Suit for recovery of money under CPC: Step by Step Process and Sample

This article titled ‘Suit for recovery of money under CPC’ streamlines the aspects and the legal requirements revolving around order 37 of the Code of Civil Procedure.

In contrast to the regular process, summary suits are a shortened form of adjudication. Order 37 of the Code of Civil Procedure, 1908, defines the summary procedure. The process outlined in Order 37 of the CPC is mostly used in situations involving financial matters. It is used for the purpose of upholding the law and maximising its effectiveness. The underlying public objective of Order 37, according to the Supreme Court, is the speedy disposition of business disputes. It is the process of removing the defendant’s unreasonable obstacles where there is no real defence.

Suit for recovery of money under CPC

A lawsuit for money recovery is a legal remedy that may be used to collect money from a defaulter. The lawsuit may be filed under Order IV of the CPC which was enacted in 1908. (CPC). It’s similar to a summary suit (Order 37, Code of Civil Procedure), which allows for a quick resolution since the other party is not allowed to defend as a subject of right, but only after requesting permission from the court.

Order 37 of the CPC is a significant form of regulation in the hands of a potential plaintiff who wants to fight a Civil Suit. In general, Rule 1, Sub-Rule 2 applies to all suits involving bills of exchange, hundies, and promissory notes, or those in which a Plaintiff seeks only to recover a debt or liquidated demand in money payable on a written contract, an enactment, where the total amount which is to be repossessed is a definite amount of money in respect of the amount owed to the Plaintiff.

A suit under Order 37 Suit must include, among other things, a generalised notion that the Suit is brought under this Order and that no remedy not covered by this procedure is sought.

Under this order, the two-step procedure is sought. The first is at Rule 2(3) level, subsequently the other is at Rule 2(2) stage (6). The process for Defendant’s attendance is set forth in Rule 2(3), which says that he must appear within a time period of 10 days after receiving the summons. After entering evidence, Plaintiff files a notice for adjudication on Defendant within ten days of service, together with an affidavit stating the prima facie case, the sum sought, and that, in his view, there is no defence to the complaint.

In case the Defendant chooses not to seek permission to defend, Rule 2(6) provides that (a) the Plaintiff is subject to immediate judgement, or (b) the Court may order the Defendant to provide such amount as security as it deems appropriate. The delayed act of entering into an appearance or asking for permission to submit a defence may also be allowed if sufficient reason is demonstrated, according to sub-clause 7.

Rule 2(5) also states that Defendant has the right of applying to leave for putting forth a defence within the time period of 10 days of receiving the summons for judgement through affidavit or other means of revealing facts considered adequate to enable him to defend himself, and it may be granted unconditionally. Furthermore, the provision enumerates that Unless Court is satisfied that the facts disclosed do not indicate a viable defence or that the defence is baseless or obnoxious, the Court will not reject permission to defend.

The actual benefit of an Order 37 Suit is that the Plaintiff is accredited to a judgement from the court of law right away unless the Defendant can prove that the individual has a significant alibi in his case. This implies that the steps of filing a WS within a time period of 30 days and not later than 90 days, a response, admission of documents, formulation of issues by the Court, leading testimony, cross-examination by parties, concluding arguments, and subsequently the judgment/decree are eliminated in a Civil Suit.

So all a Plaintiff needs to do is demonstrate that the matter comes within the purview of Order 37.

I. Where can we institute a suit (Jurisdiction)?

A suit may be instituted in any location/place where the defendant resides; or any locus where the defendant conducts business or personally works for profitable gains; or the cause of action arises completely according to Order IV of the CPC, 1908.

After considering geographical jurisdiction, preliminary jurisdiction is decided. It is determined whether the suit will be filed in the district court or the high court based on the monetary amount.

II. Who are the Competent parties to file the suit?

Companies, partnership firms, proprietorship companies, and merchants, among others, are qualified to file a case for the restoration of their unpaid debts or commercial delinquent amount or transaction if the principals have a documented contract/agreement.

III. Limitation period

In India, the time limit for bringing a civil recovery claim is three years from the day. Suits filed after the statute of limitations has expired will be dismissed. The reasons for seeking the exemption must be specified if the action is filed after the limitation period has expired.

IV. How to institute the suit?

A civil plaint is the starting point for any legal action. A plaint is a written document of the case’s facts and the definite amount being sought, including any interest. An affidavit must be used to establish the facts in any such complaint. Money recovery is a unique situation, and in such instances, the precise or approximate amount sought must be included in the lawsuit.

The following information must be included in a plaint:

1. The court’s name.
2. The name, introduction and place of residence of the plaintiff
3. The name, introduction, and place of residence of the defendant
4. Facts establishing the cause of action and the time it originated
5. Facts establishing the court’s jurisdiction
6. The plaintiff’s claim for relief; the plaintiff’s costs (Prayer clause)
7. The plaintiff’s set-off or relinquishment of his amount claimed
8. The total amount of the suit’s subject matter for the requisite of determining jurisdiction
9. Verification and signature

V. Contents of Plaint

A plaint is a legal statement that includes all the essential elements, without which it would not be known as a plaint. Rules 1 to 8 of Order VII of the CPC list the items that have to be included in a plaint. The following are some of them:

1. The name of the court whether commercial or civil where the lawsuit will be filed should be included in the plaint.
2. The plaintiff’s name, residence, and description should all be included in the plaint.
3. The defendant’s name, address, and description should be included in the plaint.
4. The Plaint should include a description of the plaintiff’s health flaws or difficulties, as well as any kind of impairment.
5. The facts that give birth to the cause of action, as well as where the cause of action originates, should be included in the plaint.
6. The plaint should comprise of all the facts pertaining to the cause of action
7. The plaintiff’s request for remedy from the court should also be included in the complaint.
8. When the plaintiff is all prepared to set forth an element of his claim, the Plaint is required to include the sum that has been allowed to be set off.
9. A declaration of the worth of the matter of the action should be included in the plaint, not only for the impetus of jurisdiction but also as a requirement to conclude a justified amount for court costs.
10. Finally, the plaintiff’s oath verification should be included.

This demonstrates that the plaint is a highly important component for the smooth and effective procedure of cases in courts and that it plays a critical role in the whole process of the proceedings.

The following are some more details that were not stated previously: According to Rule 2 of Order VII, the plaintiff must enumerate the precise amount that needs to be recovered from the defendant, while Rule 3 of Order VII of the CPC states that when the plaint includes immovable property as a required object, the property must be properly and justifiably presented before the court as discovery.

Download Sample of suit for recovery of money under CPC

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