What is letter before action and when is it mandatory to send it?

A letter before action is ordinarily called the legal notice in India. A legal notice is a formal written communication between the parties. The sender notifies the recipient through the legal notice about his intention of undertaking legal proceedings against the latter.

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, 1908: Under Section 80 of the Code of Civil Procedure 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 2-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 that 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.
  • Consumer Complaints: In case of Consumer forums where a product or service is faulty, provided to a consumer then that consumer has the right to send a legal notice to the person concerned asking him/her in order to rectify the mistake.
  • Debt Recovery: The legal proceedings in case of debt recovery from loan defaulters are initiated once a legal notice is sent to the defaulter as enshrined under Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002.
  • Employee & Employer: In the case of deprivation of salary of the employees and employer of a company, the employer/ employee can send a legal notice to the company director/ employer as the case maybe.
  • 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.

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.

Disputes suitable for pre-action letters

  • 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

Disputes not suitable for pre-action letters

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