KARNATAKA MONEY LENDERS ACT, 1961

12 of 1962

20 April, 1962

An Act to regulate the transactions of money-lending in the State of Karnataka. Whereas, it is expedient to make better provision for the regulation and control of transactions of money-lending in the State of Karnataka; Be it enacted by the Karnataka State Legislature in the Twelfth Year of the Republic of India as follows:

Section1 Short title, extent and commencement

(1) This Act may be called the Karnataka Money Lenders Act, 1961.

(2) It extends to the whole of the State of Karnataka.

(3) It shall come into force on such date as the State Government may by notification, appoint.

Section2 Definitions

In this Act, unless the context otherwise requires.

11. Clause (1) substituted by Act No. 41 of 1985 and shall be deemed to have come into force w.e.f. 31-5-1985. [(1) "Bank" means.

(i) a banking company to which the Banking Regulation Act, 1949 (Central Act 10 of 1949) applies;

(ii) the State Bank of India constituted under the State Bank of India Act, 1955 (Central Act 23 of 1955);

(iii) a subsidiary bank defined in clause (k) of Section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (Central Act 38 of 1959);

(iv) a corresponding new bank constituted under Section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Central Act 5 of 1970);

(v) a regional rural bank established under the Regional Rural Banks Act, 1976 (Central Act 21 of 1976);

(vi) a corresponding new bank constituted under Section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (Central Act 40 of 1980);

(vii) the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (Central Act 18 of 1964);

(viii) the National Bank for Agricultural and Rural Development established under the National Bank for Agriculture and Rural Development Act, 1981 (Central Act 61 of 1981);".

(ix) the Export Import Bank of India established under the Export Import Bank of India Act, 1981 (Central Act 11 of 1959);".

(x) the Industrial Finance Corporation of India established under the Industrial Finance Corporation of India Act, 1948 (Central Act 15 of 1948);

(xi) State Financial Corporations established under the State Financial Corporation, Act, 1951 (Central Act 63 of 1951);]

11. Sub-clause (xii) of clause (1) substituted by Act No. 2 of 1987 and shall be deemed to have come into force w.e.f. 16-10-1986. (xii) the Industrial Reconstruction Bank of India established under the Industrial Reconstruction Bank of India Act, 1984 (Central Act 62 of 1984);]

(xiii) the Industrial Credit and Investment Corporation of India Limited, a company incorporated under the Indian Companies Act, 1913 (Central Act 7 of 1913).

22. Sub-clause (xiv) inserted by Act No. 2 of 1987 and shall be deemed to have come into force w.e.f. 16-10-1986. (xiv) the Agricultural Finance Corporation Limited a company incorporated under the Companies Act, 1956;]

(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) "Capital" means a sum of money which a money lender invests in the business of money-lending;

(4) "Company" means a company as defined in the Companies Act, 1956 (Central Act 1 of 1956);

(5) "Co-operative society" means a society registered or deemed to have been registered under the Karnataka Co-operative Societies Act, 1959 (Karnataka Act 11 of 1959);

(6) "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 changed by a money lender for or on account of costs, charges or expenses in accordance with the provisions of this Act, or any other law for the time being in force;

(7) "Licence" means a licence granted under this Act;

(8) "Licence fee" means the fee payable in respect of a licence;

(9) "Loan" means an advance at interest whether of money or in kind, and includes any transaction which the court finds in substance to amount to such an advance, but does not includes

(a) a deposit of money or other property in a Government Post Office Bank or in a Karnataka Government Savings Bank or in any other bank or in a company or with a cooperative society;

(b) a loan to, or by, or a deposit with, any society or association registered under the Karnataka Societies Registration Act, 1960 (Karnataka Act 17 of 1960);

(c) a loan advanced by Government or by any local authority authorised by Government;

(d) a loan advanced by a co-operative society;

(e) an advance made to be subscriber to, or a depositor in, a Provident Fund from the amount standing to his credit in the fund in accordance with the rules of the fund;

(f) a loan to or by an insurance company as defined in the Insurance Act, 1938 (Central Act IV of 1938);

(g) a loan to or by a bank;

(h) an advance of not less than three thousand rupees made on the basis of a negotiable instrument as defined in the Negotiable Instruments Act, 1881 (Central Act XXVI of 1881) other than on the basis of a promissory note;

(i) except for the purposes of Sections 28 and 28,

(i) a loan to a trader;

(ii) a loan to a money lender who holds a valid licence; or

(iii) a loan by a landlord to his tenant for financing of crops or seasonal finance of not more than fifty rupees per acre of land held by the tenant;

(10) "Money Lender" means

(i) an individual; or

(ii) an undivided Hindu family; or

(iii) a company; or

(iv) an unincorporated body of individuals; who or which

(a) carries on the business of money-lending in the State; or

(b) has his or its principal place of such business in the State, but shall not include a bank 11. Inserted by Act No. 2 of 1987 and shall be deemed to have come into force w.e.f. 16-10-1986. [or any other financial institution which the State Government may, by notification specify, in this behalf;]

(11) "Notification" means a notification published in the official Gazette;

(12) "Prescribed" means prescribed by rules made under this Act;

(13) "Principal" means in relation to a loan, the advance actually made to the debtor;

(14) "Provident Fund" means a Provident Fund as defined in the Provident Funds Act, 1925 (Central Act XIX of 1925), and includes a Government Provident Fund and a Railway Provident Fund as defined in the said Act;

(15) "Recognised language" means the language of the Court;

(16) Register" means a register of money lenders maintained under Section 4;

(17) "Rules" means rules made under this Act;

(18) "State" means the State of Karnataka;

(19) "Suit to which this Act applies" means any suit or proceeding

(a) for the recovery of a loan made after the date on which this Act comes into force;

(b) for the enforcement of any security taken, or any agreement made after the date on which this Act comes into force in respect of any loan made either before or after the said date; or

(c) for the redemption of any security given after the date on which this Act comes into force in respect of any loan made either before or after the said date;

(20) "Trader" means a person who in the regular course of business buys and sells goods or other property, whether movable or immovable, and includes a wholesale or retail merchant,

Explanation. For the purposes of this clause an "artisan" means a person who does not employ more than ten workers in a manufacturing process on any one day of the twelve months immediately preceding.

11. Clause (21) inserted by Act No. 14 of 1998. [(21) "Year" means the year commencing on the first day off April.]

Section3 Appointment of Registrar General, Registrars and Assistant Registrars

The State Government may, by notification, appoint a Registrar General, Registrars and Assistant Registrars of Money Lenders for the purposes of this Act and may define the areas within which each such officer shall exercise his powers and perform his duties. Since, the order of suspension would act as a disqualification for renewal, it is a case for quashing the order, though the period of licence had expired. Amanulla Khan v Registrar of Money lenders, 1979(1) Kar. L.J. Sh. N. 7.

Section4 Register of money lenders

Every Assistant Registrar shall maintain for the area in his jurisdiction a register of money- lenders in such form as may be prescribed.

Section5 Money Lenders to obtain licence

No person shall carry on the business of money-lending in the State except 11. Inserted by Act No. 77 of 1976 and shall be deemed to have come into force w.e.f. 27-10-1976. [under and] in accordance with the terms and conditions of a licence 22. Inserted by Act No. 41 of 1985 and shall be deemed to have come into force w.e.f. 31-5-1985. [and, after the commencement of the Karnataka Money Lenders (Amendment) Act, 1985, except on payment of security deposit as provided in Section 7-A].

Section6 Application for licence

(1) Every money lender shall 33. The word "annually" omitted by Act No. 14 of 1998. [x x x x x] before such date as may be prescribed make an application in the prescribed form for the grant of a licence to the Assistant Registrar of the area within the limits of which the place where he intends to carry on the business of money-lending, or if he intends to carry on such business at more than one place in the area, the principal place of such business, is situated. Such application shall contain the following particulars, namely :

(a) the name in which such money lender intends to carry on business and the name of the person proposed to be responsible for the management of the business;

(b) if the application is by or on behalf of.

