The Nagaland Money Lenders Act, 2005

The Nagaland Money Lenders Act, 2005 
(Act No. 6 of 2005) 
Received the assent of the Government of Nagaland on 28/09/2005 and 
published in the Nagaland Gazette Extraordinary dated: 5" of November. 2005. 
An act to regulate and control the business of money lending in the State 
of Nagaland. 
Be it enacted in the fifty-sixth year of the Republic of India as follows: 
1. SHORT TITLE, EXTEND AND COMMENCEMENT: 
(i) This Act may be called the Nagaland Money Lenders Act, 2005 
(ii) It extends to the whole of the State of Nagaland 
(iii) It shall come into force on such date as the State Government may, by 
notification in the Official Gazette, appoint. 
2. Definitions: In this Act, unless the context otherwise requires: 
(1) 'bank' means a banking company as defined in clause (c) of Section 5 
of the Banking Companies Act, 1949 (Central Act 10 of 1949); 
(2) 'company' means any company as defined in Section 3 of the Companies 
Act, 1956 (Central Act I of 1956); 
(3) "Co-operative Society" means a society registered or deemed to be 
registered under the Assam Co-operative Societies Act, 1949 (Assam 
Act No. I 1950); 
(4) 'court' includes acourt acting in the exercise of insolvency jurisdiction; 
(5) 'debtor' means a person to whom a loan is advanced and includes a 
successor-in-interest or surety. 
(6) "Government' means the State Government; 
(7) 'interest' includes any amount, by whatever name called, paid or payable 
to a lender in consideration of, or otherwise in respect of, a loan in 
excess of the principal, but does not include any sum lawfully charged 
by a lender in accordance with the provisions of this or any other act for 
the time being in force or on account of costs, charges or expenses; 
(8) 'license'meansamoney lender's license granted under this Act and licensed 
shall be construed accordingly; 
(9) 'loan' means an advance whether of amoney or articles, goods or materials 
made on consideration for interest, and includes any transaction which the 
Court hds in substance to amount to such an advance, but does not include- 
(i) deposit of money or other property in a bank, Post Office Saving 
Bank, or Company; 
(ii) an advance made by a bank, or company; 
(iii) an advance made by the Government or by any person authorized 
by the Government to make advance in their behalf of by any 
local authority; 
(iv) an advance made by any person bona fide carrying on any business, 
not having for its primary object the lending of money, if such 
loan is advanced in the regular course of such business; and 
(v) an advance made by a landlord to his tenant, by a lessor to his 
lessee, by one partner or co-sharer in cultivation to another for the 
purpose of carrying on agriculture. 
(10) 'money lender' means a person whose business is that of advancing 
and realizing loans, and shall include a mundy merchant and a 
pawnbroker, but does not include a bank, or company and the expression 
'money lending' shall be construed accordingly; 
(1 1) 'mundy merchant' means a person who advances money on the security 
of any standing crop or produce; 
(12) 'pawnbroker' means a person who carries on the business of taking 
goods and cattle in pawn for a loan given by him; 
(13) 'pawner' means a person delivering an articles for pawn to a pawnbroke. 
(14) 'pledge' means an article pawned with a pawnbroker; 
(15) 'prescribed' means prescribed by rules made under this Act; 
(16) 'principal' in relation to a loan means the amount actually lent to the 
debtor; 
(17) 'year' means the financial year. 
3. Money-lender to obtained license annually: 
No person shall, on or after the date on which the provisions of this Act 
come into force, carry on business of money lending at any place in the State, 
unless he has obtained a money-lender's license under this Act. 
4. Grant and refusal of licenses: 
1 (a) Evety application for a money-lender's license shall be in writing 
and shall be made to the prescribed licensing authority; 
(b) Every such application shall be accompanied by such fee, as the 
State Government may, from time to time prescribe; 
(c) The fee payable under this sub-section shall be paid through 
Treasury Challan under the appropriate Head of Account; 
(d) Where the license applied for is refused, the fee paid under this 
sub-section shall be refunded in full and where the application 
for the lilcense is withdrawn by the applicant before the license is 
actually granted the fee paid less ten percent thereof shall be 
refunded. 
