Randhir Tomar
Asked August 29, 2016

Recovery of money

  • 2 Answers
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Need to recover money from a party

Answers 2

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Agree Comment 0 Agrees about 1 year ago
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    Randhir Tomar
    Hi Sir, we have sold material to a party in Bangalore but from last year he is not paying our money. Which is approx 15 lakhs. Company is pvt. Ltd. I have 1 checqu also which were bounced but 1 year back. can we do something.
    Agree 0 Agrees about 1 year ago


Recovery of money:

In order to recover your money, the first step is to to issue a legal notice ask them to repay the entire amount that is due. If they fail to repay the amount then you have to file a suit for Recovery of money. You can also ask compensation for damages, if there has been any loss to you due to the non-payment of dues. You also have the option to file a summary suit under order XXXVII of CPC for recovery of the money with interest.

You can claim interest rate if your contract with the company mentions interest to be charged in case of non-payment (usually there is such a clause, along with a time period given within which the party is allowed to make their payments). However, if your contract is silent, you cannot claim interest from date of default of payment.

Limitation period for such cases 3 years, that means you have to file the case for recovery of money with suit for damages before the civil court within 3 years of the day of when the other party was supposed to pay but did not.

 

 

Cheque bounce:

Sec 138 Negotiable Instruments Act, 1881, deals with cases where cheques are dishonored or bounced.

There are 3 criteria which need to be fulfilled in order to file a suit under this:

 1. The cheque needs to be presented in the bank within six months from the date when it is drawn or within the period of its validity, whichever is earlier.

2. When a cheque bounces, the payee’s bank (your bank) gives a memo and the dishonoured cheque back to you. You need to send a formal written notice with all the relevant details to the drawer (the author of the cheque) in writing within thirty days of receiving the memo.

3. And the drawer needs to pay you back the sum in fifteen days. If not, then you can file a case against him/her.

 

According to the law, if once a cheque is dishonoured, the payee can submit the cheque for a second time within three months. Your thirty days will start from the day when you received the memo from the bank and the dishonoured cheque the last time.

Now, you need to send him/her a written complaint with all the relevant details within thirty days from the dishonouring of the cheque the last time. If he/she does not pay you the sum within fifteen days of receiving this notice, you have the right to file a suit in the court of the Judicial Magistrate or Metropolitan Magistrate under whose jurisdiction your bank falls.

He may be punished with maximum two years of imprisonment or fine with twice the amount of the cheque or with both.

You can also take the help of S.417 and S.420 of the Indian Penal Code, 1860 to substantiate your case. These sections deal with cheating and their punishments.

 

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