Payment recovery from client for construction work

912 votes

Hey you can recover money with interest. The relevant date in this case is three years from the date on which payment becomes due. Generally in a civil suit one has to pay advalorem court fees and therefore it is discouraged. Having said that if there is an arbitration clause in the agreement entered into between you and the other party you can surely sue for the money. Hope that answers your question.

Advocate Raghav Awasthi LawRato

933 votes

While the last transaction was in March 2013, you can proceed to refer the dispute to arbitration as you continued to follow up with the opposite party. If you have a communication exchanged with them which is dated post March 2013, I don't see any problem with proceeding with arbitration. As regards how to proceed with the arbitration, you should file a section 9 petition for protecting your money by way of a bank guarantee or otherwise. Let us discuss this in detail.

Advocate Shikhar Khare LawRato

553 votes

I understand that a new agreement was entered into in March 2013 to settle the payments. In such a case, the limitation of 3 years does not get triggered. This can be understood keeping the following points in mind:
1. Cause of action in an arbitration has been held to accrue when the Claimant becomes entitled to raise the question i.e when the claimant acquires right to require arbitration. In this case, this cannot be considered to be accrued until the last receipt of payment, or any communication sent from your client denying payment.
2. Shree Ram Mills Ltd. vs. Utility Premises (P) Ltd. reported in (2007) 4 SCC 599 which held that if the disputes under a contract are under negotiation or consideration, then the limitation for arbitration purpose would be deemed to have not commenced.

Please get all the communications and payment receipts together. Send them a legal notice apprising them of your intention to resort to arbitration if no further payment is made. You can then initiate the proceeding depending on your terms of the agreement clause. You can get in touch with us for any further assistance in the matter.

Advocate Bhoomika Choudhury LawRato