How to Send a Legal Notice for Payment Recovery

A legal notice is a formal written demand asking someone to pay what they owe by a deadline, warning that legal action will follow. It is usually the first step before going to court, and many disputes settle at this stage.

When a legal notice helps

• A customer has not paid an invoice.
• A friend, relative or business has not repaid a loan.
• A cheque given to you has bounced – here the notice is mandatory and must go within 30 days (see the cheque bounce timeline).
• A security deposit or advance has not been returned.

What the notice should contain

1. Your name and address, and the other party’s name and address.
2. The facts: what was supplied, lent or agreed, with dates and amounts.
3. Reference to documents – invoice numbers, agreement, bank transfers, messages acknowledging the debt.
4. The exact amount due, and interest if the agreement provides for it (you can estimate interest with the Money Rights tools).
5. A clear deadline to pay – commonly 15 days.
6. A statement that you will take legal action if payment is not made.

How to send it

• Send by Registered Post or Speed Post with acknowledgement, and keep the receipt and tracking proof.
• Also send by email or messaging app where you have used these to deal with the other party.
• A notice sent through a lawyer carries more weight and is drafted to protect your position for court.

Time limits matter

• For most money claims – unpaid invoices and loans – a civil suit must generally be filed within 3 years under the Limitation Act, 1963. A written acknowledgement of the debt or a part-payment can restart the clock.
• Cheque bounce has much shorter deadlines: notice within 30 days of the return memo, and complaint within one month after the 15-day payment period ends.

If you are a registered MSME

Buyers must pay registered micro and small enterprises within the agreed period, not exceeding 45 days. Delayed amounts attract compound interest at three times the RBI bank rate. You can file a claim online on the MSME Samadhaan portal.

If they still do not pay

• Civil recovery suit: including a summary suit where the claim is based on a written contract, invoice or cheque.
• Commercial disputes of a specified value: pre-institution mediation is generally required before filing in a commercial court.
• Insolvency: for large unpaid business debts above the statutory threshold, an operational creditor may approach the NCLT.

The right route depends on the amount, the documents you hold and whether the debtor is an individual or a company.