How to recover your money?

Remedies to recover your money!

I know how it feels like, loosing your hard earned money! Get it back, ASAP!

Unlike banks with their well established recovery machinery, the common man can hardly boast such resources. However, if you are ready to battle it out, there are multiple provisions in the law to help you out.

Civil remedies

The most common civil remedy for recovering money is Order 37 of the Civil Procedure Code, which allows a creditor to file a summary suit. Compared to normal suits, summary suits are disposed of faster. Once the suit is instituted and the summons are issued, the defendant has 10 days to make an appearance, failing which the court assumes the plaintiff's allegations to be true and, accordingly, awards the plaintiff. If the defendant makes an appearance, the court accepts his defence only if it is convinced that it is substantial to the case in question.

The summary procedure applies to all suits for recovery of money that arise from written agreements. This could be promissory notes and contracts, bills of exchange or cheques, so long as the plaintiff seeks to recover specific debt. Where the matter How to recover pending dues concerns penalties or any other uncertain amount, one cannot file a summary suit.

Another option is the Negotiable Instruments Act, 1881, which only deals with the recovery of money arising from instruments such as bills of exchange or cheques. The Act contains several sections, each outlining the procedure for recovering money under a specific instrument. For instance, Section 138 explains the procedure to deal with a bounced cheque, whereby a legal notice is to be sent to the defaulter within 30 days of receiving the cheque return memo. If the cheque issuer fails to make a fresh payment within 30 days of receiving the notice, the payee has the right to file a criminal complaint under this Section.

However, the complaint should be registered in a magistrate's court within a month of the expiry of the notice period, otherwise your suit will be time barred. In other words, it will not be entertained by the court unless you show sufficient and reasonable cause for delay. On receiving the complaint, along with an affidavit and the relevant paper trail, the court will issue summons and hear the matter. If found guilty, the defaulter can be punished with a prison term of two years and/or a fine, which can be as high as twice the cheque amount.

Criminal proceedings

You also have the option of initiating criminal proceedings against the defaulter under the Indian Penal Code, 1860. You can either file a case of criminal breach of trust or cheating, or even mischief (see Sections under which..). However, criminal proceedings usually take a long time to conclude. So you may end up wasting valuable time and effort in court to recover your dues,

Out-of-court options

One of the fastest and most economical ways of recovering money is to opt for an out-of-court settlement, such as arbitration or conciliation, provided that the other party is also willing to settle in this manner. If the matter is referred to an arbitrator, the latter hears both the parties and passes an award binding on both. The award can only be appealed on three grounds.

One, if it is invalid, two, if the defendant is not given adequate time to present the case, and three, if he was not given notice about the arbitrator's appointment. In fact, if a proposal by an inter-ministerial group set up last year to look into policy and legislative changes to tackle the large number of pending cases is accepted, then the cases of dishonoured cheques will have to be decided only through arbitration, conciliation or settlement by lok adalats.

Apart from these options, you can also choose to file a winding-up petition against a client if he is not able to pay the debts. Of course, the debt in question must be specific and cannot pertain to arbitrary penalties.

Better safe than sorry

In order to avoid all these problems, it's best to take some precautions at the outset. Experts recommend a written contract between the parties involved. The contract must contain details of the transaction in clear terms, including the date on which the amount was lent and the exact principal amount and the interest, if any.

If the amount is to be returned in instalments, mention the exact amount and the repayment dates. 

Make sure that you and the borrower sign the document, without which it will not have any significance. Ideally, as a safety measure, have the document executed on a stamp paper and get it registered, though this is not mandatory,

Happy learning and Sharing. 

The stuff about the notarisation of documents in India.

1.    Who is a Notary?
Notary is person appointed by the Central Government or state government under Notaries Act 1952. The Central Government may appoint a notary for the whole or any part of the country. Likewise, the state government may appoint a notary for the entire or for any part of the state. He is a public officer.

