In short. When a recovery file lands on Advocate B.K. Singh's desk, he asks six questions, always in the same order. Who exactly owes you, and how much, and are you still inside the three-year limit that applies to most business debts? What proves the debt? What will the other side argue? Which route fits? And can the debtor actually pay? Any one of these can end the matter, so none gets skipped. This guide is for businesses owed Rs 3 lakh or more. Bring the right papers and half an hour usually gives you a clear picture, plus a list of jobs for the next seven days.
Is this your situation?
- The buyer hasn't cleared a single invoice since Diwali, and you're starting to ask whether a court case is worth the trouble.
- You've got a folder of invoices, a Tally ledger and a few hundred WhatsApp messages, and no idea if that's enough to go to court.
- Some of the unpaid bills are now over two years old. You keep doing the arithmetic on the time limit in your head.
- Every time you ask for money, they suddenly remember a quality complaint.
- You're a small supplier with a Udyam certificate, and a friend in the trade swears the MSME Council beats a suit.
- Someone told you the debtor is shifting stock to a relative's godown. You want to know what can be done quickly.
- Before spending a rupee on a notice or a suit, you'd like someone to go through the file properly.
What actually happens in the first half hour?
Six questions, asked in a fixed order. Who owes the money, how much is really due, and is the claim still in time? What proves it? What will the debtor say when it's finally cornered? Which route fits? Can the debtor pay? With the papers on the table, each one takes about five minutes. Any of them can change the conversation. Or end it. A time-barred claim doesn't need a strategy. And a debt owed by a company that pulled its shutters down last year needs a very different plan from one owed by a busy distributor with three warehouses.
Why bother with a fixed order? Because the costliest mistake in recovery work is spending months, and a heavy court fee, on a suit that was never going to bring money home. Half an hour in the right sequence catches most of those files before the first notice goes out. It'll also give you something better than a lawyer nodding along and saying the claim 'looks fine'.
Below is how that half hour really runs: what gets checked at each stage, and the mistakes we keep seeing in files from Delhi, Noida, Ghaziabad and Gurugram. If you searched for an unpaid dues lawyer in Delhi and wondered what the first meeting involves, this is it. If you're still collecting papers, our note on what to bring to your first meeting will help you walk in ready.
Half an hour, in five-minute pieces
This is the order Advocate B.K. Singh follows when he opens a recovery file for the first time. Some files need longer on one step and less on another. The order stays put.
Minutes 0 to 5: who owes, and how much
Pin down the exact legal entity that owes you, and take the principal from the ledger. Keep interest that was agreed in writing apart from interest you'd simply like to add.
Minutes 5 to 10: the time limit
Work out when time started running on each invoice, and look for a written acknowledgment or part payment that pushes it forward. Then mark the earliest date on which any part of the claim goes out of time.
Minutes 10 to 15: proof
Do the papers prove the deal, the delivery or work, acceptance and the price? Is a summary suit possible on them?
Minutes 15 to 20: their defence
Put the debtor's best case first. Quality, short supply, delay, set-off, wrong party, an arbitration clause or jurisdiction. Then see whether your own records answer it.
Minutes 20 to 25: the route
Pick between a legal notice, Section 12A mediation, a summary suit, a regular suit, the MSME Council, a cheque bounce complaint or insolvency. And say why.
Minutes 25 to 30: assets, and what's next
Ask what the debtor owns and who else it owes. Decide whether to ask for security or attachment before judgment, and write down what you have to do in the next seven days.
Minutes 0 to 5: who owes you, and how much?
Sounds obvious. It rarely is. Take a plastic moulder in Bawana. The orders came from a buyer's purchase manager on company letterhead, the invoices went to a trade name, payment came from a partnership firm run by the same family, and the goods were unloaded at a godown leased by a fourth entity altogether. So before anything else, we fix the right defendant by matching the GSTIN on the invoices, the name on the purchase orders and the payer in your bank statement. Where they don't line up, the answer may be to sue more than one entity in the alternative and explain the link in the plaint.
Who the debtor is in law decides what you can reach later. A proprietor is personally liable for his proprietorship's debts, so his house and bank accounts are in play. Partners are jointly and severally liable for the firm's debts. Directors of a private limited company generally aren't, unless one signed a personal guarantee or there's something more, like fraud. We see plenty of plans built on 'the director will pay from his own pocket'. They tend to fall apart at the first hearing.
