• Fraud by private illegal lenders

I took some personal loan from a person by cash of the amount of about 5 lakhs and issued a check, I have repaid but the cheque was not returned back. How cal I avoid the problems of cheque bouncing and subseqiuent legal problems.
Asked 3 years ago in Criminal Law
Religion: Hindu

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22 Answers

#you should have taken the cheque before repaying the amount,

# now, try to settle the matter amicably with the help of few common persons,

#how did you repay the amount, by cash or any other mode?

do you have any record of taking the amount and repay the same like any call record, Whatsapp, SMS, etc?

the presumption, as per the NI act, is in favour of the complainant,  

Suneel Moudgil
Advocate, Panipat
2372 Answers
6 Consultations

4.7 on 5.0

Respected sir ....

If there was an agreement in which cash amount and cheque number was mentioned then ask him legally to give the check back to you by mean of legal notice...and if that was not made in any agreement then you can Lodge an complaint to police stating that you have lose your cheque somewhere....that  will was a defence for you...



Thank you

Dinesh Sharawat
Advocate, Delhi
1259 Answers
12 Consultations

4.9 on 5.0

You can stop the payment on said cheque from your bank and also take acknowledgement of payment from the lender. Also it is better to collect or cancel your cheque with lender. In case he is not returning the cheque police complaint can be filed.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

- Money lending without a Money lending licence is an offence , and the person doing this without having a licence can go behind the Bar , and fine upto Rs. 30,000/- .

- Further, the Money Lending Act prohibits from charging interest rate more than 21% for unsecured loans for non-agriculture people and 18% p.a.for secured loans for non-agriculture people, The loan rate as per Money lending is simple interest per year.

- Maximum a money lender can charge 2 percent more than the commercial bank rate of interest , and nothing more

-  The Supreme Court of India has instructed the government to impose onerous conditions to restrict or even discourage people from entering into money lending business.

- You should lodge a written complaint to the police after mentioning that that the said person is engaged into the business without having an licence , and charging huge interest from the innocent persons like you , and further threatening for filing a case on the security given cheques, even after the repaying the amount of loan.

- Further make stop payment of the given cheques to him , after submitting the complaint copy to the bank.

- If, no response , then file a case before the court for declaring the given cheques as without consideration .

- Keep with you all the earlier payment proof  for future purpose. 


Good luck and dont forget to rating Positively. 

Mohammed Shahzad
Advocate, Delhi
10878 Answers
136 Consultations

5.0 on 5.0

Do you have prrof of repayment ? 

Stop the payment of cheque and send legal notice to person. Mention, full payment made and demand return of cheque, if not returned or misused, you will constrain to file police complaint.

Legal notice is pre defence against misuse of cheque.

Yogendra Singh Rajawat
Advocate, Jaipur
21536 Answers
31 Consultations

4.4 on 5.0

You file a police complaint for the same before he files cheque bouncing court. You can use the same if he files false complaint against you 

Prashant Nayak
Advocate, Mumbai
29082 Answers
113 Consultations

4.1 on 5.0

1. A "Illegal Money Lender"  (who does not hold a Money Lending License), is legaly not entitled to claim ANY amount, via cheque bounce case.  This has been upheld in several HC /SC judgments.

2. Issue a proper Legal Notice to "Illegal Money Lender" that he has illegally & forcefully collected your cheque for unknown reasons and that you demand it to be returned back to you within 2 working days.  Do not mention anything about Loan or whatever.

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

5.0 on 5.0

1. I am sure you have the proof of payment of 5 lakhs.

If that is so then send him a legal notice seeking return of the blank cheque.

If he does not then lodge a complaint in writing with the local police about criminal breach of trust and extortion agaisnt his man.

This is important to defend yourself in the event the lender files any cheque bouncing case later on. 

Devajyoti Barman
Advocate, Kolkata
22515 Answers
427 Consultations

5.0 on 5.0

No problem. First stop  payment of the cheque by giving instruction to bank. 

 Nothing to do.  Just inform the lender about it and demand return of the cheque.  That will keep you safe for ever.

Kallol Majumdar
Advocate, Kolkata
2837 Answers
14 Consultations

5.0 on 5.0

Get that cheque stopped from the bank.


Rahul Jatain
Advocate, Rohtak
5365 Answers
4 Consultations

4.8 on 5.0

Dear Sir,

You are suggested to write an humble but firm letter to lender that that he should return the cheque. At the same time submit request to bank for stoppage of payment in relation to that cheque. The said letter will be a proof and shield in case he submits the cheque for realisation and initiates any action thereafter. 

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

Send a legal notice to the money lender to return the cheque leaf.

You may file two complaints suspected to misuse your blank check.

  1. To bank (stop payment + reason)
  2. Nearest Police station.( reason + legal notice details ) 

All the details (amount, transaction date, cheque No., Name and address of the person (money lender) etc.. are clearly mentioned in the complaint and also mention about the transaction is completed . When anyone files a Cheque case against you then you can use this evidence. And burden is shifted to the complainant to prove the transaction and cheque details.

