GUJARAT MONEY-LENDERS ACT, 2011
(First published, after having received the assent of the Governor, in the "Gujarat Government Gazette", on the 8th April, 2011).
An Act to regulate the transaction of money-lending in the State of Gujarat.
It is hereby enacted in the Sixty-second Year of the Republic of India as follows:-
(1) This Act may be called the Gujarat Money-Lenders Act, 2011.
(2) It extends to the whole of the State of Gujarat.
(3) It shall come into force on such date as the State Government may, by notification in the Official Gazette, appoint.
In this Act, unless the context otherwise requires, -
(1) "appointed day" means the date on which this Act comes into force;
(2) "bank" means -
(i) a banking company or a co-operative bank to which the Banking Regulations Act, 1949, (10 of 1949) applies;
(ii) the State Bank of India constituted under the State Bank of India Act, 1955, (23 of 1955);
(iii) a Subsidiary Bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959, (38 of 1959.);
(iv) a corresponding new' bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, (5 of 1970) or the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, (40 of 1980); and
(v) a regional rural bank established under section 3 of the Regional Rural Banks Act, 1976, (21 of 1976);
(3) "b
(1) For earning out the purposes of this Act, the State Government shall appoint -
(i) an officer to be called the Registrar General of Money-Lenders, and to assist him, may appoint Additional Registrar General of Money-Lenders and Joint Registrar General of Money-Lenders for the whole of the State of Gujarat;
(ii) such number of Registrars of Money-Lenders, Assistant Registrars of Money-Lenders and other officers and persons with such designations as the State Government thinks necessary.
(2) The State Government may, by notification in the Official Gazette, specify the areas of his jurisdiction within which the officer appointed under sub-section (1) shall exercise such powers and perform such duties as may be conferred or imposed upon them by or under this Act.
(3) The superintendence and control for the proper execution of the provisions of this Act and the rules made thereund
Every Registrar shall maintain a register of Money-Lenders in the prescribed form, to whom registrations have been granted for carrying on the business of money-lending in the area within his jurisdiction.
Section 4 of the Gujarat Money-Lenders Act, 2011, primarily deals with the prohibition of carrying on money-lending business without proper registration and the penalties associated with such unlawful conduct. This section forms the backbone of the regulatory framework aimed at controlling illegal money-lending activities and protecting debtors from exploitation.
Section 4 mandates that no person shall carry on the business of money-lending unless he is duly registered under the Act. It prescribes penalties, including imprisonment and fines, for contravention of this requirement. The section also specifies the consequences of operating without registration, including the disqualification from recovery of debts and the imposition of penalties for misconduct such as molestation or illegal collection.
Section 4 of the Gujarat Money-Lenders Act, 2011, enforces strict regulation against unregistered money-lenders by making registration mandatory and prescribing penalties for violations. It aims to curb illegal lending practices, protect debtors, and ensure that only duly registered and compliant persons operate within the legal framework. Non-compliance results in criminal sanctions, disqualification from recovery, and potential invalidation of debts, thereby reinforcing the welfare and regulatory objectives of the Act.
Note: The analysis is based on the legal provisions and judicial interpretations available in the sources, emphasizing the broad scope and strict enforcement mechanism of Section 4.
(1) No Money-Lender shall commence or carry on the business of money-lending except in the area for which he has been granted a registration and except in accordance with the terms and conditions of such registration.
(2) Non-banking finance companies registered under the provisions of the Reserve Bank of India Act, 1934, (2 of 1934) with the Reserve Bank of India shall be deemed to have been registered for the purposes of this Act and they shall intimate to the concerned Registrar about their such registration with the Reserve Bank of India in the prescribed proforma.
Section 5 of the Gujarat Money-Lenders Act, 2011, establishes the fundamental requirement for registration of money-lenders, aiming to regulate and control money-lending activities within Gujarat. It seeks to prevent unregulated lending practices and ensure lawful conduct by licensed entities.
Section 5 mandates that no person shall carry on the business of money-lending without obtaining a valid registration from the competent authority. It emphasizes that only registered money-lenders are authorized to conduct such activities legally within the state.
Note: The references are based on the provided sources, emphasizing the legal framework and judicial interpretations related to Section 5 of the Gujarat Money-Lenders Act, 2011.
