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Hardeep (Business)     08 November 2013

Non payment by client - solutions ?

Hi my learned friends !

We have a situation as under  and would appreciate all advise from seniors here ...

a) A Placement Company provides a Candidate to a Client. Terms are payment within 30 days of candidate joining otherwise interest will be payable at the rate of 3 % per month.

b) All contractual obligations of the Placement Company are over and payment is now 90 days overdue. Client says " we will pay you as soon as possible, but can't commit when. And we will pay you the interest also when we pay you as per our Agreement with you ".

c) This is of course untenable  since Client may delay indefinitely causing serious damages to the Company.

What recourse does the Service Provider have ? Case law citations and all legal advice highly appreciated !

Thanks much in advance for everyone's attention and efforts !



 10 Replies

BAALASUBRAMANNYAMM (Advocate)     08 November 2013

The placement company should have to send a demand notice to the "Client Company" demanding to pay the amounts, whatever receivable from  the "client", first. Then only the Placement company will react, after any reply form your "client company".

1 Like

K.(P).Sree Devi (Sr. Lawyer)     09 November 2013

I agree with what Mr.Baala Subrahmanyam advised you. Because once legal demand notice is issued we can know the strategy of the Respondent.

1 Like

Hardeep (Business)     10 November 2013

Thank you very much my learned friends Mr. Baala and Sreedevi for your attention and efforts !

Polite e-mails have been gong for about a month now. No formal/ written response from Client. Only verbal assurances that " payment will follow shortly "

My question is- can such a plea ( as is being verbally taken now) be formally be taken up by the Client  when a written / legal notice be sent them ? And will that be tenable in law ? 

Appreciate all advise !

sanjay kumar (BE/ LLM in Corporate Laws)     11 November 2013

Whether any duration was mentioned in the Contract that by this time, the Client will make the payment after raising of the Bill by you. Anyhow, if there is no such clause, you have to simply raise a Bill on your client and put a condition that "Payment: Within 30 days from the Date of the Bill". Either submit the Bill personally and take acknowledgement or send it thru registered post. If the client does not pay within 30 days or confirms a likely date(it has to be reasonable say another 30-45 days and not 1 or 2 years or no commitment of date), he will termed as defaulter and then you can send a legal notice to him.

1 Like

Hardeep (Business)     13 November 2013

Thank you very much Sanjay for your efforts.

a) Payment Terms mentioned in Agreement are :

c) Payment Terms : Within 30 days of the Selected Candidate(s) joining. Any delays in Full and Final settlement beyond these 30 days would invite Interest Charges at 3 % per month or part thereof , payable by the Client.

b) Our Invoice clearly says Payment " Within 30 days of Candidate joining " . Candidate joined on 19th July - mentioned on the invoice itself. Date of Invoice is 29th August ... we ourselves raised the invoice after more than 30 days per request from Client as they wanted to see if the Candidate stabilises etc.As of yesterday, the Candidate is still working with the Client Company.

Bill and Agreement has already been sent long ago. Client verbally confirmed receipt. All this- along with all e-mail trails -  has also been repeated on E-mails to client ( MD's PA as well as the HR Manager we were dealing with ) with no denial of facts so far from there side. But we don' t have a written acknowledgement on the Agreement / Invoice from the Client .

Total amount is approx. Rs. 1.25 lacs. Jurisdiction is Delhi Courts ( mentioned in invoice as well as the Agreement )

I'd appreciate advise of  all here as to under :

a) Since E-mails are not being replied to, can we now send a legal notice ?

b) In case we have to go to Court, approximately how much would be the Court Charges and time taken by them ?

c) If we go to Court, how much damages can we " reasonably claim " over and above the amounts due , and due what reasons ? I am not greedy and would be happy to give all such to to a Court determined Charity but really feel charlatans such as this who unnecessarily burden the judiciary, while creating problems for small businesses such as ourselves should be served with exemplary damages.

d) In case any here is interested in handling this Case as our lawyer what would be their charges ?

All interested in "d" above please send me a PM separately.along with your contacts.

Thanks much for everyone's interest !





sanjay kumar (BE/ LLM in Corporate Laws)     18 November 2013

Dear Mr.Hardeep,

1. There is no harm that you raised the Bill at a later date than your entitlement as per the Contract which is 19th august, Your client has to make payment immediately after 19th august or he invites penalty. But as you have raised the Bill on 29th august, you have to give a reasonable time of 7-10 days to process the payment.

