Payment Recovery Legal Remedies for Small Businesses
Transcript of Payment Recovery Legal Remedies for Small Businesses
Wednesday, the 30th July, 2014
FSIA & I am SME of India
Team AGBians
That You are Sleeper Financier Cell to Your Client who is Bigger in size
Regular Money Flow is Oxygen for your business
You are paying interest whereas you have extended interest free credit that too without security
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Threat of Delayed Payment beyond agreement period
Verbal assurances given day in and day out by Vendor Development Managers and Accounts Heads, etc.
Meeting after meetings resulting into wastage of time but no recovery in sight
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IF YES – THEN YOU NEED TO PRESERVE FOLLOWING DOCUMENTS
• Signed Copy of Agreements and Purchase Orders
• Signed Copy of Delivery Schedules
• In-Transit Sales Tax Forms• Delivery Challans• Minutes of Meeting• Quality Reports (if you can)
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YOU NEED TO REMEMBER
• The limitation period *3 years* to keep the claim alive – send e-mails, letters that also through speed post
• Always take periodic Balance Confirmations
• *7 Year* Vendor Itch
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This is always beneficial to look for
Alternative Dispute Resolution Mechanism in Agreement as Essential
Clause• Conciliation• Followed by Mediation• Further followed by
Arbitration
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Do You Know???I am SME of India
or FSIA or
any other forum can also be appointed as
Mediator or ArbitratorTeam AGBians
Negotiable Instrument Act 138 for Cheque
Bouncing
•First Warning Sign of Deteriorating Health
•Don’t get carried by flimsy excuses of your client
•Do Remember to invoke criminal offenceTeam AGBians
State MSE Facilitation Council
constituted under MSME Development Act,
2006
• IEM 2 is compulsory to file case under MSME Act
• The forum is comparatively Cheap
• Provides for interest @ 3 times of Bank Rate fixed by RBI
• Appeal against Order difficult
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PERMANENT LOK ADALAT
1. Established by State Level Legal Service Authority (HALSA)
2. Public Utility Services, Pre-litigation Stage, Financial Dispute upto the amount of 25 lacs
3. No fees4. No appeal5. Simple Mechanism6. Less Procedural7. Advocate – not necessary
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CIVIL SUIT UNDER CIVIL PROCEDURE
CODE •Traditional Method of recovery
•Time consuming as well as Money Guzzler
•Heavy Initial CostTeam AGBians
SUMMARY PROCEEDINGS UNDER CIVIL PROCEDURE
CODE
• Fast Decision Possible
• Less Expensive • Possible when you have third
party conclusive proof about timely and qualitative Delivery
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CRIMINAL SUIT UNDER CRIMINAL PROCEDURE CODE
Possible wherever
• Breach of Trust is there• Intent of Fraud can be
proved• Misrepresentation • Concealment of Facts• Wilful Default
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WINDING UP PETITIONUNDER COMPANIES
ACT • In case of client being
Corporate Entity• Not referred to BIFR• Claim is more than 50k• Only as a Last Option
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WHAT IS THE BEST
REMEDY???
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COMPROMISE IS END OF EVEN WORLD WAR
• There are no permanent enemies nor friends• You are here to do business not fight legal battle•Wherever and whenever respectable compromise is offered – do it and move on in life• Judicial System (Registrar, Judges, Advocates, etc.) is not at all interested in resolving disputes that too business disputes Team AGBians