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IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. HEMALATHA, J.
Damodar Hariram & Others – Appellants
Versus
The State Represented by The Inspector of Police, Chennai & Another – Respondents
Crl. R.C. No. 899 of 2023 & Crl. M.P. Nos. 7313 & 11521 of 2023
Decided On : 17-08-2023
Exorbitant Interest Act - Criminal Revision - Sections 3 and 4 of the Exorbitant Interest Act, 2003, 406 and 420 IPC - [SUMMARY OF ACT SECTIONS] - The court discussed the application of the Exorbitant Interest Act, 2003 and its provisions in relation to the loan transaction, the charging of exorbitant interest, and the seizure of documents. The interpretation of the Act influenced the court's decision to set aside the trial court's order and direct the return of documents to the accused.
Fact of the Case:
The defacto complainant borrowed a large sum of money and alleged that the accused charged exorbitant interest. The trial court ordered the return of seized documents to the complainant, leading to the filing of a Criminal Revision.
Finding of the Court:
The court found that the trial court's order was erroneous, especially considering the pending suit for recovery of the amount due under the mortgage deed and promissory notes. The Criminal Revision was allowed, and the trial court's order was set aside.
Issues: The issues revolved around the application of the Exorbitant Interest Act, the seizure and return of documents, and the pending suit for recovery of the loan amount.
Ratio Decidendi: The court's decision was influenced by the interpretation of the Exorbitant Interest Act, the pendency of the recovery suit, and the erroneous nature of the trial court's order.
Final Decision: The Criminal Revision was allowed, the trial court's order was set aside, and the documents were directed to be returned to the accused.
JUDGMENT
(Prayer: Criminal Revision filed under Section 397 Cr.P.C. against the order dated 20.04.2023 passed in Crl.M.P. No.3557/2023 on the file of the Metropolitan Magistrate, for Exclusive Trial of CCB cases (relating to Cheating Cases in Chennai) and CBCID Metro Cases, Egmore, Chennai 600 008.)
1. The revision petitioners are the accused 1 to 4 in CCB Crime No.258/2022 of Central Crime Branch, Chit & Kanthuvatti Wing, Team VII, Egmore, Chennai.
2. Arumugam, the 2nd respondent (defacto complainant) lodged a complaint with the Inspector of Police Central Crime Branch, Chit & Kanthuvatti Wing, Team VII, Egmore, Chennai stating that the present petitioners are charging exorbitant rate of interest for the loan of Rs.1,70,00,000/- borrowed by him.
3. The case of the defacto complainant in nutshell is as follows:
(1)The defacto complainant is running a construction business in the name and style of M/s. Rajkham Housing and M/s.Rajkham Builders Private Limited and he is the Managing Director of the both the companies.
(2)Since the defacto complainant was in need of money, he borrowed a sum of Rs.1,70,00,000/- from the revision petitioners and also created a simple mortgage by deposit of title deed dated 20.01.2022 and the same was registered as document No.230/2022 dated 21.01.2022 on the file of the Sub Registrar Office, Kodambakkam.
(3)When the defacto complainant approached the revision petitioners/accused to redeem the mortgaged properties, they demanded a sum of Rs.40 lakhs towards interest and thus charged an exorbitant rate of interest.
(4)Based on these allegations, an FIR in Crime No.258/2022 was registered by the 1st respondent for the offences punishable under Sections 3 and 4 of the Exorbitant Interest Act, 2003 and 406 and 420 IPC against the present revision petitioners and the following documents were seized from them.
| S. No. | Doc. No. | Date of Document | Nature of the document | Executed by | In favour of |
| 1. | 5788/1981 | 30.09.1981 | Simple Mortgage deed | Noorjahan Bibi & another | The Nungambakkam |
| 2. | 2035/1983 | 25.07.1983 | Simple Mortgage deed | Noorjahan Bibi & another | The Nungambakkam |
| 3. | 2728/1985 | 30.08.1985 | First Simple Mortgage deed | Noorjahan Bibi & another | Parvathiraman |
| 4. | 243/1989 | 26.04.1989 | Power of Attorney | Mrs. M.Noorjahan Bibi | Mr. Haja Mohideen |
| 5. | 2465/1995 | 04.05.1995 | Receipt | Parvathiraman | M.Noorjahan Bibi |
| 6. | 2536/1995 | 08.05.1995 | Simple Mortgage deed | Noorjahan Bibi & another | Ineian Members |
| 7. | 1493/2002 | 19.04.2002 | Receipt | Ineian Members | Noorjahan Bibi & another |
| 8. | 1733/2002 | 09.05.2002 | Sale deed | Noorjahan Bibi & another | Mrs. Nirubarani |
| 9. | 1734/2002 | 09.05.2002 | Sale deed | Noorjahan Bibi & another | Mr.T.Muthu Vijayan |
| 10. | CA No.1084/ | 06.07.1981 | Extract from permanent Land Register | Tahsildar Egmore- - | Noorjahan |
| 11. | CA No. | 20.02.2023 | Extract from Town survey Land Register | Tahsildar Egmore- - | Nirubarani & |
The above documents were filed before the Metropolitan Magistrate, For Exclusive Trial of CCB cases (relating to Cheating Cases in Chennai) and CBCID Metro Cases, Egmore, Chennai-8 under form 95.
(5)Thereafter the 2nd respondent/defacto complainant filed a petition under Section 451 r/w 457 Cr.P.C in Crl.M.P. No.3557/202
The central legal point established in the judgment is the interpretation and application of the Exorbitant Interest Act, 2003 in the context of loan transactions and the charging of exorbitant inter....
The main legal point established in the judgment is that the transactions between the parties were purely commercial and not covered under the Money Lenders Act, leading to the quashing of the procee....
Criminal Revision - Party who files a revision under Section 397 Cr.P.C., but fails, cannot move the High Court under Article 227 of the Constitution.Bar contained under Section 397(3) Cr.P.C., would....
The validity of documents, probative value, and admissibility of documents cannot be examined at the stage of framing charges and can be addressed during trial. The defense taken by the accused canno....
Dishonour of cheque – Mere non-filing of any suit by complainant to recover amount due under promissory note does not entitle accused to claim order of acquittal.
The court affirmed that the maximum interest for secured loans is 9% per annum under Tamil Nadu law, and the plaintiffs failed to prove their claims of excessive interest charges.
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