Money Recovery

Let’s face it, getting paid what you’re owed shouldn’t be a battle. But in India, where the business landscape can be complex, money recovery can sometimes feel like climbing Mount Everest. This blog will equip you with the knowledge to navigate the terrain of money recovery in India.

Understanding Your Options:

  • The Friendly Reminder: A well-worded email or letter outlining the owed amount, due date, and late fees (if applicable) can work wonders. Keep it professional but firm – after all, you’re running a business, not a charity.
  • Legal Notice: Sending a Legal Notice through advocate sometimes can do the wonders and make the other party sit on the table for the compromise and this being the cost effective as well.
  • Legal Action: Filing a Legal suit in the court of competent jurisdiction is one of the most effective and efficient ways for recovering the money from the defaulter. 

Understanding your Legal Options:-

  • Civil Suit– Filing a Civil Suit is one of the most preferred and efficient way to recover dues in India, time period to file a suit for the recovery of money is 3 years from the date when the issue arose.
  • Negotiable Instruments Act, 1881– Deals with the recovery of money arising from instruments such as bills of exchange, or cheques. Section 138 explains the procedure to deal with the issues of cheque bounce.
  • India Penal Code,1860–  A case of criminal breach of trust is filed under the IPC .Section 406 and 420 of Indian Penal code provide legal recourse for the recovery of money in cases involving fraudulent activities and breach of trust. Let’s explain one by one to understand better.
  • Insolvency and Bankruptcy Code, 2016- If due is more than 1 crore of rupees, creditor can move to National Company Law Tribunal under Section IBC Code 2016.
  • Out of the Court Settlement – Parties can opt for Mediation or Arbitration for settling the money recovery dispute.

Prevention is Key:

  • Clear Agreements: Always have a written contract in Hindi or English (depending on your comfort level) outlining the terms of the transaction, payment schedule, and late fees.
  • Digital Transactions: Utilize secure payment options like UPI or digital wallets for faster settlements and a clear transaction trail.
  • Creditworthiness Checks: For larger transactions, consider running a credit check on potential debtors to assess their financial reliability.

Bonus Tip: Familiarize yourself with the Negotiable Instruments Act (1881) and relevant sections of the Civil Procedure Code (1908). These legal frameworks can provide valuable insights into your rights and options for money recovery.

Remember: Money recovery can be a complex process. Don’t hesitate to consult a lawyer for specific guidance. By understanding your options, taking preventative measures, and knowing the legalities, you can increase your chances of recovering your hard-earned money.