(1) A person who intends to commence or to carry on the business of money-lending in any area may make an application in writing in the prescribed form for the grant of registration to the Registrar having jurisdiction.
(2) An application under sub-section (1) shall contain the following particulars, namely :-
(a) if the application is by or on behalf of -
(i) an individual, the name and address of such individual;
(ii) a Hindu Undivided Family, the name and addresses of the manager and the adult co-parceners of such family;
(iii) a company, the name and addresses of the directors, manager or principal officer managing it;
(iv) an unincorporated body of individuals, the names and addresses of such individuals; and if such body is a firm, the names and addresses of all its partners;
(b) the name in which the applican
(1) On receipt of an application made under section 6, the Registrar shall after making such inquiry as may be necessary and on payment of registration fees as may be prescribed by the State Government, grant the certificate of registration in such form and subject to such conditions as may be imposed, and enter the name of such applicant in the register maintained under section 4, or may refuse to grant registration after recording the reasons for the same.
(2) The registration granted under sub-section (1) shall specify the area for which such registration is granted and the place at which the Money-Lender intends to carry on his business in such area.
(3) If the Money-Lender is granted registration in respect of more than one place of business in the area within the jurisdiction of the Registrar, the registration shall specify the principal place as well as all other places of his business and also the names of persons r
Subject to the provisions of this Act, -
(a) a registration granted under section 7 shall be valid for a period of five years from the date on which it is granted;
(b) a registration validly in force on the appointed day shall be valid till the next 31st day of March of the year in which this Act comes into force.
(1) On the expiry of the period of validity of a registration under section 8, the registration shall be liable to be renewed on an application for renewal made, in such form and with such fees and within such period as may be prescribed, before the expiry of the validity of the registration :
Provided that the Registrar may, in any case in which he is satisfied that the applicant could not make an application for renewal of a registration within the prescribed period for reasons beyond his control, he may, for reasons to be recorded in writing, condone such delay; and may renew the registration on payment of such penalty as may be prescribed by the State Government, in addition to the renewal fee.
(2) The provisions of section 6 shall, so far as may be, apply to an application for renewal of a registration as if it were an application for grant of a registration.
(3) Where an application for renewal o
(1) The grant or renewal of registration shall not be refused except on any of the following grounds :-
(a) that the applicant or any person responsible or proposed to be responsible for the management of his business as a Money-Lender is disqualified under this Act;
(b) that the applicant has not complied with the provisions of this Act or the rules made thereunder in respect of an application for the grant or renewal of registration;
(c) that the applicant has made wilful default in complying with, or knowingly acted in contravention of any provision of this Act;
(d) that satisfactory evidence has been produced that the applicant or any person responsible for the management of his business of money-lending has-
(i) knowingly participated in or connived at any fraud or dishonesty in the conduct of or in connection with, the business of money-lending, or
<When a certificate of registration is lost, mutilated, destroyed, tom or otherwise defaced, a duplicate certificate of registration may be granted to the Money-Lender on an application made to the Registrar along with such fees as may be prescribed by the State Government.
The Registrar shall, by an order, provide for the periodical inspection by such officers appointed under this Act for the purposes of sections 18 and 19.
(1) Where a complaint has been filed in a court against a Money-Lender for contravention of any of the provisions of this Act or the rules made thereunder or any inquiry is pending under sub-section (2) of section 14 or under sub-section (1) of section 15 against such Money-Lender, the Registrar may suspend the registration of such Money-Lender until the case is decided by the court or, as the case may be, final order in such inquiry is passed.
(2) An appeal shall lie from the order of the Registrar suspending registration under sub-section (1) to the Registrar General, whose decision shall be final.
(1) Any person may file an application to the Registrar General for the cancellation of registration issued to a Money-Lender on the ground that such Money-Lender has been guilty of any act or conduct for which the Registrar may under section 10 refuse the grant of registration. At the time of filing such application, the person shall deposit such amount not exceeding rupees five hundred as the Registrar General may direct.
