0.

The next ground urged by the learned counsel for the Petitioner is that the
interest charged under the hire purchase agreement can in no way be termed
to be "interest", which is defined in Section 2 of the Tamil Nadu Prohibition of
Charging Exorbitant Act and in support of his contention, he relied on the
decision rendered by the Madurai Bench of this Court in the case of
T.Senapathy Vs. State by Inspector of Police, District Crime Branch, Trichy
and two others (2008-1-TLNJ-490-Cri), wherein it is held that the "loan"
defined in the Tamil Nadu Prohibition of Charging Exorbitant Interest Act
2003 does not cover the hire purchase agreement and the definition "interest"
defined in Section 2 of the said Act cannot be applied to the interest levied
under the hire purchase agreement.
11. Section 2 of the said Act defines "daily vatti", "debtor", "exorbitant
interest", "hourly vatti", "kandhu vatti", "loan", "meter vatti" and "thandal" as
follows:"daily vatti", means interest on daily basis which will work out to an interest
rate more than that fixed by the Government under Section 7 of the Money
Lenders Act.
"debtor", means a person who receives loan for exorbitant interest.
"exorbitant interest", means and includes daily vatti, hourly vatti, kandhu
vatti, meter vatti and thandal.
"hourly vatti", means interest on hourly basis which will work out to an
interest rate more than that fixed by the Government under Section 7 of the
Money Lenders Act.
"kandhu vatti", means an interest which will work out to an interest rate more
than that fixed by the Government under Section 7 of the Money Lenders Act.
"loan", means an advance of money for daily vatti, hourly vatti, kandhu vatti,
meter vatti or thandal.
"meter vatti" means an interest which will work out to an interest rate more
than that fixed by the Government under Section 7 of the Money Lenders Act
for every day on the loan amount not paid within the stipulated time.

"thandal" means interest which will work out to an interest rate more than
that fixed by the Government under Section 7 of the Money Lenders Act which
is to be collected daily along with the part of the loan amount.
12. The interest charged by the Financier in the hire purchase business cannot
come under the definition of "exorbitant interest" defined under the said Act.
In fact, in the hire purchase agreement, there is a clause that
increase/decrease of one quarter per cent in the Bank interest rate over the
rate prevailing on the date of the agreement would be binding on the hirer.
Clause 3 of the hire purchase agreement cum guarantee agreement entered
into between the Petitioner company and the Respondent reads as follows:"3. Increase in hire purchase installments: It is hereby agreed that for any
increase/decrease of one quarter percent in the Bank Interest rate (Citibank
Prime Rate) over the rate prevailing on the date of this agreement. There shall
be a pro-tanto increase/decrease in the quantum of hire purchase installments
stipulated under this Agreement to be paid by the Hirer(s) to the Owner and
the Hirer(s)/owners agrees to pay such pro-tanto increase in the quantum of
hire purchase installments on receipt of notice thereof.
13. The Respondent has agreed to the said terms and conditions and now he
cannot contend that it is an exorbitant interest, to claim benefit under the
Tamil Nadu Prohibition of Charging Exorbitant Interest Act.