{
  "schema_version": "qanun-law-text/1",
  "id": "punjab-code-3c9818a3a43e9153",
  "title": "PUNJAB USURIOUS LOANS ORDINANCE, 1959",
  "source_collection": "Punjab",
  "content_kind": "stored_law_text",
  "content_extent": null,
  "source_url": "https://punjabcode.punjab.gov.pk/en/show_article/UWRcbwE~UGY-",
  "version": null,
  "source_snapshot": "2026-08-06T17:01:18Z",
  "legal_status": "not independently verified",
  "text_quality": "Complete stored UTF-8 TXT file recovered byte-for-byte from owned Drive. Source transcription retained verbatim; legal completeness, OCR accuracy and current consolidation unverified.",
  "text_sha256": "d46ecb9a0c1739a24485715d0696fdb455966b7a4960a383c18f07ecfc06e745",
  "source_sha256": "d46ecb9a0c1739a24485715d0696fdb455966b7a4960a383c18f07ecfc06e745",
  "text_version_id": "law:punjab-code-3c9818a3a43e9153:sha256:d46ecb9a0c1739a24485715d0696fdb455966b7a4960a383c18f07ecfc06e745",
  "quality_flags": [],
  "encoding": "UTF-8",
  "text": "THE PUNJAB USURIOUS LOANS ORDINANCE, 1959 \r\n(XVIII of 1959) \r\nCONTENTS \r\n1. Short title and extent. \r\n2. Definitions. \r\n3. Application of the Ordinance. \r\n4. Re-opening of transactions. \r\n5. Insolvency proceedings. \r\n6. Repeal. \r\n \r\nSCHEDULE \r\nTEXT \r\n1\r\nTHE \r\n2\r\n[PUNJAB] USURIOUS LOANS ORDINANCE, 1959 \r\n(XVIII of 1959) \r\n[1 April 1959] \r\nAn \r\nOrdinance \r\nto consolidate the law relating to usurious loans in the Province of \r\n3\r\n[the Punjab]. \r\nPreamble.– WHEREAS it is expedient to consolidate the law relating to usurious \r\nloans in the Province of \r\n4\r\n[the Punjab]. \r\n NOW, THEREFORE, in pursuance of the Presidential Proclamation of the 7 th \r\nday of October, 1958, and in exercise of all powers enabling him in that behalf, the \r\nGovernor of West Pakistan is pleased to make and promulgate the following \r\nOrdinance:– \r\n1. Short title and extent .– (1) This Or dinance may be called  the \r\n5\r\n[Punjab] \r\nUsurious Loans Ordinance, 1959. \r\n \r\n6\r\n[(2) It extends to the whole of the Province of \r\n7\r\n[the Punjab] , except the \r\nTribal Areas.] \r\n2. Definitions.– In this Ordinance, unless the context otherwise requires, the \r\nfollowing expressi ons shall have the meanings hereby respectively assigned to \r\nthem, that is to say– \r\n(1) “interest” means rate of interest and includes the return to be made \r\nover and above what was actually lent, whether the same is charged or \r\nsought to be recovered specifically by way of interest or otherwise; \r\n(2) “loan” means a loan whether of money or in kind and includes any \r\ntransaction which is in the opinion of the Court, in substance a loan. \r\n3. Application of the Ordinance .– This Ordinance shall apply to all suits \r\npending on or instituted after its commencement, namely:– \r\n                                                           \r\n1This Ordinance was promu lgated by the Governor of West Pakistan on March 31, 1959 , published in the Gazette of West \r\nPakistan (Extraordinary), dated April 1, 1959, pp. 255-259; saved and given permanent effect by Article 225 of the Constitution \r\nof the Islamic Republic of Pakistan (1962). \r\n2Substituted for the words “West Pakistan” by the Punjab Laws (Adaptation) Order, 1974 (1 of 1974)  (w.e.f. 14.8.1973), \r\npublished in the Punjab Gazette (Extraordinary), dated November 20, 1974, pp. 1425 -A-1425-PP, Article 2(1) read with \r\nSchedule, Part III, Serial No. 23. \r\n3Ibid. \r\n4Ibid. \r\n5Ibid. \r\n6Substituted by the West Pakistan Laws (Extension to Karachi) Ordinance, 1964 (VII of 