(i) an individual, the name and address of such individual;

(ii) an undivided Hindu Family, the names and addresses of the manager or the karnavan or the yajaman and the adult coparceners of such family;

(iii) a company, the names and addresses of the directors, and of the manager or principal officer managing it;

(iv) an unincorporated body of individuals, the names and addresses of such individuals;

(c) the area and the place or principal place of the business of money-lending in the State;

(d) the name of any other place in the State where the business of money-lending is carried on or intended to be carried on;

(e) whether the person signing the application has himself or any of the adult coparceners of an undivided Hindu Family, or any director, manager or principal officer of the company or any member of the unincorporated body on behalf of which such application has been made, as the case may be, has carried on the business of money- lending in the State in the year ending [on the 31st day of March] immediately preceding the date of the application either individually, or in partnership, or jointly with any other coparcener or any other person and whether in the same or any other name;

(f) the total amount of the capital which such person intends to invest in the business of money-lending in the year for which the application has been made;

(g) if the places at which the business of money-lending is to be carried on are more than one, the names of persons who shall be in the management of the business at each such place.

(2) The application shall be in writing and shall be signed,

(a)

(i) if the application is made by an individual, by the individual;

(ii) if the application is made on behalf of an undivided Hindu Family, by the manager or the karnavan or the yajaman, as the case may be, of such family;

(iii) if the application is made by a company or unincorporated body, by the Managing Director or any other person having control of the principal place of business in the territory of India or of its place of business in the area in which it intends to carry on the business; or

(b) by an agent authorised in this behalf by a power-of-attorney by the individual money lender himself or the family, or the company or the unincorporated body, as the case may be.

(3) The application shall also contain such other particulars as may be prescribed.

(4) The application shall be accompanied by a licence fee at me following rates :

(a)

 if the place at which the business of money-lending is to be carried on is not more than one '

 [five thousand rupees]

(b)

 if the business of money-lending is to be carried on at more than one place within the limits of the area of the Registrar

 [rupees five thousand] for the principal place of business and [rupees two thousand five hundred] for each of the other places in the area:

Provided that where an application is made after the expiry of the period prescribed by rules in respect of such application, it shall be accompanied by licence fee at double the rates specified above.

(5) The fee payable under this section shall be paid in the manner prescribed and shall not be refunded, notwithstanding the fact that the grant of the licence is refused or the application is withdrawn.

Section7 Grant of licence and entry in register

(1) On receipt of an application under Section 6 and after making a summary inquiry in accordance with the prescribed procedure, the Assistant Registrar shall forward the application, together with his report, to the Registrar. The Registrar may after making such further inquiry, if any, as he deems fit, grant the applicant a licence in such form and 11. Substituted for the words "subject to such conditions" by Act No. 41 of 1985 and shall be deemed to have come into force w.e.f. 31-5-1985. [subject to the conditions specified in Section 7-A and such other conditions] as may be prescribed, and direct the Assistant Registrar to enter the name of such applicant in the register maintained by him under Section 4.

(2) If the application also contains a request for the grant of a licence to carry on the business of money-lending at any place within the State, but at a place outside the jurisdiction of the Registrar who granted the licence in respect of the principal place of business of the money lender, the Registrar shall forward copies of the application and of the licence granted to the Registrar having jurisdiction who may grant a licence on payment of the licence fee provided for in Section 6 without making any inquiry in respect of the application.

Section7A Conditions of licence

11. Sections 7-A and 7-B inserted by Act No. 41 of 1985 and shall be deemed to have come into force w.e.f. 31-5-1985. 22. Sub-section (1)  of Section 7-A substituted by Act No. 14 of 1998.

(1) Every money lender applying for grant of a licence under Section 7 for the first time or for grant of a fresh licence under that section for the succeeding term, shall at the time of making such application, pay security deposit as provided in sub-section (2).]

(2) Every licensee specified in column (2) of the Table below shall, in the prescribed manner, deposit in the Government Treasury the amount specified in the corresponding entry in column (3) of the said Table by way of security for the due observance of the conditions of the licence.

TABLE

(1)

 A licensee who [invests] less than one lakh rupees in a year.

 Five thousand rupees

(2)

 A licensee who [invests] one lakh rupees and above and less than five lakh rupees in a year.

 Ten thousand rupees

(3)

 A licensee who [invests] five lakh rupees and above but less than ten lakh rupees in a year

 Twenty-five thousand rupees

(4)

 A licensee who [invests] ten lakh rupees and above in a year

 Fifty thousand rupees

(3) For the purposes of sub-section (2), the amount of the security payable in a year by a licensee shall be determined on the basis of the 55. Substituted for the words "aggregate amount lent by him during the previous year" by Act No. 14 of 1998. [the amount invested by him in the business during the previous year] 66. Inserted by Act No. 14 of 1998 and shall be deemed to have been inserted w.e.f. 31-5-1985. [and such security deposit shall not carry any interest:]

Provided that in the case of a new licensee or a person who was a licensee only for a portion of the preceding year the amount of security shall be determined on the basis of a declaration in the prescribed form as to the amount which he is likely to 77. Substituted for the word "lend" by Act No. 14 of 1998. [invest] during the year, filed before the Registrar in the prescribed manner.

Section7B Forfeiture of security

(1) The Registrar may, at any time, by order in writing, forfeit to the Government the whole or any portion of the security furnished under sub-section (2) of Section 7A, if the licensee,

(a) carries on the business of money lending in contravention of any provision of this Act or the rules made thereunder or the conditions of the licence; or

(b) is convicted of an offence under Section 27 or Section 58 or Section 39 or Section 40; or

(c) maintains false accounts.

(2) Before forfeiting to the Government the whole or any portion of the security deposit made under sub-section (1), the Registrar shall give the licensee a notice in writing stating the grounds on which it is proposed to take action and requiring him to show cause against it within such time as may be specified in the notice.

(3) Every order of the Registrar under this section shall be communicated to the licensee in such manner as may be prescribed.

(4) Any person aggrieved by an order under sub-section (1), may within a period of one month from the date on which the order was communicated to him, prefer an appeal to the Registrar General whose decision shall be final

(5) The Registrar may, out of the amount forfeited, direct payment of such amounts and at such rates as may be prescribed to the borrowers affected by the acts of the licensee.]

Section8 Refusal of issue of Licence

(1) The grant of licence 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 by an order under Section 16 from holding a licence;

(b) that the applicant has not complied with the provisions of this Act or the rules in respect of an application for the grant of a licence;

(c) that the applicant has made wilful default in complying with or knowingly acted in contravention of any requirements of this Act;

(d) that satisfactory evidence has been produced that the applicant or any person responsible or proposed to be 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

(ii) been found guilty of an offence under Chapter XVII or Chapter XVIII of the Indian Penal Code.

(2) The Registrar shall, before refusing a licence under sub- section (1), record the evidence adduced before him and his reasons for such refusal.

(3) An appeal shall lie from an order of the Registrar refusing a licence under sub-section (1), to the Registrar General whose decision shall be final.

Section9 Registrar's power to cancel licences

(1) The Registrar may, during the term of any licence, cancel the same by an order in writing on the ground that the person to whom it was granted has been guilty of any act or conduct for which he might under Section 8 have refused him the grant of the licence and which act or conduct was not brought to his notice at the time of the grant of licence.

(2) Before cancelling a licence under sub-section (1), the Registrar shall give notice in writing to the licensee and may hold such inquiry as may be necessary.

(3) An appeal shall lie from an order of the Registrar cancelling a licence under sub-section (1), to the Registrar General whose decision thereon shall be final.

Section9A Repayment of Security Deposit

11. Section 9-A inserted by Act No. 14 of 1998. Where a licence has been cancelled by the Registrar, he shall by order in writing refund the security deposit paid but not forfeited under Section 7-B, to the person whose licence has been so cancelled.]

