Last Updated: Wednesday June 04, 2008
(XXIV OF 1960)
[
An Ordinance to amend and
consolidate the law relating to money‑lenders in the province of the
Preamble:
Whereas it is expedient to amend and consolidate the law relating to money‑lenders,
their registration and the regulation of their accounts in the province of the
Now, Therefore, in pursuance of the Presidential Proclamation ref the seventh day of October, 1958 and having received the previous instructions of the President, the Governor of West Pakistan is pleased, in exercise of all powers enabling him in that behalf to make and promulgate the following Ordinance:---
PRELIMINARY
1. Short title and extent: (1) This Ordinance may be called the Punjab Money‑Lenders’ Ordinance, 1960.
(2) It extends
to the whole of the province of the
2. Definitions: In this Ordinance, unless the context otherwise requires, the following expressions shall have the meanings hereby, respectively assigned to them, that is to say:‑‑-
(a) “bank” mean a bank which is a "scheduled bank" as defined in the State Bank of Pakistan Act, 1956, or a banking company registered under the Companies Act, 1 913 (now the Companies’ Ordinance, 1984).
(b) “capital” means the sum of money which a money‑lender invests in the business of money‑lending;
(c) “Collector” includes such orders as may be specially empowered by Government to discharge the functions of a Collector under this Ordinance;
(d) “company” means a company registered under the Companies’ Ordinance, 1984, or any other law relating to Companies;
(e) “Commissioner” includes an Additional Commissioner or any other officer specially empowered by Government to perform the duties of the Commissioner under this Ordinance;
(f) “co‑operative society” means a society registered or deemed to have been registered under the Co‑operative Societies’ Act, 1912, or any other law relating, co‑operative societies;
(g) “Court” includes a Court acting in the exercise of its insolvency jurisdiction;
(h) “debtor” means a person to whom a loan is advanced;
(i) “effective licence” means a licence which has not been suspended or cancelled or which has not expired;
(j) “Government”
means the Provincial Government of the
(k) “interest” includes the return to be made over and above what was actually lent, whether the same is charged or sought to be recovered specifically by way of interest or otherwise, but does not include any sum lawfully charged for or on account of costs or expenses;
(l) “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 shall not include,‑‑-
(i) an advance in kind made by a landlord to his tenant for the purposes of husbandry; provided the market value of the return does not exceed the market value of the advance as estimated at the time of advance;
(ii) a deposit of money or, other property in a Post Office Saving Bank, or any other bank or with a company, or with a cooperative society or with any employer as security from his employees;
(iii) a loan to, or by, or a deposit with, any society or association registered under the Societies Registration Act, 1860, or under any other enactment relating to religious or charitable societies;
(iv) a loan advanced by or to the Federal or any Provincial Government or by or to any local authority or other body corporate set up under the authority of the Federal or any Provincial Government;
(v) a loan advanced by a bank, a co‑operative society or a company whose accounts are subject to audit by a certified auditor under the 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 negotiable instrument as defined in the Negotiable Instrument Act, 1881, other than a promissory note;
(m) “money‑lender” means a person carrying on the business of advancing loans;
(n) "prescribed" means prescribed by rules made under this Ordinance;
(o) “principal” in relation to a loan means the amount actually lent to the debtor;
(p) “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 retail merchant,
a commission agent,
a broker,
a manufacturer,
a contractor, and
a factory owner,
but shall not include a person who sells only his own agricultural produce or cattle, or buys agricultural produce or cattle for his own use.
CHAPTER II
REGISTRATION AND LICENSING OF MONEY‑LENDERS
3. Licensing of money‑lenders: (1) No money‑lender shall, after a date to be notified in this behalf by Government carry on or continue to carry on the business of money‑lending unless he holds an effective licence under this Ordinance.
(2) A money‑lender may apply to the Collector for a licence which may be granted for such period, in such form and on such conditions, and on payment of such fees, as may be prescribed.
(3) No money‑lender shall carry on the business of money‑lending except in accordance with the terms and conditions of such licence.
