Tamil Nadu Money-lenders Act, 1957

1. (1) This Act may be called the Tamil Nadu Money-lenders (Amendment) Act, 1982.
2. (2) It shall come into force on such date as the State Government may, by notification, appoint.

In section 14 of the Tamil Nadu Money-lenders Act, 1957 (Tamil Nadu Act XXVI of 1957) (hereinafter referred to as the principal Act),--

1. (a) in the marginal heading, for the words "cancel licences", the words "cancel or suspend licences" shall be substituted;
2. (b) after sub-section (2), the following sub-section shall be inserted, namely :- "(2-A) Notwithstanding anything contained in sub-section

1. (1) or sub-section (2), where in the opinion of the licensing authority any licence granted under this Act is liable to be cancelled under sub-section (1), the licensingauthority may, pending cancellation of the licence under sub-section
2. (1) and for reasons to be recorded in writing, suspend any licence granted under this Act and in such a case, no show cause notice is necessary.".

In section 15 of the principal Act:—

1. (I) in the marginal heading, after the word "cancellation", the words "or suspension" shall be added;

1. (c) after the word "cancellation", the words "or suspension" shall be inserted.

1. (1) Every application for a money-lender's licence shall be in writing and shall be made to the licensing authority prescribed under this Act : Provided that a person under the age of eighteen years shall be eligible to apply for a licence only through a guardian : Provided further that if any person acting as a guardian on behalf of a minor applies for, and obtains, a licence under this Act, such guardian shall be subject to all the provisions of this Act as if the licence has been granted to himself :
2. (2) Every licence shall be granted in such form and subject to such conditions as may be prescribed including conditions as to payment of licence fees not exceeding one hundred rupees.
3. (3) The licensing authority may by order in writing refuse to grant a licence if such authority is satisfied-
   • (a) that the applicant has not complied with the provisions of this Act or the rules made thereunder in respect of an application for the grant of a licence; or
   • (b) that the applicant has made wilful default in complying with or knowingly acted in contravention of any requirement of this Act ; or
   • (c) that the applicant has-
     • (i) knowingly participated in or connived at any fraud or dishonesty in the conduct of or in connexion 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 (Central Act XLV of 1860) ; or
     • (iii) been found guilty of an offence [under section 10-A or section 11] or section 13 on two or more occasions ; or
   • (d) that the applicant has had his licence can- celled within six months before the date of application

In section 18 of the principal Act, in sub-section (1), for the word "cancellation", the words "cancellation or suspension" shall be substituted.

1. (1) Where a money-lender refuses to accept the whole or any portion of the money or other property due in respect of his loan, the debtor may deposit the said money or property into the Court having jurisdiction to entertain a suit for recovery of such loan and apply to the Court to record full or part-satisfaction of the loan as the case may be.
2. (2) Where any such application is made, the Court shall, after due inquiry, pass orders recording full or part- satisfaction of the loan, as the case may be.
3. (3) The procedure laid down in the Code of Civil Procedure, 1908 (Central Act V of 1908), for the trial of suits shall, as far as may be, apply to applications under this section.
4. (4) An appeal shall lie from an order passed by a Court under sub-section
5. (2) as if such an order relates to the execution, discharge or satisfaction of a decree within the meaning of section 47 of the Code of Civil Procedure, 1908 (Central Act V of 1908).

Money-lender to keep books, give receipts, etc.

1. (1) Every money-lender shall-
   • (a) regularly I ecorct and mai!~taii~ or cause to be recorded and main tainetl , an .G--,, .... 1 ..hov-in2 for each debtor separately-
     • (i) the date of the loan, the oinount of the principal of the loan, the rate oS interest chargtbd c~n the loan and the nature of security taken, if any ; :mtl
     • (ii) the amount of every payment received by the money-lender in rcspcct uf the loan, and ;l~c dirte of such payment ;
   • (b) give to tbc dtbtor or his agent cz receipt hr every rqm writ paid !ni hiin, dul:t signed at d if necessary, stamped at the time ol auch payment ;
2. (7) Notwithstan cliilg any agrmlneat between the parties or any law for the time being in force, when a statement is furnished to a debtor under this section 011 any day during amonth, the interest due shall be calculated as payable for the entire month irrespective of the fact that such state- ment is furnished on any such day.