2.    What are the functions of notary?
The appointment, functions of notary public is governed by the Notaries Act 1952.

There are various functions. We shall confine here to functions which are more relevant to the public:

1.    To verify; authenticate, certify or attest the execution of any instrument. The Act refers to instrument. The word instrument is defined in the Act, as every document by which any right or liability is or purports to be, created, transferred, modified, limited, extended, suspended, extinguished or recorded. So every document is not an instrument, unless it effects a right or a liability. Each word should verify, authenticate, certify, attest, and has different meaning. Authenticating means, the notary has assured himself of the identity of the person who has signed the instrument as well as to the fact of execution. Certify means to testify. Notary is bound to make entry of notarial act of certifying the copy of the document as true copy of original. Attest means to bear witnesses to.

2.    To administer oath to, or take affidavit from any person.
3.    To translate and verify the translation, of any document from one language into another.
4.    To act as commissioner, to record evidence in any civil or criminal trial if so directed by the court or authority.
5.    To act as arbitrator, mediator, or councillor if so required.
6.    To do any other act which may be prescribed.

3.    When a notarial is completed?

Every notarial act has to be done under his signature and notary seal with registered number and date.

The relevant document is executed right before the Notary Public, after which, he notarises the document by affixing his seal and Signature!

4.    What is a notary seal?

It is mandatory for notary to use his official seal. The Notaries Rules 1956 has prescribed the form and design of the seal to be used. It shall be plain circular seal of 5 centimetres diameter. It shall contain the name of notary, the jurisdictional area where he has been appointed to exercise his functions, the registration number, and circumscription “notary” and the name of the government which appointed him. The notary shall use his office seal on every document. The Evidence Act also provides that the courts should take judicial notice of seal of the notary. In the absence of the seal of the notary, the document has no evidentiary value.

5.    Are the affidavits verified by notary admissible in courts?
The Section 139 of Code of Civil Procedure 1908 has an express provision, in this regard, where any affidavit verified by notary is admissible as evidence. Likewise, Section 297 of Code of Criminal Procedure provides for admission of affidavits verified by the notary.

6.    Does notary public have to ensure that proper stamp duty is paid on instrument?
Before doing any act of notary, it is the duty of the notary to ensure that the proper stamp duty is paid, if not he may impound it under Section 33(1) of the Stamp Act. Apart from the regular stamp duty, the act of notary attracts additional stamp duty under Article 42 of Indian Stamp Act.

7.    Does notary charge any fee for doing notarial acts?
The Notarial Rules 1956 has prescribed the fee for each category of act. The rule No.10 refers to the fee to be collected by the notary. He should display rates of fee charged in conspicuous space both inside and outside his chamber or office. In addition to the fee, notary may also charge the travelling allowance by train or road at ` 5 per kilometre.

Happy Learning and Sharing.

Source, references and DNA newspaper.

Understanding the basics of Stamp Paper and Stamp duty.

Under the Bombay Stamp Act, 1958, 62 categories of documents need to be legitimised by 'stamping' them (paying stamp duty or a kind of tax to the government). There are 14 different varieties of stamp papers, available in 10 denominations. They are of two kinds: Judicial, used for legal and court work; non-judicial, used for registration of documents, insurance policies etc. 

Telgi used loopholes in the Act. He sold fake stamp papers for share transfers or insurance policies which do not have to be registered at the stamp department. 85 per cent of stamped documents (mainly property transactions) have to registered. 

Stamp Duty basically is nothing but a type of tax collected by the government under its jurisdiction for a transaction of property.

The types of property may be freehold or leasehold from land (agricultural and non-agricultural), independent houses, flats to commercial units. As a general rule, Stamp Duty is generally paid by purchasers. Also read: Having trouble in filing returns? Here's a checklist Stamp duty in India was first introduced by Britishers in 1899.

