20,971 persons seek waiver under Debt Act in Udupi

As many as 20,971 persons have sought relief under Debt Relief Act in Udupi district. The Act promises to waive all private borrowings.

As the Pawnbrokers and Jewellers Association Karnataka had approached the High Court challenging the law, there is no clarity on whether it is applicable to licenced or unlicenced money-lenders or both compounding the problem.

All those who have submitted applications seeking relief under the Act are now doubtful whether their loans will be waived.

The borrowers are not sure whether their loans will be waived or the gold ornaments and the property papers that they have pawned will be returned to them. While the lenders are anxiously waiting for the court judgement.

Following the Debt Relief Act, many have stopped repaying the money borrowed. As a result, the loan amount remains uncleared with interest amount rising with each passing day.

Kundapur Assistant Commissioner Raju said that government had asked not to take any decision on the applications following the writ filed in the High Court. "The applications will be cleared after the High Court passes judgement and the government gives the instructions."

The Act came into existence on July 23. The applications were received from September to October (till 22nd). The applications will be verified whether it can be waived under private borrowings of Debt Relief Act.

It is said that without proper knowledge about the Act, many ineligible, including those who have availed loans from private, nationalised banks and cooperative societies, have applied for relief.

Loan borrowed from private money lenders and pawnbrokers will be waived under the Debt Relief Act, officials said.

Loan borrowed from financial institutions registered under Karnataka Registration Act 1960 and chit fund institutions will not be covered under the Act, they added.