[Act No. 29 of 1976] An Act to provide, in the interest of the
general public, for the regulation of money-lending - transactions and for the
registration of money-lenders, and for matters connected therewith, or
incidental thereto. It is hereby enacted in the Twenty-seventh Year of the
Republic of India as follows: (1) This Act, may be called the Uttar
Pradesh Regulation of Money-Lending Act, 1976. (2) It extends to the whole of Uttar
Pradesh. (3) It shall come into force on such date
as the State Government may, by notification appoint in this behalf. (1) Nothing in this Act shall apply to or
in respect of— (a) any bank or a co-operative society; (b) any loan or advance to or by or
deposit with the Government or any local authority, the Life Insurance
Corporation of India or any other statutory corporation or a public company (as
defined in the Companies Act, 1956), or the Government Post Office Saving Bank; (c) the purchase or sale or other transfer
of any securities (not including mortgage of immovable property) in which a
trustee may, under any law for the time being in force, invest trust-money; (d) any loan to a subscriber to, or a
depositor in a provident fund to which the Provident Funds Act, 1925 applies,
or any recognized provident fund as defined in clause (38) of section 2 of the
Income-tax Act, 1961 or the public provident fund established under the Public
Provident Fund Act, 1968, from the amount standing to his credit in the fund in
accordance with the rule of such fund; (e) any agreement referred to in section 3
of the Uttar Pradesh Public Moneys (Recovery of Dues) Act, 1972; (f) any loan, advance or deposit against a
hundi or other bill of exchange (as defined in the Negotiable Instruments Act,
1881), or a document of title to goods (as defined in the Indian Sale of Goods
Act, 1930); (g) any loan or advance to, or by, or a
deposit with any society or association registered under the Societies Registration
Act, 1869, or any other enactment relating to a public, religious or charitable
object; (h) any loan advanced to a Government
servant from a fund established for the welfare or assistance of such servants
and which is sanctioned by the Government. (2) Nothing in section 12 shall apply in
respect of any loan of a sum exceeding rupees five thousand advanced to a
registered money-lender or to a contractor or any other person carrying on any
profession, trade or industry. In this Act— (1) 'bank' means— (a) a banking company as defined in the
Banking Regulation Act, 1949; (b) the State Bank of India constituted
under the State Bank of India Act, 1955; (c) a subsidiary bank as defined in the
State Bank of India (Subsidiary Bank) Act, 1959; (d) a "corresponding new bank"
constituted under the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970; (e) a Regional Rural Bank established
under sub-section (1) of section 3 of the Regional Rural Banks Act, 1976; (f) any banking institution notified by
the Central Government under section 51 of the Banking Regulation Act, 1949; or (g) any other banking or financial
institution notified by the State Government as a bank for the purposes of this
Act; (2)
'business of
money-lending' means the business of advancing loans, whether or not in
connection with or in addition to any other business; (3)
'co-operative society'
means a co-operative society as defined in the Uttar Pradesh Co-operative
Societies Act, 1965; (4)
'interest' in relation to
a loan, includes any sum, by whatever name called in excess of the principal,
paid or payable to a money-lender in consideration of or otherwise in respect
of the loan, but does not include any sum lawfully charged by a money-lender
for or on account of costs, charges or expenses in accordance with the
provision of this Act or any other law for the time being in force; (5)
'loan' means an advance at
interest whether of money or in kind and includes any transaction which is in
substance a loan, but does not include sale of any goods by a dealer in such
goods whether on credit or on hire-purchase; (6)
'money-lender' means a
person who carries on the business of money-lending; (7)
'principal', in relation
to a loan, means the amount actually advanced to the debtor; (8) 'registration' means registration
under this Act, and 'registered' shall be construed accordingly. (1) The State Government may, by
notification, appoint a Registrar General of Money-lending (hereinafter
referred to as the Registrar General) who shall have jurisdiction throughout
Uttar Pradesh, and as many Registrars of Money-lending (hereinafter referred to
as Registrars) or Deputy Registrars of Money-lending (hereinafter referred to
as Deputy Registrars), and Assistant Registrars of Money-lending (hereinafter
referred to as the Assistant Registrars), as it thinks fit, each having
jurisdiction over such area as may be specified. (2) The Registrar General shall have the
superintendence, direction and control of and over Registrars, Deputy
Registrars and Assistant Registrars in the performance of their functions under
this Act. The Registrar General, the Registrars, the Deputy
Registrars and the Assistant Registrars shall have such powers of inspection in
repent of the accounts and other records of the business of money-lending
