Hello Everyone.
What is the procedure for a Private Company to initiate legal action against a debtor for non-payment of dues as per The Companies Act?
I read that a demand notice is required to be issued to the debtor and if nothing is received within three weeks time, only then legal actions can be initiated.
Are there any defences available to such debtor as per companies act?
Please Note: The debtor is a Private Company.
You may serve a legal notice on that private company for creditors voluntary winding up (assuming amount is more than 50K)
Provided you should have evidence to support your case.
Your attention is also drawn to law of limitations which says that the debt should be outstanding for less than 3 years otherwise it can be time barred.
In case, the customer has made the cheque payment and the cheque is returned unpaid , you may go under action u/s 138 of the Negotiable instrument Act. That procedure is much faster (under section 138 of Negotiable Instrument Act return of cheque is also a criminal offince so the its a stronger course of action
regards.
Thankyou Mr. Kedar. That was really helpful.
I would further like to ask.
Do you still need to serve a letter of demand under section 129 of National Credit Act?
I think there are certain conditions on fulfilment of which the Debtor could be called a 'Non-Paying debtor'.
If the debtor is disputing the amount that he owes, what are the measures to be taken?
CAclubindia