1964), published in the Gazette of West \r\nPakistan (Extraordinary), dated May 25, 1964, pp. 1679-1688, s. 2 read with Schedule, Serial No. 22. \r\n7Substituted for the words “West Pakistan” by the Punjab Laws (Adaptation) Order, 1974 (1 of 1974)  (w.e.f. 14.8.1973), \r\npublished in the Punjab Gazette (Extraordinary), dated November 20, 1974, pp. 1425 -A-1425-PP, Article 2(1) read with \r\nSchedule, Part III, Serial No. 23. \r\n(a) for the recovery of a loan made after the twenty -second day of March, \r\nNineteen Hundred and Eighteen; \r\n(b) for the enforcement of any security taken or any agreement whether by \r\nway of settlement of ac count or otherwise, made after the twenty -\r\nsecond day of March, Nineteen Hundred and Eighteen, in respect of \r\nany loan made either before or after the said date; and \r\n(c) for the redemption of any security given after the twenty -second day of \r\nMarch, Nineteen Hundred and Eighteen, in respect of any loan made \r\nwhether before or after the said date. \r\n4. Re-opening of transactions .– (1) Notwithstanding anything in the Usury \r\nLaws Repeal Act, 1855\r\n1\r\n, where, in any suit to which this Ordinance applies, whether \r\nheard ex parte or otherwise, the Court has reason to believe– \r\n(a) that the interest is excessive; or \r\n(b) that the transaction was, as between the parties thereto, substantially \r\nunfair, \r\n the Court shall exercise all or any of the following powers:– \r\n(i) re-open the t ransaction, take an account between the parties, \r\nand relieve the debtor of all liability in respect of any excessive \r\ninterest; \r\n(ii) notwithstanding any agreement, purporting to close previous \r\ndealings and to create a new obligation, re -open any account \r\nalready taken between them and relieve the debtor of all liability \r\nin respect of any excessive interest, and if anything has been \r\npaid or allowed in the account in respect of such liability, order \r\nthe creditor to repay any sum which it considers to be repayab le \r\nin respect thereof; \r\n(iii) set aside either wholly or in part or revise or alter any security \r\ngiven or agreement made in respect of any loan, and if the \r\ncreditor has parted with the security, order him to indemnify the \r\ndebtor in such manner and to such extent as it may deem just: \r\nProvided that in the exercise of these powers, the Court shall not– \r\n(i) re-open any agreement purporting to close previous dealings \r\nand to create a new obligation which has been entered into by \r\nthe parties or any persons from who m they claim at a date more \r\nthan twelve years from the date of the transaction; \r\n(ii) do anything which affects any decree of a Court. \r\nExplanation.– In the case of a suit brought on a series of transactions the \r\nexpression “the transaction” means, for the pu rposes of proviso ( i), the first of such \r\ntransactions. \r\n                                                           \r\n1XXVIII of 1855. \r\n(2)(a) In this section “excessive” means in excess of that which the Court \r\ndeems to be reasonable having regard to the risk incurred as it appeared, or must be \r\ntaken to have appeared, to the creditor at the date of the loan. \r\n(b) In considering whether interest is excessive under this section, the Court \r\nshall take into account any amount charged or paid, whether in money or \r\nin kind, for expenses, inquiries, fines, bonuses, premia, renewals or any \r\nother charges, and if compound interest is charged, the periods at which it \r\nis calculated and the total advantage which may reasonably