(2) On receipt of such application alongwith deposit, the Registrar General shall hold such inquiry as he deems fit and if he is satisfied that the Money-Lender has been guilty of such act or conduct, he may direct the Registrar to cancel the registration of such Money-Lender and thereupon the Registrar shall, by an order in writing, cancel such registration :
Provided that no such direction shall be issued without giving to such Money-Lender a reasonable opportunity of being heard.
(1) Notwithstanding anything contained in section 14, if the Registrar has reason to believe with respect to any Money-Lender holding registration for the area within his jurisdiction that such Money-Lender has been guilty of any act or conduct for which the Registrar might under section 10 have refused the grant or renewal of the registration and which act or conduct was not brought to the notice at the time of grant or renewal of such registration, or that such Money-Lender has contravened any of the provisions of this Act after the grant or renewal of such registration and if in the opinion of the Registrar such contravention makes such Money-Lender unfit for carrying on the business of money-lending, the Registrar may, after holding such inquiry as he deems fit and after giving to such Money-Lender a reasonable opportunity of being heard, by an order in writing, cancel such registration.
(2) A Money-Lender whose registration has been cancell
Where any registration is suspended or cancelled under this Act, no person shall be entitled to any compensation or refund of any fees paid under this Act.
(1) A Money-Lender whose registration has been suspended or cancelled in accordance with the provisions of this Act or any corresponding law' in force in any other State shall, during the period of such suspension or cancellation, as the case may be, disqualified from holding any registration in the State of Gujarat and shall forthwith cease to carry on business of money-lending in the State of Gujarat.
(2) No Money-Lender shall lend any money to a member of the Scheduled Tribes residing in Scheduled Areas of the State as referred to in clause (1) of article 244 of the Constitution of India, without previous sanction of the village panchayat of that village.
The Gujarat Money-Lenders Act, 2011, aims to regulate the money-lending business in the state of Gujarat. It establishes a framework for the registration of money-lenders, the conduct of their business, and the penalties for non-compliance. Section 17 specifically addresses the consequences of suspension or cancellation of a money-lender's registration.
Section 17 prohibits a money-lender from carrying on their business during the period of suspension or cancellation of their registration. This section is crucial for maintaining the integrity of the money-lending industry and protecting borrowers from unregistered lenders.
The scope of Section 17 is limited to the operational status of money-lenders in Gujarat. It ensures that only those who are duly registered can conduct business, thereby safeguarding the interests of borrowers and maintaining regulatory oversight.
While the specific penalties for violating Section 17 are not detailed within the section itself, it is implied that engaging in money-lending activities without valid registration could lead to legal repercussions, including fines or imprisonment as outlined in other sections of the Act.
The Registrar General, Registrar, Assistant Registrar and any officer authorized under section 19 shall have and exercise the same powers for the purpose of making inquiries under this Act as are vested in Courts under the Code of Civil Procedure, 1908, (V of 1908) in respect of the following matters, namely:-
(a) enforcing the attendance of any person as a witness and examining him on an oath;
(b) compelling the production of documents and material objects;
(c) issuing commissions for the examination of witnesses; and
(d) proof of facts by affidavits.
(1) For the purpose of verification whether the business of money-lending is carried on in accordance with the provisions of this Act or not, the Registrar General, Registrar or any other officer authorized by the Registrar General in this behalf may require any Money-Lender or any person in respect of whom the Registrar General, Registrar, or the officer so authorized has reason to believe that he is earning on the business of money-lending in the State, to produce any record or document in his possession which in his opinion is relevant for the purpose and thereupon such Money-Lender or person shall produce such record or document.
(2) The Registrar General, Registrar or any officer authorized under sub-section (1) may enter and search without warrant any premises where he has reason to believe that an offence under this Act has been or is being or is about to be committed and may seize any record or document found therein or from any person t
(1) If, upon the inspection of records and documents made under section 19, the inspecting officer is satisfied that the Money-Lender is in possession of property' pledged to him by a debtor as security for the loan advanced by the Money-Lender without a valid registration, the inspecting officer shall require the Money-Lender to deliver forthwith the possession of such property to him.
(2) Upon the property being delivered to him, the inspecting officer, if he is not the Registrar, shall entrust it to the Registrar and the Registrar (when he is also the inspecting officer) shall keep it in his custody for being disposed of as hereinafter provided.
