The following is general information on recovering money owed to you under Indian law.
The time limit for a civil recovery suit, how an acknowledgment of debt affects it, and which forum applies.
The legal position
The limitation period for a suit to recover a debt or liquidated sum is generally 3 years, under Articles 19, 21, or 113 of the Limitation Act, running from when the money became due.
A written acknowledgment of the debt, signed before the limitation period expires, restarts the 3-year period under Limitation Act s.18.
Where the claim is a commercial dispute of specified value ₹3 lakh or more, it falls under the Commercial Courts Act, and pre-institution mediation under s.12A is mandatory before filing, except where urgent interim relief is sought.
In Dhanbad Fuels v Union of India (15 May 2025), the Supreme Court held that suits filed on or after 20 Aug 2022 without the mandatory s.12A mediation must be rejected under Order VII Rule 11 CPC.
As a general rule, for an admitted liability with no substantial defence, a summary suit under CPC Order XXXVII can be a faster route, where the defendant must obtain the court's leave to defend.
How this generally works
The usual sequence looks like this.
Check the limitation clock
Confirm whether 3 years have passed since the debt became due, and whether any written acknowledgment has restarted that period.
Commercial disputes
If the claim is ₹3 lakh or more and commercial in nature, complete pre-institution mediation under s.12A before filing, unless you are seeking urgent interim relief.
Choose the right suit
A summary suit under Order XXXVII can be faster for a clear, documented debt; an ordinary civil suit may be necessary where the defence is contested.
Documents generally involved
- Loan agreement, invoice, or other proof of the debt
- Any written acknowledgment of the debt
- Demand notice sent to the debtor, if any
Common pitfalls
Some common mistakes are worth flagging.
- Filing a commercial suit of ₹3 lakh or more without completing s.12A mediation first — this can result in the suit being rejected outright.
- Letting the 3-year limitation period lapse without obtaining a written acknowledgment that would restart it.
- Choosing a summary suit for a disputed, undocumented claim, where the defendant is likely to be granted leave to defend regardless.
For related reading, see Cheque Bounce (NI Act Section 138): The Process After 2025 Reforms and Recovering Delayed Payments as an MSME.
Where this applies to a live matter, it is usually worth discussing it in a consultation before acting.
The content above explains how the law generally works; it is not legal advice and should not be treated as a substitute for advice on your particular facts.
This page provides general information about the law in India and is not legal advice. For advice on your specific situation, please consult a qualified advocate.