When do you need to file a legal notice for recovery of money
When do you need to file a legal notice for recovery of money

When do you need to file a legal notice for recovery of money?


Legal notice for recovery of money is a crucial part before taking legal action against the opposite party. By sending that notice, an aggrieved party ensures that the demand notice was served to the party with the reason; however, the amount was not paid to you. And you have a particular cause of action for the legal remedy due to unpaid of such recoverable money in the court. In the legal notice, you should include all facts which are the cause of the dispute.

What is Legal Notice for Recovery of Money?

In simple words, we can say through the legal notice for recovery of money is informed to the defrauder party regarding what transaction was made between them; and what due amount remains from the opposite party as per that transaction.

This legal notice is important because you are required to send a demand notice of the due amount to the opposite party before taking any legal action. That notice is considered a cause of action because, by sending it, you allow the opposite to resolve the dispute.

In the case of legal notice for recovery of money, there are no specific criteria to whom or which person or organization to send this type of notice. You may file notice against anyone to recover your due amount, For example, individual, dealer, friend, tenant, bank, company, etc.

When do you require to send a Legal Notice for Recovery of Money?

When your unpaid amount is not recovered from the person due to his misconduct. in that case, the first step for recover money is to serve a legal notice to that party.

In the initial stage of sending a legal notice for the recovery of money, most of the cases are resolved. But, if there is no result comes out, you need to follow the court for the legal remedy to recover the due amount. The legal notice count that genuinely you try to resolve the dispute from your side, and after on that basis, you are also entitled to file a complaint in the competent court.

What are the steps you need to follow for drafting a legal notice?

In drafting a recovery of money legal notice, there is no specific rule that you need to follow; However, it has some primary requirements that you must be followed for drafting.

  • Generally, the following points need to be covered in the notice;
  • The notice should specify the name and address of a party whom the recovery of money notice is to be served.
  • it should be sent through the advocate with his letterhead and sign.
  • It should mention all facts and details regarding the transaction, and the misconduct of the party, for whom the notice is served.
  •  The language of the notice should be clear and easy to understand.
  • Mention the name, address, and contact details of a client if an advocate sends it on behalf of his client.
  • The content of the legal notice must be specified in paragraphs so the opposite party can understand what happened from his side.
  • The notice should mention what right of your client is harm due to misconduct by the opposite party.
  • It should mention a specific time limit for the opposite party to resolves the dispute before taking legal action against him.
  • The notice must be sign by both an advocate and client with a date and stamp( if any available).

What type of documents are required? 

  • Generally, the following types of documents are required for sending a legal notice for the recovery of money.
  • Proof of a document which is mention that the money which you lend is your own.
  • In the case of recovery money from a company or employer, you need an agreement that states the amount agreed upon by them for your service.
  • Other relevant documents that you can prove regarding the dispute that money owed to you.

What legal spect do you need to consider for recovery of money legal notice?

The first thing you need to know is that there is a limitation period in the recovery for money matters that needed to consider. According to the provision of the limitation act, the limitation period for the recovery of money is three years. You need to file a legal notice as well money suit within this limitation period.

The main aim of sending a legal notice to the defrauder party is to give them a reasonable time to make a payment, from whom you owe your money.  You have genuine cause to file a lawsuit against the opposite party who does not follow the instruction of the legal notice.

In which circumstance arises do you need to send the legal notice recovery of money?

legal notice for recovery of money in India here below mentions some essential circumstances that will you need to know for recovery of funds legally;

How to Recover money from Employees?

In some situations, an employee elopes with money, and after the inquiry, if you found that he is at fault, it is necessary to send a show-cause notice to clarify his side.

As per the legal norms, if an employee does not support or clarify, it will take any action against the service regulation rules. After proving the guilt of an employee, the company will entitle to the recovery of money.

If we are talking about the legal provision, when the employee does not support or clarify the reason, it will take legal action against him. After proving an employee’s guilt, the company is entitled to recovery of money from the employee.

How to Recovery money from Employer or Company?

The employer who provides a job to an employee on a salary basis; in that case, an employee is entitled to sending notice for recovery of salary money if the employer fails to give a salary. An employee has to follow some procedures, like an employee can file a complaint to the labor commissioner. They can also file a suit against the company under the proviso of the payment of wages act, 1936 and industrial dispute act,1947, etc.

In some cases, the employee did not come under the labor law. He can file a summary suit according to the provision of order 37 of the civil procedure code,1908, and pray to recover money from the company.

An employee who loses or is deprived of salary the cause of the fraudulent manner of the company can also file a complaint under the various provisions of the Indian penal code and the companies act.

But for all of the above reasons, we should know that employee has to send a legal notice to the employer or company for recovery of his remaining money before taking any legal action. Like the same, the company also can accept the content of said legal notice or reply to denial that.

How to Recovery Money from Loan?

Bad loans create a terrible situation for the economy any business sector. In that way, the government also observe to resolve this problem. By introducing The Securitisation and Reconstruction of Financial Assets and the Enforcement of the Securities Interest Act, 2002 ( sort of SARFAESI Act), the government tries to reduce the bad loans; this act will help recover the money which is struck as a debt.

The debt recovery tribunal also plays an active part in resolving the recovery from debt. All these judicial bodies have done independent work to fix recovery money from loans.

Legal notice for recovery from Dealer

In the business world, selling and purchasing goods or products, supply, and the delivery chain make healthy and wealthy business sectors and economies.

This formulated business chain runs via distribution and dealership for managing the business activities. The distributor and dealers give deposits as advance cheques or post-dated cheques for security purposes as a part of this process.

In some cases, during this business cycle, the party’s cheques bounce due to insufficient funds, stop payment or any other reasons. Then the cheque holder is entitled to recover his money; he can send a legal notice or demand notice to recover money within 30 days from the date of the return memo of cheque bounce given by the bank.

After receiving the legal notice, suppose the cheque drawer does not perform his part within 15 days. The cheque holder can file a complaint against the drawer under The Negotiable Instruments Act, 1881 under section 138, which is punishable by two years jail and penalty or both.

Recovery of Money from a Friend

When you give money as a loan to a friend or family member, you try to keep a safe transaction. In that way, for safety purposes, you prepare either the promissory note or loan agreement. And as per the terms of the contract, if they fail to perform. You can recover your money which is owed from them.

For that recovery process, you can send a legal notice to recovery for money. If that does not effectively work, then you can file a money suit or a summary suit under order 37 of the civil procedure code,1908.

Recovery of Money from Tenant

When you give property in rent, and that happens, the tenant does not pay rent. Then the property owner is entitled to recover the amount which unpaid by the tenant. As per the lease or rental agreement terms, if the tenant fails to pay the rent amount, the landlord can give legal notice to recover his money.

In the way of recovery of money, the landlord can file a non-performing part of the tenant, and he can file a suit for specific performance of a contract under the provisions of various laws and pray for the recovery of his rent.

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