TRADITIONAL COURTS Vs NCLT
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 answers is sending legal notice, filing a case and then contesting a case for decades. In the end, losing money to get your money.
Nowadays, things have further deviated whether to file a case in traditional courts or before National Company Law Tribunal (NCLT). Well, it depends on the circumstances.
Before deciding where to approach a person should be clear about the following:-
- The debtor is a Registered Company or not;
- Whether there is a dispute with regard to the delivery of goods or services or not;
- Whether there is a dispute with regard quantum of dues or not;
If any one or more conditions are met a case has to be filed before traditional courts, (i) debtor is an unregistered company, (ii) dispute is there with regard to delivery, and (iii) Dispute is with regard to quantum of dues, (iv) dispute amount is less then INR 1 Lakh.
Thus it is always advisable to have all the documents supporting your claim handy.
Pre-requisite before a 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.
Filing 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 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.
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.
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.