From the Desk of:
Gurmeet Singh Labana
Mobile no. 9896801447
Email Id:
[email protected]Advocate, District & Session Court Haryana
REPLY TO LEGAL DEMAND NOTICE
Date: 15/04/2025
Notice id: KLA/SEC25/05817
To,
M/s Koncept Law Associates
Subject: Reply to Legal Notice under Section 25(1) of the Payment and Settlement
Systems Act, 2007 in relation to Personal Loan A/C No. 158687122
Dear Sir,
Under instructions from and on behalf of my client Mr. Hasmukhraj B. Prasad, S/o
Brijnandan Prasad, R/o 4/328, Next to Radhe Govind Mandir, Sector 4, Vidhyadhar Nagar,
Jaipur, Rajasthan – 302039, I hereby issue the following reply to your purported legal notice
dated 14/04/2025 issued on behalf of your client HDFC Bank Ltd. in relation to the alleged
dishonour of an Electronic Funds Transfer (EFT):
1.1. My client unequivocally denies all allegations, imputations, and assertions made in the
said notice, except those specifically admitted herein.
1.2. The said notice is misconceived, legally untenable, and issued with mala fide intent to
harass my client and coerce him into making payment under threats of criminal prosecution.
2.1. It is admitted that my client availed a personal loan from your client bank and had issued
a Standing Instruction (SI) mandate from his ICICI Bank account to repay EMIs through
ECS/ACH mechanism.
2.2. It is categorically denied that any default on part of my client was wilful or with dishonest
intent. My client has, at all material times, acted in good faith and made regular repayments.
3.1. The alleged dishonour of the ECS transaction dated 06/04/2025 was purely inadvertent
and due to a temporary shortfall or banking technicality. It cannot be construed as wilful
default or an offence under any penal provision.
3.2. It is well-settled law that for criminal liability to arise, there must be mens rea (criminal
intent). In the absence of such intent, no action under Section 25(1) of the Payment and
Settlement Systems Act, 2007 is sustainable.
4.1. Section 25(1) of the Payment and Settlement Systems Act, 2007 penalizes dishonour of
electronic fund transfers in cases where it is “with knowledge that the funds are insufficient”.
The present case lacks any such evidence of knowledge or intention.
4.2. Your client’s unilateral and premature invocation of this provision amounts to an abuse
of process of law, intended to threaten my client with criminal consequences in a purely civil
transaction.
4.3. It is pertinent to note that criminal law cannot be used to enforce civil contracts. The
Supreme Court of India has repeatedly held (e.g., Gian Singh v. State of Punjab, AIR 2012
SC 662) that disputes arising out of loan defaults are civil in nature unless accompanied by
fraudulent or dishonest inducement at inception, which is not the case here.
5.1. As per RBI Guidelines on loan recovery and ECS mandate failures, banks are required
to give customers reasonable opportunity to rectify the default and must act in a non-
coercive and fair manner.
5.2. Your client’s failure to provide such opportunity and instead issuing legal threats violates
RBI's Fair Practice Code.
6.1. My client has already initiated internal checks with his bank and is willing to resolve the
issue amicably, including making good any legitimate outstanding dues after proper
verification.
6.2. Your client is called upon to furnish a detailed statement of account, EMI schedule, and
calculation of any alleged default, which my client shall review and respond to accordingly.
7.1. If your client initiates coercive or criminal action without legal basis, my client reserves
his right to file appropriate proceedings including:
- Injunction/Suit for Defamation under law;
- Police complaint for criminal intimidation under Section 503 IPC;
- Petition under Article 226 of the Constitution to quash frivolous FIRs, if any.
7.2. Please note that my client shall not be responsible for any costs, legal consequences, or
damages suffered by your client due to its unwarranted and vexatious legal actions.
8.1. This reply is issued in good faith and without prejudice to my client’s rights and defences
under any contract, statute, or general law.
8.2. You are requested to advise your client to withdraw the said legal notice and initiate a
constructive dialogue to amicably resolve the matter, failing which my client shall be
constrained to seek appropriate legal remedy at his sole discretion and cost of your client.
Yours faithfully,
Yours faithfully,
Gurmeet Singh
Advocate for Mr. Hasmukhraj B. Prasad
