278 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
Rate of interest when deemed excessive.
- For the purposes of section 37, interest shall be deemed to be excessive if—
(i) in the case of an unsecured loan it is at a rate in excess of three times,
(ii) in the case of a loan secured by a second or subsequent mortgage it is at a rate in excess of two and a half times,
(iii) in the case of loan secured by a first mortgage or pledge it is at a rate in excess of one and a half times,
the Bank rate of the Reserve Bank or of the Imperial Bank or the Bank of Bombay, as the case may be, at the date of the loan or transaction.
Mode of taking account
- The account under section 37 shall be taken in accordance with the following rules, that is to say—
(i) separate accounts of principal and interest shall be taken,
(ii) in the account of the principal there shall be debited to the debtor such money as has from time to time been actually received by him from the money-lender and the price of goods, if any, sold to him by the moneylender as part of the transaction,
(iii) in the account of the principal there shall not be debited to the debtor any accumulated interest which had been converted into principal at any settlement of account or by any contract made in the course of the transaction,
(iv) in the account of interest there shall be debited to the debtor monthly simple interest on the balance of principal for the time being outstanding at a rate agreed between the parties but in no case exceeding the rates specified in section 38,
(v) all moneys paid by or on account of the debtor to the money-lender or on his account, and all payments in kind, all profits, service or other advantages of every