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DHello! I am based in Chennai. I run a general hardware business where I supply to Industries in and around Chennai. One of my client is a distillery with whom 5.6L payment is pending since 2020. We have been sending regular payment reminders via India Post with acknowledgement and also via email. He is not picking up our calls. We have to call the manager from different numbers to get hold of him. Whenever we speak with him. He cites that the company has been shut down due to raid and there are no funds to clear payments of vendors. He can only pay us if and when the company resumes operation. This is the standard reply he has for us.
He replied to one of our emails in January stating that he will send us a schedule of payments in the month of February 2025. But after this mail there is radio silence from his end. My dad is pretty old school. He believes that if we keep requesting him one day or the other he will pay up as once we go legal we won’t be able to go to his office and ask for payments as it all needs to be done through a lawyer. I on the other hand don’t agree to this.
I just want to know from this community, if I go legal what will be the outcome of it? How long will the process go? Considering that we have a mail from his side stating he will send the schedule of payment. And also if I win legally can I also demand for reimbursement of lawyer fees from my client. Also do share if anyone has gone through a similar scenario and come out successful.
I am new to this kind of a scenario. I request you to kindly explain in detail.
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BNAL-
**1.** You’re trying to recover ₹5.6 lakh pending from a distillery client since 2020. Despite regular email and postal reminders (with acknowledgements), they are evading your communication. The client claims their operations are suspended due to a raid and they’ll pay only if the business resumes. However, they did respond by email in January 2025, promising a payment schedule, then went completely silent.
**Things you must understand-**
**a) This is a civil recovery case.** You have the legal right to initiate proceedings under contract and commercial recovery laws.
**b) The January 2025 email is a clear acknowledgment of the debt.** Under **Section 18 of the Limitation Act**, this resets the limitation clock, giving you **3 more years** from that date to initiate legal recovery.
**c) Repeated non-response, delay tactics, and excuses about business closure don’t absolve the client of liability.** The debt remains valid.
**d) The longer you delay legal action, the harder it gets to recover, especially if they try to shut down or sell off assets.**2. Legal Options to Recover the ₹5.6 Lakh**
**a) Legal Notice** – First, send a **formal legal notice** through a lawyer demanding payment within 15 days. Mention the amount, proof of supply, and past acknowledgements. This step is mandatory before court.
**b) Civil Recovery Suit** – If there’s no response, you can file a **Summary Suit** under **Order 37 of the Civil Procedure Code**. This allows for **fast-track disposal** of cases involving clear financial dues, especially where invoices and delivery proof are available.
**c) Commercial Courts Act, 2015** – Since this is a business-to-business transaction above ₹3 lakh, your case qualifies for filing under the **Commercial Court**, which is designed for speedy disposal of commercial disputes.
**d) MSME Samadhan (if applicable)** – If your business is registered under Udyam (as MSME), you can file a complaint under the **MSME Delayed Payments Act** for fast-track recovery through the **Facilitation Council**. This is powerful and binding.**3. What You Can Expect From the Legal Process**
**a) Time Frame** – A well-drafted summary suit may get decided within **6 to 12 months** if uncontested. If the other side contests, it may go longer (up to 2–3 years).
**b) Cost Recovery** – Yes, courts allow you to recover **litigation expenses** (including lawyer fees) from the other side, especially if it’s proven they withheld money knowingly.
**c) Enforcement** – If you win, and they still don’t pay, the court can allow **attachment of their property/assets**, **bank accounts**, or issue **warrants**.
**d) Out-of-court Settlement Pressure** – Sometimes, just the legal notice and filing of the case puts pressure, and they may come forward for settlement.**4. How to Prepare Before Going Legal**
**a) Compile All Documents** – Invoices, delivery challans, emails, postal receipts, payment reminders, and the January 2025 email acknowledgment.
**b) Get a Lawyer with Commercial Dispute Experience** – Don’t go to a generalist. Choose someone who deals with **civil recovery, MSME, or commercial litigation**.
**c) Send Legal Notice First** – This gives them a final chance and also starts the legal record trail.
**d) If MSME Registered, File on MSME Samadhan Website** – This may give you a **quicker remedy**, and you don’t need to go to civil court unless necessary.**I Recommendations To-**
1. Send a **legal notice** immediately demanding ₹5.6 lakh within 15 days with interest.
2. If MSME registered, also file a complaint through the **MSME Samadhan portal**.
3. If no response, file a **summary suit under Order 37 CPC** in Chennai’s **Commercial Court**.
4. Request for recovery of legal costs and interest in your petition.
5. Do **not wait further** hoping they will pay. If they liquidate or vanish, you will be left with no recovery route.
6. Keep physical and digital backup of all documents.
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