272 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
Penalty for breach of Sec. 20 and 21
- When it is shown that a money-lending transaction was brought about by a contravention of any of the provisions of *Section 19 and 20, the transaction shall, notwithstanding that the money-lender was duly licensed under this Act, be void, unless the money-lender proves that the contravention occured without his consent or connivance.
Agreement for payment by borrower of costs, charges etc. void
- Any agreement between a money-lender and a borrower or intending borrower for the repayment by the borrower or intending borrower to the money-lender of any sum on account of costs, charges or expenses incidental to or relating to the negotiations for or the granting of the loan or proposed loan shall be void and if any sum is paid to a money-lender by a borrower or intending borrower on account of any such costs, charges or expenses, that sum shall be recoverable as a debt due to the borrower or intending borrower or in the event of the loan being completed, shall, if not so recovered, be set off against the amount actually lent and that amount shall be deemed to be reduced accordingly ;
Provided that it shall not be unlawful for a money-lender to charge the debtor with an amount not exceeding half the amount due on account of stamp duty and registration fee payable in respect of any document evidencing the transaction.
Chapter V
Duties of Money-lender
Transaction to be reduced to writing
- (1) After the commencement of this Act every contract for the repayment of the loan or for the payment of interest on the loan and for security of the loan shall be evidenced by a memorandum in writing signed by the borrower personally.
(2) The memorandum shall be in the prescribed form and shall contain all the terms of the contract and shall in particular show—
(a) the date on which the loan was made,
- Section number might be 20 and 21.—Editors