(3) On delivery of the property under sub-section (1) or sub-section (2), the Registrar shall, after due verification and identity thereof, return it to the debtor who has pledged it or, where the debtor is dead, to his legal heir.
(4) If the debtor or his l
(1) Every Money-Lender shall keep and maintain proper accounts and a cash book, ledger, register of securities, register of debtors and such other books of accounts in such form and in such manner as may be prescribed. The cash book, the ledger and the register of securities shall contain an up-to-date and true accounts of all transactions, particulars of a pawn, pledge of security and where it is kept.
(2) Every Money-Lender shall,-
(a) deliver or cause to be delivered to the debtor on the same day on which a loan is advanced -
(i) a statement in the prescribed form containing an up-to-date and true account of the transaction with the debtor, the amount (both in words and figures) and the date of the loan, the date of its maturity, the nature of security, if any, for the loan, the rate of interest charged and the names and full addresses of the debtor and the Money-Lender and such other particulars as
(1) Every Money-Lender shall deliver or cause to be delivered every year to each of his debtors within thirty days after the expiry of the year, a legible statement in the prescribed form of such debtor's accounts and of any amount that may be outstanding against such debtor. The statement shall contain the following particulars, namely:-
(i) the principal amount, the interest and the expenses due to the Money-Lender at the beginning of the year,
(ii) the total amount of loans advanced during the year;
(iii) the total amount of repayment received during the year;
(iv) the principal amount and interest due at the end of the year; and
(v) particulars of location of article as a pawn, pledge or security where it is kept.
(2) The statement to be delivered under sub-section (1) shall be signed by the Money-Lender or his agent, and shall be in
(1) The accounts of every Money-Lender shall be audited at least once in every year by a person who is a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949,(38 of 1949.) and the audit report shall be submitted to the Registrar within such period as may be prescribed.
(2) If the audit report under sub-section (1) discloses any irregularity or any contravention or non-compliance of the provisions of this Act or the rules made thereunder, or of any of the conditions of the registration, the Registrar to whom such audit report is submitted, may without prejudice to any other action that may be taken under any other provision of this Act, by order in writing direct the Money-Lender to take such action as may be specified in the order within the time mentioned therein to remedy the irregularity, or to take such steps necessary to comply with the provisions of this Act or the rules made thereunder or of the conditions of the
A debtor to whom any statement or pass book has been furnished under section 21 or 22 shall not be bound to acknowledge the correctness of the particulars mentioned therein and his failure to do so shall not by itself, be deemed to be an admission of the correctness of any of such particulars.
Subject to the provisions of sections 176 to 179 of Chapter IX of the Contract Act, 1872,(9 of 1872) or anything contained in any law for the time being in force, no Money-Lender shall dispose off any article taken from a debtor as a pawn, pledge or security for the loan advanced to him, before a period of two years from the date stipulated for final repayment of the loan.
(1) In every suit to which this Act applies filed by a Money-Lender after the appointed day or in every such suit pending before any court on the appointed day, the court shall consider and decide the point whether such Money-Lender held a valid registration or not at the time when the loan to which the suit relates was advanced and if the Court finds that such Money-Lender did not hold valid registration at that time, it shall dismiss the suit forthwith.
(2) Nothing contained in sub-section (1) shall affect the powers of a Court of Wards, or an official assignee, a receiver, or an administrator or a Court under the provisions of the Presidency Towns Insolvency Act, 1909,(III of 1909) or the Provincial Insolvency Act, 1920,(V of 1920) or any other law in force corresponding to that Act, or of a liquidator under the Companies Act, 1956,(1 of 1956) to realise the property' of a Money-Lender.
(1) In any suit to which this Act applies-
(a) a Court shall, before deciding the claim on merits, frame and decide the issue whether the Money-Lender has complied with the provisions of sections 21 and 22;
(b) if the Court finds that the provisions of section 21 or section 22 have not been complied with by the Money-Lender, it may, if the plaintiffs claim is established, in whole or in part, disallow' the whole or any portion of the interest found due, as may seem reasonable to it in the circumstances of the case and may disallow cost to the Money-Lender.
