A loan over Rs.10,000 executed through a negotiable instrument does not invoke protections under the Tamil Nadu Prohibition of Charging Exorbitant Interest Act, 2003, thus entitling the lender to charge contractual interest.

O R D E R

A borrower who filed O.P.No.2 of 2022 under Sections 3 , 5, 8 and 12 of the Tamil Nadu Prohibition of Charging Exorbitant Interest Act, 2003 is the revision petitioner. Aggrieved by dismissal of the said original petition, he has preferred the present revision petition.

2. I have heard Mr.S.Kamadevan, learned counsel for the revision petitioner and Mr.M.Kempraj, learned counsel for the respondent. I have also gone through the records and the decisions on which reliance has been placed on by the learned counsel on either side.

3. The learned counsel for the petitioner, Mr.S.Kamadevan would state that for recovering a mortgage loan of Rs.75 lakhs and the respondent being a money lender, there is a clear bar for the respondent from charging exorbitant interest and in terms of the provisions of the Tamil Nadu Prohibition of Charging Exorbitant Interest Act, 2003 and The Tamilnadu Money Lenders Act,1957 the interest would have to be calculated only at 9% per annum.

4. The learned counsel would rely on a memo of calculation and contend that if the interest is calculated in terms of Section 7 of the Tamil Nadu Money Lenders Act, 1957 , the respondent being a secured creditor is entitled to only 9 % simple interest and after giving credit to payments made by the revision petitioner, only a sum of Rs.14,73,750/- is due and payable towards interest and adding the principal sum of Rs.75 lakhs, a sum of Rs.89,73,750/- alone is due and payable. The learned counsel for the petitioner would also state that the petitioner is willing to pay the said amount within a period of two months, without seeking any extension of time.

5. The learned counsel for the Petitioner places reliance on the decision of this Court in A. Ganesa Nadar v. Jayalakshmi and others , reported in 2009 (6) CTC 181, where this Court held that, in a suit based on a mortgage deed, applying Section 2 (8) of the Tamil Nadu Money Lenders Act, a person who does money lending business would be amenable to the provisions of the Act and being a secured loan covered by a mortgage, interest cannot be claimed in excess of 9% per annum and further held that the interest charged can only be simple interest.

6. In E. Velu v. P. Abusa and another , in C.S.No.469 of 2019 by a judgment and decree dated 11.03.2024, this Court referring to Section 3 of Tamil Nadu Prohibition of Charging Exorbitant Interest Act, 2003 held that insofar as any secured loan, interest cannot exceed 9% p.a., simple interest.

7. In T. Rajeshwari v. Dharmar , in A.S.No. 285 of 2021 by a judgment dated 31.03.2022, this Court held that the mortgage deed fixing 24% per annum interest is very excessive, and beyond the maximum interest that can be charged for a secured loan and applying Section 7 of the Money Lenders Act and G.O.M.S. No.406 Co-operation dated 05.07.1979 held that, being a loan availed and secured by mortgaging the suit property, the maximum interest that can be charged is 9% per annum.

8.Per contra, the learned counsel appearing for the respondent, Mr.Kempraj, would submit that the petitioner approached the respondent for availing a loan stating that he intended to improve his business under the name and style of 'M/s.Balaji Bricks Industries'. The loan amount was released by way of a negotiable instrument, viz., Cheque dated 10.07.2017. The petitioner had agreed to repay the said amount in 30 equal monthly installments. According to Mr.Kempraj, the mortgage of the property was only as a collateral security for the borrowing.

9. The learned counsel