defend against section138 of negotiable instrument act

Querist : Anonymous (Querist) 20 May 2011 This query is : Resolved

hi one of my friend has taken as loan in cash of Rs. 100000 @10% per month against cheques of Rs. 50000 of two cheque and he paid 60000 as interest at 10000 each moth and now cheque has bounce due to insufficient balance how can i defend my client who

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Advocate. Arunagiri (Expert) 20 May 2011
The interest demanded is exorbitant. That can be only a defense for your client. Demand for the adjustment of the excess interest towards the principal. So, the cheque value is higher than the legaly enforceable debt.

PALNITKAR V.V. (Expert) 20 May 2011
If loan ofone lac is taken and only60 thousand refunded then how can the accused be saved from the clutches of 138; more so if the accused has agreed to pay the interest. At the most he can claim that interest rate is very high.

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