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pruthvi kumar (student)     18 March 2013

Stop payment from the payee


1)two years back my brother had invested rupees two lakhs,with his friend(harsha) who was a sub broker at angel broking . . .

2) harsha told us that he will pay us 5 % intrest monthly on the amount and paid us interest for six months( no weitten agreement was made)

3)every thing was going smoothly upto 6th month but when my brother went to him for collecting interest harsha said him that he incurred huge loss so he could not pay us interest no more.

4)my brother agreed with it as harsha was his friend and waited for 6 months as harsha had said him that he would return us our investment( 2 lac rupees).

5)after six months my brother went to harsha for collecting money but harsha said he has not recovered from the loss and convinced my brother to wait for another 6 months,my brother felt ok with it as he had heard some sentimental stories from harsha

6)when my brother went to harsha he said the same old story but my brother was not ready to listen to him he shouted at him,so harsha told him that he will be giving a post dated cheque for which my brother had to wait for another 6 months,my brother was satisfied beacause he had Post dated cheque with him 

7)date to drop the cheque was nearing by and my brother tried to inform harsha about droping the cheque but harsha is upsconding.

8)my brother droped the cheque and was shocked to hear that cheque has requested for stop payment by the payee(harsha) .


 1 Replies

sanjay kumar (BE/ LLM in Corporate Laws)     20 March 2013

Since there was no agreement or a collateral, its a personal loan based on faith. Your friend has breached the faith but you dont have any legal remedy available to either impose the faith or pay you the damages becuase there is no written agreement.

Further, your friend is also in bad financial shape so the options from legal angle to recover your loan are limited. Now you say that your friend has stopped the payment of his cheque. This is his clever move to avoid "dishonour of the cheque". However, in the absence of any solid reasons, his act will tentamount to dishonour of and is liable for punishment under the Negotiable Instrument Act,1881.

The only remedy available to you is to consult a Lawyer in your area to find out how much time the Courts in your area are taking to settle such cases. To my mind you have a tough job ahead. To receover your money, you have to prove before the Court of Law that your friend has enough assets to pay your money back but he is deliberately not paying you. Of course, before that, you have to prove that you had indeed given him a loan or he has to agree that he has taken a loan from you.

Good Luck.  

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