(4) An application for a licence under this Section or for the renewal of a licence shall be in such form and shall contain such particulars as may be prescribed.
(5) When an application for the renewal of a licence has been received from a money‑lender before the expiry of the period of this licence, the existing licence shall be deemed to be effective until orders on the application have been made.
4. Register of Licences: The Collector shall maintain a register of money‑lenders’ licensed under the last preceding Section in such form as may be prescribed.
Sections 5, 6, and 7 later
8. Appeals and powers of Commissioners: (1) An appeal shall lie to the Commissioner against an order of the Collector passed under Section 5 or an order refusing to grant a certificate under Section 7.
(2) Every such appeal shall be filed within thirty days of the date of the order appealed against.
(3) The provisions of the Limitation Act, 1908, applicable to appeals, shall, so far as may be, apply to appeals preferred under this section, and for the purposes of the said provisions the Collector shall be deemed to be a Court.
(4) In an appeal from an order of the Collector under sub‑section (3) of Section 4, the Commissioner may exercise the powers conferred on the Collector by sub‑sections (1) and (2) of the said section.
(5) In every appeal filed under this section, an opportunity shall be given to the appellant of being heard against the order appealed from.
9. Licensing of money‑lender after expiry of period for which licence was cancelled: A money‑lender may, after the termination of the period for which his licence has been cancelled or the expiry of the period for which he has been disqualified under Section 11, apply to the Collector under Section 3 for the grant of a licence;
Provided that full particulars of every disqualification incurred by the applicant and every cancellation or suspension of a licence held by him under this Ordinance are specified in the application.
10. Effect of money lender not being licensed: (1) Notwithstanding anything contained in any other enactment, a suit by a money‑lender for recovery of a loan or an application by a money‑lender for the execution of a decree relating to a loan shall be dismissed unless at the time of the institution of the suit or at the time of presentation of the application for execution of the decree, as the case may be, the money-lender,--
(a) holds an effective licence granted under Section 3; or
(b) holds a certificate granted under Section 7 specifying
the loan in respect of which the suit is instituted or the decree in respect of
which the application for execution is presented.
11. Suspension and cancellation of licence by Court: (1) A Court convicting a money‑lender of an offence under this Ordinance or trying a suit to which he is a party may, if satisfied that such money‑lender has committed such contravention of the provisions of this Ordinance or the rules made thereunder as, in its opinion, makes him unfit to carry on the business of money‑lending,‑‑-
(a) order that the licence held by such money‑lender be suspended for such period as the Court may think fit, or cancelled;
(b) declare any such money‑lender, or if any such money‑lender is a firm or a company or a society, any person responsible for the management of the business of money‑lending carried on by such firm, company or society; to be disqualified for holding a licence for such period as the Court may think fit;
(c) cause the particulars of the conviction and of any order made by the Court under this section to be endorsed on the licence held by the money‑lender convicted or by any person affected by the order, and shall cause copies of its order to be sent to the Collector by whom the licence was granted for the purpose of entering, such particulars in the register of money‑lenders maintained under Section 4.
(2) Any person aggrieved by an order of the Court under this section may appeal against such order to the Court to which an appeal ordinarily lies from an appeal-able decree or sentence if the Court passing the order or where the Court passing the order is a Civil Court from whose decree no appeal ordinarily lies, to the principal Court having original civil jurisdiction within the local limits of whose jurisdiction with Civil Court is situate.
(3) Every such appeal shall be filed within thirty days of the order appealed against and the provisions of the Limitation Act, 1908, applicable to appeals shall, so far as may be, apply to appeals preferred under this section.
(4) The Court which passes an order under this section or the Court of appeal may, if it thinks fit, pending the appeal, stay the operation of the order.
(5) Any licence required by a Court for endorsement in accordance with sub‑section (1) shall be produced in such manner and within such time as the Court may direct, by the person by whom it is held.
(6) Powers conferred on a Court under this section may be exercised by any Court in appeal and in revision.
(7) Where the Court of appeal or revision sets aside or varies an order passed under this section, it shall order that any endorsement made in pursuance thereof upon a licence held by a money‑lender shall be cancelled or modified, as the case may be.