Then the number. The principal should come out of the ledger, squared up against invoices, credit notes and payments. Interest is worked out on its own. Under Section 12 of the Commercial Courts Act, 2015, the specified value of a recovery suit includes interest claimed up to the date of filing. That value decides whether the dispute is commercial (Rs 3 lakh and above) and which court hears it. Pad the interest and you can end up in a higher court, or paying a higher court fee, for nothing.
Minutes 5 to 10: are you still in time?
We check limitation before the merits. A strong claim filed late just gets dismissed. Most recovery claims between businesses get three years under the Limitation Act, 1963, but the start date moves around. For goods sold and delivered with no fixed credit period, the clock usually starts on delivery. Where a credit period was agreed, it starts when that period ends. For work done, it runs from when the work was done. And on a genuine mutual, open and current account, with demands going both ways, it can run from the close of the year in which the last admitted item was entered.
Next we hunt for anything that restarts the clock. A written acknowledgment of the debt, signed by the debtor before time ran out, gives you a fresh three years under Section 18. That could be a balance confirmation signed by their accountant, an email from a director admitting the figure, or a reply to your notice saying 'we'll pay once our receivables come in'. Any of those may qualify. A part payment restarts the period under Section 19, but only if the payer acknowledges it in writing. A bare bank credit with no narration is something people end up fighting over.
What comes out of these five minutes is one date. It's the earliest day on which any part of your claim goes out of time, and if it's close, everything else gets planned backwards from it. Time spent in Section 12A pre-institution mediation is left out when limitation is counted, but only once you've actually applied for mediation. Our guide on how long you have to recover unpaid dues goes through the articles and the exceptions properly.
The limitation rules we check in every recovery file
Article 14, Limitation Act, 1963
Price of goods sold and delivered where nobody agreed a fixed credit period, which is how a lot of Delhi trade still runs. You get three years from the date of delivery.
Article 15, Limitation Act, 1963
Goods sold on a fixed period of credit. Here the three years start when that credit period runs out, not on the day the truck was unloaded at the buyer's gate.
Article 18, Limitation Act, 1963
Price of work done where nobody fixed a payment date. Three years from when the work is done. Service firms and contractors usually sit here, unless the contract names a date for payment.
Article 113, Limitation Act, 1963
The catch-all for suits no other article covers. Three years from when the right to sue accrues. Plenty of claims for refund of advances, and other money claims, get argued under it.
Sections 18 and 19, Limitation Act, 1963
A signed, written acknowledgment of liability, given before time runs out, starts a fresh period. So does a part payment made before expiry, as long as the person paying acknowledges it in writing.
Section 12A, Commercial Courts Act, 2015
Pre-institution mediation is compulsory unless you're seeking urgent interim relief. Under the proviso to Section 12A(3), the time spent in mediation isn't counted for limitation.
Minutes 10 to 15: what proves the debt?
You have to prove four things. What was agreed. That you delivered or did the work. That the debtor accepted it. And the price. We line your documents up against each one. A signed contract or purchase order proves the deal. Delivery challans, e-way bills and lorry receipts prove dispatch, while a goods receipt note or a stamped acknowledgment from the buyer's stores proves the goods arrived. For services, a sign-off email, a completion certificate or proof that the client used the work does the same job. Invoices and the ledger prove the price and the running account.
One record people forget is the debtor's own tax filing. If the buyer deducted TDS on your invoices, that shows up against your PAN in Form 26AS, which tells you the buyer booked those invoices in its accounts. It's hard to deny an invoice you've deducted and deposited tax on. The same goes for input tax credit claimed on your invoices, though that's harder to see from your side.
These five minutes also tell us whether a summary suit under Order XXXVII CPC is open to you. That needs a written contract, a bill of exchange, a cheque or promissory note, or a debt or liquidated demand arising on a written document. If your papers support it, the debtor has to ask for leave to defend and show a real defence. That's a big help on speed. If the claim rests only on oral orders and WhatsApp messages, a regular suit is the safer bet. Our guide on recovering money with only WhatsApp chats and bank transfers explains how far those records will carry you.
Minutes 15 to 20: what will they say?