According to early rules, the Duty has to be deposited in the government treasury for all property transactions, which are done through document or instrument under the provisions subscribed in Indian Stamp Act of 1899 and Bombay Stamp Act of 1958.

The amount, collected by government-appointed Stamp collectors, would go directly to the concerned State under which the individuals are taxed. In many states still the Indian Stamp Act, 1899 is in force.

The percentage of stamp duty levied varies in different states. For example Maharashtra charges 6.5 percent of the property value as stamp duty if the property lies within the city limit, while in Tamil Nadu 8 percent Stamp Duty is collected for all types of property transactions. In this, 7 percent is levied as Stamp Duty and one percent as registration charges. Tamil Nadu government has introduced its own stamp duty law in May to simplify and streamline transactions of immovable properties and securities. States such as Gujarat, Karnataka, Maharashtra, Rajasthan and Kerala too have their own stamp law. Tamil Nadu’s Bill brought some significant changes to the Central law. For example, the addition of sister, brother, husband of predeceased daughter and wife of predeceased son within the definition of family. The central law states that family means father, mother, husband, wife, son, daughter and grandchild. For those who buy flats, stamp duty is calculated on the basis of the land parcel applicable to the purchaser in the multi-storey apartment. This is known as undivided share (UDS) of the property. For example, if the apartments made on 2400 sq ft having 10 equal sized apartments, each member has to pay for a stamp duty for 240 sq ft land. The size of UDS varies if the apartment sizes vary and largest portion will be allotted for those having large sized apartments.

Why should one pay stamp duty? As mentioned earlier, this is a tax inline with sales tax or income tax collected by the Government. Technically speaking, Stamp Duty for any property transactions is paid under Section 3 of the Indian Stamp Act, 1899. Stamp duty is payable in full and on time. If there is a delay in payment, it attracts penalty at the rate of two percent every month on remaining amount and as maximum penalty being levied 200 percent for the unpaid amount. Another advantage for paying stamp duty is that the document acquires evidentiary value and admitted in any court of law in India as evidence provided the documents are how to pay the stamp duty properly stamped.

How to pay stamp duty? Now the question comes, how to pay the stamp duty? Many states have simplified the payment procedure. For example in Maharashtra, one can pay the stamp duty online as the government has recently announced linking of all sub-registrar offices across the state for easy payment. Otherwise, stamp papers, equivalent to the value of the stamp duty, should be purchased in the name of one of the parties involved in the transaction. The amount will be paid at the sub-registrar office of the jurisdiction on or before the execution of the sale deed.

Though in India it has become a practice that only purchasers bear the cost of stamp duty, actually, it is either paid by a transferee or purchaser or as mutually agreed in the agreement between parties.

Sources, readings from the TOI and money control.com 

Happy learning & Growing!

Kunal 

Corporate Law Update: Mandatory e-filing of service tax return w.e.f 1st October, 2014

The Central Board of Excise and Customs have made the filing of service tax return filing mandatory in electronic mode for all the assesses w.e.f 1st October, 2014.

Therefore all the assesses are required to file the returns diligently making use of internet banking.

Provided that the department has given powers to the Assistant commissioner that if the commissioner thinks fit, he can exempt any assessee from filing the return electronically.

For White-Collar Legal,

Partner

Kunal

Annual Compliance by Companies in India 2014.

Here is one for the Corporate, 2014, Annual Filing

Every Company registered under the Companies Act 2013/1956 shall file following Forms:-

S. NO	FORMS	PURPOSE	DUE DATE	REQUIREMENTS
1.	GNL - 2	Appointment of Auditor (Under Section 139 (1))	15 Days from the Date of Meeting in which auditor is  Appointed.	·   ADT-1, ·   Resolutions ·   Appointment Letter
2.	20B	Filling of Annual Return (Under Section 92 (1))	60 Days from the Date of AGM	·   Annual Return
3.	23AC and 23ACA	Copy of financial statement to be filed (Profit and Loss accounts and Balance Sheets) (Under Section 137 (1))	30 Days from the Date of AGM	·   Notice of AGM ·   Board of Directors Report ·   Auditors Report ·   Audited Financial Statement
4.	MGT 14	Filling of Board Resolutions for Approval of Financial Statements (Under Section 179 (3)(G))	30 Days from the Date Approvals of Financial Statements	·   Board Resolutions

