section 138 n.i.act

Querist : Anonymous (Querist) 16 March 2011 This query is : Resolved
I have borrowed rs. 5 lacs in cash at 5% interest rate per month about 4 years back and paid interest of about 10lacs already.The financier used to collect cash as interest and also collect a new cheque and return the old cheque every 3 months.
Now iam in problem and cannot pay interest or the capital I need time and the financier is threatening me. please advise what legal remedies I can take to safe guard me against harassment.

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prashant pundhir (Expert) 16 March 2011
First you answer these points-
1. Is there any other thing rather then the cheque ?

2. How you give him the cheque means writing his name and amount or bank .
Send reply earliest possible .

Parveen Kr. Aggarwal (Expert) 16 March 2011
From your query certain facts are not clear. You haven't stated whether there is any agreement in writing for loan of Rs. 5 lacs and payment of interest @ 5% per month and also about the repayment schedule. You have also not spelt out whether any receipt for collection of amount in cash from you has been issued by the financer or not. Also whether you have any proof of payment of Rs. 10 lacs and the issuance of cheque every three months.

Please provide the aforesaid information so that the query may be replied.

Kirti Kar Tripathi (Expert) 16 March 2011
There exist a judgment of Hon'ble Justice D.P. Singh of Allahabad High Court based on Damdu Pant's principal that interest can not be claimed more than principal. You can take benefit of this principle. This judgment has not been challenged as yet.

adv. rajeev ( rajoo ) (Expert) 17 March 2011
If he is professional unauthorized money lender 138 case is not maintainable. You have to prove it.
And if you proved you paid an interest then also you have got good case.
It is the duty of the complainant to prove that how he paid Rs.500000/- source of income must be shown.

Kiran Kumar (Expert) 17 March 2011
beautifully noted by Mr. Kirti Kar Tripathi

it is a correct legal position, there are various judgments on this point by various HCs.

take advantage of the legal position and save your skin.

Querist : Anonymous (Querist) 17 March 2011
Payments made by the financier to me was in cash only and the payments for interest made by me to him was in cash only there is no record or any written agreement.Only cheques of mine are with him and he is threatening me.please advise.
thanks.

Parveen Kr. Aggarwal (Expert) 17 March 2011
Then he may present the cheque for payment and in case of its dishonour, he may file a complaint under section 138 of the Negotiable Instruments Act. Better you talk with him and settle the matter.

Querist : Anonymous (Querist) 17 March 2011
i have spoken to him and asked for time of about 6 months but he refuses and is threatening me, please advise

Parveen Kr. Aggarwal (Expert) 17 March 2011
If he is adopting lawfully impermissible and unfair tactics then in order to save yourself you can instruct your banker for stopping payment of the cheque and may report the police about the loss of cheques.

Querist : Anonymous (Querist) 17 March 2011
stopping payment with the bank is ok can be done but police complaint, will not the police take both side party story and will iy stop harassment and also will it help in court in anyway.