Cheque bounce

A friendly loan of 4 lakh was given in cash after taking from a close family member (who had withdrawn money from her bank account for treatment of someone in the family for a major disease about 3 months before loan was given and some of the money was not utilized and that was given as loan). In lieu of friendly loan, he issued a post dated cheque of about 5 months later from date of loan. The cheque details were entered by him (including signature), except amount, for which he had asked me to fill (I was not aware of his dishonest intention at that time). The cheque was bounced on presentation (filed after about 2 months of due date). Despite persistent requests, he did not return the money. A legal notice was served upon him after about 6 months of return of cheque, which was not answered. Consequently, civil suit was filed for recovery. In his defense, he is wrongly stating that 1 No such loan was given and there is no enforceable liability on him for the same. 2 That cheque was given by him to me as security on behalf of someone (I had also invested some money in a company for which there was an agreement and he was only a witness to that agreement), No such cheque was given by him as security and in agreement also, the details of cheque which was given in lieu of investment are different than that given by him. 3 That, in case loan is given as cash, it is against the Income tax provisions (I was unaware of such provisions and loan was simply given to help him). 4 That loan can not be given without having the lending license, although it was given only as a friendly loan given without any interest. Kindly advise. With kind regards to our esteemed experts. Suresh