2 Every license shall be granted in such form and subject to such conditions 
as may be prescribed; 
3 The licensing authority may, by order in writing, refuse to grant a license 
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 
grant of a license; 
(b) That the applicant has knowingly acted in contravention of any 
other Act or rule for the time being in force; or 
(c) that the applicant has- 
(i) knowingly participated in, or connived at, any fraud or dishonestly 
in the conduct of, or in connection with, the business of money 
lending, or 
(ii) been found guilty of any offence under Chapter XVII or Chapter 
XVIII of the Indian Penal Code (Central Act 45 of 1860); 
Provided that before passing an order refusing a license on any of the 
grounds specified above other than the ground specified in sub-clause 
(ii) of Clause (C), the applicant shall be given a reasonable oppohty 
of being heard. 
4. The licensing authority shall, in the grant or refusal of license, be 
subjected to the control and direction of the Government. 
5. Any person aggrieved by an order of the licensing authority under sub- 
section (3) may, within one month from the date of communication of 
such order to him, appeal to the prescribed authority. 
6. Every licensing granted under this Act shall subject to the provision of 
sub-section (7) expire on the last day ofthe year for which it was granted. 
7. A license granted under sub-section (2) may be renewed from year to 
year and the provisions of sub-section (2) may be renewed from year to 
year and the provisions of sub-section (1) to (6) shall apply in relation 
to the renewal of a license as they apply in relation to the grant of a new 
license. 
5. Change of place of business by money lender: 
No money lender shall change his place of business without previous notice 
to the licensing authority and without getting the address of the new place of 
business duly endorsed on his license 
6. Money lenders to exhibit their names over shops: 
(1) Every money lender shall always display in large characters over the 
outer door of his shop or place of business his name with the word 
"money lender" 
(2) Every money lender shall always display over the outer door of hls 
shop or place of business a board specifying the name of the debt 
collector, if any, employed under Section 11, the days of the week and 
the hours duringwhich the shop or place shall be kept open for business 
and shall be bound to keep the shop or place of business open during 
the said days and hours for the transaction of business. 
7. Interest and charges allowed to money lender: 
(1) No money lender shall charge interest on any loan advanced whether 
on a pledge or otherwise at a rate exceeding more than 3 (three) percent 
above the prevailing average bank rates of interest on loans advances 
by it. 
(2) The rate of interest shall be per annum simple interest on the principal 
amount of the loan. 
(3) The month or year used for the calculation of interest shall be month or 
year of the Gregorian calendar. 
(4) A money lender may demand or take from the debtor such other charges 
as may be prescribed. 
(5) A money lender shall not demand or take from the debtor any interest 
in excess of that payable under sub-section (1) or any charge, in excess 
of that prescribed under sub-section (4). 
(6) The rate of interest to be charged under sub-section (1) and (2) shall be 
notified by the State Government each year at the beginning of the year. 
8. Pawn-ticket to be given to pawner: 
Every pawn broker shall, on taking pledge in pawn, give to the pawner 
a ticket in the prescribed form, and no pawnbroker shall take a pledge, in 
pawn the pawner takes the pawn-ticket. 
9. Conditions relating to redemption of pledge: 
(1) In the absence of a decree or order of a Civil Court or of an order of a 
magistrate or an officer of police not below the rank of sub-Inspector 
prohibiting the delivery of the pledge by the pawnbroker to the pawner, the 
pawner shall, on production of the pawn-ticket, and on payment of the sum 
legally payable in respect thereof, be entitled to the delivery of the pledge. 
(2) On a declaration being made in the prescribed form by the pawner 
(hereafter in this sub-section referred to as the transferor) that the right to 
redeem the pledge has been transferred to, or is vested in, some other 
person (hereafter in this section referred to as the transferee) and on a 
declaration being made by the transferee that he is in possession of the 
pawn-ticket and that he is entitled to redeem the pledge, the pawbroker 
shall cause an endorsement to be made on the pawn-ticket and in the 
pawn book to that effect and thereuponthe transferor's right to redeem 
the pledge shall be extinguished and the transferee shall be deemed to be 
the pawner for the purposes of this section. 
(3) Where a person claiming to be the messanger or agent of the pawner 
produces the pawn-ticket and offers to redeem the pledge, the 
pawnbroker may, after obtaining from the person so clairning, a 
declaration in the prescribed form, allow redemption if the pawnbroker 
is satisfied that the person who claims to be such messenger or agent is 
in fact such messenger or agent. 
