Under provisions of usurious interest act if court finds that rate of interest charged by creditor is excessive and transaction between parties unfair court may reopen the transaction and relive debtor of liability for excessive interest

2) even if there is agreement entered into between parties court can intervene reopen transaction and relive debtor of liability for excessive interest and if any amount has been paid to creditor ask the creditor to repay any amount which it considers to be repayable

Section 3of usurious interest act is clear

If court finds any excessive amount has been paid to the creditor court can call upon creditor to repay amount paid to the creditor that it finds excessive

1. @40% pa is too high.

2. you can file a civil suit under section 74 of contract act for determination of fair interest rate in light of rate of interest in commercial contracts.

3. court shall decide the justified rate of interest.

it shall not be more than 18% pa, because this the highest rate of interest levied by the bank.

1.There is no hindrance if one take accommodation loan from his relatives.

2. So in the Pro note you can stipulate to repay the loan along with interest. Since interest part can not be mentioned in the pro note mention the principal + interest as principal amount only.

3. if the amount is not paid within the time mentioned in the Pro note then the creditor can file sut agaisnt you.

Hand loan is not chargeable with any interest until there is a specific agreement mentioning that this loan shall be repaid on a stipulated date and an interest at the rate agreed shall be paid till the discharge of loan principle.

However the interest at the rate of 40% is exorbitant and not maintainable in law for any legal recovery purpose.

and if amount principal and interest amount paid than what

Under the provisions of prohibition of exorbitant interest act, the interest @40% p.a. is exorbitant and an offence.

Since it is already paid and the loan stands fully discharged, there is no question of recovery or taking action against such incidence.

only principal amount paid than what ?

or if MOU or promissory note date has been expired than what

If the MOU or the promissory note is barred by limitation act, then nothing shall be payable, however the residual amount in the form of interest shall be payable if claim made within three years from the last date of any payment on this.

You are at liberty to enter into contract specifying rate of interest you will pay for loans taken by you

taking amount on @40% pa is crime

It may be an act illegal as per prohibition of exorbitant interest act.

You must gather evidence for such an high rate of interest.

The maximum interest that would be considered genuine shall be at the rate of 24% p.a.

Being registered sub broker of sebi taking amount on interest @40% pa from clients is crime ?

The status of sub-broker is not a special status or a blanket permission or an authority to do whatever is against the law.

Registered sub-broker of sebi is your profession and it will not authorise you to do things which are against law or contradicting the provisions of law on any subject.

As per Rule 8 (3) (f) of SCRR, a member of the Stock Exchange is prohibited from engaging

in any business other than that of securities or commodity derivatives except as a broker or

agent not involving any personal financial liability. It is noted that the Sub-brokers are not

members of the stock exchanges. However, they are agents of the Stock broker. Therefore,

the said rule is applicable to the Sub-broker as well.

2) The SEBI Act, 1992 -

"Prohibition of manipulative and deceptive devices, insider trading and

substantial acquisition of securities or control.

12A. No person shall directly or indirectly -

(a) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed

in a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the

provisions of this Act or the rules or the regulations made there under;

(b) employ any device, scheme or artifice to defraud in connection with issue or dealing in securities which

are listed or proposed to be listed on a recognised stock exchange;

(c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon

any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a

recognised stock exchange, in contravention of the provisions of this Act or the rules or the regulations

made there under;

3) soliciting and collected funds and deposits from clients through misrepresentation and allurement of high returns is an offence under Section 12A (a) (b) and (c) of the SEBI Act

and Regulation 3 (b), (c) and (d) and Regulation 4(1) and 4(2) (k) of the PFUTP Regulations.

The position of law with regard to sub-broker's financial transaction, especially with regard to collecting money from client in the name of loan or any other thing has been prohibited by the SEBI Rules, which has been informed you.

Now you decide the further course