Can we fight a case against Pathan (afghanistan) money lenders
I took a loan of Rs. 1.20 Lakhs from a local Pathan money lender at a preposterously high interest rate of 8% per month and paid the mthly interest of Rs. 9,600/- for 20 months (i.e. Rs. 1.92 Lakhs totally). When processing the loan, they took an agreement on stamp paper with no text but with my signature and besides they took 2 blank signed cheques signed by me. No documents or papers were provided by them to me and I paid the interest by cash except for one time when it was transferred by mobile banking to the account no. given verbally by them.
Can I fight a case against them for abnormal interest claims or for lapses of not giving any documents or is there any other valid issue that I can legally fight them in court for reducing my burden.
Asked in Civil Law from Guwahati, Assam
1) interest rate of 8%per month or 96%per annum is usurious
2) does pathan have money lender licence ?without licence pathan cannot carry on money lending business
3) there is limit to interest that can be charged .
4) how has loan been rapid by you by cash or cheque? do you have receipts?
5) send letter to money lender that blank cheques have been taken by him by force and to return the blank cheque . that amount of loan of Rs 120,000 has been repaid with interest
6) in the event you are threatened lodge police complaint of criminal intimidation under section 506 of IPC .
1. The interest rate of 8% per month is unreasonable. You can challenge the loan terms in the court.
2. It is never wise to sign a blank paper, but you did so. Nobody knows what contents were filled in by them. Unless the agreement specified that they were to furnish a document to you, you cannot sue them. However, you can certainly sue them for usurious rate of interest.
there is no legal right you have until & unless there is any dispute with him.
if you will not pay the amount then he may present the cheque for encasement before bank and if the cheque got dishonour then he may issue a legal notice to you and within 15 days from receipt of the notice if you will not make the payment then he may file a criminal complaint against you before court. where you have to fight the case.
if there is any force to took the cheques then you may file a civil suit against him before civil court and claim your cheque return which were security cheques.
you may contact over the phone or mail me after pay the consultation fee.
Advocate, New Delhi
To carry out the business of money lending one needs to be a registered money lender and most states have laws for this. Without such registration if one chooses to carry out such business then one shall be penally liable and all business transactions will be held non enforceable in a court of law because such business has been done in violation of state law. In Assam the law is Assam Money Lenders Act, 1934.
Besides there are also RBI guidelines where interest cannot be charged beyond a certain limit and such interest is not enforceable in a court of law. The clauses in the agreement stating such high interest rates are voidable at your option and you may chose to disregard them.
However what worries me in your situation is that you have given them two blank cheques. If the cheques have a date then you are secured because according to RBI guidelines the validity of a cheque is only for 3 months. However if they were undated as well then they might put an amount and try to encash it. If you block the cheques you might be prosecuted for a voluntary cheque bouncing under section 138 of the Negotiable Instruments act, 1881.
So I suggest you file an FIR against the Afghan Citizen and in your FIR mention the details. After such FIR is registered contact the local bank and furnish a copy of the FIR and based on such FIR block the cheques.
That should protect you in future.
1. Lodge a police complaint first for his taking high rate of interest illegally and for taking signatures on blank documents and cheques,
2. then send him a legal notice calling upon him to return those doeuments and cheques illegally collected by him,
3. Also ask in your said legal notice to hand over money receipts of the interest he has collected in cash and also demand from him his bank account no. so that next time the interest can br transferred to his said account,
4. Since you can not prove that you have paid the huge amount in cash, you shall have to pay the interest at bank rate hence forth through cheque.
1. At the first instance you should not have signed on blank agreement and blank cheques.
2. You do not have evidence of having paid the financier abnormal rate of interest except one time when you transferred the money through mobile banking.
3. Is the financier a registered money lender with the State govt.
4. If he is not a registered money lender and is charging hefty interest amount, complain against him under the money lending act to the state government and even if he is a registered money lender, he can only charge the interest at the rates approved by the government.
5.Complain to the Police against the money lender for having taken your signature on blank agreement paper and cheques.