Nearly every recovery case runs into one of a handful of defences, and we state the debtor's version before yours. Quality comes first, by a distance. The goods were defective. The software never worked. What matters is whether that complaint was made in writing at the time, or only after you asked for money. A complaint that first appears in a reply to your legal notice carries far less weight than one sent the week after delivery. Short supply and delay come next, often tied to a liquidated damages clause in the purchase order that the supplier never read.
Set-off catches suppliers off guard more than anything. The debtor says yes, it owes Rs 18 lakh on these invoices, but you owe it Rs 11 lakh on something else, whether a rejected lot, a penalty or an advance. Whether that's a legal set-off, an equitable one or just a counter-claim depends on the facts. Either way, you need to see it coming. 'We already paid you, in cash' is another favourite. So is 'we never dealt with you at all', which is exactly why those first five minutes on the right defendant matter.
Last, two procedural defences that can stop a suit at the door. If the purchase order or contract has an arbitration clause, the debtor can ask the court to send the dispute to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996. A jurisdiction clause can tie the suit to one city. They're often hiding in the small print on the back of an order form. Bring that page.
Minutes 20 to 25: which route fits, and how long does each take?
The route depends on your proof, the debtor and the amount. Times are typical ranges in Delhi NCR, not promises. Professional fees are agreed separately, in writing, stage by stage.
| Route | When it fits | Usual time | Costs other than the professional fee |
|---|---|---|---|
| Legal notice | Nearly always the first step, and now and then enough by itself | 15 to 30 days for a reply | Postage or courier |
| Section 12A pre-institution mediation | Compulsory before a commercial suit, unless you're seeking urgent interim relief | Up to three months, plus two more if both sides agree | Rs 1,000 application fee, and a mediation fee linked to claim value under the 2018 Rules, split between the parties; check the current figures |
| Summary suit under Order XXXVII CPC | A written contract, cheque, promissory note, or a debt or liquidated demand on a written document | Often faster than a regular suit if leave to defend is refused or made conditional | Ad valorem court fee on the claim; check the current schedule |
| Regular commercial suit | Facts in dispute, oral orders, claims for damages | Often one to three years in Delhi NCR commercial courts | Ad valorem court fee, process fee, certified copies |
| MSME Facilitation Council reference | You're registered as a micro or small enterprise and the buyer is paying late | Conciliation, then arbitration; time differs from Council to Council | Little or no filing cost; check the current rules, because the 2026 amendment's new Sections 18, 18A and 19 weren't found notified as of late October 2026 |
| Cheque bounce complaint | The debtor's cheque came back unpaid | A criminal case that runs separately from any civil suit | Prescribed fee; check the current figure. See chequebouncelawyer.com |
| Insolvency application | An undisputed operational debt of Rs 1 crore or more owed by a company | Admission stage before the NCLT; varies from bench to bench | Prescribed filing fee; check the current figure. See ncltlawyers.in |
Minutes 25 to 30: can they actually pay?
The last five minutes are about money you can actually reach. What does the debtor own? Maybe a factory, a showroom, vehicles, stock in a godown, money owed to it by big customers, or a bank account you know about because it once paid you from it. Is it still trading, or have the orders dried up? Are other suppliers chasing it too, and has anyone filed already? A party-name search on the eCourts portal and a look at the MCA record for charges and filing status often answer all this in minutes.
Suppose there's evidence the debtor is about to sell off or shift its property to defeat a decree. The court can then order it to furnish security, or attach property before judgment, under Order XXXVIII Rule 5 CPC. The bar's high. You need specific evidence, and a general worry won't do. Where the debtor has nothing and owes everyone, a suit may still be worth filing to keep the claim alive. But you should spend knowing that recovery may hang on execution later. Our guide on checking whether a debtor has assets before you sue lists the public sources that help.
This is also when we dig out personal guarantees, post-dated cheques held as security and any promoter's undertaking. Each one widens the pool a decree can reach.
The mistakes we keep finding in recovery files
These are the problems Advocate B.K. Singh runs into most often in the first half hour. Usually they're sitting in files the client thought were strong.
- Credit notes issued to keep the customer sweet. You gave a 'rate difference' or 'quality discount' credit note to keep the account going, and now you want the full original amount back. Your own ledger and GST returns show the lower figure. The claim gets cut down.
- Supplies kept going long after default. Every new delivery adds to what you stand to lose. It might help limitation on a running account. More often it just digs the hole deeper.
