Money disputes are common in Pakistan, whether arising from loans, business dealings, or personal transactions. If someone refuses to pay back your rightful dues, the Civil Procedure Code (CPC), 1908, provides legal remedies to recover your money through court action.
Here’s an overview of how to file a suit for the recovery of money, along with civil remedies and relevant sections of Pakistani law.
Grounds to File a Money Recovery Suit
Dishonored cheque
Unpaid loan
Outstanding business payment
Breach of contract with monetary claims
Filing a Suit for Recovery of Money: A Guide
- Identify the Cause of Action:
- Determine the basis for recovery (e.g., loan agreement, sale of goods, services rendered).
- Ensure that the cause of action is valid and enforceable under Pakistani law.
- Legal Notice:
- Before filing a suit, send a legal notice to the defendant demanding the outstanding amount.
- This notice should clearly state the amount due, the basis of the claim, and a deadline for payment.
- Drafting the Plaint:
- Prepare the plaint (the initial document filed in court) with all necessary details.
- Include the names, addresses, and contact information of both the plaintiff and the defendant.
- State the facts giving rise to the cause of action, the amount claimed, and the relief sought.
- Jurisdiction:
- Determine the appropriate court based on territorial and pecuniary jurisdiction.
- Territorial jurisdiction depends on where the cause of action arose or where the defendant resides/conducts business.
- Pecuniary jurisdiction depends on the amount claimed.
- Filing the Suit:
- File the plaint in the appropriate court along with necessary documents (agreements, invoices, receipts, etc.).
- Pay the required court fee, which depends on the amount claimed.
- Summons:
- After filing, the court issues summons to the defendant, directing them to appear and respond to the suit.
- Ensure proper service of summons to the defendant as per the Civil Procedure Code (CPC).
- Defendant’s Response:
- The defendant must file a written defense within the prescribed time, addressing the claims in the plaint.
- Failure to file a written defense may result in the court proceeding ex parte.
- Evidence:
- Both parties present their evidence, including documents and witnesses.
- Evidence is recorded, and witnesses are examined and cross-examined.
- Arguments:
- After the evidence is presented, both parties submit their arguments based on the evidence and applicable law.
- Judgment:
- The court renders its judgment based on the evidence, arguments, and applicable law.
- If the suit is decreed, the court orders the defendant to pay the amount claimed along with any interest or costs.
- Execution:
- If the defendant fails to comply with the judgment, the plaintiff can file an execution petition to enforce the judgment.
- The court can order attachment and sale of the defendant’s property to recover the decretal amount.
Relevant Sections of Pakistani Law
- Civil Procedure Code (CPC):
- Section 9: Deals with the jurisdiction of civil courts to try all suits of a civil nature unless barred.
- Order VII, Rule 1: Specifies the particulars to be contained in the plaint.
- Order XXXVII: Provides a summary procedure for suits based on negotiable instruments like cheques and promissory notes.
- Contract Act, 1872:
- Deals with the principles of contract law, including the enforceability of agreements and remedies for breach of contract.
- Financial Institutions (Recovery of Finances) Ordinance, 2001:
- Provides a mechanism for financial institutions to recover finances.
- Section 8: Allows financial institutions to file a suit for the recovery of any amount written off, released, or adjusted under any agreement, contract, or consent, if it has reasons to believe that the amount was written-off, released, or adjusted for political reasons or considerations other than bona fide business considerations.
- Section 22: Specifies the appeal process.
- Negotiable Instruments Act, 1881:
- Deals with negotiable instruments such as cheques, promissory notes, and bills of exchange.
- Section 118: Outlines presumptions as to negotiable instruments.
Civil Remedies Explained
- Recovery Suit:
- A formal legal action to recover money owed.
- Muhammad Junaid Pasha v. Faisal Saleem: Filing an ordinary suit based on a Negotiable Instrument does not deprive the plaintiff of the statutory presumptions under Section 118 of the Negotiable Instruments Act, 1881.
- Summary Suit:
- A faster procedure under Order XXXVII CPC for suits based on negotiable instruments.
- The defendant must obtain leave to defend the suit.
- Execution Proceedings:
- If a judgment is obtained, execution proceedings are initiated to enforce the judgment.
- This can involve attachment and sale of property or arrest of the judgment debtor.
Important Considerations
- Limitation Period:
- The suit must be filed within the limitation period prescribed by the Limitation Act, 1908.
- Generally, the limitation period for recovery of money is three years from the date when the cause of action arises.
- Evidence:
- Ensure all relevant documents and evidence are preserved and presented in court.
- Legal Representation:
- It is advisable to seek legal representation to navigate the complexities of civil litigation.
Relevant Judgments and Statutes
- Muhammad Asif v. Muhammad Javed Akhtar, 2006 M L D 1184: Clarifies that criminal proceedings under section 489-F of the P.P.C. do not bar a civil suit for the recovery of money based on a bounced cheque. It reinforces that civil and criminal remedies can be pursued simultaneously, as they serve different purposes and have different consequences.
- Saudi Pak Commercial Bank Ltd. v. Qazi Ehtishamul Haq, 2008 CLD 566: Reinforces the applicability of the Financial Institutions (Recovery of Finances) Ordinance, 2001, and the Negotiable Instruments Act, 1881, in cases of loan recovery.
- Section 9, Civil Procedure Code: Deals with the jurisdiction of civil courts to try all suits of a civil nature unless barred.
- Section 8, THE FINANCIAL INSTITUTIONS (RECOVERY OF FINANCES) ORDINANCE, 2001: Allows financial institutions to file a suit for the recovery of any amount written off, released, or adjusted under any agreement, contract, or consent.
- Section 118, Negotiable Instruments Act, 1881: Outlines presumptions as to negotiable instruments.
- Section 22, THE FINANCIAL INSTITUTIONS (RECOVERY OF FINANCES) ORDINANCE, 2001: Specifies the appeal process.