Section10 Term of licence

A licence shall be valid 22. Substituted for the words and figures "from the date on which it is granted to the 31st day of December following" by Act No. 14 of 1998. [for a term of five years:] Provided that where a money lender holding a licence has made an application for a fresh licence before the date prescribed under sub-section (1) of Section 6, for the succeeding 33. Substituted for the word "year" by Act No. 14 of 1998. [term], such money lender shall, notwith- standing the expiry of the term of his licence, be deemed to have a valid licence until orders are received by him on his application for the fresh licence.

11. Explanation inserted by Act No. 14 of 1998. [Explanation. Where a licence has been granted in the middle of a year, for the purpose of computing the term of licence, the remaining part of the year shall be deemed to be a year]

Section11 [x x x x x] Suits by money lenders not holding licence

22. The words "Stay or omitted by Act No. 77 of 1976 and shall be deemed to have come into force w.e.f. 27-10-1976.

(1) After the expiry of six months from the date on which this Act comes into force, no court shall pass a decree in favour of a money lender in any suit to which this Act applies, filed by a money lender, unless the court is satisfied that at the time when the loan or any part thereof to which the suit relates was advanced 33. Inserted by Act No. 77 of 1976 and shall be deemed to have come into force w.e.f. 27-10-1976. [and on the date such suit was filed], the money lender held a valid licence.

44. Sub-sections (2), (3) and (4) omitted by Act No. 77 of 1976 and shall be deemed to have come into force w.e.f. 27-10-1976. [(2) x x x x x x.

(3) x x x x x.

(4) x x x x x.]

(5) Nothing in this section shall affect.

(a) suits in respect of loans advanced by a money lender before the date on which this Act comes into force;

(b) the powers of an official receiver, an administrator or a court under the provisions of the Karnataka Insolvency Act, 1925, or other corresponding law in force in any area of the State, or of a liquidator under the Companies Act, 1956, to realise the property of a money lender.

Section12 Entry in register and grant of licence to a money lender directed to obtain licence under Section 11

11. Section 12 omitted by Act No. 77 of 1976 and ahall be deemed to have come into force w.e.f. 27-10-1976. x x x x x.]

Section13 Application for cancellation of licence

(1) Any person may, during the currency of a licence, file an application, to the Registrar for the cancellation of the licence issued to a money- lender on the ground that such money lender has been guilty of any act or conduct for which the Registrar

(2) On the receipt of such application and deposit, the Registrar shall hold an inquiry and if he is satisfied that the money lender has been guilty of such act or conduct he may cancel the licence of the money lender and may also direct the return of the deposit made under sub-section (1).

(3) If in the opinion of the Registrar, an application made under sub-section (1) is frivolous or vexations, he may, out of the deposit made under subsection (1), direct to be paid to the money lender such amount as he deems fit as compensation.

(4) Any person aggrieved by an order of the Registrar under sub- section (2) or (3) may, within such time and on payment of such fee as may be prescribed, appeal to the Registrar General and the order of the Registrar General on such appeal shall be final.

Section14 Registrar and Assistant Registrar to have powers of Civil Court

For the purposes of Sections 7 and 13, the Registrar and Assistant Registrar shall have and may exercise the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, in respect of the following matters :

(a) enforcing the attendance of any person and examining him on 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.

Section15 Power of authorised officer to require production of records or documents and power of entry, inspection and seizure

11. Section 15 substituted by Act No. 77 of 1976 and shall be deemed to have come into force w.e.f. 27-10-1976.

(1) The Registrar,Assistant Registrar or any Officer authorised by the State Government in this behalf may, for the purpose of verifying whether the business of money- lending is carried on in accordance with the provisions of this Act, enter the premises of the money lender or any person who in his opinion is carrying on the business of money-lending and call upon him to produce any record or document relating to such business and every such money lender or person shall allow such inspection and produce such record or document.

(2) The Registrar, Assistant Registrar or the Other officer referred to in sub-section (1) may, for the purposes of the said sub-section, search the premises and seize any record and document as may be necessary. The record or document seized shall be retained only for such period as may be necessary for the purposes of examination, prosecution or other legal action: Provided that the provision of Sections 100 and 102 of the Code of Criminal Procedure, 1973 (Central Act 2 of 1974) shall, so far as may be, apply to such search and seizure:

Provided further that for every record or document seized, appropriate acknowledgement shall be given to the person from whose custody it is seized.

(3) The Registrar, Assistant Registrar or the other officer referred to in sub-section (1) shall also have power to summon and examine the money lender or any person who in his opinion is in a position to furnish relevant information.]

Section16 Court's power to cancel or suspend a licence

(1)

(i) A court passing an order of conviction against a money lender for an offence under this Act,

(ii) a court trying a suit to which this Act applies, if satisfied that such money lender has committed such contravention of any provisions of this Act or the rules as would, in its opinion, make him unfit to carry on the business of money-lending,

(a) may order that all the licences held by such money lender in the State be cancelled or suspended for such period as it may think fit; and

(b) may, if it thinks fit, declare any such money lender or if any money lender is an undivided Hindu Family, a company or an unincorporated body, such family, company or body and also any person responsible for the management of the business of money lending carried on by such family, company or body, to be disqualified from holding any licence in the State for such time as the court may think fit:

Provided that no order or declaration shall be made under this sub-section unless a reasonable opportunity has been given to the person concerned to show cause against the order or declaration proposed to be made.

(2) Where a court convicts a money lender of an offence under this Act, or makes an order or declaration under clause (a) or (b) of sub-section (1), it shall cause the particulars of the conviction, order or declaration, as the case may be, to be endorsed on all the licences held by the money lender convicted or by any other person affected by the order or declaration and shall cause copies of its order or declaration to be sent to the Registrars by whom the licences were granted, for the purpose of entering such particulars in the registers:

Provided that where any licence held by any money lender is suspended or cancelled or any money lender is disqualified from holding any licence under this section he may appeal against such order to the Court to which an appeal ordinarily lies from the decision of the Court passing the order; and the Court which passed the order or the Court of appeal may, if it thinks fit, pending the appeal, stay the operation of the order under this section.

(3) Any licence required by a Court for endorsement in accordance with sub-section (2) shall be produced by the person by whom it is held in such manner and within such time as may be directed by the court and any person who, without reasonable cause, makes default in producing the licence so required shall be liable, on conviction, to a fine which may extend to five hundred rupees for each day of the period during which the default continues.

(4) Powers conferred on a Court under this section may be exercised by any Court in appeal or in revision.

Section17 No compensation for suspension or cancellation of licence

Where any licence is suspended or cancelled under this Act, no person shall be entitled to any compensation or the refund of any licence fee.

Section18 Persons debarred from doing business during period of suspension or cancellation of licence

A person whose licence has been suspended or cancelled in accordance with the provisions of this Act shall not during the period of suspension or cancellation, as the case may be, carry on the business of money- lending in the State.

Section19 Person whose licence is suspended or cancelled not to apply without giving particulars of endorsement or of disqualification

No person whose licence has been endorsed under Section 16 or who has been disqualified from holding a licence shall apply for, or be eligible to hold a licence, without giving particulars of such endorsement or disqualification.

Section20 Duty of money lender to keep accounts and furnish copies

(1) Every money lender shall keep and maintain a cash books and a ledger 11. Inserted by Act No. 2 of 1987 and shall be deemed to have come into force w.e.f. 16-10-1986. [in Kannada or in English] in such form and in such manner as may be prescribed.

