I am a retired headmaster of a government school.Due to policy decision of education department,I had to construct the residential building of kasturba vidyalaya.Due to the fault of the department,the work started in 2014.I was not inclined to start the work but the department threatened me that I would be dismissed from the service and would be sent to jail.I had to complete the building by taking loan from a local money-lender.He took benefit from my situation and charged 5% monthly compound interest.After the construction work was completed,I was paid at the rate prevalent in 2011.It amounted me a loss of around 24 lakhs.Here the department committed severe mistake and the act of the department was in defiance of financial and PWD rules.This matter is pending with honourable patna high court. In order to pay the interest ,I had to take further loan from another money-lender.To pay the interest of this another money-lender,I had to take yet another loan from a third money-lender and it continued.I had also to take loan from the bank to cover up interest of these money-lenders.I fell prey to severe debt-trap.In the meantime I was forcefully and wrongly retired from the service.This matter is also pending with honourable patna high court. Now the situation is that I am on a pension of around 40,000.00.The EMI of bank is 86,000.00.The bank deducts all of my pension.I had to pay rest 46,000.00 by taking loan.I do not get any money to provide even food to my family.Not even that,the money-lenders use every means to torture me and my family daily to pay interest and principal.I have no money at all.I do not find any way out.Is it not the violation of fundamental right of right to food and right to life with dignity? So far I have paid more than 1.5 crore towards payment of interest only.All the money-lenders took benefit from my situation. They added interest to the principal amount and also added penalty.I had taken something more than 20 lakhs as a loan from these money-lenders. This amounted to a debt of 70 lakhs by adding interest and penalty.I reached this situation due to the fault of the department.I would like to get legal interference to prevent money-lenders and bank to recover interest and principal till the judgement of the high court.A relaxation time of two years would be sufficient.I am in deep trouble.please give appropriate suggestion.
1) rate of interest is usurious .
2) 5 per cent monthly compound rate is 60 per cent annually . refuse to pay
3) is the money lender registered under money lender act of your state
4) if registered he can only charge maximum amount as per money lending act of your state
5) let money lenders file suit to recover money
6) contest the false suit on merits
If the private money lenders are indulging in illegal tactics to recover the money by putting pressure on you or visiting yor house etc., yo can file a FIR agaisnt them for their illegal activities.
Since your other issues are pending before high court you may have to wait for the disposal of the case for taking any further action on them
- As per law, Money lending without a Money lending licence is an offence , and the person doing this without having a license can go behind the Bar , and fine uptoRs. 30,000/- .
- Further, the Money Lending Act prohibits from charging interest rate more than 21% 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 two 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 can lodge a written complaint to the police after mentioning that that money lender is engaged into the business without having an license , and charging huge interest from the innocent persons like you , and further threatening for dire consequences and to file cases.
- Further, as per RBI, the bank should give proper time and offers for the settlement of loan amount., on the ground of health and sudden loss
- Hence you can send a legal notice to the bank after mentioning your poor financial conditions to waive the interest.
- If bank official/people are harassing, then you can lodge a complaint at the police station for harassing & threatening , as law not permits anybody to take the law in his hand.
You can contact me for further suggestion in this regard.
Dear Client,
You are right; your present position is worrisome, and it is a worrying indicator of your rights to food, to live with dignity, and to be protected from death. Under these circumstances, action based on legal procedures is inevitable in order to avoid further economic loss and to defend oneself.
For that reason, it is necessary to rush to a lawyer for an application for an order to restrain the moneylenders and the bank from demanding and collecting interest and principal amounts until the Patna High Court furnishes its jurisdiction. It will help you avoid reaching a point where you have no money to pay your bills, and once you have a steady job, you should be able to minimise your spending and repay the money borrowed.
Your lawyer can then appeal to the judge and explain that it is unfair and unreasonable for a moneylender to ask for exorbitant interest rates and other penalties given the circumstances surrounding the borrower’s debt trap. Emphasising your acknowledgment of the infringement of rights because of the money that you are expected to pay may help build your argument for the relief needed.
Also, your lawyer should apply for a stay or grace period, which should be two years, as you suggested. As suggested, you should manage your factoring to evade debts. In this period, interest accrual and penalty charges are likely to put more pressure on your financial capability, but the court may agree to suspend these charges.
Document collection is also critical, mainly loan agreements, bank statements, and any writing that the education department will have sent to either the lender or the debtor. Your legal counsellor, who will be assigned to your case, will then move for the appropriate legal redress in order to give you the relief you deserve.
It is thus advised that you seek legal help as soon as you can so that your emergency financial situation can be addressed comprehensively and all your constitutional rights can be defended.
