Section 10(4)(b) in The Jammu and Kashmir Money Lenders and Accredited Loan Providers Act, 2010
(b)if the Lok Adalat or Panchayat finds that the provisions of section 6 have not been complied with by the money lender, it may, if the money lender's claim is established in whole or in part, disallow the whole or any portion of the interest found due as may seem reasonable to it in the circumstances of the case and may disallow costs.