Letter Before Action

A letter before action is ordinarily called the legal notice in India, which is a formal written correspondence to a person or entity, informing the party of your intention to undertake a legal proceeding against them.

In India, a legal notice is considered to be the first step involved in any legal proceeding. All legal actions are generally initiated in India only after the legal notice has been served upon the other side, which may be an entity or individual. The said practice, however, is not mandatory in all cases. Such requirement if provided in any particular Act or statute then it is mandatory, however, if there is no specific provision then sending the legal notice is not mandatory in such cases. Some of the instances where sending a pre-action letter/ legal notice is mandatory are as under:

• The Code of Civil Procedure Code, 1908 – Section 80 of the Code of Civil Procedure, 1908, provides that no suit/ legal action shall be instituted against the Government or against a Public Officer in respect of any act purporting to be done by such public officer in his official capacity unless a two month notice in writing has been served upon the government or the public servant as the case may be.
• The Negotiable Instrument Act, 1881– In cases of dishonor of cheques, Section 138 of the Negotiable Instrument Act, 1881, makes it mandatory to issue a legal notice to the issuer of the cheque within a time frame of 30 days of dishonor of cheque. The issuer of the cheque is to be given 15 days’ time to make the payment, and if the payment is made within the aforesaid period then the matter is resolved. Otherwise, the aggrieved party can initiate a legal action within 30 days from the date of expiry of 15 days specified in the notice.
• The Transfer of Property Act, 1882- There are several provisions under the act which makes it mandatory to serve a legal notice before taking any legal action against the person.
• The Insolvency and Bankruptcy Code, 2016 – As per Section 8 of the IBC, a demand notice has to be served by an Operational Creditor to the Corporate Debtor demanding payment of the operational debt in respect of which the default has occurred, giving 10 days’ time to the Corporate Debtor to make payment.
• There are many other statutes in India which makes it mandatory to serve a pre-action letter/ notice before taking any legal action against any individual or entity.
• It is also mandatory in many contracts to serve prior intimation by sending a legal notice by one party to the other, before initiating any legal action against them.

In cases, where sending a pre-action letter/legal notice/notice is mandatory and is not served prior to initiation of legal action, such actions shall fail.

What types of disputes are considered suitable for sending a pre-action letter? Are there any circumstances in which parties in your jurisdiction are permitted to refrain from sending a pre-action letter? Are there different forms of pre-action procedures that apply in different cases such as construction or professional negligence?

In India, all disputes related to property, recovery of dues, dishonour of cheques, commercial contracts, Arbitration proceedings, family dispute, labour matters and any other dispute of civil nature are suitable for sending a pre-action letter. However, as stated above, sending such letter is not mandatory in every case.

There are no circumstances where parties are permitted to refrain from sending a pre-action letter.

• Property Disputes
• Notice by employer
• Notice by employee
• Dishonor of cheque
• Arbitration
• Consumer complaint
• Recovery of dues
• Insolvency
• Family disputes
• Writ Petitions for infringement of fundamental rights or any legal injury
• Trademark Infringement

A legal notice is generally issued in civil cases. However, in criminal cases, there is no such practice of issuance of a pre-action letter/ legal notice, as in case of a criminal offense the action is instituted by the state against the person committing the offence. Some of the disputes not suitable for pre-action letters are:

• Personal crimes
• Property Crimes
• Statutory crimes
• Financial and other crimes

• Property Disputes: There are several types of property disputes where sending of legal notice is the first step before initiating the legal action such as Issue of partition between family members, delay by the builder to provide possession of the property, eviction of tenant, dispute relating to title of a property etc.  
• Dishonour of Cheque: In cases of dishonor of cheques, Section 138 of the Negotiable Instrument Act, 1881, makes it mandatory to issue a legal notice to the issuer of the cheque within a time frame of 30 days of dishonor of cheque. The issuer of the cheque is to be given 15 days’ time to make the payment, and if the payment is made within the aforesaid period then the matter is resolved. Otherwise, the aggrieved party can initiate a legal action within 30 days from the date of expiry of 15 days specified in the notice.
• Consumer Complaints: Notices in consumer cases are issued in cases of faulty products, deficiency of service, negligence, mental agony and harassment etc.
• Complaint against the Employer: Employees of an organisation are empowered to send legal notice to their employers in issues such as wrongful termination, sexual harassment, abuse of power, non-payment of salary etc.
• Complaint against the Employee: Like the employee, the employers have the power to send notice to the employees in issues such as violation of any policies of the company, complaint of sexual harassment etc.

