Lost to usury

The suicide by a family of four in the Tirunelveli Collectorate complex brings to the fore the problem of usury, which is widespread in Tamil Nadu, and the government’s lack of will to end the violent ways of moneylenders.

People trying to douse the flames on Esakkimuthu and one of his daughters when they committed self-immolation in the Tirunelvelli Collectorate complex on October 23.

ON October 23, P. Esakkimuthu, a 30-year-old farm labourer, his graduate wife Subbulakshmi, 27, and their daughters Mathi Saranya, six, and Akshaya Barani, two, were engulfed in flames in full public view inside the Collectorate compound in the southern town of Tirunelveli of Tamil Nadu. As the poignant scene was uploaded live on social media, a swell of rage against an administration which remained more or less nonchalant swept across Tamil Nadu. What scorched the family more than the flames was the pernicious practice of usury when they were alive.

Esakkimuthu and Subbulakshmi of Kasitharmam village in Tirunelveli district had borrowed money for their immediate needs on different occasions from a local woman usurer, Muthulakshmi, a year ago. The family migrated to Coimbatore and later to Tirupur around eight months ago in search of employment since crops had failed for the third successive year. According to Esakkimuthu’s brother Gopi, the loan amount was Rs.1,45,000 and the family had repaid Rs.2,34,000 in six equal monthly instalments. However, there was continued harassment to pay an exorbitant interest.

The family arrived at the Tirunelveli Collectorate complex to submit a petition to the Collector, Sandeep Naduri, for the fifth time in three months at the grievances’ day meeting, seeking action against their intimidators. When officials who were present at the office castigated the couple for not repaying the loan, the couple came out of the Collector’s office in a huff and, to the shock of other petitioners, resorted to the extreme step.

Onlookers attempted to save them but it was too late. The victims suffered more than 75 per cent burns. The mother and the girls died late in the evening on the day of admission to the Tirunelveli Government Medical College Hospital, while Esakkimuthu succumbed to burns the next day. He furnished a dying declaration to a judicial officer.

The incident has brought the malice of usury, which has turned into a major sociopolitical issue, to the fore besides exposing the abject failure of the enforcing mechanism and the lack of political will to curb it. Gopi, who accompanied Esakkimuthu’s family to the Collectorate, had gone to a nearby tea shop at that critical moment. He blamed the district administration for the death of his brother and his family.

The Palayamkottai police registered a case against the usurers Muthulakshmi, her husband Thalavai Raj, and her father-in-law Kali under Section 306 (abetment of suicide) and 511 (attempting to commit offences punishable with imprisonment for life or other imprisonment) of the Indian Penal Code (IPC) and Section 4 of The Tamil Nadu Prohibition of Exorbitant Interest Act, 2003, a piece of legislation introduced by the Jayalalithaa government in the wake of the suicide of the noted film producer G. Venkateswaran allegedly due to usurer harassment.

Two days after the Tirunelveli incident, Chief Minister Edappadi K. Palaniswami, in a press statement, merely requested the harassed borrowers to approach the District Collectors and police officers to get their grievances redressed. The National Human Rights Commission has sought a detailed report on the incident.

The Tirunelveli Superintendent of Police, P. Ve. Arun Shakthikumar, said in a statement that Esakkimuthu had been a habitual debtor and also used to relend the money he had borrowed, and had thus fallen into a debt spiral. The official said that since he could not repay, Esakkimuthu resorted to the practice of submitting petitions of usurer harassment to the Collector. He submitted petitions during the grievances’ day meetings on September 9, September 18, September 25 and October 9. Esakkimuthu’s petitions were received and forwarded to the departments concerned mechanically and no follow-up action was initiated. Activists are of the opinion that the death of Esakkimuthu and his family could have been avoided had the Collector taken up the petitions in right earnest.

(It was Chief Minister M.G. Ramachandran (1980-87) who introduced the concept of observing every Monday as grievances redress day in all the districts of the State. Collectors are expected to remain in the district headquarters on Mondays and accept petitions from the people. They are also expected maintain a status update on the petitions thus received. But of late these meetings have been reduced to a mere ritual, defeating the very objective for which they were designed.)

“This lapse proved costly in the Esakkimuthu case. He had even gone on record saying that the officials had forwarded his last petition to the same Achanputhur police whom he accused of colluding with the usurers. Had the Collector understood the seriousness of the issue and the S.P., instead of attempting to portray the victim as a bad debtor, pursued it with due diligence, a heart-wrenching tragedy could have been avoided today,” said Henry Tiphagne of People’s Watch, a rights body based in Madurai. Incidentally, Madurai is euphemistically called the usury capital of the State.

Support forum In order to fight the menace of harassment by moneylenders, activists on October 28 floated a forum called the Joint Action Movement Against Usury. Henry Tiphagne told Frontline that a helpline had been created for usury victims. “The forum will provide legal support and safety from harassment to usury victims. A public hearing will be organised in Tirunelveli on November 19, and on the basis of the findings, the High Court will be approached for relevant action against usury harassment,” said Henry.

In fact, the southern districts, especially Madurai and Tirunelveli, are fertile ground for this evil practice. Kallars, belonging to the Most Backward Classes (MBC), who had monopolised usurious lending, now face competition from micro-financing institutions (MFIs). Growing consumerism and the failure of institutional lending have facilitated these unauthorised players to monopolise informal rural credit flow. An unofficial estimate claims that the finance market today has nearly one lakh persons engaged in usurious lending with crores of rupees in circulation, exposing the state’s fragile financial priorities. Besides Kallars in the south and central districts, who have been in the lending business for quite some time, other caste groups, such as Vellala Gounders in the western belt, Vanniyars in northern districts and a few Dalit groups in some pockets of Chennai, Kancheepuram and Tiruvallur, are actively involved in the business today.

