The JAMMU AND KASHMIR REGULATION OF ACCOUNTS ACT, 2001 (1944 A.D.).

REGULATION OF ACCOUNTS
ACT, 2001
(Act No. XIV of Samvat 2001)
THE JAMMU AND KASHMIR REGULA TION OF
ACCOUNTS  ACT , 2001 (1944 A.D.).
(Act No. XIV of Samvat 2001)
CONTENTS
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Preamble
SECTION
1. Short title, extent and commencement.
2. Definitions.
3. Duty  of  creditor  to  maintain and furnish accounts.
4. Penalty for non-compliance with the provisions of section 3.
5. Savings.
6. Power of Government to  make rules.
REGULATION OF ACCOUNTS ACT, 2001 329
330 REGULATION OF ACCOUNTS ACT, 2001
REGULATION OF ACCOUNTS ACT, 2001 331
THE JAMMU AND KASHMIR REGULATION OF
ACCOUNTS ACT, 2001 (1944 A.D.).
(Act No. XIV of Samvat 2001)
[Received the assent of His Highness the Maharaja Bahadur on 2nd
November, 1944/18th Kartik, 2001 and published in Government Gazette
dated 14th Poh, 2001/28th December, 1944.]
An Act to regulate the keeping of accounts of certain transactions.
Preamble.—Whereas it is expedient to make provision for regulating
the keeping of accounts relating to certain transactions in 1[the Union
territory of Jammu and Kashmir] ; It is hereby enacted as follows :—
1. Short title, extent and commencement. ––(a) This Act may be
called the Jammu and Kashmir Regulation of Accounts Act, 2001.
(b) It shall extend to 1[the Union territory of Jammu and Kashmir].
2[(c) It shall come into force on such day as the Government may,
by notification in the 3[Official Gazette], appoint in this behalf :
Provided that this day shall not be earlier than six months or later
than one year after the date of final publication of the rules made under
section 6.]
2. Definitions.—In this Act, unless there is anything repugnant in
the subject or context,—
(a) “bank” means a company carrying on the business of
banking ;
(b) “company” means a company as defined in 4[the Companies
Act, 2013 (18 of 2013)] for the time being in force ;
1. Substituted for “the Jammu and Kashmir State” by S.O. 1229(E) dated 31.03.2020.
2. Act came into force from 1st day of Kartik, 2003 under Government Order No.
5-L/2003. (G. G. 24-6-2003).
3. Substituted for “Government Gazette” by S.O. 1229 (E) dated 31.03.2020.
4. Substituted ibid for “the Jammu and Kashmir Companies Act”.
332 REGULATION OF ACCOUNTS ACT, 2001
(c) “co-operative society” means a society registered or deemed
to be registered under the provisions of the Jammu and
Kashmir Co-operative Societies Act ;
(d) “creditor” means a person who in the regular course of
business advances a loan as defined in this Act, and shall
include, subject to the provisions of section 3, the legal
representatives and the successor-in-interest whether by inher-
itance, assignment or otherwise of the person who advanced
the loan ;
1[(da)“Government” means Government of the Union territory of
Jammu and Kashmir ;]
(e) “interest” includes the return to be made over and above what
was lent, whether the same is charged or sought to be
recovered specifically by way of interest or otherwise;
(f) “loan” means an advance whether of money or in kind at
interest and shall include any transaction which the Court finds
to be in substance a loan, but it shall not include—
(i) a deposit of money or other property in a Government
Post Office Bank or any other bank or in a company or
with a co-operative society,
(ii) a loan advanced by Government or by any local body
authorised by Government,
(iii) a loan advanced by a bank, a co-operative society or a
company whose accounts are subject to audit by a
certified auditor under any law for the time being in force
in the *State,
(iv) a loan advanced to a trader,
(v) an advance made on the basis of a mortgage deed ;
(g) “prescribed” means prescribed by rules made under this Act.
1. Cause (da) inserted by S.O. 1229(E) dated 31.03.2020.
* Now Union territory of Jammu and Kashmir.
REGULATION OF ACCOUNTS ACT, 2001 333
3. Duty of creditor to maintain and finish accounts. ––(1) A creditor
shall, in order to comply with the provision of this Act,—
(a) regularly reward and maintain an account for each debtor
separately, of all transactions relating to any loan advanced
to that debtor, in such manner as the Government may
prescribe ;
(b) furnish each debtor every six months with a legible statement
of account signed by the creditor or his agent of any balance
or amount that may be outstanding against such debtor on the
last date of Assuj, or on the last date of the month of Chet
in every year. This statement of account shall include all
transactions relating to the loan entered into during the six
months to which the statement relates, and shall be sent, in
such manner and in such form and containing such details as
the Government may prescribe, within one month after the last
date of the said six months.
