What a recovery notice does
A recovery notice is a legal notice with one job: getting a specific sum of money paid by a specific date. It tells the debtor what is owed, how the figure is made up, the legal basis for the claim and what you will do if payment does not arrive.
It often gets you paid, fixes the amount and facts on record, and becomes the first exhibit in any later mediation, MSME Council reference or suit.
For the general rules on legal notices, such as when a notice is mandatory, how it is served and how to reply to one, see our legal notice service. This page covers what is specific to money claims.
Money you can recover with a notice
Almost any fixed or provable sum can be demanded through a recovery notice. The strength of the claim depends on your proof, not on the type of debt.
| Situation | Proof that helps most | Limitation usually runs from |
|---|---|---|
| Unpaid invoice for goods | Purchase order, invoice, delivery challan or e-way bill, ledger | Date of delivery, where no credit period was agreed |
| Unpaid invoice for services | Contract or email acceptance, invoice, work proof, ledger | Depends on the contract terms; the advocate confirms |
| Money lent to a friend or relative | Bank or UPI transfer, messages admitting the loan, any promissory note | Date the loan was made |
| Salary and dues | Appointment letter, salary slips, bank statements, resignation or termination letter | Depends on the dues claimed |
| Security deposit or advance | Rent agreement or contract, deposit receipt, handover proof | Depends on the agreement |
| Dishonoured cheque | Cheque, bank return memo, underlying invoice or loan proof | Strict 30-day notice window, see below |
Unpaid invoices from clients
This is the most common recovery notice we handle. The notice lists each invoice with its date, amount, due date and payments received, and claims the balance with interest where your terms provide for it.
If the client has disputed quality or quantity in writing, the notice should answer that point.
Money lent to friends or relatives
A written loan agreement is not essential. Bank or UPI transfers prove that money moved, and messages where the borrower admits the loan or promises to repay prove that it was a loan and not a gift.
Cash loans are harder to prove, so gather anything in writing: a promissory note, a receipt or a chat mentioning the amount.
Salary and other employment dues
A recovery notice to a former employer lists the months unpaid, the amounts, and any other dues such as reimbursements or the full and final settlement. Attach salary slips and bank statements showing the missed credits.
If the employer does not pay, the next step is usually a complaint to the labour authority or a civil claim, and the advocate advises which fits your case.
Security deposit and advances
Landlords who do not refund a deposit and suppliers who keep an advance without delivering are both money claims. The notice relies on the agreement, the payment proof and, for a deposit, proof that you handed back the premises.
Dishonoured cheque
A bounced cheque has its own strict timetable under section 138 of the Negotiable Instruments Act, 1881. The notice must go within 30 days of receiving the bank's return memo, and the drawer then has 15 days to pay.
If your cheque bounced, tell us the memo date in your first message. See our cheque bounce notice service for the full procedure.
How much you can claim: principal, interest and costs
You can claim the principal due, interest where you have a legal or contractual basis for it, and in some cases the costs of recovery. The figure in the notice must be exact, because an inflated demand weakens your credibility and can be used against you.
The statement of dues
We prepare a statement of dues from your invoices, ledger or bank records and attach it to the notice. It shows:
- Each invoice or payment, with date and amount.
- Credit notes, part payments and TDS deducted by the debtor, if any.
- The principal balance.
- Interest, calculated period by period, with the rate and its basis.
- The total amount demanded as on the date of the notice.
Reconcile TDS before sending. A business client may have deducted TDS and paid it to the government, and demanding that amount again invites a reply that your figures are wrong.
Interest needs a basis
Interest can be claimed where your contract or accepted invoice terms provide for it, or where a law gives it. For micro and small enterprises, the MSMED Act gives a statutory rate that overrides a lower contract rate (see below).
Where there is no interest clause and no statute, the advocate decides whether to claim interest at all. We do not add a rate that has no basis.
The limitation clock: three years for most money claims
Under the Limitation Act, 1963, most money claims must be filed in court within three years. After that the debt still exists, but a court will usually dismiss the claim as time-barred.
| Claim | Period | Counted from |
|---|---|---|
| Price of goods sold and delivered, no fixed credit period (Article 14) | Three years | Date of delivery |
| Money lent (Article 19) | Three years | Date the loan was made |
| Compensation for breach of contract (Article 55) | Three years | Date of breach |
Sending a notice does not stop the clock. If you are close to the three-year mark, the advocate may advise filing first and negotiating afterwards.
Acknowledgement and part payment
Section 18 of the Limitation Act says that if the debtor signs a written acknowledgement of the debt before the period ends, a fresh period starts from the date of that acknowledgement. An email or letter admitting the balance can therefore restart the clock.
A part payment made before the period ends can also restart it under section 19, but only where the payment is shown in writing by the person paying. Keep every signed confirmation of balance, every reply admitting the debt and every record of part payment.
Micro and small enterprises: the MSMED Act route
If you are a micro or small enterprise supplying goods or services to a buyer, the Micro, Small and Medium Enterprises Development Act, 2006 gives you rights no ordinary creditor has. They apply whatever your contract says.
- Payment deadline (section 15). The buyer must pay on or before the agreed date. The agreed period cannot be longer than 45 days from the day the buyer accepts, or is deemed to accept, the goods or services.
- Interest (section 16). If the buyer pays late, it owes compound interest with monthly rests at three times the bank rate notified by the Reserve Bank of India, even if the contract says otherwise.
- Facilitation Council (section 18). You can refer the dispute to the Micro and Small Enterprises Facilitation Council. Applications are filed online on the MSME Samadhaan portal.
