(2) Any agreement between a money-lender and a borrower or an intending borrower for the payment to the lender of any sum on account of costs, charges or expenses incidental or relating to the negotiations for, or the granting of, the loan or proposed loan, shall be illegal, and if any sum is paid to a lender by the borrower or intending borrower as, or on account of, any such costs, charges or expenses, that sum shall be recoverable as a debt due to the borrower or intending borrower, or in the event of the loan being completed, shall, if not so recovered, be set off against the amount actually lent and that amount shall be deemed to be reduced accordingly:
Certain agreements to be void.
Provided that nothing in this section shall debar a lender from recovering the costs of investigating title, of stamp duty and registration of documents and other necessary and incidental expenses in cases where the agreement includes a stipulation that property is to be given as security or by way of mortgage, or the costs of stamp duty and registration of documents in the case of unsecured loans, if both parties have agreed to such expenditure and the reimbursement thereof, nor from recovering such costs, charges or expenses es are leviable under the provisions of the Transfer of Property Act, 1882, or any other law for the time being in force. 4 of 1882.
(2) Any agreement between a money-lender and a borrower for the payment outside the Islands, of any loan or interesf'thereon or any part of such loan or interest shall be illegal and shall not be enforceable in any court of law.
Six 1] THE GAZETTE OF INDIA EXTRAORDINARY 443
CHAPTER V PROVISIONS RELATING TO SUITS AND APPLICATIONS IN RESPECT OF LOANS AND EXECUTION OF DECREES
18. After the expiry of six months from the commencement of this Regulation, no court shall entertain a suit by a money-lender for the recovery of a loan advanced by him after such commencement unless the court is satisfied that such money-lender held a valid licence at the time when such loan was advanced.
Suits for recovery of loaus.
19. Notwithstanding anything contained in any law for the time being in force, in any suit brought by a money-lender for the recovery of a loan— Procedure in suits relating t i ljans.
(a) the court shall, before deciding the claim on its merits, frame and decide the issue whether the money-lender has jn respect of the claim in suit complied with the provisions of Chapter III;
(b) if the court finds that any of the aforssaid provisions have not been complied with, it may, if the plaintiff's claim is established in whole or in part, disallow the whole or such portion of the interest found due as may, in the circumstances of the case, appear to the court to be reasonable and may also disallow the whole or any portion of the costs.