I am planning to help my friend out of business losses and willing to lend him 5lac for a period of 2 years. After the period gets over he will pay me back the money. I am giving him through cheques and also taking his 6 cheques as security. He has a salon business which is rented property. Kindly advise me what type of agreement I can make with him, or get registered so that the recovery is smooth and if he does not stay on his word than I can take some legal action and Recover my loan given. Thanks Zubin
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You can enter into simple loan agreement wherein your friend acknowledges receipt of loan and agrees to repay loan after 2 years
2) it should provide the interest payable on loan
3) it should mention that he has given 6 cheque’s for repayment of loan
4) if he fails to repay you can take civil and criminal proceedings against your friend to recover your money with interest
If the money to be lent is for accommodation loan and not for any financial gain then promissory note with 2 witnesses is most suitable action.
On default of the time mentioned in the promissory note you can file a civil suit for recovery of money.
Without your friend having any security i.e., any immovable asset you may not be able to recover your loan amount with interest in the future if he do not repay or becomes a defaulter.
You can enter into a loan agreement and also obtain a promissory note besides the cheques you have already obtained from him.
As far as the loan is concerned you may have to first ascertain his repaying capacity in future to help him with the proposed lending of the loan amount.
You can take a promissory note from him. You can also make loan agreement cum promissory note on stamp paper and get it registered or notarized. Also take cheques from for the same as safety. You can also take collateral from him
Get an agreement signed to this effect (help your friend out of business losses) mentioning the cheque numbers given to him and post dated cheque received by you as security for return of the cheque amount given to him. Once you are giving the payment by cheque from your account, it is hard to deny. Secondly, the agreement would support your contention and the post dated cheques mentioned in the agreement prove the debt liability. Get the cheque details filled and signed with his own handwriting. Take a copy his ID, Aadhar Card. The agreement should be witnessed by two witnesses who would support you in case of default. Your legal aspect is safe.
Get a notarized agreement on Rs.100/- Stamp paper duly notarized by a Govt. Notary.please also open nos. of cheque and the issuing bank in this agreement.
- You can enter into an agreement for loan with your friend after stating the details of cheques .
- If he defaults in payment , then you can proceed with the bouncing cases against him , and can recover the amount from him.
- Registration is not mandatory , if there is already cheques in your possession.
you can get an affidavit and in addition to it get a pronote and receipt signed. It is compulsory and will keep you on the safe side. Pronote works like an extra security. So make sure you get the pronote signed.
Ans:-You can enter into an MOU with your friend and accordingly get the same registered. Incase he defaults in the future for your payment you will have to go to the civil court for the recovery of your money..
