Legal Question in Credit and Debt Law in India

I am into money lending business..i am having money lenders license ....i lend money on blank future dated cheques....what is the right procedure to execute the loan legally with all the documents...

currently...i take from the borrower--

1.sign on the promissory note printed on a legal paper with cross sign on revenue stamp attached and a photo which is also cross signed..

2.also a loan agreement on a 20 rs. stamp paper with the signature of borrower

3. id and adress proof of the borrower self attested...

also if there is any guarantor or security..

i ensure it is signed by the guarantor in both promissory not and loan agreement..

also there is this situation for default...

what should be document flow in case of default on any loan...


Asked on 4/30/16, 10:53 pm

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

04.05.2016

Dear Sir / Madam,

You are following the right procedure. In case of default in repayment, you will fill and deposit each signed cheque in the Bank, If it is dishonoured, you will lodge a Police complaint and recovery suit as per Section 138 of the Negotiable Instruments Act, 1938 against the loan defaulter. In new instances, it is advisable to include a family member of the main borrower as the joint holder of the loan.

Regards,

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Answered on 5/03/16, 8:46 pm


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