(4) Where a person producing a pawn-ticket claims to be the messenger or 
agent of the pawner and offers to redeem the pledge, the pawnbroker 
may send a notice in the prescribed form by registered post to the pawner 
to the address given by the pawner to the pawner, and if the pawner does 
not hear to the contrary from the pawner, within two weeks after the date 
on which the notice would in the usual course of post reach the pawner, 
the pawnbroker may, after the expiry of the said two weeks and after 
obtaining from the person claiming to be such messenger or agent, a 
declaration in the prescribed form allow the person so claiming to redeem 
the pledge and shall, in that event, be exonerated kom further liability to 
the pawner, but without prejudice to any rights in respect of that pledge, 
which the pawner may be entitled by due process of law to enforce against 
the person who was allowed by the pawnbroker to redeem the pledge. 
(5) (a) where the pawner is dead and a person who produces the pawn- 
ticket claims to be the legal representative of the pawner and offers to 
redeem the pledge, the pawnbroker may, after obtaining from such 
person a declaration in the prescribed form and after sending a notice 
to every other person who claims to be entitled to redeem the pledge, . - 
permit such redemption if the pawnbroker is satisfied that such person 
is in fact the nearest legal representative of the pawner. 
Provided that the pawnbroker may decline to permit redemption of the 
pledge by such person unless it is delcred by a competent Court that 
such person is entitled to redeem the pledge. 
(b) Where the pawnbroker permits redemption of the pledge under 
Clause (a) without declaration of a competent Court, he shall not be 
exonerated from liability to the nearest legal representative of the 
deceased pawner, if such legal representative be a person other than a 
person who was permitted by the pawnbroker to redeem. 
(6) (a) Where the pawner alleges that the pawn-ticket has been lost or 
destroyed and claim redemption of the pledge, the pawnbroker shall, 
after obtaining from the pawner a declaration in the prescribed form, 
allow such redemption: 
Provided that if any other person who is in possession of the pawn- 
ticket and who is entitled to redeem the pledge objects to the redemption 
of the pledge by the pawner and claims the right of redemption, the 
pawnbroker may decline to pemit redemption of the pledge by the 
pawner or such person unless it is declared by a competent Court that 
the pawner or such person is entitled to redeem the pledge. 
(b) Before allowing redemption under clause (a) the pawnbroker may 
insist on indemnity being given by the pawner against a claim by any 
other person. 
(7) (a) where aperson claims to be the owner ofa pledge and alleges that it was 
pawned without his knowledge or authority, the pawnbroker shall take a 
declaration hm such person in the prescribed form and send anotice inthe 
prescribed form by registered post to the pawner at the address given to the 
pawnbroker b the pawner and similarly to every other claimant, ifany, and if 
the pawn-broker does not receive any communication in writing fiom the 
pawner or any other claimant objecting to the delivery of the pledge to the 
alleged owner within two weeks fiom the date on which the letter would in 
the usual course ofpost reach the addressee, the pawn-broker may allow 
the alleged owner to redeem the pledge and pawn-broker is hereafter 
exonerated fiom Mher liability to the pawner or any other claimant but 
without prejudice to any rights in respect ofthat pledge to which the pawner 
or any other claimant may be entitled by due process of law to enforce 
against the alleged owner who was allowed by the pawn-broker to redeem 
the pledge. 
(b) If, on receiving notice, the pawner or any other claimant objects to the 
delivery of the pledge to the alleged owner, the pawnbroker may decline to 
permit redemption of the pledge by the alleged owner unless it is declared 
by acompetent Court thatthe alleged owner is entitled to redeem the pledge. 
