Quick answer
- Start with a legal notice. Many debtors pay at this stage.
- If you hold a bounced cheque, a Section 138 NI Act case is the fastest pressure point. The time limits are strict (30 days for the notice, then 15 days for payment).
- For written contracts, invoices or promissory notes, a summary suit under Order XXXVII CPC gets faster judgment. The defendant must seek leave to defend.
- The general limitation for money claims is 3 years. Unpaid dues of a registered MSME can be taken to the MSME Facilitation Council.
Unpaid loans to friends, pending invoices from clients and security deposits that are not returned are some of the most common disputes. The right remedy depends on the documents you hold and the amount involved.
1. Should you send a legal notice first?
Yes, in most cases. A notice from an advocate sets out your claim, gives a deadline and warns of legal action. It is mandatory before a cheque bounce complaint, and it strengthens every other remedy. It also helps extend limitation if the debtor acknowledges the debt in writing.
2. Can you file a cheque bounce case?
If the debtor gave you a cheque that bounced:
- Send a demand notice within 30 days of receiving the bank’s return memo
- If payment is not made within 15 days of the notice, file a complaint within one month after that
- The court can order compensation, and the accused faces up to 2 years’ imprisonment
See our cheque bounce lawyer page and our article on friendly loans and Section 138.
3. What is a summary suit under Order XXXVII CPC?
A summary suit is available for debts or liquidated sums arising from bills of exchange, promissory notes, written contracts, or guarantees. The defendant cannot defend as of right. They must apply for leave to defend, generally within 10 days of service of the summons for judgment, and show a substantial defence. In IDBI Trusteeship Services Ltd. v. Hubtown Ltd., (2017) 1 SCC 568, the Supreme Court set out when leave should be granted. Weak defences often lead to quick decrees.
4. Should you file a regular or commercial suit?
For other claims, file an ordinary money suit. If the dispute arises from a commercial transaction worth ₹3 lakh or more, it goes to the Commercial Court. Unless urgent interim relief is sought, you must first try pre-institution mediation under Section 12A of the Commercial Courts Act, 2015. You can ask the court for attachment before judgment (Order XXXVIII CPC) if the debtor is disposing of assets.
5. Can an MSME recover dues faster?
A supplier registered as a micro or small enterprise can refer delayed payments to the MSME Facilitation Council under Section 18 of the MSMED Act, 2006. The buyer is liable to pay compound interest at three times the RBI bank rate. The buyer must deposit 75% of the award before challenging it.
Is filing a cheating FIR a good idea?
Only if there was dishonest intent from the very beginning. A simple failure to repay is a civil dispute. Courts regularly quash FIRs that try to use criminal law for money recovery. Read our article on cheating vs criminal breach of trust.
What is the time limit?
Generally 3 years under the Limitation Act, 1963, counted from the date the money became due. A written acknowledgment or part payment before expiry starts a fresh period (Sections 18 and 19).
Need help?
See money recovery lawyer in Noida and commercial arbitration for contracts with an arbitration clause.
Sources
- Code of Civil Procedure, 1908 — Order XXXVII and Order XXXVIII
- Negotiable Instruments Act, 1881 — Sections 138 and 142
- Commercial Courts Act, 2015 — Section 12A; MSMED Act, 2006 — Sections 16 to 19
- Limitation Act, 1963 — Sections 18 and 19
- IDBI Trusteeship Services Ltd. v. Hubtown Ltd., (2017) 1 SCC 568
This article is general legal information, not legal advice for your specific case. Law and procedure change; please consult an advocate before acting.
