Velikkathara Susheela spends most of her time these days inside her home that stands on about 1,300 sq ft of land in Vallarpadam island, close to the Vallarpadam International Container Transhipment Terminal in Kochi.
The tiles on the roof are cracked, and termites have gnawed away at the structure’s wooden doors and windows. But the 69-year-old Dalit woman, who lives on her own, does not want to shift elsewhere as she fears that bank officials will attach her property if she is not around.
In 2013, bank officials had attempted to seize her house under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, better known as Sarfaesi Act, but they were driven away after protests by people in the area.
What is odd is that Susheela, who has studied till Class 10 and used to work as a daily wage labourer, did not know the bank had given her a loan. Like several other poor people in Kerala, she fell prey to a moneylender who ended up cheating her out of her property.
In 2009, Susheela borrowed Rs 50,000 from her moneylender for an eye surgery. “A growth covered my left eye and doctors suggested surgery to remove it,” she said. “I approached at least three banks for a loan and offered to pledge my property but my efforts went in vain.”
A moneylender offered her a hassle-free loan – all they demanded in return, was the title deed of her property, which she handed over. Along with this, the moneylender also helped Susheela open an account in a bank, and took her signatures on a few cheques and other documents, which the lender kept.
A few years later, Susheela came to know that the moneylender had taken a loan of Rs 6 lakh in her name from the Indian Bank, and mortgaged her land as security. When the loan instalments went unpaid, the bank stepped in. “In 2013, it published a notice to take over my property under the provisions of Sarfaesi Act,” she said. By then, she had already repaid the loan she had taken from the moneylender.
Besides Susheela, there are 10 other Dalit families in Vallarpadam island who are in a similar predicament. The pattern is strikingly similar. People who need small loans approach banks, but their applications are rejected. They then turn to moneylenders, who provide them with money after getting hold of their land deeds. The lenders help them open bank accounts, and obtain their thumb impressions or signatures on a few cheques and other documents. The lenders then apply for loans in the names of these people and withdraw the sanctioned loans. When the clueless borrower defaults on repayment, banks start the process of seizing their properties under the Sarfaesi Act.
“The moneylenders first earn the borrowers’ trust by providing them with money at the time of an emergency,” said VK Prasad, former leader of the All India Bank Officers’ Confederation. “The borrowers then have to surrender their land documents with the lender, and sign a document that gives the lender power of attorney for the property.”
Prasad said it was the power of attorney – a legal document giving one person the authority to act for another person in specified or all legal or financial matters – that helped moneylenders mortgage the properties with banks. “In most of the cheating cases in Vallarpadam, moneylenders mortgaged the property to get loans,” he said. “Bank officials might have colluded with them in some of the deals.”
‘Anti-people Sarfaesi Act’
Passed in 2002, the Sarfaesi Act gives banks and financial institutions the power to recover loans disbursed by them without interference from the courts.
A people’s movement against the Act started in Kerala in 2013 after a series of cases in which banks attached the property of the poor who claimed that they were cheated by their moneylenders with the connivance of bank officials.
PJ Manuel, one of the leaders of the group that is called the People’s Movement against Sarfaesi Act, said that the Act is the cruelest anti-people law in the country. “The Act gives power to banks to decide on loan recovery,” he said. “It robs poor people’s right to live.”
The Kerala Assembly has also unanimously spoken out against the terms of the Act. In August, it asked the Union government to exempt plots not exceeding five cents (approximately 2,200 sq feet) on which houses stand from recovery under the Sarfaesi Act. Chief Minister Pinarayi Vijayan, who moved the resolution, said thousands of economically weaker families were suffering because of it.
Kerala’s cashew processing industry, which has been reeling due to a series of setbacks since 2016, has also been affected by the Act. Banks have started recovery proceedings against over 700 cashew nut processing factories in Kollam district alone, and have seized the assets of several businessmen who have defaulted on loans. Over 3 lakh workers have been rendered jobless.
Manuel alleged that banks and financial institutions deliberately tried to take over the properties of vulnerable sections of society. “It is easy to threaten those who do not know anything about banking rules,” he said.
Victims speak
The Dalits who were cheated in Vallarpadam said that their fight for justice will continue.
PD Ravi, 64, borrowed Rs 3 lakhs from money lenders in 2009 for his daughter’s wedding after submitting the title deed of the land his house stands on as security. Like Susheela, he also approached three banks for the loan first, but was refused one. “I had no other option but to approach money lenders,” he said.
That same year, his moneylenders went on to mortgage his property with Syndicate Bank against a loan of Rs 18 lakhs, which they withdrew. Ravi, who is now retired but previously worked as a security guard, only came to know about it when bank officials seized his property in 2011 under the provisions of the Sarfaesi Act. Ravi moved to a rented house for four years, but re-occupied his property in 2015 with the support of the People’s Movement against Sarfaesi Act. “It was the biggest people’s protest against the Sarfaesi Act in Kerala,” he said.
Sixty-nine-year-old daily wage labourer Muraleedharan’s case is similar. He needed Rs 3 lakhs for his niece’s wedding in 2009, and a moneylender obliged in exchange for the papers to his small plot of land on which his house stands. The moneylender then took a Rs 15 lakh loan in Muraleedharan’s name from the Central Bank of India, giving the property papers as security. In 2011, Muraleedharan got a shock when bank officials pasted a possession notice on his two-room house, saying that he had “defaulted on the loan payment”. His home has not yet been seized.
Muraleedharan said that his only hope now was Kerala’s request to the Centre that financial institutions stall recovery proceedings from those who own small plots. “I am pinning my hopes on the order,” he said.
Chandramathi’s story is about the same. The 85-year-old took Rs 3 lakh from a money lender in 2009 after depositing the title deed of her property with the lender. A year later, the bank informed her that she had defaulted on repayment of Rs 20 lakh and her property would be attached under the Sarfaesi Act. When bank officials tried to seize her property, the People’s Movement Against Sarfaesi Movement intervened. “I am still worried about losing the property,” she said. “I haven’t slept well for the last nine years.”
‘Pan-India movement needed’
Manuel said the people’s resistance against the Sarfaesi Act in Kerala should be made into a pan-India movement to include people from other states who are facing similar bank action. “We will plan a march to Parliament to bring attention to the issue,” he said.
He said the government must repeal the Sarfaesi Act. “We will intensify the agitation raising this demand,” he said. “We will convince the lawmakers on the importance of repealing the Act.”
All photographs by TA Ameerudheen.