LexThe Telangana Money Lenders Act, 1349 Fasli.
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Open in Lexace · Ask the AI about this actTHE TELANGANA MONEY LENDERS ACT, 1349 F.
(ACT NO. V OF 1349 F.)
ARRANGEMENT OF SECTIONS
Sections
1. Short title, commencement and extent.
2. Definitions.
2-A. Non-mulki money lenders barred from carrying on
business of money lending.
3. Money lenders to get their names registered.
4. Power to cancel or suspend licence.
5. Money lenders to maintain accounts and to furnish
statements thereof to debtors.
6. Omitted.
7. Debtors not bound to admit correctness of
accounts.
8. Receipt for payment of loan.
9. Procedure of Court in suits for recovery of loans.
10. Computation of interest.
11. Power of Court to limit interest due in certain cases.
12. Order for payment of decretal amount by
instalments.
13. Punishment for molestation of debtor.
14. Exemption from arrest.
15. Power to make rules.
16. Power to exempt.
THE TELANGANA MONEY LENDERS ACT, 1349 F.1
ACT No.V OF 1349 F.
1. This Act may be called 2[the Telangana Money Lenders
Act, 1349 F.] and shall come into force in 2[the whole of the
State of Telangana from the date of its publi cation in the
Official Gazette and from the sa id date the Agricultural
Debtor‘s Relief and Prevention of Usury Regulation, 1341 F,
and the Money Lenders ‘ Regulation, 1347 Fasli shall be
repealed.
(2) The form prepared, money lenders name
registered, licence issued or anything done under the
Money Lenders Regulation, 1347 F. till the commencement
of this Act, shall be deemed to have been prepared, issued,
registered and done under this Act; and this Act shall apply
to them in the same manner as if they had been prepared,
issued, registered, and done under this Act.
2. In this Act, unless there is anything repugnant in the
subject or context,-
(1) ‗bank‘ means a company carrying on the business
of banking and registered under *the Companies Act, 1956.
(2) ‗company‘ means a company registered under *the
Companies Act, 1956.
1. The Andhra Pradesh (Telangana A rea) Money Lenders Act, 1349 F. in
force in the combined State, as on 02.06.2014, has been adapted to the
State of Telangana, under section 101 of the Andhra Pradesh
Reorganisation Act, 2014 (Central Act 6 of 2014) vide. the Telangana
Adaptation of Laws (No.2) Order, 2016, issued in G.O.Ms.No.46, Law (F)
Department, dated 01.06.2016.
2. Substituted by G.O.Ms.No.46, Law (F) Department, dated 01.06.2016.
* Now see Companies Act, 2013 (Central Act 18 of 2013).
Definitions.
Short title,
commencement
and extent.
Central Act 1 of 1956.
Central Act 1 of 1956.
2 [Act No.V of 1349 F.]
(3) ‗co-operative society ‘ means a society registered
under the 3Hyderabad Co-operative Credit Societies Act No.
II of 1323 F.
(4) ‗loan‘ means a loan secured or unsecured,
advanced on interest in cash or in kind, and shall include
every transaction which is in substance a loan, but shall not
include the following:-
(a) a deposit of money or other property in a Post
Office or in a bank or in a company or with a co -operative
society;
(b) a loan to or by and deposit with, any society or
association registered under any law;
(c) a loan advanced by Government or by any local
authority authorised by Government;
(d) a loan advanced by a bank, a co-operative society
or a company;
(e) a sum of money advanced on the basis of a
negotiable instrument as defined in 4[the Negotiable
Instruments Act, 1881] other than a promissory note;
(f) a loan advanced to an agricultural labourer by his
employer;
(g) a loan advanced by one trader to another trader in
the ordinary course of business, in accordance with practice
in trade;
3. Repealed by Act XVI of 1952.
4. Repealed by Central Act 3 of 1951.
Central Act 26 of 1881.
