Madras HC issues notice to Muthoot Fincorp

Petitioner S Karthik claimed that Muthoot Fincorp Limited had demanded that he pay 36% interest for the jewellery he pledged on February 20, 2012 after assuring him initially that he would have to pay

The Madras High Court bench here has issued a notice to the district Administration and Muthoot Fincorp Limited on a petition, alleging that the firm demanded usury from its customers to redeem jewels pledged with it.

Petitioner S Karthik claimed that Muthoot Fincorp Limited had demanded that he pay 36 per cent interest for the jewellery he pledged on February 20, 2012 after assuring him initially that he would have to pay 24 per cent.

He said the firm had hiked the rate excesively without offering a proper explanation and also threatened to auction the jewels if he did not pay the principal amount with the interest they demanded.

The petitioner contended that the firm had violated the provisions of the Tamil Nadu Pawn Brokers Act, 1943 by demanding exorbitant interest.

Karthik said he had had sent representations to the Chief General Manager and General Manager of Reserve Bank of India, Madurai District Collector and the Melur Tahsildhar, but no action had been taken.

Justice K K Sasidharan yesterday restrained Muthoot Fincorp from auctioning the petitioner's jewels and ordered notice to the Collector, the Tahsildar and the firm.