the provision of section 28, shall not, as long as the default continues, be entitled to sue for or recover any sum due under the contract on account either of principal or interest, and interest shall not be chargeable in respect of the period of the default. Penalty for default 31. A money-lender who contravenes the provision of section 28 or 29 shall be liable to a fine not exceeding Rs. 100/-. Accounts to be kept in books obtained from Government 32. Every money-lender shall obtain from Governemnt on payment of such fees as may be prescribed, such books of accounts as may be necessary for him for the purpose of recording his transactions as a money-lender and shall regularly record and maintain accounts of all his transactions relating to the loans made and security for such loan, if any, in such account books, containing such details and in such script and numerals and in such ink as may be prescribed by Government from time to time.

275A BILL............MONEY-LENDING Production of books of account used during the year for authentication. 33. (1) On or before the 31st January in each year every money-lender shall produce before the licensing officer all the books of account used by him in the previous year. (2) The licensing officer shall thereupon sign and date in the case of running accounts the first and last entries on either side of each book and in the case of a ledger the first and last entries of each account in the ledger. (3) The licensing officer shall also enter after the last entry in the running account particulars of the books issued to the money-lender in the previous year but not used by him in that year. Entries in books not in accordance with Sec. 31 and 32*, inadmissible in evidence. 34. Notwithstanding anything contained in the Indian Evidence Act, 1872, no entry in any book, register or record relating to any loan or security therefor shall be admissible as evidence in any suit or proceedings for a money-lender unless it is contained in a book supplied by Government under the provisions of section 32 of this Act and reorded in the manner prescribed by the said section and in the case of an entry which relates to a previous year authenticated as provided by section 33. Chapter VII Suits and Proceedings Jurisdiction of Small Causes Court excluded 35. Notwithstanding anything contained in the Provincial or Presidency Small Causes Court Act, no suit by or against a moneylender in respect of any claim arising out of any moneylending transaction shall be cognizable by a court of Small Causes unless that claim is in respect of a single transaction and such transaction is not directly or indirectly connected with earlier transactions between the parties or persons through whom they claim. * It may be 32 and 33 - Editors.