Financial Exploitation by a Partner — How to Recover Money and Take Legal Action in India

One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.

Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.

Priya Verma, a 33-year-old IT professional from Pune, had been in a relationship for nearly three years with a man she trusted completely. Over that period, he convinced her to fund what he described as a promising logistics startup. She transferred money, made credit card payments on his behalf, purchased a motorcycle registered in his name using her savings, and handed over several expensive electronic devices — a laptop, a tablet, and a high-end mobile phone. The total amount came to approximately twenty-eight lakhs.

When the relationship ended in early March 2024, he vanished. No calls returned. His family, based in Nagpur, told her they had no idea where he was — even though, when Priya visited their home, the motorcycle and the devices were clearly visible in his room. His parents refused to let her collect them in his absence. She was left with partial bank records, credit card statements, and two blank cheques he had issued months earlier when mutual friends had confronted him about repayment.

Priya had initially approached a general civil litigator in Pune who filed a basic recovery notice. Nothing moved. By mid-April 2024, she approached Advocate Sudhir Rao. The matter was identified as mixed in nature: primarily civil (money recovery, unjust enrichment) with strong criminal elements (cheating under Section 318 BNS, criminal breach of trust under Section 316 BNS, and a cheque bounce proceeding under Section 138 of the Negotiable Instruments Act). A coordinated strategy was put in place — a criminal complaint, a civil recovery suit, and proceedings on the blank cheques — and the matter began moving at a pace Priya had not seen in the months prior. The structured, domain-specific approach made a material difference in how quickly the court took cognizance and how the evidence was presented.

Advice in Such Cases

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 to 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.

Preserve all evidence immediately. Don't delete messages, emails, or call records. Screenshot every conversation where money was discussed or promised. Bank statements, credit card bills, and UPI transaction histories are your strongest starting assets — get certified copies from your bank without delay. And here's the thing: people wait weeks before doing this, and by then records get harder to retrieve.

Don't confront the opposite party alone. Any unilateral attempt to recover property or extract an admission can backfire legally. Let your advocate guide all communication from this point forward. Even a well-intentioned visit to the other party's home can be twisted into a harassment allegation — it happens more often than you'd think.

Cases involving financial exploitation within personal relationships sit at the intersection of civil recovery law, criminal cheating statutes, and negotiable instruments law. A general practitioner may not know how to run these tracks simultaneously, or how courts weigh partial documentary evidence against consistent oral testimony. Engaging an advocate who regularly handles such mixed-character financial disputes typically results in faster relief and stronger evidentiary framing.

Applicable Sections of Law

• Section 318 BNS (Cheating): Applies where a person dishonestly induces another to deliver property or money by deception — directly relevant here given the false startup pretext.
• Section 316 BNS (Criminal Breach of Trust): Applies where property or money is entrusted to a person who dishonestly misappropriates or converts it for their own use.
• Section 138, Negotiable Instruments Act, 1881: Governs cheque dishonour — blank cheques filled and presented, if dishonoured, attract criminal liability with imprisonment up to two years or fine up to twice the cheque amount.
• Order 37 CPC (Summary Suit): For recovery of liquidated money based on written instruments, a summary suit allows faster adjudication than a regular civil suit.
• Section 73, Indian Contract Act, 1872: Allows recovery of compensation for loss or damage arising from breach of a promise or contractual obligation.

Punishment and Penalties

Frankly, the penalties here are serious enough that a well-presented complaint gets attention.

• Section 318 BNS (Cheating): Imprisonment up to three years, or fine, or both. Where cheating involves delivery of property, imprisonment may extend to seven years with fine.
• Section 316 BNS (Criminal Breach of Trust): Imprisonment up to three years, or fine, or both; aggravated forms attract up to seven years.
• Section 138 NI Act: Imprisonment up to two years, or fine up to twice the cheque amount, or both.
• Cognizable and Non-Bailable: Offences under Section 318 and 316 BNS are cognizable and non-bailable. Section 138 NI Act is non-cognizable and bailable.
• Compoundable: Section 138 NI Act is compoundable with the complainant's consent. Offences under BNS may be compounded with leave of court in appropriate cases.

Jurisdiction — Where to File the Case

Get this wrong and you lose months to technical objections. For the criminal complaint under Section 318 and 316 BNS, the jurisdictional police station is the one covering the area where the fraudulent inducement occurred or where the money was handed over — in this type of case, typically the victim's location. The Magistrate's Court having jurisdiction over that area will take cognizance.

For the Section 138 NI Act cheque bounce case, jurisdiction lies with the Magistrate Court at the place where the cheque was presented for payment — that is, the bank branch location. As held in Dashrath Rupsingh Rathod v. State of Maharashtra, 2014, the place of dishonour governs territorial jurisdiction.

For the civil money recovery suit, the District Court or City Civil Court at the plaintiff's place or where the cause of action arose has pecuniary and territorial jurisdiction. Getting jurisdiction right from the start avoids delays and technical objections later.

What if Police Refuse to File FIR?

Police sometimes treat financial disputes within relationships as civil matters and decline to register an FIR. That refusal is not the end of the road. Here's what you can do:

• Submit a written complaint to the Superintendent of Police (SP) of the district under Section 173(4) BNSS, requesting directions to the station to register the FIR.
• File a private complaint directly before the concerned Judicial Magistrate under Section 175(3) BNSS — the Magistrate can direct an investigation or take cognizance independently.
• Apply to the High Court under Article 226 of the Constitution for a writ of mandamus directing registration of the FIR, if both earlier steps fail.
• Document every refusal — get a written endorsement from the police station or note the date and officer's name — as this record supports your complaint to higher authorities.

