The Hindu : Andhra Pradesh News : Extend loan at your own risk Law and order

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Andhra Pradesh

Andhra Pradesh

Extend loan at your own risk Law and order

Instances of private financiers ending up in criminal cases to get back their money are on the rise, writes Marri Ramu

On the face of it, the ‘suicide’ of Srinivas Reddy, a glass factory employee, reported two days ago in Rajnagar of Sanathnagar looks like a fall-out of monetary dispute.

But, there is more to this death than what meets the eye. Reddy’s is a classic case of how individuals extending loans land in trouble while trying to recover them. Police records say Reddy gave Rs. 2 lakhs to his relative Narsimha Reddy but the latter ‘failed’ to repay the amount.

Frustrated over recovery of the debt, Srinivas Reddy ended his life prompting the police to register a suicide case against Narsimha Reddy.

It is rare that a creditor resorts to the extreme step of killing himself but the instances of financiers ending up in criminal cases trying to get back their money are on the rise.

Inspectors of many police stations in the city daily receive complaints from individuals that someone had trespassed into their houses or attacked or abused them and their family members, including women.

In a good number of cases, it is found that the attacker is the financier and the complainant owes him some money. The dispute begins over repayment of the amount.

As per the law, the creditor has no right to enter the house of the debtor without the latter’s permission, or coerce or threaten or abuse him to recover the money.

Any such move by the person who extended loan in good faith would attract penal action. Few months ago, the Mahankali police arrested four persons for kidnapping a person.

The arrested quartet later explained that the ‘victim’ owed lakhs of rupees to them and they took him to their house to recover their money. “Whatever be their intentions, the creditors must understand that they have the only option of filing civil suits in the court to recover their money, but the debtors have the right of filing criminal complaints if force is used,” a police officer said.

Hence, police suggest that, a person extending loan must ensure that he is legally right by securing promissory notes or cheques or agreement on stamp papers from the debtor. Normally, financial firms take all such precautions. If the debtor tries to evade the money, the financier can get back the money using these documents.

But threatening or abusing the debtor even out of frustration or helplessness lands the financier in trouble.

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