12. Bar of doing business of money‑lending and to compensation for suspension or cancellation of a licence: (1) Any person whose licence has been cancelled or suspended in accordance with the provisions of this Ordinance shall, during the period for which such order of cancellation has 0ect or during the period of suspension, as the case may be, be deemed to be disqualified for holding a licence.
(2) No person whose licence has been suspended or cancelled under the provisions of this Ordinance shall be entitled to any compensation for the suspension or cancellation of his licence, or to the refund of any licence fee paid or deposit made in respect thereof.
CHAPTER III
REGULATION OF ACCOUNTS
13. Duty of money‑lender to keep accounts: Every money‑lender shall,---
(a) deliver to the debtor, at the time--a loan is advanced, a statement showing in clear and distinct terms the amount and date of the loan, the date of its maturity, the nature of the security, if any, for the loan, the name and address of the debtor and the rate of interest to be charged;
(b) give to the debtor a plain and complete receipt for every payment made on account of any loan at the time of such payment and permit him or his agent to endorse such payment on the document if any, evidencing the loan;
(c) upon payment of a loan in full, mark indelibly with words indicating payment or cancellation every paper signed by the debtor pertaining to the loan and discharge any mortgage, restore any pledge, return any note, and cancel any assignment given by the debtor as security for the loan.
14. Duty of money‑lender to keep and furnish accounts: (1) Every money‑lender shall,‑‑-
(a) regularly record and maintain an account for each debtor separately, of all transactions relating to any loan advanced to that debtor; furnish each debtor every six months with a legible statement of accounts signed by the money‑lender or his agent of any balance or amount that may be outstanding against such debtor on the 30th day of June or the 31st day of December in each year, and such statement of accounts shall include all transactions relating to the loan entered into during the six months to which the statement relates, and shall be sent on or before the 31st day of August in the case of any balance outstanding on the 30th day of June and on or before the 28th day of February in the case of any balance outstanding on the 31st day of December.
(2) The accounts shall be so kept that items due by way of interest shall be shown as separate and distinct from the principal sum, and separate totals of principal and interest shall be maintained.
(3) Entries in accounts maintained under clause (a) of sub‑section (1) shall be deemed to be regularly kept in the course of business for the purpose of Section 34 of the Evidence Act, 1872 (now Art, 48 of the Qanun‑e‑Shahadat, 1984) and copies of such entries certified such manner as may be prescribed, shall be admissible in evidence for any purpose in the same manner, and to the same extent as the original entries.
Explanation: A person to whom a statement of accounts has been sent under sub‑section (1) shall not be bound to knowledge or deny its correctness and his failure to protest shall not, by itself, be deemed to be an admission of correctness of the accounts.
(4) Government may prescribe the form and numerals in which the accounts required by this section and the last preceding section shall be maintained and furnished. Government may also prescribe, for the whole or any part of the province, a panel of scripts and languages, any of which may be employed by the money‑lender at his option in keeping and furnishing the accounts:---
Provided that if the debtor in writing demands that the accounts be furnished in any other script included in the panel it shall be supplied to him in that script at his cost according to the scale prescribed.
(5) The provisions of this section and of clauses (b) and (c) of Section 13 shall apply to every person to whom a loan has, since it was advanced, passed by way of inheritance, assignment or otherwise, in the same manner as to the money‑lender, advancing the loan:---
Provided that if the person to whom the loan has passed be a minor or a widow, such minor or a widow shall not be bound to maintain or furnish the accounts prescribed by this Section.
