A legal notice for recovery of money is a written demand served before you file a suit, asking the debtor to pay a specific sum with interest within a stated period. It records the debt, the evidence behind it and the deadline, and it often produces payment without litigation.
Getting it right matters because the notice and the plaint that may follow must tell the same story, and because limitation keeps running while you negotiate.
Who this applies to
- Traders, suppliers and service providers with unpaid invoices.
- Lenders who advanced money on a hand loan, promissory note or written agreement.
- Contractors and professionals whose fees remain unpaid.
- Anyone holding cheques, ledgers, emails or messages that show a debt is admitted.
How to state the debt and the evidence
A recovery notice should read like a summary of the suit to come. State the transaction and the date, the amount due, how it is made up, and the documents that prove it. Invoices, a running ledger, signed delivery challans and receipts show the supply; a promissory note, loan agreement or bank statement shows the advance; emails, messages and letters in which the debtor acknowledges the balance or asks for time show that the debt is admitted. Attach copies of these papers so the debtor cannot say the demand is unexplained.
Where a cheque was given and dishonoured, the recovery notice and the statutory notice under Section 138 of the Negotiable Instruments Act, 1881 are different instruments with different objects — one to recover money, the other to lay the groundwork for a prosecution — and both should be considered.
Interest and how it is claimed
Interest may be claimed if the contract, invoice or usage of trade provides for it, or by way of damages for delay. The notice should set out the rate, the period from which interest is charged, and the basis, so the figure is capable of being checked. Where interest is contractual, the contract clause should be quoted; where it is not, the claim should be reasonable and consistent with the claim in the suit that may follow.
What to do if the debtor denies the debt
A reply denying the debt is not the end of the matter. It tells you the defence — perhaps that the goods were defective, that the payment was made, or that the transaction never happened. Examine the denial against your documents. If the denial is false, your ledger, acknowledgement or correspondence will answer it in the plaint. Do not let a denial draw you into a long exchange of notices; at some point the claim must be converted into a suit before limitation runs out.
Documents to attach
- Invoices, bills and the ledger of account between the parties.
- Proof of supply or service — delivery challan, e-way bill, signed receipt, completion certificate.
- Loan agreement or promissory note, where money was advanced.
- Acknowledgements of debt — email, message, admitted balance in accounts, a letter asking for time.
- The dishonour memo, if a cheque is involved.
Limitation and acknowledgement
Under the Limitation Act, 1963 a suit to recover money is generally barred after three years from the date the debt became due. An acknowledgement of liability — for instance in the debtor's own writing or in a signed statement of accounts — made before the limitation expires gives a fresh period of limitation from the date of the acknowledgement, under Section 18. For this to help, the acknowledgement must be of the specific debt and must be made before the period ends, so preserved correspondence can be decisive. Do not rely on an acknowledgement you cannot produce.
When to move to a summary suit
Order XXXVII of the Code of Civil Procedure, 1908 provides a summary procedure for suits on bills of exchange, hundis, promissory notes and, in some courts, on written contracts for a fixed debt. It is faster because the defendant must apply for leave to defend with a genuine defence; if leave is not granted, the plaintiff succeeds without a full trial. A recovery notice that squarely states the sum, the instrument and the evidence makes a summary suit easier to frame.
Is a notice necessary before a money suit?
For most money suits a notice is not mandatory, but it is standard practice and helps in settlement. Some claims require notice by statute, for example a two-month notice under Section 80 of the Code of Civil Procedure, 1908 before suing the Government.
Does sending a notice stop limitation?
No. Limitation under the Limitation Act, 1963 continues to run. Filing the suit within the period prescribed is essential; only an acknowledgement of the debt in writing before limitation expires gives a fresh period under Section 18.
Can I claim interest in the notice?
Yes, if the contract, invoice or usage of trade allows it, or as damages for delay. State the rate, the period and the basis so the debtor can verify the figure.
What if the debtor pays part of the amount?
Accept the part payment as part settlement only if you are willing to give up the balance or have agreed terms. Otherwise record it as part payment towards the whole and continue to claim the balance, keeping limitation in view.
FileX Advocates & Legal Consultants, 14 Hare Street, Kolkata 700001, drafts recovery notices, plaints and summary suits, and advises on limitation. Call +91 7439811422 or message https://wa.me/917439811422 . See /services/recovery-suits, /services/legal-notice-recovery and /legal-formats/civil-litigation, or reach the team at /contact.