Rights of the Accused

Now, before you act, understand this: even in cases involving financial cheating, the accused retains constitutional and statutory rights that must be respected. Courts take violations seriously, and any irregularity in procedure can become a handle for the defence.

• Right against self-incrimination: Under Article 20(3) of the Constitution, the accused cannot be compelled to be a witness against themselves.
• Right to legal representation: Article 22 guarantees the right to consult and be represented by an advocate of their choice.
• Right to be produced before Magistrate within 24 hours: Any person arrested must be brought before the nearest Magistrate within 24 hours of arrest, excluding travel time.
• Right to know grounds of arrest: The accused must be informed of the grounds of arrest at the time of arrest.
• Right to copy of FIR: As affirmed in Lalita Kumari v. Government of UP, 2014, the FIR is a public document and a copy must be provided to the accused upon arrest.

Bail Provisions

Offences under Section 318 and 316 BNS are non-bailable, meaning bail is not a matter of right and must be sought from court.

• Regular Bail: The accused may apply under Section 480 BNSS before the Magistrate or Sessions Court, depending on the stage of proceedings.
• Anticipatory Bail: If the accused apprehends arrest, they may apply under Section 482 BNSS before the Sessions Court or High Court for pre-arrest bail.
• Typical conditions: Courts routinely impose conditions such as surrender of passport, periodic reporting to the police station, and a bar on contacting the complainant.
• Bail strategy in mixed financial cheating cases often hinges on demonstrating the civil nature of the dispute — but courts increasingly resist this argument where dishonest inducement is clearly established from the outset.

Quashing of FIR / Case

The accused may approach the High Court under Section 528 BNSS seeking quashing of the FIR. But this route is not straightforward in financial cheating matters.

Grounds on which quashing may succeed include: no prima facie case on the face of the FIR, the dispute being purely civil in nature without any criminal element, or a genuine settlement between parties in a compoundable offence. As the Supreme Court held in State of Haryana v. Bhajan Lal, 1992, quashing is warranted only in exceptional cases where the FIR is an abuse of process.

Where the facts show deliberate, pre-planned deception — as in cases involving false investment pretexts — courts generally decline to quash. The complainant should be prepared to oppose any such application with a strong affidavit supported by documentary evidence.

If You Are the Victim

Start here. Compile everything before you do anything else.

• Compile all financial records immediately — bank statements, UPI histories, credit card statements, and screenshots of any promises made in writing or over chat.
• Do not fill in the blank cheques on your own without legal guidance — the amount, date, and payee must be filled correctly and consistently with your claim to withstand scrutiny in a Section 138 NI Act proceeding.
• Send a formal legal notice through your advocate before initiating any proceeding — this creates a paper trail of demand and refusal, which is relevant both civilly and criminally.
• If movable property (devices, vehicles) is identifiable and located, note its presence with photographs or video discreetly — this can support a claim for attachment or recovery of property.
• Avoid posting about the matter on social media. Such posts can be used against you to allege harassment or defamation, weakening your position unnecessarily.

Documents You Must Keep Ready

• Aadhaar card and PAN card (identity proof of the complainant)
• Bank account statements covering the full period of transactions
• Credit card statements showing payments made on the accused's behalf
• UPI / NEFT / RTGS transaction records with reference numbers
• Copies of the blank cheques (preserve originals carefully)
• Screenshots of WhatsApp, SMS, or email conversations discussing money, promises, or repayment
• Purchase receipts or invoices for devices or the motorcycle bought on the accused's behalf
• Any written agreement, promissory note, or acknowledgement of debt, however informal

What Evidence Is Required?

• Primary documentary evidence: Bank transfer records, credit card statements, and UPI receipts directly establishing the flow of money from victim to accused.
• Cheque evidence: Original blank cheques, along with bank dishonour memos if presented and bounced, form primary evidence in NI Act proceedings.
• Electronic evidence: Chat messages, emails, and voice messages are admissible as electronic records under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023, provided proper certification is obtained.
• Witness testimony: Friends who were present during confrontations about repayment, or who heard the accused's promises, can give corroborative oral testimony.
• Photographic / video evidence: Images or footage showing the property (motorcycle, devices) at the accused's residence support the recovery and ownership claim.
• Partial documentation is not fatal — courts regularly draw adverse inferences from an accused's refusal to respond when the available evidence establishes a consistent pattern of financial exploitation.

How the Police Behave in Such Cases

Make no mistake — police often treat financial disputes between intimate partners with scepticism, viewing them as "personal matters" rather than cognizable offences. Expect initial reluctance to register an FIR, especially if the accused frames the transactions as voluntary gifts or friendly loans. Officers may suggest mediation or civil court as alternatives. This reluctance is not insurmountable, but it does require a well-drafted complaint that clearly articulates the deceptive inducement from the outset — distinguishing this from a simple loan dispute. Having an advocate draft the complaint significantly improves the chances of prompt registration.

Timeline of Legal Process

• Week 1-2: Legal notice sent by advocate; evidence compiled and organised.
• Week 2-4: FIR filed / private complaint before Magistrate; civil recovery suit or summary suit filed simultaneously.
• Month 1-3: Police investigation begins; court issues summons in civil suit; Section 138 NI Act complaint filed and cognizance taken.
• Month