The PUNJAB REGISTRATION OF MONEY LENDERS ACT, 1938

1938 : Pb. Act IIl.] REGISTRATION OF MONEY-LENDERS |7 THE PUNJAB REGISTRATION OF MONEY- LENDERS’ ACT, 1938. PuniaB AcT No. III oF 1938. [Received the assent of his Excellency the Governor on the 31st August, 1938, and was first published in the Pun- jab Gazette, Extraordinary of the 2nd September, 1938.] 1 2 3 4 Year No. Short title Whether repealed or otherwise affected by legislation S 1938 ..} II | The Punjab Registra- | Amended by the Indian Independence . 1 de i r > s n ’ o A f c t M , on 1 e 9 y 3 8 Len- ( A A ct d s a ) p ta O t r i d o e n r , of 19 B 48 e ng ( a G l . G. a O n . d P 40 u ) n . jab Amended by the Adaptation of Laws « Order, 1950, Amended by the Adaptation of Laws (Third Amendment) Order, 1951. Extenled to the territories Which, immediately before the 1st Noyem- ber, 1956, were comprised in the S State of Patiala and East Punjab N States Uaioa by Punjab Act No. 44 of 19608, 3 . .3 Amended by the Punjab Re-organisa- - tion (Chandigarh) (Adaptation of Laws on State and Concurrent Sub- jects) Order, 1968. WHEREAS it is expedient to register money-lenders and preamble. to regulate their business in the manner hereinafter appear- ing, it is hereby enacted as follows :— b 1. (1) This Act shall be called the Punjab Registra- sport iile, extent 1 tion of Money-lenders’ Act, 1938. and comimence- (2) It shall extend to 5[ Union Territory of Chandigarh], (3) It shall come into forceon such 4date] as the 5[Central Government] may, by notification, direct. 1 For Statement of Objects and Reasons see Punjab Government Gazetter (Extmord?::ary), 1938, page 87 ; for the Select Committee’s report see Punjab Gyvernment Gazette, 1938, Parl V, Pages 124—151, and for the proceedings in Assembly see the Punjab Legislative Assembly Debates, 1938, Volume V, pages 227—257, 978~ 1030, 1031— 1089, 1100— 1170, 1174—1234 and 1292—1324. 2. For Stalemen!( of Qbjects and Rcasons, see Punjab Government Gazette (Extraordinary), 1960, page 1945. . - . o ar 3Substituted for the words ‘“Punjab” by the Punjab Re-organisaticn (Chan garh) (Adaptation of Laws on State and Concurrent Subjects) Oider, 1968. *It came into force on Ist July, 1939,—vide Punjab Government Notification No. 3470-J-39,20108, dated 2nd June, 1939. “Substituted for the words State Government by the Punjab Re-lorxgn!sztian, Chandigarh Adaptation of Laws on State and concurrent subjects Order, 1968. y-LENDERS [193. 8 : py, Act : | § RE G G I I S S T T R R A A T T I I O N OF ONE ' | 2. Inthihiss AcAtc,t , unless there is anything rep u 8nap tin Deflinitions the subject or context— n - Bank ”» f:g;fi%lg a c an o id m p r a c an n y ng y t r?] c r a b r c g ar r nl y i i l n ( g ?S d? o n . any o u t s ?l ; l e ness o ts relating to compan Or the tin ena g ct men i the United Kingdom or ;. img being in force e in ependencie : s therg N - an any of thge Colonies at o e r or D ep Pa rt C State] or i o n f c g i or 1[an()1/ 11:3)3.1';;'n:AIASCtt'1 of Pal'llamen.t 2.[0f 1he I;J:é)d Kin d il] or by Royal Charter or Letters Patey oKr” %)gy (z)my Act of 3[Parliament]. (2) “Collector” means a Collector of the D ismct h other offi i cer no t below the rank of As. girstz:lctICOIIector first grade as may be specla“y empowered by the 4[Central Government] to di. cha};ge the functions of a Collector for ], pur. poses of this Act. ©) “Commissioner” means the Commissioner of the Division in which a money-lender g Tegisterd, ” means a Company registereq Lctm p K a i n n i g es d om fo r o t r h e an t y i me o f b t e h i e n g Co i l n o n f i o j r e c s e o i a r n l ing D t h e e p t e o n Un d i c e t o p e p . q . c S i t e a s t e] t he or r eo i f n co or r po in r at ‘ e [a d n y by P ar a t n A A c t St o a f t e Pa or r li P a a m r e t p; ¢ VI of 1920 Companies to which the Indian Li Companies Act, 1912, applies. means a society regis- 1 of 1912, 1ons of Co-operative *Inserteq by the A, Lo =Substit\.ne g d * fi d aptati s o, of Laws (Third Amendment) Order, 1951. Order, fliess]l ,"d'i a“ Legis: lature” 0 by the Adartatiticcr of 1938: Pb. Act III.] REGISTRATION OF MONEY-LENDERS 19 (8) “Loan” means an advance whether secured or unsecured of money or in kind at interest and shall include any transaction which the court finds to be in substance a loan, but it shall not include— (/) an advance in kind made by a landlord to his tenant for the purposes of husbandry; provid- ed the market value of the return does not ex- ceed the market value of the advance as esti- mated at the time of advance ; (i7) adeposit of money or other property in = Government Post Office Bank, or any other Bank, or with a company, or with a co- operative society or with any employer as security from his employees ; (+) aloan to, or by, or a deposit with any society or association registered under the Societics Registration Act, 1860, or under any other enactment; (7v) a loan advanced by or to the Central or any ![State] Government or by or to any local body under the authority of the Central or