Khyber Pakhtunkhwa Assembly is likely to pass a bill to prohibit the business and practice of private money-lending and advancing loans and transactions based on interest in the province.
For this purpose, a private bill has already been introduced in the provincial assembly during last session of the house. The bill is carrying the signatures of Fakhre Azam Wazir (PPP), Sultan Mohammad Khan (QWP) and Mahmood Jan of the treasury benches.
The preamble of the Bill called the Khyber Pakhtunkhwa Prohibition of Interest on Private Loans says that the injunction of Islam as laid down in the Holy Qur'an and Sunnah have explicitly and unequivocally prohibited charging interest on loans and have declared war against those who do not abandon interest.
The Constitution of the Islamic Republic of Pakistan also obliges the state to take steps to enable the Muslims of Pakistan, individually and collectively, to order their lives in accordance with the fundamental principles and basic concepts of Islam and to provide facilities whereby they may be enabled to understand the meaning of life according to the Holy Qur'an and Sunnah.
After the enactment of the Act no money lender either individually or in group of persons would lend money or advance loan to any person for the purpose of receiving interest thereon, nor would carry on an interest based transaction in the province and whoever contravenes the provisions of the act would be punished with imprisonment of either description which may extend to ten years but shall not be less than three years and would also be liable to fine not exceeding one million rupees.
Similarly, whoever intentionally and wilfully abets, engages, assists or aids the money lender in lending money or in recovery of interest or on interest based transaction in contravention of the sub-section (1) of section 3 would also be liable to the same punishment.
Furthermore, whoever molests any borrower or debtor, whether on his own behalf or on behalf of anybody else with intention to force such borrower or debtor to pay back any loan or debt or any part thereof or any interest thereupon, would be punishable with imprisonment of either description for a term which may extend to five years and would also be liable to fine up to five hundred thousand rupees.
Within three days on receipt of any application or complaint with regard to the commission of an offence under this Act, order the local police to register case against such person or group of persons.
On the commencement of the Act every obligation of any debtor or borrower to pay interest on debt or such part of interest would stand extinguished. No court inferior to that of Judicial Magistrate of the first class would try an offence under this Act.
Notwithstanding anything to the contrary contained in the Code or any other law for the time being in force an offence under this Act would be cognisable, non-compoundable and non-bail able.
The trial court, if it is proved that the money lender committed an offence under this Act, would order that the interest already paid to the money lender is considered as payment towards the principal amount. Provided that where the amount of interest paid by a borrower exceeds the principal amount, the court would order the money lender to return such excess amount to the borrower.
In case, the penalty imposed on money lender under the Act or the amount order to be returned, is not paid- the court may order to recover the amount payable by selling assets belonging to such person and in case the amount cannot be recovered from such person, the court may prepare and sign a certificate specifying the amount due from such person and send it to the collector of the district in which such person owns any property or resides or carries on business; and the collector of the district on receipt of such certificate would proceed to recover from the said person the amount specified in the certificate as if it is an arrear or land revenue.
Any person aggrieved by any decision given, sentence passed or order made by the trial court under this Act, may within thirty days of such decision, sentence or order prefer appeal under the provisions contained in Chapter XXXI of Code.
Where any lender, whether a money lender as defined in this Act or otherwise, refuses to accept the whole or any portion of the money or other property due in respect of his loan without payment of interest, the debtor may deposit the said money or property into the court having jurisdiction to entertain a suit for recovery of such loan and apply to the court record full or part satisfaction of the loan, as the case may be.
Where any such application is made, the court will after due inquiry, pass orders recording full or part satisfaction of the loan, as the case may be.
The procedure laid in the Code of Civil Procedure 1908 (Act No V of 1908), for the trial of suits would as far as may be, apply to applications under Act.
An appeal will lie from an order passed by a court under sub-section (2) within thirty days excluding the time of obtaining a certificate copy of the order as it such an order relates to the execution, discharge or satisfaction of a decree within the meaning of section 47 of the Code of Civil Procedure 1908. The Act would override other laws.
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