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Suseela Sivasekar
in Contracts Law Commercial Law
Asked October 15, 2017

Default in payment of dues

  • 1 Answer
  • 512 Views

Hi, I have given 310000 from bank loan on feb 2016, to my frd in thought helping him, he paid me 8 emi and now refusing and trying to cheat me the money. . I was paying the emi for him from my salary trusting him . now he is theatrening me as he will do anything with his known links and smash my life. His frds are the people who giving him ideas against me and my money to cheat me since my financial suitation is bad now . I have a check given by him with me. I have all conversation , that he accepted he borrowed money from me nu. Plz help me. I'm totally stressed out his cheating techniques

Answer 1

In this case, there are two possible ways of exercising your right. One, since you have contracted a loan agreement with the alleged wrong-doer, you have a contractual claim based on this contract. Therefore, you can file a suit for breach of contract and claim damages under Section73 of the Indian Contract Act, 1872 , i.e., compensation to recover the credited money. For that you will have to prove fraud as defined in section 17 of the Indian Contract Act, by proving the following - 1) Your friend had asked you to take the loan in your name, promising to pay you the EMIs regularly, though he did not believe in that promise himself, 2) He made the promise made without any intention of performing it; and 3) Take note of any other act he had done to mislead you.

Second, since you think that the person has intentionally cheated on you, if the act of cheating is proven, he can be held liable under section 415 of the IPC [Indian Penal Code,1870]. If the charge is proven, the punishment would be imprisonment for 1 Year, or fine, or both. However, since cheating is a con-cognizable offence the police would file a General Diary [GD] and would not have any power to arrest without the permission of a Magistrate of First Class. Also, as cheating is a compoundable offence, you can come to a compromise and pressurise the accused to return your money in exchange of settling the case with prior permission of the court. But note that in case of a criminal complaint, the burden of proof is higher.

Along with the offence of cheating, the person can also be held liable under Section 503 of the IPC for Criminal Intimidation. If the charge is successfully established, the punishment for committing the offence of criminal intimidation amounts to imprisonment for a term extending to 2 years, or fine, or both. As laid down by the Supreme Court in the case P. Swaroopa Rani vs. M. Hari Narayana alias Hari Babu, 2 civil proceedings and criminal proceedings can proceed simultaneously. Therefore it would be advisable to file the civil and criminal complaints simultaneously. Sources: Cases:  The Indian Contract Act, 1872  The Indian Penal Code, 1860  P. Swaroopa Rani Vs. M. Hari Narayana Alias Hari Babu, Air 2008 Sc 1884

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