Usury is not new to Tamil Nadu, and Esakkimuthu is not the lone victim of the high-handedness of usurers. Several people subjected to “contemptuous shaming” have chosen to remain silent, fearing loss of self-respect. Families have perished; women have been molested and children orphaned, abandoned or enslaved; property has been usurped; and legal documents have been seized. As usury gangs are linked to politically powerful groups, the victims feel helpless and hopeless. “Despite such a grave human tragedy, the state refuses to be embarrassed. A strong political will is needed to implement the laws that remain on paper only,” said Henry Tiphagne.

Esakkimuthu’s death is the second tragedy to occur in Tirunelveli in two months. Babu Elango, 47, a schoolteacher committed suicide when debtors tortured him. Not long ago, a family of six committed suicide by consuming cyanide when an usurer threatened to molest the girls of the family. A couple of years ago, a doctor in Madurai murdered five of his family members by administering poison and absconded after a moneylender threatened him. When the police arrested him after a year near Kancheepuram, he allegedly committed suicide by swallowing a cyanide pill.

In 2009, a young weaver was raped in Pallipalayam in Namakkal district for not paying interest on the loan she had taken. C. Veluchamy, a Communist Party of India (Marxist) functionary who dared the politically linked usurers’ gang in this case, was murdered. Veluchamy had been opposing the lending lobby, which was active among powerloom workers in Pallipalayam, where some 25,000 looms employ 50,000 workers. Earning poor wages, the weavers live in abysmal conditions.

Vile grip Chennai is also not free of usurious lending. The police arrested a film financier, S. Mukundchand Bothra, and his two sons on charges of harassing a businessman for repayment of a loan of Rs.83.5 lakh for which the financier demanded Rs.4.24 crore. They also arrested another leading moneylender, S. Mohankumar, on charges of harassing and collecting usurious interest from borrowers. The usury gang’s vile grip transcends the State’s borders.

In March 2017, a moneylender was arrested for harassing a senior professor of the Madras Medical College. The lender even got the professor imprisoned for 15 days in Lucknow, Uttar Pradesh. The creditor handed over blank cheques and promissory notes given by the professor to a criminal gang in Lucknow. The gang filed a false complaint against the doctor in a Lucknow police station and got him arrested. The doctor’s family had to move heaven and earth to get him released.

The courts have often come down heavily on the usury menace. The Madurai Bench of the Madras High Court, acting on a petition in September 2014, wondered how only 188 cases could be booked in the past 10 years since Madurai is known for large-scale usury. Justice N. Kirubakaran said: “Many families commit suicide, men get abducted, women get sexually abused and children get kidnapped because of it.” The police had submitted in the court that a mere 20 of the 1,531 usury cases had ended up in conviction in the past 10 years.

The Pattali Makkal Katchi leader, Dr Anbumani Ramadoss, had some alarming statistics to offer. He said that in the past seven years, 823 persons had committed suicide unable to face the harassment of moneylenders. He accused the All India Anna Dravida Munnetra Kazhagam (AIADMK) government and the police of colluding with moneylenders. He said stern action should be taken against the Tirunelveli District Collector and the officials concerned. Henry Tiphagne endorsed this view. Some leaders have sought a judicial inquiry into the practice of usury and its victims in the State.

The police have occasionally reacted strongly to complaints of harassment. The Madurai police, when Asra Garg was its chief in 2008-10, arrested a notorious moneylender who was said to be behind the suicide of the film producer Venkateswaran. “But in many cases, the hesitant victims refuse to come forward to file a complaint against these lenders, which make them escape the law. However, any law, which is not executed, is dead,” said a Chennai-based senior police officer.

Sanitary workers, daily wage labourers, construction workers, farm labourers, weavers, small-time vendors, unorganised sector workers, traders, farmers and even film producers are victims of the usury menace. Almost all rural and urban middle- and lower-income households, besides a few wealthy businessmen and industrialists, are trapped one way or the other in the hellholes of debt. “Too many needs and too little money force people to get ensnared in the net of these money sharks,” said A. Marx, a social activist. The lenders employ different categories of interest. “Run vatti” is for a minimum loan amount of Rs.10,000 with the interest rate of Rs.100 a day. The “meter vatti” demands Rs.1,100 from the borrower in the evening for a Rs.1,000-loan given in the morning. Unlike these two categories, “kandhu vatti” is for long-term loans and comes with high penalty.

Reserve Bank of India guidelines say that financial institutions other than banks (non-banking finance companies) shall charge 9 per cent for secured loans and 12 per cent for unsecured loans. The provisions of the Tamil Nadu Prohibition of Exorbitant Interest Act, 2003, prohibit higher rates of interests though usurers, according to activists in Madurai, charge a staggering 42 per cent annual interest.

Today, almost all marginal farmers are tethered to moneylenders who have monopolised the rural credit market. The failure of institutional funding and the dilution of the self-help groups (SHG) concept are factors that have contributed to this situation.

A senior State agricultural officer said: “The moment the Chief Minister announces release of water from the Mettur dam for cultivation, moneylenders, small and big, would descend on these delta districts from Chennai, Madurai and other places to lend money to farmers, mostly marginal farmers. In a normal season, the money would be returned after the harvest. But tragedy will unfold when crops fail. Often farmers who are unable to repay the loans resort to suicide.”

“However noble the State legislation on usury is, if it is not implemented it is nothing but a piece of paper. You need political will to enforce it forcefully. Rural credit, small or big, has to be institutionalised,” said Marx.