payment recovery legal remedies for small businesses
TRANSCRIPT
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Wednesday, the 30th July, 2014
FSIA & I am SME of India
Team AGBians
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That You are Sleeper Financier Cell to Your Client who is Bigger in size
Regular Money Flow is Oxygen for your business
You are paying interest whereas you have extended interest free credit that too without security
Team AGBians
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Threat of Delayed Payment beyond agreement period
Verbal assurances given day in and day out by Vendor Development Managers and Accounts Heads, etc.
Meeting after meetings resulting into wastage of time but no recovery in sight
Team AGBians
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IF YES – THEN YOU NEED TO PRESERVE FOLLOWING DOCUMENTS
• Signed Copy of Agreements and Purchase Orders
• Signed Copy of Delivery Schedules
• In-Transit Sales Tax Forms• Delivery Challans• Minutes of Meeting• Quality Reports (if you can)
Team AGBians
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YOU NEED TO REMEMBER
• The limitation period *3 years* to keep the claim alive – send e-mails, letters that also through speed post
• Always take periodic Balance Confirmations
• *7 Year* Vendor Itch
Team AGBians
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This is always beneficial to look for
Alternative Dispute Resolution Mechanism in Agreement as Essential
Clause• Conciliation• Followed by Mediation• Further followed by
Arbitration
Team AGBians
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Do You Know???I am SME of India
or FSIA or
any other forum can also be appointed as
Mediator or ArbitratorTeam AGBians
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Negotiable Instrument Act 138 for Cheque
Bouncing
•First Warning Sign of Deteriorating Health
•Don’t get carried by flimsy excuses of your client
•Do Remember to invoke criminal offenceTeam AGBians
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State MSE Facilitation Council
constituted under MSME Development Act,
2006
• IEM 2 is compulsory to file case under MSME Act
• The forum is comparatively Cheap
• Provides for interest @ 3 times of Bank Rate fixed by RBI
• Appeal against Order difficult
Team AGBians
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PERMANENT LOK ADALAT
1. Established by State Level Legal Service Authority (HALSA)
2. Public Utility Services, Pre-litigation Stage, Financial Dispute upto the amount of 25 lacs
3. No fees4. No appeal5. Simple Mechanism6. Less Procedural7. Advocate – not necessary
Team AGBians
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CIVIL SUIT UNDER CIVIL PROCEDURE
CODE •Traditional Method of recovery
•Time consuming as well as Money Guzzler
•Heavy Initial CostTeam AGBians
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SUMMARY PROCEEDINGS UNDER CIVIL PROCEDURE
CODE
• Fast Decision Possible
• Less Expensive • Possible when you have third
party conclusive proof about timely and qualitative Delivery
Team AGBians
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CRIMINAL SUIT UNDER CRIMINAL PROCEDURE CODE
Possible wherever
• Breach of Trust is there• Intent of Fraud can be
proved• Misrepresentation • Concealment of Facts• Wilful Default
Team AGBians
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WINDING UP PETITIONUNDER COMPANIES
ACT • In case of client being
Corporate Entity• Not referred to BIFR• Claim is more than 50k• Only as a Last Option
Team AGBians
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WHAT IS THE BEST
REMEDY???
Team AGBians
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COMPROMISE IS END OF EVEN WORLD WAR
• There are no permanent enemies nor friends• You are here to do business not fight legal battle•Wherever and whenever respectable compromise is offered – do it and move on in life• Judicial System (Registrar, Judges, Advocates, etc.) is not at all interested in resolving disputes that too business disputes Team AGBians