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Money Recovery Legal Notice

A recovery notice is a formal notice between one person and another. Warning of legal action if the latter fails to pay the amount due. To your surprise, you can send a legal notice to a friend to collect money if he owes you a lot.

So to collect money from someone you owe, a legal notice for debt collection is required. An employee, tenant, friend, company, bank, etc. can also file a legal notice against the dealer for a refund.

A legal notice to recover money is usually a formal communication and warning from one party to another before taking any legal action to collect their debt.

From the beginning, the most common problem people face is friends not returning their money. To be precise, a legal notice can be filed against anyone to recover your money, be it your friends, tenants, employers, etc.

Details of Money Recovery Legal Notice

Following are some important points for money recovery notice.

  • Money Recovery Suit

Suing to recover your money is the most productive and systematic way to get your work done. The civil remedy to recover your money is to file a suit in a court of competent jurisdiction.

  • Period for Filing Suit

The time limit for filing a lawsuit to recover your money is three years from the date of the cause of action. However, that too is on the vigilance of the Hon'ble Court.

  • File a Lawsuit to recover money

The important question is where to file a lawsuit to recover money. "Jurisdiction" to sue may be determined by taking into account the financial constraints the Hon'ble Court has jurisdiction over from where or where the defaulter belongs.

  • Territorial Jurisdiction

The most essential factor in filing a suit against a defaulter is whether the defaulter falls within the jurisdiction of the court or not. Under this type of jurisdiction, the geographic limits of the court's jurisdiction are clearly defined and enumerated. Therefore, the Court cannot assume or exercise any jurisdiction beyond its territorial limits.

According to the Code of Civil Procedure, 1908 a suit can be filed in the following jurisdictions -

  1. Where the defaulter (defendant) resides.
  2. Where the defendant carries on a business or earns it.
  3. Where the cause of action arises. (in whole or in part)

  • Pecuniary Jurisdiction

"Paishika '' means relating to money. This type of jurisdiction seeks to monopolize if a court of law can prosecute that monetary value or amount of litigation in question. For example, the pecuniary jurisdiction of Calcutta City Civil Court and Calcutta High Court has valued at Rs. 10 lakhs and 1 crore. However, before proceeding to file a suit, territorial jurisdiction is first kept in mind, followed by pecuniary jurisdiction.

Mansee Online
Expertise in Private Limited


Mansee Online

Expertise in Private Limited Company


Legal Action May be Taken against Defaulters

Following are some actions to take against the defaulter of recovery of money;

  • The first step is equally simple, i.e. inform the defaulter of the amount owed by him in the form of a formal notice containing personal details of the plaintiff, details of reasons, etc.
  • Try reaching out to places for good and quick instructions and drafting such instructions.
  • In cases where the defaulter does not respond to the notice of the prosecutor, a case can be filed against the defaulter.

Statues for Filing a Case against the Defaulter

Code of Civil Procedure: Under Order 37 of CPC, 1908, the creditor is asked to file a summary suit which is the most "go-to" way to recover money. The defaulter shall have ten days from the date of suit to appear before the court, failing which the Hon'ble Court shall presume the alleged claims of the plaintiff to be true and valid and shall be awarded.

  • Indian Penal Code, 1860

There are several sections in the penal laws which provide remedies for people whose money has been defrauded for any reason, which are punishable under the Indian Penal Code, 1860.

  • Insolvency and Bankruptcy Code, 2016

Proceedings of suits can also be filed to recover money where the defaulters are being tried in a strict time-bound manner, which is less than a year.

  • Indian Contract Act, 1872

Section 73 of the Act can be considered for its features to award damages for breach if a person commits fraud or misrepresentation or if the indemnifier is unable to carry out the contract due to possible insolvency. of the contract.

  • Negotiable Instrument Act, 1881

This law mainly focuses on cases where your check sent by the employer has bounced once and you are trying to recover the money from them. Section 138 of the Act punishes the drawer of a check which had no primary intention to make payment and draws a check which bounces, therefore Section 138 has criminal and civil liability.

Some Relevant Issues for Money Recovery

Even in this age of entrepreneurship and startup businesses, the economy is getting the much-needed boost on the path to financial freedom. But one of the realities that contradict this vision is negative cash flow

  • Negative Cash in-Flow

According to the IBM Institute for Business Value and Oxford Economics, more than 90% of funded startups close within five years of launch. The cause of negative cash flow, ie, problems with the recovery of money. This is due to a lack of solid legal support and prudent legal advisors. Businesses fail to recover huge sums from their creditors. This coercion of non-recovery pushes them into business closure or other financial instability.

  • Legal Notice to Defense

So, a person can save themselves from bankruptcy and recover their money by sending a legal notice. Hire a lawyer first. A lawyer has issued a legal notice seeking a settlement on behalf of his client. A legal notice contain some of the following points;

  1. Complainant's name and description
  2. Place of residence of the complainant
  3. Details of the cause of action
  4. Financial assistance claimed by the complainant
  5. A summary of the legal basis for the relief claimed

Drafting of Legal Notice for Recovery of Money

  • The complainant must prepare a legal notice on the solicitor's letterhead. Instructions must be specific and appropriate. It should also contain the lawyer's address and contact details.
  • A legal notice to collect money must contain the name and details of the customer.
  • The notice must state that the defendant is violating the complainant's right. And you get the amount from him.
  • The respondent party should give specific directions and time limits.
  • The notice must be signed and dated by the attorney and the sender.

Cases of Legal Notice for Recovery of Money

There are many situations when it becomes necessary to opt for legal remedies. The most common are the following points;

  • Tenant

Form of legal notice for rent recovery: If the tenant does not pay the rent to the landlord, the landlord, by signing the lease and license agreement, can send a legal notice for recovery of arrears.

  • Employees

Sample legal notice to the employee to recover money: If an employee absconds with the money, the company can initiate a domestic inquiry by sending a show-cause notice to his residence.

  • Debt Recovery

Debt defaulters are having a huge impact on the economy. The government takes strict steps to recover money diverted through loans. Therefore, they set up debt recovery tribunals in each state to resolve such debt-related issues. So one can start by serving legal notices for debt recovery from banks or financial institutions. You can refer to the legal notice format for non-payment of dues or debts.

Frequently Asked Questions

Is legal notice mandatory for recovery of money suit?
Yes, a legal notice must be issued in India before claiming your money back under the Indian Penal Code or a civil suit. A legal notice is used to inform them that criminal or civil charges will be brought against them.
What is the penalty for not returning the money?
If the lender can prove that the borrower has committed a criminal breach of trust and has not returned his money, he can file a case under Section 420 and Section 406 of the IPC for cheating and criminal trespass, and if the court finds the borrower guilty, the person will go to jail and also have to pay restitution.
How do you defend a money recovery suit?
The defendant must file a written statement of defense before the first hearing or within 30 days of receiving the summons. The defendant must raise new issues in his favor or file a suit in response to the claimant's request in a written statement.
What is the time limit of the recovery suit?
A claim can be filed within 3 years from the date of the action. This limitation period cannot be waived.
What if a legal notice is not received?
As a result, they will file a case against you for which you will face some legal obligations. And there is no point in replying to the notice you have received. It is a must to reply to the notice earlier.
Can I send a legal notice without an Advocate?
Yes. You can send a legal notice without a lawyer, but it is advisable to hire a lawyer as professional writing skills and legal language make the notice very effective.
How can I recover the money without proof?
You can file a police complaint against him or you can send a legal notice. If he agrees to pay you the amount, then it is fine. Otherwise, you have no option but to go to the police or file a private complaint in court.

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