10. Money lender and pawnbroker to keep books give receipt etc: 
(1) Every money lender and pawnbroker shall: 
(a) regularly record and maintain or cause to be recorded and maintained, 
an account showing for each debtor separately 
(i) the date of the loan, the amount of the principal of the loan and rate of 
interest charged on the loan; 
4 the amount of every payment received by the money-lender inrespect 
of the loan, and the date of such payment; 
5) if articles are taken in pawn 
(1) afull and detailed descriptionofthe article or ofeach of the articles 
taken in pawn; and 
(2) the time agreed upon for the redemption of the pawn; and 
(3) the name and address of the pawner, and where the pawner is not the 
owner of the article or of any of the articles pawned, the name and 
address of the owner thereof; 
keep and use inhis business, ifhe is apawn-broker, the following documents 
and books in the prescribed form and enter therein, from time to time, as 
occasion requires, in a fair and legible manner, such particulars and in 
accordance with such dictions, as may be prescribed: 
pawn-ticket; 
sale book of pledge; 
declaration under Section 9; and 
receipt on redemption of pledge; 
give to the debtor or his agent areceipt for every amount paid by him, duly 
signed and if necessary, stamped at the time of such payment; 
on requisitioninwriting made by the debtor furnish to hirnor, ifhe so requires, 
to any personmentioned by him in that behalf in his requisition, a statement 
of account signed by himself or his agent, showing the particulars referred to 
in clause (a) and also the amount which remains outstanding on account of 
the principal and of interest, and charge such sum as the Government may 
prescribed as fee therefor; 
Providedthat no such statement shall be required to be furnished to adebtor 
if he is supplied by the money-lender with a pass book in the prescribed 
form containing an up-to date account of the money-lender's transaction - 
with the debtor; and 
submit suchreturns relating to the loans advanced by him to such authority in 
such manner and at such time as may be prescribed. 
All records and entires made in the books, accounts and documents referred 
to in sub-section (10 shall be either in English or in such language of the 
locality as may be prescribed. 
Notwithstanding an* containdinthe IndianEvidence Act, 1872 (Centml 
Act 1 of 1872), a copy of the account referred to in clause (a) of sub- 
section (1), ceaitied in suchmanner as may be prescribed, shall be admissible 
in evidence inthe samemanner and to the same extent as the orid account. 
A debtor to whom a statement of account has been furnished under clause 
(d) of sub-section (1) and who fails to object to the corresctness of the 
account shall not, by such failure alone, be deemed to have admitted the 
correctness of such account. 
(5) In the receiptto te givenunder clause (c) of subsection (1) or in the statement 
of account to be fiunished under clause (d) of that sub-section or in the ~. 
pawn ticket fiunished to the pawner, the figures shall be entered only in 
Arabic numerals. 
(6) In any suit or proceeding relating to a loan, if the Court finds that a money 
lender has not maintained an account as required by clause (a) of sub-section 
(I), it shall disallow his costs. 
(7) If any money lender fails to give to the debtor or his agent a receipt as 
required by clause (c) of sub-section (1) or to furnish on a requisition 
made under clause (d) of that sub-section a statement of account as 
required within one month after such requisition has been made, or if a 
pawn-broker fails to deliver to the pawner a pawn-ticket as required by 
Section 8, he shall not be entitled to any interest for the period of his 
default. 
11. Employment of debt collectors: 
(1) No person shall be employed by any money lender for the purpose of 
demandimg or recovering any loan due to him unless such person is in 
possession of a certificate authorizing him to act as a debt collector 
granted under this section. 
(2) Every application for such a certificate shall be made to such authority 
and shall be in such form and shall contain such particulars, as may be 
prescribed: and before a certificate is granted to him, the application 
shall satisfy such authority that he bears a good character. 
(3) The certificate shall be in such form and for such period and shall contain 
such particulars, as may be prescribed. 
12. Appointment of inspectors and their powers: 
(1) The Government or any authority or officer empowered by them may, 
by notification in the Nagaland Gazette, appoint one or more persons 
to be inspectors for the purpose of this Act and may specify in such 
notification the local limits of their jurisdiction. 
(2) Every inspector shall be deemed to be a public servant within the meaning 
of Section 21 of the Indian Penal Code (Central Act 45 of 1860) 
(3) (a) An inspector may, at any time, with such assistance as he thinks 
necessary, enter any premises within his jurisdiction in which any person 
carriesonbusiness as licensed money lender and inspectthe books, 
accounf records, files, documents, safes, vaults and pledges insuchpremises. 
(b) A Mapistrate of the first class on receiving a report from an Inspector that he 
has reason to believe that amon is mnyingonwithout alicense the business - - - 
onmoney-lending at any place within the jurisdiction of such Magistrate, 
may issue awarrant empowering the Inspectorto enter such place with such 
assistance as such Magistrate considers necessary and to inspect the books, 
accounts, records, files, documents, safes vaults and pledges m suchpremises. 
(c) On an inspection made under clause (a) or clause (b), the Inspector may 
take to his office for further investigation, such books, accounts, records - 
files and documents as he considers necessary. 
