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Ni act- money lending license

Page no : 3

Anil Agrawal (Retired)     17 September 2011

Every State has enacted Money Lending Act. What is the provision in Punjab is not known. If he is a habitual moneylender and is lending money to many persons and charging interest, then the Act would be attracted and perhaps NI Act would not be applicable without the licence. I suggest that you contact a lawyer practising in Punjab conversant with both NI Act and Punjab Money Lending Act to get the correct picture.

Anil Agrawal (Retired)     17 September 2011

i am quoting a para from this judgement which may please be downloaded. It is from Punjab & Haryana High Court. Have you stated in your averment that the complainant was engaged in the money lending business?

35. The plea of the defendants that the suit is barred under the provisions of the Punjab Registration of Money Lenders Act, 1938 on the ground that the plaintiff does not have a license to act as a money lender is neither here nor there for the reason defendants have nowhere pleaded in the applications seeking leave to defend that the plaintiff was engaged in the business of money lending. The Punjab Registration of Money Lenders Act, 1939 requires a person to obtain a license to act as a money lender if the person is in the business of money lending. It was for the defendants to have made specific averments that the plaintiff was engaged in the business of money lending. The said Act does not prohibit casual advancing of loan by a person to a third party. Casual loans do not require a license.

Attached File : 17909 210077 33 atul anand vs nanak food industries and ors on 2 august 2006.pdf downloaded: 167 times

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     17 September 2011

These are discussions on a public platform and it can help you to solve your problem in court. There you have to engage an advocate who can raise the issue.

Shri Agrawal has done real hard work and dishing out the citation. But such citations must be read in toto and not single phrase or sentence in isolation.

The main trust of the citation is that the plea is not taken in WS that is at the earliest stage and hence at belated stage it becomes irrelevant.

Ankit @mka.asr (Prop)     17 September 2011

Dear Mr Agarwal, Thank you very much for the details. In my case, complainant has shown that he gave me Friendly loan ( without mentioning anything about interest). His last 1 year back bank statement ( taken back from cheque bouncing) show that he had only Rs 2500/- in his bank account. He gave me Cash Loan of Rs 1,00,000 without signing any Loan agreement. He also admitted that he has lent same kind of loan to 4-5 other persons and he doesn't remember their name. without remembering names of the borrowers how he can lent Loans. Doesn't it sound like commercial business of illegal money lending without Money Lending Licence.

Ankit @mka.asr (Prop)     25 September 2011

Please provide me judgment copy of judgment reported in 2009 (2) ALL MR (Journal) 61 in the matter of "Sunderdev v. Yogesh".

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     26 September 2011

This citation is for civil case not applicable for cheques.

Ankit @mka.asr (Prop)     26 September 2011

Dear Rajeev, If some is claiming to have lent the Rs 1,00,000/- cash loan to his friend. He also admit in Cross statement that beside his friend he has lent cash loan to 4 or 5 persons more( he doesn't remember names). Can we prove him Illegal Money lender under Punjab Money lending Act?

Anil Agrawal (Retired)     26 September 2011

Please remember that giving loan casually does not come under ML Act. I think it has to be proved that he is habitual moneylender and charges interest.

Ankit @mka.asr (Prop)     26 September 2011

Dear Mr Agarwal, Normally private Money lending in Punjab is happening without writing an agreement. Even Money lenders charge interest in cash and handover cash loan. It is always hard to prove that Individual person is Illegal Money Lender. 

In my NI 138 case, Complainant has admitted in cross examination by my Lawyer in court that he has lent Cash Loan to 4 or 5 other persons also beside me. When my Lawyer asked about their names then Complainant replied that he doesn't remember their name. 

My point is is it possible to give Cash Loan to 4-5 persons casually? If Complainant claims those loan borrowers are his friends then why he doesn't remember names of those.

Is it enough to prove him Money Lender without License in Court?

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     26 September 2011

Most of the advocates in cross get evidence against their clients since no advance prepration and expereince.

