CHENNAI: Police in Villupuram district have registered the first case under the Tamil Nadu Money Lending Entities (Prevention of Coercive Actions) act, 2025, which came into force on 9 June 2025, after a borrower set himself on fire due to alleged harassment by recovery agents.
The law was introduced by the Government of Tamil Nadu to protect poor and vulnerable people, especially farmers, women, and women‘s self-help groups from harassment or coercive recovery methods used by money lending entities.
”No borrower or any of his family members shall be subjected to coercive action by a money lending entity or its agents while recovering a loan from the borrower,” section 20 of the act states.
The victim in the Villupuram case had purchased an earthmover vehicle about five years ago from a lending agency at TV Nallur. He had allegedly not paid the monthly instalments for the past two and a half years after which on Feb 13, manager of the recovery agency along with his colleagues came to the house and demanded the dues. The recovery agents allegedly tried to seize the vehicle without following proper legal procedures after which the victim poured petrol on himself, and set himself on fire. The fire was put out, and he was taken to the hospital with burn injuries, police said.
Based on this incident, a case was registered at TV Nallur Police Station in Viluppuram District under relevant sections of the BNS and under Sections 20 and 21(ii) of the Tamil Nadu Money Lending Entities (Prevention of Coercive Actions) Act, 2025. The manager of the recovery agency was arrested on Feb 14 and remanded to judicial custody.
"All money lending entities are hereby strictly advised to adhere to the due process of law while undertaking loan recovery proceedings. Members of the public are requested to approach the Police and lodge complaints in the event of any coercive or unlawful recovery practices by lenders," said an official statement from Tamil Nadu Police.