Bengal Money-Lenders Act, 1940
[Act, No. 10 of 1940]
[1stAugust, 1940]
Preamble
An Act further to regulate transaction of money-lending in Bengal.
Whereas it is expedient to make further and better provision for the control of money-lenders and for the regulation and control of money-lending:
It is hereby enacted as follows:-
Chapter: I - INTRODUCTORY
Section 1 - Short title, extent and commencement
(1) This Act may be called the Bengal Money-lenders Act, 1940.
(2) It extends to the whole of West Bengal but is shall not apply to the Reserve Bank of India constituted by the Reserve Bank of India Act, 1934 (2 of 1934).
(3) It shall come into force on such date as the State Government may, by notification in the Official Gazette, appoint.
Section 1 - Short title, extent and commencement
(1) This Act may be called the Bengal Money-lenders Act, 1940.
(2) It extends to the whole of West Bengal but is shall not apply to the Reserve Bank of India constituted by the Reserve Bank of India Act, 1934 (II of 1934).
(3) It shall come into force on such date as the State Government may, by notification in the Official Gazette, appoint.
Section 2 - Definitions
In this Act, unless there is anything repugnant in the subject or context,--
(1) "bank" means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949, and includes--
(i) a bank included in the Second Schedule to the Reserve Bank of India Act, 1934;
(ii) "a corresponding new bank" as defined in clause (d) of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970; and
(iii) any other financial institution which may be notified in this behalf by the State Government;
(2) "borrower" means a person to whom a loan is advanced and includes a successor-in-interest or surety;
(3) "Calcutta" means the area within the limits of the ordinary original civil jurisdiction of the High Court in Calcutta;
(4) "commercial loan" means a loan advanced to any person to be used by such person losely for the purposes of any business of concern relating to trade, commerce, industry, mining, planting, insurance, transport, banking or entertainment, or to the occupation of wharfinger, warehouseman or contractor or any other venture of a merecantile nature, whether as proprietor or principal or agent or guarantor;
Explanation,--Notwithstanding anything contained in any agreement relating thereto, a loan shall not be deemed to be a commercial loan unless it is in subtance a loan to be used solely for any of the purposes referred to this clause.
(5) "co-operative life insurance society", "mutual insurance company" and "provident society" have the same meaning as in the Insurance Act, 1938 (4 of 1938);
(6) "co-operative society" means a society registered under the Cooperative Societies Act, 1912, (2 of 1912) or any Provincial Act or Act of the State Legislature, for the time being in force, relating to such societies (2 of 1912);
(7) "insurance company" means--
(a) in relation to any loan advanced before the commencement of the Insurance Act, 1938, an insurance company within the meaning of the Indian Insurance Companies Act, 1928 (20 of 1928).
(b) in relation to any loan advanced after the commencement of the Insurance Act, 1938, an insurance company within the meaning of the Act;
(8) "interest" includes any sum by whatsoever name called, in excess of the principal paid or payable to a lender in consideration of, or otherwise in respect of a loan whether the same is charged or sought to be recovered specifically by way of interest or otherwise, but does not include any sum lawfully charged by a lender in accordance with the provisions of this Act or any other law for the time being in force for or on account of costs, charges or expenses:
(9) "lender" means a person who advances a loan and includes a moneylender;
(10) "licence" means a licence granted under this Act;
(11) "life insurance company" has the same meaning as in the Indian Life Assurance Companies Act, 1912 (6 of 1912);
(11A) "Life Insurance Corporation of India" means the Corporation established under sub-section (1) of section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956);
(12) "loan" means an advance, whether or money or in kind, made on condition or repayment with interest and includes any transaction which is in substance a loan but does not include--
(a) ***
(b) ***
(c) a loan taken or advanced by, by the Central Government or any State Government or by any local authority in West Bengal;
(d) a loan advanced before or after the commencement of this Act--
(i) by a bank; or
(ii) by a co-operative life insurance society, co-operative society, insurance company, life assurance company, Life Insurance Corporation of India, mutual insurance company, provident insurance society or from a provident fund;
(e) an advance made on the basis of a negotiable instrument as defined in the Negotiable Instruments Act, 1881, (26 of 1881) other than a promissory note;
(f) Omitted by W. B. Money Lender Amendment Act, (Act IV of 1931).
