If you are stuck in such a situation, here is what to do.

Mr. Sameer, who works at a tech firm named “Quantum Innovations” in the city of Chandrapur, lent a sum of ₹1,50,000 to his colleague, Mr. Alok, about a month ago. Mr. Alok was facing a personal emergency and promised to return the entire amount within ten days. All transactions were conducted online, creating a clear digital trail. After fifteen days, Mr. Alok returned ₹70,000 but assured Sameer he would clear the remaining ₹80,000 within the next three days. However, it has been over three weeks since that promise, and Mr. Alok has now stopped answering Sameer’s calls and responding to his messages. Sameer has all the WhatsApp conversations, call recordings where the loan and repayment dates were discussed, and the online bank transaction records as evidence.

Advice in such cases

When a friendly loan turns sour, especially in a professional environment, it can be distressing. The primary challenge is often proving that the transaction was a loan and not a gift. It’s also crucial to establish that the borrower had a dishonest intention from the outset, which can elevate the matter from a civil dispute to a criminal offense.

Applicable Sections of Law

While this may appear to be a civil matter for the recovery of money, the element of deception can attract criminal provisions under the Bharatiya Nyaya Sanhita (BNS), 2023.

• Section 316 of the Bharatiya Nyaya Sanhita (BNS), 2023 – Criminal Breach of Trust: This section applies if it can be proven that you entrusted the money to your colleague for a specific purpose or under an agreement, and they dishonestly misappropriated it or converted it to their own use, thereby violating that trust.
• Section 318 of the Bharatiya Nyaya Sanhita (BNS), 2023 – Cheating: This section is applicable if you can demonstrate that your colleague deceived you from the very beginning, fraudulently inducing you to lend the money with no real intention of returning it. The subsequent actions of avoiding calls and breaking promises strengthen this argument.
• Civil Remedy: You can also file a summary suit for recovery of the money under Order 37 of the Code of Civil Procedure, 1908, which is a faster procedure for recovering money based on written contracts, which can include electronic communication like WhatsApp chats.

If you are the complainant

If you are in a situation like Sameer’s, here are the steps you should consider:

• Send a Formal Legal Notice: The first step is to have a lawyer draft and send a formal legal notice to the borrower. This notice will detail the amount owed, the circumstances of the loan, and a final deadline for repayment. It warns of legal action (both civil and criminal) if the payment is not made. This often prompts the borrower to settle the matter.
• File a Police Complaint: If the legal notice is ignored, you can file a written complaint at the local police station, detailing the facts and citing potential offenses under Sections 316 and 318 of the BNS. Provide copies of all evidence, such as bank statements, WhatsApp chats, and call recordings.
• File a Private Complaint with the Magistrate: If the police are hesitant to register a First Information Report (FIR), you can file a private complaint directly with the jurisdictional Magistrate under Section 221 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023.
• Initiate Civil Recovery Suit: Concurrently or alternatively, you can file a civil suit in the appropriate court to recover the outstanding amount along with interest and legal costs.
• Consult with Lawyer: The very basic and important step to start is to talk to a lawyer/advocate. You should not hesitate in paying his consultation fee, i.e., might be in the range of Rs. 10,000 to 50,000, depending on the case. He is helping you come out of this situation. He is an expert in the domain and can help you understand the procedure which you might have never explored. A good lawyer can get the issues resolved in 7-10 days.

If you are the victim

As the victim of such a breach of trust, it is important to act methodically. Do not engage in public confrontations or harassment, as this could work against you. Preserve all communication and transaction records meticulously. Keep a calm and documented approach. Your primary goal is to either recover the money or ensure that the person faces the legal consequences of their actions. Acting emotionally can weaken your legal position.

How the police behave in such cases

The police may initially view such cases as civil disputes over money and might be reluctant to file an FIR. They often advise the parties to settle the matter or go to civil court. However, if you can present clear evidence of dishonest intent and deception from the beginning, you can impress upon them that the ingredients of a criminal offense like cheating are present. A well-drafted complaint by a lawyer, clearly outlining the criminal elements, can persuade them to register the case.

FAQs people normally have

What evidence is required?

Strong evidence is key to a successful case. The most crucial pieces of evidence include:

• Bank Transaction Records: Proof of the online transfer showing the amount, date, and recipient.
• Electronic Communication: Printouts of WhatsApp messages, emails, or SMS exchanges where the loan is discussed, and repayment is promised.
• Call Recordings: Audio recordings of conversations about the loan are admissible as evidence.
• Witnesses: If anyone else was aware of the loan transaction, their testimony can be valuable.

Note: For electronic evidence to be admissible in court, it must be accompanied by a certificate under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023.

How long will the investigation take?

The duration of a police investigation and subsequent court proceedings can vary significantly. An investigation might take a few weeks to several months, depending on the police’s workload and the cooperation of the accused. If the matter goes to court, it can be a lengthy process. However, the initiation of criminal proceedings and the possibility of arrest often pressure the accused into settling the matter out of court much sooner.

Advocate Sudhir Rao, Supreme Court of India