What happens if the debtor flees the country?

Answer By law4u team

If a debtor flees India to avoid repaying debts, certain legal actions can be taken to recover the debt: 1. Filing a Civil Suit for Recovery: - The creditor can file a civil recovery suit under Order 37 of the Civil Procedure Code (CPC), 1908 (summary suits) for a quick resolution. - If the debtor has assets in India, the court can attach those assets before judgment. 2. Criminal Action (If Applicable): - If the debt is related to a cheque bounce case, a complaint can be filed under Section 138 of the Negotiable Instruments Act, 1881. - A Lookout Circular (LOC) can be issued to prevent the debtor from leaving India if criminal liability is involved. 3. Red Corner Notice: - In cases of significant financial fraud or criminal misconduct, the creditor may request the authorities to issue a Red Corner Notice through Interpol for international tracing and arrest. 4. Enforcement of Foreign Judgments: - If the debtor settles abroad, the creditor can approach Indian courts to obtain a decree and then enforce it in the debtor's country under Section 44A of the CPC, 1908 (for reciprocating territories). - For non-reciprocating countries, a fresh suit must be filed in the foreign country. 5. Insolvency Proceedings: - If the debtor is declared insolvent in India, creditors may initiate proceedings under the Insolvency and Bankruptcy Code (IBC), 2016 for recovery from available assets. 6. Extradition: - In cases involving criminal activity, the Indian government may request extradition if the country where the debtor resides has an extradition treaty with India.

Answer By Ayantika Mondal

Dear Client, If the debtor still owning debt to his creditor, flees India, it does not automatically absolve him of his debt. He is still under a legal obligation to repay the creditor. Here is what happens – 1. The creditor has the right to file a civil suit for recovery of his money under Order 37 of the Civil Procedure Code, 1908. It can be helpful if the claim is backed by written documents. 2. However, issuing a legal notice to the debtor demanding repayment of debt is mandatory before filing civil suits or cases of cheque bounce. 3. The court has the authority to attach the debtor’s Indian assets, both movable and immovable, to compensate the creditor. 4. A criminal case under the Bharatiya Nyaya Sanhita (BNS), 2023, can also be established if the debt involves any acts of cheating or fraud committed by the debtor 5. If the debtor has any assets abroad, the creditor can even approach international courts seeking the enforcements of the Indian decree. 6. The debtor, even in his absence, has the right to be represented by an advocate in India. However, for certain stages the presence of the debtor may be necessary. I hope this answer helps. For any further queries, please do not hesitate to contact us. Thank you.