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How to File A Suit for Recovery of Money

A brief action or summary procedure is available for recovery of money under the Civil Procedure Code, 1908,  by way of the institution of a suit in a court of appropriate jurisdiction. Order 37 CPC is one of the best provisions in the hands of a proposed Plaintiff, wanting to institute a Civil Suit. The article enumerates the steps involved in filing the suit for the recovery of money.

By: Pallavi Kumari, 2nd Year, LLB, Symbiosis Law School, Pune.

Civil remedy

A Suit for recovery of money is a civil remedy and acts as an effective tool to recover money from the defaulter. The suit can be established under Order IV of the Code of Civil Procedure 1908 (CPC). It is generally like a summary suit (Order 37, Code of Civil Procedure) which offers expeditious disposal of the suit as here the defendant is not entitled to defend as a matter of right but only after applying for leave of the court, he can defend.

Jurisdiction 

According to Order IV of the Code of Civil Procedure 1908 (CPC),  a suit can be filed at any place where the Defendant resides; or any place where the defendant carries on business or personally works for gain; or the cause of action wholly or partly arises.

Pecuniary jurisdiction is determined after considering the territorial jurisdiction. Based on the pecuniary value of the suit, it is decided whether the suit will be filed either in the district court or in the high court.

Competent parties

Companies, partnership firms, proprietorship firms, and traders, etc., are competent to file a suit for recovery of their unpaid bills or Business outstanding amount or payment where there is any written contract/agreement between the parties.

Limitation period

The time period for filing a civil recovery claim in India is limited to three years from the date of cause of action has arisen. The suit exceeding the period of limitation will not be taken into consideration. If the suit is instituted after the expiry of the limitation period, the grounds for claiming the exemption must be stated.

Documents required

Any document verifying the grant of money from a person to the defaulter is enough to prove the debt. To file a suit to recover a debt or request a liquidator of the funds paid to the defendant, with or without interest, arising from a written contract, or  In the case of enactment, if the amount to be recovered is a fixed amount of money or like the debt other than the penalty, or on a guarantee, if the claim against the Director relates only to a debt or a liquidator’s request.

If the contract or agreement is not in writing, a simple civil action will be filed based on the truths and circumstances of the cases.

Bank account transactions, promissory notes, a contract or other payments so made serve as legal evidence of the lending of such money. Also, Any document, contract, message, telephonic conversation, mail, or post can serve as proper evidence in the Court of law to prove your debt.

Institution of suits under order IV of CPC

Every suit is instituted by way of a plaint. A plaint is the description of facts of the case and the exact amount being claimed along with interest if any. In every such plaint, the facts are to be proved by an affidavit.

A suit is instituted when the plaint is presented, and not when the suit is registered.

A plaint must contain the following particulars:

  1. Name of the court
  2. Name, description, and place of residence of the plaintiff
  3. Name, description, and place of residence of the defendant
  4. Facts constituting the cause of action, when it arose
  5. Facts showing that the court has jurisdiction
  6. The relief the plaintiff claims; the plaintiff’s costs (Prayer clause)
  7. Any set-off or relinquishment of his claim by the plaintiff
  8. Value of the subject matter of the suit for the purposes of jurisdiction and court fees
  9. Signature and verification

Recovery of money is a specific case, and in such cases, the exact or approximate amount claimed must be mentioned in the suit.

Proceedings after institution

  • Issuance of summons: A  summon is a document issued from the office of a court, calling upon the person to whom it is directed to attend the court before a judge or an officer of the court for a certain purpose. The Court after examining the plaint and its admissibility shall issue a summon which is required to be duly sent to the Defendant within 30 days of the institution of the suit.
  • Written Statement: A written statement is a reply to the plaint filed by the plaintiff. The Defendant must at or before the first hearing or not more than 30 days from the date of summoning present a written statement of its defense. In the written statement, the defendant is required to state new facts in its favor or take legal actions against the plaintiff’s claim. 
  • Framing of Issues, Trial and Arguments: After framing of issues involved in the suit, the next stage is the settlement of issues, and finally, the trial shall commence. After consideration of all the evidence, the final arguments would be heard and the suit will be decreed.

Once the suit is registered and summon is issued, the defendant has 10 days to make an appearance, failing which the court assumes the plaintiff’s allegations to be true and, accordingly, awards the plaintiff.

Court fees

As per the schedule, the court fee is required to be paid by the Plaintiff. A suit shall not be accepted in case the same is not filed along with the court fee.

Execution of a Decree

The next step when a person obtains a decree from a court of law against another person,  he is to get the decree satisfied. Execution proceedings are the processes by which a person moves to the court for the satisfaction of the decree. Execution is the enforcement of an order or giving effect to the judgment of the court. The execution comes to an end when the judgment-creditor or decree-holder gets cash or other thing granted to him by judgment, decree, or order.

Reference

1.https://www.indialawoffices.com/knowledge-centre/recovery-suit#:~:text=The%20civil%20remedy%20for%20recovery,Civil%20Procedure%201908%20(CPC).

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