• Debt recovery if no promissory note is in place

Hi,

We lent money to a near friend without any promissory note through bank transactions. We made sure we transferred all the amount of Rs. 12 lacs through bank. Now they are not responding to the calls or see no signs of repayment.

They have given a blank check of their daughter instead of theirs as a security but the amount that was transferred was to the mother.

Can I know what are my legal options?
Asked 1 year ago in Criminal Law from Hyderabad, Andhra Pradesh
Religion: Hindu
1. The procedure followed by you for lending the huge sum of amount has flaws,

2. You should have collected promissory note and the said cheques from the person whom you have lend your money,

3. Do not call those cheques as security cheques since security cheques escape application of sec.138 of N.I. Act. Call those cheques as normal repayment cheques though the daughter may claim that she did not take any amount from you and those cheques were lost from her which you have filled and deposited, if those cheques bounce on deposition,

4. However, you can file a recovery suit since you can establish your lending the said amount through Bank transaction,

5. Also deposit the said cheques and file cheque bouncing case on their being dishonoured.
Krishna Kishore Ganguly
Advocate, Kolkata
12043 Answers
228 Consultations
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1. Promissory note is not mandatory to claim recovery of money. You have to prove remittance. If you can prove it through passbook entries then you can succeed in getting a favourable judgment from the court. 

2. You should issue a lawyer's notice to the borrower seeking repayment of the money. If the legal notice proves futile then you may file a case for recovery of money in the court.
Ashish Davessar
Advocate, Jaipur
18061 Answers
446 Consultations
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1. Yes on this basis you can file recovery suit for money.
2. Yes, you can and you have merit in this case.
3. Yes
4. File cheque bouncing case anyway as that would at least drag them to court.
Devajyoti Barman
Advocate, Kolkata
5164 Answers
54 Consultations
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1. Without the promissory note is the bank transfer or wire transfer considered as negotiable instrument?
It cannot be considered as a negotiable instrument, but the bank statement can evidence the money transaction.


2. Can I file summary suit and how strong can that be since I do not have promissory note but just the bank transfer details?
That is the only option before you, the proof of lending the money will depend on how you prosecute the case. 


3. Is bank transfer considered equivalent to cheque payment under article 3 or negotiable instruments act?
It can be considered as an evidence for the money transaction.


4. Regarding the cheque bounce there is probability of the daughter not claiming the responsibility as there is no proof against her except the cheque? Which was their clever instinct and my bad.
The cheque bounce case may not be maintainable or tenable  in law since her daughter has not received any money anytime, if her mother received the money, the legally liable debt lies only on her mother and not on the daughter.

You may first issue a legal demand notice seeking your money back, the notice copy may be sent to the daughter too intimating that she stood as a guarantor and had given the cheque as collateral security hence she is liable to pay the money if her mother fails to repay, this move may make her to sit back and think.
T Kalaiselvan
Advocate, Vellore
13934 Answers
127 Consultations
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