Lending money to friend to deposit money on behalf of me

The simple advice is never be too ambitious and select short cuts in earning money and never drag friendship into financial transactions.

The precautions is to obtain a promissory note specifically stating the full amount to be refunded (12.20lakhs) and he should state that in a covering letter that the amount borrowed was invested in such and such society and that nomination was done in your name, and original deposit receipt with a post dated cheque No.......dt............(date of maturity)  for total amount of Rs.12.20 lakhs was given to you with promissory note.. Get the letter signed by his spouse and major children if they are majors as witness.  You can also obtain nomination and keep the deposit receipt with you.  These are all just precautions..

Being an ex employee of the said society,were U not aware of the rules and regulations.U have given such a huge amount without any documentation and now U R repenting.The only possible way is to involve some common friends and go for an amicable settlement with that fellow and recover whatever U can.

If as per the by-laws of the Cooperative Society, deposit from non members cannot be accepted, you cannot circumvent such rule by giving money to your friend who shall deposit in his name.  If in dispute, litigant has to approach the Courts with clean hands and not like this.  Therefore, no matter what documentation you take, if your friend dupes you, you shall be in deep trouble as you cannot explain the intention but should only go to court as if you had given a hand loan to your friend.  Naturally, your friend will not give any security for this, as he is taking the money at your request, besides he may have to face Income Tax scruitiny too as the money in question is Rs.10.00 lakhs.

Please desist from this kind of ab-initio troublesome activity.

You can lend money to your friend as a hand loan or a loan on the basis of an agreement by which the terms and conditions of loan can be formulated accordingly. 

You can obtain  a promissory note executed in your favor in the presence of witnesses.

Always exercise caution while lending huge sums to anyone.

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:-

1. Who lacks business sence and cannot raise funds out of his own business and suddenly wants to be rich.

1. 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.

1.  Who knows he can afford not to refund.
2. Who trusts his thick skin
3. Who intends not to refund
4. 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 (fiend or relative)

Such loans are given by the persons :-

1. Who has surplus money.
2. Who displays and boasts of such surplus money.
3. Who stupidly believe that there will be a refund.
4. Fails to realise as to why he alone (not bank) is being contacted for loan.
5. Who has extreme trust on the debor
6. who are either stupid or extremely greedy of the unusual (or illegal) rate of interest.

Such loans are always given

1. Without documentation.
2. Without witness
3. Without guarantor.

Business started by such money  (easy money belonging to other) invariably fails.

Such loans always sink and not refunded.

So give the money not as a loan but as charity only. 

You are not getting it back .

If you create any contract as per your plan then you  are entering in illegal contract as you yourself cannot invest in that society and want ot invest under sham identity of your friend.  You want to defeat the prupoe of a law which forbinds investment from you.

Technically speaking you are violating IPC as this amount to cheating the society.

You will lose money as well as respect in society.