Moneylenders are adopting a new way to avoid punishment for usurious lending by forcing borrowers to name transfer their properties by registering sale deeds instead of pledging them.
A former DMK MLA, D. Radhakrishnan, on Monday lodged a complaint with Madurai Superintendent of Police Sujit Kumar claiming that his relative had cheated him of prime properties worth ₹9 crore for a ₹2-crore loan he had taken. The SP said he had instructed his officials to inquiry into the complaint.
“He insisted that I should execute sale deeds of some of my properties with the promise that on repayment of loan with interest, he would cancel the registration. But now he has gone back on his word with an intention to cheat me,” said Mr. Radhakrishnan, who had won Sholavandan Assembly constituency in 1989.
“This is a novel practice being adopted by moneylenders in some districts like Pudukottai, Madurai and Theni. They believe that borrowers cannot seek legal remedy if their properties are usurped through sale deeds,” said a senior police officer.
Earlier moneylenders used to force borrowers to give blank cheques or pledge properties as collateral for the loan. “As the State government brought in a legislation to abolish ‘kanthu vatti’ (Tamil Nadu Prohibition of Charging Exorbitant Interest Act, 2003), they are trying to take a shield under registration of sale deeds,” he said.
Mr. Radhakrishnan took a loan of ₹1 crore in 2016 in a similar fashion from two persons after executing a sale deed of 1.70 acres of his agricultural land in Vadipatti. When the moneylenders wanted him to repay, he sought the help of another moneylender, who is his relative. After the land was transferred to the new moneylender by the first moneylenders, Mr. Radhakrishnan took a loan of ₹1.70 crore to settle the initial loan.
He later got ₹30 lakh as loan for his daughter’s marriage, after registering a few other properties to the same moneylender. “I had told them that I would soon repay the loan amount with interest after selling my property in Tiruppur. However, as things did not go as planned, I could not immediately repay the loan,” Mr. Radhakrishnan said.
Meanwhile, the moneylender made a gift settlement of the 1.70 acre land to his son and they sunk a borewell and were trying to set up a petrol pump in the land without the knowledge of Mr. Radhakrishnan.
When local people, including the first moneylenders, asked him to return the land to Mr. Radhakrishnan on repayment of loan, he rejected their suggestion.
