Legal Question in Banking Law in India

Seven years back I had availed of a personal loan of Rs.10,000 from a pvt. marwadi financer . In the due course of time i have paid him all the interest @6 Per month .

In between for some days I could not pay the interest amount. so under duress he made me sign a bill of exchange of Rs.400000 some 3 yrs back .

Now he is threatning me with a recovery suite in mumbai high court unless i pay him rs.400000 .

My question is merely signing a bill of exchange makes me liable to pay him the amount ?

is the court not supposed to ask him that how did he pay me Rs.400000 in cash ?

Will the court not ask him the proof of payment ?

If contested how long will the case go on ?

Pl help

Regards


Asked on 4/05/11, 11:17 pm

1 Answer from Attorneys
J. Radhakrishnan independent Practice

contest the suit. Bill of exchange is ordinarily issued by a creditor. If you mean that you have signed a promissory note and in case the creditor files the suit, contest the same that it is not supported by consideration. Further under the Income tax Act, loan by a private banker has to be by an account payee crossed cheque. You can contest the case on these lines when the case is filed. make sure that you issue a proper reply for the presuit demand notice.

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Answered on 4/15/11, 9:25 pm


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