IMPORTANT NOTE:- (In Case of Non Filling or Delay Filling)

1. The Company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakhs rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both;
2. Disqualifications for appointment of director u/s 164 (2)(A)
3. Winding up by the Tribunal;
4. Issue of Notice by the Registrar of Companies to declare as Dormant Company;
5. Additional Fees may attract for delay filling;

Staying Relevant.

How to understand the relevancy of people, of their knowledge to be precise…

Understand by observing whom they quote. If they keep quoting Bill Gates or Steve Jobs or Einstein (everyone’s favorite) I’m sure they’re just making it up. If they’re quoting someone who’s been in their profession for a long time, it is an indication that they haven’t been reading much lately and therefore are resorting to stay out of harm’s way.

The same applies for your professional colleagues as well.

Expertise is dynamic and the person germane today might have been a totally unknown name yesterday.

Best tip I received today (from a doctor actually)

BE RELEVANT. Everything else follows.   

Doing Business in a democracy! Part 2.

Doing business in a democracy pays off, as: 5 highlights!

1.      Large employable workforce (incentives to employ)

As the government is unable to cater to and provide employment to all, they provide incentives and subsidies to budding entrepreneurs and industrialists as they are provide mass employment. The rationale behind setting up SEZs and EHZ was purely to dole out employment to the rural population.

2.      Better pricing flexibility

A business has both types of clients. The niche’ clientele and the masses. In India, we have three, the uber rich, the middle class and the LIGs. (Lower income groups) Therefore, a business can have top of the line and basic products in their offering. For e.g. Mercedes Benz offers the S class for the 1^st group, the C class for the second, and a pre-owned & lease system for the ambitious third. A diverse client base allows you this.

3.      Working on national interests/products of national importance

It is only in a democratic set up that a company (even a private limited) can discharge sovereign functions. Who had thought to reliance entering into the fuel and natural gas biz. ONGC was earlier the only licenses one. One an organization proves its mettle; the government goes all out to share their chunk of responsibility towards citizens. Last IC session, we also understand how Lawrence & Mayo is helping measure the highways and so on. Even professionals get to work and defend the government even when they are not full time employees. Nani Palkhiwala was a jurist regularly hired by the govt to defend them in international cases. Please note, Mr. Palkhiwala was a private practitioner and in no way connected to the government. (Even the tax speeches he gave were widely publicized through various government mediums)

4.      Best of both worlds

As a developing democracy is hungry and just waiting for opportunities. One can either take a franchisee of a successful business (like McD) or start a quasi-biz. Many entrepreneurs have observed great business during their tours abroad and have simply replicated them in their home country. The reason why many domestic social networking sites have thrived in spite of there being google+ and facebook. (Fropper & fan2go are some examples)

5.      Accommodative governmental system

The government goes out of its way to promote entrepreneurs. There have been instances of the government letting Air India flight slots to the more successful ones like Indigo and Jet airways. Similarly, 100% EOUs don’t have to pay taxes, Industries like IT and others, which do not pollute get amazing 10-15 year income tax exemptions.

The government also stripes of the uber wealthy and royal families of their status and wealth. For eg. The pataudi family lost their nawab status and had to surrender much of their ancestral property to the government, as under the IT Act, 1961, the government has introduced caps on how much property can be held. This is enforceable in developed countries. Sometimes, I agree that this accommodative nature of the govt is taken for granted by some of the MNCs who are thriving here, but the pros clearly outweigh the cons.

Happy business you'all :)