Loan by an individual to another individual
SANJAY BUBNA
(Querist) 10 April 2015
This query is : Resolved
Is it mandatory to have any kind of money lending license if any individual provides any loan to another individual?
I had provided an accommodation loan of 3 lac to my friend for his business purpose. He issued 2 cheques of 50,000/- each towards part repayment. Both the cheques got dishonoured. I filed case u/s 138 of NI Act. Now his advocate is taking plea that since i had lent the money without having license under Bengal Money lending Act,1940, the case is liable for rejection.
Please guide.
Guest
(Expert) 10 April 2015
Discuss the real problem, if there is any.
SANJAY BUBNA
(Querist) 11 April 2015
Is it mandatory to have any kind of money lending license if any individual provides any loan to another individual?
I had provided an accommodation loan of 3 lac to my friend for his business purpose. He issued 2 cheques of 50,000/- each towards part repayment. Both the cheques got dishonoured. I filed case u/s 138 of NI Act. Now his advocate is taking plea that since i had lent the money without having license under Bengal Money lending Act,1940, the case is liable for rejection.
Please guide.
Anirudh
(Expert) 11 April 2015
Dear Mr. Sanjay,
Are you in the business of 'money lending'? I think you are not.
Therefore, only those who are doing 'money lending' business have to take the licence. Not taking licence will affect their case.
However, since you are not a money-lender and you have given this as an hand loan to your friend, you are not required to take money-lending licence. If, you are in the habit of extending such loans to others also (in case the opposite party is able to bring some evidence to show that you are usually lending money to many)then you will have problem. Otherwise not. You should take a definite stand that you are not in the business of money-lending.
Guest
(Expert) 11 April 2015
If you are not doing money lending business you need not be afraid of the plea of the oppisite lawyer. He will have to prove that you have the business of money lending.
SAINATH DEVALLA
(Expert) 11 April 2015
If U want to continue money lending business, U have to obtain license.How did U give him that money cash or in the form of cheque? If it is an official transaction U have to submit evidence in the court to that extent. The plea of the opp lawyer may not yield merit for the accused. So fight Ur case having trust and belief on UR lawyer.
Sudhir Kumar, Advocate
(Expert) 11 April 2015
Money given to friends and relatives is basically a charity in the garb of loan and is taken never intended to be returned and given hoping to be refunded.
Dr J C Vashista
(Expert) 12 April 2015
It would be termed as "friendly" hand-loan and no license is required, it is just a defence plea, ask your lawyer to rebut it promptly.
T. Kalaiselvan, Advocate
(Expert) 13 April 2015
Well advised by experts above. The further issues can be handled by your lawyer at the time of argument, you can apprise him the experts opinion then.