(d) If the Inspector removes from the premises any books, accounts, records, 
file and documents, he shall give to the person in charge of the place 
from whose custody they were removed a receipt describing the books, 
accounts, records, files and documents so removed by him. 
(e) The Inspector shall within twenty-four hours of the removal of the books, 
accounts, records, files and documents fiom the premises, 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 and documents, 
or any of them to the person &om whose custody they were removed 
by the Inspector, after taking eom such person such security as the 
Magistrate considers necessary for the production of the books, accounts 
records, files and documents when requited whether by the Inspector 
or by the court, or may pass such other orders as to their disposal as 
appears just or necessary. 
(f) AnInspector shall have authority to require any person whose testimony 
he may require regarding any loan or money-lending business, to appear 
before him or to produce or cause to be produced any document and to 
examine such person on oath. 
(4) An Inspector may apply for assistance to an officer-in-charge of apolice- 
station and take police aid in performing his duties under this Act and 
rules made thereunder. 
13. Redemption of pledge: 
(1) Notwithstanding any agreement between the pawnbroker and the pawner 
that a pledge shall be redeemed within a specified period which is less 
than one year, it shall be lawful of the pawner to redeem the pledge 
within one year &om the date of pawning exclusive of that day, and 
there shall be added to that year of redemption seven days of grace 
within which every pledge shall continue to be redeemable. 
(2) where the contract between the pawner provides a period longer than 
one year for redemption there shall be added to such period of 
redemption seven days of grace within which the pledge shall continue 
to be redeemable. 
(3) if a pledge is not redeemed before the expiry of the period of redemption 
andthe days of grace, the pledge, the pledge shall be disposed of by the 
pawnbroker in accordance with the provisions of Section 14. 
14. Sale of pledge and inspection of sale book: 
(1) An unredeemed pledge shall be disposed of by the pawnbroker only by 
sale at a public auction. The sale shall be conducted in such manner as 
may be prescribed. 
(2) Where the highest bid at such sale is the bid of the bid of the pawnbroker 
the sale shall not become absolute unless the bid is for a sum exceeding 
the sum payable on the pawn inclusive of interest and charges and the 
sale is confirmed by the inspector appointed under sub-section (10 of 
Section 12. 
(3) At any time within one year from th date of public auction, the holder 
of the pawn-ticket may inspect the enhy reIating to the sale either in the 
sale book of pledges or in such lists of the auction as may be prescribed. 
(4) (a) If the pledge was sold for more than the amount of the loan and the 
interest and charges due at the time of the sale, the pawnbroker shall 
pay to the holder of the pawn-ticket the excess amount after deducting 
therefrom the necessary cost and charges of the sale. 
@) If within twelve months before such sale, sale of any other pledges 
belonging to the same person has resulted in a deflect, the pawnbroker 
may set offthe deficit against such excess amount and shall be liable to 
pay only the balance, if any. 
15. Liability of pawn broken in case of fire etc: 
(1) here pledges is damaged, destroyed or lost by, or in consequence of, 
fire, or otherwise, the pawnbroker shall nevertheless be liable to pay 
the value of the pledge as noted in the pawn book to the pawner after 
deducting the amount of the principal and interest or other charges due 
to him. 
(2) A pawnbroker shall be entitled to insure to the extent of the value so 
noted in the pawn book. 
16. Punishment for advancing smaller amount or receiving higher interest 
than that specified in the accounts for other documents: 
(I) Any money lender, whether licenced or not: 
(a) who actually advances an amount less than the amount shown in 
his accounts, registers, pawn-tickets or other documents relating 
the loan, or 
(b) who receives interest or other charges at arate higher than the rate 
shown in the accounts, registers, pawn-ticket or other documents 
shall be punishable with imprisonment for a tern may extend one 
year or with fine which may extend to five thousand rupees or 
with both. 
(2) If a money lender is convicted of an offence under sub-section (1) after 
having been previously convicted of such an offence, the Court 
convicting him on the subsequent occasion may cancel his license as a 
money lender. 
Provided that such cancellation shall not afFect the right of a money 
lender to realize loans advanced by him in accordance with the 
provisions of this regulation prior to the cancellation of his license. 
17. Cognizance of offences: 
No Court shall take cognizance of an offence punishable under this Act 
or the rules made thereunder except on a complaint in writing made by the 
Inspector appointed under sub-section (1) of Section 12, or such other officer 
or authority as may be prescribed. 
