Borrowing money and lending are an inseparable part of the business field.
A person lends money as he believes that the borrower will return if as per the
conditions decided while lending the money. However, in case the money was not
returned at the time decided, the lender has to make a gentle reminder
regarding the same.
In case after repeated reminders the borrower does not pay back the money
owed, the buyer can send the notice mentioning the details of the transaction
and the conditions agreed by the parties. Even if after sending the notice a
satisfactory reply is not received, the lender shall contact a Business
Lawyers In Kolkata or his own city to seek proper legal guidance
for further legal options available to him.
Lead India offers you a team of experienced business advocates who have
been successfully handling the same, in case you need legal advice or
assistance for the recovery of money, you may contact us.
Different ways available to recover money from loan defaulters-
Sending a Legal Notice - after the defaulter receives a legal notice,
he/she has a period of 15 days to return the money or send a satisfactory reply
to the lender, if not, the lender can file a complaint with the court or an FIR
with the police.
Summary Suits - as provided under the Order 37 of the Civil
Procedure Code, summary suits are the quickest way to recover money, as they
are based on the written statement and will speed up the court proceedings.
Criminal case - it can be filed against the defaulter under
the provisions of Indian Penal Code, 1860 for recovering the debts.
Negotiable Instruments Act - under this Act, provisions have been
provided for recovering the debt instruments such as cheques, bills of
exchange, etc.
Insolvency and Bankruptcy Code - To initiate proceedings under this Act, the
aggrieved party can approach the National Company Law Tribunal (corporate
person), where within a period of 24 days from the date the demand notice was
issued, the petition filed by the creditor shall be either accepted or denied
by the NCLT.
Civil Suit-
- In case the money was lent through a promissory note or a loan agreement, the lender can file a civil suit for the recovery of the money so owed.
- Under the Order 37 of the CPC, a summary suit could be filed. The suit shall consist of an important declaration about the specific relief the lender expects, also the relief so pled shall not be more than the ambit of the final relief as provided by the order.
- The first step for the suit recovery by a civil suit shall be drafting the summary suit to be summoned to the person who had borrowed the money.
- Related documents shall be produced before the court along with the summons.
- After a suit has been filed, the defendant shall be asked to appear before the court within a period of 10 days.
- In case the defaulter fails to appear before the court, the applicant has to produce the summons that was sent to the defaulter earlier, after which the court will order him to send another summon.
- After the due process, the court shall give the judgment as required.
- An application under the Negotiable Instruments Act can also be filed in case the money was lent from checks, exchange bills, etc.
- In case the borrower returned the money through cheque, which got bounced, the aggrieved party can file a suit under Section 138 of the NI Act. In this situation, the borrower has to pay the debt within a period of 30 days. Failing to do which, the lender can file a criminal suit, the imprisonment in this case could for a period of two years also, and the borrower could be ordered to pay double the amount of cheque issued.
- As could be understood from above, different laws have been provided for different cases, in case you are facing the situation where the money lent could not be recovered, it is advised to seek professional guidance from a Business Lawyers In Lucknow for recovery of the money lent.
Criminal Suit-
- The lender is required to prove that the borrower had committed a criminal breach of trust and also did not return the money
- A suit could be filed under Section 420 of the IPC for cheating the money from the lender, also under Section 406 of the IPC case could be filed for Criminal Breach.
- In case the court finds the borrower guilty, a sentence of imprisonment could be filed also shall have to pay the amount borrowed.
Out of Court Settlement for recovery of debt-
The lender in case does not wish to go through the court for the recovery
of debt, he may choose to solve the issue through arbitration, conciliation or
Lok Adalat. These are quick and efficient ways to recover the debts.
For sorting the issue through mutual consent, both the parties shall be
willing for the out of court settlement.
While having the issue sorted through conciliation or arbitration, legal
representation would be helpful. Thus, it is advised to seek the advice of an
experienced Business Lawyers In Mumbai or your city.
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