[Act No.V of 1349 F.] 3
(h) a sum of money payable to a trader by a person
other than a cultivator or a labourer for articles sold on
which interest is charged by reason of non -payment on due
date;
(5) ‗principal‘ means the amount of loan actually
advanced to the debtor;
(6) ‗interest‘ includes the return to be made expressly
or impliedly in excess of the actual amount of loan
advanced;
(7) ‗money lender ‘ means a person including a pawn -
broker, who, within the meaning of this Act, only advances
loan in the ordinary course of his business or does so along
with other business, and shall also include the legal
representative of such person and the person claiming to be
his representat ive on the ground of succes sion or
assignment or otherwise;
(8) ‗pawn-broker‘ means a person who in the ordinary
course of his business advances loan and takes goods in
pawn as security for payment of such loan;
(9) ‗trader‘ means a person who in the ordinary course
of his business buys and sells goods and property and shall
also include the following persons:-
a wholesale dealer and retailer,
a commission agent,
a broker,
a controller of factory,
a contractor,
4 [Act No.V of 1349 F.]
a factory owner,
but shall not include a person who sells only his non -
agricultural produce or cattle or buys agricultural produce or
cattle for his own use;
(10) ‗cultivator‘ shall mean a person who is a member
of the agricultural class within the meanin g of the
5Prevention of Agricultural Land Alienation Act No.III of 1349
F. and whose main source of livelihood is agriculture;
(11) ‗labourer‘ shall mean a person who earns his
livelihood merely by physical labour and who receives
wages in cash or in kin d not exceeding one rupee per day
or thirty rupees per month;
(12) ‗prescribed‘ shall mean prescribed by rules made
under this Act;
(13) ‗stranger‘ means a person who is not a citizen of
India within the meaning of the Citizenship Act, 1955
(Central Act 57 of 1955).
2-A. (1) No money -lender who is a stranger shall carry on
the business of money-lending from 18th Khurdad 1355 F.
(2) All licences granted under this Act to the money -
lenders referred to in sub -section (1) shall be deemed to
have been cancelled from 18th Khurdad 1355 F; and all
transactions of money -lending carried on by such persons
as money -lenders shall cease from the said date. Such
money-lenders shall not be entitled to refund of licence fee
or to compensation on account of cancellation of licences.
5. Repealed by Act No.XXI of 1950.
Non-mulki money
lenders barred
from carrying on
business of
money lending.
[Act No.V of 1349 F.] 5
(3) Th e money -lenders referred to in sub -section (1)
who had obtained licences of money -lending under this Act
prior to the 1 8th day of Khurdad 1355 F. may, under the
provisions of this Act, recover through a competent court
the loans advanced before the said date.
(4) Any money -lender referred to in sub -section (1)
who carries on the business of money -lending in
contravention of the provisions of the said sub -section, or
recovers his dues otherwise than in accordance with the
provisions of sub -section (3) he s hall, on conviction before
the 6[Collector], be punished with imprisonment for a term
which may extend to one year, or with fine or with both. An
appeal from the order of the 6[Collector] shall lie to the
Sessions Judge.
(5) An offence under this section shall be cognizable
and bailable and the Court trying the offence shall, unless it
is proved to the contrary, presume that the accused is a
stranger and that he was carrying on the business of
money-lending in contravention of the provisions of this
section.
3. (1) Every officer who has been authorised by
Government under this Act shall maintain a register of
money-lenders in such form and with such particulars as
may be prescribed, such register shall be deemed to be a
public document within the meaning of the Indian Evidence
Act, 1872.
(2) Every money -lender, in order to get his name
registered, shall present an application in writing in the
prescribed form to the competent officer and the said officer
shall on such application being pr esented, register the
6. Substituted for the word ―Taluqdar‖ by the Andhra Pradesh
Adaptation of Laws Order, 1957.
Money lenders to
get their names
registered.
Central Act 1 of 1872.
6 [Act No.V of 1349 F.]
applicant‘s name and grant a licence in the prescribed for m
and written prescribed period:
Provided that the licensing authority may, if he has
reason to believe that a money -lender is of undesirable
conduct, refuse to grant or to renew a licence and shall
record the reasons therefor. Where the licensing authority is
a Tahsildar an appeal from his order shall lie to the Collector
and to the 7[Board of Revenue] where the licensing authority
is a Collector. The decision of the appe llate authority shall
be final.