- A cheque taken 'as security' with nothing in writing. If no letter records why it was handed over, using it later in a cheque bounce case, or as an acknowledgment, turns into an argument.
- Splitting one claim to save court fee. Order II Rule 2 CPC says a suit must include the whole claim arising from the same cause of action. Leave a part out and you generally can't sue for it later.
- Notice sent to an old address. A notice to a registered office that shifted two years ago proves nothing about what the debtor knew. Check the current address on the MCA or GST record first.
- Claiming MSME interest without the registration in place. Interest at three times the RBI bank rate under Sections 15 to 17 of the MSMED Act, 2006 is for registered micro and small suppliers. Whether a registration taken after the contract counts is unsettled and pending before a larger bench, so a claim that leans on it needs a fallback.
- Signing a 'full and final' letter under pressure. Take a reduced payment against a letter that says full and final, without advice, and you may have signed away the rest of your claim.
A made-up example: half an hour with an Okhla label maker
This one's invented, to show the method. A maker of woven labels and hang tags in Okhla Phase I is owed Rs 17.6 lakh by an export house in Gurugram for 14 months of supplies. The owner walks in with invoices, a ledger, a few purchase orders and a phone full of WhatsApp chats with the export house's merchandiser.
First five minutes: the invoices and purchase orders match one company and one GSTIN, and the payments came from that same company. There's no doubt about the defendant. The ledger shows Rs 15.9 lakh of principal, and the other Rs 1.7 lakh is interest the owner added at 18 percent, which no document mentions. Next five: the oldest unpaid invoice is 34 months old. But the export house deducted TDS on every invoice, and its accounts executive emailed a balance statement ten months ago. Whether that email counts as a signed acknowledgment is arguable, so the plan treats the oldest invoices as urgent. Next five: there are purchase orders for most supplies, but six invoices relate to verbal repeat orders confirmed only on WhatsApp.
Then the defence surfaces. The merchandiser complained twice on WhatsApp about colour mismatch on two lots, worth about Rs 2.3 lakh. On route, the export house is an active company with big buyers, the claim is above Rs 3 lakh and nothing calls for urgent interim relief. The advice is a tight legal notice, Section 12A mediation through the Legal Services Authority, and a commercial suit in Gurugram or Delhi, depending on where the orders were placed and delivery accepted. In the last five minutes the owner learns that the export house's main asset is money owed by its foreign buyers, which changes how execution would work. He leaves with a seven-day list: export the WhatsApp chat from the original phone, and get transporter receipts for the six verbal orders. And stop adding 18 percent interest to every statement.
What to bring for a 30-minute review
A short list does the job. If you have more, bring it. If you have less, come anyway, particularly when limitation is close.
- Your ledger for this party, for the whole relationship, printed from Tally or whatever you use
- The invoices, plus purchase orders or work orders wherever they exist
- Proof of delivery, whether that's challans, e-way bills, lorry receipts, goods receipt notes or sign-off emails
- The last six months of emails and WhatsApp chats about payment or complaints
- Any balance confirmation, acknowledgment or settlement offer you've had from the debtor
- Any notice you sent or got, and any cheque you received along with its return memo
- Your Udyam registration certificate, if you're a micro or small enterprise
- Whatever you know about the debtor's premises, its bank, its customers and who else it owes
Where would the suit be filed?
Two things decide it: value and territory. In Delhi, a commercial recovery suit up to Rs 2 crore goes to the District Judge (Commercial Court) in the relevant district court complex, whether that's Saket, Tis Hazari, Karkardooma or another. Above Rs 2 crore, it goes to the Commercial Division of the Delhi High Court. In July 2026 the Delhi High Court's Full Court recommended raising the district limit to Rs 10 crore. That needs a legislative amendment. So check the current limit before you file. Our page on Delhi's district commercial courts shows which complex covers which area. In Ghaziabad, Gautam Buddh Nagar, Gurugram and Faridabad, recovery suits go to the court designated as the Commercial Court for that district.
Territory follows Section 20 CPC. You can sue where the debtor lives or carries on business, or where the cause of action arose, wholly or in part. For a supplier, that can mean where the order was accepted, where the goods were delivered or where payment was due. A jurisdiction clause can narrow that down to one of those courts. We answer the territory question alongside the route, because it changes the cost, the travel and how quickly summons are likely to get served.