carried on by any person, and such other powers as may be prescribed. Every Registrar shall maintain for the area within his
jurisdiction, a register of money-lender in such form and containing such
particulars as may be prescribed. (1)
Any person carrying on the
business of money-lending on the date of commencement of this Act wishing to
carry on such business after such commencement, in any part of Uttar Pradesh
may apply to the Registrar within the local limits of whose jurisdiction he has
his principal place of such business, and where his principal place of business
is situated outside Uttar Pradesh, to any Registrar within the local limits of
whose jurisdiction he carries on or proposes to carry on his business, for
registration as a money-lender under this Act: Provided that any person carrying on the said business from
before the commencement of this Act may apply for registration under this Act
within three months from the date of such commencement. (2) The application shall be in such form
and shall contain such particulars and shall be accompanied by a deposit of
such fee, which shall be paid in such manner as may be prescribed. (3) The Registrar shall after satisfying
himself that the application is in conformity with the requirement of
sub-section (2), and that the applicant is not a person against whom an order
under section 16 or sub-section (2) of section 22 is for the time being in
force, enter his name and other particulars in the register of money-lender
referred to in section 6, and grant him a certificate of registration in the
prescribed form. (4) Such certificates shall be valid
throughout Uttar Pradesh and shall, (unless cancelled or suspended earlier
under this Act, remain in force for a period of one year from the date of its
commencement, and the money-lender shall, on payment of such fee as may be
prescribed, be entitled to renewal of his certificate, unless the Registrar,
for sufficient cause, refuses to renew the certificate: Provided that no order refusing to renew a certificate
shall be passed except after giving to the money-lender an opportunity of
showing cause. (1)
The Registrar may, at any
time, for sufficient cause cancel or suspend a certificate of registration
granted under section 7: Provided that no order canceling a certificate shall be
passed except after giving to the money-lender an opportunity of showing cause. (2)
Where any certificate of
registration is suspended or cancelled under sub-section (1), no person shall
be entitled to any compensation or to refund of any registration fee. Any person aggrieved by an order of the Registrar refusing
to grant a certificate under section 7 or canceling or suspending it under
section 8 may within thirty days from the date of such order prefer an appeal
against the order to the Registrar General, who may thereupon pass such orders
as he thinks fit. (1)
No person shall carry on
the business of money-lending, unless he holds a valid certificate of
registration: Provided that a person referred to in the proviso to
sub-section (1) of section 7 may, subject to other provisions of this Act,
continue to carry on such business for the period mentioned in that proviso and
thereafter until his application for registration is refused. (2)
Every registered
money-lender shall display his certificate of registration in such manner as
may be prescribed. (1) Every registered money-lender raising
money by deposits from the public, shall maintain by way of liquid assets an
amount which shall not, at the close of the business on any day, be less than
twenty-five per cent of his outstanding liabilities in respect of such
deposits. (2) No money-lender, referred to in
sub-section (1), shall, at any time have invested in an unsecured loan which
shall, at the close of the business on any day, be more than fifty per cent of
the deposits held by him or double the amount of liquid assets maintained by
him, whichever is greater. Explanation—For the purposes of this section, the
expression 'liquid assets', in relation to a money-lender, means— (a) balance of cash with the money-lender;
or (b) any amount held by him in a current or
any other deposit account with a scheduled bank; or (c) investment by him in unencumbered
securities (not including mortgage of immovable property) in which trustee may,
under any law for the time being in force, invest trust money. (1) Notwithstanding anything contained in
any decree, order, custom, contract or other instrument or any other law for
the time being in force, no money-lender shall in respect of any loan, whether
advanced before or after the commencement of this Act, be entitled to interest
exceeding such rates as may be notified under sub-section (2). (2) The State Government may from time to
time, after considering the rate of interest normally charged by a scheduled
banks for commercial loans, notify the maximum rates of interest that may be
charged by money-lenders: Provided that different rates may be notified for secured
and unsecured loans. (3)
Any alteration in the rate
of interest notified under sub-section (2) shall not affect the validity of any
claim for interests made in respect of a loan granted before such alteration. (1) "Every money-lender shall— (a) mention or cause to be mentioned in