Explanation. - A Money-Lender who has given the receipt or furnished a statement of accounts or a pass book in the prescribed form and manner, shall be deemed to have complied with the provisions of section 21 or section 22, as the case may be, in spite of any errors and omissions, if the Court finds that such errors and omissions are not material or
Notwithstanding anything contained in any agreement or any law for the time being in force, no court shall, in respect of any loan whether advanced before or after the appointed day, decree, on account of interest, a sum greater than the principal of the loan due on the date of the decree.
The court may, at any time on the application of the judgment-debtor, after notice to the decree-holder, direct that the amount of any decree passed against him, whether before or after the appointed day, in respect of a loan, shall be paid in such number of installments and subject to such conditions, and payable on such dates, as, having regard to the circumstances of the judgment-debtor and the amount of the decree, it considers fit.
(1) Notwithstanding anything contained in any law for the time being in force, the court shall, in any suit to which this Act applies, whether heard ex-prate or otherwise -
(a) reopen any transaction, or any account already taken between the parties;
(b) take an account between the parties;
(c) reduce the amount charged to the debtor in respect of any excessive interest;
(d) if on taking accounts, it is found that the Money-Lender has received more than what is due to him, pass a decree in favour of the debtor in respect of such amount:
Provided that in the exercise of these powers, the court shall not -
(i) reopen any adjustment or agreement purporting to close previous dealings and to create new obligations which have been entrusted into by the parties or any person through whom they claim at a date more than six years from the date of
(1) Any debtor may make an application in prescribed form at any time to the Court, whether the loan has or has not become payable, for taking accounts and for declaring the amount due to the Money-Lender.
(2) On receipt of such application, the Court shall cause a notice of the application to be given to the Money-Lender.
(3) On the date fixed for the hearing of the application or on such date to which the hearing may be adjourned from time to time, the Court shall make an inquiry and shall, after taking an account of the transactions between the parties, pass an order declaring the amount, if any, still payable by the debtor to the Money-Lender in respect of the principal and interest, if any. In taking accounts under this section, the Court shall, so far as may be, have regard to the provisions of sections 21 to 30 and sections 33 to 37.
(1) At any time, the debtor may tender to a Money-Lender any sum of money due from him in respect of a loan by way of principal or interest or both.
(2) If a Money-Lender refuses to accept any sum so tendered, the debtor may deposit the said sum in the Court which has jurisdiction to try the suit for the recovery of such sum, to the account of the Money-Lender.
(3) The Court shall thereupon cause written notice of the deposit to be served on the Money-Lender, and the Money-Lender may, on presenting a petition stating the sum then due in respect of the loan, and his willingness to accept the said sum, receive and appropriate it first towards the interest and the residue, if any, towards the principal.
(4) When the Money-Lender does not accept the sum, the Court shall appropriate the said sum first towards the interest and the residue, if any, towards the principal.
(1) The State Government may, from time to time by notification in the Official Gazette, fix the maximum rates of interest for any local area or class of business of money-lending in respect of secured and unsecured loans.
(2) No agreement between a Money-Lender and a debtor for payment of interest at rates exceeding the maximum rates fixed by the State Government under sub-section (1) shall be valid and no Court shall in any suit to which this Act applies award interest exceeding the said rates.
(3) No Money-Lender or a person advancing a loan shall make an oral or written demand or charge or receive from a debtor interest at a rate exceeding the maximum rate fixed by the State Government under subsection (1).
(4) Any loan in respect of which the Money-Lender or any person has realized from the debtor an interest at rates exceeding the maximum rates fixed by the State Government under sub-section (1),
Section 33 of the Gujarat Money-Lenders Act, 2011, pertains to the regulation of interest rates charged by money-lenders, aiming to prevent exorbitant interest and protect borrowers from exploitation.
Note: The analysis is based on the available sources, primarily focusing on the provisions and enforcement aspects of Section 33 of the Gujarat Money-Lenders Act, 2011.
(1) No Money-Lender shall receive from a debtor or intending debtor any sum, by whatsoever name called, as costs, charges or expenses on the loans other than reasonable costs of investigating title to the property, cost of stamp, registration of documents and other usual out-of-pocket expenses in cases where an agreement between parties includes a stipulation of that property is to be given as security or by way of mortgage and where both parties have agreed to such costs and expenses and to reimbursement thereof, or where such costs, charges or expenses are leviable under the provisions of the Transfer of Property Act, 1882,(4 of 1882) or any other law' for the time being in force.