Explanation.—(i) The Government shall prescribe the forms and
numerals in which the accounts required by this provision of this
sub-section are to be maintained and furnished.
(ii) The prescribed accounts shall be so kept that items due by way
of interest shall be shown as separate and distinct from the principal sum,
and separate totals of principal and interest shall be maintained. The
creditor shall not include the interest or any portion of it in the principal
sum ; and the principal and interest shall be separately shown in the
opening balance of each new six monthly account :
Provided that—
(a) if the loan has, since it was originally advanced, passed by
inheritance or assignment to a widow or minor, such widow or minor shall
not be bound to maintain and furnish the account prescribed by this
section for a period of six months from the date of such  passing ;
(b) nothing in this section shall be deemed to lay upon any person
the duty of maintaining and furnishing the prescribed account in the case
of a loan wherein the title to recover is sub-judice between two or more
334 REGULATION OF ACCOUNTS ACT, 2001
persons claiming as creditors adversely to each other unless and until
the title has been finally decided by a Court of competent jurisdiction.
(2) Entries in the account prescribed under clause (a) of sub-section
(1) shall be deemed to be regularly kept in the course of business for
the purposes of section 34, 1[Indian Evidence Act, 1972 (1 of 1872)], and
copies of such entries certified in such manner as may be prescribed shall
be admissible in evidence for any purposes in the same manner and to
the same extent as the original entries.
Explanation.—A person to whom a statement of account has been
sent under clause (b) of sub-section (1) shall not be bound to acknowl-
edge or deny its correctness and his failure to protest shall not be deemed
to be an admission of the correctness of the account.
4. Penalty for non-compliance with the provisions of section 3.—
Notwithstanding anything contained in any other enactment in force for
the time being,––
(a) in any suit or proceeding relating to a loan, the Court shall,
before deciding the claim on the merits, frame and decide the
issue, whether the creditor has complied with the provisions
of clauses (a) and (b) of sub-section (1) of section 3 ;
(b) if the Court finds that the provisions of clause (a) of
sub-section (1) of section 3 have not been complied with by
the creditor, the Court shall, if his claim is established in
whole or in part, disallow the whole or a portion of the
interest found due, as may seem reasonable to the Court in
the circumstances of the case and shall disallow costs ;
(c) if the Court finds that the provisions of clause (b) of sub-
section (1) of section 3 have not been complied with by the
creditor the Court shall, in computing the amount of interest
due upon the loan, exclude every period for which the creditor
omitted duly to furnish the account as required by clause (b)
of sub-section (1) of section 3 ; provided that if the creditor
has, after the time prescribed in that clause, furnished the
account and he satisfied the Court that he had sufficient cause
1. Substituted for “Evidence Act, 1977” by S.O. 1229(E) dated 31.03.2020.
REGULATION OF ACCOUNTS ACT, 2001 335
for not furnishing earlier, the Court may, notwithstanding such
omission, include any such period or periods for the purposes
of computing the interest.
Explanation.—A person who has kept his account and sent his six
monthly statements in the form and manner prescribed in clauses (a) and
(b) of sub-section (1) of section 3 shall be held to have complied with
the provisions of these clauses, in spite of errors and omissions, if the
Court finds that the errors and omissions are accidental and not material
and that the accounts have been kept in good faith with the intention
of complying with the provisions of these clauses.
5. Savings.–– The provisions of this Act shall not apply to any loan
advanced before the commencement of this Act.
6. Power of Government to make rules.—(1) The Government may
1make rules, not inconsistent with this Act, for the purposes of carrying
out all or any of the provisions of this Act.
(2) In particular and without prejudice to the generality of the
foregoing power, the Government may make rules—
(i) prescribing the forms and numerals to be used in the accounts
required by sub-section (1) of section 3 ;
(ii) prescribing the manner in which the accounts required by
clause (b) of sub-section (1) of section 3 shall be furnished
by the creditor to the debtor, the forms to be used, and the
details to be incorporated therein.
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1. For rules see C. Q. No. 667-C of 1945 dated 31st July, 1945 G . G . dated 1st Bhadon,
2002.

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