any '[State] Government; (v) a loan advanced by a bank, a co-operative society or a company whose accounts are subject to audit by a certificated auditor under the 2Indian Companies Act, 1913; (vi) a loan advanced by a trader to a trader, in the regular course of business, in accordance with trade usage; (vii) an advance made on the basis of a negoti- able instrument as defined in the Negotiable Instruments Act, 1881, other than a promis- sory note. e lgso‘Suhstituted for the word *“Provincial” by the Adaptation of Laws Order, *Reealed and r2vlaced by th: Com-anies Act, 1926 (1 of 1935,) A 50 REGISTRATION OF MONEY-LENDERS [1938. Pp, (9) “ “Money lend lenc er” mea f n a s d va a n ci p n e g r son, . In ' log carryjni a ?'l,lflécsfilfi]"}gscslu;e the lcgalg}'eprc::m:;sefirrllm :Eetmssuccis’st‘)rs-in-intcrest whether by Inheritape, ' o ient or OtherW‘lS . e, Of 'Sl:lc h I‘Crsofl or r f 11 r m; pl'Ov"; assl g \ :Othing in th]S definltlon Sha“ apply to ded tfi“t who is the legal represeng, (a) aispelif;niuheritance the SUCCCSSOI-in-imet;‘e’e o the estate of a_deceased Money.Jgp e:t of gether with all his rights and liabifigrec® to. vided that such person only— HE Y (/) winds up the estate of such Money.Jep, e, (if) realises outstanding loans; (éii) does not renew any existing loan, pop ad. vance any fresh loan ; (b) a bona fide assignment by a money-lender of a single loan to any one other than the wife or husband of such assignor, as the case my be, or any person, who is descended from 3 common grandfather of the assignor (10) “Prescribed” means prescribed by rules made under this Act. (11) “Trader” means a person who in the regular course of business, buys and sells goods or other property, whether movable or immovable and shall include— a wholesale or a retail merchant, a commission agent, a broker, a manufacturer, 2 contractor, a factory owner, but shall . not include a person who sells 07 I , y 5 b OWn agricultural produce or cattle, o O r oo agricultura] producg or cattle for his 0% REGISTRATION OF MONEY-LENDERS [1938 Pb. : Act IIL. 21 3. Notwithstanding anything contained in any other S uits and applica- enactment for the time being in force, a suit by a money- t l i e o n n d s e rs by m o b n a e r y re - d — — lender for the recovery of a loan, or an application by a unless money- money-lender for the execution of a decree relating to a l ed e nde a r n d is l r i e c g e i n s s t e e d r e loan, shall, after the commencement of this Act, be dismis- sed, unless the money-lender— T N P (a) at the time of the institution of the suit or pre- R sentation of the application for execution ; or (b) at the time of decreeing the suit or deciding the application for execution— (i) is registered ; and (i) holds a valid licence, in such form and man- ner as may be prescribed ; or (i) holds a certificate from a Commissioner granted under section 11, specifying the loan in respect of which the suit is institute- ed, or the decree in respect of which the ap- plication for execution is presented ; or (iv) if he is not already a registered and licensed money-lender, satisfies the Court that he has applied to the Collector to be registered and licensed and that such application is pend- ing : provided that in such a case, the suit or application shall not be finally disposed of until the application of the money-lender for registration and grant of licence pending before the Collector is finally disposed of. 4. Every money-lender may apply for registration of Registration of his name at the office of the Collector of the District ; and money-lenders. his name shall be registered on furnishing such particulars as may be prescribed and on payment of a fee of Rs. 5. 5. Every money-lender may apply to the Collector Licensin, of for a licence which shall be granted for such period, in money-lenders. such form, and on such conditions, and on payment of such fees, as may be prescribed. Explanation.—When an application for the renewal of a licence has bzen received from a licensed money- lender before the expiry of his licence, the existing 22 REGISTRATION OF MONEY-LENDERS [1938: Pb. Act Irj, licence shall be decmed to continue in force until orders on the application have bec1 issued. Where licence . A licence may be cancelled by the Collectpr and may be °““°""°"'sha]16not be 1renewed for such period as may be specified by him, if after the commencement of this Act, a money- lender commits an act or is guilty of an omission with reference to which he— (i) has been held by a Court to have contravened the provisions of section 3 of the Punjab Regu-!u lation of Accounts Act, in more than two suits ; (i) has had his suit dismissed, in whole or in part, under section 37 of the Punjab Relief of i Indebtedness Act; I (iii) has had his suit dismissed with a finding that he has made, dishonestly or fraudulently, a material alteration in any document relating to a loan ; (iv) has had his suit dismissed with a finding that it is fraudulent ; (v) has been found by a Court to have charged higher