18. Certain otherActs of pawnbrokers to be punishable: 
A pawnbroker who- 
(1) takes article in pawn from any person obviously appearing to be under 
the age of eighteen years or to be of unsound mind or to be intoxicated; 
or 
(2) purchases or takes in pawn or changes a pawn-ticket issued by another 
pawn-broker; or 
(3) employs any person under the age of eighteen years to take pledges in 
pawn; or 
(4) under any pretence, except at a public auction, any pledge while in 
pawn with him; or 
(5) permit any pledge while in pawn with him to be redeemed with a view 
to purchasing it for himself; or 
(6) makes any contract or agreement with any person pawning or offering 
to pawn any article, or with the owner thereof, for the purchase, sale or 
disposition thereof within the time of redemption; or 
(7) sells or othenvise dispose of any pledge pawned with him except at 
such time and in such manner as is authorized by or under this act or 
the rules made thereunden; shall be punishable with imprisonment for 
a term which may extend to one year or fine which may extend to five 
thousand rupees or with both. 
19. Certain Acts of pawner to be punishable: 
(1) Any person who- 
(a) offers by way of pawn to a pawnbroker any article of which he is 
unable, or refuses, to give a satisfactory account of the means by 
which he came into possession of the article; or 
(b) willfully or knowingly gives false information to apawnbroker as 
to the ownership of the article to be pawned or as to the genuineness 
thereof or as to his name and address or as to the name and address 
of the owner of the article; or 
(c) not being entitles to redeem a pledge, attempts or endeavours to 
redeem the same; shall be punishable with imprisonment ffor a 
term which may extend to six months or with fine which may 
extend to two thousand five hundred rupees or with both. 
In every case falling under sub-section (10 and in any case, where, on 
an article being offered in pawn, for sale, or otherwise, to pawnbroker, 
the pawnbroker reasonably suspects that it has been stolen or otherwise 
illegally or clandestinely obtained, he shall in the absence of reasonable 
excuse, in inquire into the name and address of the person concerned 
and seize and detain the article and forthwith communicate to the nearest 
police station the facts of the case and shall deliver the article seized to 
the police. 
(3) A list of stolen properties may be made over by the police to any 
pawnbroker licensed under this Act and thereupon it shall be the duty 
of such pawnbroker- 
(a) if any article answering the description of any of the properties set 
forth in any such list is offered to him in pawn, for sale or otherwise, 
proceed in accordance with the provisions of sub-section (2); and 
(b) if any such article is already in his possession, to communicate to 
the nearest police station forthwith the facts of the case (including 
full particulars as to the name and address of the person who 
delivered the articles to the pawnbroker) and, if so required by the 
police, to deliver the articles to them. 
20. Penalty for molestation of debtor: 
(1) Whoever molests or abets the molestation of any debtor for he recovery 
of any loan shall punishable with imprisonment for a term which may 
extend to one year or with fine which may extend to five thousand 
rupees or with both. 
(2) Notwithstanding anything contained in the Code Criminal Procedure, 
1898 (Central Act 5 of 1898), an offence under this Section shall be 
cognizable and bailable. 
21. Power to suspend or cancel licenses: 
(1) The licensing authority may, at any time, during he term of any license, 
suspend it for such period as that Authority may deem fit or cancel it by 
an order in writing- 
(a) If the licensee carries on the business in contravention of the 
provisions of this Act or the rules made thereunder or of the 
conditions of the license; or 
(b) if any reason for which the licensing authority could have refused 
to grant the license to the money lender under sub-section (3) of 
Section (4), is brought to the notice of that authority after the grant 
of the license; or 
(c) If the license is convicted by a Criminal Court under Section 20 
or for an offence involving moral turpitude; or 
(d) If the license maintain false accounts; or 
(e) If he obstructs or willfully reuse facilities to an inspector appointed 
under sub-section (1) of Section 12 or other authority appointed 
under this Act in the performance of his or its duties under this 
Act or the rules made thereunder. 
(2) Before suspending or canceling alicense under sutFsection(l), the licensing 
authority shall give the licensee anotice in writing statingthe grounds on - - . 
which it is proposed to take action and requiring him to show cause against 
it within suchtime as may be specified in the notice. 
