The Tamil Nadu Prohibition of Charging Exorbitant Interest Act, 2003

 
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The Tamil Nadu Prohibition of Charging Exorbitant Interest Act, 2003 
 
Act 38 of 2003 
 
 
 
 
 
 
 
 
Keyword(s): 
Daily Vatti, Debtor, Exorbitant Interest, Hourly Vatti, Kandhu Vatti, Loan, 
Meter Vatti, Money-Lenders Act, Thandal 
 
TAMIL NADU GOVERNMENT GAZETTE EXTRAORDINARY 171 
1 
The following Act of the Tamil Nadu Legisiative Assembly received 
Governor on the 14th November 2003 and is hereby published for general 
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 :- 
1. (I) This Act may be called the Tamil Nadu Prohibition of Charging Exorbitant Interest Act, Short title, 
2003. extent and 
commence- 
r 
ment. 
(2) It extends to the whole of the State of Tamil Nadu. 
I (3) It shall be deemed to have come into force on the 9th day of June 2003. 
p 2. In this Act, unless the context otherwise requires,- Definitions. 
(1) "daily vatti" means interest on daily basis which will work out to an interest rate more 
b 
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 of the Money-lenders Act; 
(6) "loann means an advance of money 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 of the 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. 
3. No person shall charge exorbitant interest on any loan advanced by him. 
4. 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. 
J',+,; !,.I ' 
5. (1) A debtorAmay deposit the money due in respect of loan received by him from any person 
together with interest at the rate fixed by thc Government under sectron 7 of thc Money-lendcrs Act, 
into the Court, having jurisdiction, 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 (I 1. refer a copy of the petition 
to the person mentioned in the petition, directing him to give his version of the casc w~thin a period 
of fifteen djys as may be granted by thc CIourt. The Court may. afier due 1nqull.y a~ld aficr 
Prohibition of 
charging 
exorbitant 
interest. 
Penalty. 
Deposit of 
money and 
I 
presentation of 
petition to 
Court and the 
procedure 
thereof. 
Restoration of 6. 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't of 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. 
Abetment of 9. Where a debtor or any member of his famtly commrts surctde and rf it IS shown that 
I suicide. 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 
I deemed to have abetted the commrss~on of such su~crde. 
Explat~czt~otl - For the purpose of this sectton, "member of famtly" means the spouse, 
I unmarried daughter or unmarrted son. 
I 
I 
, Court fees. 10. Notwlthstandtng anything contamed in any other law for the tlme betng In force, the court 
i fce payable rn respect of a petrtton undcr thts Act shall be rllpecs one hundred. 
I Act not to be in I I. The provrsrons of sectlon 12 of the Money-lenders Act shall not apply In respect of 
offences under thls Act. The prov~sions of thts Act shall be in additton to and not in derogatton to 
k other laws. the provisions of any other law for the trme belng In force. 
I 
Application of 12. Subject to the provisions of thrs Act, the provrsions of the Money-lenders Act, in so far 
provisions of as they are applicable to money-lenders shall t~lu~atrs nrtrtandrs 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. 
Repeal atid 13. (I) The Tamil Nadu Prohibition of Charging Exorbitant Interest Ordinance, 2003 T~~IIN 
Savlng. is hereby repealed. 
to have been done or taken under this Act. 
(By order of the Governor) 
A. KRISHNANKUTTY NAIR, 
Srcrrtlr~:~ to Gol.er.n~~renr, 
Ltrnq L)rptrr.fnzent. 

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