Could not pay car loan, afraid that cheque given to bank will bounce

862 votes

As you have taken vehicle through lian so definetly there will be an option of hypotecation wherein if ur not clearing lian vehicle will be seized by bank by way of court procedure ... Cheque will issued during loan period only for the purpose of releasing loan ... Hence need not take tension that your cheque will be presented in bank n it will get bounced .. This will not happen ... The bank can only seize ur vehicle ... So better contact bank manager n pay the remaining balance of loan amt so that the bank people will release your vehicle...

Advocate Suma N LawRato

924 votes

Better to clear off loan as it is a debt you had with Mahindra finance
If the cheque is bounced then necessarily the criminal case will be filed
If the finance people is not answering properly you can issue a legal notice enlighting them to intimate about the latest position on the dues

Advocate Sridhar A LawRato

589 votes

Dear client,

I am writing with regard to your query posted above. At the outset, it is pertinent to note that even if you have defaulted in payment for certain period, the bank has to proceed with due course of law for recovery; the lenders are not allowed for complete walkover.

Typically, a bank has to follow the due process whereunder in first step it has to serve a notice to the borrower for settling the full amount within the period provided in the notice. If the borrower fails then a bank serves a second notice for taking possession of the asset held as security for the money lent by it. Generally, such process takes more than 1 year from the date of actual default (the last one which give the bank right to invoke the legal remedy for recovery).

Hence, a bank cannot immediately submit the cheque. Even if, they submit the cheque, as per the law they have to first serve a notice to you for payment of amount after dishonour of the cheque. Thus, you will have the time to settle your dispute with the bank; in your reply you can mention that you have already paid the full amount to the bank.

Best regards,

Disclaimer: As to matters of law, I limit my response to the laws of India and the laws/rules/regulations of the state under whose jurisdiction the subject matters falls. Further, my response is limited to the facts presented by the client and laws in existence on the date of this response and at no subsequent time. This response is delivered to you in connection with the query raised/posted, and may not be utilized or quoted by you for any other purpose or relied upon by any other person or entity without prior consent. Further, this response does not create any attorney client relationship.

Advocate Sangeet Sindan LawRato