Loan Agreement

Yes — a documented loan with a banking trail is an enforceable contract regardless of relationship. What defeats recovery is informality: cash hand-overs, no document, vague WhatsApp promises. The agreement plus bank transfer converts goodwill into a provable debt with a 3-year limitation clock you can manage.

Between private parties, agreed interest is enforceable if not unconscionable; several states' money-lending acts cap rates for lending as business (commonly 12–18% registered/secured benchmarks). Interest must be stated in the document — courts rarely imply it. We calibrate the rate to your state and context.

Section 269SS: no accepting loans of ₹20,000+ in cash. Section 269T: no repaying ₹20,000+ in cash. Penalty equals the amount involved. Beyond tax law, cash loans are evidentially fragile — bank channels are both the legal and practical answer.

A promissory note is a short unconditional promise to pay — quick, low stamp cost, but bare-bones. A loan agreement covers interest mechanics, schedule, default, security and acceleration. For anything beyond trivial amounts, use the agreement (often WITH a pro-note as supporting security) — our standard structure.

A bounced repayment cheque opens Section 138 NI Act — a criminal complaint process that motivates settlement like nothing in civil recovery. The agreement should record the cheques as repayment instruments (numbers, amounts) so dishonour links cleanly to the debt. We architect this in.

State-specific: loan/agreement duty is often nominal-to-moderate (e.g. ₹100–₹500 in several states; ad-valorem where security like pledge/hypothecation is created). Under-stamping makes the document inadmissible until penalties are paid — precisely when you are already fighting. We stamp it right the first time.

Interest earned is taxable as income; business lenders may face TDS u/s 194A mechanics on interest paid to them. For director-company loans, Companies Act Sections 185/186 and deemed-dividend rules (2(22)(e)) need checking before structuring. Our brief covers the flags relevant to your case.

Demand notice (we draft it), then: Section 138 complaint if cheques bounced, summary civil suit under Order 37 CPC for documented debts (faster than ordinary suits), arbitration if the agreement provides, and execution against security. Every option exists only as built — which is the case for the document you are buying.