(3) Every person making an application under sub -
section (2) shall pay such licence f ee not exceeding twenty -
five rupees, as has been fixed for the district concerned.
(4) A licence issued under sub-section (2) shall be valid
for one year from the date of issue.
(5) (a) No money -lender shall carry on in any district
the business of money-lending without obtaining a licence
provided for in sub-section (2);
(b) If any person contravenes the provisions of clause
(a), he shall be punished with rigorous imprisonment for a
term which may extend to six months or with fine or with
both. T he fine imposed shall, in case of default, be
recoverable as arrears of land revenue. The Collector shall
have power to award punishment under this clause. An
appeal against his order shall lie to the Sessions Judge;
(c) An offence under this sub -section shall be
cognizable and bailable.
7. Substituted for the word ―Subedar‖ by the Andhra Pradesh Adaptation
of Laws Order, 1957.
[Act No.V of 1349 F.] 7
(6) [XXX]
4. (1) Where it is found in respect of a money -lender that
after the commencement of this Act;
(a) he has been found guilty by a Civil Court of
contravening the provisions of sections 5, 6 or 8 in more
than two suits, or
(b) the suit instituted by him has been dismissed in
whole or in part on the ground that an entry relating to loan
has been made by him in any document showing the
amount of loan to be in exces s of that actually advanced
including the necessary expenses incurred, or
(c) the suit instituted by him was dismissed on the
ground that it was based on fraud, or
(d) he has been found guilty in a money transaction
by a Court, of forgery, cheating or coercion within the
meaning of section 15 of the Indian Contract Act, 1872, or
he or his agent has been found guilty of contraveni ng
the provisions of section 13.
The Collector may cancel the licence or suspend it for
any term, or prohibit the renewal thereof for a period not
exceeding two years:
Provided that the Collector shall not pass such order
until the expiry of the period for appeal or revision or review
and in case an appeal or revision or review has been
disposed of.
(2) (a) the Collector may take action under sub -section
(1) either of his own motion or on the app lication of an
interested party:
Power to cancel
or suspend
licence.
Central Act 9 of 1872.
8 [Act No.V of 1349 F.]
Provided that no licence shall be cancelled or
suspended nor renewal thereof shall be prohibited without
giving the money-lender an opportunity to defend.
(b) The Collector may, during the period for an
appeal, either of his own motion or on the application of an
interested party review his own order, provided an appeal
therefrom is not pending before the Board of R evenue. An
appeal from an order of the Collector shall lie to the Board of
Revenue whose decision shall be final.
5. (1) A money-lender shall,–
(a) maintain a regular account of loan for each debtor
separately;
(b) deliver to the debtor every year the prescribed
statement of account signed by him or his agent specifying
the amount of loan that may be outstanding against such
debt or on the prescribed date. Such state ment of account
shall contain all transactions of loan entered into during that
year. The said statement shall be in the language of the
village office of the district for which the money -lender has
obtained a licence.
(2) The account mentioned in clause (a) of sub-section
(1) shall be so maintained that items of principal and interest
may be separately and clearly ascertained and the balance
of principal and interest shall be shown separately. The
money-lender shall not be authorised to include the inter est
or any portio n of interest in the principal. The opening
balance of principal and interest shall be separately shown:
Provided that if after a loan was originally advanced by
a money-lender, a widow or minor becomes entitled to such
loan, such widow or minor shall not be required to maintain
the account and furnish the statement of account under sub-
Money lenders to
maintain accounts
and to furnish
statements
thereof to debtors.
[Act No.V of 1349 F.] 9
section (1) for a period of one year from the date on which
such right accrued.
(3) The licensing authority or any person authorised by
him may inspect the books of account of a money-lender for
the purpose of satisfying himself that the provisions of this
section are being complied with.
8[6. [XXX]]
7. A debtor to whom a statement of account has been
furnished under clause (b) of sub -section (1) of section 5,
shall not be bound to admit or deny the correctness of such
account, and from his mere silence it shall not be presumed
that he has admitted the correctness of the account.