every document evidencing a loan advanced by him in the course of his
money-lending business— (i) the true principal amount; and (ii) his registration number; (b) maintain such accounts, forms and
registers as may be prescribed, and furnish to the Registrar such periodical
returns as may be prescribed; (c) issue to the debtor or his agent a
receipt attested by at least one witness for every payment made by him; and (d) on payment of the prescribed charges,
furnish to the debtor such documents or yearly statements of accounts as may be
prescribed. (2) A debtor to whom a document or
statement of account has been furnished under clause (d) sub-section (1), shall
not be bound to acknowledge or deny its correctness, and his failure to do so shall
not, by itself, be deemed to be an admission of the correctness thereof. (1) Every loan advanced, after the
commencement of this Act, by a money-lender shall be evidenced by a cheque, if
the amount of such loan is one thousand rupees or more. (2) Every transaction of money-lending in
relation to a loan advanced in contravention of sub-section (1) shall be void. (1) The provisions of this section shall
apply to every suit, whether heard ex-parte or otherwise— (a) by a money-lender for the recovery of
a loan advanced after the commencement of this Act; (b) by a money-lender for the enforcement
of any security taken or any agreement, whether by way of settlement of account
or otherwise, made after the commencement of this Act in respect of any loan
advanced either before or after such commencement; (c) against a money-lender for the
redemption of any security given to him after the commencement of this Act in
respect of any loan advanced either before or after such commencement. (2) In any such suit, if the court finds
that the money-lender's claim is untrue, wholly or in part, and that the
money-lender has omitted to comply with any of the requirements of sub-section
(1) of section 13, the court may disallow his costs and may also disallow the
whole or any part of the interest due to him, and where the omission relates to
the requirement of giving a receipt to the debtor for any payment made by him
towards the loan, or where the principal amount was untruly stated by the money
lender, may also disallow any part of the principal. (1) In any suit referred to in sub-section
(1) of section 15, the court may, if it is of opinion, that the money-lender
has willfully committed a breach of any of the provisions of this Act, cancel
his certificate of registration or suspend it for such period as may be
specified. (2) Any court of appeal or revision to
which an appeal or revision has been preferred from the decision in any such
suit may, for reasons to be recorded, stay the operation of any order under
sub-section (1) on such terms, if any, as it thinks fit, and may modify or
annul such order. (1) The Court making an order under
section 16 or sub-section (1) of section 22, shall send a copy of its order to
the Registrar by whom such certificate was issued, and the Registrar shall take
necessary action accordingly. (2) Each of the provisions of sub-section
(2) of section 15, section 16 and section 22 are in addition to and not in
derogation of any other of the said provisions. No suit on the basis of any loan, agreement or security
referred to in sub-section (1) of section 15 shall be instituted by a
money-lender, unless he at the time of any such loan or agreement made or
security taken after the commencement of this Act, holds a valid certificate of
registration: Provided that a suit for the enforcement of any loan,
agreement or security made or taken before such commencement may be instituted
or continued if the money-lender applied for registration under section 7
within a period of three months from the date of such commencement, and a
certificate of registration is issued to him. Notwithstanding anything contained in any contract or any
law for the time being in force, a suit by a money-lender for the recovery of
any loan advanced to a person actually or voluntarily residing or carrying on
business or personally working for gain in Uttar Pradesh or interest due in
respect thereof may, after the commencement of this Act, be instituted only in
a court within the local limits of whose jurisdiction the debtor so resides or
carries on business or works for gain, and not in any other court: Provided that in the case of co-debtors, the suit may be
instituted in a court within the local limits of whose jurisdiction any of the
co-debtors so resides or carries on business or works of gain. (1) A debtor may, at any time, tender to a
money-lender any sum of money payable by him to the money-lender in respect of
a loan by way of principal, interest, or both, whether the sum has become due
or not. (2) If the money-lender refuses to accept
any sum so tendered, the debtor may deposit, the sum in the court of Munsif
having territorial jurisdiction, 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 he 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. Where the debtor had deposited in court any amount under
section 20, the sum shall be deemed to have been paid to the money-lender, and
interest on the principal or on part thereof as the case may be, shall cease
