Legal Question in Consumer Law in India

I have taken a loan of Rs 40000 from Moneylender (Kabuliwala) on February 2011. From next month onwards I am. Paying him Rs 4000 every month, he counts it as interest. Total 38 months I have paid an amount which comes to Rs 1,52,000.00, but sti

still he demands me the Principal amount of Rs 40000. I don't have capability of paying that amount to him. What should I do, can you suggest please.

I have given this amount through bank account of his friend, the account number of that person was sent to me from his mobile by him.


Asked on 3/27/14, 7:58 am

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

27.03.2014

Dear Sir / Madam,

Moneylenders (kabuliwalas) charge interest ranging from 30% if secured i,e against mortgage of gold ornaments, to 36% per annum, if the amount is given without any security. So, in your case even if one is to take the higher interest rate of 36% per annum on straight line basis, the total amount payable by you over a period of 36 months including the principal repayment i.e for 3 years it works out to Rs. 1,00,618.24 ps (Rupees One Lakh Six Hundred Eighteen & Paise Twenty-Four Only) whereas you have already repaid the moneylender Rs. 1,52,000/- which works out to around 57% per annum, which is an exhorbitant rate of interest going by any stretch of imagination. In fact, the moneylender has to actually refund you the excess Rs. 52,000/- paid by you in his friend's A/c back to you. You should straightaway tell the moneylender to immediately return back the promissory note or any other documents that he has got signed from you as security, failing which you should report the matter to the local Police for action.

Regards,

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Answered on 3/27/14, 9:52 am


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