Gaurav Kapoor (Associate) 14 August 2013

Recovery suit in civil

My Father has some outstanding to few people. He was involve in a trade business which was not at all on papers. it was a sort of free lance trade.

He has debts and against which he has issued cheques which are bounced due to insufficient funds.

My Father is a ex govt employee.. he was employee in Defence (civil service) and took voluntary retirement. he is on pension (12k) monthly.

Once we came to know abt his debts it was all too late and i am not in position to repay that or help him finacilly.

Now he is out of home since last 30 months. we have received few notices for repay the amount. and now we have received summon from court in which a person has convicted my father under 138 NE act.

The house in which we are was living purchased by my grandfather and then it was transfered to my father thru gift deed. But now the has been transfered to me by my father by virtue of gift deed

My Father borrowed some money of abt 4.5 Lac from a person in April 2010 against which he gave a cheque without dated.

He had losses in a business which was not even registered as he was working free lance. He then paid about 2 lac ang gave the balance cheque of 2.5 lac.

The other person promised him that he will return the old cheque of Rs 4.5 Lac as the cheque is in his bank locker.

On threathing by that person my father arragned 90 thousand and ask for the chques back and promise that he his pay the balance amt of 1.6 lac in due course of time.

My father didnt take any receipt of the amount i.e. 2 lac and 90 thousnd which was paid in cash. Now the person has the chqeque (which are from tow differnt cheque book serise) he presented the cheques in bank and they bounced due to insufficent funds.

He present both cheques in oct month i.e. 10 Oct and 18th Oct 2010.

I was not aware of any transcation as i am working in MNC and has no link of my fathers business transtionaction.

This residential property was transferd to my name on 3rd March. (which is priort to taking loan)

Now that person has filed a recovery suit ( for which i have not accepted any notice as i am not the party and my father is absconding). Can this gift deed be challanged or is there any threat to property.

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3 Replies

Sudhir Kumar, Advocate (Advocate) 14 August 2013

query on challange of gist deed is highly subjective and you need to meet lawyer immediately with relevant papers.

In the menawhile you hve to stop your father from irresponsible behaviour.

Hemang (Advocate) 15 August 2013

Discussion on legal implications:

Obvisouly, when the cheques drawn by the Drawer are returned by the Banker due to insufficient fund, the drawer is bound to face the criminal prosecution as provided under Section 138 of the Negotiable Instruments Act. The ultimate result of the trial depends upon the "proof of evidence" and the "interpretative process by the trial Court". If it is proved to the satisfaction of the trial court that offence is committed by the accused, the Court has no option, but to "convict the accused". The Court may also consider to compensate the complainant. This is one thing.

The Creditor has a remedy to file a Civil Suit for recovery of amount simultaneouslu. The Creditor is justified in doing so. The main originator is absconding, and therefore, it is likely that the process may be delayed for sometime. However, if you have accepted the "summons and notices" on his behalf, the process is deemed to have been served. It is necessary that the Plaintiff (main originator) should contest the suit without being fled away, or else the court may pass an exparte decree fixing the debt, which will be executable on the strength of the decree. If, there are properties left by the main originator, it is likely that the properties may be attached and auctioned so that the decree can be fulfilled.

It has been mentioned in your thread that your father has gifted the immovable property to you. Meaning thereby that you know that your father has had incurred debt. The fact mentioned in your thread that you are innocent and do not know anything is unbeliveable. What was the reason with your father to trasnfer the property by way of git during his life time. The obvious presumption is to "avoid the debt incurred" so that the property may not be affected. these are all old practices and course, or routes to defeat the recovery. But clearly note that if the immovable property was transferred by way of gift prior to or within a period of three years from the date of litigation, the "course that your father adopted" may not work that effectively.

However, you may contact a seasoned or well experienced lawyer doing on such subject to get tested and proved before the justice delivery system. If you have any query,or confusion, please feel free to ask.

Moral is that you have admitted in so many words in your thread that your father incurred debt while doing free lance business. If that was really so and when it was acknowledged, it is better to compromise. Make honest affort to build the confidence in the creditor and whenever you repay the debt, obtain the receipt, or else pay it by bankers cheque or draft so that it may serve as a proof.

Contradictory statement that I found in thread:

On one hand you say that you are unable to pay the debt as you have no money and on the other hand you say that you are serving in Multi National Company. Which one of the statement should be belived?