1. you can send him a legal notice through counsel to return the said cheque given by you as a guarantee at the time of borrowing the amount since you had repaid the amount,

2. each statement have two aspects, another aspect of your notice would be treated as your acceptance to the cheque amount and it may have an adverse effect on you,

3. do you have any proof of taking and repaying the amount 

You can file a police complaint and then contest the trial if he files any case. You don't have to worry. 

1. IF the said Money Lender is registered and has a license under the local state Money Lenders Act, THEN "ONLY" he can file 138 cheque bounce case to recover his money.  ELSE NO.

2. You can make a police FIR about such illegal money lending business and police will take legal action on him.

Firstly if money lender is registered then only he can charge interest that also as per the act.

Secondly if amount is paid and he is intimidating for cheque bounce you can issue him legal notice and give a written police complaint.

I presume that you have repaid Rs 2 lakhs by cheque 

2) issue notice to lender to return your cheque of Rs 1.50 lakhs as loan had been repaid by you and Rs 2 lakhs paid to him in repayment of loan with interest 

3) I presume you have not signed any documents to repay loan with 5 per cent monthly  interest 

Do he have money lending license ? And do you have payment proof of money already paid.

If yes than no more amount payable. Stop the payment of cheque.

Without lending license, cheque bounce case not maintainable.

- As per Money Lending Act, Charging more than 21% interest annual is illegal , and against the regulations of RBI.

- Since, you have already paid more than 2 Lakh rupees, hence now legally you are not liable to pay further.

- You should loge a complaint against the said Lender , after stating that you have already paid him principal amount with interest , but the said lender is threatening for implication in false cases.

- Further, you should send him a legal notice , and thereby ask him return the given cheque for security purposes, on the ground of payment of full amount of loan with interest .

Private money lending is a extortion racket in most places and unless and until you believe sometime it is fraught with risk as stated above.

Now it is not clear whether you have documentary proof of amount borrowed and amount repaid.

if yes then send him a legal notice informing the full satisfaction of repayment of loan and return of your cheque.

If still he files such case then you will have a good defence in court.

1. You should just clear the dues with person who have your cheque.

2. If he files the case then you may have to pay double the cheque amount along with two year jail term.

3. So the best option is to go for mutual settlement with lender. 

Professional money lender is required to have a money lending license to do business of money lending.

Issue a legal notice through an advocate and ask lender to return security cheque back and mention that you had been repaid him lending amount with  interest .

He will write a date on the cheque and file it. Do es he have any proof that you have a liability? If yes then the court may issue non bailable warrant against you.

Try to deposit the money or negotiate with him.

Have you given the blank cheque to him without date and amount mentioned  int it, then you immediately lodge a police complaint that you have lost the cheque and it is not traceable hence you request to register a case for missing cheque.

After that you personally visit the bank immediately and submit a letter stating that you have lost the cheque and request him to make stop payment on the cheque being presented by anyone.

After that let him file any case against you which can be challenged based on the documentary evidences you have created now.