Business work on relations and business relations are very circumstantial. We all have studied demand and supply rule, one delivers goods or services and other pay consideration amount. But what happens when the latter is not performed?
The obvious answer is sending a legal notice, filing a case and then contesting a case for decades. In the end, losing money to get your money.
Does this sound discouraging, demotivating? Well! Yes, if you are still opting for traditional methods to recover.
By the introduction of The Insolvency and Bankruptcy Code, 2016 recovery mechanism has changed drastically.
The procedure is reduced to a minimum, with less liberty for the parties to take undue adjournments. Thus we can rightly say the recovery of outstanding payments has become inexpensive and fast.
How to do that? Well! By approaching National Company Law Tribunal (NCLT). In simplified terms, it can be rightly stated that is a specialized court, established for the purpose smoothing of business.
Answering the first question! Pre-requisite before every business transaction?
- Always keep official, residential address and email address of a person whom you are delivering your goods or services. (very important at a later stage).
- Keep with yourself all proof establishing to delivery of goods or services.
One should clearly understand, every business transaction should be properly documented, starting from placing orders, to delivery, to proof of delivery and outstanding.
Remember that image of a lady with a weight scale in one hand and closed eyes? Now you do! Yes, it is the nature of courts, and well-documented transactions are easy to recover.
Let’s quickly move to who you are?
Taking liberty but very crucial, a small technical term “OPERATIONAL CREDITOR” will make a huge difference in how you will do business from now onwards.
Whenever you provide any goods or to the other party you are called an operational creditor. It is the right of the operational creditor to get money from a company, and if they fail to do so, you have the right to move to NCLT for your recovery.
Filing case a Case
You as an operational creditor should first get in touch with your lawyer and send a detailed demand notice to the other party.
You will either receive a reply from the opposite party denying any liability or no reply will be received. In either case, after 10 days from the date of sending a legal notice, you can file a case before NCLT filing insolvency of the opposite party, due to inability to pay dues.
Yes, it is a strong step. Moving to NCLT for insolvency of a company, but once we should understand the pressure is the key, and pressure of the way.
Procedure before NCLT?
NCLT issue notice to the opposite party to appear before them, so remember addresses, those are very important.
Then be ready to meet your opponent in a neutral zone. After the second party appears they will file a reply to your petition, keeping all documents with you will help here.
Afterward, a rejoinder or we can simply say a reply to the other party’s reply has to be filed by you. And the case will be put-up for final arguments.
An opportunity to resolve the dispute mutually
Yes! The parties have an opportunity to settle the dispute mutually and they can mutually mention before the NCLT to settle the same.
Remember pressure? Yes, it will work here as well. As the opposite party doesn’t want to wind up its entire business for one party will surely settle the dispute.
So don’t think you are the looser, and a person who is at loss, you a humble person who knows his rights extensively and know how to enforce them.
If you keep all the documents handy you can get your money back, despite the fact the other person company is compulsory wound-up for that.