(2) Any sum received by a Money-Lender in contravention of subsection (1) from a debtor or intending debtor on account of costs, charges or expenses referred to in that sub-section, shall be recoverable from the Money-Lender as debt from him to the debtor or, as the
(1) Where a loan advanced, whether before or after the appointed day, or any interest of such loan or the benefit of any agreement made or security taken in respect of such loan or interest is assigned to any assignee, the assignor, whether he is the Money-Lender by whom the money was lent or any person to whom the debt has been previously assigned shall, before the assignment is made, -
(a) give the assignee a notice in writing that the loan, interest, agreement or security is affected by the operation of this Act;
(b) supply to the assignee all information necessary to enable him to comply with the provisions of this Act; and
(c) give to the debtor a notice in writing of the assignment, supplying the name and address of the assignee and send or cause to be sent a copy thereof to the Registrar.
(2) Any person acting in contravention of the provisions of sub-section (1) shall be l
(1) Save as hereinafter provided, where any debt due to a Money-Lender in respect of money lent by him, whether before or after the appointed day or of interest on money so lent or of the benefit of any agreement made or security taken in respect of any such debt or interest, has been assigned, the assignee shall be deemed to be the Money-Lender and the provisions of this Act shall apply to such assignee as if he were a Money-Lender.
(2) Where for any reason, any such assignment is invalid and the debtor has made any payment of money or transfer of property on account of any loan which has been so assigned, the assignee shall in respect of such payment or transfer, be deemed to be the agent of the Money-Lender for all the purposes of this Act.
Notwithstanding anything contained in any agreement between the parties or any law for the time being in force, when a statement is delivered and pass book is supplied to a debtor under section 21 or accounts are taken under section 31 or a tender is made by a debtor to a Money-Lender in respect of a loan under section 32 before the sixteenth day of a month, the interest due shall be calculated as payable for fifteen days of the said month, and if the statement is delivered and pass book is supplied or accounts are taken or tender is made on any subsequent day, then interest shall be calculated for the entire month, irrespective of the fact that such statement is delivered and pass book is supplied or such accounts are taken or such tender is made on any such day.
Explanation. - For the purpose of this section, 'month', in relation to any loan, means a month of the year for which the accounts of the Money-Lender relating to such loan are ordinar
No Money-Lender shall accept any promissory' note, acknowledgment, bond or other writing from the debtor which does not state the actual amount of the loan, or which states such amount wrongly or which contains erasures or over-writings not duly authenticated by the debtor or accept from the debtor any documents signed by such debtor in which blanks are left, or execute any instrument affecting a debtor in which blanks are left for being filled in after execution.
Notwithstanding anything contained in this Act or in any other law' for the time being in force, no Money-Lender shall recover the principal of the loan advanced by him or the interest thereon either in part or in whole except in cash.
Whoever molests or abets the molestation of a debtor for the recovery' of a loan due by him to a Money-Lender shall, on conviction, be punished with imprisonment for a term which may extend to two years and with fine which may extend to twenty-five thousand rupees :
Provided that in absence of the special and adequate reasons to the contrary to be mentioned in the judgements of the Court -
(i) for the first offence, such imprisonment shall not be less than six months and such fine shall not be less than ten thousand rupees;
(ii) for the second and subsequent offences, such imprisonment shall not be less than one year and such fine shall not be less than twenty-five thousand rupees.
Explanation. - For the purposes of this section, a person who, with intent to cause another person to abstain from doing any act which he has a right to do or to do any act which he has a right to absta
Section 40 of the Gujarat Money-Lenders Act, 2011, prescribes penalties related to misconduct and offenses committed by money-lenders, including acts such as molestation and other contraventions during the course of recovery of loans. It aims to regulate the conduct of money-lenders and prevent abuse of their position while enforcing loan recovery.
Section 40 specifically deals with penalties for molestation and related misconduct by a money-lender or their agents during the process of recovering a loan or interest. It criminalizes acts such as molestation, intimidation, or harassment of debtors, with prescribed punishments including imprisonment and fines.