2. It appears that you have not sent the Bill through a proper mechansim like Registered Post or through proper Dak/Diary system between the companies. Since they have not acknowledgede the receipt of the Bill, they are taking liberty. So you have to correct this first. Send a copy of the Bill through Registered Post immediately stating that you have already submitted this Bill to them through _____ however, you have not received the payment. You have to give a reasonable time say 4 days for postal transit and 7-10 days for processing i.e. about 15 days from the date of posting. 

3.Even then you dont receive the payment or they are still dilly-dallying you can verbally inform them that you are going to take legal action against them. To take legal action, you have to send a legal notice through a lawyer to them stating that if the payment is not received by this and this date, legal action is liable to be taken by you. The sending of legal notice by a lawyer should not cost more than Rs.500-1000/-.

4.Now regarding actual time taken by court and expenses,you have to consult a lawyer of the court having proper jurisdiction. Preliminary enquiry regarding cost of sending legal notice, cost of filing of petition, the court where the petition will be filed etc etc will not cost anything. You can consult two-three lawyers and then decide upon one of them.

5.If the judgement goes in your favor, which it will be , you can recover the Amount due + legal expenses + interest + inconvinience cost etc. etc which will depend upon the Learned Judge as to how much he gives you.

1 Like

Hardeep (Business)     19 November 2013

Thanks much Sanjay Sa'ab for your interest and efforts. yes indeed the bill has been sent via Courier and not registered post.. verbally the HR Manager has acknowledged receipt, but yes formally on paper/ e-mail no acknowledgement. There is no denial to all these facts on which many E-mails have been sent to them- including the PDF file of the bill( again, with no reply from their side till date )
I will now be sending the bill through registered post as well.
As already said, anyone interested in taking up this for us please send me a PM. The Company - as well as ourselves - are based in Delhi ( and our Invoice / agreement also says Jurisdiction in case of any Dispute would be Delhi.. ).
Thanks for everyone's interest. It is actually pathetic - and disturbing - to note how even " big companies " ( this is an approx. Rs. 500 Crore turnover Company ! ) are prepared to behave unethically.. no wonder our legal system is clogged up !

Ms.Nirmala P.Rao (CEO)     27 November 2013

I concur with Mr..Sanjay Kumar.

Hardeep (Business)     12 December 2013

Hi All on this Thread 


Since this case has closed happily, I'd like to take this opportunity to thank all who participated and gave their valuable inputs.


What seemed to have worked is the Registered Post with the Bill ( with copies of some E- mail correspondence attached ) which  I sent to the MD of the Company as well as the Head Administration . Few days afterwards, got a call from the HR Manager stating the " Bill was pending since no agreement was attached therewith ". Which was not correct since he himself had confirmed receipt of the same and in all my consequent E-mails this fact had been mentioned.


Anyways, I personally delivered another copy to him and he said payment will be processed forthwith. Accordingly , I have got the cheque yesterday and deposited in the bank. Hopefully it should clear !


Of course they have made very clear that they will not deal with us again... which is the call I had myself taken long ago when we bypassed the HR Manager and approached the MD direct as HR Manager was not giving any clear answer, pending " signing of agreement by MD ". IMHO, it is better to focus on clients who pay per agreed terms rather than waste time with those who just become causes for aggravation after all your efforts have been put in.

Hemant   19 August 2016

Hi Friends,

Need an advice to collect overdue payment, 

I have made the transactions on 2014, amount of 4,35,000/-, 

On the terms of 60 days the client supposed to clear the dues, 

After 4 months he provided me cheques for the amount,

Unfortunately the cheque bounced, after which i got intimation from client that he will make the payment ASAP Without failure. 

(I have noted all necessary mail correspondence too) 

Now, a year is passed, i thought to make a visit to his company address, 

there i came to know that the company is closed since past 3 months, (But the said company is alive in CST) 

Now, he is refusing to make a payment & informed me to proceed a legal procedure.

I have kept a file (Contains Original Bill Copies/ LR/ Courier Receipt / Bounced Cheques & Form-C) 

Now im looking for further process, 

If i could get any suggestion from this blog, i would be very thankful, 



Hemant Shah 



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