Chapter IV Chapter IV

Dispute Resolution

(1)In case of any dispute relating to the transactions involving a loan of upto Rs. 50,000/- or equivalent value (excluding interest), the aggrieved person may file an application in the prescribed form along with the prescribed fee, before the Mamlatdar of taluka and on receipt of such application, the Mamlatdar shall cause a notice of the application to be given to the other party.

1. (2) In every dispute relating to the transactions involving a loan exceeding Rs. 50,000/- or equivalent value (excluding interest), the aggrieved person may file an application in the prescribed form along with the prescribed fee, before the Collector of district and on receipt of such application, the Collector shall cause a notice of the application to be given to the other party.
2. (3) The orders passed by the Mamlatdar or Collector, as the case may be, after hearing the parties shall be binding on all the parties to the dispute.
3. (4) Notwithstanding anything contained in any law for the time being in force, in any suit to which this Act applies,—
   • (a) The Collector or Mamlatdar shall, before deciding the claim on merits, frame and decide the issue whether the moneylender has complied with the provisions of section 6;
   • (b) if the Collector or Mamlatdar finds that the provisions of section 6 have not been complied with by the money lender, he may, if the money lender’s claim is established, in whole or in part,

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 6, as the case may be, inspite of any errors and omissions if the Collector or Mamlatdar finds that such errors and omissions are not material or not fraudulent.

1. (5) Notwithstanding anything contained in the Code of Civil Procedure, 1908 (Central Act5 of

1908), the Mamlatdar or Collector, as the case may be, shall have jurisdiction to hear and decide disputes relating to loan between a money lender and borrower at the place where the borrower resides.

1. (6) The Mamlatdar or Collector, as the case may be, while hearing a dispute under this Act shall have all the powers as are vested in a civil court under the Code of Civil Procedure,1908

(Central Act 5 of 1908) while trying a suit in respect of the following matters, namely:—

1. (i) the summoning and enforcing the attendance of any defendant or witness and examining the witnesses on oath;
2. (ii) the discovery and production of any document or other material object producible as evidence;
3. (iii) the receipt of evidence on affidavits;
4. (iv) issuing of any commission for the examination of any witness; and
5. (v) any other matter which may be prescribed.

1. (1) The Mamlatdar or

Collector may, at any time, on application of the borrower, after due notice to the money lender, direct that the money of any decree passed against him, whether before or after the date of coming into force of this Act, in respect of a loan, shall be paid in such number of installments

1. (2) (a) Where a money lender refuses to accept the whole or any portion of the money due in

1. (b) Where any such application is made, the Mamlatdar or Collector, as the case may be, may,

after due inquiry pass an order recording full or part satisfaction of the loan, as the case may be.

Any person aggrieved by an order of the Mamlatdar shall appeal to the Collector and any person aggrieved by an order of the Collector shall appeal to the Administrative Tribunal. An appeal shall be filed in such manner along with such fee as prescribed.

Notwithstanding anything contained in any other law for the time being in force,—

1. (i) a suit by a money lender for the recovery of a loan; or
2. (ii) an application by a money lender for the execution of a decree relating to a loan; or
3. (iii) an application for resolution of dispute through a Lok Adalat or Mamlatdar, shall be dismissed, unless at the time when the loan was advanced, the money lender held an effective registration under this Act.