Loan without interest is money lending
Querist :
Anonymous
(Querist) 12 May 2018
This query is : Resolved
what is money lending
Ms.Usha Kapoor
(Expert) 13 May 2018
Yes! You give hanbd loans to your friends without security under oral contract.Is there any eviudence, any witness watching the loans given by you to your friends, receipts you've taken from your friends in proof o payment. Without all these it is difficult to prove hand loans without security.If they give bounced cheque you can file cheque bounce cases against them if it is bounced for insufficiency of funds.It's a criminal case.These days even if they are close friends you need to demand receipts for the loans advanced,.
Guest
(Expert) 13 May 2018
Ms. Usha kapoor's advice is totally vague and irrelevant. She should have read the question very carefully before posting her reply.
The querist has asked, whether he would be treated as a money lender in the eyes of law, if he lend money to people and friends, but she she advised him to take evidence of lending money to sue them in the courts of law.
She should have replied on the main issue whether he would be treated as a money lender, even if he lends money without interest.
Sudhir Kumar, Advocate
(Expert) 13 May 2018
cheque is no guarantee of refund. you have to prove that the cheque is given against loan.
Sudhir Kumar, Advocate
(Expert) 13 May 2018
Money given to friends and relatives is always a charity in the garb of loan which is given in expectation of refund but always taken with intention of non-refund.
Such loan is taken by a person:-
(i) Who lacks business sense and cannot raise funds out of his own business and suddenly wants to be rich.
(ii) who cannot raise bank loan because :-
Either
he himself is not creditworthy
Or
the purpose for which he seeks loan is illegal
or
the purpose for which he seeks loan is not at all commercially viable.
(iii) Who knows he can afford not to refund.
(iv) Who trusts his thick skin
(v) Who intends not to refund
(vi) Who has made fortification against action of refund.
So he has to find someone who can part with his money. SO he finds a lender near him (friend or relative)
Such loans are given by the persons :-
(i) Who has surplus money.
(ii) Who displays and boasts of such surplus money.
(iii) Who stupidly believe that there will be a refund.
(iv) Fails to realise as to why he alone (not bank) is being contacted for loan.
(v) Who has extreme trust on the debtor
(vi) who are either stupid or extremely greedy of the unusual (or illegal) rate of interest.
Such loans are always given
(i) Without documentation.
(ii) Without witness
(iii) Without guarantor.
(iv) During cordial relations
Soon after giving such loan :-
(a) Relations are no more remain cordial
(b) Business started by such money (easy money belonging to other) invariably fails.
(c) Such loans always sink and not refunded.
(d) Person seeking such refund suffers at legal process.
(e) Person seeking such refund legally or by persualtion is socially criticised.
Guest
(Expert) 13 May 2018
If you had received any Cheque and if it is bounced obviously Sec 138 would be applicable. When the money was given as a Loan with out interest and when they default it would be Breach of Trust also. Discuss with Local Advocate
Guest
(Expert) 13 May 2018
Mr. Sudhir Kumar and Mr. NJS have also failed to reply his main query whether he could be termed as a money lender, as per law. Implication of provisions of section 138 is now very commonly known, nothing new in that, the expertise of experts lies in answering the main query of the querist, which nobody seems to have taken care of.
P. Venu
(Expert) 13 May 2018
Why IF? What is the real issue?
Querist :
Anonymous
(Querist) 16 May 2018
thanks all for your reply but my question is that " if given loan to few people/ frnds through bank without interest with contract against cheque and 1 gurantor and while recovery could I be claimed as money lender or not".................would it be issue to recover it
KISHAN DUTT KALASKAR
(Expert) 22 May 2018
Dear Sir,
You can win cheque bounce cases provided nobody takes defense saying that you are a real money lender and lending the money with interest without having money lending licenses.
