Insolvent petition

In the event of default by the debtor, recovery proceedings can be started against him or her. To initiate recovery proceedings one can approach the National Company Law Tribunal (NCLT) (this applies to corporate persons) which exercises the authority to dispose of cases under the Insolvency and Bankruptcy Code.

The Default is generally defined as non-payment of debt when whole or any part of payment of the amount of debt has become due and payable and is not paid by the debtor.

Before Insolvency and Bankruptcy Code, initiation of a resolution process lied with the debtor, and the creditor may follow separate actions for security enforcement, recovery, and debt restructuring. But Insolvency and Bankruptcy Code make a noteworthy departure from the present resolution regimen by shifting the obligation on the creditor to initiate the insolvency resolution process against the debtor.

Demand will be issued to the debtor by the creditor. If the creditor does not receive any payment due within 10 days of the notice then he or she can file an application in the NCLT for initiating the recovery process (Corporate insolvency resolution). The NCLT within 14 days of receiving the application will either accept the application or reject the application.

Therefore, under the  Insolvency and Bankruptcy Code, within 24 days from the date of issue of the demand notice, the petition filed by the creditor will be either accepted or rejected by the NCLT. The amalgamated regime envisages an organized and time-bound process for insolvency.

• he new stringent laws which would take care of the existing defaulters in a time-bound manner.
• It addresses the issues faced currently in the context of insolvency and winding up
• It improves the ease of doing business in India and also facilitates a better and faster debt recovery mechanism.

Through the Insolvency and Bankruptcy Code, debt can be recovered very quickly. There is no need of going to high court which is a time taking process.

Regards,

Anaita Vas

You can give police complaint. Legal chit funds safer but many risk the illegal route. In other words, they are sitting on a powder keg. 

No definite suggestion is possible unless the documents are perused and facts ascertained.