How Can I Take Legal Action To Receive My Debt?

Lead india
Oct 6, 2023
3 min read

In most circumstances, the individual who is owed money has the option of taking legal action by sending legal notice. This might involve filing a lawsuit, calling a debt collector, or demanding that the funds be moved to a bank account. These many activities are governed by separate regulations, and each circumstance is unique.

Here are some fundamental guidelines to assist you in pursuing legal action if someone owes you money.

Make sure you have all of the information you need to bring a lawsuit and send the legal notice for recovery of money. This contains the name of the individual who owes you money, the amount due, and any documents that support your claim (e.g., canceled checks, and emails).
Negotiate with the guy who owes you money. If they are ready to repay you in full, it may be easier to avoid legal action. However, if they refuse to pay, a lawsuit may be necessary. For this, you can send a court notice.
If the individual who owes you money fails to respond to your attempts to negotiate or take legal action, contact a debt collector. Companies and individuals engage debt collectors to recover debts.

Legal provisions:

1. Filing a Civil Suit for Recovery under the 1908 Code of Civil Procedure: A civil suit brought under Order IV of the Code of Civil Procedure (CPC), 1908, is an efficient technique to collect money from a debtor. It is a summary suit (Order 37, Code of Civil Procedure) that allows for the suit to be resolved quickly since the defendant is not required to defend themselves as if it were a matter of right. The litigation must be brought within three years after the occurrence of the cause of action by sending the legal notice to an advocate. Furthermore, it can be tolerated and left to the discretion of the court. Civil litigation, particularly recovery cases, is frequently drawn out and should be avoided. It is often assumed that if one is unfamiliar with the extent of Order XXXVII of the Civil Procedure Code, bringing a recovery claim might tie oneself for several years. A recovery suit may be filed under Order IV of the CPC, 1908 at the location where the defendant resides, works, or does business, or where the cause of action arises and the help of a lawyer can be taken for the drafting of the legal notice. Another alternative for similar situations is the Negotiable Instruments Act of 1881, which solely deals with the recovery of monies originating from instruments such as checks or bills of exchange. This Act offers provisions for monetary recovery under a specific instrument.

2. Criminal Law: If money is borrowed via checks or bills of exchange and is not repaid, the lender may launch a complaint under the Negotiable Instruments Act. If the money is paid by check or bills of exchange and it bounces, the lender may initiate a complaint under Section 138 of the Negotiable Instruments Act, which requires the borrower to reimburse the amount within 30 days. When pursuing a criminal prosecution against a borrower, the moneylender must establish that the borrower violated the terms of the loan. If a moneylender is cheated, the moneylender can file a complaint under Section 420 of the IPC, and if the borrower commits a criminal breach, the moneylender can take action against the borrower under Section 406 of the IPC. If proven guilty, the borrower faces imprisonment and must return the moneylender.

As of today, debt recovery laws in India are a patchwork of multiple laws and forums, increasing the likelihood of proceedings being instituted in multiple forums for the same dispute as a method of harassing the debtor rather than attempting to resolve the debt most practically. With its decision in Vidya Drolia versus Durga Trading, the Supreme Court further complicated matters by ruling out arbitration as a viable form of debt collection for a major number of disputes arising from financial obligations held by banks and financial organizations.

For sending a lawyer's notice, you can contact Lead India. Lead India offers legal help, online tools, and free legal advice. As soon as you have Lila, you can talk to a lawyer immediately away. Ask a legal question for advice.