Validity of agreement

K Pradeep (Querist) 24 April 2014 This query is : Resolved
I, K Pradeep lent a sum of Rs 2.5 lacs to a person known to me Mr Kanakaraj on a non judicial stamp paper agreement of Rs 20 in which his signature and thump impression and signature of two witnesses were taken.The money was paid in cash. The money was lent on 31 Jan 2011. In the agreement, the individual had quoted that " I will return the amount (2.5 lacs) with interest on demand" as no fixed time period has been given in the agreement. Three years have lapsed, the individual has not yet paid any single paisa despite my requests. The individual has his own land and a home. In the agreement, he promised that in case of failing to return the loan amount, the loan amount can be recovered from his said property. The property and the house worth more than 10 lacs as on date as per market value. Please confirm whether (a) the document is legally valid ? (b) Can I file a Suit in a court ? (c) Can I recover my money with interest from him after attaching the property and selling it through legal way ? Thank u very much sir

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ajay sethi (Expert) 24 April 2014
you ought to have filed recovery suit within period of 3 years ie January 2014 . your claim would be barred by limitation .

Advocate Bhartesh goyal (Expert) 24 April 2014
Now you can not recover loan amount legally as your claim is time barred.

Advocate. Arunagiri (Expert) 24 April 2014
Your case is time barred.

K Pradeep (Querist) 24 April 2014
Sir, the party is willing to sign another agreement on Rs 20 non judicial stamp paper as agreed by him for 2.5 lacs + interest, the new principal amount will be 3 lacs, again the witnesses signature will be taken, in the new agreement all details of property will again be given, the new agreement will be for a period of six months, if money not returned within six months a suit will be filed, sir once again i request to please confirm after six months can i recover the amount from property, will it be legally acceptable if i ask his wife and another man known to him to sign as witnesses in the new agreement. Sir there will be no handing over of cash physically on the date of new agreement, the party will sign the agreement as if he has received the money on the new date of agreement, will there be any problem in doing so, sir what percentage of interest shall I mention in the new agreement (as 12 % or 24 %) which will be legally valid as i came to know that mentioning more than 12% interest is legally incorrect, thank u sir for your valuble guidance and comments, jai lawersclub

T. Kalaiselvan, Advocate (Expert) 25 April 2014
First you get your loan agreement renewed (better get new loan agreement), and as mentioned, go for the 6 months period, in case he fails to repay, you may initiate a money recovery suit on the basis of the so called loan agreement which can be termed as acknowledged receipt for the loan amount received by him and in that suit you can file an application for attaching his property for the purpose of security until the judgment/disposal which is called attachment before judgment. This way you can sigh a relief.