2014 ACD 341 (MAD)

Madras High Court

Hon'ble Judge(s): K. B. K. Vasuki , J

( A ) Negotiable Instruments Act (26 of 1881) S. 138 — Tamil Nadu Money Lenders Act (26 of 1957), Ss. 2(6), 3, 4, 7, 12 — Tamil Nadu Prohibition of Charging Exorbitant Interest Act (38 of 2003), S. 3 — Dishonour of cheque — Accused borrowed Rs. 2 Lakhs from complainant and agreed to pay interest @ 24% p.a. — Plea by accused on dishonour of cheque issued by him, that interest chargeable at 24% p.a. is prohibited u/S. 3 of 2003 Act r/w S.7 of 1957 Act, cannot be enforced in any court of law and therefore, ingredients of offence u/S. 138 of N.I. Act, not attracted — Not tenable — As the borrowal is supported by pronote, provisions of said Acts are not applicable.The specific allegation raised in the complaint is that the accused borrowed money for his family expenses and having agreed to repay the amount with interest @ 24 p.a. executed a pro note for the amount in question. Accused contended that as the interest chargeable at 24% p.a. is prohibited under Section 3 of Tamil Nadu Prohibition of Charging Exorbitant Interest Act, 2003 r/w Section 7 of the Money Lenders Act, 1957, it cannot be enforced in any Court of law. Held that as the borrowal is supported by pro note, both the provisions of law under the Money Lenders Act and Tamil Nadu Act are not applicable to the loan transaction. Though an argument is sought to be advanced on the side of the accused that the definition of ‘loan’ and ‘money lender’ in this case is different....