Pronote vs (cheque+loan agreement)

Dear Nagendra,

the person or the company who had given loan has the valid NBFC License???? if, yes then only the loan could be given by the person or the Company. failing which the borrower might challange the validity of the agreement to escape the prosecution under the sec. 138 of the negotiable instrument act.

Therefore, you need to confirm the facts before taking the opinion.

Regards,

Advocate Rohit Dalmia

9324538481

Mumbai 

Let me put this clearly,   One of my friend who was in need of money , borrowed money from me. He has signed a loan agreement to that extent & issue post dated cheques.

I was advised to take a Pronote from the borrower aswell. Is this required?

Then you do require promissory note to be signed by your friend.

If you wish, you may share the agreement copy for checking out whether the agreement is valid or not. since, you don't have money lending license from the Reserve Bank of India.

Regards,

Advocate Rohit Dalmia

9324538481

Mumbai

Thanks Rohit for your response. I am attaching the agreement format.

Thanks Rohit for your response. I am attaching the agreement format.

I have gone through the agreement and its contents. 

The agreement is not valid and has no standing in the court.

you require a proper agreement which has legal validity and maintainability in the court.

Regards,

Advocate Rohit Dalmia

9324538481

Mumbai

Thanks for you prompt response.  Can you please share a valid Loan Agreement format?

Nagendra,

There is no standard format for loan agreement. But i have developed my own format which is used by the few corporates in india and has a validity in the court. 

I could provide you the agreement, but there shall be fees for the same.

Regards,

Advocate Rohit Dalmia

9324538481

Mumbai

Agreement or no agreement it will be contested by any defense advocate.  If no agreement it will be doubtful, if agreement it may attract money lending act.

In John K. John v. Tom Varghese & Anr. [JT 2007 (13) SC 222], this

Court held:

The High Court was entitled to take notice of he conduct of the parties. It has been found by the High Court as of fact that the complainant did not approach the court with clean hands. His conduct was not that of a prudent man. Why no instrument was executed although a huge sum of money was allegedly paid to the respondent was a relevant question which could be posed in the matter. It was open to the High Court to draw its own conclusion therein. Not only no document had been executed, even no interest had been charged.

 The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its

failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument.

FROM A SUPREME COURT JUDGMENT.