How To Recover Money From Your Client By Legal Means

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Timely recovery of money is the top most priority for all businesses today. A big contributor behind the success of a business is how quickly company recovers money from client and what is the percentage of bad debts in relation to total turnover.

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How To Recover Money From Your Client By Legal Means:

How To Recover Money From Your Client By Legal Means

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Timely recovery of money is the top most priority for all businesses today. A big contributor behind the success of a business is how quickly company recovers money from client and what is the percentage of bad debts in relation to total turnover. At the same time, money recovery is not an easy job to achieve, sometimes, a business has to go through the legal process for recovery of dues, may be issuing of legal notices and then taking appropriate legal actions against the client. In the era of fast economic development and growing business activities, timely money recovery has become the most important task for the business.

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Sometimes in booming economy a lot of default happens on the part of the individual, associations, institutions and companies due to chasing of growth / bad business decision. Therefore sometimes a person resorts to legal options to recover money from its debtors. Depending upon facts and circumstances of each, any of the following legal strategy may be deployed to recover money under the applicable Indian laws. Summary suit: Order XXXVII of Code of Civil Procedure, 1908 provides this method for the money recovery.

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It’s a summary trial and applies where the claim of the claimant/plaintiff is based on the bill of exchange, hundies and promissory notes. This method of money recovery also applicable where the Plaintiff’s claim is based on some written contract or it is in the nature of debt or the other party has admitted its liability. Here under this process the defendant has to first get the leave to defend the suit from the court in his favour , only then he can contest the suit. If he gets failed to get the same, suit will be decreed against him. Simple Recovery Suit: This is another mode as per CPC to recover the money. In the same of recovery suit, it is not necessary that there must be some written agreement between the parties, even a person can file the simple recovery suit even on the basis of oral agreement.

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Bouncing of cheques : If a person issued a cheque in discharge of his liabilities and on presentation it got dishonoured then it will attract the criminal proceedings under Section 138 of Negotiable Instruments Act. The complainant have to give a statutory notice within 30 days from the date of dishonour of the cheque , wherein giving a 15 days time to make the payment. Thereafter he may file complaint u/s 138 of N.I. Act within 30 days after passing of 15 days from the date of delivery of notice. If the complainant succeeds in its complaint then he may get up to the double of the cheque amount and the accused may also be punished with the imprisonment up to two years.

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Winding up Petition: Where the liabilities lies against a company duly incorporated under the Companies Act in that case an individual, institution or company may opt for winding up proceedings against the defaulting company under section 433 of the Companies Act, 1956 for the recovery of their money, resultantly it might be possible the defaulting company may be winded up, an official liquidator may be appointed who takes control of the assets of the defaulting company and sold it out for recovery of money for the satisfaction debtors, if the defaulter failed to make the payment of receiving of the notice of winding up.

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Arbitration proceedings: In case if there is a written agreement between the parties and wherein the parties to the same have agreed to settle all of their disputes or claim through arbitration proceedings as per the provisions of the Arbitration and Conciliation Act, then they may invoke arbitration clause and appoint arbitrator to resolve their dispute. For more such legal notices format and other relevant drafts documents, please visit this website.

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