When a business invoice goes unpaid or a borrower defaults, the creditor’s most common civil remedy is a suit for recovery of money. But “recovery” is not one single route — Indian law provides multiple procedures (summary suits, regular civil suits, special debt tribunals and statutory remedies) each with different standards, timelines and risks. Here’s a detailed, reporter-style guide to how money-recovery litigation works today, who it helps most, and what recent court rulings mean for creditors and debtors.
What kind of claims qualify as suits for recovery of money?
Broadly, a money-recovery suit seeks a liquidated monetary sum arising from:
- written contracts (loan agreements, invoices, supply contracts),
- negotiable instruments (bills of exchange, promissory notes, cheques), or
- admitted liabilities (acknowledgements of debt).
If the amount is ascertainable from documents (not a disputed question of complex facts), the plaintiff can often choose a summary route under Order XXXVII of the Code of Civil Procedure (CPC). Otherwise, a regular civil suit is the route.
Two major routes — quick summary suits vs regular suits
1) Summary suits (Order XXXVII CPC) — “fast lane” for clear claims
Order XXXVII gives plaintiffs an expedited remedy for liquidated demands supported by written documents (e.g., promissory notes, bills, written contracts). The court issues a Summons for Judgment; the defendant must either pay or apply for leave to defend by showing a bona fide and substantial defence. Mere denials or technical objections won’t usually suffice; courts expect a credible prima facie defence before allowing full trial proceedings. If leave to defend isn’t granted, the court can decree the claim summarily.
Why plaintiffs use it: Speed and lower cost; good where documentary proof is strong.
Risks for plaintiffs: If a defendant convinces the court there is a real defence, the suit proceeds as a full trial and the plaintiff may face costs or delay.
2) Regular civil suits (Ordinary procedure under the CPC)
Where the claim raises contested facts, equitable defences, or complex disputes (title, set-offs, cross-claims), plaintiffs use the full suit procedure — pleadings, discovery, evidence, oral arguments and (usually) a longer timeline. This route is slower but necessary where the defendant’s factual dispute cannot be resolved on paper.
Specialized forums for debt recovery
- Debt Recovery Tribunals (DRTs): Set up under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, for expeditious adjudication of bank/financial-institution claims above statutory thresholds. Appeals go to Debts Recovery Appellate Tribunals (DRATs). DRTs are often faster than regular civil courts but limited to qualifying creditors and kinds of debt.
- SARFAESI and Insolvency routes: Secured creditors may use the SARFAESI Act to recover secured debts without court process, or initiate insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) in appropriate cases. These are statutory, out-of-ordinary-civil-court mechanisms. (Not every creditor or debt qualifies.)
Time limits: when must you sue? (Limitation)
Time is critical. Most suits for money recovery flow from simple contracts and are governed by the Limitation Act, 1963— three years is the typical limitation period for actions founded on simple contracts (the exact “trigger” date depends on the cause of action — e.g., date loan was due, date cheque dishonoured). Special rules (suspension of time if administration of an estate is pending, or for specific statutory actions) may apply. Plaintiffs should check the precise triggering event before filing.
Recent judicial clarifications
In 2025 the Supreme Court and several High Courts have reaffirmed that Order XXXVII is not a shortcut — courts must carefully test the defendant’s prima facie case before denying leave to defend. Recent rulings have emphasized:
- Defendants cannot be allowed to file a substantive defence in a summary suit without seeking and obtaining the court’s leave; doing so undermines the distinction between summary and ordinary suits.
- Courts should ensure procedural safeguards so that summary procedures don’t trample genuine defences.
These judgments tighten the judicial gatekeeping around summary suits: speedy recovery remains possible, but plaintiffs cannot expect automatic decrees where the defence is plausible.
Typical procedural steps in a summary recovery suit (Order XXXVII)
- Plaintiff files plaint expressly stating the suit is under Order XXXVII and attaches supporting documents (invoices, promissory notes).
- Court issues Summons for Judgment to the defendant; defendant gets time to pay, apply for leave to defend, or do nothing.
- If defendant applies for leave to defend, they must disclose the nature of defence and show prima facie grounds; if leave is granted, matter proceeds to full trial. If leave refused, court may pronounce judgment summarily.
- Execution: After decree, plaintiff moves for execution (attachment, garnishee orders, arrest/attachment of property). Enforcement can be contested on narrow grounds.
Practical considerations and tips for litigants
- Pick the right forum: For bank/financial debts, DRTs may be faster; for secured creditors, statutory remedies (SARFAESI/IBC) can be more effective.
- Document the debt: Order XXXVII succeeds when documentary proof clearly establishes the debt and due date. Poor or ambiguous paperwork undercuts summary relief.
- Watch limitation: Identify the triggering event (due date, dishonour date) and file before limitation runs out. Time-barred debts may still be collectible by some extrajudicial means, but courts typically decline to entertain stale suits.
- Consider costs vs speed: Summary suits save time but risk being converted into full trials; if the defendant has arguable defences, weigh expected recovery against litigation costs.
Real-world impact: debtors, MSMEs and corporate creditors
For small businesses and creditors, summary suits have been an important tool to preserve working capital — they allow quick resolutions when documents are clear. But the courts’ recent insistence on preserving defendants’ right to a fair hearing has made outcomes slightly less predictable: plaintiffs must present airtight documentary cases and be prepared to litigate if a defence looks real.
What lawyers say
Legal practitioners advise: always attempt pre-suit settlement (demand notices, references to arbitration clauses where present), preserve documents (agreements, proof of delivery, acknowledgement of debt), and file the appropriate mode of suit (Order XXXVII vs ordinary suit vs DRT/SARFAESI) after a brief risk assessment. Where a defendant appears to have bona fide disputes of fact, initiating a full suit from the start can avoid being bounced between summary procedure and a later trial.
Quick checklist for a plaintiff who wants to file today
- Is the claim liquidated and supported by written proof? → Consider Order XXXVII.
- Is the creditor a bank/financial institution or does the RDDBFI Act apply? → Consider DRT.
- Has limitation run out? → Check the Limitation Act trigger.
- Are there security interests or insolvency/IBC options? → Explore statutory remedies.
Bottom line
Suits for recovery of money remain a central civil remedy in India. The law offers fast (Order XXXVII), specialized(DRTs/SARFAESI) and full-trial (ordinary suits) options — and recent case law has recalibrated the balance between speed and fairness. Creditors with clear, document-backed claims still have powerful, time-efficient tools; debtors with plausible defences are more likely than before to get their day in court. As always, choice of forum, impeccable paperwork and attention to limitation are decisive.
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