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Judgment
M. Venugopal, J.—The revision petitioner/petitioner/plaintiff has filed the present revision petition as against the order dated 5.2.2008
passed in I.A. No. 7124 of 2008 in O.S. No. 1832 of 2003 by 15th Assistant Judge, City Civil Court, Chennai in dismissing the application filed
by the revision petitioner/petitioner/plaintiff under Sections 5 and 8 of the Tamil Nadu Prohibition of Charging Exorbitant Interest Act 2003 (Tamil
Nadu Act 38 of 2003) (hereinafter referred to as ""the said Act"").
The trial Court, while dismissing the said Interlocutory application, has inter alia opined that the revision petitioner/petitioner/plaintiff has come
forward without asking for any relief but take note of the bonafide payment made and as such, no relief can be granted in this petition. If at all, if
any payment is made or proved to be made, the Court will definitely consider the same in deciding the main case and has resultantly dismissed the
said application.
The learned Counsel appearing for the revision petitioner urges before this Court that the trial Court has failed to appreciate the fact that the
revision petitioner/petitioner/plaintiff is entitled to seek relief under the provision of the said Act and further that the trial Court should have
conducted an enquiry in I.A. No. 7124 of 2008 and granted the relief to the revision petitioner/plaintiff in accordance with law and that the trial
Court has not taken into account of the fact that no time is prescribed u/s 5 of the said Act and that a sum of Rs. 75,000/- has already been
deposited and further sum of Rs. 1,17,750/- has been paid to the first defendant in Court and this can be treated as deposit enacted in Section 5 of
the said Act and this aspect of the matter has not been considered by the trial Court and more over the interest calculated by the first
defendant/respondent prima facie is in violation of the ban fixed under Tamil Nadu G.O.Ms. No. 406, Co-operation Department dated 5.7.1997
and that the trial Court has erred in not taking note the fact that Section 20A, 20C of Tamil Nadu Moneylenders Act 1957 as amended by Act
41/1979 are applicable to the facts of the case and therefore prays for allowing this revision petition.
The revision petitioner has filed I.A. No. 7124 of 2008 before the trial Court inter alia stating that the respondent/defendant has no right to claim
such exorbitant demand since the calculation of exorbitant interest is at the rate of 2.5% per annum which is unheard of and further that the
respondent/defendant has no right to charge interest exceeding 9% simple interest per annum as per the Government Order in G.O.Ms. No. 406
(Co-operation) dated 6.7.1997 and therefore prays for to take note of the bonafide payment made and to conduct the enquiry by the trial Court
under the provisions of the said Act.
The first respondent/first defendant has filed a counter among other things mentioned in I.A. No. 7124 of 2008 which has been filed by the
revision petitioner/plaintiff to drag on the proceedings and in the main suit, cross examination of the witnesses of the plaintiff are over and D.W.1 is
in the stage of cross examination to be done on the plaintiff''s side and at the stage of the suit, the application is dubious and therefore prays for
dismissal of the said application.
Admittedly, the revision petitioner/plaintiff has filed the main suit praying for the relief of declaration that the proposed auction sale to be held on
12.4.2003 on the basis of the auction sale notice published by the second defendant on behalf of the first defendant is null and void as the same is
contrary and against the description of the schedule of property mentioned in mortgage deed dated 27.2.1995 and for the relief of permanent
injunction restraining the defendants 1 and 2 from bringing the suit property bearing door No. 383, 21st Street, N.S.K. Nagar, Arumbakkam,
Chennai-106, for auction sale proposed to be held on 12.4.2003 or any other subsequent dates in future.
The learned Counsel for the revision petitioner/plaintiff submits that as per Section 5 of the said Act, I.A. No. 7124 of 2008 has been filed by
the revision petitioner/plaintiff and therefore duty is cast on the trial Court to conduct an enquiry in the said application as per ingredients of Section
5 of the said Act and it is not open to the trial Court to observe its order that no relief can be granted in the said application and if at all, if any
payment is made or proved to be made, the Court will definitely consider the same in deciding the main case and therefore, the order of the trial
Court in dismissing the said application has resulted in miscarriage of justice.
Further the learned Counsel appearing for the revision petitioner/plaintiff also drew the attention of this Court to Section 8 of the said Act
relating to an adjustment of interest. In this connection, it is pertinent to point out that as per Section 5 of the said Act, a debtor can deposit into the
respective jurisdictional Court, the amount due in respect of the loan received by him along with interest at the rate of 9% per annum for secured
loan or 12% per annum for unsecured loan with a petition to record that the amount has been paid in full or part satisfaction of the loan and then
the Court, after due inquiry by giving 15 days notice to the person advancing the loan, pass orders recording the satisfaction of the loan and interest
therefore in full or in part, as the case may be. Also Section 8 of the said Act enjoins the Court of law to pass an order for the adjustment of the
interest paid by the debtor, over and above the rate of interest fixed by the Government (i.e., 9% p.a. For secured loan and 12% p.a. For
unsecured loan) u/s 7 of the Tamil Nadu Money Lenders Act 1957.
The learned Counsel for revision petitioner/plaintiff relies on the decision reported in B. Beekamchand Sowcar v. M. Jayaraman 1985 (1)
M.L.J. 324 wherein this Court has inter alia held that '' in this case, the defendant did not raise the question of valuation of the suit or the Court fee
payable in the trial Court itself and therefore, it will not be possible for him to question the same in second appeal. In fact, he had not questioned
the same in the first appeal preferred by him, even though he was the appellant in the Court below instead he had simply adopted the value given
by plaintiff in the trial Court. In the circumstances, therefore, it is not open to the defendant to re-value the claim in the second appeal for the first
time in his own way.'' He also further relies on the decision reported in N.M. Veerappa Vs. Canara Bank and Others, wherein the Honourable
Supreme Court has inter alia held that grant of interest at the rate of 6% from the date of suit is proper.
