Use a notice to state a clear, documented claim
A money recovery notice is a formal letter telling the other side what is owed, why it is owed and what will happen if it stays unpaid. It is often the first step before a civil suit, a summary suit under Order XXXVII of the Code of Civil Procedure, or a commercial dispute. The notice is strongest when every statement matches a document: an invoice, an agreement, a ledger entry, a bank transfer, an email accepting the amount or a written acknowledgement. State the principal amount precisely and avoid adding figures you cannot support.
Keep the tone factual. Accusations, threats of criminal action without basis or personal remarks can weaken your position and may create liability of their own. If a cheque was given and dishonoured, the separate Section 138 Negotiable Instruments Act route has strict time limits; use the dedicated cheque bounce notice instead of this general format.
Check limitation before relying on the notice
The Limitation Act, 1963 sets time limits for filing suits. Many money claims carry a three-year period, but the correct article and starting point depend on the nature of the claim — for example goods sold, money lent, or an account stated. Sending a notice does not by itself extend limitation. A written, signed acknowledgement of liability made before the period expires can start a fresh period under Section 18, and part-payment can have a similar effect under Section 19 when the conditions are met.
Because the consequences of a missed deadline are serious, check the applicable article with an advocate. LawLine’s court deadline calculator can help you understand typical limitation rules, but it does not determine your specific claim.
Claim interest only on a real basis
Interest should be claimed only if the agreement provides for it, the invoices state it as an agreed term, or a statute grants it. For suppliers registered as micro or small enterprises, Sections 15 and 16 of the MSMED Act, 2006 require payment within the agreed period (not exceeding 45 days) and provide compound interest at three times the bank rate notified by the RBI on delayed payments. Such suppliers can also apply through the MSME Samadhaan portal to the Micro and Small Enterprises Facilitation Council.
For commercial disputes of specified value, Section 12A of the Commercial Courts Act, 2015 generally requires pre-institution mediation before a suit unless urgent interim relief is contemplated. Verify whether this applies before planning the next step.
Send it properly and keep evidence
Use registered post with acknowledgement, speed post with tracking, or a documented courier, and where appropriate also email. Keep the postal receipt, tracking record and any returned envelope. The time you give for payment, often 15 days, runs from receipt, so record when the notice was actually delivered rather than the date written on it.
Frequently asked questions
Is a legal notice compulsory before filing a money suit?
Not in every case, but it is common practice and can be required by contract or by specific laws. Commercial disputes may also need pre-institution mediation under Section 12A of the Commercial Courts Act.
Does sending a notice stop the limitation period?
No. A notice alone does not extend limitation. A signed acknowledgement or qualifying part-payment by the debtor may, under Sections 18 and 19 of the Limitation Act.
Can I add 18% or 24% interest?
Only if the agreement or a statute provides for it. This draft adds no interest rate by default.
What if a cheque bounced?
Use the Section 138 cheque bounce notice, which has strict 30-day notice and 15-day payment windows.
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Related formats
Official sources
- India Code — Limitation Act, 1963
- MSME Samadhaan — delayed payment applications
- India Code — Code of Civil Procedure, 1908
- India Code — Commercial Courts Act, 2015
This page gives general information, not legal advice. Forms, fees and timelines are set by each State and can change — confirm on your State portal before applying.