It was a moment of desperation for Dr. M Sudheer, according to his version of events. He wanted a good college education for his son, and that costs a lot of money, which Dr. Sudheer did not have. He had no collaterals to take a legal education loan from a bank. So, he approached ‘Kanduvatti’ Kamaraj, an illegal loan-shark in Chennai, and borrowed a hefty sum of Rs. 20 lakh from him, at 5% interest per month.
That was 2011. By 2013, Dr. Sudheer, the senior professor at Madras Medical College in Chennai, had already paid back a stunning Rs. 48 lakh, and he still wasn’t done paying back his ‘loan’. He says that he had paid an ‘interest’ of Rs. 1 lakh for 48 months till then. He didn’t stop there, and now had to start paying more. Between 2014 and 2016, he had to pay Rs. 80,000 towards the interest, and Rs. 1,20,000 towards the principal, every month.
Having paid his initial ‘loan’ many times over, things turned sour in mid-2016. Dr. Sudheer started delaying his payments to Kamaraj, and in May 2016, after Kamaraj intimidated him and his family members, the professor approached the police and filed a criminal complaint. This sent Kamaraj into a tizzy, and triggered off a series of events, which took Dr. Sudheer to Lucknow under arrest, and ended in a massive doctors’ protest in Chennai last week.
‘Kanduvatti’ is the street name in Tamil Nadu for loan-sharking, the ‘Kanduvatti-karans’ are local money lenders who give out loans with usurious rate of interest, in blatant violation of Prohibition of Charging Exorbitant Interest Act, 2003. Kamaraj is alleged to be, and according to police confessed to have been, a Kanduvatti-karan.
In his confession statement to the police, a copy of which is with TNM, Kamaraj claims that after the case was filed against him, the Teynampet police summoned him to the station with concerned documents. This, the money lender claims, sent him into a frenzy. A case had already been registered against him in 2014 by the Central crime branch for threatening borrowers to pay him Rs 27,00,000, including the principal and interest amount.
According to experts, one of the primary reasons that people approach money lenders is because they are not required to produce collateral. Kamaraj, however, made the professor give him 6 blank cheques, 4 promissory notes and 2 blank green sheets as security.
"I was afraid another case will be registered against me at the Central Crime Branch if I went to the police station. I filled up the Axis Bank's 2 blank cheques with Rs 15 lakh out of the 6 blank cheques I received and also filled up the blank promissory note for Rs 30 lakh as if it was written by Dr. Sudheer. I also sent a notice to Dr. Sudheer through my advocate in June 2016," admits Kamaraj in his statement to the police.
The notes were then transferred to a gang in Lucknow, which reportedly had political connections. The members - Sarfroz, Piyush and Sachin Tandon - manipulated the notes and filed a case in the Aliganj police station. "We prepared a fake acknowledgement receipt in the name of Dr. Sudheer as if he received Rs. 1 crore from Sarfaraz Ahamed to get him permission for a medical college," says Kamaraj in his statement.
On February 24, Uttar Pradesh police arrived in Chennai with a warrant for the professor. He was produced before the Magistrate Court at Saidapet which granted the transit remand. Thus, a senior professor from the Madras Medical college was flown to Lucknow and lodged in jail for the non-repayment of an amount far more than what he borrowed.
The incident has brought back into sharp focus, the harassment and power that these moneylenders possess in an economy where bank loans are 'inaccessible' to the common man.
Money lenders, their only resort?
According to the Prohibition of Charging Exorbitant Interest Act, the interest that was being charged by Kamaraj is 'kandhu vatti'. This means that the interest paid by the borrower will work out to rate more than that fixed by the Government under Section 7 of the Money-Lenders Act. The Act, which came into force in 1957, says that the interest rates will be fixed and notified by the government from time to time.
Economists, who have been studying the credit system in the country for decades now, claim the common man is suffering because the credit system and the law have not evolved with time. "The Money Lending Act is ancient and the government has failed to understand the ground situation," says Venkatesh Athreya, an economist. "There is a huge unmet demand for credit in Tamil Nadu. While nationalisation of banks led to some improvement, all progress was lost in the last 3 decades after liberalisation. Banks have become pro-rich and pro-corporate and therefore normal people are forced to turn to money lenders for a crisis. Not everybody has the collateral to show a bank to borrow money. This is something that the government needs to understand," he says.
