Private lending: Landmark case likely to be settled in jirga

Borrower expects the interest amount to be waived at Saturday’s sitting.

RAHIM YAR KHAN:

A jirga to be held on Saturday in a Rahim Yar Khan village will decide the dispute over interest paid on a private loan in the first ever case registered under the Prohibition of Private Money Lending Act of 2007.

Muhammad Asghar, a resident of Chak No78, told The Express Tribune that Kot Samba police had registered the case this Tuesday on a complaint he had filed with the additional district and sessions judge more than one-and-a-half-month ago. But, he said, he had now told the police to withhold investigations till Saturday. He said he was expecting the two lenders to agree to return the interest they had collected. “The lenders sent over some people a couple of days ago to say that they were ready to return the interest if I withdrew the FIR,” he said.

SHO Zahoor David confirmed that Asghar had asked the police not to move ahead with investigations in the case. He said if Asghar submitted a settlement note on Saturday the FIR would be treated as withdrawn. Otherwise, he said, they would arrest the accused and start their investigations.

Petitioner’s counsel Chaudhry Nadeem said he would not advise his client to withdraw the FIR.

He said sometimes people registered FIRs so that they could pressure the other party into an out-of-court settlement.

However, he said, his concern was to raise awareness of the issue.

He said private money lending had become a lucrative business in the area. He said he had been following the practice for some time but could not do anything against it because the borrowers did not want to prosecute the lenders fearing revenge or the police refused to register a case because they were ignorant about the law.

Nadeem said it took him over one-and-a-half month to persuade the police to register the FIR in this case. “The local police were initially not even aware that such a law existed,” he said.

Asghar had submitted in his petition that he had borrowed Rs80,000 from Muhammad Ashfaq Assi and Abdul Razzaq, residents of Taranda Muhammad Nawan, in March 2010.

He said he had returned the loan in March this year and paid Rs96,000 interest on top of the capital. He said he had to offer gold jewellery and a blank cheque as collateral. He also attached a copy of the loan agreement with the complaint.

Prohibition of Private Lending Act

Section 3:  Prohibition of Private Money Lending No person, individually or collectively, shall engage himself in private money lending in the Province of the Punjab.

Section 4: Punishment Any person who contravenes section 3 of this Act shall be punished with imprisonment for a term which may extend to ten years or with fine which may extend to five hundred thousand rupees or with both.

Published in The Express Tribune, May 13^th, 2011.