Time barred debt Vs PDC
Kumari Snigdha
(Querist) 08 January 2018
This query is : Open
I had taken a personal loan from the bank in 2008 for rs 5 Lac to be repaid in 3 yes .. repaid 5 instalment of rs 16000 each n didn't repay after that..had given 3 undated signed cheques of 2 Lac each at the time of disbursement..the loan became time barred in in 2014.. now in 2017 the recovery agent is harassing me.. my Q is can the bank use the old cheques to recover the debt even though the limitation period has elapsed & the debt is presently not legally enforceable. Plz advise
by Kumari Snigdha on 04 January 2018
My topic is recovery of time barred debt Vs post dated cheques
by Kumari Snigdha on 04 January 2018
My topic is recovery of time barred debt Vs post dated cheques
by Kumari Snigdha on 04 January 2018
My topic is recovery of time barred debt Vs post dated cheques
by Nitish Banka on 04 January 2018
Dear Snigdha,
Bank can use undated cheques and you may be prosecuted U/s NI 138 if chques are bounced. The cheques can be used as acknowledgement of debt and Limitation period can be revived.
Adv. Nitish Banka
9891549997
by Rama chary Rachakonda on 04 January 2018
The High Court clearly held that if a cheque is issued for a time barred debt and it is dishonoured the accused cannot be convicted under Section 138 of the N.I. Act. simply, on the ground that the debt is not legally recoverable.
Kumari Snigdha
(Querist) 08 January 2018
I read one supreme court's order that if the debt is legally not enforceable since the debt is time barred before bouncing of the cheque then the bank can't recover using the PDC cheque given at the time of disbursement since the cheque is treated as without any consideration hence the criminal provisions of the NI Act 1881 are not applicable.
Advocate Bhartesh goyal
(Expert) 08 January 2018
You are very right, Bank can't use cheques given as security at the time of taking loan specially when the loan became time barred.when loan is legally not recoverable then no case of cheque bouncing is maintainable.
Kumar Doab
(Expert) 08 January 2018
Agreed with Mr. Bhartesh Goyal...
Kumari Snigdha
(Querist) 08 January 2018
I request a few more expert opinions in order to reassure myself.
Kumari Snigdha
(Querist) 09 January 2018
Now how do I deal with the recovery agent being sent by the bank repeatedly.
Kumar Doab
(Expert) 09 January 2018
IF you are still left with doubts, subsequent to post from Mr. Bhartesh Goyal ......
You may show all docs to a very able Senior Local counsel of unshakable repute and integrity
specializing in Civil matters and having successful track record.....
Online discussions are not substitute to in person discussions with LOCAL counsel specializing in
respective filed of law and considered opinion after examination of all docs/inputs ........
Spend quality time with your counsel.........
Also go thru profiles and threads under profile of Experts......
Kumar Doab
(Expert) 09 January 2018
Record all calls/visits..............
Generically Speaking; Admission of debt and payment is all that recovery agents want....
Kumari Snigdha
(Querist) 10 January 2018
Is then the oral communication with the recovery agent is adminissible in law. So far I have not admitted that there is any loan I owe to the bank as of the date.
Kumari Snigdha
(Querist) 10 January 2018
I mean I have not admitted anything. I have so far avoided them by saying that there is no loan outstanding against me as of today.
J K Agrawal
(Expert) 11 January 2018
1.If you give a fresh cheque for a time barred debt, it amounts acknowledgement and the cheque is valid. You are to pay it.
2.If bank enters date or other information for a debt which is not enforceable,(being time barred or otherwise), it is offence. Punishable under 409 IPC. You are not liable for such a cheque.
3.If cheque was given for security, there should be a security contract with specific terms that what conditions the security will be encashed. If no such agreement the cheque of security also can not be used.
Kumari Snigdha
(Querist) 11 January 2018
Thanks Agrawal Sir for your valuable advice. Now my doubts are cleared & I thank all the above experts for sparing their time to respond to my queries.
Kumari Snigdha
(Querist) 11 January 2018
One more thing that those old cheques were not CTS 2010 compliant. I don't know if such are still valid or not.
