Sanjeev Kuchhal (Publishers) 05 July 2010

Dishonour of cheque - Cash loan given

A recent judgment of Bombay High Court reported in 2010 (6) LJSOFT (URC) 77

Dishonour of cheque _ Complainant advanced cash loan of Rs.5,70,000/- (Amount above Rs.20,000/-) to the accused against receipt and in presence of one witness. Accused also executed an agreement and towards discharge gave the said cheque. Section 269-SS of I.T. Act only provides for penalty for its non compliance and it does not say that if money is advanced in contravention of that Section it would be unrecoverable. Documents executed prove the existence of a legally recoverable debt.

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6 Replies

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE ) 05 July 2010

Sanjeev kuchhal good judgment brought to the notice on this site and I am sure it will BRING lot of pleasure to NI.138 complainants but still it is not last word since amount is more so parties will go to further litigation.

PLEASE KEEP DOING IT.

Basavaraj (Asst, Manager-Legal) 06 July 2010

Many Many thanks to Mr.Sanjeev to publish and made legal awarance on this site and brought impt judgment.

Rgds

BASAVARAJ.R

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE ) 10 July 2010

Yes it can be challanged in SC since the penalty u/s 271 D of IT act is 100% of the amount, so what is the benefit to the borrower to take such risk.

rahul (chartered accountant) 27 October 2010

Sir,

As it appears from your text that a case where a loan given in cash ( even in excess of 20000) can be contested on grounds of sec 138 of NI act. What if only a promissory note is executed for the loan amount but without any receipt. Can a cheque taken at the time of sanctioning the loan be presented to the bank as issued against discharge of the debt and on dishonour can a case be filed u/s 138 of NI act..

thanks in advance..

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE ) 09 November 2010

Now there is a further judgement of Bombay HC which contricts above judgment on account of section 23 of contract act.

Deven (N/A) 15 October 2011

be careful with any cash loans or payday loans. they are usually a rip off. persoanlly I recommend to read all information twice before you make any decission. Some loans are endorsed by famous people such as the https://www.montelwilliamsloan.net . Think twice and make the right decission.