SC TO EXAMINE ILLEGAL MONEY LENDING BUSINESS BY PEOPLE WITH "SHYLOCKIAN ATTITUDE"

New Delhi, Jul 26 (PTI) The Supreme Court has decided to examine and lay down law to check unlicensed money lending business in India for rescuing hapless borrowers who are driven into a debt trap by moneylenders having "Shylockian attitude".

Shylock was a fictional moneylender in William Shakesphere's play "The Merchant of Venice".

A bench of Justices CT Ravikumar and Sanjay Kumar, while adjudicating a cheque bounce dispute involving Bollywood film producer and director Raj Kumar Santoshi, who allegedly borrowed money from a man named Prashant Malik to produce film "Saragarhi", said it has taken note of a "growing menace to the society".

The bench said, "We are coming across cases where such so-called friendly advances are in crores (of rupees). 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."

Santoshi, in his plea filed by advocate Durga Dutt, has claimed when he was preparing for making "Saragarhi", Malik, who knew him, had approached him with an offer to invest Rs 2 crore in the film.

He claimed Malik only paid Rs 35 lakh, and when he reminded him about the promise of investment, the respondent (Malik) with malafide intention, refused to invest more citing his financial condition.

Malik has, however, refuted Santoshi's claim and told the court that he advanced Rs 85 lakh as friendly loan to Santoshi on different dates and through different modes.

The bench, in its July 23 order said, "We will regulate such instances and rescue the hapless who happen to borrow loans and then are doomed in debts. In cases where huge amounts involve 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."

The bench said, "We may add that the Shylockian attitude sans shame continues in such instances and more often than not, despite repaying the amount actually advanced, the borrower is constrained to pay sometimes double the amount or more, towards interest."

It said, "To fall outside the purview of money lending business laws, prudently (or cunningly?) some such lenders avoid continued transactions and give huge loans only for interest, intermittently."

The bench impleaded the Centre and the Delhi government as parties to the matter and sought their response.

While posting the matter for hearing on August 23, the bench also restrained the trial court in Delhi from passing any final order till then in the case filed by Malik against Santoshi alleging dishonouring of cheques under the Negotiable Instruments Act.

Senior advocate Manan Kumar Mishra, who appeared for Santoshi, said the film producer has returned Rs 4 lakh to Malik.

"However, to utter shock and surprise of the petitioner (Santoshi), the Respondent (Malik) presented the security cheques given by the petitioner in tune of Rs 45 lakhs, which clearly shows ulterior motive of the respondent," the plea of Santoshi said.

Security cheques are issued in furtherance of a financial obligation and acts as a surety for the person accepting such cheque.

Santoshi contended that no case is made out as when a part-payment is made after the issuance of a post-dated cheque, the legally enforceable debt at the time of encashment is less than the sum represented in the cheque.

In his plea, Santoshi denied having received any amount in cash and said the film project was marred by uncertainties which arose due to a rival movie studio producing the movie on the same subject matter.

Santoshi has moved the top court challenging the Delhi High Court's March 14 order dismissing his plea for quashing the summons issued by the trial court on August 24, 2021 and subsequent orders in the case filed by Malik.

2024-07-26T14:31:39Z dg43tfdfdgfd