15. Penalty for non‑compliance with the provisions of Section 14: Notwithstanding anything contained in any other enactment,‑‑-
(a) in any suit or proceeding relating to a loan the Court shall, before deciding the claim on the merits, frame and decide the issue, whether the money‑lender has complied with the provisions of clauses (a) and (b) of sub‑section (1) of Section 14;
(b) if the Court finds that the provisions of clause (a) of Sub‑section (1) of Section 14 have not been complied with by the money‑lender the Court shall, if the money‑lender’s claim is established in whole or in part, disallow the whole or such portion of the interest found due, as may seem reasonable to the Court in the circumstances of the case and shall disallow costs;
(c) if the Court finds that the provisions of clause (b) of subsection (1) of Section 14 have not been complied with by the money‑lender, the Court shall in computing the amount of interest due upon the loan exclude every period for which the money‑lender omitted duly to furnish the accounts as required by clause (b) of sub‑section (1) of Section 14.
Explanation: A person who has kept his accounts and sent his six monthly statements of accounts in the form and manner prescribed in Subsection (4) of Section 14 shall be held to have complied with the provisions of that sub-section, in spite of errors and omissions, if the Court finds that the errors and omissions, have been accidental and not material and that the accounts have been kept in good faith with the intention of complying with the provisions of that sub‑section.
CHAPTER IV
MISCELLANEOUS
16. Computation of interest on loans in kind: In the case of loans in kind, the money value of the commodity at the time when, and the locality where the loan was advanced shall, for the purposes of this Ordinance, be deemed to be the principal of the loan, and in determining the amount which gray, subject to the provisions of this Ordinance, be decreed in respect of a loan repayable in kind, the Court shall take into consideration the market value of the commodity in the said locality at the date or dates of repayment.
17. Prohibition of charge for expenses of loan by moneylender: Any agreement between a money‑lender and a debtor or an intending debtor for the payment by the debtor or intending debtor to the money‑lender of any sum on account of costs, charges or expenses incidental or relating to the negotiations for or the granting of, the loan shall be illegal and if any sum is paid to a money‑lender by the debtor or intending debtor for, or account of, any such costs, charges or expenses that sum shall be coverable as a debt due to the debtor or intending debtor, or in the event of loan being completed shall, if not so recovered, be set off against the amount actually lent and the amount shall be deemed to be reduced accordingly. Provided that nothing in this section shall debate a money‑lender from recovering costs of investigating title, of stamp duty and, registration of documents and other necessary and incidental expenses in cases where the contract includes a stipulation that property is to be given as security or by way of mortgage, or the costs of stamp duty and registration of documents in the case of unsecured loans, if both parties have agreed to such expenditure and reimbursement thereof, or where such costs, charges or expenses are leviable under the provisions of the Transfer of Property Act, 1882, or any other law for the time being in force.
CHAPTER V
PENALTIES
18. Penalty for false claim of principal sum: Where, in a suit for the recovery of a loan, the Court is satisfied that the entry relating to the loan has been made by a money‑lender or at his instance in any document showing the amount of the sum advanced to be in excess of that actually advanced plus permissible expenses incurred, the Court shall disallow the whole claim with costs, unless the money‑lender satisfies the Court that the entry was accidental or was the result of a bona fide mistake.
19. Punishment for money‑lending without registration
or licence: Whoever carries on the business
of money‑lending without being in possession of an effective licence
under Section 3 shall be punished with imprisonment for a term which may extend
to six months, or with fine or with both.
20. Punishment for charging high rates of interest: Any moneylender who charges compound interest, or
simple interest at a rate higher than seven and a half per centum per annum or
two per centum above the bank rate, whichever is higher, in the case of a
secured loan and twelve and a half per centum per annum in the case of an
unsecured loan, shall be punished with imprisonment for a term which may extend
to six months or with fine, or with both.
21. Penalty for use of documents containing false entries: (1) Whoever, being a party to a suit for the recovery of a loan, dishonestly uses in such suit any document in which, he is aware, that there is any statement or entry relating to such loan which is false in any material particulars shall be punished with imprisonment which may extend to three months, or with fine not exceeding one thousand rupees, or with both.
(2) If the Court is satisfied, after such preliminary enquiry, as it thinks fit, that there is ground for enquiring into an offence under sub‑section (1), the Court may record a finding to that effect and prefer a complaint of the offence in writing to a magistrate of the first class having jurisdiction, and such magistrate shall deal with such complaint in the manner provided in the Code of Criminal Procedure, 1898.
