Moneylenders capitalising on absence of effective law

CHENNAI MAY 22. With the tentacles of usurious moneylenders spreading fast in the State, the absence of an effective and comprehensive law to curb harassment of borrowers seems to have emboldened the unscrupulous private financiers. What started as a "short duration lending" has assumed mammoth proportions with moneylenders making merry and their daily business running into lakhs, according to an unofficial estimate.

Exorbitant rates of interest, at times 10 per cent a day, harassment, threats and physical assault of borrowers for default in repayment to "discipline them" and to serve as a "lesson to others," have come to stay in the `trade', which strangely involves no paper work at all. As no worthwhile document is involved in the transaction and lenders' muscle power alone works, complaints by unsuspecting borrowers are far and few in between. Those who obtain money, who include the poor and the prominent in society, would have to suffer in silence to protect their honour.

As is common to any illegal transaction, money is lent under various fearsome names, `kandu vatti', `runvatti', `meter vatti' and `killer vatti'. Initially, `instant financiers' entered the business arena to provide money to small merchants, particularly vegetable and flower sellers, who found it difficult to mobilise the required amounts in the morning for making purchases. The lenders gradually spread their activities to other sections, and now the film industry too is a beneficiary with some personalities obtaining loans for producing films.

"The menace is prevalent almost throughout the State, but is rampant in Tiruppur, Pollachi, Salem, Madurai and Kancheepuram districts," according to a senior State police officer. Chengalpattu-East is slowly gaining a dubious distinction in the trade, with some persons, who were originally bootlegging in Tirunelveli district, `graduating' as financiers in Chennai suburbs, he says.

The modus operandi of lenders is to readily give money to those who ask for it and fix a time schedule for repayment. Failure to repay on time at the fancy interest rates charged by lenders, will invite a threat or a murderous assault. Borrowers stand the risk of their property, either land or building, being taken away. As there is no written evidence in the transaction and due to the lenders' attitude, complaints are usually not preferred.

In fact, according to a petition filed before the State Human Rights Commission, the producer, G. Venkateswaran, committed suicide because of the humiliation suffered by him at the hands of a Madurai-based moneylender.

The worst affected in the transaction are middle-income families who desperately seek money from lenders to meet an emergency. Political support to moneylenders cuts across party lines, says the officer.

"The 20-year trade has been consolidated in a big way. Several government and police officials, circulate their ill-gotten wealth through this trade. Many police officials are helpful spectators of the illegal activities," says V. Suresh, a PUCL functionary.

The Tamil Nadu Money Lenders Act seems to exist only in the statute book. "It is ineffective to deal with cases of this sort," the police say. As per the legislation, if at all any complaint is received, the police have to conduct a probe based on court orders and later register an FIR if a prima facie case is made out. At present, the police can take action on a complaint of harassment or threat from a borrower, only under Sections 387 (putting person in fear of death or of grievous hurt, in order to commit extortion) and 506 (criminal intimidation) of IPC.

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