Legal Question in Credit and Debt Law in India

I have filed a case u/s 138 of Negotiable Instruments Act. I have lend the money to a trader on interest. I have encashed 4 cheques of interest.

When the term got over, I deposited cheque of Principle amount, it bounced and the borrower refused to pay me.

I recently learnt that If the victim encashed the Interest cheque, the case gets dismissed automatically. This is because, I cannot claim that encashed cheque was towards interest and only banks / regd money lenders can lend money to someone.

IS IT TRUE ? Please reply.


Asked on 6/25/13, 5:45 am

2 Answers from Attorneys

u can claim for the principle amount u/s 138 N.I.Act.as well as u can file civil suit for recovery.

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Answered on 6/25/13, 6:02 am
Fca Prashant Chavan Expert Edge LLP

25.06.2013

Dear Sir / Madam,

It is untrue that if the interest cheques have been encashed, the principal amount gets automatically waived. The borrower remains liable to repay your principal and you have the legal right to lodge a Section 138 case if the cheque for the principal amount has bounced.

Regards,

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Answered on 6/25/13, 8:17 am


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