Section 40 applies to:- Money-lenders executing their recovery activities.- Agents or representatives acting on behalf of money-lenders.- Acts of molestation, intimidation, or abuse committed during recovery.- It aims to prevent harassment and abuse during debt recovery, ensuring lawful conduct.
This concise legal commentary highlights the key aspects of Section 40 of the Gujarat Money-Lenders Act, 2011, emphasizing its purpose, scope, essential ingredients, and judicial interpretation for effective enforcement and protection of rights.
If any Money-Lender or a person takes from a debtor at the time of advancing a loan or deduct out of the principal of such loan any salami, batta, dharmada or other extraction of similar nature by whatever name called, he shall be punishable with fine which may extend to twenty thousand rupees.
Whoever-
(a) carries on the business of money-lending in any area without registration in contravention of section 5; or
(b) fails to produce any record or document in compliance with any requirement made under sub-section (1) of section 19 or knowingly produces any false record or document; or
(c) obstructs any officer making an entry, inquiry, search, seizure or entrance under sub-section (2) of section 19: or
(d) demands, charges or receives from a debtor the interest at higher rate in contravention of sub-section (3) of section 33; or
(e) accepts any promissory note, acknowledgement bond or other writing or document or any instrument in contravention of section 38; or
(f) tempers with debtors' record or transaction or makes a wrongful or false entry therein or tempers or mutilates or destroys pawn or property -
Section 42 of the Gujarat Money-Lenders Act, 2011, prescribes penalties for contraventions of certain provisions of the Act, notably Sections 5, 19, 33, and 38. It aims to regulate illegal money-lending activities and ensure compliance with the statutory framework.
Section 42 stipulates that any person who carries on the business of money-lending without proper registration or contravenes specific provisions of the Act shall be subject to penalties. It explicitly mentions penalties for violations of Sections 5, 19, 33, and 38, including fines and imprisonment, depending on the nature of the offence.
Section 42 applies to all individuals or entities engaged in money-lending activities within Gujarat who fail to comply with registration requirements or violate specific provisions of the Act. It covers both procedural violations and substantive contraventions related to interest rates, loan recovery methods, and licensing.
The penalties under Section 42 include:- Imprisonment, which may extend to a specified period.- Fine, which may be substantial.- Penalties are enforceable upon conviction by competent courts.- The section also emphasizes that contraventions are non-compoundable, indicating strict legal consequences.
Note: The references are based on the provided sources, primarily "," which contain legal provisions and commentary on Section 42 of the Gujarat Money-Lenders Act, 2011.
Whoever contravenes the provisions of section 21 or section 22 shall, on conviction, be punished with imprisonment for a term which may extend to one year and with fine which may extend to ten thousand rupees :
Provided that in absence of the special and adequate reason to the contrary' to be mentioned in the judgements of the Court -
(i) for the first offence, such imprisonment shall not be less than one month and such fine shall not be less than five thousand rupees;
(ii) for the second and subsequent offences, such imprisonment shall not be less than six months and such fine shall not be less than ten thousand rupees.
Whoever fails to comply with, or acts in contravention of, any of the provisions of this Act shall, on conviction, if no specific penalty is provided for such offence in this Act, be punished with imprisonment for a term which may extend to one year and with fine which may extend to ten thousand rupees :
Provided that in absence of the special and an adequate reason to the contrary to be mentioned in the judgements of the court -
(i) for the first offence, such imprisonment shall not be less than one month and such fine shall not be less than two thousand rupees;
(ii) for the second and subsequent offences, such imprisonment shall not be less than two months and such fine shall not be less than five thousand rupees.
(1) A Court passing an order of conviction against a Money-Lender for an offence under this Act, if it is satisfied that such Money-Lender has committed such contravention of the provisions of this Act or rules made thereunder as would make him unfit to carry on the business of money-lending, may, by order, direct, in addition to any penalty which it may impose on him for such offence, that such Money-Lender shall be disqualified from holding any registration in the State for carrying on such business for such period, not being less than six months, as the Court may think fit.
(2) Where a Court convicts a Money-Lender of an offence under this Act, or makes an order under sub-section (1), it shall cause the particulars of the conviction and the order passed by it to be endorsed on all the authorized registrations held by the Money-Lender convicted or by any other person affected by the order and shall cause a copy of its judgment and order duly a
(1) If the person committing an offence under this Act is a Hindu Undivided Family, the person responsible for the management of business of such family shall be deemed to be guilty of such contravention.