1. (1) The Government or any authority or officer empowered by them may, by notification, appoint one or more persons to be Inspectors for the purposes of this Act and specify in such notification the local limits of their jurisdiction.
2. (2) Every Inspector shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code (Central Act XLV of 1860). (3)
   • (a) A District Magistrate, an Additional District Magistrate or a Sub-Divisional Magistrate may, on receiving a report from an Inspector that a person carries on without a licence or that a money-lender carries on in contravention of the provisions of this Act or the condition of the licence granted thereunder the business of money-lending at any place within the jurisdiction of such Magistrate, issue a warrant empowering the Inspector to enter such place with such assistants as he considers necessary and inspect the books, accounts, records, files, documents and securities in such premises. On receiving such warrant, the Inspector may enter the place and inspect the books, accounts, records, files, documents and securities in such premises and may take to his office for further investigation such books, accounts, records, files, documents and securities, as he considers necessary: Provided that if the Inspector removes from the premises any books, accounts, records, files, documents and securities he shall give to the person in charge of the place, a receipt describing the books, accounts, records, files, documents and securities so removed by him: Provided further that within twenty-four hours of the removal of the books, accounts, records, files, documents and securities from the premises, the Inspector shall either return them to the person from whose custody they were removed or produce them in the Court of the Magistrate who issued the warrant. Such Magistrate may return the books, accounts, records, files, documents and securities or any of them to the person from whose custody they were removed by the Inspector, after taking from such person such security as the Magistrate considers necessary for the production of the books, accounts, records, files, documents and securities when required whether by the Inspector or the Court and pass such other orders as to their disposal as appear just and convenient to the Magistrate.
   • (b) An inspector shall have authority to require any person whose testimony he may require regarding any money lending business, to attend and produce or cause to be produced any document and to examine such person on oath.
3. (4) An inspector may apply for assistance to any officer incharge of a police station and take such officer to accompany and assist the Inspector in performing his duties under this Act.

1. (1) No money-lender, whether licensed or not, shall take from a debtor or an intending borrower any promise to pay, acknowledgment, power of attorney, bond, security or other document which does not state the amount of the loan, the rate of interest and the time, if any, within which the principal is to be repaid in full, or which states any of them incorrectly, nor shall he take from a debtor or an intending borrower any document left blank for completion at a later date.
2. (2) Whoever contravenes the provisions of sub-section
3. (1) shall be punished with imprisonment which may extend to six months or with fine which may extend to one thousand rupees or with both.
4. (3) Notwithstanding anything contained in section 21 or in any other law for the time being in force, any note, promise to pay, acknowledgment, power of attorney, bond, security, or other document referred to in sub-section
5. (1) shall be void and unenforceable.

1. (1) Any money-lender whether licensed or not—
   • (a) who actually advances an amount less than the amount shown in his accounts or registers or the document relating to the loan, or
   • (b) who takes or receives interest or any other charge at a rate higher than the rate shown in the accounts, registers or documents aforesaid or allowed under this Act, shall be punished with imprisonment for a term not exceeding six months but not less than three months: Provided that the Court may, in addition to such imprisonment, impose a fine which may extend to one thousand rupees. (1-A) Notwithstanding anything contained in the Indian Evidence Act, 1872 (Central Act I of 1872) or in any other law for the time being in force, in any suit by or against a money-lender, whether licensed or not, or in any prosecution or other proceeding in a Court, the burden of proving that the money-lender had actually advanced to the debtor the amount specified in—
   • (a) any document relating to the loan; or
   • (b) the accounts or registers of such money-lender, shall be on the money-lender.
2. (2) If a money-lender is convicted of an offence under section 10-A or under this section, the Court convicting him may cancel his licence as a money-lender.
3. (3) Any person aggrieved by an order of the licensing authority cancelling a licence may, within one month of the date of communication of the order to him, appeal to the prescribed authority.

1. (3) Any person aggrieved by an order of the licensing authority cancelling a licence may, within one month of the date of communication of the order to him, appeal to the prescribed authority.

Every order of cancellation of a licence under this Act shall be notified in the District Gazette and also on the notice board of the office of the licensing authority.

A person whose licence is cancelled under section 14 or is deemed to have been cancelled under sub-section

1. (2) of section 18-A shall not be entitled to any compensation in respect of such cancellation or to the refund of any fee paid in respect of such licence.

Whoever carries on the business of money-lending without a licence or otherwise than in conformity with the terms and conditions of a licence shall be punished with fine which may extend to one thousand rupees: Provided that a person shall not be deemed to carry on the business of money-lending without a licence, if he had ceased to carry on the business of money-lending but was taking steps to recover any loan advanced by him.