22. Entry of sum in documents greater than the loan advanced
to be an offence: (1) No money‑lender
shall take from a debtor or intending debtor any note promise to pay, bond or
security which states an amount greater than the actual amount of the loan, nor
shall he take from any debtor or intending debtor any instrument in which the
principal amount is left blank for being filed in at a later date.
(2) Whoever intentionally contravenes the provisions of sub‑section (1) shall be punished with fine which may extend to one thousand rupees.
(3) Notwithstanding anything contained in any law, every note, promise to pay, bond, security or document referred to in sub‑section (1) shall be void and unenforceable.
23. Penalty for molestation[1] of debtors: Whoever molests, or abets the molestation of a debtor for the purpose of recovering or attempting to recover a loan shall be punished with imprisonment which may extend to three months, or with fine not exceeding five hundred rupees, or with both.
Explanation: For the purpose of this section, a person who, with intent to cause another to abstain from doing or to do any act which he has a right to do or to abstain from doing:‑‑
(a) obstructs or uses violence to or intimidates such other person; or
(b) persistently follows such other person from place to place or interferes with any property owned or used by him or deprives him of or hinders him in the use thereof, shall be deemed to molest such other person.
24. Punishment for default in producing licence for endorsement: Whoever, without reasonable cause, makes default in producing the licence required to be produced under Section 11 for endorsement shall be punished with fine not exceeding twenty‑five rupees for each day for the period during which the default continues.
25. Punishment for applying for or obtaining a licence during the pendency of disqualification: Whoever, being disqualified for holding a licence applies for or obtains a licence during the pendency of such disqualification without disclosing the fact thereof, shall be punished with fine which may extend to five hundred rupees.
26. Penalty for obliterating[2] endorsement on licence: Whoever obliterates or causes to be obliterated or attempts to obliterate an endorsement entered on a licence under this Ordinance or abets such obliteration or attempt shall be punished with imprisonment which may extend to six months or with fine which may extend to five hundred rupees, or with both.
27. General provisions for punishment of offences: Whoever intentionally makes default in complying with or intentionally acts in contravention of any of the provisions of this Ordinance shall, if no specific penalty has been provided in this Ordinance, be punished with fine which may extend to five hundred rupees.
28. Cognizance: Offences under Sections 19 and 23 shall be cognizable within the meaning of clause (t) of sub‑section (1) of Section 4 of the Code of Criminal Procedure, 1898.
29. Rules: (1) Government may make rules for carrying out the purposes of this Ordinance.
(2) In particular and without prejudice to the generality of the foregoing provisions, such rules may provide for all or any following matters:‑‑-
(a) the form of the application for a licence;
(b) the form of a licence and the conditions subject to which a licence shall be issued or renewed;
(c) the scale of fees for the issue or renewal of a licence;
(d) the place where a money‑lender shall apply for a licence;
(e) the form in which a register of money‑lenders is to Section 4; the procedure before the Collector and the Commissioner in proceedings under Sections 5 and 8;
(g) the panel of scripts and languages from which money‑lender in a particular area may select one at his option under sub‑section (4) of Section 14;
(h) the form and the numerals to be used in the account kept and furnished by a money‑lender;
(i) the scale of costs to be paid by such debtors as may demand that the six‑monthly accounts should be furnished in a particular script.
(3) Rules made under this section shall be subject to the conditions of previous publication.
30. Repeal: The enactments specified in the Schedule are repealed to the extent specified in the fourth column thereof.
SCHEDULE
Enactments Repealed
(Section 30)
|
Year |
No. |
Short title |
Extent of repeal |
|
1 |
2 |
3 |
4 |
|
1930 1935 1938 1938 1944 1934 1939 |
I V III III XIV VII IV |
The The The The Punjab
Registration of Money‑lenders Act as applicable to the former The Sindh Money‑lenders Act. The The |
The whole. The whole. The whole. The whole. The whole. Sections 37 and 38 Section 4. |
[1]
Annoyance,
abuse, harassment; sexual harassment.
[2]
Erase;
destroy.
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