Hi, My Query is regarding loans and advances given to farmers. We are fruit commission agents in New Delhi Azadpur Mandi and Many a times we give advance in the form of either bank transfer or in the form of seed for sowing a new crop. There is a mutual understanding that once the crop will be ready the produce will come to us and we will adjust the advance. But due to weather conditions or markets not supporting the advance doesn't gets adjusted.Now there are many farmers who not ready to pay the advance amounts even after regular followups. Some imp facts : 1. Its all verbal. 2. In some cases we have the commitment to pay signed on stamp paper but still not paid 3. In some cases we have cheques signed. Pls clarify are we legally strong if not then what should be done as future course of action. What if we send out legal notice to these farmers(in Andhra Pradesh) under the jurisdiction of Delhi Regards Naveen
Hello,
You can send the legal notice to the farmers as the cause of action arose in Delhi only, nothing can be done for the verbal commitments. However, you can present the cheque in the bank and if the amount is not cleared then you can file a case for Cheque bouncing.
Regards
1) it would be difficult to prove oral contracts
2) if you have written commitment from farmers to pay the x amount or have cheques issued by farmers you can issue legal notice to farmers to repay the loan amount failing which you would take recovery proceedings against them
3) since loan was advanced in Delhi courts in Delhi would have jurisdiction to entertain your complaint
What is the best way of documenting such advances for future so that we are legally strong
You can get all the terms of transaction noted down on a stamp paper and write the conditions of default, but you must understand one thing that ACT OF GOD is a defense which will apply to such transaction always, a farmer may always come up with the situation that since there was a drought etc he can not fulfill the contractual obligation.
In that case you can also keep a security cheque with yourself.
Regards
1) get terms and conditions of loan reduced in writing
2) you can contact any lawyer on this website in this regard
Execute a loan agreement the next time you advance a loan to any farmer. That will safeguard your rights as a lender.
For the PDCs cheques you have against the advances, present them for clearance. Once the cheque bounces, you may file a cheque bounce case for recovery of advances.
Even if you have poor documentation, it will still be wise to send a legal notice to all the creditors asking them to repay and warn them with a legal action incase they fail.
Sir, you can file recovery suit in the cases where you have written consent on the Stamp papers..2) the cheques can be used to file a compalaint under 138 NI act , to recover your money 3) the jurisdiction of both proceedings lie in Delhi and cAses can be pursued in Delhi..4) for further transactions you can obtain a PDC cheque in your favour , in terms of loan granted to them