The Supreme Court in the case of Raj Kumar Khurana v. State of (NCT OF DELHI) and Another,[1] had decided whether if a cheque is lost or reported stolen, can a case of cheque bouncing under 138 NI Act be still made, and observed that,

“Section 138 of the Act moreover provides for a penal provision. A penal provision created by reason of a legal fiction must receive strict construction. (See R. Kalyani v. Janak C. Mehta[3] and DCM Financial Services Ltd. v. J.N. Sareen[4]) Such a penal provision, enacted in terms of the legal fiction drawn would be attracted when a cheque is returned by the bank unpaid. Such non-payment may either be:

(i) because of the amount of money standing to the credit of that account is insufficient to honour the cheque, or

(ii) it exceeds the amount arranged to be paid from that account by an agreement made with that bank.

Before a proceeding thereunder is initiated, all the legal requirements therefor must be complied with. The court must be satisfied that all the ingredients of commission of an offence under the said provision have been complied with.”

The Supreme Court further observed that since the parameters for invoking the provisions of Section 138 NI Act are limited, the Bank’s refusal to honor the cheque is not mischief as per the provisions of Section 138 NI Act.

Thus, as per the Supreme Court, if it can be proved that the cheque was reported stolen or lost and the same was intimated to the bank and / or to the police, a complaint under Section 138 NI Act cannot be made out as there has to be a strict interpretation that has to be given to the provisions of Section 138 because of the legal fiction that has been made in it.

Ajay N S
Advocate, Ernakulam
4043 Answers
103 Consultations

5.0 on 5.0

immediately issue a legal notice to the lender and demand your cheque back, if the lender did not return the cheque within notice period then file a complaint against him before the police or file a civil suit for a mandatory and permanent injunction before the civil court. but if payment paid by you in cash then you are in problem and he may use this cheque as per the presumption of law.

Nadeem Qureshi
Advocate, New Delhi
6247 Answers
302 Consultations

4.9 on 5.0

Issue  notice to money lender to return blank cheque as loan has been repaid 


2) file poluce complaint against money lender if he refuses to return  the cheque 

Ajay Sethi
Advocate, Mumbai
90487 Answers
6636 Consultations

5.0 on 5.0

You should directly ask him to return the check back to you. If he doesn't then file a complaint against him. You must  be having the receipts of the transactions. That would be sufficient to show that you paid back the amount.

Rahul Mishra
Advocate, Lucknow
13980 Answers
65 Consultations

5.0 on 5.0

If you have discharged the loan amount in full and have not retrieved your cheque given for security purpose, you can issue a legal notice demanding the return of the same  and simultaneously you can pass instructions to your bankers to stop payment on the cheque if presented for payment.

This notice will come to your rescue if he is filing a cheque bounce criminal case against you in future

T Kalaiselvan
Advocate, Vellore
80652 Answers
1740 Consultations

5.0 on 5.0

Dear sir,

Get issue a legal notice to return the cheque and also lodge the police complaint if necessary.  These documents can be used as your defense if he files cheque bounce case.

Netravathi Kalaskar
Advocate, Bengaluru
4952 Answers
27 Consultations

4.8 on 5.0

First inform the bank to not allow to encash. In case they attempt to encash it then give them a legal notice or else give them a lawyer's letter asking them to give it back. You should first verbally request them to return.


Swarupananda Neogi
Advocate, Kolkata
2954 Answers
6 Consultations

4.7 on 5.0

If he has not presented the cheque in the bank you can write an application for missing of cheque or cancellation of cheque stating the cheque number also do you have any documented evidence or any other evidence to say that u have taken money and given him back. If so then you can approach the court before any further help contact local lawyer. 

Mohammed Mujeeb
Advocate, Hyderabad
19292 Answers
32 Consultations

4.7 on 5.0

1. It was naive on your part to have repaid the entire amount without insisting that cheque should be returned to you.

2. Now immediately serve a lawyer's notice to him to state that you have repaid the entire amount, nothing is now due from you and the cheque should be returned immediately.

3. If you do not take the step mentioned in the previous para then you will have no defence to repel the case of cheque dishonour under Section 138 of NI Act which he will file in the court after the cheque is dishonoured by bank on presentation.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

1. Ask him to return the cheques.

2. If he refuse to return the cheques then send him a legal notice that he took cheques forcibly and you can take legal action against him for using the cheques. 

Mohit Kapoor
Advocate, Rohtak
10687 Answers
7 Consultations

5.0 on 5.0

Issue notice to the lender asking to return the cheque issued towards security against loan taken by you, enclose the acknowledgment copy of loan amount repaid by you (if you have it).

By appending the copy of above notice issue instructions to your Bank for Stop Payment of said cheque.

You can also lodge complaint with police by using above documents, as the lender is not returning the cheque issued by you as security after repayment of loan amount.


S Srinivasa Prasad
Advocate, Hyderabad
2876 Answers
9 Consultations

5.0 on 5.0

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