It cannot be gainsaid that Section 2(2) of the said Act defines as follows:
Debtor"" means a person who receives loan for exorbitant interest; Moreover Definition Section 2(3) speaks of ""exorbitant interest"" means and
includes daily vatti,hourly vatti, Kandhu vatti, meter vatti and thandal; Section 2(4) refers to ""hourly vatti"" means interest on hourly basis which will
work out to an interest rate more than that fixed by the Government u/s 7 of the Money Lenders Act; Section 2(5) speaks ""Kandhu vatti"" means
an interest which will work out to an interest rate more than that fixed by the Government u/s 7 of the Money-lenders Act; Significantly Section
2(6) visualise that ""loan"" means an advance of money for daily vatti, hourly vatti, kandhu vatti, meter vatti or thandal. As a matter of fact, Section
2(7) which speaks of ''meter vatti'' means an interest which will work out to an interest rate more than that fixed by the Government u/s 7 of the
Moneylenders Act, for every day on the loan amount not paid within the stipulated time.
The statement of object and reasons leading to an enactment of the said Act says that if any person charges more than 9% simple interest per
annum for the secured loan and 12% simple interest per annum for unsecured loan advanced by him for daily vatti, hourly vatti, kandhu vatti, meter
vatti and thandal, then he is charging exorbitant interest and to provide stringent punishment and accordingly Tamil Nadu Prohibition of Charging
Exorbitant Interest Ordinance, 2003 (Tamil Nadu Ordinance 2 of 2003) was published by the Government on 9.3.2003 and the same was
published in the Tamil Nadu Government Gazette on 9.6.2003. If more interest is charged then the specified one, then one is punishable u/s 4 for
violation of Section 3 of the said Act.
The pith and substance of the revision petitioner''s argument is that when the application in I.A. No. 7124 of 2008 has been filed by the
revision petitioner/plaintiff then the trial Court would have conducted an enquiry into the matter by giving 15 days notice to the person advancing
the loan and should have passed orders, recording the satisfaction of loan and interest therefore in full or in part but the same has not been done by
the trial Court.
This Court has paid its anxious consideration to the contentions projected by the learned Counsel appearing on either side and noticed their
contentions.
It is brought to the notice of this Court that an application/petition under Sections 5, 6, 7 or 8 of the Tamil Nadu Prohibition of Charging
Exorbitant Interest Act must be affixed with a Court Fee of Rs. 100/- as per Section 10 of the Act (Tamil Nadu Act 38 of 2003) and that the fees
mentioned in Tamil Nadu Court Fees and Suits Valuation Act 1955 will not apply. Admittedly, the revision petitioner has not paid the due Court
Fee of Rs. 100/- in I.A. No. 7124 of 2008 and yet the trial Court has entertained the same with deficit Court Fee and passed orders in the said
application.
It is not in dispute that in the main suit before the trial Court, plaintiff''s side evidence has been closed and D.W.1 is in the stage of cross
examination. A reading of Sections 5 and 8 of the Act do indicate clearly that the Court has to take an enquiry by giving 15 days notice to the
person advancing the loan and that the debtor can deposit into the respective jurisdictional Court amount received by him along with the interest of
9% for secured loan or 12% for unsecured loan with a petition to record that the amount has been paid in full or in part satisfaction of the loan
amount and that the Court of law can pass orders for an adjustment of the interest paid by the debtor over and above rate of interest fixed by the
Government u/s 7 of the Tamil Nadu Moneylenders Act 1957 (i.e., 9% p.a for secured loan and 12% for unsecured loan).
In the present case on hand, the suit has reached the post trial stage and therefore there is no express or implied bar either u/s 5 or Section 8 of
the Act for the trial Court to take up the contentions of the petitioner/plaintiff in the main suit and to deal with the same on merits at the time of
conclusion of the trial. More over Sections 5 and 8 of the said Act are explicit and only directory in nature and not a mandatory one and further it
admits of no exception in the considered opinion of this Court. In short, the provisions of Tamil Nadu Prohibition of Charging Exorbitant Interest
Act must be interpreted in a manner to subserve and advance the cause of justice rather than to defeat the same. Therefore, when the main suit is
at the part heard, at the stage of post trial and when D.W1 is in the box, at that time, the revision petitioner/plaintiff has projected the I.A. No.
7124 of 2008 and there is nothing wrong for the trial Court to decide the controversies at the conclusion of the trial in regard to the factum of any
payment is made or proof to be made and also to give a finding in regard to the charging of interest whether it is usurious or a prohibited one.
In fine, the civil revision petition is dismissed, the order passed by the trial Court in I.A. No. 7124 of 2008 in O.S. No. 1832 of 2003 is
hereby confirmed for the reasons assigned by this Court in this revision. Further as the contentions put forth by the learned Counsel appearing for
the revision petitioner/plaintiff are a mixed question of fact and law, the trial Court is also directed to frame necessary issue in this regard in
consonance with Sections 5 and 8 of the said Act or under any law as the case may be and to provide opportunities to both parties to let in
evidence both oral and documentary in the manner known to law. The trial Court is directed to dispose of the main suit within a period of two
months from the date of receipt of a copy of this order. Liberty is given to the revision petitioner/plaintiff to project and substantiate his case as per
Sections 5 and 8 of the said Act or under any law which he seeks in aid of his case. The parties are directed to cooperate with the trial Court for
completion of the proceedings of the main suit. No costs. Consequently, connected M.P. No. 1 of 2008 is also dismissed.