Small supplier, big customer, or lender: what changes?
If you're a small supplier owed money by a much bigger buyer, we spend the time on proof of acceptance and on the buyer's own systems. Large companies run vendor portals, goods receipt entries and three-way matching of order, receipt and invoice. A screenshot of the portal showing your invoices as 'approved' or 'pending payment' can be strong evidence. Take it today. Portal access has a way of disappearing once a dispute starts.
If a smaller customer owes you, we spend longer on assets. A proprietor trading out of a rented shop may have little beyond stock and receivables, and both can vanish fast. Here, speed's worth more than polish.
If you lent money to another business, the first ten minutes usually go on what the transaction really was. Was it a loan, an advance against future supplies, an investment or a deposit? The answer changes limitation, whether a summary suit is possible and what the borrower will argue. Where the lender is a company and the borrower is related, tax questions under the Income-tax Act, 2025 may come up, so check the current provision before you structure the claim.
What you walk out with
By the end of the half hour you should have six answers. The right defendant. The principal, plus an interest claim you can defend. The limitation date the whole plan hangs on. Where your proof is strong and where it's thin. The defence to expect. And the route we'd recommend, with what it costs in time and court fee. You'll also have a short to-do list for this week. It nearly always includes saving electronic records, chasing missing delivery proof and steering clear of anything that could weaken the claim, like signing a settlement letter or issuing more credit notes.
If the route is a suit, the money recovery suit page walks through what happens next. The guide on why recovery cases fail covers the traps that show up later on. For invoice disputes specifically, the page on unpaid invoice recovery sets out the usual run from notice to decree.
Getting your file reviewed by Advocate B.K. Singh's team
A file that's looked at early is cheaper to fix than one looked at after a wrong notice or a missed date. If a recovery suit is on your mind, this review is what tells you whether it's worth filing at all.
To have your ledger, invoices and correspondence put through it, share them with Advocate B.K. Singh's team through the contact page.
Frequently asked questions
Is 30 minutes really enough to judge a recovery claim?
For a first view, usually yes, as long as the ledger, invoices, delivery proof and recent correspondence are there. A file with many parties or a long running account may need a second sitting. Drafting the notice or the suit takes longer, of course.
What if I don't have delivery challans for some invoices?
Other records can fill the gap. Think e-way bills, transporter receipts, the buyer's goods receipt entries, TDS deducted on those invoices, or emails confirming receipt. Invoices with no delivery proof at all are the weakest part of any claim. We may deal with them separately.
Does it help to send the debtor a balance confirmation request?
It can. A signed confirmation is a written acknowledgment under Section 18 of the Limitation Act. But it can also tip off a debtor who's already planning not to pay. Decide that first, on your facts, before anything goes out.
How much interest can I claim on unpaid invoices?
Start with any interest agreed in writing in the contract or purchase order. Without that, the court decides under Section 34 CPC, and in commercial matters it may allow more than 6 percent, though ordinarily not above the contract rate or the bank lending rate. Registered micro and small suppliers can claim interest under the MSMED Act, 2006 at three times the RBI bank rate. Check the bank rate for each period.
Is it worth suing a company that's stopped trading?
Sometimes. It keeps the claim alive and lets you go after whatever assets are left, but keep your expectations realistic. If the company is insolvent, other routes may work better. We'd also look at whether any guarantor or related entity is liable.
How is a recovery review different from a legal opinion?
The review is a structured first look at the claim and the route, usually done across the table. A written legal opinion is a fuller document. It's prepared after the review if you need one, say for a board or a lender.
Can the review be done if the debtor's in another state?
Yes. The questions don't change, and territory under Section 20 CPC is part of the review anyway. Where the suit has to be filed outside Delhi NCR, the firm works with associate counsel in that state.
Should I stop supplying the debtor before the review?
That's a business call. But carrying on usually adds to your exposure. If you're unsure, hold further dispatches until we've met, and don't issue new credit notes or sign any settlement letter in the meantime.
Advocate B.K. Singh
Founder of B.K. Singh & Associates. MCA, LL.B., LL.M. More than twenty years in practice before the Supreme Court, the Delhi High Court, district and commercial courts in Delhi NCR, and tribunals.
This guide explains the law in general terms and is not legal advice. For advice on your own papers, contact the team.