The Kerala Prohibition of charging Exorbitant Interest Act 2012

ACT 2 OF 2013
THE KERALA PROHIBITION OF  CHARGING EXORBITANT INTEREST
ACT, 2012 *
An Act to prohibit lending of money for exorbitant interest and to provide for
stringent punishment for charging exorbitant interest in the money lending
business in the State of Kerala and for matters connected therewith  or
incidental thereto.
Preamble.—WHEREAS, it is expedient to prohibit lending of money for
exorbitant  interest  and  to  provide  for  stringent  punishment  for  charging
exorbitant interest in the money lending business in the State of Kerala and for
matters connected therewith or incidental thereto;
BE  it enacted in the Sixty-third Year of the Republic of India as follows:—
1. Short title and commencement.—(1) This Act may be called the Kerala
Prohibition of Charging Exorbitant Interest Act, 2012.
(2) It shall be deemed to have come into force on the 27th day of
August, 2012.
2. Definitions.—(1)  In this Act, unless the context otherwise requires,-
(a) "daily vatti" means interest on daily basis which will work out to an
interest rate more than that specified under sub-section (1) of section 7 of the
Kerala Money-Lenders Act, 1958 (35 of 1958);
(b) "debtor" means a person who receives loan for exorbitant interest;
(c) "exorbitant interest" means an interest at the rate more than the rate
specified in sub-section (1) of section 7 of the Kerala Money Lenders Act,
1958 and includes daily vatti, hourly vatti, kandu vatti, meter vatti and thandal;
(d) "hourly vatti" means interest on hourly basis which will work out to
an interest rate more than that specified under sub-section (1) of section 7 of
the Kerala Money-Lenders Act, 1958 (35 of 1958);
(e) "kandu vatti" means an interest which will work out to an interest
rate more than that specified under sub-section (l) of section 7 of the Kerala
Money Lenders Act, 1958 (35 of 1958);
(f) "loan"  means an  advance of  money for daily  vatti,  hourly  vatti,
kandu vatti, meter vatti or thandal;
* Received the assent of the Governor on the  4th day of January,2013 and published in
the Kerala Extraordinary Gazette No. 65 dated 07-01-2013.
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(g) "meter vatti" means an interest which will work out to an interest rate
more than that specified under sub-section (1) of section 7 of the Kerala Money-
Lenders Act, 1958 (35 of 1958) for every day on the loan amount not paid within
the stipulated time;
(h) "thandal" means interest which will work out to an interest rate more
than that specified under sub-section (1) of section 7 of the Kerala Money-
Lenders Act, 1958 (35 of 1958) which is to be recovered daily along with the
part of the loan amount;
(2) Words and expressions used but not defined in this Act and defined in
the  Kerala  Money-Lenders Act, 1958 (35 of  1958) shall  have  the  meanings
respectively assigned to them in that Act.
3.  Prohibition  of  charging  exorbitant  interest.—No person  shall  charge
exorbitant interest on any loan advanced by him.
4. Offences to be cognizable and non-bailable. — Any offence under this Act
shall be cognizable and non-bailable.
5.  Deposit of money and presentation of petition before the Court and the
procedure related thereto.—(1) A debtor may deposit the money due in respect of
loan received by him from any person together with interest at the rate specified
under sub-section (1) of section 7 of the Kerala Money-Lenders Act, 1958 (35 of
1958) into  the Court, having jurisdiction, along with a petition to record that the
amount  deposited  is in  full  or  in  part  satisfaction  of  the  loan  including  the
interest thereon, as the case may be.
(2) The Court shall, on receipt of a petition under sub-section (1), refer a
copy of the petition to the person mentioned in the petition, directing him to give
his version of the case within a period of fifteen days or within such other time
as may be granted by the Court. The Court may, after due inquiry and after
considering the versions of the parties, pass orders recording the satisfaction of
the loan and interest thereon in full or in part, as the case may be.
6. Restoration of possession of property.— The Court may, on filing a petition
by the debtor, order the restoration of possession of property, whether movable
or immovable, if any, taken possession by any person towards repayment of the
loan advanced to him or interest thereon.
7.  Voluntary disclosure. —Any person who charges exorbitant interest may,
within one month from the date of coming into force of this Act, file a petition
before the Court disclosing his intention to charge only the rate specified under
sub-section (1) of section 7 of the Kerala Money-Lenders Act, 1958 (35 of 1958)
on the loan advanced by him and on such disclosure, the interest in respect of
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such loan shall be as specified under sub-section  (1) of section 7 of the said Act
and no prosecution for the offences under this Act shall be instituted in respect of
such loan.
8. Adjustment of interest.— The Court may, on petition filed by the debtor for
settlement  of  loan,  including  the  interest  thereon,  pass  an  order  for  the
adjustment of the interest, if any, paid by the debtor, over and above the rate of
interest specified under sub-section (1) of section 7 of the Kerala Money-Lenders
Act, 1958 (35 of 1958), towards the loan.
9.  Penalty.—(1) Notwithstanding anything contained in the Kerala Money-
Lenders Act, 1958 (35 of 1958),-
(a)  whoever  contravenes  the  provisions  of  section  3  shall,  on
conviction, be punished with imprisonment for a term which may extend to three
years and also with fine which may extend to fifty thousand rupees;
(b) whoever harasses any debtor mentally or physically or abets such
harassment  for recovery of any loan, shall, on conviction, be punished with
imprisonment for a term which may extend to one year and also with fine which
may extend to ten thousand rupees.
(2) Where the person who has advanced the loan or any other person as
directed by him, harasses the debtor mentally or physically and consequently and
immediately thereafter the debtor commits suicide, the person who advanced the
loan, shall, on conviction, be punished with imprisonment for a term which may
extend to five years and also with fine which may extend to fifty thousand
rupees.
10. Court fees. — Notwithstanding anything contained in any other law for
the time being in force, the court fee payable in respect of a petition under this
Act shall be one hundred rupees.
11. Act not to be in derogation of any other laws. — The provisions of this
Act shall be in addition to and not in derogation of the provisions of any other
law for the time being in force.
12. Application of the provisions of the Kerala Money-Lenders Act, 1958 (35
of 1958). — Subject to the provisions of this Act, the provisions of the Kerala
Money-Lenders Act,  1958 (35 of 1958),  in  so  far  as they  are  applicable  to
money-lenders, shall mutatis mutandis apply to a person referred to in section 3
of this Act.
Explanation.—Where an act of a person constitutes an offence under this
Act and under the Kerala Money-Lenders Act,1958 (35 of 1958), prosecution
shall be launched under this Act.
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13. Repeal and saving. —(1) The Kerala Prohibition of Charging Exorbitant
Interest Ordinance, 2012 (53 of 2012) is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken under
the said Ordinance shall be deemed to have been done or taken under this Act.

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