1. (1) Whoever contravenes any of the provisions of this Act or of any rule made thereunder or of any terms or conditions of a licence granted or deemed to be granted thereunder or makes a claim or a statement which is false or which he does not believe it to be true shall, if no other penalty is elsewhere provided for in this Act for such contravention, be punished with fine which may extend to one thousand rupees. Explanation.—The cancellation of a licence under section 14 shall not be deemed to be a penalty for the purpose of this sub-section.
2. (2) Where a contravention of any of the provisions of this Act or of any rule made thereunder of which a person is convicted consists of an omission to do a thing, the Magistrate may, when convicting the offender; direct him to do the thing before an appointed day and may on the failure of the offender to do the thing before the said day, pass an order, whether the offender appears in Court or not on that day cancelling his licence.

A. Non-citizens not to carry on business of money-lending.

Transfer of licence to legal representative

1. (3) The licensing authority may, if he is satisfied that the applicant is in fact the legal representative of the deceased and that he is otherwise eligible to a licence under this Act, transfer the licence in the name of the applicant after obtaining from the applicant a declaration in the prescribed form.
2. (4) Any licence transferred under sub-section
3. (3) shall be deemed to have been granted to the applicant himself and shall be valid for the period for which it would have been valid if the licence had not been transferred; and the provisions of this Act shall apply accordingly.

No court inferior to that of a Metropolitan Magistrate or of a Judicial Magistrate of the first class shall try any offence punishable under this Act.

A. 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 of the publication of the Tamil Nadu Money-lenders (Amendment) Act, 1979, in the Tamil Nadu Government Gazette, decree on account of interest a sum greater than the principal of the loan due on the date of the decree.

B. Notwithstanding anything contained in the Code of Civil Procedure, 1908 (Central Act V of 1908), the court may, at any time, on application of a judgment-debtor and after notice to the decree-holder, direct that the amount of any decree passed against him, whether before or after the date of the publication of the Tamil Nadu Money-lenders (Amendment) Act, 1979, in the Tamil Nadu Government Gazette, 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 judgment-debtor and the amount of the decree, it considers fit.

C. Notwithstanding anything contained in any law for the time being in force, the court shall, in any suit to which this Act applies, whether heard ex-parte or otherwise—

1. (a) reopen any transaction, or any account already taken between the parties;
2. (b) take an account between the parties;
3. (c) reduce the amount charged to the debtor in respect of any excessive interest;
4. (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 excess.

D. In any suit to which this Act applies, the court shall, before passing a decree, hold an inquiry for taking accounts and declaring the amount due to the money-lender.

Contracts not to be void on account of offence.

1. (1) Nothing in this Act shall affect, or shall be deemed to affect any of the benefits conferred on any person by any of the provisions of the Tamil Nadu Agriculturists Relief Act, 1938 (Tamil Nadu Act IV of 1938) or the Tamil Nadu Debt Relief Act, 1972 (Tamil Nadu Act 38 of 1972) or the Tamil Nadu Indebted Agriculturists (Temporary Relief) Act, 1976 (President's Act 15 of 1976) or the Tamil Nadu Indebted Persons (Temporary Relief) Act, 1976 (President's Act 16 of 1976) or the Tamil Nadu Indebted Agriculturists and Indebted Persons (Special Provisions) Act, 1976 (President's Act 17 of 1976) or the Tamil Nadu Debt Relief Act, 1976 (President's Act 31 of 1976) or the Tamil Nadu Debt Relief Act, 1978 (Tamil Nadu Act 40 of 1978), notwithstanding anything to the contrary contained in this Act.
2. (2) Save as otherwise provided in sub-section (1), the provisions of this Act shall be in addition to, and not in derogation of, any of the Acts specified in sub-section (1), or any other law for the time being in force.

1. (1) The State Government may, after previous publication, make rules to carry out the purposes of this Act.
2. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for—
   • (a) all matters expressly required or allowed by this Act to be prescribed;
   • (b) the form and the particulars to be contained in an application for a licence under this Act;
   • (c) the terms and conditions subject to which a licence may be granted;
   • (d) the form in which books, accounts and documents specified in this Act shall be recorded, maintained, kept or used;
   • (e) the procedure which should be followed and the powers which may be exercised by the authorities exercising functions, holding inquiries and hearing appeals under this Act.