Suit for Recovery of Money In India
A Suit for Money Recovery is a legal action filed to recover money owed by one person to another. This kind of suit is common in cases of unpaid loans, debts, or payments for goods and services. In India, the Code of Civil Procedure (CPC), 1908 provides the framework and rules for filing and handling money recovery cases.
Here’s a simplified explanation of a Money Recovery Suit under the provisions of the CPC:
What is a Money Recovery Suit?
A Money Recovery Suit is filed when one person (the plaintiff) wants to recover money from another person (the defendant) who has not fulfilled a financial obligation, like repaying a loan or making a promised payment for services or goods.
Grounds for Filing a Money Recovery Suit:
You can file a money recovery suit if:
Someone has borrowed money from you and failed to repay.
A payment is due for goods or services you provided.
There is a breach of contract involving a financial obligation.
Key Provisions in the CPC for Money Recovery:
Plaint and Jurisdiction (Order VII, Rule 1):
The person filing the suit (plaintiff) has to submit a “plaint,” which is a written complaint detailing the amount due, the reason for the claim, and any supporting facts.
The court must have the jurisdiction to hear the case, which depends on the amount of money involved and the location where the transaction occurred.
Summons (Order V):
Once the plaint is filed, the court issues a summons to the defendant (the person who owes the money). The summons is a legal notice informing the defendant about the case and asking them to appear in court and respond.
Written Statement (Order VIII, Rule 1):
The defendant must file a written statement within 30 days (extendable to 90 days with court permission). In this document, the defendant provides their defense or justification for not paying the money.
Trial Process:
After the exchange of the plaint and written statement, both parties will present evidence and arguments before the court during the trial. This includes submitting relevant documents (like contracts or loan agreements) and witness testimony.
Judgment (Order XX):
Once the trial is completed, the court will issue its judgment. If the court rules in favor of the plaintiff, the defendant will be ordered to pay the money owed along with any interest or legal costs.
Execution of the Decree (Order XXI):
If the defendant does not comply with the judgment, the plaintiff can request the court to enforce the execution of the decree. The court can order measures like attaching (seizing) the defendant’s property, garnishing their wages, or auctioning assets to recover the money.
Time Limit for Filing a Money Recovery Suit:
According to the Limitation Act, 1963, the time limit to file a money recovery suit is 3 years from the date the money became due (for example, the date of the loan or contract breach).
Special Types of Money Recovery Suits:
Summary Suits (Order XXXVII):
A summary suit is a faster method of recovering money in cases where the claim is based on a promissory note, bill of exchange, or written contract. Unlike regular suits, the defendant cannot file a detailed defense unless they get special permission from the court.
Interest and Costs:
Under Section 34 of the CPC, the court may order the defendant to pay interest on the money owed from the date the suit was filed until the full amount is recovered.
The court can also order the losing party to pay court costs to cover the expenses of the winning party.