Sanks 23 December 2017

Agreement of payment on a plain paper

Dear experts,

I am an NRI. I gave some money to my friend in India almost 6 months back without making any formal agreement. He promised to repay the money by December but failed. He is asking for an extension (by mid-Feb 2018). I am now plannning to make an agreement on a plain paper by inserting a penalty clause. He has agreed to this procedure. I cannot make any agreement on a stamp paper as I am living in Europe and the option of a Power of Attorney is also problematic. I am thinking to send the agreement paper with my signature to my friend, which he will sign and then either sends me back or sends to one of my relatives in India. Therefore, I have three questions:

1. Do you think this a reasonable procedure?

2. Is there a need for a witness when my friend signs the agreement?

3. Can I take legal action against him with this agreement paper if he breaches the agreement?

Any suggestion will be highly appreciated. Thanks for your help.

Regards,

Sanks

Reply Follow

3 Replies

KISHAN DUTT KALASKAR (Advocate) 23 December 2017

1. Agreements on white papers do not hold good, no sanctity attached to these white papers even notarized stamp papers.

2. You may take sign of your barrower on " PROMISSORY NOTE" on which Rs. 2 revenue stamp attached and the borrower must sign across it.

3. The simplest method is to take 2 to 3 signed and undated blank cheques so that it will have both criminal and civil sanctity if borrowers fails to repay the hand loan amount.

Sanks 23 December 2017

Dear Mr. Dutt,

Thanks for your kind reply. I paid the money to my friend through online bank transfer and the amount was Rs. 1.60 lakh. I would like to know that your 'signed and undated blank cheque' suggestion will work in that case.

Thanks in advance!

Regards,

Sanks