from the date of such deposit. (1) Whoever willfully contravenes any of
the provisions of section 20 or section 11, shall be punishable with
imprisonment for a term which may extend to six months, or with fine which may
extend to five thousand rupees or with both. (2) Any court convicting a person under
sub-section (1) may also cancel his certificate of registration or suspend it
for such period as may be specified, and any court of appeal or revision may
stay the operation of any such order on such terms, if any, as it thinks fit,
and may modify or annul such order. (3) No court shall take cognizance of an
offence punishable under sub-section (1) except with the previous sanction of
the Registrar. (1)
Whoever molests, or abets
the molestation of, a debtor for the recovery of a debt due by him to a
creditor shall, on conviction, be punishable with imprisonment of either
description which may extend to three months or with fine which may extend to
five hundred rupees or with both. Explanation—For the purposes of this sub-section a
"person who— (i) with intent to cause the debtor to
abstain from doing any act which he has right to do or to do any act which he
has a right to abstain from doing, obstructs or uses violence to or intimidates
such debtor, or (ii) being a money-lender or an agent or
employee of money-lender, loiters on any pay day at or within fifty metres from
the outer boundary or gate of the factory or office in which the debtor is
employed, shall be deemed to molest such debtor. (2)
Every offence punishable
under sub-section (1) shall be cognizable. (1)
If the person committing
an offence under this Act is a company, the company as well as every person in
charge of and responsible to the company for the conduct of its business at the
time of the commission of the offence 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 if he proves that the offence
was committed without his knowledge or that he exercised all due diligence to
prevent the commission of such offence. (2)
Notwithstanding anything
contained in sub-section (1), where any offence under this section has been
committed by a company and it is proved that the offence has been committed with
the consent or connivance of, or that the commission of the offence is
attributable to any neglect on the part of any managing agent, secretary,
treasurer, director, manager or other officer of the company, such managing
agent, secretary, treasurer, director, manager or other officer shall also be
deemed to be guilty of that offence and shall be liable to be proceeded against
and punished accordingly. Explanation—For the purposes of this section— (a) "company" means any body
corporate, and includes a firm or other association of individuals, and (b) "director" in relation to a
firm, means a partner in the firm. (1) The Registrar General, and subject to
his control, any Registrar may, either before or after the institution of proceeding
for an offence punishable under this Act, accept from any person charged with
such offence, by way of composition of the offence a sum not exceeding one
thousand rupees. (2) On payment of such sum, no further
proceeding shall be taken against the accused person in respect of the same
offence, and if in custody, he shall be discharged, and such composition shall
have the effect of an acquittal of the accused with whom the offence has been
compounded. (1) Every money-lender carrying on the
business of money-lending from before the commencement of this Act shall submit
to the Registrar, a statement in the prescribed form within a period of three
months from the date of such commencement. (2) The statement referred to in
sub-section (1) shall contain the particulars of debts due to each money-lender
and of deposits made with him and such other particulars as may be prescribed. (3) Every such statement shall be
counter-signed, dated and sealed by the Registrar and shall be kept and
maintained in the manner prescribed. (4) Notwithstanding anything contained in
any contract, decree or order or any other law for the time being in force, no
money-lender shall be entitled to claim any amount from a debtor in respect of
any loan advanced before the commencement of this Act, unless the name of such
debtor and the amount due from him has been specified in the statement referred
to in sub-section (1). (1) No order made by any officer or
authority in exercise of any power conferred by or under this Act shall be
called in question in any court. (2) No suit, prosecution or other legal
proceeding shall lie against any person for anything which is in good faith
done or intended to be done in pursuance of this Act or of any order made there
under. The State Government may by notification make rules for
carrying out the purposes of this Act. The Usurious Loans Act, 1918 shall in its application to
Uttar Pradesh stand repealed with effect from the date of any notification
issued for the first time under sub-section (2) of section 12. In the Uttar Pradesh Regulation of Agricultural Credit Act,
1940 clauses (1), (3) to (5) and (7) to (13) of section 2, sections 3 to 7 and
10 to 35 shall be omitted. The Uttar Pradesh Prohibition of Bonded Labour Act, 1975 is
hereby repealed. THE UTTAR PRADESH REGULATION OF
MONEY-LENDING ACT, 1976
PREAMBLE