Short answer: Recovery usually starts with a documented demand, and then follows one of four routes: negotiated settlement, a civil suit (summary procedure where the claim is on a written instrument), arbitration where the contract provides for it, or an insolvency route where the debtor is a company and the debt is undisputed. The right route depends on the documents, the amount and the debtor's solvency.
Get the paperwork in order first
Recovery is a documents exercise. Purchase orders, invoices, delivery proof, acknowledgements, ledger confirmations and any written admission of liability are worth more than the strength of the grievance.
A statement of account reconciled to the debtor's own acknowledgements often resolves the matter without proceedings.
Demand notice
A properly drafted notice sets out the claim, the documents relied on and a time to pay. It frequently produces payment or a settlement discussion, and it establishes a record if proceedings follow.
Choosing the forum
- Civil suit — the general route; summary procedure may be available where the claim arises on a written instrument
- Arbitration — where the contract provides for it, with the process governed by the clause
- Insolvency route — available only in defined circumstances against corporate debtors, and inappropriate where the debt is genuinely disputed
- Mediation or negotiated settlement — usually the fastest and cheapest where the relationship still has value
Limitation and interest
Claims are time-barred if not brought within the applicable limitation period, and acknowledgements can affect how that period runs. Interest depends on the contract and the applicable statute.
Delay is the most common self-inflicted problem in recovery matters.
Frequently asked questions
- Can I use insolvency proceedings as a recovery tool?
- That route exists for defined situations and corporate debtors, and it is not intended for genuinely disputed claims. Using it inappropriately can be counterproductive; take advice on eligibility first.
- What if there is no written contract?
- Recovery is still possible where purchase orders, invoices, delivery records and correspondence establish the transaction, though the evidence burden is heavier.
- How long do I have to file?
- The limitation period depends on the nature of the claim and when the cause of action arose. Because acknowledgements can affect it, get the dates reviewed early.
Related services
Related reading
This article is general information about Indian law and procedure as at the date of publication. It is not legal advice, and outcomes depend on the facts of each matter. Please take advice on your own situation before acting.
Need advice on your own matter?
Speak with a lawyer at our Saidapet, Chennai office. Consultations are available in person, by telephone, by video call or on WhatsApp, Monday to Saturday, 9.30 am to 6.30 pm IST.