(2) Every money lender shall

(a) deliver or cause to be delivered

(i) to the debtor within thirty days from the date on which a loan is made, a statement 22. Substituted for the words "in any recognised language" by Act No. 2 of 1987 and shall be deemed to have come into force w.e.f. 16-10-1986. [either in Kannada or in English] showing in clear and distinct terms the amount and date of the loan and of its maturity, the nature of the se-

Provided that no such statement shall be required to be delivered to a debtor if he is supplied by the money lender with a pass book which shall be in the prescribed form and shall contain an up-to- date account of the transactions with the debtor;

(ii) to the Assistant Registrar, within the said period, a statement containing the particulars referred to in sub-clause (i);

(b) upon repayment of a loan in full, mark indelibly every paper signed by the debtor with words indicating payment or cancellation, and discharge every mortgage, restore every pledge, return every note and cancel or reassign every assignment given by the debtor as security for the loan.

(3) No money lender shall receive any payment from a debtor on account of any loan without giving him a duly signed receipt for the payment.

(4) No money lender shall accept from a debtor any article as a pawn, pledge or security for a loan without giving him a signed receipt for the same with its description, estimated value, the amount of loan advanced against it and such other particulars as may be prescribed.

Section21 Delivery of statement of accounts and copies thereof by money lender

(1) Every money lender shall deliver or cause to be delivered every year to each of his debtors a legible statement of such debtor's accounts signed by the money lender or his agent of any amount that may be outstanding against such debtor. The statement shall show

(i) the amount of principal and the amount of interest, separately, due to the money lender;

(ii) the amount of every payment already received by the money lender in respect of the loan during the year together with the date on which each payment was made;

(iii) all payments credited first in the accounts of interest and the residue, if any, of any payment more than sufficient to discharge the balance of interest due at the time it is made, credited to the debtor in the account of principal, in the alternative such of the payments credited first in the account of principal as the money lender may determine and the remaining payments credited in the account of interest calculated on the basis of the decreased balance of principal and when the balance of interest is fully discharged the residue of the payments, if any, further credited in the account of principal;

(iv) the amount of principal and interest remaining unpaid. The statement shall be signed by the money lender, or his agent, and shall be 11. Substituted for the words "in any recognised language" by Act No. 2 of 1987 and shall be deemed to have come into force w.e.f. 16-10-1986. [either in Kannada or in English]. It shall be in such form and shall be supplied to the debtor on or before such date as may be prescribed: Provided that no such statement shall be required to be delivered to a debtor if he is supplied by the money lender with a pass book which shall be in the prescribed form and shall contain an up-to-date account of the transactions with the debtor. The money lender shall on or before the aforesaid date deliver or cause to be delivered a statement containing the particulars specified in clauses (i) to (iv) to the Assistant Registrar.

(2) In respect of any particular loan, whether advanced before or after the date on which this Act comes into force, the money- lender shall, on demand in writing being made by the debtor at any time during the period when the loan or any part thereof has not been repaid, and on payment of the prescribed fee supply to the debtor or if the debtor so requires, to any person specified in that behalf in the demand, a statement, 22. Substituted for the words "in any recognised language" by Act No. 2 of 1987 and shall be deemed to have come into force w.e.f. 16-10-1986. [either in Kannada or in English], signed by the money lender or his agent, and containing the relevant particulars specified in sub-section (1).

(3) A money lender shall, on a demand in writing by the debtor, and tender of the prescribed sum of expenses, supply a copy of any document relating to as loan made by him or any security therefor, to the debtor, or if the debtor so requires, to any person specified in that behalf in the demand.

11. Sub-section (4) omitted by Act No. 14 of 1998. [(4) x x x x x.]

Section22 Fees for certain statements supplied to debtors and Assistant Registrars

(1) A money lender may recover from a debtor fees for the statements or a pass book supplied to him under sub-section (2) of Section 20 or sub-section (1) of Section 21 and in respect of copies of such statements supplied to the Assistant Registrar under the said sub-sections.

(2) Such fees shall be recoverable at such rates and in such manner as may be prescribed, subject to the maximum of two rupees per debtor, per year, irrespective of the number of statements or copies thereof supplied to the debtor or the Assistant Registrar during the relevant year.

Section23 Debtors not bound to admit correctness of accounts

A debtor to whom a statement of accounts or a pass book has been furnished under Section 20 or 21 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 of the accounts.

Section24 Procedure of court in suits regarding loans

Notwithstanding anything contained in any law for the time being in force, 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 20 and 21;

(b) if the Court finds that the provisions of Section 20 or Section 21 have not been complied with by the money lender, it may, if the plaintiff 's claim is established, in whole or in part, disallow the which or any portion of the interest found due as may seem reasonable to it in the circumstances of the case and may disallow costs.

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 held to have complied with the provisions of Section 20 or Section 21, 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 not fraudulent.

Section25 Provisions of certain sections hot to apply to loans made by company or unincorporated body exempted by Government

Nothing in Sections 20 to 24 shall apply to loans advanced by any class of companies or unincorporated bodies which the State Government may by notification exempt from the operation of those sections.

Section26 Power of Court to limit interest recoverable in certain cases

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 date on which this Act comes into force, decree, on account of interest, a sum greater than the principal of the loan due on the date of the decree.

Section27 Power of court to direct payment of decretal amount by instalments

The court may, at any time, on application of a judgment-debtor, after notice to the decree-holder, direct that the amount of any decree passed against him, whether before or after the date on which this Act comes into force, in respect of a loan, shall be paid in such number of instalments 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.

Section28 Limitation on rates of interest

(1) The State Government may from time to time by notification 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) Notwithstanding anything contained in any law for the time being in force, no agreement between a money lender and a debtor for payment of interest at a rate exceeding the maximum rate 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) If any money lender charges or receives from a debtor interest at a rate exceeding the maximum rate fixed by the State Government under subsection (1), he shall, for the purposes of Section 39, be deemed to have contravened the provisions of this Act.

Section29 Prohibition of charges for expenses on loans by money-lenders

No money lender shall receive from a debtor or intending debtor any sum other than reasonable costs of investigating title to the property, costs of stamp, registration of documents and other usual out-of-pocket expenses in cases where an agreement between the parties includes a stipulation that property is to be given as security or by way of mortgage and where both parties have agreed of such costs and reimbursement thereof ; or where such costs, charges or expenses and leviable under the provisions of the Transfer of Property Act, 1882, or any other law for the time being in force.

Section30 Notice and information to be given on assignment of loan

(1) Where a loan advanced, whether before or after the date on which this Act comes into force, or any interest on 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 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 the debtor notice in writing of the assignment supplying the name and address of the assignee.

(2) Any person acting in contravention of the provisions of sub-section (1) shall be liable to indemnify any other person who is prejudiced by the contravention.

Section31 Application of Act as respects assignees

(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 date on which this Act comes into force, 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 all the provisions of this Act shall apply to such assignee as if he were the money lender.

(2) Notwithstanding anything contained in this Act or in any other law for the time being in force, 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.

Section32 Reopening of transactions

Not with standing 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 parte 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 entered into by the parties or any person through whom they claim at a date more than six years from the date of the suit;

(ii) do anything which affects any decree of a court.

Explanation. For the purpose of this section "excessive interest" means interest at a rate which contravenes any of the provisions of Section 28.

Section33 Inquiry for taking accounts and declaring the amount due

(1) Any debtor may make an application 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. Such application shall be in the prescribed form and accompanied by the prescribed fee.

(2) On receipt of such application, the Court shall cause a notice of 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 follow the provisions of Sections 20 to 32 and Section 35.

Section34 Deposit in court of money due to money lender

(1) At any time a debtor may tender to a money lender any sum of money due from him to the money lender in respect of a loan by way of principal, interest or both.

(2) If the money lender refuses to accept any sum so tendered, the debtor may deposit the said sum in court to the account of the money lender.

(3) The court shall thereupon causes 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.

(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.

Section35 When interest to be paid for entire month

Not with standing any agreement between the parties or any law for the time being in force, when a statement is delivered or pass book is supplied to a debtor under Section 21 or if accounts are taken under Section 33, or a tender is made by a debtor to a money lender in respect of a loan under Section 34 before the sixteenth day of a calendar month, the interest due shall be calculated as payable for fifteen days of the said month, and if the statement is delivered or pass book is supplied or accounts are taken or tender is made on any subsequenrday, then for the entire calendar month irrespective of the fact that such statement is delivered or pass book is supplied or such accounts are taken or such tender is made on any such day.

