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

Ms. Anika Sharma, a freelance designer based in Nagpur, entered into a formal Memorandum of Understanding (MoU) earlier this year to provide design services for a project managed by a company based in Singapore, “Zenith Innovations Ltd.” She was hired by the project head, Mr. Sameer Verma, who coordinated the work between her and a team of developers. Ms. Sharma diligently completed all her assigned tasks and delivered the final designs well before the stipulated deadline in April. However, the development phase of the project ran into multiple roadblocks, with several developers leaving the team. Consequently, the company decided to scrap the project entirely.

Despite fulfilling all her contractual obligations, Ms. Sharma is still awaiting a payment of ₹60,000 from the company. Mr. Verma, who is responsible for processing her payment, has become unresponsive. He is not answering her calls or replying to her emails and messages. This has left Ms. Sharma in a difficult position, seeking advice on the legal options available to her to recover her legitimate dues.

Advice in such cases

If you find yourself in a similar situation where a client refuses to pay for services rendered, here are the steps you should consider:

• Gather and Organize All Documentation: Compile every piece of evidence related to the project. This includes the signed MoU or contract, all email and chat conversations, invoices sent, proof of work submission, and any records of partial payments received.
• Send a Formal Legal Notice: The first formal step is to have a lawyer draft and send a legal notice to the company and the concerned individuals. This notice will detail the services rendered, the outstanding amount, the breach of contract, and a specific timeframe within which to make the payment, failing which legal proceedings will be initiated.
• Explore Civil Remedies: Your primary recourse is through the civil courts. You can file a suit for the recovery of money. Depending on the evidence, a summary suit might be an option for a quicker resolution.
• **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

Applicable Sections of Law

This issue is primarily a civil matter governed by the laws of contract and civil procedure.

• The Indian Contract Act, 1872: This Act governs the agreement between you and the client. The client’s failure to pay for services rendered constitutes a breach of contract under this Act. You can sue for damages and recovery of the promised amount.
• The Code of Civil Procedure, 1908: This code outlines the procedure for filing a civil suit. For recovery of a specific sum based on a written contract, you may be able to file a Summary Suit under Order XXXVII, which can lead to a faster decree if the defendant has no substantial defence.
• The Commercial Courts Act, 2015: If the value of your claim qualifies as a ‘commercial dispute’ under this Act, you can approach a Commercial Court, which is designed to expedite the resolution of such matters.
• Bharatiya Nyaya Sanhita, 2023 (BNS): While primarily a civil case, if you can establish that the client had a dishonest intention to not pay you from the very beginning, a criminal complaint for cheating under Section 316 of the BNS could be considered. However, proving this initial fraudulent intent is often challenging.

If you are the complainant

As the complainant (the person who is owed money), you must act methodically to build a strong case.

• Preserve the Paper Trail: Do not delete any emails, messages, or other communications. Keep a record of every interaction, including the dates and times of unanswered calls.
• Document Your Work: Ensure you have copies of all the work you submitted and any feedback or approval you received from the client. This proves you fulfilled your part of the agreement.
• Issue a Legal Notice: This is a crucial step before approaching the court. It shows your intent to resolve the matter legally and gives the other party a final chance to pay.
• **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

As the victim of non-payment, your actions should be guided by legal strategy, not emotion.

• Stay Professional: Avoid sending angry or threatening messages to the client. All communication should be formal and documented, as it can be used as evidence in court.
• Understand Jurisdiction: Since the company is based abroad, determining the correct jurisdiction (which country’s courts to approach) is critical. Your contract or MoU might have a clause specifying this. An experienced lawyer can advise on the feasibility of filing a suit in India.
• Follow Legal Procedure: Do not resort to non-legal methods of recovery. Adhere to the process advised by your lawyer, from sending the legal notice to filing a suit.
• **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

In cases of non-payment for freelance work, the police are generally reluctant to intervene. They view such disputes as civil in nature, stemming from a breach of contract, rather than a criminal offense. If you approach a police station, they will most likely advise you to seek a remedy in a civil court. An FIR for cheating under Section 316 of the BNS is only registered if there is strong prima facie evidence to suggest a pre-meditated plan to defraud you from the start. Simply failing to pay after the work is done is usually not considered sufficient grounds for a criminal investigation.

FAQs people normally have

Here are some common questions that arise in these situations.

What evidence is required?

To build a successful case for the recovery of your dues, you will need strong and clear evidence. The most crucial pieces of evidence include:

• The Contract/MoU: The written agreement that outlines the scope of work, deliverables, deadlines, and payment terms.
• Communication Records: All emails, WhatsApp chats, or messages exchanged with the client, project manager, or any company representative.
• Proof of Work Delivery: Copies of the final work submitted, links to the deliverables, or any acknowledgement of receipt from the client.
• Invoices: Copies of all invoices you sent to the client for the work performed.
• Bank Statements: To show any partial payments made or the complete lack of payment against the invoices.

How long will the investigation take?

Since this is a civil matter, there is no “investigation” in the police sense. The process is a “civil suit” in court. The duration of a civil suit for recovery can vary significantly. A summary suit, if applicable, can be resolved relatively quickly, sometimes within 6-12 months, if the defendant has no valid defence. However, a regular civil suit that is contested by the other party can take several years to conclude, depending on the court’s caseload, the complexity of the arguments, and procedural delays. Dealing with a foreign company can add further delays related to serving notices and enforcing a potential decree.

Advocate Sudhir Rao, Supreme Court of India