Before legal action is taken against a debtor,the claim should be brought to his or her notice to make sure that the debtor is aware of the fact that the debt has not been paid back. A letter should be sent to the debtor containing important details and specifics. This should include information concerning the debt, for instance, how the debt was incurred, the original amount of the debt, when the last payment was made, and the current amount that is due to be paid back. The letter should also mention information regarding the paymentarrangement, providing the debtor with a phone number or an address in order to get back to the creditor.Most importantly, a due date should be provided to the debtor mentioning by which date he or she must make payment arrangements in totality. The idea is to choose a reasonable date and allow the debtor some time after he or she reads the letter to repay the debt. Also time must be given for the debtor to respond. At this stage, it is better to motivate the debtor rather than throw him/her into panic. A copy of this correspondence should be saved.
If this date passes without any payment of the debt being made or any indication of it being paid in the near future, one could send a letter of demand from a lawyer’s office, before commencing any legal action. The problem may be solved by way of negotiation.
If this too fails, either by way of the debtor not responding or refusing to make the payments, it may be necessary to institute legal proceedings against the debtor. Relevant papers in one’s possession that are related to the amount due (debt)debt or any documents of a similar sort including a copy of the correspondence between oneself and the debtor should be kept.
The limitation period for filing a civil recovery suit in India is 3 years. After that the claim is barred by time. It is imperative to decide which Court of law one should file their suit for recovery. In India, according to the Civil Procedure Jurisdiction, the pecuniary or monetary jurisdiction of the Courts depends on the state in which the cause of action arises. The pecuniary jurisdiction of the Court divides the Court on a vertical basis, which means that depending on the valuation of the suit filed, there are different levels of Courts with different monetary jurisdictions, and the suit will have to be instituted in the Court which has the required jurisdiction. For example, the pecuniary jurisdiction of the Courts in Delhi areas follows:
- Suits amounting to Rs.1 – Rs.20, 00,000/- lie before District Courts.
- Suits over and above Rs. 20,00,000/- lie before the High Court.
It is essential to remember that the amount of pecuniary jurisdiction is different for all High Courts in India. This limit is decided by respective High Court Rules and in many states the High Court has no pecuniary jurisdiction. All civil suits go before the District Courts, and only appeals lie before the High Court. The creditor, that is the one who owes the will have to determine in which Court the claim can be filed, which in turn shall be determined in accordance with the amount claimed. If the Court finds that it has no jurisdiction to entertain the, it shall transfer the suit to the Court having jurisdiction. In order to verify the pecuniary jurisdiction of the Courts in a particular state, one must refer to the rules determining the pecuniary jurisdiction of the district courts which have original jurisdiction.
The parties can appear in Court on their own, but it is not uncommon to be represented by a lawyer. If one does not appear, the Court or Tribunal can dismiss or adjourn the case. If either party does not appear, the other may obtain the judgment by default. Any promissory note, contract made, or any other documentary evidence of the debt should be provided to the Courtby the debtor, or his or her attorney. One should make such copies of any evidence to be submitted. Both parties will be given the opportunity to explain their stands before the court. If the court gives judgment against the debtor the amount that the debtor has to pay, including court costs becomes payable immediately from the date of judgment. This judgment could be obtained following the hearing of the case,or in the situation of the non-appearance of one of the parties, on default. If one is dissatisfied with the judgment, one can always appeal to the High Court. In case one finds the proceedings to be long winded or elaborate, it is best to consider hiring a lawyer, who are well-versed in the procedures of Courts and Tribunals.
 :“Contracts. Illegal Contracts. Recovery of Money Paid”, Virginia Law Review, Vol. 4, No. 8 (May, 1917
 Civil Procedure with Limitation Act, 1963 by C.K. Takwani (Thakker), 7th Edition, 2013, Reprinted 2015, along with Sanjiva Row’s The Limitation Act, 1963, II Vols. 9th Edition