Legal Question in Credit and Debt Law in India

Dear Sir,

I have executed 2 promissory notes for Rs.20,000/- and for Rs. 40,000/- (total Rs. 60,000/-) with my own brother in 2004 and I have paid Rs. 85000/- in two installments and last installment was in the year 2010. but he is still insisting to pay another Rs. 2,00,000/- including interest and I told him this is ridiculous and it cant be that much and he is threatening that I have executed promissory note. I told him that in normal interest I will repay but not this ridiculous amount, but he is not listening.

Now, kindly advise me whether those promissory note is still valid, which I have executed in 2004? can he file a case against me by demanding of Rs. 2lakhs? kindly help me by giving proper advise. Thank you very much.

Kind Regards,

Sunny-Hyd


Asked on 5/16/15, 5:51 am

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

17.05.2015

Dear Sunny,

The rate of interest as specified in the Promissory Notes will remain applicable. Interest normally ranges from 18% to 24% per annum. If we take an even higher rate of 30% per annum, considering that you repaid the last sum in 2010, the total interest on Rs. 60,000/- for six years (2004 to 2010) works out to Rs. 1,08,000/- (Rupees One Lakh Eight Thousand Only) plus the principal amount of Rs. 60,000/- (Rupees Sixty Thousand Only) which works out to Rs. 1,68,000/- (Rupees One Lakh Sixty-Eight Thousand Only) . Your brother is unreasonably claiming double this amount as interest from you. You should tell your brother that you will at the most pay him the balance amount of Rs. 83,000/- (Rupees Eighty-Three Thousand Only) and he has to return the original Promissory Notes back to you.

If the specific date of repayment is not mentioned on the Promissory Notes, they are still valid. If your brother files a recovery suit in the Court, his demand being unreasonable and unjustified, may not sustain.

Regards,

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Answered on 5/16/15, 8:35 pm


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