Supreme Court takes on predatory money lending businesses, slams 'Shylockian attitudes'

New Delhi: The Supreme Court has decided to deal with the growing menace of money lenders with 'Shylockian attitudes', who are forcing even people who are doomed in debts to pay back double the amount, resulting in a spate of suicides.

A bench of Justices C T Ravikumar and Sanjay Karol issued a suo motu notice to the Union and the Delhi governments after impleading them in a case filed by noted film director and producer, Raj Kumar Santoshi.

The petitioner led by senior advocate Manan Kumar Mishra and advocate Durga Dutt claimed one Prashant Malik promised to invest Rs two crore in a film produced by him.

He, however, paid Rs 35 lakh and subsequently used security checks given by the petitioner to make out a case under the Negotiable Instruments Act. He challenged the validity of the Delhi High Court order, declining to quash summons issued against the petitioner.

After hearing the counsel, the bench said, "We are mainly peeved and pained by instances where ordinary laymen take such loans and are at last driven to streets or driven to commit suicide, on account of lenders entertaining Shylockian attitudes. We will regulate such instances and rescue the hapless who happen to borrow loans and then are doomed in debts."

The bench said it has taken this extraordinary step in this matter taking note of a growing menace to the society.

"Lending money on interest without any license and on some security like cheque or title deeds of property partake a character not, in essence, different from ‘money lending business’," the bench said.

The court said it has been coming across cases where such so called friendly advances are in crores. In cases where huge amounts involved such as Rs 50 lakhs as also in crores, besides overreaching of the provisions under money lending laws, huge evasion of tax may also involve, it added.

"We may add that the Shylockian attitude sans shame continues in such instances and more often that not, despite repaying the amount actually advanced, the borrower is constrained to pay sometimes double the amount or more, towards interest. To fall outside the purview of money lending business laws, prudently (or cunningly?) some such lenders avoid continued transaction and give huge loans only for interest, intermittently," the bench said.

The court fixed the matter for consideration on August 23.