8. Every money-lender shall, without delay, pass a receipt
for the payment made by a debtor and if payment is made
by challan an endorsement shall be made thereo n
acknowledging receipt thereof.
9. 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 c omplied 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 mo ney-lender as
defined in sub -section (7) of section 2, but does not hold a
8. Section 6 omitted by the Telangana Pawn Brokers Act, 2002 (Act No.6
of 2002).
Debtors not
bound to admit
correctness of
accounts.
Receipt for
payment of loan.
Procedure of
Court in suits for
recovery of loans.
10 [Act No.V of 1349 F.]
licence granted under section 3, th e 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 st atement 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 i n good
faith.
[Act No.V of 1349 F.] 11
10. 9[(1) The Government may, from time to time, by
notification in the 10Telangana Gazette, fix the maximum rate
of interest for any local area or clas s of business of money
lending in respect of secured loans and unsecured loans.
(1-a) No money -lender shall levy charges other than
compound interest and expenses mentioned in sub -section
(3) of this section incurred by him in respect of loans.
(1-b) Whoever , being a money -lender, demands or
charges or re ceives from a debtor interest at a rate
exceeding the ma ximum rate fixed by the Government
under sub-section (1), shall be punished with impri sonment
for a term which may extend to six months, or with fine
which may extend to one thousand rupees, or with both.]
(2) The parties may include a stipulation in the
agreement that if the sum payable as interest is not paid on
the date fixed, under the agreement the money -lender may
charge simple interest on such sum by way of damages
from the date of default until it is paid, at a rate not
exceeding half the rate of interest payable on the principal
and th e interest so charged shall not, for the purposes of
this Act, be deemed to be part of the interest charged in
respect of the loan.
(3) When property is given by way of security or
mortgage nothing in this section shall prevent a money -
lender from recovering the expenses incurred for
investigating title to the property, the costs of stamp and
expenses for registration of document and other expenses
incurred which may be reasonable in the opinion of the
Court, if the parties have agreed in writing to the levy and
payment of such expenses, otherwise only expenses
9. Substituted by Act No.21 of 1978.
10. Substituted by G.O.Ms.No.46, Law (F) Department, dated
01.06.2016.
Computation of
interest.
12 [Act No.V of 1349 F.]
leviable under the 11Transfer of Property Act No. I of 1336 F
or any other law for the time being in force, shall be allowed.
Explanation:— In cases where the transaction of loan is
in kind or loan is in cash and its repayment in kind, or loan
in kind and repayment in cash, the amount of principal and
interest shall be determined according to the local market -
price of the commodity at the time of taking and repayment
of loan.
11. (1) The provisions of this Act shall not apply to a loan
advanced before the commencement of this Act:
Provided that no Court shall be competent to pass a
decree for a sum exceeding the principal on account of any
outstanding interest in respect of a loan advanced to a
cultivator or labourer before the commencement of this Act.
(2) In an inquiry under sub -section (1 ) into the loan
advanced to a cultivator or a labourer, th e outstanding
interest shall be computed in the following manner:-
(a) the account for the twelve years preceding the
commencement of this Act shall be so examined that on the
first day of the twelve years period and if the loan had
commenced within twe lve years, on the date on which the
transaction commenced the amount outstanding against the
debtor shall be entered against t he debtor ‘s name as
principal;
(b) separate accounts, of the principal a nd interest
shall be maintained;
11. Repealed by Central Act No.III of 1951 (Now see the Transfer of
Property Act, 1882 (Central Act No.4 of 1882).
Power of Court to
limit interest due
in certain cases.