Who can send a pre-action letter?

In India, a pre-action letter/legal notice is ordinarily a notice sent by a lawyer on behalf of his/her client. However, it is not mandatory for a person to send a legal notice through a lawyer. A person himself can send a legal notice on his/her accord without the assistance of a lawyer communicating its intention of initiating a legal action. However, it is advisable to hire a lawyer for this purpose in order to avoid making any mistake, especially in the matters where issuance of pre-action letter is mandatory. A lawyer with good drafting skills can collect information from you and send a notice on your behalf.

What details/supporting documents should be included in a pre-action letter?

A pre-action letter/legal notice must be in writing and must include below mentioned details:

• Name, description and residential address of the sender.
• Name and address of the person against whom sender has grievances.
• Material facts and grievances caused: A notice must consist the facts and grievances of the sender in points and paragraphs.
• Summary of relief claimed/compensation: A notice must consist of an amount of claim or relief if any claimed against the defaulting party. It is also important to mention the law or reference under which the claim, compensation or relief is sought.
• Reasonable time limit to be provided to the defaulting party to reply to the notice so issued.
• Signature of lawyer and client is must or signature of the person who is sending the notice.
• Supporting documents: It is not mandatory or practice to attach any document with the pre-action letter/ legal notice, however, it is advisable that in case of notice for recovery of dues or notice for dishonor of cheque, all the necessary documents should be attached to support your claim or relief sought.

Is there a time-limit for sending a response to a pre-action letter?

In India, there is no such time limit prescribed under the law for sending a response to a legal notice. In general, the time limit to file a response to a legal notice varies from case to case basis, ranging from 15 days-45 days. However, in cases where a period is specifically provided in the statute for the said purpose, the same has to be followed mandatorily. Ordinarily, a party should try and reply to the notice as soon as possible and within the period mentioned in the notice/pre-action letter.

What details should be included in the reply to a pre-action letter? Are there any negative implications for the potential respondent(s)/recipient(s) if they choose not to respond to the pre-action letter? Are there standard forms of response in specific cases?

Details to be included

[Insert answer.] A reply to a legal notice should contain all the necessary facts and averments regarding the case. A reply must contain reply to all the facts as stated in the legal notice sent by the Claimant, which the respondent wish to state in its defence.

Negative implications

It is not mandatory to reply to the legal notice in every case, except in cases where a statutory notice is sent before initiating any legal action. Yet it is advisable to reply to legal notice within the time limit provided in the notice sent by the sender. The consequences of not replying to notice is not an offence under the law, however, one must bring on record the relevant facts/ averments in his defence. In case no response is sent, and a legal action is initiated by the sender, the Court may take adverse inference against the defaulting party.

Standard forms

There is no standard form for a good response but if a person chooses to reply to a legal notice, he/she should make sure that the following information is clearly mentioned:

• The reply has to be addressed to the lawyer of the person or to the person who has sent the notice.
• Name, description and address of the sender must be provided.
• Mention the facts of the issue with the relevant dates, events and time. Then, refute the allegations made against you by the sender.
• It is advisable not to admit or accept any of the allegation made by the sender.
• If you have any grievances against the sender, mention them. This will form as a part of your counter-claim.
• Provide a summary of your defence to the issue. Question Set:

Does the pre-action letter interrupt the running of the limitation period for initiating civil proceedings? If not, what steps can the potential Claimant take to protect its position on account of the imminent expiry of the limitation period? Can the potential claimant start legal proceedings and then get them temporarily suspended while they comply with the pre-action rules or obligations (if any)?

