Usurious Loans Act, 1977 (1920 A. D.)
No: 57 Dated: Apr, 01 1978
THE USURIOUS LOANS ACT, 1977 (1920 A. D.)
(Act No. XLVII of 1977)
An Act to give additional powers to Courts to deal in certain cases with usurious loans of money or in kind.
WHEREAS it is expedient to give additional powers to Court to deal in certain cases with usurious loans of money or in kind ;
It is hereby enacted as follows :––
1. Short title, extent and commencement. ––(1) This Act may be called the Usurious Loans Act, 1977.
(2) It extends to the whole of the Jammu and Kashmir State. It shall come in to force on the Ist of Baisakh, 1978.
(3) [The Government] may, by notification in the Jammu and Kashmir Government Gazette, direct that it shall not apply to any specified area, class of persons, or class of transactions.
2. Definitions.– In this Act, unless there is anything repugnant in the subject or context,––
(1) ‘‘interest’’ means rate of interest and includes the return to be made over and above what was actually lent, whether the same is charged or sought to be recovered specifically by way of interest or otherwise ;
(2) ‘‘loan’’ means a loan whether of money or in kind and includes any transaction which is, in the opinion of the Court, in substance a loan ;
(3) ‘‘suit to which this Act applies’’ means any suit—
(a) for the recovery of a loan made after the commencement of this Act ; or
(b) for the enforcement of any security taken or any agreement, whether by way of settlement of account or otherwise, made, after the commencement of this Act in respect of any loan made either before or after the commencement of this Act.
3. Rate of interest to be decreed by Courts.– In any suit in which interest is recoverable, the amount shall be adjudged or decreed by the Court at the rate (if any) agreed upon by the parties; and if no rate shall have been agreed upon or where the Court considers the stipulated rate as excessive or unfair, at such rate as the Court shall deem reasonable.
4. Rate of interest upon a judgement or decree.– Whenever a Court shall direct that a judgement or decree shall bear interest, or shall award interest upon a judgement or decree, it may order the interest to be calculated at the rate allowed in the judgement or decree upon the principal sum adjudged, or at such other rate as the Court shall think fit.
5. Contract for usufruct of property in lieu of interest.– A mortgage or other contract for the loan of money, by which it is agreed that the use or usufruct of any property shall be allowed in lieu of interest, shall be binding upon the parties.
6. Rate of interest on future adjustment of accounts.– In any case in which an adjustment of accounts may become necessary between the lender, and the borrower of money upon any mortgage, conditional sale of landed property, or other contract whatsoever, which may have been entered into before, or which may be entered into after the passing of this Act, interest shall be calculated at the rate stipulated therein, or if no rate of interest shall have been stipulated and interest be payable under the terms of the contract, at such rate as the Court shall deem reasonable.