Section36 Money Lenders to exhibit their names over shops

Every money lender shall always keep exhibited over his shop or place of business, his name with the word 'money lender' and its equivalent in Kannada.

Section37 Entry of wrong sum in bond, etc., to be an offence

(1) No money lender shall take any promissory note, acknowledgment, bond or other writing which does not state the actual amount of the loan, or which states such amount wrongly or execute any instrument in which blanks are left to be filled after execution.

(2) Whoever contravenes the provisions of sub-section (1), shall, on con- viction, be punished with imprisonment which may extend to six months or with fine which may extend to one thousand rupees or with both.

Section38 Penalty for molestation

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 punished with imprisonment which may extend to six months or with fine which may extend to 11. Substituted for the words "one thousand" by Act No. 77 of 1976 and shall be deemed to have come into force w.e.f. 27-10-1976. [five thousand] rupees or with both.

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 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 of any such property, or

(c) loiters at or near a house or other place where such other person resides or works, or carries on business, or happens to be, or

(d) does any act calculated to annoy or intimidate such other person or the members of his family, or

(e) moves or acts in a manner which causes or is calculated to cause alarm or danger to the person or property of such other person, shall be deemed to molest such other person:

Provided that a person who goes to the house or place referred to in clause (c) in order merely to obtain or communicate information shall not be deemed be molest.

Section39 General provision regarding penalties

Whoever fails to comply with or acts in contravention of any provision of this Act, shall, if no specific penalty has been provided for in this Act, on conviction, be punished

(a) for the first offence with simple imprisonment which may extend to22. Substituted for the words "two months" by Act No. 77 of 1976 and shall be deemed to have come into force w.e.f. 27-10-1976. [three months] or with fine which may extend to 33. Substituted for the words "five thousand" by Act No. 77 of 1976 and shall be deemed to have come into force w.e.f. 27-10-1976. [one thousand] rupees or with both, and

(b) for the second or subsequent offence with imprisonment which may extend to six months or with fine 11. Inserted by Act No. 77 of 1976 and shall be deemed to have come into force w.e.f. 27-10-1976. [which may extend to two thousand rupees] or with both.

Section40 Offences by Hindu Joint Family, Corporation, etc

(1) If the person contravening any of the provisions of this Act is an undivided Hindu Family, the person responsible for the management of the business of such family shall be deemed to be guilty of such contravention.

(2)

(a) Where an offence under this Act 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 clause 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 be exercised all due diligence to prevent the commission of such offence.

(b) Notwithstanding anything contained in clause (a), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of, any director, manager, secretary, or other officer of the company, such director, manager, secretary 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 a 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.

Section41 Certain offences to be cognizable

Offences punishable

(a) Under Section 39 for contravening the provisions of Section 5, and

(b) Under Section 38, shall be cognizable.

Section42 Every officer to be public servant

Every officer of the Government acting under the provisions of this Act shall be deemed to be a public servant within the meaning of Section 21 of the Indian Penal Code.

Section43 Saving of laws relating to agriculturists' indebtedness

Nothing in this Act shall affect any of the provisions of any enactment relating to relief of agriculturists' indebtedness.

Section44 Rules

(1) The State Government may, after previous publication, by notification, make rules for carrying out the purposes of this Act.

(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely :

(a) the form of the register under Section 4;

(b) the form of the application for a licence, the further particulars to be included therein and the manner of payment of licence fee under Section 6;

(c) the form and conditions of the licence, and the procedure for a summary inquiry under Section 7;

(d) the form of cash book and ledger and the manner in which they should be maintained under sub-section (1) of Section 20 and the other particulars to be prescribed under sub-section (4) of that section;

(e) the form of the statement of accounts and pass books to be furnished or delivered and the date before which it is to be furnished or delivered under sub-section (1), the, fee to be paid under sub-section (2), and the sum of expenses to be paid under sub-section (3), of Section 21;

(f) the rates at which and the manner in which fees may be recovered under Section 22;

(g) the form of application and the fee to be paid under sub-section (1), of Section 33;

(h) the period within which appeals under this Act have to be filed and the fee payable in respect of such appeals;

(i) any other matter which has to be or may be prescribed under this Act or any matter for which there is no provision or insufficient provision in this Act and for which provision is, in the opinion of the State Government, necessary for giving effect to the provisions of this Act.

(3) Every rule made under this Act, shall be laid, as soon as may be after it is made before each House of the State Legislature while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions, and if before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Section45 Repeal and savings

The Bombay Money Lenders Act, 1946 (Bombay Act XXXI of 1947), as in force in the Bombay Area; the Coorg Money Lenders Act, 1939 (Coorg Act I of 1939), as in force in the Coorg District; the Hyderabad Money Lenders Act, 1349 F (Hyderabad Act V of 1349 Fasli), and the Hyderabad Money Lenders (Validity of Licenses) Act, 1956 (Hyderabad Act XLVIII of 1956), as in force in the Hyderabad Area; the Madras Debtors Protection Act, 1934 (Madras Act VII of 1935) as in force in the Madras Area and the Karnataka Money Lenders Act, 1939 (Karnataka Act XII of 1939) as in force in the Karnataka area, are hereby repealed:

Provided that Section 6 of the Karnataka General Clauses Act, 1899 (Karnataka Act III of 1899) shall be applicable in respect of the repeal of the said enactments and Sections 8 and 24 of the said Act shall be applicable as if the said enactments had been repealed and re-enacted by this Act.

RULE:

KARNATAKA MONEY LENDERS RULES, 1965

In exercise of the powers conferred by Section 44 of the Kar- nataka Money Lenders Act, 1961 (Kamataka Act 12 of 1962), the Government of Karnataka hereby makes the following rules, the same having been previously published in Part IV, Section 2-C (i) of the Karnataka Gazette, dated the 13th December, 1962 as required by sub-section (1) of the said section, namely.

Rule1 Title

These rules may be called the Karnataka Money Lenders, Rules, 1965.

Rule2 Definitions

In these rules, unless the context otherwise requires.

(a) "Act" means the Karnataka Money Lenders Act, 1961;

(b) "Form" means a form appended to these rules;

(c) "Section" means a section of the Act.

Rule3 Register of Money Lenders

The Register of Money Lenders required to be maintained under Section 4 shall be in Form 1.

Rule4 Display of list of licensed money lenders

Every Assistant Registrar shall display on a notice board in his office a list of money lenders licensed to cany on the business of money lending in the area under his jurisdiction. Such list shall contain the addresses of the money lenders.

Rule5 Application for licence

(1) A money lender desiring to carry on the business of money lending in any area shall make an application in Form 2 to the Assistant Registrar concerned. The application shall be delivered at the office of the Assistant Registrar during office hours either personally by the applicant or through an agent duly authorised in writing in this behalf or sent by registered post addressed to the Assistant Registrar. (2) An application for grant of a licence for the first time may be made on any date and an application for 22. Substituted for the words "renewal of licence" by GSR 222, dated 12/13-9-1985. [grant of a fresh licence for the succeeding year] may be made 33. Substituted for the words "on'any date within two months prior to the expiry of the period of licence" by GSR 76, dated 10-3-1988. [before the last day of October every year.]

11. Proviso inserted by GSR 76, dated 10-3-1988. [Provided that where an application for grant of a licence for the first time is made between the first day of November and thirty first day of December of a year, the application for a fresh licence for the succeeding year shall be made before the expiry of the period of licence.]

Rule6 Change in partnership of management

If during the currency of a licence a new partner is taken up or a person is appointed as responsible for the management of the business of money-lending, the money lender shall, within seven days communicate to the Registrar the name of the partner so taken up or of the person so appointed and shall satisfy the Registrar that the new partner or the person appointed is not himself disqualified from holding a licence on any of the grounds, mentioned in Section 8.

