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Debt Recovery Notice
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Debt Recovery Notice
Debt Recovery Notice

India is currently facing an economic slowdown. Businesses are facing a significant cash crunch in the market. From demonetization to situations like the spread of Coronavirus to the mishap of Yes bank has made the current scenario worse. India is facing a period of recession where a country faces economic decline and is generally accompanied by a steep drop in the stock market and an increase in unemployment.

Due to such circumstances, the creditors, debtors, businessman, and professionals are dealing with inadequate cash flow in the market. In such a scenario, lending someone money becomes a huge deal. Moreover, after the money is lent, recovery of the same becomes an inevitable issue. The one who has lent money should make sure that the money is recovered from the latter only through legal means. Therefore due to the current happenings, it is crucial to understand the ways through which a person can legally recover his debt. One of the easiest and most appropriate means is to send legal notice to recover the debts.

Debt Recovery Legal Notice

A debt recovery legal notice is intimation between two people, one warning the other, before a legal action is initiated to clear their dues clear. A legal notice can also be sent to a friend, in case, if he/she owes you money. A legal notice will help you to recover the money from a debtor by not getting involved in litigation. Notices are a secure and faster mode to recover money. However, it is essential that before drafting a notice, all its elements are understood by an individual.

Essentials of a Legal Notice

  • Legal name, description, address of the sender of the notice.
  • Monetary relief which is to be claimed by the party.
  • Details of the cause of action.
  • Other legal formalities.

Need for a Debt Recovery Notice

There are various relationships in which a need for debt recovery notice may arise:

  1. Notice to an Employee
  • Sending a notice to an employee arises in cases where an employee absconds with the money of the company. Under such circumstance, a domestic enquiry is initiated, and a show-cause notice is then sent to the employee’s residential address.
  • If the employee does not reply even after sending 2-3 such notices, then disciplinary action may be taken against the employee according to the Service Regulations or Standing orders of the organization.
  • This will give a chance to the employee to defend himself/herself against the charges.
  • Once it is cleared that the employee is no more a part of the company, a legal notice can then be sent to the employee for the recovery of the money.
  1. Notice sent under a Loan

The Indian economy is going through a cash crunch, mainly because of the defaulters of the loan. The government has created measures to recover the money circulated through debt. The SARFAESI Act was introduced with the sole purpose to recover the debt through a separate judicial body. The debt recovery tribunal formed in every state to resolve debt-related issues begins by sending a legal notice to the defaulter for recovering the amount. Sending a legal notice always helps, as it gives the receiver an appropriate amount of time to reply and settle the amount.

  1. Notice from an Employer to the Company

An employer who is deprived of a legitimate salary by a company can send a legal notice. He/she can also take action under different laws which are made for the protection of the employees. When an employer sends a legal notice, he/she should take care of all the legalities and should also mention the appropriate reason for such an action.

  1. Recovery of money from Dealers

Post-dated cheques which are kept as security deposits are sometimes bounced due to the non-availability of funds. Under such a situation, the drawee can send a legal notice for the recovery of money within 30 days from the date of receipt with the return memo from the bank.


Sending a legal notice is helpful in those situations, where an individual does not want to get involved in the court cases. The matters are settled outside the court if a reply is sent to the received notices. Both the sender and the receiver can benefit from such a facility. Legal remedies for the recovery of money are mentioned under Order 37 of The Code of Civil Procedure, 1908. However, the sender is advised to hire a professional to draft a legal notice. A properly draft legal notice helps in the recovery of money in a faster manner.

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