rates of interest than those prescribed under section 5 of the Punjab Relief of Indebt- v edness Act in more than one suit ; 193 (v) has been found guilty by a Court of forgery or cheating in respect of a money transaction : Provided that the Collector shall not cancel a licence until the prescribed period of appeal, revision or review. as the case may be, has expired ; or in case of appeal re- vision or review, the appeal, revision or review has l’)een finally decided. vme; Collestor 7. (1) The Collector may take proceedings suo motu or on the application of any person interested for the can- cellation of a money-lender’s licence : . Provided that no licence shall be cancelled without giving the money-lender a notice in such form as may be prescribed. 1938: Pb. Act III.] REGISTRATION OF MONEY-LENDERS 23 F¥ (2) The Collector may during the period of limita- tion for an appeal, either of his own motion or on the application of a party interested, review his own order, provided no appeal is pending with the Commissioner. 8. The name of a money-lender whose licence has Effect of cancel lation of licence been cancelled under section 6, shall be struck off the re- gister maintained at the office of the Collector for the registration of money-lenders : Provided that a licence shall not be deemed to be cancelled nor the name of the money-lender deemed to be struck off the register during the period an appeal or an application for review or an application under section 11 is pending. 9. Nothing in this Act shall apply to suits or applica- Saving. tions for execution pending— (a) at the time of the commencement of this Act ; or (b) on the date of the cancellation of the licence of the money-lender, if before his current licence is granted or renewed, a Court has not givea any such finding as would render him liable to have his licence cancelled under the provisions of section 6 of this Act. 10. A money-lender may, after the termination. of Further regist- the period for which his licence has been cancelled, apply ration and licens- ing of money- for registration and for the grant of a licence, to the Col- lender after ex- lector who shall, on his furnishing such particulars as may piry of period for which licence be prescribed, register his name on payment of a fee of was cancelled. Rs 5 ; and shall grant him a licence for such period, in such form and subject to such conditions and on payment of such fees, as may be prescribed. 11. (J) An appeal shall lie to the Commissioner Appeals, reviews and certificates. against the order of the Collector under section 6 cancel- ling a licence provided that the appeal shall be instituted within 30 days of the order appealed against, not including the period requisite for obtaining copies of such order. (2) If the money-lender or the appellant is not present at the time of announcement of the original or the appellate order, the order shall be communicated to him in such manner as may be prescribed. [1938: : Pb. Pb. Act 1qy, OF MONY® 34 REGISTRATION LENDERS an appea] issi may, in dismissing the loang specifying ) ghe C;?;n l?élslfi(e);l g.rcertifipatf; bfy him or the ignr a;r;; t(e)ci gfnvlv%ic}}: a suit may be msptu’ged Ior execution decregs in respect of which an application may be presented. an against order 4@ o f A t he mo C n ol e l y e - c l t e o n r d e u r n der wi t s h e o cc u tt t ii oon n a p 6, p ea m l a i y n g within 30 days C of o m t m he i ss C i ol o l n e e c r to r’ f s o r or a der c ert c i a f n i c c e a l te l ing of hi th s e ¢ li n c a e t n u ce r , e a s p p p e l c y i fi t e o d th i e n sub-clause (3). (5) The Commissioner may, either on his own motion, or on the application of a party interested, review h1_s own order at any time within 30 days of the communication of his appellate order to the money-lender concerned. Exemption. 12. The [Central Government] may, by notification, exempt any person or class of persons from the operation of this Act or from any of the provisions thereof. 13. (J) Subject to previous publication the [Central Rule-making power. Government] may make rules, for carrying into effect the provisions of this Act. . (2) In particular and without prejudice to the gene- rality of the foregoing powers, such rules may specify— (@) the place where a money-lender shall apply for registration for obtaining a licence, the district or districts in which a money-lender who operates in more than one district shall be re- quired to register, and the area in which a licence shall be valid; (b) the scale of fees payable for the issue or re- newal of a licence of a2 money-lender; (¢) the form of a licence ; and the conditions under which a licence shall be issued; and (d) the particulars whv ich a mon ey-lender shall supply at the time of being %’egistered- (Chan * d S i ub g ! s r t a i h t ) u te ( d A dap fo t r a t t i h o he n . w or o d f s Law “ s St a o t n e S G t a o t v e er a n nd m en Ct t u ” :\ cm') b ; , etxl;te ls)fifl ji f cbu)k e(-:olrcggl:”] i ‘ s ? a ‘ t l i z o ' n