Start by collecting proof of the debt and sending a lawyer's legal notice demanding payment. If that fails, file a money recovery suit, ideally a summary suit under Order XXXVII CPC if you have a written contract, promissory note or cheque. A bounced cheque also allows a Section 138 case, and MSME suppliers can use the Samadhaan portal.
Key takeaways
- Proof first: agreements, bank transfers, messages and acknowledgements decide recovery cases.
- A legal notice is cheap and often enough; it also starts the paper trail for court.
- Order XXXVII summary suits are faster where there is a written contract, promissory note or cheque.
- Recovery suits are generally time-barred three years after the money became due.
- Never use threats or 'recovery agents' to harass a debtor; that is a crime.
First steps when someone does not return your money
Before any legal step, get your proof together and fix the amount. Courts and lawyers will ask for the same things:
- How the money was given: bank transfer, UPI, cheque or cash (with withdrawal records).
- Any written agreement, promissory note, invoice, purchase order or ledger confirmation.
- Messages or emails where the borrower admits the debt or promises to repay. An acknowledgement in writing also extends the limitation period (Limitation Act s.18).
- Part payments, which prove the debt and also restart limitation (s.19).
- The borrower's full name, current address, workplace or business details.
Then decide what kind of dispute this is. If the person lied to get the money, there may also be a criminal angle, covered in our guide on filing a cheating case. If they gave you a cheque that bounced, read the Section 138 cheque bounce guide now, because its deadlines are only 30 days.
How to file a legal notice for recovery of money
A legal notice is a formal letter, usually sent by an advocate, that sets out the debt and demands payment within a fixed time, commonly 15 to 30 days, failing which you will go to court.
- Give your lawyer the proof and a short timeline.
- The notice should state the amount, how it arose, any interest claimed and the deadline.
- Send it by registered post with acknowledgement and also by email or WhatsApp, keeping proof.
- Keep any reply carefully; admissions in it are valuable, and denials tell you their defence.
Many debts are settled at this stage, often in instalments. If you agree to instalments, put it in writing, ideally with post-dated cheques, so a later default is easier to enforce.
Debt recovery process in India: which route fits?
| Route | Best for | Key points |
|---|---|---|
| Summary suit (Order XXXVII CPC) | Written contract for a fixed sum, promissory note, bill of exchange, cheque, guarantee | Defendant must get the court's leave to defend; if no real defence, decree can follow quickly |
| Ordinary money recovery suit | Oral loans, disputed amounts, complex dealings | Full trial with evidence; slower but works without written contract |
| Commercial suit | Business-to-business dues above the specified value (currently ₹3 lakh) | Pre-institution mediation under Commercial Courts Act s.12A is generally needed unless urgent interim relief is sought |
| Section 138 NI Act | Bounced cheque given for the debt | Criminal pressure; strict deadlines; runs alongside a civil suit |
| MSME Samadhaan / MSEFC | Udyam-registered micro or small supplier with unpaid buyer invoices | Statutory interest and conciliation, then arbitration |
| Lok Adalat (pre-litigation) | Parties willing to settle | No court fee; settlement becomes binding award |
Debt Recovery Tribunals are only for banks and financial institutions, and insolvency proceedings against a company need a default of ₹1 crore or more, so neither usually suits individual lenders.
How to file a money recovery suit, including Order 37
A summary suit under Order XXXVII of the Code of Civil Procedure is the fastest civil route when the claim is for a definite sum based on a written document. The process, in short:
- File the plaint in the court with territorial jurisdiction (where the defendant lives or works, or where the cause of action arose) and the right pecuniary value, stating that it is filed under Order XXXVII and attaching the documents. Court fee depends on the amount and the state.
- Summons go to the defendant, who must enter appearance within 10 days.
- Summons for judgment: you then apply for judgment; the defendant must apply for leave to defend within 10 days, showing a substantial defence.
- Decision on leave: if the defence is sham, the court can pass a decree straight away; if it is plausible, leave may be granted, sometimes conditional on depositing money.
- Decree and interest: the court decides the amount and interest from the due date to payment.
An ordinary suit follows the same filing route without the leave-to-defend step. Either way, the suit should generally be filed within three years of when the money became due. If the defendant is dodging summons, see what to do when summons are not served.
MSME Samadhaan for unpaid business invoices
If you are a micro or small enterprise registered on Udyam and a buyer has not paid for goods or services, the MSMED Act, 2006 gives you a special remedy. Buyers must pay within the agreed period, which cannot exceed 45 days, and late payment attracts compound interest at three times the RBI bank rate.
You can file an application on the MSME Samadhaan portal (samadhaan.msme.gov.in). It goes to the state's Micro and Small Enterprises Facilitation Council, which first tries conciliation and, if that fails, decides the matter by arbitration. A buyer challenging the award must generally deposit 75% of the amount. Registration should be in place before the contract for the claim to be covered, so check this with your lawyer.
What you must not do to recover money
Frustration tempts people to send "boys" to the debtor's home, shame them on social media or threaten their family. All of this can make you the accused: criminal intimidation (BNS s.351), extortion (s.308), wrongful restraint, trespass, or defamation. RBI rules also bar lenders and their recovery agents from harassment, abusive calls and contacting borrowers' contacts; if you face such conduct yourself, read loan app harassment: what to do.
Equally, do not try to obtain a debtor's bank statements, call records or location data privately. Lawful recovery means notices, courts, and lawful information-gathering.
Winning is half the job: finding the debtor and assets
A decree is only paper until it is executed. Under Order XXI CPC you file an execution petition asking the court to attach and sell property, attach bank accounts or a share of salary, or, in limited cases, order civil detention. Order XXI Rule 41 lets the court examine the judgment-debtor on oath about their assets, and Order XXXVIII Rule 5 allows attachment before judgment if they are trying to dispose of property to defeat you.
All of these need facts: where the debtor now lives, where they work, and what they own. That is the investigative step, separate from the legal route. A verified investigator can trace a current address and identify land, vehicles and business interests through public records and field enquiries, as explained in asset tracing in India, so your lawyer can ask the court to attach the right assets. You can find a verified detective for this through Hire Your Detective.
Bottom line
Gather proof, send a legal notice, then choose the right forum: an Order XXXVII summary suit for documented debts, an ordinary suit for oral loans, Section 138 for bounced cheques, and MSME Samadhaan for unpaid business invoices. Watch the three-year limitation, keep everything lawful, and plan from the start how you will find the debtor's assets to enforce the decree.
Sources & official links
This guide is general information, not legal advice. Laws and procedures change, and every case is different — speak to a lawyer about your situation. In an emergency, call 112.