be taken to \r\nhave been expected from the transactions. \r\n(c) In considering the question of risk, the Court shall take into account  the \r\npresence or absence of security and the value thereof, the financial \r\ncondition of the debtor and the result of any previous transactions of the \r\ndebtor, by way of loan, so far as the same were known, or must be taken \r\nto have been known, to the creditor. \r\n(d) In considering whether a transaction was substantially unfair, the Court \r\nshall take into account all circumstances materially affecting the relations \r\nof the parties at the time of the loan or tending to show that the transaction \r\nwas unfair, including the necessities or supposed necessities of the debtor \r\nat the time of the loan so far as the same were known, or must be taken to \r\nhave been known, to the creditor. \r\nExplanation.– Interest may of itself be sufficient evidence that the transaction was \r\nsubstantially unfair. \r\n(e) The Court shall deem interest to be excessive if it exceeds seven and a \r\nhalf per centum per annum simple interest or is more than two per centum \r\nover the bank rate, whichever is higher at the time of taking the loan, in the \r\ncase of secured loans, or twelve and a half per centum per annum simple \r\ninterest in the case of unsecured loans; \r\n Provided that the provisions of this clause shall not apply if the loan \r\nhas been advanced by any bank which is a ‘scheduled bank’ as defined in the \r\nState Bank of Pakistan Act, 1956\r\n1\r\n, or any banking company registered under \r\nthe Companies Act, 1913\r\n2\r\n, \r\n3\r\n[* * *] or any Co-operative Society duly registered \r\nunder any law for the time being in force  \r\n4\r\n[, or any credit institution to be \r\nnotified by Government in this behalf.] \r\n (3) Whatever be the form of the suit this section shall apply if such suit is \r\nsubstantially one for the recovery of a loan or for the enforcement of any agreement \r\nor security in respect of a loan or for the redemption of any such security. \r\n (4) Nothing in this section shall affect the rights of any transferee for value \r\nwho satisfies the Court that the transfer to him was  bona fide, and that he had at the \r\n                                                           \r\n1XXXIII of 1956. \r\n2VII of 1913. \r\n3Omitted the words,  figures and commas “ prior to the first day of April, 1937, ” by the West Pakistan Usurious Loans \r\n(Amendment) Ordinance, 1960 (XX of 1960), published in the Gaz ette of West Pakistan (Extraordinary), dated June 14, 1960, \r\npp. 2403-2404, s. 2(i). \r\n4Substituted for full stop and added by the West Pakistan Usurious Loans (Amendment) Ordinance, 1960 (XX of 1960), \r\npublished in the Gazette of West Pakistan (Extraordinary), dated June 14, 1960, pp. 2403-2404, s. 2(ii). \r\ntime of such transfer no notice of any fact which would have entitled the debtor as \r\nagainst the lender to relief under this section. \r\n For the purposes of this sub -section, the word “notice” shall have the same \r\nmeaning as is ascribed to it in section 4 of the Transfer of Property Act, 1882\r\n1\r\n. \r\n (5) Nothing in this section shall be construed as derogat ing from the \r\nexisting power or jurisdiction of any Court. \r\n5. Insolvency proceedings .– On any application relating to the admission or \r\namount of a proof of a loan in any insolvency proceedings, the Court may exercise \r\nthe like powers as may be exercised unde r section 3 by a Court in a suit to which \r\nthis Ordinance applies. \r\n6. Repeal.