Question about Money lending license/collecting on debt owed

Manager

Good afternoon everyone,

 

I have a question about money lending license. I had given a handloan of about 4 lacs to a person 2 years ago. They have not returned the entire amount so far and there is still an amount of 2.5 lacs pending which they have provided a cheque as security. I have tried to call them many times but they do not answer their phone or return phone calls.

After sending a notice to them for cheque bounce and intimating that I will file a complain in court, they called me. They started threatening me saying I will lose my case because I dont have a money lending license and asked me to settle for 50% of the amount, that too will be paid after 6 months.


I wanted to check what the requirement is to be called a "money lender". I lent the money in good faith, as a hand loan and I have never lent money to anyone else before, or after this. I have not filed any case under NI 138 on anyone in the past, and I have my pay slips/IT returns to show that I have the capacity to earn and save the said amount from my own salary. This particular case was the only time I lent money to anyone.

Also they claim they will be able to produce medical certificates to show he is terminally ill (which is a lie) and get the case dismissed. They are pressurizing me for settling for about 50% of the outstanding (and no interest has been charged till date, the entire outstanding amount is the principal only).

So after two years of waiting for my money, they are trying to do this. I would appreciate if someone can give me their opinion about my questions. I am worried about losing my hard earned money.

 

Thanks and regards,

Lakshmi


Total likes : 1 times

 
Reply   
 
Works In Judicial Department

No need to worry, if they take the plea that you are  a money lender with out a  valid licence, burden lies on them to prove that conntention. As you never lent money to any body, no need to worry. Just out of acquaintance you have lent the money. There is no need to obtain money lending licence to lend the moeny to the people acquainated with  or to relatives.  If the persons are in the business of money lending, then it is mandatory to obain money lending licence. In your case there is no need to possess moeny lending licence.  File the NI ACT case immediately and drag them to court, there is no need to forego 50% amount. Just take legal action, on receipt of summons from court they will definetly appraoch you for the settlement and if you desire so you can settle the matter at that time. 


Total likes : 1 times

 
Reply   
 


Manager

Thank you for your response, Kiran. Since the amount is about 4 lacs, is there a limit on how much can be given as hand loan? is an agreement required for the same? They also mentioned that since the amount is greater than 50,000 and I dont have an agreement, the debt cannot be collected through court. I know they are trying to pressurize me but I want to know the law about these particular circumstances.

 

I will appreciate any help or direction in this matter.

 

Regards,

Lakshmi


Total likes : 1 times

 
Reply   
 
Advocate/Lawyer

Yes ... a money lending license is necessary in case one does the business of money lending on interest .....

But in your case you say that have given a hand/friendly loan ( without interest )

you do not engage in the business of money lending and this is just the first time that u have lent money to someone .... these points should come before the court ins evidence in ur 138 complaint .... and if this is true then there is no need to worry .... but if the opposition proves that u regularly lend money .... then it could be fatal to ur case ....

And yes ... a written proof of you giving the hand/friendly loan would definitely be helpful for ur case ....

in the event uf there is no writing/agreement ... then u would need witnesses ....


Total likes : 1 times

 
Reply   
 
Manager

Thank you for your response. I have clearly not lent money to anyone in the past (and after this experience, will never do so in future as well).

The only eye witness from my end was a friend of mine who coaxed me to lend this money. Now she has gone silent and will not answer her phone calls and said she wont interfere on this on my behalf. I sometimes get the feeling they were all in collusion from the start but ofcourse, thats just a feeling I have based on the turn of events AFTER I gave the hand-loan.


Total likes : 1 times

 
Reply   
 

Laxmi,

Simply file the case under Section 138 N.I. Act without bothering what they are saying.  It is not your responsibility to prove why they had given cheque.  If there is any defence they want to put forth before the court, it is their responsibility to prove those things.  But take care that the time period prescribed in Section 138 N.I. Act for filing the case and file the case in the mandatory stipulated period and you will win the case.  Do not bother about your witness's silence.  Her presence will not be required. 


Total likes : 1 times

 
Reply   
 
Manager

Hello SKJ - Advocate,

As to why he is threatening, it seems clear he wants to keep the money and not pay back if he can. The amount was withdrawn from bank. Part payment was done through the same account, as the cheques in question that bounced

All other questions have been answered in my previous 3 posts. Thank you for your valuable inputs.

An update:

I have gone ahead with the case despite everything they tried to do. The summons were served recently but the police personnel who served the summons has refused to give the "shara" (acknowlegement) to my lawyer. He said he will give it in court. 

A friend of mine said this "dont be surprised if the police dont turn up to court on the said day. Even the other party will not turn up saying he never got any summons etc."

One questions comes up. What is the process of serving summons? does the complaintant have to personally take the police with them and serve the summons, then take immediate acknowledgement etc? or do we just leave the summons at the police station, and then hope that the police dont get bribed and end up taking the side of the other party?

I dont mean to say all police are corrupt, but not a single day goes by without hearing various corrpution stories in our country.


Total likes : 1 times

 
Reply   
 
Manager

@ SKJ - Advocate - you have made a universal statement and sorry but it doesnt help answer my question.


Total likes : 1 times

 
Reply   
 

LEAVE A REPLY


    

Your are not logged in . Please login to post replies

Click here to Login / Register  



 

  Search Forum








×

Menu

Post a Suggestion for LCI Team
Post a Legal Query
CrPC Course!     |    x