[Act No.V of 1349 F.] 13
(c) in the account of principal there shall be debited
to the debtor‘s name all such amounts as may, from time to
time, have been actually received by the debtor from the
money-lender and if any goods is sold as part of the
transaction, its price shall be included therein;
(d) in the account of principal there shall not be
debited to the debtor‘s name any outstanding interest which
has been converted into principal by any agreement,
settlement, or contract in the course of the transaction;
(e) in the account of interest up to the date on which
this Act comes into force, simple interest on the balance of
principal shall be calculated at the rate agreed between the
parties, provided that it does not exceed nine per cent per
annum in the case of secured loan and twelve per cent per
annum in the case of unsecured loan, and , from the date on
which this Act comes into f orce upto 18th Khurdad 1355 F,
the rate of interest shall not exceed nine percent per annum
and twelve per cent per annum respectively. From 18th
Khurdad 1355 F. the rate of interest shall not exceed six per
cent per annum and nine per cent per annum respectively;
(f) all payments made in cash or kind by the debtor to
the money lender or on his account, and all benefit of
services or other advantages of every d escription, received
by the money lender in the course of the transaction the
value of which shall, if necessary, be determined by the
court in its discretion or with the aid of arbitrators appointed
by it, shall be credited first in the account of interest; and the
balance, if any, after payment of the interest due shall be
credited to the account of the principal;
(g) the principal and interest shall be calculated up to
the date of institution of the suit, and the balance (if any) of
the suit, outstand ing against the debtor on the said date. If
14 [Act No.V of 1349 F.]
the amount of interest exceeds the principal, the amount of
interest in excess of the principal shall not be allowed.
12. (1) The court may, in respect of a decree without
instalments passed after the commencement of this Act at
any time on the application of a judgment -debtor, after
notice to the decree -holder, direct that the amount of the
said decree shall be paid in such number of instalments and
subject to such conditions and on such dates as may, in its
opinion, be proper having regard to the circumstance of the
judgment-debtor and the amount of the decree.
(2) In case the judgment -debtor is a cultivator or a
labourer; the power mentioned in sub-section (1) may also
be ex ercised in respect of a decree passed before the
commencement of this Act:
Provided that such power shall not be exercised more
than once in respect of the same decree.
13. (1) A money -lender or his agent who molests or abets
the molestation of a debtor for the recovery of debt shall be
punished with rigorous imprisonment for a term which may
extend to two years or with fine or with both.
Explanation:- For the purposes of this section a money
lender or his agent shall be deemed to molest a debtor
when he commits the following acts with intent to prevent
the debtor from doing any act which he has a right to do or
forces him to do any act which he has a right not to do:-
(a) obstructs th e debtor of uses violence against or
intimidates him, or
(b) follows the debtor wherever he goes or interferes
with any property owned or used by him or deprives him of,
or hinders him in, the use thereof, or
Order for payment
of decretal
amount by
instalments.
Punishment for
molestation of
debtor.
[Act No.V of 1349 F.] 15
(c) loiters or does any similar act at or near a house
or place where the debtor resides, works, or carries on any
business or is present there by accident:
Provided that if a money lender or his agent happens
to be at a near such house or place merely for the purpose
of obtaining or communicating any information or to make a
demand for a loan due, he shall not be deemed to have
molested the debtor.
(2) An offence under this section shall be cognizable
and bailable.
14. Notwithstanding anything contained in the Code of
Civil Procedure , 1908 a labourer or a cultivator who is a
pattedar, shikmidar, Asami -Shikmi or holder of land with a
revenue of fifty rupees or less, shall not be arrested to be
detained in civil Jail.
15. (1) Government may make rules for carrying out the
purposes of this Act.
(2) All rules made under this Act shall come into force
from the date of publication in the Official Gazette.
12[16. The Government may by notification published in the
13Telangana Gazette and for reasons to be recorded ther ein,
exempt any person or class of persons or any financial or
banking institution or agenc y or any class of financial or
banking institutions or agencies from all or any of the
provisions of this Act or the rules made thereunder, subject
to such conditions as the Government may deem fit to
impose; and they may, likewise, vary or cancel such
exemption.]
* * *
12. Inserted by Act No.31 of 1981.
13. Substituted by G.O.Ms.No.46, Law (F) Department, dated
01.06.2016.
Exemption from
arrest.
Central Act 5 of 1908.
Power to make
rules.
Power to exempt.