What to Do When Someone Has Not Returned Your Money?

In case of default in the repayment of money, a lender can approach the court and file a civil suit for recovery of money or a criminal suit for fraud/ breach of the agreement.

Generally speaking people lend money because they are confident the borrower will repay it in a timely manner. However, it is best practice for a lender to only lend money after signing the promissory note or a loan agreement which consists of the terms and conditions of the loan. The lender must even issue a letter outlining the loan date, the precise amount borrowed, and the repayment terms to ensure that the borrower pays back the money in full. Nevertheless it may become crucial for the lender to give frequent, polite reminders concerning loan repayment. Moreover, the person who received money for repayment may even have to be given a specific repayment plan. If none of the lender’s repayment calls are successful, a lender should not hesitate to consult a Vakilsearch lawyer and launch a lawsuit against the debtor. Keep reading to learn more about the different legal avenues available to lenders When Someone Has Not Returned Your Money.

Legal Procedures When Someone Not Returned Your Money:

• Civil Suit

A lender can file a civil suit for recovering the money owed through promissory note or loan agreement. He can do so under Order 37 of CPC which allows the lender to file a summary suit.

Drafting the summary lawsuit is the initial step in this process, after which the borrower should be served with the summons. Along with the copy and summons, the court requires certain documents to be produced before it. The defendant will be required to appear in court within 10 days of the lawsuit being filed. If the debtor doesn’t show up, the lender must show the court the summons that was previously sent, and then the judge may compel him to send another summons. If the defendant has a defense, he may raise it in court; if not, the judge will take the lender’s claim as genuine and award the judgment accordingly in his favor.

The creditor can also lodge a complaint under the Negotiable Instrument (NI) Act as well. The Act can only be used to file a suit against parties who have not returned money lent through instruments such as cheques, exchange bills, etc.

If the borrower returned the money to the lender by cheque and it was later discovered that the check had bounced, the lender may launch a lawsuit under Section 138 of the NI Act. In this case, the repayment period outlined is 30 days. If the money is still not repaid, the lender will bring a criminal complaint against the debtor. If the court deems him guilty, he may have to serve a two-year prison sentence and be required to repay the full amount of the cheque in addition to whatever fines and penalties are levied.

• Criminal Suit

If the lender is able to prove that the debtor had committed criminal breach of trust and had not returned his money, he hecan file a suit under Section 420 and Section 406 of IPC for cheating and criminal breach and if the court finds the debtor guilty, the person will be imprisoned and will even have to repay the money he borrowed.

• Out of Court Settlement
  

The lender has the option of choosing an out-of-court settlement through Lok Adalat, arbitration, or conciliation to recover the money owed. This is one of the least expensive and fastest ways to recover. Both parties must be willing to and present themselves at the hearing in order to reach an out-of-court settlement. The parties are typically heard by the arbitrators before the decision is made. Once the award has been announced, there is usually no room for appeal.

Steps involved in Drafting a Legal Notice

Sending a legal notice is one of the foremost and most crucial moves towards money recovery in India. A legal notice is usually issued by a lawyer to solicit settlement on behalf of his client. The following must be included in a legal notice:

• The legal notice should be drawn up in the letterhead of a lawyer and must include the lawyer’s addresses and contact information
• The legal notice must include the date of its issuance, including the name, address and contact information of the individual to whom the legal notice is issued to
• The lender’s name and other details must be shared as well
• In the notice, it should be clear how the lender’s right was breached by the other party’s actions
• The notice might include any such act or omission. The relief sought must also be mentioned, along with a time limit to provide the same
• Most importantly, the lawyer and the sender must sign and date the notice.

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