No. The pre-action letter does not stop running of the limitation period. In India, the limitation for initiating any civil action is ordinarily 3 years from the date when right to sue accrues. However, different period of limitation has been provided in some of the statutes. There is no provision for condonation of delay in case limitation period has expired for an action to be initiated under Code of Civil Procedure, 1908. However, in certain acts/ statutes there are specific provisions which entitles a party to seek condonation of delay in case limitation period has expired. Since, pre-action letter is required to be issued prior to initiating the court proceedings, therefore, once the court proceedings have been initiated the same cannot be suspended for the purpose of complying with the pre-action obligations. In cases, where issuance of pre-action letter/ legal notice is mandatory under the statute, the court proceedings shall fail, if the pre-action letter/ legal notice is not issued prior to initiating the court proceedings.

Are pre-action letters considered effective in avoiding the need for legal proceedings?

In India, a pre-action letter/notice is considered effective in avoiding the need of legal proceedings as it provides for a platform and a chance to both the parties to reach a consensus without taking the route of the Court proceedings.

It is a well-known fact that the process of litigation consumes lots of money and take long to resolve a dispute. This procedure of sending pre-action letter/notice gives a midways to both the parties to settle the dispute amicably and save their time and money.

Are there any practical tips that should be kept in kept in mind while issuing or responding to a pre-action letter in your jurisdiction?

Practical tips that should be keep in mind while issuing a legal notice in India:

• It is advisable to approach a lawyer or a legal expert for this purpose in order to avoid committing any mistake. A lawyer with good skills of drafting can collect information from you and send a notice on your behalf.
• The notice must be in writing and must be sent on the letterhead of the entity/ lawyer sending the same.
• It must contain all the necessary details of both the parties along with the complete facts.
• The notice must contain proper summary of relief claimed along with the supporting documents. If any.
• Issuer must specify a time limit for the receiver to reply to the notice.
• It should be properly signed by the person sending the same.

 In India, if a person chooses to reply to a legal notice, he/she must keep in mind the following tips:

• It is advisable to hire a lawyer for the purpose in order to avoid mistakes.
• The reply must be in writing and must be sent on the letterhead of the person along with the necessary details and facts of the issue.
• Check the limitation period to reply to the notice.
• Check the contractual obligation of the Claimant, if any.
• It is advisable not to admit or accept any of the allegation made by the sender.
• If the content in the notice is not relevant, then one can counter threat a claim or damaged against a sender.
• Are there any clauses that would be usual to see in a letter before action or and/or that are standard practice in your jurisdiction which do not appear in the Standard document, Letter before action: Cross-border (see below)? Are there are any clauses included which you would not normally see, and if so for what reason (for example, is it because they are not enforceable)?

[ON HEADED NOTEPAPER OF POTENTIAL CLAIMANT OR POTENTIAL CLAIMANT’S SOLICITORS]

[WITHOUT PREJUDICE]

For the attention of [the Senior Manager OR Directors and Company Secretary OR [Named individual]]

[NAME OF POTENTIAL RESPONDENT OR POTENTIAL RESPONDENT’S BUSINESS OR POTENTIAL RESPONDENT’S LAWYERS/SOLICITORS]

[ADDRESS LINE 1]

[ADDRESS LINE 2]

[POSTCODE]

[DATE]

Dear [NAME OF ADDRESSEE],

[RESPONDENT’S NAME]: [CLAIM DETAILS]

• We have been instructed by [FULL NAME OF POTENTIAL CLAIMANT] of [ADDRESS] to [SPECIFY THE REASON FOR WHICH LETTER OF CLAIM IS BEING SENT]. We refer to [SPECIFY RELEVANT PRIOR CORRESPONDENCE].

