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Writer's picturethelila500
Feb 22, 20233 min read

How to Recover Money from a Co-Founder of a Firm

Nowadays, it happens that the other party doesn't return the money or repay the amount within the agreed-upon time frame. So, the party that has been wronged has a variety of legal options to pursue against the party who has defaulted. Summary actions, the Negotiable Instruments Act, criminal charges, or the Insolvency and Bankruptcy Code are all possibilities open to the person that is still not being compensated.


An effective civil remedy for recovering the delinquent party's assets is a money recovery lawsuit. The Civil Process Code of 1908 Order IV must be followed when taking the action. The accused also lacks the right to refute his accusation; he can only do so with the court's approval. In essence, it allows a rapid dismissal of the case and acts similarly to a summary litigation (Order 37, Code of Civil Procedures).


A lawsuit may be filed wherever the defendant resides, operates a company, or performs paid employment, unless the cause of action originates entirely or largely there, according to Order IV of the Code of Civil Procedure 1908 (CPC). Geographic competency shall be considered before determining the financial authority. The worth of the case is taken into consideration while deciding whether to file a lawsuit in the high court or the lower court.

Proceedings:

  • A summons is a written request made to a person to appear in court for a particular purpose by a judge or other court official. The court will issue a summons after evaluating the plaintiff and its admissibility, and the defendant must be properly served with it within 30 days of the action's commencement.

  • The appellant's response to the complaint is made in writing. The defendant must file a formal declaration of his defense before the first hearing or 30 days following the date of summoning. The claimant must provide any new evidence or ask for legal action to refute his claim in the written statement.

  • The trial starts after the issues are settled, which is the following step in the process. The last allegations must be heard and the case must be decided after considering all the evidence. The court must give the defendant 10 days to appear after the complaint is filed and the defendant is served with a summons before it may assess the appellant's claim and award the plaintiff.

  • When a judgment against someone else is issued by a court, the following action is to follow the order. The steps that must be taken in order for the decree to be executed are the execution hearings. The execution of an injunction or the application of a court decision is referred to as regulation. Execution is suspended if the judgment creditor obtains money or anything else that is granted to him by decision, declaration, or order.

  • If the defaulter is a corporation, a lawsuit may be brought under the 2013 Companies Act. These lawsuits may be class actions, where a particular group of people file a lawsuit on behalf of a certain class to recover debts owed to them, or they may include businesses where payments are due under a contract.

Jurisdiction:


When deciding where to bring a lawsuit, it is essential to consider whether the court has territorial jurisdiction over the defendant. This type of jurisdiction clearly defines and establishes the geographical limits of a court's authority. It has no influence outside of the territorial/geographical limit.


According to CPC, 1908, a lawsuit may be filed in any of the following territorial jurisdictions:

  • The defendant's place of residence (the money defaulter).

  • The place where the defendant conducts business or earns a living.

  • The exact or approximate location of the activity's cause.

Pecuniary indicates a relationship with money. Pecuniary jurisdiction seeks to establish a court's ability to hear issues and lawsuits involving money or other assets. This depends on the monetary worth or total quantity of money involved. Depending on how much money is involved, a case for money recovery may be started.


Lawyers in Mumbai can be appointed if the cause of action has occurred in Mumbai. Moreover, if the cause of action has occurred in Kolkata then Cheque Bounce Lawyers in Kolkata can be appointed. Corporate Lawyers in Delhi can also be appointed.


For seeking advice you can also contact Lead India. Here, you can talk to lawyer, ask a legal question and take free legal advice online. We have expertise of lawyers.


Call Us: +91–8800788535


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