Any NI 138 case can be demolished in cross alone., I have given no of  examples of cross on this site at many threads  by which any complainant can be clean bold in cross alone.

You have messed up your case since 1) admitted you had given cheque 2) your bank has admitted that the cheque was bounced from your account and 3) you have given opportunity to the complainant to show source of funds.


Any court will ask why the cheque was given having your signature and from your account  which was bounced far want of funds.

Money lending and availabilty of funds these two items were solid defense which should have been got from the mouth of the complainant which is missed and now citafions have no meaning.


Please also do not sent me PM since I prefer to reply publicly for benefit of all and even let others to join by their inputs.

Ankit @mka.asr (Prop)     26 September 2011

Dear JSDN,

1. I have never admitted that cheque is issued by me. I have lodged FIR of lost cheque book and made STOP Payment.

2. More over in Cross examination of Complainant, he has admitted that he is not financially sound and he has borrowed Rs 60,000/- from his father to give me Cash loan. He has also admitted that his father is taking Old Age pension from Goverment. He has also admitted that he has lent Cash loan to other persons also. 

3. More over for full year ( from date of lenting loan to me till cheque boucning) complainant was having only Rs 2560/- in his bank account. 

Anil Agrawal (Retired)     27 September 2011

Filing FIR about loss of cheque book AFTER 138 complaint is filed is meaningless. Stop payment has no value.

Is the cheque signed by you with the complainant or not? 

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     27 September 2011

You have scewed knowledge of law and so most of so called legal experts since they do not handle day to day cases in the courts and hence ignorant of outcome.

1) You have filed FIR but why you did not proceed further ,it shows to the court your guilty mind.

2) You have given opportunity to complainant to explain from where money has come so his bank balance has no relevance. It was the duty of the complainant to show from where money has comes instead by lousy cross you have given opportunity to him which amounts to admission on your part.

see following example :- 


Certain examples of how your advocate takes cross which goes against you and results in loosing the case, which would have been won easily.
1) Your advocate ask in the cross to the complainant that does he maintain accounts- the intention is to show to the court that he does not maintain account and the liability is not existence/real.

Now the reply is most cases will be YES, even though no accounts are there . So unwittingly your advocate has brought on record that the complainant is maintaining accounts.

To cover this lapse even though the advocate do not understand what HARAKARI / suicide he has made of his case ; he will ask through court for submission of accounts. Few dates will pass , no accounts will be submitted . If the matter is pressed the court will say adverse inference will be drawn. But this is a vague term and every body forgets it in further happening of the case so no adverse inference is drawn.

WHAT SHOULD HAVE BEEN DONE- Your advocate should have asked “ whether you have produced any accounts “ , which he will say a big NO. However without exception court generally discourage such questions on the plea that since accounts are not there so court will take note. No , you should not be influenced and insist for the question. And once it comes on record basic foundation of the complainant case is broken.

2) Similarly there was lot of discussion about unstamped slips of the bank and thereafter deposition of bank officer which went against the accused.

Here again once the legal requirements of the bank slips are not taken care by the complainant that the same should be stamped, no further evidence to support them must be allowed by the accused. By allowing further evidence of bank person you have given acceptance and validity of otherwise invalid evidence.

There are numerous such examples where the advocates of the accused miss opportunities and than blame all others .

Any NI 138 case can be won easily by the accused even by proper cross examination.

Velavartipati Vachaspati (Telugu Press)     24 November 2011

Sir, most of the private money lenders keep blank cheques and promisory notes from the public to lend money. Can anybody do it legally? If yes, under what sections? If no, under what sections? How to stop this private money lending business in india?

Velavartipati Vachaspati (Telugu Press)     26 November 2011


Most of the  Private Money Lenders demand blank cheques and promisory notes from the public. Is it legal? Almost all the private money lenders doesn't pay Income Tax. How to bring them to the fold of the government? Most of the victims are poor and losing their properties, to the Private Money Lenders. What kind of suggestions can we give to them? What are the suggestions to demolish or eradicate private money lending business in India? How and where to get the licence to do the Money Lending Business in India? 

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