• Bank debt

I had taken a loan of Rs 7 lacs from Private Bank in 2015. After paying the emi for 1 year I have lost my job.
Currently I have defaulted for 4 months on my emi and unable to make further payment. I have asked for extension but the bank is not willing give me any further time and is planning to go ahead with legal proceeding. They have warned me to  put the security cheque totalling the full amount of 7 lacs. I do not have that much amount to settle immediately. How can I be saved from such a situation.?Please advice. What is the danger on me if they bounce the cheque? Is cheque as security against loan acceptable in the court of law? If they bounce the cheque where will they most like do it - in my permanent home address that they have in the documents i.e. Odisha or file the legal case here at Bangalore the place of loan sanction.
Asked 3 months ago in Civil Law from Bangalore, Karnataka
1) in case cheque is dishonoured bank would file case under section 138 NI for cheque bouncing 

2) cheque against security is acceptable 

3) complaint would probably be filed in Bangalore if cheque has been issued by you from Bangalore 

4) apply to bank to reschedule your loan as you have lost job and unable to make further payments 
Ajay Sethi
Advocate, Mumbai
23107 Answers
1213 Consultations
5.0 on 5.0
1) cheque bouncing case take 5 years to be disposed of 

2) you can later with bank consent make application for compounding of case 

3) you will get a years time 

4) cheque bounce will affect your CIBIL record

5) you can engage a lawyer but have to appear in court unless exemption from personal appearance granted 

6) you would get bail in cheque bouncing case 
Ajay Sethi
Advocate, Mumbai
23107 Answers
1213 Consultations
5.0 on 5.0
1. The bank is free to go ahead with the recovery proceedings. You can meet the branch manager personally to request him to reschedule the installments. The bank can its discretion either reschedule the installments or waive a part of the amount that you are liable to repay.

2. If the security cheque gets bounced due to insufficiency of funds in your account then a criminal prosecution for cheque bounce which carries an imprisonment of up to 2 years can be launched against you.
Ashish Davessar
Advocate, Jaipur
18057 Answers
445 Consultations
5.0 on 5.0
Dear Sir/Madam, you are not escape from your legal enforceable debt under the Negotiable Instrument Act. But you are safe that cheque is secured for loan as security purpose, you will fight like this and to get more time. If any property is in your name that property will attached after the recovery certificate from court order, it will take time, but SARFACIE Act is giving immediate effect, you will avoid by use tactics. As your question CIBIL, it is definitely affect. If you want my legal advice as well as service I will do it under paid service.
C. V. Jadhav
Advocate, Bangalore
262 Answers
3 Consultations
3.8 on 5.0
If you have availed loan it becomes your duty to repay it regularly as per the agreement.

You have defaulted the repayment continuously for four months or more but you still want to protect yourself from the legal action that can be initiated for this default and want to defy law in this regard.

You have to talk to the Manager of the bank in person, request for restructure the loan and may also agree to pay an amount upfront which will enable to gain their confidence  and then your loan repayment may be restructured and regularised.

The security cheque is meant for this purpose only, once they get the cheque bounced then they may initiate cheque bounce criminal case against you.  

They will initiate the case where the bank is situated. 
T Kalaiselvan
Advocate, Vellore
13915 Answers
127 Consultations
5.0 on 5.0
If you have defaulted in loan repayment then the bank may report this adverse information to the CIBIL which will record the same and that will remain in their records till the bank is not giving a clearance report about this.

Cheque bounce case has nothing to do with cibil ratings. 

If they file a cheque bounce case against you, you try to drag on the same for a period of one year by the expertise of your lawyer and can file a memo to settle the matter through lok adalat, which will save you from all troubles. 


You have to engage a good and experienced lawyer who will take care of your interests. 
T Kalaiselvan
Advocate, Vellore
13915 Answers
127 Consultations
5.0 on 5.0

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