Legal Question in Criminal Law in India

My friend had given 2 of his checks as security to a private financier to borrow money and give it to his friend who was in difficluty. He didnt collect any documents from his friend before giving the money. His friend didnt repay the money and now the financier has put my friends check to bank and has sent leagl notice for under Instrument Act of 1938. The financier has turned the case stating that my friend had promised to repay the loan amt of 4lacs within 3mths which is false. The financier was regulary harrasing my friend fro repayment of loan and interest since they claim that they had given money to my friend and not to the original borrower. Unable to face the financier he had put a stop payment on check he issued as security. Now what will be the fate of my friend since the fianacier has issued leagal notice to my friend. Please advice.


Asked on 11/11/10, 12:59 pm

1 Answer from Attorneys
Rashmi Bhatia Sangare Private Practise

The Financer has a right to deposit the cheque as it was a security for loan. As your friend had defaulted in the repayment, the Financer is correct. Now, you have no option but to make the payment and recover it from your friend. Sec 138 is a criminal offence. Please pay.

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Answered on 11/11/10, 8:29 pm


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