You Lent Money to a Friend or Relative and They Are Not Returning It
The problem
You lent money to a friend, relative or colleague. There may be no written agreement. Months later, they avoid you and do not repay.
Example: A person transfers ₹6 lakh to a friend by bank transfer for a “short-term need”. Two years pass with only excuses.
What the law says
You can file a civil suit to recover the money. Under the Limitation Act, 1963, a suit for a loan must usually be filed within 3 years. A written acknowledgment of the debt, signed by the borrower before the time ends, starts a fresh 3-year period.
What you can do – step by step
- Collect proof of the loan: bank transfer records, messages, emails, a promissory note or witnesses.
- Ask for repayment in writing, such as by WhatsApp or email. A reply admitting the debt is strong evidence.
- Send a legal notice demanding repayment within a fixed time, with interest if agreed.
- If you hold a cheque from the borrower that bounces, follow the cheque bounce procedure under Section 138 of the Negotiable Instruments Act, 1881.
- File a recovery suit. If you have a written contract or promissory note, a faster summary suit under Order XXXVII of the Code of Civil Procedure, 1908 may be possible.
- Consider mediation or Lok Adalat for a quicker settlement.
Documents to keep
- Bank statements showing the transfer
- All messages that mention the loan
- Any promissory note, cheque or acknowledgment
Mistakes to avoid
- Giving large loans in cash with no record.
- Waiting more than 3 years without a written acknowledgment.
- Making threats in messages. Keep all messages polite and factual.
Contact
To speak to an advocate, call +91 63660 42792 or email contact@baselegal.in. You can also send us a message. Read more about our Civil, Property & Consumer practice.
This article is for general information only. It is not legal advice. Please speak to an advocate about your own case.