Money Recovery Suit
1. A suit for the recovery of money is an effective and efficient
way to recover a debt from the debtor.
2. 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
1. The time period for filing a suit for money recovery is 3 years
from the date when the cause of action arises.
2. It can also be condoned and subjected to the discretion of the
court.
Where to file Suit for Money Recovery
The jurisdiction for filing a money recovery case can be decided based
on the place or locationor
Wheremoney defaulter belongsand
Thepecuniary limit that a courtcan have power over it.
Territorial Jurisdiction
The most important thing when and 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:
Place where the defendant(money defaulter) resides.
Place where the defendant runs his/her business or has a
medium of earning.
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.
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:
Suits amounting between Rs.1 – Rs.20, 00,000/-lie before
District Courts.
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?
Firstly, you will have to inform the debtor about the amountthat he
needs to pay in the form of a notice.
The noticemust include your personal details(name, description,
place of residence), details of cause, and many more.
In case, if the debtor does not respondto 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.
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
Indian Penal Code,1860
Insolvency and Bankruptcy Code,2016
Indian Contract Act,1872
Companies Act,2013
How to file a Money Recovery suit.
Institution of suits under order 4 CPCand essentials of plaint:
A suit is instituted by way of a plaint. Plaint is the description of facts
of the case and the exact amount being claimed along with any
interest.
Documents:The Plaint is to be accompanied by the supporting
documents viz, written contract, particulars of claim and
correspondences if any. This plaint is required to be proved by way of
an accompanying affidavit and an appropriate verification of the facts.
Court Fee:
Court fee as per the schedule is required to be paid by the
Plaintiff. A suit shall be returned in case the same is not filed
along with court fee.
Once the said plaint is filed in Court, the same shall be
numbered by the Court.
PROCEEDINGS AFTER INSTITUTION:
Issuance of summons:The Court after examining the plaint and
its admissibility shall issue summons which is required to be
duly served upon the Defendant/s.
Written Statement: The Defendant after entering appearance
shall be required to file its Defense/ Written Statement within
the timeline prescribed.
Framing of issues, Trial and Arguments:After framing of issues
involved in the suit, the trial shall commence. On conclusion of
Evidence, the final arguments would be heard and suit decreed.
EXECUTION OF THE DECREE:Decrees can be executed by way
of an Execution Application filed in the jurisdiction of the place
where the assets of the Defendant/s are situated. In case of non-
satisfaction of decree the code also provides for imprisonment for
the Defendant/s.
IN THE COURT OF DISTRICT JUDGE (DISTRICT __________)
SUIT NO ……………. OF 20..
(SUIT UNDER ORDER XXXVII OF THE CODE OF CIVIL
PROCEDURE, 1908)
IN THE MATTER OF:
M/s ABC Pvt. Ltd.
Through its Director
Shri……………………
VERSUS
M/s XYZ Ltd.
SUIT FOR RECOVERY OF RS. …………… UNDER ORDER XXXVII
OF CODE OF CIVIL PROCEDURE, 1908.
MOST RESPECTFULLY SHOWETH:
1. That the Plaintiff is a Company constituted under the Companies
Act having its registered office at ………………………….. , is a duly
constituted attorney of the Plaintiff-company and is authorized and
competent to sign and verify the plaint, vakalatnama etc. and to
institute this suit on behalf of the Plaintiff.
2. That the Plaintiff-company inter-alia carry on the business of
construction, engineering and designing. The Plaintiffs are builders of
international repute and have earned a big name in their business.
3. That the Defendant is a Company incorporated under the
Companies Act having their registered office at ………….. . However,
the Administrative office of the Defendant is situated at ……. i.e.
within the jurisdiction of this Hon’ble Court.
4. Brief facts about the facts that result for this suit.
5. The suit is within the period of limitation.
6. This Hon‟ble Court has jurisdiction to entertain this suit because
the part of the cause of action arose in ……….. . The contract for
construction of the paper mill was entered at ……… , all the payments
upto this date have been made at ……. and the payment of the
outstanding amount was also to be made at……. . The Administrative
Office of the Defendant is situated at ….. where they carry on the
work for their gain.
7. The value of this suit for the purposes of court fee and jurisdiction
is Rs. ——— on which court fee of Rs. ___________is paid.
8. That this suit is filed under Order XXXVII of the Code of Civil
Procedure and no relief has been claimed which does not fall within
the ambit of Order XXXVII.
PRAYER:
It is, therefore most respectfully prayed that this Hon‟ble Court may
be pleased to :-
Pass a decree for Rs………… with interest @ 18% per annum
from ………… upto the date of filing the suit in favour of the
Plaintiff and against the Defendant;
Award pendentlite and future interest at the rate of 18% per
annum on the above stated amount of Rs. ………….. with
interest @ 18% per annum from ……… upto the date of filing the
suit in favour of the Plaintiff and against the Defendant;
Award cost of the suit in favour of the Plaintiff and against the
Defendant; and
Pass such other and further order(s) as may be deemed fit and
proper on the facts and in the circumstances of this case.
Place and Date
Plaintiff
Through Counsel
VERIFICATION:
Verified at …… on this ….. day of ………. 20… that the contents of
paras 1 to … of the plaint are true to my knowledge derived from the
records of the Plaintiff maintained in the ordinary course of its
business, those of paras … to …. are true on information received and
believed to be true and last para is the humble prayer to this Hon’ble
Court.
Plaintiff
