The Sindh High Court (SHC) on Wednesday directed the home department to ensure a serious crackdown on usury and action against the delinquents who are in the business of private loaning, which is an offence under the Sindh Prohibition of Interest on Private Loans Act, 2023.
Hearing an application with regard to the implementation of the private loans act, a single SHC bench headed by Justice Salahuddin Panhwar directed the home secretary and the provincial police chief to submit a progress report on the crackdown conducted against usury across the province.
The court also directed the home secretary to ensure that the rules, as required under Section 16 of the private loans act, are framed within two months, and a compliance report is submitted as well. The court said that now that the private loans act has been enacted and is in the field, it is to be implemented by the respective authorities.
The court also said that the enactment of the private loans act has been ensured to make it possible to prosecute those persons who collect interest by taking advantage of people’s helplessness.
The court added that the injunction of Islam, as laid down by the Holy Quran and Sunnah, have explicitly and unequivocally prohibited charging interest on loans. The bench said that comprehensive legislation on the subject of prohibition of interest has been made for covering all the aspects of the mischief of private money lending by prohibiting the business and practices of private money lending, and advancing loans and transactions in Sindh.
The bench also said that Section 3(1) of the private loans act states that no moneylender, either individually or in a group of persons, must lend money for cars or any other purpose, or advance loan to any person for the purpose of receiving interest thereon, nor carry on an interest-based transaction in Sindh.
The bench added that those who contravene these provisions, either directly or indirectly, would be punished with imprisonment of either description that might extend to 10 years, but would not be less than three years, and would also be liable to a fine not exceeding Rs1 million.
The SHC said that the same penalty applies to those who intentionally and wilfully abet, engage, assist or aid the moneylender, and such an offence under the private loans act would be cognisable, non-compoundable and non-bailable. The SHC also said that complaints of such an offence would be made to the relevant SHO for the registration of the case against such a person or group of persons under Section 6 of the private loans act, and thus, strict compliance of the above section is the need of the hour.
The high court directed the IGP to ensure compliance of Section 6 of the private loans act and communicate instructions to all the SSPs concerned for strict compliance of the private loans act to curb the illegal practice of usury and to protect innocent people.
The court said that the home secretary must also issue the required directions as provided under the private loans act to all the deputy commissioners, and ensure a serious crackdown on usury and action against the delinquents who are in the business of private loaning.