The economist and his two Swedish colleagues had been part of a study regarding credit patterns in the Tiruchirappalli District. "We studied the pattern across two years - 1980 and 2004. We surveyed 250 households across 6 villages. In 1980, most houses were getting loans from the banking system but in 2004, borrowing from money lenders was rampant. This was despite the rapid expansion of banking in 20 years in between," says Venkatesh. "What had happened is that with liberalisation of the economy, banks could now choose to lend to whoever they wanted and they chose people who already had the money. So, the middle-classes and agrarians were of least preference to them. What will you do if your child is unwell and you need Rs. 30 lakh for surgery? You can't go to a bank because you have no collateral to show. Instead you end up going to the money lender," he says.
When Dr. Sudheer borrowed from the money lender, the interest rate offered in the banks was 13%, says Tejas, his son. "Yes, the rate of interest in banks were much lower but we couldn't take that route," says Tejas. "My father did not have any collateral to pledge and we needed the money to pay for my younger brother's education. We had initially agreed on a yearly interest rate of 24% but Kamraj forced us to pay interest of up to 60%. When we finished paying as per the 24% agreement and refused to pay more, he came with thugs to threaten us," he explains.
From threats to a trap in Lucknow
Kamaraj's threat, with thugs by his side, was merely a preview to the political clout that he possessed. This money lender's decision to get a case filed is Lucknow starts making sense as one looks at his Facebook profile. His timeline is scattered with pictures of him alongside former Uttar Pradesh Chief Minister Akhilesh Yadav. One picture even shows him seated next to Akhilesh at the late Tamil Nadu Chief Minister J Jayalalithaa's funeral.
According to Dr. Stanley, a colleague of Dr. Sudheer, two sub inspectors from Lucknow had arrived in Chennai on February 24, to arrest the senior professor. "They used local thugs to even find Dr. Sudheer," says Dr. Stanley, who is currently in Lucknow. "They had gotten permission from the Saidapet magistrate to take him to Lucknow by train. But Kamaraj, the money lender, booked flight tickets for them," he claims. The extortion demands began again, even before the flight reportedly took off.
"Dr Sudheer was made to tell his family to pay Kamaraj whatever amount he asked for so that he will be allowed to leave from Delhi. The whole arrest was one big racket. How can the police who have got an arrest warrant just let someone go before they even reach Lucknow?" asks Dr. Stanley.
"They left Chennai at around 7pm and one civilian by the name of Ram Bachan Yadav was accompanying them. He was Kamaraj's associate. When they reached Delhi, they spent the night in the lounge there before continuing to Lucknow the next morning. The whole time, the threats continued under the police's supervision," he says.
When they did reach Lucknow, however, the doctor was not taken to the police station immediately. According to reports, Dr Sudheer was taken to Sarfroz's house where the 'money lending mafia' demanded that the family pay an additional Rs 40 lakh.
"During the illegal custody one Sarfaraz Ahamed and Piyush Mishra repeatedly called my number, my son's number and my brother Brijesh Singh's number," says Gayathri Devi, Dr Sudheer's wife in her complaint to the police. "They threatened us that if we settled the amount, my husband would be released. But if we failed to do so, my husband will be in jail for a long time or that they will arrange goondas to finish him," she adds.
When the professor's family expressed their inability to pay, that was when the senior professor was taken to Lucknow jail.
The wait for his release
Meanwhile, protests intensified in Chennai, as doctors pursuing their post-graduation refused to work. Many scheduled elective surgeries were suspended and the administration reportedly had to deploy assistant professors and paramedical staff to deal with the shortages of hands during the day. It had been close to week since his arrest and the Lucknow police were refusing to re-investigate the case, despite demands from Dr. Sudheer's family.
Amidst this agitation, Dr. Stanley flew to Lucknow on Monday. "Until last Friday we were waiting to see if he will be granted bail. But the process kept getting delayed and his bail denied. When we came here to Lucknow, we confronted the SP who is overseeing this case. He pointed us back to the SI, Haridas Chowrasia. Chowrasia had come to Chennai to arrest Dr. Sudheer and was also the investigating officer in the case. Despite our repeated efforts and production of evidence, the SP failed to do anything in the matter," says Dr. Stanley. That was when, he approached the SSP Lucknow Mazil Saini. After re-examining the case and the evidence, the SSP directed Indiranagar inspector to replace Chowrasia as the investigating officer. She further admitted lapses on the part of the police.
Following this a special CBI court granted bail to Dr. Sudheer. "This whole ordeal has been a big shock for the family," says his son Tejas. "We just want it to end," he adds. Dr.Sudheer returned to Chennai on Saturday.
An FIR has further been filed against Kamraj, Sarfaraz Ahamed and Piyush Mishra in Teynampet Station based on Dr Sudheer's wife's complaint, on March 7. The accused have been charged of violating 7 sections of the Tamil Nadu Prohibition of Charging Exorbitant Interest Act.