CIRCUMSTANCES RESULTING IN THE CLAIM

[SET OUT THE BASIS ON WHICH THE CLAIM IS MADE (THAT IS, WHY THE POTENTIAL RESPONDENT IS LIABLE), AND A CLEAR SUMMARY OF THE FACTS ON WHICH THE CLAIM IS BASED.]

RELEVANT DOCUMENTS [OPTIONAL]

1. We enclose the following copy of documents that are relevant to the Claim:
2. [LIST THE COPY DOCUMENTS ENCLOSED WITH THIS LETTER.]
3. Please provide to us within [SPECIFY THE TIME-LIMIT] days copies of the following documents, which we believe are relevant to the Claim and are likely to be in [your OR [NAME OF INDIVIDUAL OR COMPANY]’s] control:
4. [LIST THE DOCUMENTS AND DOCUMENT TYPES REQUESTED.] [OPTIONAL- WHERE REQUIRED FOR DISCOVERY PROCESS]

This is not purported to be an exhaustive list of documents relevant to the Claim. Please also provide any other documents that you consider to be relevant and confirm that [you OR [NAME OF INDIVIDUAL OR COMPANY]] will take proper and appropriate steps to ensure no relevant documents, including electronic documents, that are in [your OR [NAME OF INDIVIDUAL OR COMPANY]’s] control, are altered, lost, destroyed or disposed.

[ACTION REQUIRED]

[SET OUT THE DETAILS OF PAYMENT OF DEBT/OBLIGATION OR THE POTENTIAL CLAIMANT’S DEMANDS WITH REPECT TO THE REMEDIAL ACTION REQUIRED FROM THE POTENTIAL RESPONDENT. SET OUT THE METHOD OF PAYMENT AND THE ADDRESS TO WHICH IT CAN BE SENT OR THE DETAILS OF HOW CAN THE POTENITAL CLAIMANT CAN ADDRESS THE PONETIAL CLAIMANT’S CLAIM]. You may contact us on [PROVIDE CONTACT DETAILS] to discuss possible repayment and remedial options.]

[FUNDING ARRANGEMENTS] [OPTIONAL/ WHERE APPLICABLE]

[You should note that our client has obtained [INSERT REFERENCE TO ANY THIRD-PARTY FUNDING ARRANGEMENT, CONDITIONAL FEE ARRANGEMENT AND/OR AFTER THE EVENT INSURANCE POLICY AND WHETHER YOU INTEND TO SEEK TO RECOVER ANY RELATED ADDITIONAL LIABILITIES FROM THE RESOPONDENT]

[ALTERNATIVE DISPUTE RESOLUTION]

[SET OUT THE FORM OF ALTERNATIVE DISPUTE RESOLUTION (IF ANY) THAT THE POTENTIAL CLAIMANT/CLIENT CONSIDERS THE MOST SUITABLE AND INVITE THE PONTETIAL RESPONDENT TO AGREE TO THIS].

[INSTRUCTING AN EXPERT] [OPTIONAL- WHERE APPLICABLE]

[We propose that one of the following experts be jointly instructed as [a single joint expert OR an agreed expert] in the field of [SPECIFY FIELD], on the issue of [SPECIFY ISSUE]: [LIST PROPOSED EXPERTS].]

THE NEXT STEPS

• An acknowledgment to this letter should be provided within [SPECIFY THE TIME-LIMIT] days of receipt, namely by [DATE]. [Your OR [NAME OF INDIVIDUAL OR COMPANY]’S] full response to this letter should be provided no later than [SPECIFY THE TIME-LIMIT] days after the date of this letter, namely by [DATE].
• Our client reserves all its rights, including the right to commence proceedings (without further reference to you should that prove necessary and appropriate) to obtain a court judgment requiring you to [SET OUT THE RELEVANT ACTION REQUIRED FROM THE POTENTIAL CLAIMANT].
• [Ignoring this letter may lead to our client starting proceedings against you and may increase your liability for costs.]

Yours faithfully,

Disclaimer: This document was prepared for Thomson Reuters-Practical Law Series. It has been reproduced here for our website readers