Diwan Advocates

Commercial Law Practice

A business issues a cheque in settlement of a trade debt. The cheque returns dishonoured. The payee wants payment and is aware of the criminal remedy under the Negotiable Instruments Act but is not sure how to use it alongside a civil recovery suit.

A trading company has been supplying goods to a buyer on credit terms for two years. The buyer has accumulated a large outstanding balance, is now seeking further credit, and the supplier is wondering what security it can take and how to enforce it quickly if the buyer defaults.

Commercial disputes in India cut across contract law, negotiable instruments, secured lending, and insolvency. At Diwan Advocates, we advise traders, lenders, suppliers, and buyers on the full range of commercial legal issues that arise in day-to-day business.

Cheques and Negotiable Instruments

The Negotiable Instruments Act, 1881 governs cheques, bills of exchange, and promissory notes. A dishonoured cheque gives rise to both a civil remedy and a criminal complaint under Section 138. The criminal complaint must be filed within thirty days of receiving the bank's dishonour notice, after a demand notice has been sent and the drawer has failed to pay within fifteen days. The complaint is filed before the Judicial Magistrate. Conviction carries imprisonment of up to two years and a fine of up to twice the cheque amount. We conduct Section 138 prosecutions and defend against them.

Summary Suits and Commercial Courts

Commercial disputes above a specified value are heard by Commercial Courts established under the Commercial Courts Act, 2015. These courts have strict timelines, limited adjournments, and case management procedures designed to deliver faster resolution. The Commercial Division of the High Court hears commercial disputes of higher value. Summary suits under Order XXXVII of the Code of Civil Procedure allow a creditor to obtain a decree without a full trial where the claim is based on a written contract, a cheque, or a bill of exchange and there is no triable defence.

Letters of Credit and Bank Guarantees

Letters of credit and bank guarantees are autonomous instruments: a bank's obligation to pay is independent of the underlying commercial transaction. A bank is not entitled to refuse payment under a guarantee or letter of credit merely because the beneficiary and the account holder are in dispute about the underlying contract, unless there is clear fraud or special equities. Courts are slow to grant injunctions restraining payment under guarantees, and the threshold for obtaining one is high.

Why Diwan Advocates for Commercial Law?

Legislative Reference Index

Commercial debts age quickly and limitation periods are fixed. The earlier advice is sought, the more options are available.

Diwan Advocates is ready.

Diwan Advocates  |  Delhi, India