Mortgage

Whether the borrower has reconciled his loan account with lender ? If so, whether there is some discrepancy where lendor is reflecting dues ?

What do you mean by the term "morgage suit" stated to be filed by lender ? 

Of course holder of dishonoured cheque can / shall file complaint against its drawer.

Facts and query are incomplete and vague.

Can the lender file a Mortgage Suit?

Yes.

• Right to Foreclose/Recover: As long as the principal property mortgage remains valid and created security for the debt (including any top-up loans secured against the same property), the lender can file a Mortgage Suit for Foreclosure or Sale to recover the outstanding balance.

• Lawyer’s Notice as Admission: The legal notice sent by the borrower’s lawyer serves as a strong written admission of debt under Section 18 of the Limitation Act. This confirms the subsisting liability and helps prevent the claim from being barred by limitation, even if payments were spread out or interrupted over time.

2. Can the lender file a Cheque Bounce Case (e.g., Section 138 NI Act / relevant dishonor law)?

Yes, provided procedural requirements are met.

• Legally Enforceable Debt: Since the borrower’s legal notice acknowledges the outstanding principal balance, it proves that a legally enforceable debt exists.

• Conditions: If the borrower issued security cheques or EMI cheques towards repayment of this specific balance and those cheques bounce upon presentation (due to insufficient funds or stop-payment instructions), the lender can file a cheque dishonor case.

• Timeline Requirement: The lender must serve a statutory demand notice within the required statutory window (e.g., 30 days of cheque dishonor) before initiating criminal proceedings.

Key Takeaway

The legal notice sent by the borrower actually strengthens the lender’s case by providing documentary proof of the debt and top-up loan history. The lender can initiate both civil recovery (mortgage suit/SARFAESI proceedings if applicable) and criminal proceedings (cheque bounce) simultaneously.

What if borrower gives spouse cheque 

It is liability of borrower and not his/her spouse, where in both are separate entity.

But what if borrower spouse gives their cheque for discharge of borrower loan

If the cheque is honoured there is no issue/dispute. 

The query is short of material facts. It appears there are deeper issues. Instead of 'ifs' and 'buts', please post complete facts.

The  lender can file both a mortgage suit and a cheque bounce case. In Indian law, civil remedies for recovery of debt and criminal remedies for dishonored cheques are independent, and a lender is entitled to pursue both simultaneously.

In Indian law, a cheque issued by a third party (including a spouse) toward the discharge of another person’s debt or liability is legally enforceable.

The cheque must have been presented to the bank and returned unpaid (bounced) due to insufficient funds, structural mismatch, or "payment stopped."

The lender must issue a legal demand notice within 30 days of receiving the bank memo.

The borrower must fail to pay within 15 days of receiving the lender's notice.

A civil mortgage suit and a criminal complaint under Section 138 are legally distinct. The Supreme Court of India has held that civil recovery actions do not bar criminal prosecution for cheque bouncing.

If the borrower provided blank "security cheques" at the time of initial loan disbursement, the lender can legally fill in the balance amount declared due and present them, provided the debt is actual and subsisting.