If you are stuck in such a situation, here is what to do.

Mr. Sameer, a freelance digital marketer from Pune, was hired by Mr. Vikram for his company, “Apex Tech Solutions,” to develop and run two comprehensive online marketing campaigns. The terms of the engagement were discussed and agreed upon primarily over WhatsApp conversations and phone calls, and no formal written contract was signed. Mr. Sameer successfully completed and delivered both campaigns, providing all the necessary reports and access to Mr. Vikram. However, when it came time for payment, Mr. Vikram began making excuses and delaying the payment indefinitely. Mr. Sameer, being a small business owner dependent on this income, found himself in a difficult position and was unsure of his legal options.

Advice in such cases

When faced with non-payment from a client, especially when there is no formal written contract, it is crucial to act strategically and methodically.

• Preserve all forms of communication. This includes screenshots of WhatsApp chats, emails, text messages, and any call logs that can establish the existence of an agreement and the work you have delivered.
• Send a formal written demand for payment. Before escalating the matter, send a professional email or a registered post letter detailing the work done, the amount due, and a clear deadline for payment.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
• A lawyer can send a formal Legal Notice on their letterhead, which often prompts payment from the defaulting party as it signals your intent to pursue legal action.

Applicable Sections of Law

Several Indian laws can be invoked in cases of non-payment for services rendered, even without a formal written contract.

• The Indian Contract Act, 1872: An oral agreement or an agreement made via electronic communication like WhatsApp is a valid contract. Non-payment constitutes a breach of this contract. You can file a civil suit for recovery of the due amount based on this breach.
• The Code of Civil Procedure, 1908 (CPC): For recovery of money, you can file a regular civil suit. If your claim is based on written evidence like invoices or emails (WhatsApp chats can also be considered), you may be able to file a Summary Suit under Order XXXVII of the CPC, which is a much faster legal remedy.
• Bharatiya Nyaya Sanhita (BNS), 2023: If you can establish that the client had a fraudulent or dishonest intention from the very beginning of the contract and never intended to pay, you may be able to file a criminal complaint for Cheating under Section 316 of the BNS.
• The Commercial Courts Act, 2015: If the value of your claim is above the specified threshold and the dispute qualifies as a “commercial dispute,” the case can be filed in a Commercial Court, which is designed for speedier resolution of such matters.

If you are the complainant

As the person who has not been paid, you are the complainant or plaintiff. Your course of action should be systematic.

• Compile all evidence: Gather every piece of communication, proof of work delivery (like project files, links, reports), and any invoices you sent.
• Send a Legal Notice: This is a mandatory first step before filing a suit. It is a formal communication from your lawyer to the client, demanding payment and stating the legal consequences of failure to comply.
• File a Civil Suit: If the legal notice does not result in payment, your lawyer will help you file a suit for the recovery of money in the appropriate civil court.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

If you are the victim

Being the victim of non-payment can be frustrating. Here are some key points to remember.

• Stay Professional: Do not resort to threats, harassment, or any illegal means to recover your money. This can weaken your case and potentially lead to legal trouble for you.
• Document everything: Keep a detailed timeline of events, from the initial agreement to the final communication regarding payment. This will be invaluable for your lawyer.
• Be prepared for counter-allegations: The client might falsely claim that the work was unsatisfactory or incomplete to justify non-payment. Your proof of delivery and communication will be key to refuting this.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

How the police behave in such cases

Typically, disputes over non-payment for services are considered civil matters, not criminal ones. The police are often hesitant to get involved.

• When you approach the police, they will likely inform you that this is a breach of contract and advise you to seek a remedy in a civil court.
• They are generally unwilling to register a First Information Report (FIR) for cheating unless you provide strong preliminary evidence that the client’s intention was to deceive you from the very beginning.
• In some cases, the police might informally summon the other party to the police station to mediate a settlement, but they have no legal power to enforce payment in a civil dispute.

FAQs people normally have

Is a contract on WhatsApp legally valid in India?

Yes. Under the Indian Contract Act, 1872, a contract does not need to be on paper to be valid. An agreement made through WhatsApp, emails, or even verbally is considered a legally binding contract. These electronic records are admissible as evidence under the Bharatiya Sakshya Adhiniyam, 2023.

Can I take down the websites I built if the client doesn’t pay?

This can be a grey area. While you might feel justified, taking down a delivered service could lead to a counterclaim from the client for causing business loss. It is always better to pursue legal channels for recovery rather than taking matters into your own hands. Consult your lawyer before taking any such step.

How much does it cost to file a recovery suit?

The cost involves two main components: court fees and advocate’s fees. Court fees are a percentage of the amount you are claiming and vary from state to state. Advocate’s fees depend on the complexity of the case and the lawyer’s experience.

What evidence is required?

To build a strong case for recovery of your dues, you will need to gather substantial evidence. The more proof you have, the higher your chances of success.

• Communication Records: Screenshots of all WhatsApp chats, emails, and any other written communication discussing the project scope, deliverables, and payment terms.
• Proof of Work: Links to the live websites or campaigns, project files, design mockups, source code, or any other tangible proof of the work you have completed and delivered.
• Invoices and Reminders: Copies of all invoices sent to the client and any follow-up emails or messages requesting payment.
• Witnesses: If a third person was present during any discussions or was aware of the agreement, their testimony can be valuable.
• Bank Statements: Your bank statements showing that no payment was received from the client can serve as supporting evidence.

How long will the investigation take?

The timeline for resolving such a dispute varies significantly depending on the legal path you choose.

• Pre-Litigation: The process of sending a legal notice and negotiation can take a few weeks. Many cases get resolved at this stage.
• Civil Suit: A standard civil recovery suit can be a lengthy process. Due to the backlog in Indian courts, it can take anywhere from a couple of years to several years to get a final judgment.
• Summary Suit: If your case is eligible for a summary suit under Order XXXVII of the CPC, the process is much faster. If the defendant cannot present a substantial defence, a decree can be passed in your favour within a few months.
• Criminal Complaint: If a police investigation is initiated for cheating, the timeline is governed by the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023. The investigation and subsequent trial can also be a prolonged process.

Advocate Sudhir Rao, Supreme Court of India