(2) Where an offence under this Act or rules made thereunder has been committed by a company, every person, who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly :
Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge, or that he exercised all due diligence to prevent the commission of the offence.
(3) Notwithstanding anything contained in
Notwithstanding anything contained in the Code of Criminal Procedure, 1973, offences punishable-
(a) under section 40,
(b) under section 42 for contravening the provision of section 5 -
shall be cognizable.
No court shall take cognizance of any offence other than offences referred to in section 47 except with the previous sanction of the Registrar.
(1) The Registrar General or any other officer authorized by him in this behalf, may accept, from the person who has committed or is reasonably suspected of having committed any offence under this Act, by way of compounding of such offence -
(a) a sum of money equal to the maximum amount prescribed as fine under this Act, if the offence is committed for the first time; and
(b) in other cases, twice the amount of such fine prescribed under the respective sections :
Provided that an offence with respect to which a proceeding is pending before the Court shall not be compoundable :
Provided further that the offences punishable under sections 42 and 43 of this Act shall not be compoundable.
Notwithstanding anything contained in any law for the time being in force, no debtor who cultivates land personally and whose debts does not exceed rupees fifty thousand shall be arrested or imprisoned in execution of a decree for money passed in favour of a Money-Lender, whether before or after the appointed day.
Explanation. - For the purpose of this section, the expression "to cultivate personally" will have the meaning assigned to that expression in the relevant tenancy law.
Every officer of the Government when acting or purporting to act in pursuance of the provisions of this Act or the rules made thereunder shall be deemed to be public servant within the meaning of section 21 of the Indian Penal Code.
No suit, prosecution or other legal proceedings shall lie against the Registrar General, Registrar, Assistant Registrar or any officer or employee subordinate to him appointed under section 3 or any person acting on his authority, in respect of anything which is in good faith done or purported to be done by him in pursuance of the provisions of this Act, or rules made thereunder or any instructions, for carrying out the purposes of this Act.
Nothing in this Act shall affect any of the provisions of any law which may be in force in any part of the State relating to relief of agricultural indebtedness and no Court shall entertain, or proceed under this Act with any suit or proceeding relating to any loan in respect of which debt adjustment proceedings can be taken under the said Act, or as the case may be, the said law.
Whenever a copy of any document from the record of any application, inquiry or appeal under this Act is required by any party to such application, inquiry or appeal, it may be granted on payment of such fees as may be prescribed by the State Government.
(1) The State Government may, by notification in the Official Gazette, make rules generally for carrying out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing provision, such rules may provide for all or any of the following matters :-
(a) the form of the register of Money-Lenders to be maintained by the Registrar under section 4;
(b) the form of application for registration under sub-section (1) of section 6; the other particulars of such application, under sub-section (2);
(c) the form of certificate of registration, the conditions of registration and fees for registration and the manner of payment thereof under sub-section (1) of section 7;
(d) the form of application for renewal of registration, the period for making such application; and the fee for renewal of registration; to fix amount of penalty and t
The State Government may, by general or special order to be published in the Official Gazette, exempt any Money-Lender or class of Money-Lenders from all or any of the provisions of this Act subject to such conditions and for such period as may be specified in such order.
Nothing in this Act shall affect the operation of the Gujarat Rural Debtors Relief Act, 1976 (Gujarat 35 of 1976).
(1) The Bombay Money-Lenders Act, 1946, (XXXI of 1947) is hereby repealed.
(2) Notwithstanding such repeal of the Act refer to in sub-section (1) (hereinafter in this section refer to as the "said Act") -
(a) any license issued under the said Act and validly in force immediately before the appointed day shall be deemed to be the registration issued under this Act, and
(b) any appointment, notification, order, rule, form, notice or register made, issued or maintained under the said Act shall, so far as it is not inconsistent with the provisions of this Act, continue in force and be deemed to have been made, issued or maintained under the provisions of this Act, unless and until it is superseded by any appointment, notification, order, rule, form, notice or register made, issued or maintained under the provisions of this Act.
(3) Any other thing done or action taken under the said A
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