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Beg, borrow but don't lend
 Even
before the dawn of civilisation, it was only the borrower who was held liable
for
punishment if he failed to pay back the lender. During the time of king's rule, debtors were summoned
by the king and ordered to pay the money which they owed to their lenders. In Shakespeare's play 'The Merchant of Venice', it
was lender Shylock who asked for a pound of flesh from his debtor Antonio in
court.
But time has now changed considerably. Nowadays, the debtor is
safe and he challenges the lender and threatens to put him behind bars if he asks
for the money
which he has lent. They have a convenient ploy to terrify their lenders. The weapon
is none other than 'usury interest.'
The ordinance on usury
interest,
introduced by the Government of Tamil Nadu, was promulgated for a good purpose. The
usury financiers had exploited the poor, downtrodden and even middle-class people by
charging exorbitant interest rates, calculating for weeks, days and even for
hours.
These usury financiers used to
collect their dues by intimidating the debtors by force or with the help of
goondas. There were many cases in which the debtors committed suicide fearing these
financiers when they could not pay them back.
It was only in such a situation
that the government had decided to curb and punish these financiers to
save the victims. But, when the ordinance was issued, even while welcoming it, fears were expressed in these columns that some
people might misuse the law. It was felt that this could become a trap for
honest lenders and that the borrowers would swallow the loan amount by taking recourse to this usury interest
ordinance.
As if to buttress the fears expressed
in these columns, several cases have recently been reported in the city crime
branch, Chennai. As soon as the ordinance was issued, many of the debtors
stoutly refused even to pay back the principal amount, threatening the lender that
he would prefer a usury interest complaint against him if he demanded his money
back.
A woman doctor in Chennai had
borrowed Rs 2 lakh from a lender for Rs 2 as interest, of course
a nominal interest rate. As soon as the usury interest ordinance was enacted,
she stopped paying the interest and when the debtor asked her to repay at least
the principal, she bluntly refused, threatening the lender that she would
prefer a usury complaint against him. Unable
to take any action against her, the lender simply kept quiet fearing police action against him under
the ordinance.
In a recent case handled by the
Chennai
city crime branch, hardware merchant David had preferred a complaint against
20 businessmen, charging all of them with having lent him money for usurious
interest. He had business dealings with some of them for which he had given
blank cheques.
The policemen took all of them to
Chennai city crime branch and forced them to give their blank cheques back to the
complainant. A threat of a prison term was allegedly held against them for
charging usurious rates of interest. It was pathetic to see many decent
businessmen being treated like third-rate men by the police who abused them and
addressed them all as 'notorious criminals'.
When contacted, one of them,
who wished to remain anonymous, said he had lent Rs 2 lakh to
the complainant in 2001 (the usury interest ordinance came into effect only during
2003) for an interest rate of Rs 3.
Within 10 days of receiving the money, he had preferred a complaint against him in the
Saidapet Police Station, accusing him of intimidation. Since then he has not
paid
any interest and in order to get back the blank cheques which he had given, he
cleverly preferred a complaint against him of charging usurious interest. The
policemen also helped the complainant, and ensured that he got back the cheques and
other documents.
When a person gives a complaint
against 20 persons under the usury interest ordinance, policemen should use their common
sense and should know that the case cannot be genuine and that the man was
taking recourse to the act for other purposes.
But, instead, the policemen
helped the complainant recover the blank cheques and other
documents. They do not ask the person if he has any evidence to substantiate his
charge
that the lenders were collecting usurious interest.
They simply depend upon a mere
verbal statement from the complainant. In this case, the complainant came in
an expensive Ford car and policemen accompanied him to a hotel for dinner. The lenders, who have been branded as criminals, in a
state of shock, were witnessing these ugly developments helplessly.
It is high time that the
Commissioner of Police and the government took effective steps to
see that the move against usurious rates of interest helps only the real victims without allowing fraudulent
persons to misuse the law. The message for everyone is that under the present
circumstances, if is always safe to be a debtor.
Don't lend money to anyone even
for interest-free loans. You will not only lose your principal, but if the other
person gives a complaint against you under the usury interest measure, there need not be
any evidence, the policemen would simply send you to prison.
You would also be shown on TV
as if you are a branded criminal. You may have to pay a hefty cut if you should
be spared this mental agony.
In 'Kamba Ramayanam', while
describing Ravana when he was on the verge of defeat, Kambar describes
Ravana's mental state as "being as agonised as that of a debtor". If
Kambar were to write today about Ravana's condition, he would have said 'Ravana
was in a state of shock like a lender'.
Harvey
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