Villupuram registers 1st case under money-lending Act

CHENNAI: The Villupuram Police have registered their first case under the Tamil Nadu Money Lending Entities (Prevention of Coercive Actions) Act, 2025, which came into force on June 9, 2025, after a borrower set himself on fire allegedly due to harassment by recovery agents.

The Tamil Nadu government had introduced the law to protect the poor and vulnerable sections, especially farmers, women, and women's self-help groups from harassment and coercive recovery methods employed by money lending entities.

"No borrower or his family members shall be subjected to coercion by money-lending entities or their agents to recover loans," as per Section 20 of the Act.

The victim in the Villupuram case had purchased an earthmover about five years ago from a lending agency at TV Nallur. He allegedly failed to pay the monthly instalments for the past two and a half years, after which, on February 13, the manager of the recovery agency, along with his colleagues, went to his house and demanded the dues.

The recovery agents allegedly tried to seize the earthmover without following proper legal procedures. The borrower doused himself in petrol and set himself on fire. The fire was put out, and he was taken to the hospital with burn injuries, police said.

A case has been registered at TV Nallur police station in Villupuram 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 February 14 and remanded in 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 the Tamil Nadu Police.