• Payment in excess of Rs. 20,000 to borrower

Dear Sir,
I am a Legal Money Lender licence holder from Maharashtra my Q is
1. Can I lend money in excess of Rs.20000/- in Cash?
2. Can I lend money in excess of Rs.20000/- through Bearer Cheuqe i.e paid across the Bank Counter to the Borrower?
3. In both the above Cases will there any problem in recovery of Money U/s 138 of NI Act as money was paid in cash or Bearer Chq above Rs.20000/-?
4. Under Which Circumstances Registrar under Bombay Money Lenders Act can take a legal action or Suryev or Raid against Registered Money Lender by complain by Borrower? 
Please Guide
Asked 4 years ago in Criminal Law
Religion: Hindu

First answer received in 10 minutes.

Lawyers are available now to answer your questions.

14 Answers

Firstly, when you yourself is a registered money lender in the state approved by the state act, then where is the question of not compliance of the provisions of the act.

Secondly, you please do as per the act otherwise would be in trouble and your licence would also get cancelled.

Thirdly, as provision is quite clear which states as to not o lend more than 20K in cash.

Sanjay Baniwal
Advocate, South Delhi
5464 Answers
13 Consultations

5.0 on 5.0

You can not give a loan amount above 20k if your license does not permit for the same.

In any view of the matter the 138 case will be well maintanable in the court .

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

No, for cheque you can make it, but My answer was meant for only cash transaction.

Sanjay Baniwal
Advocate, South Delhi
5464 Answers
13 Consultations

5.0 on 5.0

1) Yes, you can lend Rs.20,000/- its depends upon your license fee.

2) Yes, Its mentioned in cash or kind.

3) No, there will be no problem in recovery of money. For amount which you are talking for that please check how much License fees you have paid it

4) Registrar can take legal action under section 13A

SECTION 13A: POWER OF AUTHORISED OFFICER TO REQUIRE PRODUCTION OF RECORDS OR DOCUMENTS

Ganesh Kadam
Advocate, Pune
12335 Answers
191 Consultations

4.9 on 5.0

Dear Sir,

Your activities must be in accordance with the following Act. You can claim amounts through cheque bounce cases.

===========================================================================================

The Maharashtra Money-Lending (Regulation) Act, 2014

===========================================================================================

http://www.lawsofindia.org/pdf/maharashtra/2014/2014MH8.pdf

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

UNDER SECTION 269SS of Income Tax Act, above Rs20,000/- cash transaction is not permissible, and your claim will be defeated, if violate the law.

Konda Srinivas
Advocate, Hyderabad
211 Answers
2 Consultations

Not rated

1. No cash transaction in money lending above 20 thousand is permited in view of Section 269SS income tax act.

2.yes you can pay through cheque.

3. In first case yes there shall be problem second case there shall be no problem.

4. Under section 13 Maharastra Money lending act.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

You cannot lend over Rs 20000 by cash

2) don’t issue any nearer cheque

3) issue account payee cheque only for loans advanced by you

4) Section 269SS of the Income Tax Act prohibits any person from taking or accepting from any other person any loan or deposit in any other way than by cheque or bank draft where the amount is more than Rs 20,000. Similarly, Section 269T prohibits the re-payment of any loan or deposit other than by cheque or bank draft, if the amount is more than Rs 20,000.

Ajay Sethi
Advocate, Mumbai
87898 Answers
6207 Consultations

5.0 on 5.0

1. Can I lend money in excess of Rs.20000/- in Cash?

A. Yes, but the amount should be less than 2 lakhs. The government has banned cash transactions of Rs 2 lakh or more from April 1, 2017, through the Finance Act 2017.

2. Can I lend money in excess of Rs.20000/- through Bearer Cheuqe i.e paid across the Bank Counter to the Borrower?

A. Yes. That can be done.

3. In both the above Cases will there any problem in recovery of Money U/s 138 of NI Act as money was paid in cash or Bearer Chq above Rs.20000/-?

A. You can file cases under both circumstaces, if you have cheques to that effect and it would be maintainable.

4. Under Which Circumstances Registrar under Bombay Money Lenders Act can take a legal action or Suryev or Raid against Registered Money Lender by complain by Borrower?

Please Guide.

A-If they come to know if you're in contravention or violating the explicit provisions of BMLA.

Siddharth Jain
Advocate, New Delhi
5925 Answers
101 Consultations

5.0 on 5.0

Hello,

1 . No .

2 . Yes.

3 . No

4 . The circumstances are clearly laid down in the act itself.

Regards

Swarupananda Neogi
Advocate, Kolkata
2941 Answers
6 Consultations

4.7 on 5.0

1. The rule for others namely other non banking finance companies will be applicable to you in this regard.

2. The same answer as above suits this also

3. What is recovery of loan doing with section 138 of NI act, this provision is designed for trying the accused for bouncing the cheque.

4. For exorbitant interest other than what is permissible and other illegal activities.

T Kalaiselvan
Advocate, Vellore
78057 Answers
1543 Consultations

5.0 on 5.0

Dear Client,

Sec 138 attack in cheque bounce cases, not in cash dealing.

No specific provision in money lending act if lending in cash or through cheque, just maintain cash book.

4. Under Which Circumstances Registrar under Bombay Money Lenders Act can take a legal action or Suryev or Raid against Registered Money Lender by complain by Borrower? --- No survey raid,

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1. Since dealing in Cash of over Rs. 20,000/- is not permissible under the Income Tax laws, any such money shall remain illegal and will not come under the parameters of "legally enforceable liability" under the N.I.Act, and the opposite accused party will be able to get away with this.

2. The Registrar of Coop., CANNOT conduct raids, on complaints by borrowers, BUT will issue Show Cause notice, which you will have to duly comply, by producing Books of Accounts and other documents, which will prove to be time-consuming and a nuisance for business.

Keep Smiling .... Hemant Agarwal

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

5.0 on 5.0

Under 269SS of income tax Act it is prohibited to advance or accept more than 20000 in cash. So the said transaction becomes illegal. Secondly it is also illegal to repay more than 20000 in cash and without account payee cheque vide section 269 T.

Prashant Nayak
Advocate, Mumbai
27224 Answers
88 Consultations

4.4 on 5.0

Ask a Lawyer

Get legal answers from lawyers in 1 hour. It's quick, easy, and anonymous!
  Ask a lawyer