Rule7 Change of address

A money lender shall communicate to the Registrar any change in his address giving full details of the new address within seven days of such change.

Rule8 Procedure for summary inquiry under Section 7

The Assistant Registrar shall make the summary inquiry under Section 7 by calling for such information from the applicant and examining such persons as he may deem fit in order to satisfy himself about the bona fides of the applicant and his suitability for carrying on the business of money lending. If from the information supplied and the examination made, the Assistant Registrar is not so satisfied, he may examine the applicant personally. The Assistant Registrar shall maintain a record of such inquiry duly signed by him. The record shall contain a brief memorandum of the substance of evidence taken and a summary of the conclusions regarding facts elicited during the enquiry.

Rule9 Form of licence

The licence under Section 7 shall be in Form 3.

Rule10 Manner of payment of licence fees

(1) The licence fee 22. Substituted for the words and figures "of Rs. 10 and Rs. 3" by GSR 222, dated 12/13-9-1985. [payable] under Section 6 shall be paid in cash at the time of presenting the application or by remitting it by postal money order addressed to the Assistant Registrar or by crediting to Government account at a Treasury, or the Reserve Bank of India, and forwarding the receipt of the postal money order or the receipted challan to the Assistant Registrar along with the application.

(2) The Registrar while forwarding copies of the licence for the principal place and the application to other Registrar or Registrars shall make an endorsement in token of having received the requisite licence fee.

Rule11 Order refusing to grant licence or cancelling licence to be communicated

If a Registrar refuses to grant a licence, or cancels a licence, he shall communicate the order to the applicant or the licensee, as the case may be.

Rule12 Appeal against orders of Registrar refusing or cancelling a licence

(1) An appeal under sub-section (3) of Section 8 or sub- section (3) of Section 9 against the order of a Registrar refusing to grant or cancelling a licence shall be filed within 30 days from the date on which the Order of refusal or cancellation is communicated to the money lender. An appeal under sub-

(2) The Registrar General shall decide the appeal after giving a reasonable opportunity to the appellant to be heard.

Rule13 Display of licence

Every money-lender shall exhibit his licence in a prominent place on the premises where he carries on the business of money-lending.

Rule14 Issue of a duplicate licence

(1) When a licence granted to a moneylender is lost, destroyed or torn or otherwise defaced in such a manner as to render it illegible, the money-lender may make an application to the Registrar through the Assistant Registrar concerned, for the grant of a duplicate licence.

(2) Where a duplicate licence is required on the ground that the original licence is torn or defaced, the money-lender shall surrender the original licence to the Registrar along with the application made under sub-rule (1).

(3) An application under sub-rule (1) shall be accompanied by a fee of Rupee one. The fee shall be paid in the manner prescribed in Rule 10.

(4) On receipt of such application, if the Registrar, is, after making such inquiry as may be deemed necessary, satisfied that a duplicate licence may be issued to the money-lender, he shall issue a duplicate licence and direct the Assistant Registrar to make a note of the issue of such a duplicate licence to the money-lender against his name in the register.

(5) The duplicate licence so issued shall bear on its face the number and date of the original licence and shall also bear the word "duplicate".

Rule14A Payment of Security Amount

11. Rules 14-A to 14-E inserted by GSR 222, dated 12/13-9-1985. Every licensee shall deposit in the Government Treasury in cash the security amount specified in Section 7-A under the head of account notified by the Registrar General.

(2) The treasury receipt for having deposited the security amount shall be sent to the concerned Assistant Registrar.

Rule14B Declaration of amount under Section 7-A

Every declaration under Section 7-A shall be in Form 3-A.

Rule14C Communication of order under Section 7-B

Every order of the Registrar under Section 7-B shall be communicated to the licensee either personally or to his agent or by registered post acknowledgement due addressed to the licensee's residence or place of business or last known residence or place of business.

Rule14D Payment out of forfeited amount

(1) A borrower who has been affected by the acts of a licensee shall make an application to the Registrar specifying the nature of claim and the amount due from such licensee.

(2) The Registrar may on receipt of an application under sub-rule (1), after holding such enquiry as he deems fit, determine the amount payable to the applicant out of the forfeited amount:

Provided that if there are more than one applicant the amount shall be paid rateably in proportion to the amounts determined to be payable to the applicants.

Rule14E Refund of security amount

(1) A licensee who has wound up his business or has not applied for a fresh licence after the expiry of the term of his licence, may apply to the Registrar for refund of the amount deposited under Section 7-A.

(2) The Registrar may, on receipt of an application under sub-rule (1), after being satisfied that the licensee has either wound up his business or has not applied for a fresh licence for the succeeding year and that no case against him regarding contravention of any of the provisions of the Act or of the rules made thereunder is pending, order refund of the amount deposited under Section 7-A or so much of the balance thereof, if any, remaining after the forfeiture to the Government under Section 7- B.]

Rule15 Forms of cash book, ledger and statement under Section 20

The cash book and ledger to be maintained by a money-lender under sub- section (1) of Section 20 shall be either in Forms 4 and 5 respectively or in Forms 4 A and 5-A respectively. The statement under clause (a) of sub-section (2) of Section 20 shall be in Form 6.

Rule16 Annual statement of accounts to be delivered by money-lender to debtor, etc., under Section 21

(1) The annual statement of accounts to be delivered by a money-lender to each of his debtors under sub-section (1) of Section 21 shall be in Form 7.

(2) The statement shall be furnished to each of the debtors within sixty days after the close of the year for which the accounts of money-lenders are ordinarily maintained:

Provided that the Registrar may on the application of the money-lender extend such period in the aggregate to not more than ninety days after the close of such year, if the money-lender proves to the satisfaction of the Registrar that not less than two-thirds of the total number of statements will be furnished within the said sixty days.

(3) The fee to be paid by a debtor to a money-lender for supplying a statement of accounts under sub-section (2) of Section 21 shall be fifty paise.

(4) The expenses to be recovered from a debtor for supplying copies of documents by a money-lender under sub-section (3) of Section 21 shall be according to the following scale. For copying 100 words or fraction thereof

 10 paise

For copying 100 words or part thereof tabular statement

 15 paise

Rule17 Fees for supplying of statements or pass books

(1) The rate of fees recoverable under sub-section (2) of Section 22 shall be (a) 15 paise for each statement or a copy thereof supplied under sub-section (2) of Section 20 and sub-section (1) of Section 21 and (b) 75 paise for each pass book containing not less than eight pages excluding cover pages supplied under sub-section (2) of Section 20 and sub-section (1) of Section 21.

(2) The amount on account of such fees shall be shown separately in debtors account.

Rule18 Form of pass book

The pass book mentioned in Sections 20 and 21 shall be either in Form 8 or Form 9.

Rule19 Notice and information to be given on assignment of loan

The notice to be given to an assignee under clause (a), the statement of information to be supplied to an assignee under clause (b) and the notice to be given to the debtor under clause (c), of sub-section (1) of Section 30 shall be in Forms 10, 11 and 12 respectively.

Rule20 Form of application under Section 33

The application to be made by a debtor under sub-section (1) of Section 33 shall be in Form 13 and shall be accompanied by a Court fee of Rupee one.

Rule21 Copies of documents on payment of fees

(1) Any party to any application, inquiry or appeal under the Act before the Assistant Registrar, Registrar or Registrar General or any person who is interested in such application, inquiry or appeal may apply to the Assistant Registrar, Registrar or Registrar General, as the case may be, for a copy of any documents in the record of such application, inquiry or appeal.

(2) The application shall be accompanied by deposit or an amount to cover the cost of preparing copies according to the following scales of copying fees, namely.

