II borrowed a sum of 8 lacs rupees from a local money-lender at different intervals of time in 2013.No agreement was signed,no security was taken.He charges interest at rate of 5% per month.whenever I failed to pay the interest,he added the interest to principal amount and got the entry signed by my son who is 20 years of age.This type of entry is not signed by me.By adding the due interest in principal amount,the principal amount has reached upto 36 lacs because of compounding of interest.So far I have paid Rs.75 lacs as interest only. I paid the interest in following ways- By bank transfer----Rs.15 lacs or more By cash--- 40 lacs approx INTEREST Added in principal amount---20 lacs.approx I fear he will not accept that he has taken any cash amount.He has added interest in principal amount not as interest but as principal amount.He will not accept that he has added interest in principal amount. The crux of the problem arose in 2017.his outstanding loan as on [deleted] was 5,60,000.00.By cheating my son (20 years old) and taking him in good faith ,He received an amount of 8,60,000 via bank transfer and 500000 Rs via cash.Thus he took Rs 13,60,000 from my son as against his dues of Rs 5,60,000 by cheating him.His cheating did not stop there. In January of 2019 he called my son to his house and got the account done from [deleted] to [deleted]. He added all the amounts and completed Rs.19,50,000 but did not deduct Rs.13,60,000 from the total amount given by my son. After deducting this amount, his outstanding amount should have been only 5,90,000. But he continued to charge interest on the entire 19,50,000 at the rate of 5% per month compound interest. In this way, till December 2021, he kept taking a total of 40 lakh 80 thousand rupees from me only as interest which is illegal. Please suggest that- ----How can I get back this illegally taken amount? ---- Is there any provision to get the calculation done by reducing the interest rate again?
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If he has done all such illegal activities and is threatening you then you can approach police with a complaint for exorbitant interest and lodge a criminal complaint under the prohibition of exorbitant interest act.
In the police station you can negotiate the amount and close the entire loan amount at one go and get relieved from him instead of suffering the humiliations regularly
You can recover the same by showing that higher rate was charged to you as per the interest Act by filing suit
does money lender have money lending licence ?kindly clarify
rate of interest charged is usurious . He cannot charge such rate of interest
I presume you have not signed any documents agreeing to high rate of interest
file police complaint against money lender for extortion
The rate of interest is illegal and against public policy. Lender cannot do business of lending without registration with RBI. As per law Interest cannot exceed principal. Your apprehension is correct. Upu should report the matter to police and also file recovery of excess amount over and above principal amount I.e. eight lakh.
If the moneylender has charged you exorbitant interest, threatened you, or harassed you in any other way, you can file a complaint with the police under the Prohibition of Charging Exorbitant Interest Act. The police will investigate your complaint and take appropriate action.
You can also try to negotiate with the moneylender to close the loan amount in one go. This may be a good option if you are tired of being harassed and want to be free from the debt.
- As per law, money lending without a Money lending licence is an offence , and the person doing this without having a licence can go behind the Bar , and fine upto Rs. 30,000/- .
- Further, the Money Lending Act prohibits from charging interest rate more than 21% p.a for unsecured loans for non-agriculture people and 18% for secured loans for non-agriculture people, The loan rate as per Money lending is simple interest per year.
- Maximum a money lender can charge 2 percent more than the commercial bank rate of interest , and nothing more
- The Supreme Court of India has instructed the government to impose onerous conditions to restrict or even discourage people from entering into money lending business.
- You should lodge a written complaint to the police after mentioning that that money lender is engaged into the business without having an licence , and charging huge interest from the innocent persons like you , and further threatening for filing a case on the security given cheques.
- Further make stop to make any payment to him , and let him approach the Court for the recovery of the remaining amount.
