While the stereotypical usurer in the big, bad world uses brute force to make you pay up, there are others who can be subtler, but achieve the same end result — like moneylenders in Virudhunagar district, who don’t take to violence for coercing the debtor to pay up. They simply prepare documents at the registrar’s office, committing the borrower to transfer his property to the lender, if he fails to repay the sum. While the actual transfer of holding doesn’t happen, the documents are the Damocles’ sword that can make people pay outrageously high interest rates.
“It is a sophisticated form of cheating the poor,” says S George Virumandi, secretary of the Usury Atrocity Prevention Movement. He recounts the case of one Shanmuganathan (42), a small time labour contractor of Thiruthangal in Virudhunagar district. Usurer Pana Nadar got a sale deal for Shanmuganathan’s house at the registration office. The document mentions that Shanmuganathan sold his house to Nadar for Rs 15 lakh. Pana Nadar, however, didn’t take possession of the house. Instead, he used the document to collect exorbitant interest from Shanmuganathan, who had borrowed Rs 5 lakh at five per cent interest and had been repaying the debt regularly for six months, says Virumandi. In the seventh month, Pana Nadar said the principle amount had gone up to Rs 10 lakh and demanded an increased interest computed on the new sum. “When Shanmuganathan refused, he started threatening him with the sale deal documents,” Virumandi adds.
Shanmuganathan finally approached the Thiru-thangal police station for help. Instead of invoking Section VI of the Tamil Nadu Prohibition of Charging Exorbitant Interest Act 2003 against the usurer to retrieve the property, the police officer helped the usurer,” alleges Virumandi. The woman officer allegedly forced Shanmuganathan to sign on documents that said the latter would pay Rs 10 lakh to Pana Nadar within a week, failing which the usurer would take possession of the property. “When I asked the police officer why she didn’t invoke Section VI of the Act, she bluntly refused to answer,” Virumandi says. Hence, we filed a petition with the Madurai Bench of the Madras High Court demanding action against the police officer and Pana Nadar, he adds.
The Virudhunagar model is followed in Theni district as well, says usurer Prakash (name changed). “After the police acted against a moneylender for collecting kandhu vatti without proper documents a few years ago, we changed our techniques. For instance, if person approaches us for money, we first send our agents to verify his property documents and details. Once we are convinced that the documents are original, we sign an agreement with them in the registrar office before lending the money,” he says.
“The document would clearly specify that if the borrower didn’t pay back the principle with interest within the stipulated period (three to five years), their property would automatically come into our possession,” he adds.
Sadly, many government officers too engage in usury. Recalling a case reported in Theni six months ago, Virumandi says around 50 government employees pooled Rs 1 lakh each and handed the sum of Rs 50 lakh to Latha, a familiar face in the money lending business. They asked her to pay them interest at the rate of 4 per cent and told her to keep the rest for herself, explains Virumandi. If the borrower refused to pay the money, these government employees would also assist her in retrieving the money.
At one point, however, Latha was not able to retrieve the money from a borrower. The government employees then started demanding their interest amount. “Only after our intervention did she manage to escape from them,” says Virumandi. He blames the police force for failing to implement the Tamil Nadu Prohibition of Charging Exorbitant Interest Act 2003.