What happens if the debtor flees the country?

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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.

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