– The enactments specified in the Schedule are hereby repealed to \r\nthe extent mentioned in the fourth column thereof. \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n                                                           \r\n1IV of 1882. \r\nSCHEDULE \r\nYear No. Short title Extent of \r\nRepeal \r\n1 2 3 4 \r\n1918 X The Usurious Loans Act, 1918. The whole. \r\n1934 VII The Punjab Relief of \r\nIndebtedness Act, 1934. \r\nSections 5 \r\nand 6. \r\n1935 IV The Usurious Loans (North -West \r\nFrontier Province Amendment) \r\nAct, 1935. \r\nThe whole.",
  "passage_offset_convention": "zero-based Unicode code points and UTF8 bytes; end exclusive",
  "passages": [
    {
      "passage_id": "law:punjab-code-3c9818a3a43e9153:sha256:d46ecb9a0c1739a24485715d0696fdb455966b7a4960a383c18f07ecfc06e745:chars-0-1796:8b36c941c9cef3425620961a95522cec39d2ac4b8df9c1b89666113253a13254",
      "character_start": 0,
      "character_end": 1796,
      "utf8_byte_start": 0,
      "utf8_byte_end": 1818,
      "passage_sha256": "8b36c941c9cef3425620961a95522cec39d2ac4b8df9c1b89666113253a13254",
      "reader_fragment": "p-0-1796-8b36c941c9cef342"
    },
    {
      "passage_id": "law:punjab-code-3c9818a3a43e9153:sha256:d46ecb9a0c1739a24485715d0696fdb455966b7a4960a383c18f07ecfc06e745:chars-1796-3581:d64c3cc98e0b1ec6597e80bef536ebc4497d7dbb4010b36196e63474c932eb04",
      "character_start": 1796,
      "character_end": 3581,
      "utf8_byte_start": 1818,
      "utf8_byte_end": 3613,
      "passage_sha256": "d64c3cc98e0b1ec6597e80bef536ebc4497d7dbb4010b36196e63474c932eb04",
      "reader_fragment": "p-1796-3581-d64c3cc98e0b1ec6"
    },
    {
      "passage_id": "law:punjab-code-3c9818a3a43e9153:sha256:d46ecb9a0c1739a24485715d0696fdb455966b7a4960a383c18f07ecfc06e745:chars-3581-5368:239e9f79d68fd4745e1a41c8ff40bdfa4fb130c0ccc2172d566e97e91f6c9396",
      "character_start": 3581,
      "character_end": 5368,
      "utf8_byte_start": 3613,
      "utf8_byte_end": 5412,
      "passage_sha256": "239e9f79d68fd4745e1a41c8ff40bdfa4fb130c0ccc2172d566e97e91f6c9396",
      "reader_fragment": "p-3581-5368-239e9f79d68fd474"
    },
    {
      "passage_id": "law:punjab-code-3c9818a3a43e9153:sha256:d46ecb9a0c1739a24485715d0696fdb455966b7a4960a383c18f07ecfc06e745:chars-5368-7162:9f38a50622f3846119dea21c7dabe55d1cc70989c34f870493cd565b27dd50dd",
      "character_start": 5368,
      "character_end": 7162,
      "utf8_byte_start": 5412,
      "utf8_byte_end": 7212,
      "passage_sha256": "9f38a50622f3846119dea21c7dabe55d1cc70989c34f870493cd565b27dd50dd",
      "reader_fragment": "p-5368-7162-9f38a50622f38461"
    },
    {
      "passage_id": "law:punjab-code-3c9818a3a43e9153:sha256:d46ecb9a0c1739a24485715d0696fdb455966b7a4960a383c18f07ecfc06e745:chars-7162-8958:033febd0a8031e22708e703040a50f47a63af354bdbab2c344305557cb873749",
      "character_start": 7162,
      "character_end": 8958,
      "utf8_byte_start": 7212,
      "utf8_byte_end": 9020,
      "passage_sha256": "033febd0a8031e22708e703040a50f47a63af354bdbab2c344305557cb873749",
      "reader_fragment": "p-7162-8958-033febd0a8031e22"
    },
    {
      "passage_id": "law:punjab-code-3c9818a3a43e9153:sha256:d46ecb9a0c1739a24485715d0696fdb455966b7a4960a383c18f07ecfc06e745:chars-8958-10003:f9ef672e3f9484a1c524e044d52955c4c8d878f5b12ff6c07d20c3d5ed97636a",
      "character_start": 8958,
      "character_end": 10003,
      "utf8_byte_start": 9020,
      "utf8_byte_end": 10069,
      "passage_sha256": "f9ef672e3f9484a1c524e044d52955c4c8d878f5b12ff6c07d20c3d5ed97636a",
      "reader_fragment": "p-8958-10003-f9ef672e3f9484a1"
    }
  ]
}