(a) in the case of English copies, 5 paise for every 25 words or fraction thereof;

(b) in the case of copies in regional languages, 5 paise for every 30 words or fraction thereof;

(c) in the case of certified copies, an additional 5 paise for 100 words or fraction thereof for comparing;

(d) in the case of documents in tabular forms, twice the ordinary rate: provided further that a surcharge of 55 per cent shall be levied on all copying, comparing and translation fees and added to the total charges for the preparation of certified copies;

(e) when the description of the document given in the application is incorrect or deficient and it shall in consequence be necessary for the Record-keeper to search his records in order to find it, a fee at the rate of one rupee for each year, of which the records are searched, shall be payable by the applicant for such search, whether the document be found or not and whether the copy for which he applies, on examination of the said document, be granted or not.

(3) The amount calculated according to the above scale shall be credited to the Government by the Assistant Registrar, Registrar or Registrar General to whom the application for grant of copies is made, as copying fees and the surplus amount, if any, deposited by the person applying for copies shall be refunded to him at the time of supplying the copy: provided that the person applying for copies shall, if the amount deposited by him is not sufficient to cover copying fees, pay the deficit before taking delivery of the copy.

Rule22 Forms of summons

The summons to be issued for enforcing the attendance of any person under Section 14 in connection with an inquiry under Section 7 shall be in Form 14 or 15 as the case may be.

APPENDIX 1 Register of Money Lender

FORM [See Rule 3]

FORM 1

[See Rule 3]

Register of Money Lender

Office of the Assistant Registrar of .......... Taluka ......... District

s1.No. Name, father's or husband's name and full address of the money lender Name, father's name and full address of the person or persons repsponsible for the management of the business, if any Full details of the principal of business or the branches thereof Date and SI. No. of previous licence, if any Date of the issue of the presence licence (1) (2) (2)(a) (3) (4) (5)       

SI. no. of application Cancellatio n of licence if any with date and particulars Orders of Appellate Authority, if any Particulars of cancellation of licence under Section 14 (ii)(a) or disqualification under Section 14(ii)(h) No. of duplicate licences issued with dates Signature of Assistant Registrar Remarks (6) (7) (8) (9) (10) (11) (12)        

In the case of an undivided Hindu Family, Col. 2 should show the names and addresses of the manager and adult co-paceners of such family; in the case of a bank or company, the Col. 2 should show the names and addresses of the directors and manager or principal Officer and in case of an unincorporated body of individuals, the names and addresses of all individuals.

.When filling up this column, the section of the Act under which cancellation is made, should be entered.

APPENDIX 2 Application for the grant of a licence to a money lender.

FORM [See Rule 5]

FORM 2

[See Rule 5]

Application for the grant of a licence to a money lender.

.In the office of the Assistant Registrar of.........

..P.O..........

..Taluka........

..District. ......

.1. Name of the applicant, with father's or husband's name, surname, residence  and address in full.

.Names of the manager and the adult co-parceners of the undivided Hindu family, with father's name, surname, residence and address in full.

.Name of the Director, Manager or principal officer managing the Bank or company with the father's or husband's name, surname, residence and address in full.

.Names of all the persons forming an unincorporated body, with father's or husband's names, surnames, residences and address in full.

.2.  Name in which the applicant carries on or intends to carry on his money-lending business.

.3. Name of the area within which the applicant has his business of money-lending on the date of the application.

.4. Names of persons responsible or proposed to be responsible for the management  of the applicant's money-lending business with their father's or husband's  name, surname, residence and address in full.

.5.  Location of the applicant's place or principal place of business, with full particulars thereof and the name, father's or husband's name, surname and address of the person in charge.

.6. Whether the person signing the application or any of the adult co- parcener  of an undivided Hindu family, or any Director, Manager or Principal Officer of the Bank or Company or any member of the unincorporated body on behalf of which the application is made, as the case may be carried on the business of money-lending in the province in the year ending on the 31st day of March immediately preceding the date of the application either individually,  or in partnership of jointly with any other coparcener or any other person and whether in the same or any other name.

.7. Is the applicant or any other person on behalf of whom the application has been made carrying on or intends to carry on the business of money-lending in any other place in the province? If so, give complete particulars with the name, father's or husband's name, surname, and address of the person

incharge of each office. Give particulars of the location of each such office and the area within which the business of money-lending is being carried on or is proposed to be carried on at each such place.

.8. What is the extent of the total business of the applicant on 31st March?

.9. What is the total amount of the capital which the applicant intends to invest in the business of money-lending in the year for which the application has been made?

.A. What is the year for which the applicant's accounts are maintained?

.10. Has the applicant carried on the business of money-lending in the past and if so since when?

.11. Has any application for licence previously been made? If so, when, where and with what results?

.12. In case the application has previously been granted, give full particulars  of the licence.

.13. Has any licence granted previously to the applicant been cancelled or suspended or does it contain any endorsements of the Court or any disqualifications  imposed by the Court? If so, full particulars should be given including  the name of the Officer and/or Court and the date and terms of the order.

.14. Is money-lending the sole business of the applicant or is he engaged in any other business, profession or calling?

.15. (i) Whether the applicant is a full time servant in the employment of Government or of a local authority; if so, state the designation of the post held; and

.  (ii) Whether by rules applicable to him in that capacity he is entitled to start or carry on the business of money-lending?

.Certified that all the facts set out in the application are true to my knowl-edge except ........ .paragraphs, which are true to my belief being based on information supplied by............

Signature of applicant with date.

APPENDIX 3 Money-lender's Licence

FORM [See Rule 9]

FORM 3

[See Rule 9]

Money-lender's Licence

District................

Taluks.................

Place.................P.O.................

Licence No...............

This Licence has been granted to..........to cany on the business of money-lending subject to the provisions of the Karnataka Money lenders Act, 1961, and the Rules thereunder and the following conditions, namely.

(1)  The licence shall be valid up to 31st July.........

(2)  It shall entitle the money-lender to carry on the business of money-lending in .....

(3)  The licensee shall surrender the licence when ordered to do so by the Registrar granting it or by the Registrar-General or by a Court.

(Seal of the Registrar) date    

Registrar.

Here insert area.

(Back)

Endorsement, if any. ......Signature........Remarks.

APPENDIX 4 Cash Book

FORM [See Rule 15]

FORM  4

[See Rule 15]

Cash Book

Dr. Receipts Disbursement Cr. Date Particulars Ledger folio Amount Date Particulars Ledger folio Amount    Rs. P Rs. P    Rs. P Rs. P        

In case of loans in kind the entry shall contain clear refrence to the commodity  advanced with market value of same at the date of each transaction.

APPENDIX 4A Cash Book

FORM [See Rul 15]

FORM 4- A

[See Rul 15]

Cash Book

Date Creditor Debtor Amount Particulars Amount Particulars Opening balance brought forward Closing balance carried over   

APPENDIX 5 Debtor

FORM [See Rule 15]

FORM  5

[See Rule 15]

Debtor .........

.Name and address of the debtor ...... Ledger Account ........ Ledger No ........

A Principal amount borrowed or debited Amount due in respect of supply of Statement of debts Amount repaiid or credited Principal Interest Fees for statements of debts (1) (2) (3) (4) (5) (6)      

Balance due for each transaction Details of calculation of interest Total Principal Interest Fees for statements of debts Principal Due Months Amounts of interest recovered Remarks (7) (8) (9) (10) (11) (12) (13) (14)        

APPENDIX 5A FORM

FORM [See Rule 15]

FORM 5-A

[See Rule 15]

..Ledger folio No.

..Name of Debtor

..Ful address of Debtor

Creditor Debtor Amount Date Page No. 1 of Correspond in g entry in the cash book Particulars Amount Date Page No. of the Corresponding entry in the cash book Particulars of Security, etc. (1) (2) (3) (4) (5) (6) (7) (8) Total       Total   Receipt       Payment  

ABSTRACT

Principal Interest

Debited (During the year)

Recoveries (During the year)

Net balance due Carried over

APPENDIX 6 Statement showing the details of conditions of the Loan

FORM [See Rule 15]

FORM  6

[See Rule 15]

Statement showing the details of conditions of the Loan

Name of Debtor  . Address  . 1. Amount of loan  . 2. Date of loan  . 3. Date of maturity of the loan, if any  . 4. Rate of interest per annum  . 5. Nature of the security  . 6. Particulars of documents, if any  . 7. Any special condition on which the loan has been made  . 8. Other connected information  .

