Legal view
kishan
(Querist) 08 May 2015
This query is : Resolved
A money lender suggested a plan to repay his debt by asking a person to trade in stock market as the borrower was finding it difficult to repay high interest. He invested the money of a investor of his company so that he could make profits from the market, pay some amount and nominal interest to the investor and take interest/amount due coming from the profit share from the person he authorized to trade.
He opened the trading account in that person's (investor's)name.all went well till one day market crashed eroding 60 percent of the capital.now he is asking the person who he authorized to trade to payback the amount lost. There is no written agreement on part of the money lender and the stock trader. Will a case stand in court of law if the money lender sues the person who traded? what would be the legal route the trader can resort to for protection.
SAINATH DEVALLA
(Expert) 08 May 2015
Unless there is a written agreement between the two,there is no chance of proceeding legally.
Sudhir Kumar, Advocate
(Expert) 09 May 2015
how old is debt.
what is rate of interest?
whether such rate is permitted by RBI?
kishan
(Querist) 09 May 2015
The debt is 2 years (May2013) with an annual interest rate of 30% and 1:1 penalty in case of delayed interest payment( eg: if interest of 10000 is delayed, another 10,000 is levied as penalty for subsequent month)and there is no agreement.
what is the best recourse to take this forward as threats and intimidation is increasing with unknown people calling and landing at doorstep(sent by him)
SAINATH DEVALLA
(Expert) 09 May 2015
Such type of behaviour will always be there with private money lenders.The quantum of simple and compound interest U have illustrated indicates the velocity of the situation.
U HAVE 2 OPTIIONS:
1. As there is no written agreement,cheques or promissory notes involved, send a legal notice regarding harassement.
2.Lodge a police complaint that U are being subjected to unnecessary harassment by that X.
kishan
(Querist) 09 May 2015
@ Mr.Devalla
Sir, there is no cheque or promisorry note for the trading part. But for the debt cheques and promissory notes were issued.
is there any provision for exhorbitant interest rate charged and also for stopping people ( irrelevant to the deal) from calling and coming?
SAINATH DEVALLA
(Expert) 09 May 2015
Once u have issued cheques and promissory notes to the money lender U are finished.Just defend UR case on merits if it is the court of law.nothing more
Guest
(Expert) 09 May 2015
Mr. Kishan,
First of all, please state in what way you are concerned with the money lender, the person, the debtor, the company or the stock trader?
Secondly, legal views on post facto events have no relevance in the absence of and without examination of the case related documents. The views should have been asked prior to entering in to any transaction.
Thirdly, the nature of your query clearly hints towards its being of an academic nature, as no stock is traded without opening of a DMAT account and entering in to an agreement with the stock broker.
kishan
(Querist) 09 May 2015
Sir what about the trading part? I cannot be pulled to the court isnt it? I will defend in court for the loan I had taken. is there any provision for high interest rates and high penalty collection?
kishan
(Querist) 09 May 2015
Mr.Dhingra,
I'm the debtor. And I was authorized(orally) to execute trades after opening account with the broker.The money generated will go as profits to the lender.
I who owe money to him will give back my share of profit percentage towards his pending dues.on an extremely choppy day, market crashed and he is now pressing me to arrange funds lost in the market along with the debt i owe. I feel it is unfair only to look at profits. I had never solicited any business from him. he knew that I was trading for a living and he came up with the idea of investing funds and make profits. i felt that some pressure would ease off me if money coming to me is taken towards my debt. Now i'm in bigger mess with that person pressuring me to meet both obligations. thats the reason i need some advise to protect myself.please advise. thank you
Guest
(Expert) 09 May 2015
Mr. Kishan,
Nothining substantial can be made out of your query as well as clarification without examination of your debt documents, confirmation of opening of your account with the stock trader, online transaction list and the online account with the trader, etc.
So, either send scanned copis/screenshots of your physical/ online documemts through email or contact some local lawyer for help.
T. Kalaiselvan, Advocate
(Expert) 10 May 2015
Investment in stock market and ending up in loss is a normal affair, that cannot be mingled with the personal liabilities however, if there is an agreement, that will be dealt as a separate subject. You may wait for the lender to sue you for the loan amount recovery, you can challenge it accordingly.
SAINATH DEVALLA
(Expert) 10 May 2015
Let us not discuss about the business aspect,it is a concluded chapter,we will be wasting our time involving in it.Let us go to the liability affair.U have only 2 options (1) meet the money lender settle the liability for a certain amount or (2) face him if he proceeds legally.
Dr J C Vashista
(Expert) 10 May 2015
I agree with expert Mr. Sainath Devalla, it is a commercial query which is to be dealt with, opined, advised, guided and proceeded by a professional local lawyer after going through the documents and circumstances.
Biswanath Roy
(Expert) 10 May 2015
Either you shall have to play in defense, or you shall have to play in offense or offense and defense both simultaneously and concurrently to bring your opposite party under the fold of a reasonable compromise.
kishan
(Querist) 11 May 2015
Thank you all for your valuable opinions.As Mr.Roy pointed out, I need to take charge and stop thinking like a victim.
