Bombay Money Lenders Act

Querist : Anonymous (Querist) 11 April 2011 This query is : Resolved
Dear Sir,
I am a Registered Money Lender under the above Act in Maharastra State. I lend the money on the basis of security of gold.
My question is what is the duration that I hold the security(Gold) can be sold off if the borrower is defaulter. I have heard that upto 3 year from date of default we cannot take action.
So what is the exact time Span in the Act within which I can Sell the gold & recover my money in case of Default?

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Bhushan V. Kale (Expert) 11 April 2011
There is 3 years limitation to file suit for recovery of loan. However, if you want to sell the gold, please issue legal notice to the borrowers in that respect.

It is not necessary to wait for 3 yrs. to sale the gold, it depands upon the terms and conditions decided in between you and borrower while granting the loan.

Querist : Anonymous (Querist) 12 April 2011
Dear Sir,
Can there be a written agreement to repay the loan within six months failing to repay the loan a month notice after that the gold well be demolished.
Sir my question is wheather a six month peroid is sufficent as per Law?
There are number of views regarding the period to be allowed I want the exact period as per Law so after that the action can be taken.

Bhushan V. Kale (Expert) 12 April 2011
yes, you can execute a written agreement. you can fix any period for repayment of loan amount. Law is silent over the minimum period of repayment of loan.

There should be a legal notice prior to taking any action. Though, it is not mandatory, but it is necessary to safeguard your interest and action taken if any borrower failed to repay the loan.

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