Procedure of Court in suits for recovery of loans.

Notwithstanding anything contained in any law for the time being in force, in every suit relating to a loan:

(1) the Court shall frame and decide the issues whether the money-lender is a money-lender as defined in sub-section (7) of section 2, and whether he has complied with the provisions of section 3 and of clauses (a) and (b) of sub-section (1) of section 5 and sub-sections (1) and (2) of section 6;

(2) if it is proved that the plaintiff is a money-lender as defined in sub-section (7) of section 2, but does not hold a licence granted under section 3, the Court shall dismiss his suit;

(2-A) if it is proved that the money-lender has not complied with the provisions of clause (a) of sub-section (1) of section 5, or of sub-section (1) of section 6, or of section 8 and the plaintiff‘s claim is established in whole or in part, the Court may, in the circumstances of the case, disallow the whole or any portion of the interest due and may disallow the cost wholly or in part;

(3) if it is proved that the money-lender has not furnished the debtor with a statement of account in accordance with the provisions of clause (b) of sub-section (1) of section 5 or of sub-section (2) of section 6, the Court shall, in computing the amount of interest, exclude the interest in respect of every period for which the money-lender has not furnished the debtor with the statement of account:

Provided that if the money-lender has, after the prescribed time, furnished the statement of account and the Court is satisfied that there was sufficient cause for not furnishing the statement earlier, the Court may, inspite of such default, include such period or periods for computing the interest.

Explanation:- If a money-lender has maintained his account and delivered the statement of account in the prescribed form and manner, it shall, inspite of any error or omission, be presumed that he has complied with the provisions of clauses (a) and (b) of sub-section (1) of section 5 and of sub-section (1) and (2) of section 6, if the Court is of opinion that such error or omission is accidental or immaterial and that the accounts are maintained in good faith.