Recover Money Legally Owed to You in India
What you need to know
If someone owes you money — whether from a personal loan, business transaction, unpaid dues, or a bounced cheque — Indian law provides multiple remedies to recover it. The legal route depends on the amount, the nature of the debt, and the evidence you hold (e.g., receipts, messages, agreements, cheques). For smaller amounts, you can approach a Civil Court or consumer forum; for cheque-related defaults, Section 138 of the Negotiable Instruments Act is a powerful criminal remedy. Acting promptly is important, as civil suits for money recovery must generally be filed within three years of the default under the Limitation Act.
Your rights
You have the right to send a formal legal demand notice before filing suit, which itself often prompts repayment
You can file a money recovery suit in Civil Court for any amount; suits up to Rs 1 crore go to District Court
If recovery is via a bounced cheque, you can pursue both criminal prosecution and civil recovery simultaneously
For business/MSME dues, you can approach the MSME Samadhan portal for facilitated arbitration under MSMED Act
What you should do now
Action firstGather and organise all evidence of the debt
- Collect agreements, invoices, receipts, bank transfer records, WhatsApp/email conversations acknowledging the debt
- Note the exact amount owed, date it was due, and any part-payments already made
Send a formal legal demand notice
- Send a written demand notice (preferably via a lawyer) by registered post / speed post with acknowledgment
- Give the debtor 15–30 days to repay; keep the postal receipt and delivery proof carefully
- For cheque bounce, notice must be sent within 30 days of dishonour — this is mandatory under Section 138
File the appropriate legal proceeding if unpaid
- Cheque bounce: file a criminal complaint under Section 138 NI Act at the Magistrate's Court within 30 days of demand notice expiry
- General money recovery: file a summary suit (Order 37 CPC) in Civil Court for quick decree if debt is undisputed
- MSME dues: file on MSME Samadhaan portal for free conciliation/arbitration
Enforce the decree / judgment
- Once you obtain a court decree, file an Execution Petition to attach and sell the debtor's property or bank account
- Consult a lawyer to identify attachable assets (bank accounts, immovable property, salary) of the debtor
Acts applicable
Code of Civil Procedure, 1908
centralOrder 37 — summary suit for recovery of liquidated sums
Negotiable Instruments Act, 1881
centralSection 138 — criminal liability for cheque dishonour
Limitation Act, 1963
centralArticle 18/55 — 3-year limitation for money recovery suits