Debt Recovery in India: The Legal Framework

When debt cannot be recovered, it turns into bad debt. Normally, in “Debt Collection” the creditor tries to recover consumer credit and loans/ receivables that have not been paid back and in “Debt Recovery” the creditor hires a third party to recover such debt/ receivables when it goes unpaid for a substantially longer time period. Many times there is a security given by the borrower to the creditor, however when that security becomes unusable to pay back the complete debt, recovery becomes important.

There are various legal as well as non-legal methods to recover a debt/ receivable. The non-legal ways include personal contact with the borrower or sending agents to recover the money, etc.

The legal ways include:

1) Civil Remedy: A civil suit can be filed in any Court which has the appropriate jurisdiction by any aggrieved party against the defaulter party.

2) Criminal Remedy: FIR can be lodged in the local police station that can take cognizance of the matter in serious cases. After this, a criminal case can be filed to carry on the legal proceedings.

3) Arbitration, Mediation, and Conciliation:  These are efficient and quick ways to amicably resolve recovery disputes outside the Court but within the legal framework.

The laws that govern the debt recovery in India are:

1) Indian Contract Act 1872:  Dishonoring of contract represents the majority of debt recovery cases in India. Section 17, 18, 124, 126 and 73 can be invoked for varied reasons like misrepresentation, fraud, compensation for breach of contract, etc.

2) The Indian Penal Code: Criminal breach of trust under section 405 and 406, cheating and dishonest misappropriation of property are some grounds that are available for any aggrieved party to approach the Court under the penal law.

3) RDDBFI Act: If the aggrieved party is a financial institution, bank or even a private finance company, this Act provides for the establishment of various Tribunals to look into debt recovery cases.

4) SARFAESI Act: The Act is enacted with the objective to regulate securitization and reconstruction of financial assets. Establishment of Asset Reconstruction Companies is also one of the unique provisions of this Act.

5) Negotiable Instruments Act: Instances like section 138 for the dishonor of cheques, a legal notice is first issued under this Act and later the proceedings are initiated. These proceedings are criminal in nature.

6) Arbitration Act: When the parties expressly insert an arbitration clause or decide to adopt arbitration as means of resolving the dispute, then in such cases arbitration process can be invoked.

7) Insolvency Act: When the defaulter is a firm, the parties can invoke the insolvency proceedings against the defaulter under this recent Act.

Legal Assist is a premier global debt recovery firm effectively handling accounts of any size, in any stage of delinquency – from a few days to many months across the globe. Our team is at your service, all the time and through all crisis. Trust us to be there to make your businesses easier and smoother and your investments secured.

The COVID-19 Pandemic and the Need of the Hour

Did you ever think that in the global 21st century, there would be a time when the whole world would have to fight a war with a tiny virus that hostages the entire universe?

Hope you are staying safe and protected! Whether this war ringing Corona virus persists for a few weeks or holds us under threat for a few months or even for entire life, remember – your assets and investments will stay yours and secured only if you are particular about it, its detailed documents and other aspects.

Therefore, in this crucial time where no one can predict how long life would be and even where many of our known ones have succumbed to this deadly virus, please spend some time going through all your property documents to ensure that they are complete and credible and secured for your future generations.

Meanwhile, even in this crisis, LEGAL ASSIST remains connected and open to all its clients – existing and potential.

As a premier global legal management firm, handling the most crucial and complex property matters we are constantly aware of the responsibility we have towards our esteemed clients including NRI’s across the world.

We have an exceptional record of delivering legal services for issues related to the immovable and moveable assets. Our competent team of vast experienced lawyers is capable of providing consultation to clients. All legal advice is given after complete reviews of all documents. An exceptional communication service network is used to give legal advice to clients.

LEGAL ASSIST team step forward to provide a range of services to resolve issues related to the following – Title Search, Transfer of Property, Property Documentation and Registration, WILL, Succession Certificate, Surviving Member Certificate, Freehold Conversion, Mutation, Estate Planning. Besides these, we can help you find solutions to any dispute related to property.

We would suggest that all the time that you are now getting to be at home should also be used to sort out your personal and official documents. Top most priority has to be your documentation on property.

Do ensure that transfer papers and succession certificate, probate of Will complications are kept into consideration and you are aware of what the procedures are.

Our team is working round the clock and globe, well connected and in sync with each other to resolve all your queries and issues.

Legal Assist– Your trusted legal partner, is at your service, all the time and through all crisis. Trust us to be there to make your life easier and smoother and your assets and investments secured.