(3) Any person aggrieved by an order of the licensing authority suspending or 
canceling a license may, within one month of the date of communication of - 
such order to him appeal to the prescribed authority 
22. Publication of order of suspension or cancellation: 
Every order of suspension or cancellation of a license under this act shall be 
notifiedinthe ~azette id at the police stationhaving jurisdiction over the area to 
which the license relates and also on the notice board of the office of the licensing 
authority. 
23. No compensation for suspension or cancellation of license: 
A person whose license is suspended or cancelled under Section 2 1 shall - - 
not be entitled to any compensation in respect of such suspension or cancellation 
or to the refund of any fee paid in respect of such license. 
24. Penalty for carrying on business without license: 
Whoever carries on the business of money lending without a license or 
otherwise that in conformity with the terms and conditions of a license shall 
be punishable with imprisonment for a term which may extend to six months 
or with fine which may extend to two thousand five hundred rupees or with 
both. 
25. Other penalties: 
(1) Whoever contravenes any of the provisions of this Act or of any rule 
made thereunder or of any terms or conditions of a license granted 
thereunder or makes a claim or a statement or furnishes a declaration 
under Section 9 which is false he does not believe to be true shall, if no 
other penalty is elsewhere provided for in this act for such contravention, 
be punishable with imprisonment for a term which may extend to one 
year or with fine which may extend to five thousand rupees or with 
both. 
(2) Where a contravention of any of the provisions of this Act or of any 
rules made thereunder of which a person is convicted consists of a mere 
omission to do a thing, the Magistrate may, while 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 
suspending or cancelling his license. 
26. Jurisdiction to try offences: 
No Court inferior to that of a Magistrate of the second class shall try 
any offences punishable under this Act. 
27. Contracts not to be void on account of offence: 
Where a money lender is guilty of an offence punishable under this act 
any contract of pawn or other contract made by him in relation to his business 
of money-lending shall not be void by reason only of that offence, nor shall 
he by reason only of that offence lose his lien on, or right to, the pledge, or his 
right to the loan and the interest and other charges, if any, payable in respect 
thereof. 
28. Power to make rules: 
(1) The government may, after previous publication, make rules to carry 
out the purposes of this Act. 
(2) In particular and without prejudice to the generality of the foregoing 
power, such rules may provide for all or any of the following matters, 
namely:- 
the form of and particulars to be contained in an application for a license 
and the authority to whom such application shall be made under Clause 
(a) of sub-section (1) of section 4. 
the manner in which the license fee payable under Clause (c) of sub- 
section (1) of Section 4 shall be paid; 
the form of the license and the terms and conditions subject to which it 
may be granted under sub-section (2) of section 4. 
the other authority referred to in sub-section (4) of section 4 subject to 
whose control on direction of licensing authority shall grant or refuse 
the license; 
the form of the license and the terms and conditions subject to which it 
may be granted under sub-section (2) of section 4; 
the authority referred to in sub-section (5) of section 4 to whom an 
appeal shall lie against the order ofthe licensing authority passed under 
sub-section (3) of Section 4; 
the form of the pawn-ticket to be given to the pawner under Section 8; 
the form of declarations under Section 9; 
the form of notice to be given under Section 9; 
(j) the form and the language of the locality in which books, accounts and 
documents specified in this act shall be maintained, kept or used; 
@) the authority to whom, the manner in which and the times at which, the 
returns relating to the loans shall be submitted under clause (e) of sub- 
section (1) of Section 10; 
(1) The authority to whom an application shall be made for the grants of a 
certificate under sub-section (2) of Section 11 and the form of and the 
particulars to be contained in, such application; 
(m) the form in which and the period for which the certificate referred to in 
sub-section (3) of Section 11 may be granted and the particulars which 
such certificate shall contain; 
(n) the procedure which shall be followed and the powers which may be 
exercised, by the authorities exercising functions, holding inquiries and 
hearing appeals under this Act; 
(0) any other matter which is to be, or may be, prescribed under this act; 
(3) All rules under this Section shall come into force from the date of 
commencement specified in the rules and shall be punished in the 
officials Gazette. 
29. Power to remove difficulties: 
If any difficulty arises in giving effect to the provisions of this Act, the 
Government may, as occasion may require, by order, do anything which 
appears to them to be necessary or expedient for the purpose of removing the 
d'iEculty. 

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