Signature of money-lender

Name and Address

of money-lender

Date..........

APPENDIX 7 Annual statement of accounts to be delivered by a money-lender to his debtors under sub-section (1) of Section 21.

FORM [See Rule 16(1)]

FORM  7

[See Rule 16(1)]

Annual statement of accounts to be delivered by a money-lender to his debtors under sub-section (1) of Section 21.

Name of the Debtor  Occupation  Address  Number of Ledger Account or number of ledger folio   Amounts of principal and interest separately due to the money- lender and the amount of fees due in respect of supply of statement of debts   Amount of every payment already received by the money-lender in respect of the loan during the year together with the date on which each payment was made   All payments credited first in the account of interest, and the residue, if any, of any payment more than sufficient to discharge the balance of interest due at the time, it is made credited to the debtor in the account of principal   Payments credited first in the account of principal by the money lender; and the remaining payments credited in the account of interest calculated on the basis of the decreased balance of principal; and when the balance of interest is fully discharged, the residue of the payments, if any, further credited in the account of principal.   Payments made on account of fees due in respect of supply of statements of debts.   The amount of principal remaining unpaid, the interest thereon, and the amount remaining unpaid on account of fees due in respect of statements of debts.  

APPENDIX 8 Pass Book

FORM [See Rule 18]

FORM 8

[See Rule 18]

Pass Book

Name of the Money-Lender

His Address

Licensed money lender under the Mysore Money Lenders Act, 1961

Contents of the Pass Book

Pass Book

Name of the Money Lender: ..Name of the Debtor:

His Address: ...His Address:

SI. No.   Date, Month and year Amount of Loan advanced Nature of security particulars of documents and special conditions, if any Rate of Interest Date of maturity Total Amount repaid by the debtor (1) (2) (3) (4) (5) (6) (7)       

Amount repaid by the debtor how dredited Balance to be recovered from the debtor Signature of the money lender Remarks Principal Interest Principal Interest (8) (9) (10) (11) (12) (13)      

APPENDIX 9 Cover Page

FORM [See Rule 18]

FORM 9

[See Rule 18]

Cover Page

Pass Book

Name of the licensed Money Lender.

His Address. .

Name of the Debtor.....................................

His Address............................................

Contents of the Pass Book

Pass Book

Name of the Money Lender...............................

His Address............................................

Name of Debtor........................................

His Address...........................................

Date of loan............................................

Amount of loan.........................................

Rate of Interest per annum...............................

Nature of Security.......................................

Particulars of document..................................

Any special conditions on which the loan is advanced..........

Creditor Debtor Amount Date Particulars Amount Date Particulars Total Receipt   Total Payment Abstract   Principal Interest

APPENDIX 10 FORM

FORM [See Rule 19]

FORM  10

[See Rule 19]

Please take notice under clause (a) of sub-section (1) of Section 30 of the Karnataka Money-Lenders Act, 1961, that pursuant to the agreement made by me with

the loan You to assign the balance of loan  interest on the loan

balance of interest on the loan

advanced to Mr. ......Address............together with accrued  interest/balance of interest and benefits of the agreement under which the aforesaid loan was given to the debtor as well as security in respect of loan / interest on loan, you will be subject, with effect from.... ...................... to the provisions of the Karnataka Money-

Lenders Act, 1961.

Signature of the Money-Lender

Prior assignee f the Money Lender.

Date:

APPENDIX 11 FORM

FORM [See Rule 19]

FORM 11

[See Rule 19]

.Statement of information to be supplied to the assignee under clause (b) of sub-section (1) of Section 30 of the Karnataka Money Lenders Act, 1961.

.Name of money lender including subsequent assignees, if any, and his / their address / addresses.

.Name of debtor:

.Address:

.1.     Date of loan.

.2.     Amount of loan.

.3.     Rate of interest per annum.

.3-A. Amount of fees due in respect of supply of debts.

.4.     Total repayments made by the debtor up-to-date:

. . (a)       Principal.

. . (b)      Interest.

. . (bb)    Fees for supply of statements of debts.

. . (c)       Total.

.5.     Amount outstanding on:

. . (a)       Principal.

. . (b)       Interest.

. . (bb)    Fees for supply of statements of debts.

. . (c)       Total.

.6.     Nature and value of the security.

.7.     Particulars of documents including previous assignments, if any.

.8.     Any special condition attaching to the loan.

.9.     List of documents of which copies are attached.

.10.   Other information, if any.

Signature of Assignor / Money Lenders.

Address.

Date.

APPENDIX 12 FORM

FORM [See Rule 19]

FORM 12

[See Rule 19]

To

Debtor.

.Please take notice under clause (c) of sub-section (1) of Section 30 of the Karnataka Money Lenders Act, 1961, that I propose to make an assignment.

 the loan Of balance of loan  interest on loan  balance of interest on loan

advanced to you on..................together with accrued interest /balance of interst and benefits of the agreement under the aforesaid loan as well as security taken in respect of the loan / interest of the loan

to........................................(Name of the assignee) ....................................(Address of the assignee with

effect from..................(date) and that from the date of such assignment  the assignee abovenamed shall exercise all rights and shall have all the liabilities under the provisions of the Karnataka Money Lenders Act, 1961.

Signature of the Money Lender

Address

Signature of prior assignee of the Money Lender Address.

APPENDIX 13 Application to a Court under sub-section (1) of Section 33 for taking accounts

FORM [See Rule 20]

FORM 13

[See Rule 20]

.(Application to a Court under sub-section (1) of Section 33 for taking accounts)

.In the Court of.........

.Mis. Case No......of 19.....

.The undermentioned debtor applies for taking accounts of the loan described below and for declaring me amount due to the money-lender.

Particulars of loan

.1. Documents, if any, with particulars:

.2. Amount:

.3. Description of the money-lender:

. . (a) Name.

. . (b) Father's / Husband's name.

. . (c) Address.

.4. Description of the debtor:

. . (a) Name.

. . (b) Father's/Husband's name.

. . (c) Address.

Date                 

Signature.

APPENDIX 14 Summons to Money-Lender

FORM [See Rule 15]

FORM 14

[See Rule 15]

Summons to Money-Lender

No Name of the office.........

To

Whereas your application for grant of a licence under the Karnataka Money Lenders Act, 1961, has been received by me, you are hereby summoned in ac- cordance with Section 14 of the said Act to appear before me at the above address in person on the......day of......19-----at......O' clock in the

.....Noon, for your being examined in connection with me said application; and you are directed to produce on that day all the documents upon which you intend to reply in support of your application.

Take notice mat, in default of your appearance on the day before mentioned,  your application for grant of licence under the said Act, shall not be considered.

Given under my hand and seal this......day of.....19....

Seal.

Signature of the Officer.

APPENDIX 15 Summons to Witness

FORM [See Rule 22]

FORM 15

[See Rule 22]

Summons to Witness

No.     

Name of the Office....

To

Whereas it is necessary to examine you in connection with the application made by Sri........for grant of a licence under the Kamataka Money Lenders  Act, 1961, you are hereby summoned in accordance with Section 14 of the said Act, to appear before me at the above address in person on the ...

----day.......19----at----O'clock in the......NOON and you are directed to produce any documents you may have in your possession in support of the information that will be supplied by you.

Take notice mat if you fail to comply with mis order without lawful excuse,  you will be liable to a fine which may extend to five hundred rupees.

Given under my hand and seal this.......day of......19-----

Seal                                             

Designation of the Officer.