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The Money-Lenders Act, 1940 (Bengal Act)

( ACT NO. X OF 1940 )

Chapter VI


Limitations as to the amount and rate of interest recoverable
30. Notwithstanding anything contained in any law for the time being in force, or in any agreement,
(1) no borrower shall be liable to pay after the commencement of this Act-
(a) any sum in respect of principal and interest which together with any amount already paid or included in any decree in respect of a loan exceeds twice the principal of the original loan,
(b) on account of interest outstanding on the date up to which such liability is computed, a sum greater than the principal outstanding on such date,
(c) interest at a rate per annum exceeding in the case of-
(i) unsecured loans, ten per centum simple,
(ii) secured loans, eight per centum simple,
whether such loan was advanced or such amount was paid or such decree was passed or such interest accrued before or after the commencement of this Act;
(2) no borrower shall after the commencement of this Act, be deemed to have been liable to pay before the date of such commencement in respect of interest paid before such date or included in a decree passed before such date, interest at rates per annum exceeding those specified in sub-clause (c) of clause (1);
(3) a lender shall be entitled to institute a suit at any time after the commencement of this Act in respect of a transaction to which either or both of the preceding clauses applies or apply.

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