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Money Recovery Suit: How to File, Where to file?

Updated on July 08, 2024 08:00:15 AM

Money Recovery! Is this something that you're currently concerned about?
You've probably lent money to people before, but things didn't work out, and they defaulted on paying you back. Or do you want to recover your own money from other parties?

From now on, you won't have to be concerned about it. You might wonder ‘how’ and ‘why’. If you're considering filing a lawsuit for money recovery, it's important to understand what that entails. Let us first understand what money recovery or money recovery suit really means, and then we will discuss how you can recover your money legally, what are the money recovery laws in India, and other important details about it.

Money recovery suit how to file where to file

What is a Money Recovery Suit?


A suit for the recovery of money is an effective and efficient way to recover a debt from the debtor. The civil remedy for money recovery is suing a money defaulter. It's the filing of a lawsuit in a court of competent jurisdiction.

The suit may be filed under Order IV of the Code of Civil Procedure, which was enacted in 1908, (CPC).

Limitation Period

The time period for filing a suit for money recovery is 3 years from the date when the cause of action arises. However, it can also be condoned and subjected to the discretion of the court.

Where to file Suit for Money Recovery?

After understanding the meaning of a money recovery suit, the next possible question in your mind could be the place where you can file a case for a suit related to money recovery in India. The jurisdiction for filing a money recovery case can be decided based on the place or location where your money defaulter belongs and the pecuniary limit that a court can have power over it.

Territorial Jurisdiction

The most important thing when you're deciding where to file a case is whether the court has territorial jurisdiction over the person or not.
Under this type of jurisdiction, the geographical limits of a court’s authority are clearly delineated and specified. It cannot exercise authority beyond that territorial/geographical limit.

As per CPC, 1908 a suit can be filed at any of the given territorial jurisdiction:

  1. Place where the defendant(money defaulter) resides.
  2. Place where the defendant runs his/her business or has a medium of earning.
  3. Place where the cause of action arises either wholly or partially.

This was about territorial jurisdiction, but we need to keep in mind pecuniary jurisdiction also. Like where to file the case, be it district court, high court, or supreme court.

Pecuniary Jurisdiction

Pecuniary means ‘related to money’. Pecuniary jurisdiction tries to address whether a court of law can try cases and suits of the monetary value/amount of the case or suit in question.

This is determined by the pecuniary value(amount of money)you are dealing with. Based on the pecuniary amount, the case for money recovery can be filed.

For example, the pecuniary jurisdiction of the Courts in Delhi are as follows:

  1. Suits amounting between Rs.1 – Rs.20, 00,000/- lie before District Courts.
  2. Suits over and above Rs. 20,00,000/- lie before the High Court.

{Note: First territorial jurisdiction is determined then you have to look for pecuniary jurisdiction.}

What legal actions can be taken against Money Defaulter?

Now you are well aware of the term so let’s move further with all the legal actions that can be taken against the debtor as per the constitution of India.

Firstly, you will have to inform the debtor about the amount that he needs to pay in the form of a notice. The notice must include your personal details(name, description, place of residence), details of cause, and many more. But with experienced advocates like LiteM, you don't need to worry about that.

In case, if the debtor does not respond to your notice, you can file a case against them. All those sections and acts(money recovery acts) are discussed below which applies to money recovery-related issues in India. There are plenty of ways one can go to recover their money back from the money defaulter.

But here let us try to understand which laws and legal actions can be initiated and under what scenarios:

  • Order 37 of CPC(Summary Suit)
  • There is no need to waste time since the whole case is based on written statements. Order 37 of the Civil Procedure Court, which requires a borrower to file a summary suit, is the most common civil remedy for recovering money. The defaulter has 10 days from the day the suit is filed and summons is given to appear, failing which the court assumes the plaintiff's claims are valid and awards the plaintiff.
  • Negotiable Instrument Act,1881
  • This Act primarily applies to those who have sent you a bounced cheque and you are now attempting to recover money from them. The purpose of Section 138 of the Act is to punish the drawer of a cheque who has no intention of making a payment and draws a cheque that bounces. In the case of an unscrupulous cheque drawer, Section 138 of the Act imposes criminal responsibility in addition to civil liability.
  • Indian Penal Code,1860
  • Indian laws provide a number of remedies to the creditors who are not paid the money which is rightfully theirs. In some cases, people are even cheated of their money. This is a punishable offence under the Indian Penal Code (IPC).
  • Insolvency and Bankruptcy Code,2016
  • Proceedings for debt recovery can also be instituted under the IBC Code, 2016 wherein the defaulters are dealt with the new stringent laws in a time-bound manner (less than a year). The provisions of the Code are applicable to companies, limited liability entities, firms, and individuals (i.e. all entities other than financial service providers).
  • Indian Contract Act,1872
  • If an individual defrauds (Section 17), misrepresents (Section 18), or an indemnifier or guarantor is unable to execute the contract due to a complete cash crunch and potential insolvency on his or her end, Section 73 of the Indian Contract Act may be invoked, which provides for recovery of loss or damage caused by breach of contract.
  • Companies Act,2013
  • If the defaulter is a company, a suit can be instituted under the Companies Act, 2013. Suits under this can be class action suits where a certain group of people representing a particular class institute a suit for recovery of debts due to them or in case of a business where debts are due in accordance with a contract.

How to file a Money Recovery suit with LiteM?

We at LiteM know how much value the money that you have earned means to you. You can’t just leave your money and you shouldn’t.

The process for filing a suit for the recovery of money is quite simple with Litem.
All you have to do is just follow our 3 simple steps process:

  1. Fill our simple form and receive a call back from our team of experienced advocates.
  2. Provide us with all necessary details and documents related to your case.
  3. Our team of legal experts will handle that for you.

Our legal advisors and advocates have the deepest understanding and expertise in this area especially related to specific laws applied in money recovery cases. So, when you are in need of any kind of legal representation and have already decided to choose one, you can avail the services of Litem, one of the best law firms in the country with dedicated representatives precisely to deal with recovery cases.

How to file a money recovery suit with LiteM

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Frequently Asked Questions

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