Debt Recovery Notice

LEGAL NOTICE FOR RECOVERY OF DUES BY REGISTERED POST WITH ACKNOWLEDGMENT DUE / SPEED POST / EMAIL Date: [notice_date] To, [debtor_name] [debtor_address] Subject: Demand for payment of Rs. [principal_amount] due and outstanding Sir/Madam, Under instructions from and on behalf of my client [creditor_name], of [creditor_address] (hereinafter "my Client"), I serve upon you the following notice: 1. THE TRANSACTION [transaction_details] 2. THE AMOUNT DUE 2.1 A sum of Rs. [principal_amount] (Rupees [amount_in_words] only) became due and payable by you to my Client on [due_date]. 2.2 The said amount remains wholly unpaid to date. 2.3 My Client is additionally entitled to interest on the said sum at the rate of [interest_rate]% per annum from the due date until the date of actual payment. 3. DEMANDS ALREADY MADE [reminders_sent] Despite the above, you have failed and neglected to make payment, and have offered no satisfactory explanation for the default. 4. ACKNOWLEDGMENT OF LIABILITY You have at no stage disputed your liability to pay the said amount. Your conduct amounts to an admission of the debt. 5. DEMAND You are hereby called upon to pay my Client the sum of Rs. [principal_amount], together with interest as stated above, WITHIN [compliance_days] DAYS of receipt of this notice. Payment shall be made by demand draft or direct bank transfer in favour of my Client. 6. CONSEQUENCES OF NON-PAYMENT 6.1 TAKE NOTICE that if you fail to make payment within the stipulated period, my Client shall be constrained to institute civil proceedings for recovery of the said amount, together with interest, costs and damages, entirely at your risk, cost and consequence. 6.2 Where the debt is evidenced by a dishonoured cheque, my Client additionally reserves the right to proceed under Section 138 of the Negotiable Instruments Act, 1881. 6.3 Where you are a company or a limited liability partnership, my Client further reserves the right to initiate proceedings under the Insolvency and Bankruptcy Code, 2016, subject to the minimum default threshold prescribed under that Code. 6.4 All costs of and incidental to such proceedings shall be to your account. 7. THIS NOTICE AS AN ACKNOWLEDGMENT This notice is issued without prejudice to all other rights and remedies available to my Client, all of which are expressly reserved. A copy of this notice is retained in my office for record and further necessary action. Yours faithfully, [advocate_name] Advocate For and on behalf of [creditor_name] LIMITATION — THE POINT THAT DECIDES MOST RECOVERY CASES Under the Limitation Act, 1963, a suit for recovery of a debt must ordinarily be filed WITHIN THREE YEARS of the date on which the amount became due. After that period the debt becomes time-barred and cannot be recovered through the courts, however genuine and however clearly admitted it may be. TWO THINGS RESTART THE CLOCK, and both must happen BEFORE the three years expire: 1. A fresh WRITTEN ACKNOWLEDGMENT of the liability, signed by the debtor (Section 18). An email or a letter in which the debtor admits the debt will usually serve. A verbal admission will not. 2. A PART-PAYMENT of the principal, where the fact of payment appears in the handwriting of, or in a writing signed by, the person making it (Section 19). Creditors routinely lose good claims by sending reminder after reminder while the limitation period runs out. Sending a notice does NOT by itself extend limitation. If the three years are approaching, either obtain a signed acknowledgment or file the suit. PRACTICAL: send by Registered Post with Acknowledgment Due or Speed Post and retain the receipt and tracking record. Proof of dispatch and service is what makes this notice useful in evidence.