Payment Recovery

Payment Recovery

If your payment is due upon any person, firm, company, contractor or friend, the same is legally recoverable under the civil law. Indian laws provide for a number of ways to initiate proceedings to recover any debt accrued. The most common methods are examined below;

Institution of proceedings under The Bharatiya Nyaya Sanhita, 2023

This method may be used by the aggrieved party in certain specific instances by filing cases under the following sections:

• Section 316: Criminal breach of trust
• Section 318: Cheating

Summary Suit under Order XXXVII of the Civil Procedure Code, 1908 (CPC)

Order XXXVII of the CPC allows a creditor to file a summary suit where the debt is based on a written contract and the debt is acknowledged in writing. A summary suit once instituted assumes Plaintiff's allegations to be true and decides the case in their favour in a short span of time since the proceedings are timebound in nature.

Filing a civil suit under before Civil Judge:

If the debt is denied or disputed, a suit for recovery can be filed at one of the following places;

• Where the defendant resides, or carries on business, or personally works for gain; or
• Where the cause of action, wholly or in part, arises. Cause of action would generally mean where services are provided.

Institution of proceedings under the Negotiable Instruments Act, 1881 (NI Act)

This method is used in instances concerning the recovery of money arising from instruments of payment such as cheques and bills. Section 138 of the NI Act provides the basis for initiating criminal proceedings in instances of bounced cheques with clear timelines and limitations for each step.

Instituting arbitration proceedings under the Arbitration and Conciliation Act, 1996 (A&C Act)

Ideally the arbitrability of the dispute depends on multiple factors, the primary aspect being the presence of an arbitration clause in the agreement from which the dispute arises.