SC issues notice to lenders on plea by Karnataka govt

SC issues notice to lenders on plea by Karnataka govt

SC issues notice to money lenders on plea by Karnataka against quashing of FIRs

The Supreme Court on Monday issued notice to a group of money lenders on a plea by the Karnataka government challenging the quashing of FIRs against them.

A bench of Justices N V Ramana and Mohan M Shantanagoudar sought response from the accused-money lenders on a special leave petition filed by the state government, challenging the Karnataka High Court's judgement of June 22, 2017.

The Dharwad bench of the high court had set aside the FIRs lodged against money lenders Shrimant, a resident of Bagalkot, and others for charging exorbitant interests for loans.

The state government, represented by advocate V N Raghupathy, contended that the high court granted relief to the accused-money lenders on reported procedural irregularities like conducting raids on their premises without prior permission from the registrar.

He cited an apex court's judgement delivered on March 15, 2018 that had held as “constitutional, valid and legal” the 1998 amendments brought into the Karnataka Money Lenders Act, 1961 and the Karnataka Pawn Brokers Act, 1961, providing that the security deposit furnished by the money lenders and pawn brokers shall not carry interest.

The court had then said we must also remember that the businesses of money lending and pawn broking are usurious businesses and the government may rightly impose onerous conditions to restrict or even discourage people from entering into such businesses.

On April 7, the top court had asked a complainant, who challenged the relief granted to accused-money lenders, to approach the high court afresh.

Veerabasappa, a resident of Koppal, challenged quashing of an FIR registered against Shanmukhappa Singanal, his son Suresh, and Mahesh in 2015 with Gangavathi Town Police Station for the offences under the Karnataka Prohibition of Charging Exorbitant Interest Act 2004 and under Section 420, 504 and 506 of Indian Penal Code.

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