Keyword(s):
Daily Vatti, Debtor, Exorbitant Interest, Hourly Vatti, Kandhu Vatti, Loan,
Meter Vatti, Money-Lenders Act, Thandal
ACT No. 38 OF 2003.
An Act to prohibit the charging of e.xorbitrmt interest by rrity person untl
matters incidental titereto.
BE it enacted by the Legislative Assembly of the State of Tam11 Nadu in the
Fifty-fourth Year of the Republic of India as follows :-
- (I) This Act may be called the Tamil Nadu Prohibition ofCharging Exorbitant Interest Act, Short title,
- extent and
commence-
ment.
(2) It extends to the whole of the State of Tamil Nadu.
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I (3) It shall be deemed to have come into force on the 9th day of June 2003.
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Definitions. - In this Act, unless the context otherwise requires,-
(1) “daily vatti” means interest on daily basis which will work out to an interest rate more
than that fixed by the Government under section 7 of the Money-lenders Act;
I (2) “debtor” means a person who receives loan for exorbitant interest;
(3) “exorbitant interest” means and includes daily vatti, hourly vatti, kandhu vatti, meter
vatti and thandal;
(4) “hourly vatti” means interest on hourly basis which will work out to an interest rate
more than that fixed by the Government under section 7 of the Money-lenders Act;
(5) “kandhu tatti” means an interest which will work out to an interest rate more than that –
fixed by the Government under section 7 ofthe Money-lenders Act;
(6) “loann means an advance ofmoney for daily vatti, hourly vatti, kandhu vatti, meter vatti
or thandal;
(7) “meter vattin means an intenst which will work out to an interest rate more than that
fixed by the Government under section 7 of the Money-lenders Act, for every day on the loan
amount not paid within the stipulated time*
(8) “Money-lenders Act” means the Tamil Nadu Money-lenders Act, 1957;
(9) “thandal” means interest which will work out to an interest rate more than that fixed
by the Government under section 7 ofthe Money-lenders Aa, which is to be collected daily along
with the pan ofthe loan amount;
(10) words and expressions used but not defined in this Act, shall have the meanings
assigned to them in the Money-lenders Act.
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‘ - No person shall charge exorbitant interest on any loan advanced by him.
- Notwithstanding anything contained in the Money-lenden Act, whoever contravenes the
provisions of section 3 or molests or abets the molestation of any debtor for recovery of any loan
shall be punishable with imprisonment for a term which may extend to three years and also with
fine which may extend to thirty thousand rupees.
I - (1) A debtorAmaydeposit the money due in respect of loan receivedby him from any person
together with interest at the rate fixed by thc Government under sectron 7 ofthc Money-lendcrs Act,
into the Court, havingjurisdiction, along with a pctition to rccord that the amount deposited is in
full or part, satisfaction of the loan rncluding the Interest therefor, as the casc niay be.
(2) ‘The Court shall, on receipt ot’a petition under sub-section (I1. refer a copy ofthe petition
to the person mentioned in the petition, directing him to give his version ofthe casc w~thina period
of fifteen djys as may be granted by thc CIourt. The Court may. afier due 1nqull.y a~ldaficr
Prohibitionof
charging
exorbitant
interest.
Penalty.
Deposit of
money and
presentation of
petition to
Court and the
procedure
thereof.
J’,+,;Restoration of - The Court may, on filing a petttion by the dedtor, order the restoration of possession of
possession of property whether movable or ~mmovable,if any, forcibly taken by any person towards repayment of
property. the loan advanced or rnterest therefor.
~djustmen’tof 8. The Court may, on a petttion filed by the debtor for settlement of loan tncludlng the interest
irlterest. therefor, pass an order for the adjustment of the tnterest, if any, paid by the debtor, over and above
the rate of rnterest fixed by the Government under sectton 7 of the Money-lenders Act, towards
the loan.
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Abetment of
suicide.
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I - Where a debtor or any member of his famtly commrts surctde and rf it IS shown that
immediately prror to such surcrde, the debtor or any member of hts famlly was subjected to
molestation by any person, the person who has advanced loan shall, unless the contrary 1s proved, be
deemed to have abetted the commrss~onof such su~crde.
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Explat~czt~otl -For the purpose of this sectton, “member of famtly” means the spouse,
unmarried daughter or unmarrted son. - Notwlthstandtng anything contamed in any other law for the tlme betng In force, the court
fce payable rn respect of a petrtton undcr thts Act shall be rllpecs one hundred.
I I. The provrsrons of sectlon 12 of the Money-lenders Act shall not apply In respect of
offences under thls Act. The prov~sionsof thts Act shall be in additton to and not in derogatton to
the provisions of any other law for the trme belng In force.
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Court fees.
Act not to be in
other laws.
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Repeal atid
Savlng. is hereby repealed.
(By order of the Governor)
Application of 12. Subject to the provisions of thrs Act, the provrsions of the Money-lenders Act, in so far
provisionsof as they are applicable to money-lenders shall t~lu~atrsnrtrtandrs apply to a person referred to In sectton
Money-lenders 3 of this Act.
Act.
Exp1anatron.-Where an act of a person constitutes offences under this Act and under
the Money-lenders Act, prosecution shall be launched under this Act.
to have been done or taken under this Act.
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