- Deposit to challenge (section 19). A buyer who wants a court to set aside the Council's award must first deposit 75% of the amount awarded.
A recovery notice that cites sections 15 and 16 and sets out the interest often gets paid before a reference is needed. If it does not, the notice and any reply go into your application. Keep your Udyam registration certificate with your papers. Our MSME Samadhaan filing service covers the application itself. On the buyer's side, a company that owes a micro or small supplier beyond 45 days reports it in MSME-1 filing by the buyer.
What the Facilitation Council does
The Council first tries conciliation between you and the buyer. If that fails, it takes up the dispute for arbitration or refers it to an arbitration institution. The Act requires a reference to be decided within 90 days.
These rights are for micro and small suppliers. A medium enterprise, or a buyer's own claim against a supplier, does not use this route.
Recovery notice fees
Our professional fee for a recovery notice starts at ₹1,999. There is no government fee to send a notice. We confirm the exact fee in writing after a free review.
| Fee | Amount |
|---|---|
| Professional fee, recovery notice | From ₹1,999 |
| Government fee to send a notice | No government fee |
| Postage (registered post AD or speed post) | At actuals |
| Court fee | Only if a suit is later filed, under the court fee law of the state where it is filed |
Professional fees exclude GST at 18%. Government fees, where they apply, are paid at actuals to the department and are shown separately. Fees verified on 22 September 2026.
The starting fee covers a notice to one party on a claim supported by a straightforward set of documents. A claim with many invoices, several parties or a contested history is quoted separately before any work starts.
What is included
- Free review of your claim and documents, with a written fee quote
- A statement of dues with interest, prepared by our accountants from your records
- A check of the limitation date and, for small suppliers, the MSMED Act position
- Drafting, signature and dispatch by an advocate we work with
- One round of changes after you read the draft
- Dispatch by registered post AD or speed post, with an email copy
- Proof of dispatch and delivery tracking sent to you
- A short note on your options if the debtor does not pay
How it works, step by step
There are four steps. In our experience the notice is usually ready to send within 3-5 working days of receiving complete documents.
- Claim review. Send us the debtor's details, the amount and your documents on WhatsApp or email. We check proof, limitation and any urgent deadline, such as a cheque memo date.
- Statement of dues. Our accountants reconcile invoices, payments, credit notes and TDS and calculate interest where it applies.
- Drafting and signature. The advocate drafts the notice. You review it, we make changes, and the advocate signs it.
- Dispatch and follow-up. The notice goes by registered post AD or speed post with an email copy. We send you the proof, track delivery and help you read any reply.
If the debtor does not pay
If the debtor ignores the notice or refuses to pay, you choose the forum that fits the claim and the amount. The notice and any reply become part of every route below.
Settle in writing
Many debtors reply with an offer to pay in instalments. If you accept, record it in a signed settlement letter with the amounts, dates and what happens on default. A signed settlement also acts as a written acknowledgement of the debt.
Pre-institution mediation for commercial disputes
For a commercial dispute of ₹3 lakh or more, section 12A of the Commercial Courts Act, 2015 says a suit that does not seek urgent interim relief cannot be filed until you have tried pre-institution mediation. The mediation is conducted through the legal services authority.
The Supreme Court held in 2022 that this step is mandatory, and a suit filed without it faces rejection. Unpaid business invoices usually fall in this category. Personal loans between friends usually do not.
Summary suit under Order XXXVII CPC
For debts and fixed sums based on written contracts, cheques and similar documents, the Code of Civil Procedure provides a summary procedure under Order XXXVII. The defendant cannot defend as of right and must first get the court's leave to defend.
Where the paperwork is strong, this is faster than an ordinary civil suit for recovery.
Is non-payment cheating?
Usually not. Cheating is now section 318 of the Bharatiya Nyaya Sanhita, 2023, which replaced IPC section 420 from 1 July 2024. It generally needs a dishonest intention at the time the promise was made.
A simple failure to repay is a civil dispute. Threatening criminal action without supporting facts can hurt your case.
Documents that make a money claim strong
Collect these before you contact us. Clear scans or phone photos are enough.
- Your identity proof, and for a company or firm, the authorisation for the person instructing us
- The debtor's full name and every address you have, including the registered office for a company
- Contract, purchase order, quotation acceptance, rent agreement or appointment letter
- Invoices, delivery challans or proof of work, and your ledger or statement of account
- Bank statements or UPI records showing payments made or received
- Emails, letters and WhatsApp chats about the debt, especially any admission or promise to pay
- For a cheque: the cheque copy and the bank's return memo
- For MSME claims: your Udyam registration certificate
Mistakes that weaken a recovery claim
Most weak recovery cases fail on paperwork and timing, not law. Avoid these:
- Waiting too long. Every month of delay uses up the three-year limitation period.
- Round-figure demands. Claim the exact reconciled amount, not an estimate.
- Ignoring TDS and credit notes. They reduce what the debtor owes.
- Informal settlements. A verbal promise to pay is hard to enforce. Get it signed.
Why Regikart for a recovery notice
Regikart is a CA and CS firm serving 250+ clients from offices in Kolkata (head office), Delhi and Bengaluru. For recovery notices, our accountants prepare the figures and an advocate we work with drafts, signs and sends the notice.
- The number is right. Most money claims turn on the statement of dues. We build it from your books, including interest, TDS and credit notes.
- MSME rights used. If you are a micro or small supplier, we apply the MSMED Act interest and the Council route.
- Fee in writing first. From ₹1,999, quoted after a free review.
- Prevent the next one. Clear payment terms in a service agreement or contract make the next recovery easier, and accounting support keeps your receivables ledger ready.