(g) ***
(h) a loan made to or by the Administrator-General and Official Trustee of West Bengal or the Commissioner of Wakfs or the Official Assignee or the Official Receiver of the High Court in Calcutta;
(i) a loan or debenture in respect of which dealings are listed on any Stock Exchange;
(13) "money-lender" means a person who carries on the business of money-lending in West Bengal or who has a place of such business in West Bengal, and includes a pawnee as defined in section 172 of the Indian Contract Act, 1872 (9 of 1872).
(14) "money-lending business" and "business of money-lending" means the business of advancing loans either soley or in conjuction with any other business;
(15) "prescribed" means prescribed by rules made under this Act;
(16) "principal" means in relation to a loan the amount actually advanced to the borrower;
(17) "Provident fund" has the same meaning as in the Provident Funds Act, 1925 (19 of 1925);
(18) "provident insurance society" means a society registered under the Provident Insurance Societies Act, 1912 (5 of 1912);
(19) "register" means a register of money-lenders maintained under section 7;
(20) "scheduled bank" has the same meaning as in the Reserve Bank of India Act, 1934 (2 of 1934);
(21) "suit" includes an appeal (2of 1934);
(22) "suit to which this Act applies" means any suit or proceeding instituted or filed on or after the 1st day of January, 1939 or pending on that date and includes a proceeding in execution--
(a) for the recovery of a loan advanced before or after the commencement of this Act;
(b) for the enforcement of any agreement entered into before or after the commencement of this Act, whether by way of settlement of account or otherwise, or of any security so taken, in respect of any loan advanced whether before or after the commencement of this Act; or
(c) for the redemption of any security given before or after the commencement of this Act in respect of any loan advanced whether before or after the commencement of this Act.
Section 3 - Notified bank Omitted by s. 3 of he Bengal Money-Lenders (Amendmen) Act, 1965 (Wes Bengl Ac XXI of 1965)
Omitted by s. 3 of the Bengal Money-Lenders (Amendment) Act, 1965 (West Bengal Act XXI of 1965).
Chapter: II - COMPETENT AND PROCEDURE
Section 4 - Competent Courts under this Act
Notwithstanding anything contained in any other law, the Courts (hereinafter referred to as Competent Courts) which have jurisdiction to entertain proceedings under sections 16 and 19 and to pass orders therein are the Courts hereinafter specified, within the local limits or whose jurisdiction the money-lender actually and voluntarily resides or carries on the business of money-lending--
(a) in Calcutta, the Court of Small Causes of Calcutta;
(b) outside Calcutta, the Court of the District Judge (hereinafter called a "District Court") and any Court to which he may transfer the proceedings.
Section 5 - Procedure in Competent Courts
(1) Subject to the provisions of this Act, a Competent Court shall, in proceedings under section 19, have the same powers and shall follow the same procedure as it has and follows in civil suits, and the provisions of section 24 of the Code of Civil Procedure, 1908, (Act V of 1908) shall apply to such proceedings.
(2) Every order made by a Competent Court under this Act shall be subject to appeal in accordance with the provisions of the Code of Civil Procedure, 1908, applicable to appeals.
(3) An appeal from a decision made by the Court of Small Causes of Calcutta under this Act shall lie to the High Court as if it were an appeal under sub-section (2) to the High Court from a decision made by a District Court.
Chapter: III - REGISTRATION AND LICENSING OF MONEY-LENDERS
Section 6 - Appointment of State and other Registrars
There shall be State Registrar for the purposes of this Act and as many Registrars and Sub-Registrars of money-lenders for assisting the Registrar as the State Government may from time to time determine. The State Government may define, by notification in the Official Gazette, the area within which each such officer shall exercise his powers and perform his duties and may prescribe the control which shall be exercised by the State Registrar over Registrars and Sub-Registrars and by a Registrar over Sub-Registrars:
Provided that no person who is not a servant of the Government shall be empowered to act as a State Registrar, Registrar or Sub-Registrar under this Act.
Section 6A - Appointment of Inspectors, their powers and duties
(1) The State Government may, by notification in the Official Gazette, appoint such persons as it thinks fit to be Inspectors for the purposes of this Act and define the area within which each such Inspector shall exercise his powers and perform his duties.
(2) All Inspector appointed under sub-section (1) shall exercise such powers and peform such duties as may be prescribed and may also--
(a) call...
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