What should i do regarding the personal loan taken?

In the year 2006 I had taken personal loan against which I had given them some post dated cheques. During that time I was working with a company who had opened a bank account for us. I had issued all these post dated cheques from my salary account. After a period of one year the company I was working in was shut down. I immediately informed the loan company from whom I had taken the loan via email not to deposit any cheques into the bank. As my bank was located into government zone I preferred giving the loan in cash and tell one of the representatives to come and collect the cheques. Even after informing them on the mail, the next month I got a call from the loan department that my cheque had been bounced. At that time I informed them about my company and told them not to deposit the cheque henceforth. I was assured by the customer care that henceforth their representative will come and collect the cheque from the address given. For few months the representative use to come to my place and collect the cheques and he use to give me proper official receipts in exchange. One day I got a call from the representatives that they would be coming to collect the cheques and this time some other representative walked in. I asked him to show me his ID card. He showed me the card. When I was just paying him the money I told him to give me the receipt. So he told me he has not carried the receipt book as one of his friend (other representative had carried some where in other area and they have only one receipt book) and I would get the receipt after few days. So I did not pay him the money. I told him to get the receipts after which I would pay him the money. So sitting there only he made a call to his friend and within no time his friend came to join him. After he gave me the receipt I checked it thoroughly and gave him the cash. After few days I got a call from the loan department saying not to pay cash to anyone unless and until they show their ID cards because the representatives whom we were paying the cash had fled away. I became careful. After my 12th cash instalment, I again received a call from the loan department saying that my cheques have been continuously bouncing. I was shocked. In spite of telling them in written and verbally on phone and in spite of their representative coming and collecting the cash on the specified dates how they can tell me this. I got wild. I immediately checked the bank account, which was having minimum balance in the account. The balance had gone to zero as the charges towards bouncing of cheques had been deducted. I continued paying them the installments in cash and I had kept the receipts safely with me. As my charges towards bouncing of cheques were deducted, I stopped paying my last installment and told them that I don't mind paying the the balance amount deducting Rs.1000/- which was deducted towards bouncing of cheques. Today after, 5 months, their company advocate is calling me up and telling me to pay the last installment along with penalty charges.. Is it right?? Can anyone please guide ?? What I should do?? Did I do something wrong by stopping the last installment.. Please help me out.|||You should have collected the cheque post dated cheque of that month before making payment by cash. You can meet in person the concerned and explain.