Narendra 18 July 2017

Loan recovery related dispute

I lended Rs. 2 lakhs to a person through proper banking cheque with a proper notorised agreement in the month of July 2016 in which the person have to deposit Rs.2500/- as intrest in my bank account which I provide to him and it also written in agreement deed and he would have to return back the principal amount Rs. 2 lakhs after 2 years. A condition was also written in agreement that if he failed to deposit 3 installment continuously in that case I would use advance cheque of whole amount which he gave at the time of agreement. Now the case is he is not depositing the installment for last five months. I gave him a written latter but no response from his side then I use the advance cheque but the cheque was dishonerd by his bank due to insufficient balance. In that case please suggest what I have to do as legal action to recover my money ?

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10 Replies

Siddharth Srivastava (Advocate) 19 July 2017

Though your interest charged by you was mush higher than prevailing rate of interest as charged by bank hence it was against public policy. You may initiate proceeding u/s. 138 NI Act and suit for recovery.

Ms.Usha Kapoor (CEO) 19 July 2017

You cn initiate section 138 proceedings of Negotiable Instrument Act. and file a suit for loan recovery under order 37 of CPC in which case your case will be disposed of in a summary/speedy manner.

Narendra 19 July 2017

Thanks for your early response and valuable suggestion

Advocate Bhartesh goyal (advocate) 19 July 2017

Yes,you can initiate proceedings of sec 138 of N.I.Act.

Dr J C Vashista (Advocate) 20 July 2017

Proceed u/s 138 /142 of the Negotiable Instruments Act, 1881 through a local lawyer, as advised by experts, which I agree.

(Guest)

Proceed u/s 138 NI act , but at same time take opinion of local experienced advocate in this matter too , this case presentation is required to be diplomatic .

Reason -- My state Maharashtra there is one law which is called Money Lender Act 2014, It prohibite to lend money to others without proper license and procedure , now in such case if it violates that act then you can not get relief from Hon. Court , So situation is that you don't have green corridor in Hon. Court as opp. side may raise the point that since Lender never had valid license while giving loan /lending money court can not grant relief etc. and eventually you may fail.

Similarly in your state you need to check such law too before jumping or taking legal step. or you may construct some other case with help of your proffessional consultant who can guide you after complete analysis of the case

Narendra 20 July 2017

Thanks Madhu ji for your suggestion , my state is Rajasthan and I also want to clear hear that I am not a professional lenderer and I gave the money for his business purpose.

(Guest)

You need to check state law if any , because all lender at end will state same it was friendly loan. CA for adjustment put in balance sheet friendly loan but if person who took money don't return and there is some law affecting it and passed from state legislature then it is case of concern.

After going through Maharashtra law I concluded prima facie if money is given on interest and person don't return then you loose all (If you don't possess required license) .

Please check Rajasthan Advocate for further details